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Amazon will acquire the primary care organization One Medical in a deal valued roughly at $3.9bn, marking another expansion for the retailer into healthcare services.
One Medical, whose parent company is the San Francisco based 1Life Healthcare, Inc., is a membership-based service that offers virtual care as well as in-person visits. It also works with more than 8,000 companies to provide its health benefits to employees.
Overall, consumer demand for telemedicine and virtual health care care visits exploded during the Covid-19 pandemic. Healthcare bill payers like employers and insurers are also becoming more focused on improving access to patient care and making sure their patients stay tuned in to their health, see their doctors regularly and take their prescriptions.
Healthcare costs have risen faster than wages and inflation for years and represent a huge expense to employers that offer coverage. Employers and insurers think that by connecting people to regular care, they can prevent expensive hospital stays from happening or keep chronic conditions like diabetes from leading to bigger problems.
For Amazon, the acquisition deepens its foray into healthcare services, the latest industry the company has sought to disrupt. In 2018, it bought the online pharmacy PillPack for $750m before opening its own online drug store that allows customers to order medication or prescription refills and have them delivered to their front door in a couple of days. And last year, it began offering its Amazon Care telemedicine program to employers nationwide.
In afternoon trading, shares of 1Life Healthcare surged 69% to $17.17. Amazon added less than 1% to $123.75.
