Amazon’s announcement Thursday that it’s splurging almost $4 billion on a San Francisco healthcare provider is interesting — and potentially troublesome — on a number of levels.
The e-commerce behemoth is acquiring One Medical, a membership-based primary-care service that operates in over two-dozen U.S. markets and provides health benefits to more than 8,000 companies.
The move follows Amazon’s 2018 purchase of PillPack, an online pharmacy.
“We think healthcare is high on the list of experiences that need reinvention,” Neil Lindsay, senior vice president of Amazon Health Services, said in a statement.
“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.”
That’s a pretty sweeping agenda.
On the plus side, few companies are as laser-focused on number crunching as Amazon. If any company can squeeze savings and efficiencies out of the $4-trillion U.S. healthcare market, it’s Amazon.
The company’s tech prowess also positions it for a leadership role in the growing field of telehealth or telemedicine — consulting with a doctor or nurse via phone or video.
COVID-19 has shown telehealth to be a major factor in improving access to healthcare providers and easing the burden of in-office visits.
On the downside, well, it’s Amazon, a company that dominates every market it enters.
A key factor here is One Medical’s membership structure. If there’s anything Amazon knows — and makes the most of — it’s membership services.
On the one hand, as Prime members know, this is a way Amazon can offer cool deals to reward loyalty.
On the other, as Prime members know, membership requirements can limit competition and encourage monopolistic behavior.
At this point, I’m upbeat about Amazon’s focus on being a major healthcare player.
Roughly a third of all healthcare spending in the United States is now squandered on bureaucratic overhead. If Amazon’s data expertise can reduce that waste, this in theory can lower costs for patients.
I’ve also lost hope that lawmakers will do anything significant to address the myriad problems with our largely for-profit medical system. There’s just too much money being made by some very powerful companies for politicians to rock the boat.
Private-sector solutions seem more feasible under the circumstances.
The key thing now is to closely watch Amazon’s moves and subsequent deals, and to regulate the market accordingly.
Again, we spend $4 trillion a year on healthcare. The stakes couldn’t possibly be higher.