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Amazon’s Next Step into Healthcare



July 22 - Amazon announced that it has entered an agreement to acquire primary healthcare company One Medical at approximately $3.9 billion. One Medical is a human-centered, technology-powered U.S. primary care organization which tries to make quality healthcare more affordable and accessible through a combination of in-person, digital, and virtual care services. The company markets itself as a membership-based, tech-integrated, consumer-focused primary care platform. At the end of March 2022, It had worked with 8,000 companies and had 767,000 members.


This is not the first footprint the online retail giant had left in the healthcare industry. Amazon acquired online pharmacy PillPack in 2018 and utilized it to create Amazon Pharmacy. The company also partnered with JP Morgan Chase and Berkshire Hathaway to provide “Haven” - health care services and insurance at a lower cost - to workers and families at the three companies, although this was not successful. With the One Medical Deal, Amazon is fully entering the healthcare field. Michael Abrams, managing partner at Numerof and Associates, considers Amazon’s acquisition as “a real reinforcement of their commitment to the primary care space", as One Medical will give Amazon shortcuts to accelerated growth in their business in primary care. He also noted that Amazon may experience a growth in its online pharmacy and diagnostics businesses.


As Amazon always builds its business upon customers’ needs, the company's bigger push into healthcare may raise the stakes for other players to take a consumer-centric approach. Amazon could apply its massive, powerful analytical capabilities and consumer behavior data to empower this approach. "Amazon knows how to get customers, keep them and get them whatever it is they want. So imagine kind of applying that skillset and the analytics capabilities that they have to the primary care experience," commented Sari Kaganoff, general manager of consulting at Rock Health, a digital health-focused venture capital firm. Companies that provide traditional healthcare services — and/or are slow in building up the digital sides of their business — may need to adapt their brick-and-mortar based business as providers of non-traditional models, such as Amazon, directly meet patients’ demands for a seamless mobile care. Since Amazon already has a large pool of steady customers — approximately 44% of Americans have an active Amazon Prime membership — they can extend their adept, seamless services into wellness services for their large audience, especially as they gain control of more health access points.


Nevertheless, what remains to be seen, and will likely be closely watched, is whether Amazon and other tech giants’ inroads into healthcare actually result in better access, reduced cost to care for patients and better quality of medical services. Concerns are raised, such as how do individuals know that Amazon does not have an interest in broader access to patient data? Stacy Mitchell, co-executive director of the Institute for Local Self-Reliance, notes that this may be “...another opportunity to gather up a huge cache of personal data to use that data and those relationships to further cement Amazon’s dominance as an online intermediary for lots of goods and services.” Some are worried that the retail giant’s cross-industry tentacles will give it extensive access to data that will allow them to develop deep insights about individuals - which it can use to find very precise ways to manipulate us and the economy. But some trust Amazon. They believe the company who claims to be driven by customer obsession will not easily play with the trust they have built over the past 25 years. As one of the most trusted brands in the United States, Amazon will put a priority over privacy. What is your opinion on Amazon’s deal with One Medical? Do you think the tech giant will benefit patients in the long run? Feel free to leave your comments!


Interested in learning more about healthcare? Stay in touch with us! Sedna leads in the design, construction, and implementation of cutting-edge solutions for Health and Human Services information systems. And we also have over 15 years of expertise in SNAP, Medicaid, Child Support, and WIC. Check out our previous articles “How Healthcare Technology is Transforming Medicaid” and “AI in Healthcare” for more of our insights into the healthcare industry.



Sources:

https://www.fiercehealthcare.com/health-tech/how-amazons-one-medical-deal-could-boost-its-healthcare-ambitions-and-heat-competition

https://www.geekwire.com/2022/can-amazon-change-healthcare-experts-sound-off-on-tech-giants-3-9b-deal-to-buy-one-medical/

https://www.cnn.com/2022/07/21/tech/amazon-one-medical/index.html