With $3.9B One Medical Deal, Amazon Extends Healthcare Reach

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On July 21st, Amazon and One Medical revealed their intentions to join in a $3.9 billion transaction that would see the retail behemoth continue its ambitious spree of healthcare purchases. According to the merger agreement’s provisions, Amazon will buy One Medical in an all-cash deal for $18 per share, subject to the usual closing requirements.

Headquartered in San Francisco, One Medical is a technology-focused primary healthcare organisation that provides in-person, online, and virtual care services with the goal of enhancing its clients’ access to healthcare, according to the company. One Medical CEO Amir Dan Rubin, who will persist in that position, said in a statement that the chance to reshape health care and improve consequences by incorporating One Medical’s human-centered and technology-powered prototype and outstanding team with Amazon’s customer fascination, background of innovation, and willingness to spend in the longterm is so exciting.

He said that by working with Amazon, the agreement would make primary care more approachable, inexpensive, and even fun for patients, clinicians, and insurers. Over the past few years, Amazon has made significant investments in the healthcare industry, and this is one of its most significant declarations yet that it intends to play a significant role in the future provision of both telehealth and in-person treatment across the United States.

The SVP of Amazon Health Services, Neil Lindsay, stated in a statement that they believe health care is high up on the list of experiences that need reimagining. They see lots of possibilities to both enhance the customer’s experience and give the people back precious time in their lives, he said. Booking a meeting, having to wait weeks or months to be seen, taking time off from work, driving to a health centre, discovering a parking spot, waiting in the reception area, then the exam room for what is very often a hasty handful of minutes with a physician, and making a further trip to a drugstore.

According to market commentators, the agreement benefits both companies, at least on paper. Paddy Padmanabhan, CEO of Damo Consulting, who has written at length about Amazon, Big Tech, digitalization, and the consumerization of healthcare, stated that Amazon is delving into the next phase of growth with the recent reconfiguration of the healthcare business and the consolidation of all the different units such as Pillpack and AmazonCare into one leader. The One Medical purchase not only complements AmazonCare’s efforts to improve the primary care service, but it also helps the company with scaling issues in a competitive labour market, Padmanabhan said. Additionally, this is a strategy that One Medical can use to avoid the shaky financial and economic picture in the long run.

The acquisition by the e-commerce and cloud services firm provides One Medical with a roadmap to sustainable growth in a marketplace where the struggle for general practise is intensifying and top health systems ramp up their consumer digital initiatives to drive growth and retention, the executive continued. However, he issued a warning that the purchase raises intriguing problems regarding how more established clients of AWS’s health system will perceive Amazon’s audacious entry into the primary care market.

According to Padmanabhan, only Oracle’s acquisition of Cerner is thus close to the company’s core business of providing healthcare services.