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Amazon is buying primary care tech provider One Medical for $3.9B

·4-min read

Amazon's interest in healthcare and being a major player in that industry is taking one big step forward today. The company has just announced that it intends to buy One Medical, a primary care provider that leverages in-person, digital and virtual interactions in its services. One Medical went public in 2020 and Amazon said it will be paying $18/share for the company, working out to an enterprise value of $3.9 billion.

Amazon is so far not saying much at all about its plans for One Medical under the wing of Amazon. Amazon is so far not saying much at all about its plans for One Medical under the wing of Amazon. It's not clear, for example, if it will remain an independent company or whether it will be integrated into Amazon's wider healthcare strategy. The e-commerce and cloud services behemoth has been making a number of inroads into the field under its own steam, including launching an online pharmacy and building an on-demand healthcare services platform.

But the rise of services like One Medical's notionally fit very closely into a wider vision of digital services -- replacing those same services delivered by more traditional, and often analogue, means -- as played out by Amazon across a number of other verticals.

“We think health care is high on the list of experiences that need reinvention. Booking an appointment, waiting weeks or even months to be seen, taking time off work, driving to a clinic, finding a parking spot, waiting in the waiting room then the exam room for what is too often a rushed few minutes with a doctor, then making another trip to a pharmacy – we see lots of opportunity to both improve the quality of the experience and give people back valuable time in their days,” said Neil Lindsay, SVP of Amazon Health Services, in a statement.

“We love inventing to make what should be easy easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years. Together with One Medical’s human-centered and technology-powered approach to health care, we believe we can and will help more people get better care, when and how they need it. We look forward to delivering on that long-term mission.”

“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,” added Amir Dan Rubin, One Medical CEO. “There is an immense opportunity to make the health care experience more accessible, affordable, and even enjoyable for patients, providers, and payers. We look forward to innovating and expanding access to quality healthcare services, together.”

One Medical works on both a direct-to-consumer model, as well as by selling services via companies in their health plans for employees. It has more than 8,000 organizations as B2B2C clients currently.

The company, which was backed by Google and others during its phase as a startup, has had its share of ups and downs. We wrote about a data leak at the company in 2021 that exposed hundreds of customers' email addresses. (From what we understand, at least one of One Medical's significant shareholders, Carlyle, is exiting the company completely.)

Amazon has been making inroads, and laying out its ambitions, in healthcare for a number of years already. It has made acquisitions toward online pharmacy services, such as PillPack, and launched products off the back of that. It's also built out is own on-demand healthcare services, which is where One Medical may be situated in the bigger company longer term. And it's been looking at healthcare as an enterprise opportunity as well, for example exploring integrations of Alexa into healthcare environments.

But not all of those initiatives have been completely successful. In 2018, it formed a JV with JP Morgan and Berkshire Hathaway to build an employee healthcare operation, appointing a high-profile doctor to lead it. But that service never appeared to take shape as expected and shut up shop in 2021.

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