One Medical is a membership-based primary care service that promises clients “24/7 access to virtual care.” The company operates in a dozen major U.S. markets, according to its website, and works with over 8,000 companies to offer One Medical health benefits to their employees.
In a statement Thursday announcing the acquisition, Neil Lindsay, senior vice president of Amazon Health Services, said the e-commerce giant believes “healthcare is high on the list of experiences that have to be reinvented”. Lindsay added that Amazon hopes to be one of the companies “that will help dramatically improve the healthcare experience in the years to come.”
The acquisition is just the latest example of the tech giant expanding its presence in the healthcare space. Amazon acquired PillPack, an online pharmacy, in 2018 and later launched its own digital pharmacy in the United States. Separately, Amazon has partnered with JP Morgan Chase and Berkshire Hathaway to offer better healthcare and insurance at a lower cost to the three companies’ workers and families, and potentially other companies as well. That effort, called Haven, was shut down last year.
Amazon has expanded its empire from online retail to entertainment, groceries and more in recent years, while expanding its tremendous reach into consumers’ lives. The acquisition of One Medical would be one of the largest in Amazon history. Amazon agreed to buy grocery chain Whole Foods for $13.7 billion in 2017 and earlier this year inked an $8.5 billion deal to buy legendary Hollywood film studio MGM.
The One Medical deal would give Amazon access to healthcare clinics and “payer-hospital system relationships,” Evercore ISI analyst Elizabeth Anderson said in a note Thursday morning.
Headquartered in San Francisco, One Medical has seen an increase in demand for its services in recent years amid the Covid-19 pandemic and the rise of the telemedicine sector. In its most recent quarterly report, One Medical said it had a total membership of 767,000, up 28% year over year. One Medical went public in January 2020. Shares of 1life Healthcare (ONEM), parent company of One Medical, rose more than 65% in early trade Thursday after the announcement. Amazon stock opened relatively flat on Thursday. (Shares of CVS Health Corp and Walgreens Boots Alliance fell slightly Thursday morning after the news.)
The transaction is subject to One Medical shareholder and regulatory approvals.
While Anderson argued that given Amazon’s limited presence in healthcare, there was minimal antitrust risk, some tech industry critics were quick to voice concerns about the deal and the data the company could access.
“For Amazon to have backdoor access to private healthcare data is frankly a terrifying thought and underscores the urgent need for Congress to pass antitrust reform to stop these tech giants from abusing their monopoly,” said Sacha Haworth, executive director of the Tech Oversight Project advocacy, CNN Business said in a statement.