Amazon might own your doctor’s office after latest acquisition

When Amazon launched Amazon Care to its employees in 2019, the goal was to test the product before rolling it out nationwide. After that rollout happened earlier this year, Amazon CEO Andy Jassy told Insider that the expansion would “fundamentally” change the health care game by dramatically enhancing the medical-care process. He predicted that patients in the future would be so used to telehealth and other new conveniences that they’ll think that things like long wait times and delays between in-person visits commonly experienced today are actually “insane.”

Now, The Wall Street Journal reports, Amazon has gone one step closer to that future by agreeing to a $3.9 billion deal to purchase One Medical, a company that operates a network of health clinics. With this move, Amazon will expand the number of patients it serves by gaining access to “a practice that operates more than 180 medical offices in 25 US markets and works with more than 8,000 companies to provide health benefits to employees, including with in-person and virtual care.”

Echoing Jassy’s enthusiasm, Neil Lindsay, Amazon Health Services’ senior vice president, told WSJ that the company thinks “health care is high on the list of experiences that need reinvention.” Purchasing One Medical is a way for Amazon to break further into the $4 trillion health care industry at a time when Amazon’s revenue is down and costs are up.

An Amazon spokesperson declined to comment on Ars’ questions about any projected timeline once the deal is made for merging One Medical services into Amazon Care or whether there is a waitlist of companies who have expressed interest in joining Amazon Care in the past who might benefit from the acquisition. Instead, the spokesperson directed Ars to its press release. One Medical did not immediately respond to Ars’ request for comment.

In the past, Amazon has partnered with major players and ended up throwing away $100 million on a losing health care venture called Haven that tried to reinvent the wheel and failed after three years. This new venture is more expensive but perhaps less ambitious, benefiting from tapping into One Medical’s existing infrastructure and, thus, likely less disruptive. Lindsay says Amazon’s innovative focus for this venture is on speeding up health care delivery and improving the overall patient experience.

One Medical’s troubling past

After the deal is done, One Medical chief executive Amir Dan Rubin “will remain CEO.” In a news release to One Medical investors, Rubin expressed a lot of enthusiasm for the deal.

“The opportunity to transform health care and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention, and willingness to invest in the long-term is so exciting,” Rubin says. “There is an immense opportunity to make the health care experience more accessible, affordable, and even enjoyable for patients, providers, and payers.”

Currently, One Medical is a primary-care company that claims to share Amazon’s customer-focused approach to health care, providing a range of digital services, including wellness apps and 24/7 virtual care. Feeding what WSJ says is a growing need for convenience through the pandemic, One Medical lets members schedule appointments, renew prescriptions, and message their doctors in an app.

It has not been a total success story, though. Almost half a billion of Amazon’s investment in One Medical is paying off the company’s debt.

One Medical also recently came under fire in 2021 during a Congressional investigation into how it administered COVID-19 vaccines when they first became available in December 2020.

The investigation surfaced emails and internal chat messages that Congress says showed that One Medical leveraged its supply of vaccines to push costly membership subscriptions. Congress reports that One Medical successfully signed up close to 400 members by making it easy to get a vaccine by purchasing a membership for $199 and difficult to get one if you didn’t pay for the membership. One senior exec chatted to another, “the only way people can get a vaccine is if they are a member.”

In addition to accusations about profiting from vaccine scarcity, Congress says One Medical also hoarded vaccines for staff, their friends, and their families, giving them early access to sign up for an appointment, even if they weren’t eligible for a vaccine yet. Congress concluded, “One Medical’s willful disregard of proper vaccination prioritization contributed to a delay in vaccination of members of vulnerable communities.”

The Hill reported that “a One Medical spokesperson called the memorandum ‘grossly unfair,’ noting the company ‘was not given the opportunity to address the staff’s findings before the memorandum was released.'” The spokesperson also said that “claims that One Medical used its vaccines to promote the company’s interests, convince more people to become members,” or offer improper vaccinations to friends and family were false.

Congress’ investigation did not disrupt One Medical operations much. NPR reported that Washington state and nearby counties stopped allocating vaccines to One Medical because of the scandal.

Rubin was leading the company at the time. He has been CEO of One Medical since 2017 and has previously held executive roles for decades at health care companies, including a recent stint at UnitedHealth Group.

Congress’ recent investigation into One Medical’s untimely delivery of vaccines to vulnerable communities is not mentioned in the joint press release from Amazon and One Medical. Instead, Lindsay expresses full confidence in how One Medical handles delivery of patient care, saying Amazon will benefit from One Medical’s “human-centered and technology-powered approach to health care,” which Amazon believes “can and will help more people get better care, when and how they need it.”

https://arstechnica.com/?p=1868616