But already, privacy advocates are raising concerns about the consequences of the tech giant — which already knows what millions of customers have purchased and asked Alexa — getting access to patients’ health care records. And some of Amazon’s health care efforts have stumbled in the past.
Primary care is often focused on helping patients make improvements to their lives, and Amazon could use the acquisition to point people to buy nutritional food at Whole Foods or get prescriptions from Amazon Pharmacy, said Daniel Grosslight, a healthcare tech research analyst at Citi.
“It’s really the entry point for Amazon,” he said. “And then it’s about what else can Amazon do with a patient.”
Health care is in need of reinvention, said Neil Lindsay, senior vice president of Amazon Health Services, in the release announcing the deal, and the combo will aim to improve the quality of service for customers. (Amazon’s founder, Jeff Bezos, owns The Washington Post.)
One Medical is a membership-based primary care provider that uses a strategy of planting offices close to where people work, and it has billed itself as more of a tech company by allowing members to use an app to book appointments and track health records. Headquartered in San Francisco, the company operates 188 offices in major metro areas including Atlanta, Chicago, Los Angeles and the District.
It has 767,000 members, and patients are typically charged an annual subscription fee of $199. But the company is not profitable, according to its most recent quarterly report.
Other big tech giants, including Google, Microsoft and Apple, have also made forays into health care in recent years, drawn to the industry’s huge size and relative lack of technical prowess. But the moves have also drawn scrutiny from regulators and privacy advocates, who worry about the growing access to sensitive data the companies wield.
That’s been heightened in recent weeks, following the Supreme Court decision overturning the landmark abortion rights ruling Roe v. Wade, raising questions about how personal data could be used by state agencies to surveil and punish people seeking reproductive health services, including abortions.
In a letter Wednesday, six House Democrats demanded to know whether major cloud computing players Oracle and Amazon Web Service are taking steps to “protect the privacy rights of those seeking to exercise their reproductive rights.”
“Data collected and sold by your company could be used by law enforcement and prosecutors in states with aggressive abortion restrictions,” the lawmakers wrote, with particular concern about the collection and use of location data.
Amazon, which got its start in the 1990s as an online book retailer, has grown its business over the past twenty plus years to encompass a delivery network roughly the size of UPS, a dominant cloud provider that allows companies to store data remotely and a vast ecosystem of Alexa-powered devices. And it has grown its Prime membership program to more than 200 million globally.
The company frequently takes a spaghetti-against-the-wall approach to building its businesses, and sometimes fails.
Amazon in the past has turned to acquisitions to quickly expand its reach and expertise, including with its nearly $14 billion purchase of Whole Foods in 2017 and more recently its $8 billion bid for movie studio MGM. The company for years had worked to build both its grocery business and studios, and those acquisitions provided a quick way for Amazon to get a jump-start.
The acquisition of One Medical — which is considered something of a boutique service and already follows a subscription business model — is likely to provide a similar boost to Amazon’s existing health care businesses.
“To me, this acquisition today is as relevant to health care as what the acquisition of Whole Foods was to the grocery industry,” said Tom Andriola, chief digital officer for University of California Irvine.
Amazon has long tried top break into the healthcare space. In 2020, Amazon debuted Amazon Pharmacy, two years after it acquired online pharmacy PillPack for $753 million. And it’s built Amazon Care, which offers telehealth visits for employees of certain companies including Hilton in some cities.
In leaked audio of an all-hands meeting in November, Amazon’s chief executive Andy Jassy told staff that Amazon Care is one of the company’s top innovations, highlighting that the division is aiming to expand through partnerships and new services, Insider reported earlier this year.
Amazon Web Services offers specific products for healthcare and a healthcare accelerator for startups, and counts Moderna among its customers. The company has also used its Amazon Business e-commerce offering to target hospitals, according to reports.
But some of Amazon’s prior health care initiatives have also floundered. Haven, an ambitious effort by three of America’s most prominent companies — Amazon, JPMorgan Chase and Berkshire Hathaway — to address soaring health-care costs and improve patient outcomes shuttered last year after two years.
Some critics have already raised concerns about Amazon getting too close to patient health care information.
“Amazon’s takeover of One Medical is the latest shot in a terrifying new stage in the business model of the world’s largest corporations,” said Barry Lynn, the executive director of the left-leaning Open Markets Institute, said in a statement. “The deal will expand Amazon’s ability to collect the most intimate and personal of information about individuals, in order to track, target, manipulate, and exploit people in ever more intrusive ways.”
Amazon said in a statement Thursday that the deal won’t change the fact that One Medical has to comply with HIPAA.
“Both One Medical and Amazon have stringent policies protecting customer privacy in accordance with HIPAA and all other applicable privacy laws and regulations,” Amazon spokeswoman Angie Quennell said in a statement. “Customers’ Protected Health Information (PHI) is protected by Amazon’s practices and by law, including HIPAA, and we will retain our focus on this as we continue to grow our healthcare businesses, including the acquisition of One Medical.”
She declined to comment on whether Amazon would integrate One Medical services with any of its own services.
Amazon announced the acquisition amid heightened antitrust scrutiny of its business in Washington.
Lina Khan (D) ascended to the helm of the Federal Trade Commission last year with wide expectations that she might pursue a lawsuit against the company, following her groundbreaking academic work that argued the company violates competition laws.
Because of the deal’s size, Amazon will be required to report the merger to both the Federal Trade Commission and Department of Justice for antitrust review. When asked about Amazon’s increasing expansion into healthcare during a June interview, Khan told The Washington Post that “our current approach to thinking about mergers still has more work to do to fully understand what it means for these businesses to enter into all these other markets and industries.”
Amazon’s $18 a share offer represents a 77 percent premium for the subscription-based provider. Shares of 1life health care Inc, One Medical’s parent company, soared more than 68 percent, to just above $17, following the announcement.
Cat Zakrzewski and Christopher Rowland contributed to this report.
