Amazon buys One Medical for $3.9 billion as it increases healthcare footprint

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One Medical is a membership-based primary care provider that promises customers “24/7 access to virtual care”. The company operates in a dozen major U.S. markets, according to its website, and partners with more than 8,000 companies to bring health benefits of One Medical to their employees.

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In a statement announcing the acquisition Thursday, Neil Lindsay, senior vice president of Amazon Health Services, said the e-commerce giant believes “healthcare is high on the list of experiences to be reinvented.” Lindsay added that Amazon hopes to be one of the companies “that will dramatically improve the healthcare experience in the coming years”.

The acquisition is just the latest example of the tech giant expanding its presence in healthcare. Amazon acquired PillPack, an online pharmacy, in 2018 and later launched its own digital pharmacy in the United States. Separately, Amazon worked with JP Morgan Chase and Berkshire Hathaway to provide better health care and insurance at a lower cost to employees and families at the three companies, and possibly other companies as well. That effort, called Haven, stopped last year.

Amazon has broadened its empire in recent years from online retail to entertainment, groceries and more, expanding its vast reach in consumers’ lives. The acquisition of One Medical would be one of the largest in Amazon history. Amazon agreed to buy supermarket chain Whole Foods for $13.7 billion in 2017 and closed an $8.5 billion deal earlier this year to buy iconic Hollywood film studio MGM.

The One Medical deal would give Amazon access to physical health clinics and “payer and hospital system relationships,” Evercore ISI analyst Elizabeth Anderson said in a note Thursday morning.

One Medical, headquartered in San Francisco, has seen demand for its services increase in recent years during the Covid-19 pandemic and the rise of the telehealth 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 for 1life Healthcare (A), the parent company of One Medical, rose more than 65% in early trading on Thursday after the announcement. Amazon stocks opened the relatively flat Thursday. (Shares for CVS Health Corp and Walgreens Boots Alliance fell slightly Thursday morning after the news.)

The deal has yet to be approved by One Medical’s shareholders and regulators.

While Anderson claimed there is minimal antitrust risk given Amazon’s limited healthcare footprint, some tech industry critics were quick to voice concerns about the deal and the data the company could gain access to.

“Amazon’s backdoor access to private health care data is nothing short of a terrifying thought and highlights how desperately Congress needs to push through antitrust reforms to prevent these tech giants from abusing their monopoly power,” Sacha Haworth, executive director of the Tech Oversight Project advocacy group, told CNN Business in a statement.

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