Amazon to buy One Medical for $3.9 billion in major healthcare expansion
Amazon’s offer of $18 per share represents a 77% premium for the subscription provider. Shares of 1life Healthcare Inc, the parent company of One Medical, soared more than 68% to just over $17 after the announcement.
Amazon founder Jeff Bezos owns The Washington Post.
One Medical is a membership-based primary care provider with a focus on digital services and building a seamless relationship with patients. Based in San Francisco, the society operates 188 offices with 767,000 members but is not profitable. The provider lost nearly $91 million in the three months ended March 31.
One Medical’s subscription model and strategy of locating offices close to places of work and shopping attempts to merge the convenience of emergency care with the stability of providing patients with a “medical home”. It touts its user-friendly website and app for booking appointments and tracking health records, similar to the interfaces consumers expect from tech companies, to set it apart from traditional doctor’s offices.
The acquisition significantly expands Amazon’s healthcare reach. In 2020, it launched the new Amazon Pharmacy, two years after acquiring online pharmacy PillPack for $753 million.
The tech giant already operates Amazon Care, which offers telehealth visits to employees of select companies in select cities. In 2021, Amazon landed a major customer, partnering with Hilton to give its employees on the corporate health plan access to Amazon Care services.
And in leaked audio from a November show of hands, Amazon chief executive Andy Jassy told staff that Amazon Care is one of the company’s key innovations, pointing out that the division aims to grow through partnerships and new services, Initiated reported earlier this year.
But Amazon’s earlier health initiatives have also failed. Haven, an ambitious effort by three of America’s largest companies – Amazon, JPMorgan Chase and Berkshire Hathaway – to tackle soaring healthcare costs and improve patient outcomes was shut down last year after two years.