Amazon on Thursday announced plans to buy primary care company One Medical for roughly $3.9 billion, marking the technology giant's latest move to expand into the health care industry.
Amazon expands into primary care with One Medical deal
Although primary care has been considered one of the least-profitable areas of medicine, it has been attracting major investments from retailers, health insurers, and drugstore chains in recent years. For example, Walgreens Boots Alliance last year paid $5.2 billion for a controlling stake in clinic chain VillageMD.
Following in these steps, Amazon on Thursday announced plans to expand its own primary care offerings by acquiring One Medical, which is owned by 1Life Healthcare. According to the Wall Street Journal, the deal is valued at approximately $3.9 billion, including the company's net debt.
One Medical, which is a membership-based service that offers both in-person and virtual care, operates 182 medical offices in 25 U.S. markets and works with more than 8,000 companies to provide health benefits to their employees. During the Covid-19 pandemic, One Medical's membership increased significantly, CNN reports, with its latest quarterly earnings report showing a 28% increase year-over-year to 767,000 total members.
"We think health care is high on the list of experiences that need reinvention," said Neil Lindsey, SVP of Amazon Health Services, adding that Amazon sees "lots of opportunity to both improve the quality of the experience and give people back valuable time in their days."
"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," he added. "We look forward to delivering on that long-term mission."
Once the deal closes, One Medical CEO Amir Dan Rubin is expected to continue leading the company, the Journal reports.
"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," Rubin said. "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." (Day/Tozzi, Bloomberg, 7/21; Evans/Herrera, Wall Street Journal, 7/21; Kokalitcheva, Axios, 7/21; Thorbecke, CNN, 7/21; Amazon press release, 7/21)