NEW YORK (Washington Insider Magazine) – In a deal estimated to be worth $3.9 billion, Amazon will buy the primary care company One Medical, continuing its expansion into the healthcare industry.
The Seattle-based e-commerce behemoth said on Thursday that it will acquire One Medical for $18 in cash per share. One of Amazon’s largest purchases, it follows its $13.7 billion acquisition of Whole Foods in 2017 as well as its $8.5 billion earlier this year completed acquisition of Hollywood studio MGM.
One Medical is a membership-based service that provides both virtual treatment and in-person appointments. Its parent business is the San Francisco-based 1Life Healthcare, Inc. In order to offer its health services to employees, it also partners over 8,000 companies.
According to its first quarter financial report, which also indicated the corporation had sustained a net loss of $90.9 million despite bringing in $254.1 million in sales, One Medical had around 767,000 members as well as 188 medical offices as of March across 25 markets. One Medical’s debt is included in the deal’s overall worth, which was revealed on Thursday.
According to Neil Lindsay, senior vice president of Amazon Health Services, the purchase aims to reimagine the way people access health care for activities like making appointments and going to the pharmacy.
Overall, during the COVID-19 epidemic, customer demands for telemedicine and online doctor visits skyrocketed. Employers and insurers who pay for medical expenses are concentrating more on ensuring that patients have better access to treatment, maintain a healthy lifestyle, visit their physicians frequently, and take their prescribed medications.
For years, the cost of health care has increased more quickly than inflation and salaries, putting a significant burden on businesses that provide insurance. Insurance companies and businesses believe that by getting people access to routine treatment, they may avoid costly hospital visits or stop chronic conditions such as diabetes from developing into more serious issues.
With this acquisition, Amazon expands its venture into the newest sector it is looking to upend: health care services. Prior to launching its own online pharmacy where consumers may acquire medication or prescription refills and have them brought to their front door in a few days, it purchased the online pharmacy PillPack for $750 million in 2018. It started making its Amazon Care telemedicine service available to companies nationwide last year. According to experts, the most recent agreement would enable it to strengthen the employer clientele it has been working to cultivate.
It is hardly surprising that Amazon is increasing its presence in the healthcare industry, according to Neil Saunders, managing director of GlobalData Retail. The corporation is seeking fresh prospects for development as its cloud computing and retail operations mature, according to Saunders. The difficult yet highly profitable field of health care is appealing. But it’s not always simple to make a large impression.
Additionally, Amazon participated in a brief partnership to reduce healthcare expenses with Berkshire Hathaway and JPMorgan. To improve the care given to their workers and develop better methods to control costs, the three corporate juggernauts established an independent company named Haven. The business was founded in 2018 and chose Dr. Atul Gawande, a well-known author and surgeon, as its CEO. But in 2021, it silently disintegrated.
The newest agreement comes as legislators are investigating Amazon and other Big Tech firms for their market dominance. Shortly after the business’s announcement on Thursday, opponents urged American regulators to halt the acquisition on the grounds that it compromises privacy and gives the company access to yet another important market.
One Medical was the subject of a congressional investigation during the pandemic as a result of allegations the company disregarded COVID-19 vaccination guidelines. The investigation came to a conclusion in December that the corporation had used its access to in-demand coronavirus vaccines to further its commercial objectives and encourage vaccine seekers to become members. Additionally, it stated that the business and its staff gave friends and family immunizations top priority.
Stocks of 1Life Healthcare climbed 68 percent to $17.13 during afternoon trade. According to ABC NEWS, Amazon.com Inc. increased 1.4 percent to $124.50.
The transaction is pending regulatory approval. When everything is finished, Amazon announced that Amir Dan Rubin, CEO of One Medical, will keep his position.
