In a move described by some political figures and privacy advocates as “dangerous,” Amazon said it agreed to a $3.9 billion all-cash deal to buy One Medical, a San Francisco-based private health services provider.
If completed, the deal will give Amazon access to One Medical’s 188 primary care practices and its 767,000 members, who pay approximately $200 in concierge fees annually to access the provider’s services, CNBC reported.
Amazon also will acquire One Medical’s subscription telehealth service, in-house electronic health-record system and established contracts with employers who hire One Medical to provide healthcare services to their employees.
The One Medical transaction represents Amazon’s third-largest acquisition, following Whole Foods ($13.7 billion) and MGM Studios ($8.5 billion).
One Medical reported a net loss of $90.9 million for the quarter ending March 31, according to its most recent filing with the U.S. Securities and Exchange Commission.
Amazon and One Medical said the deal reflects their shared objective to “reinvent” healthcare.
Neil Lindsay, Amazon’s senior vice president of health services, told The Washington Post — owned by Amazon founder and executive chairman Jeff Bezos — that “we think healthcare is high on the list of experiences that need reinvention.”
“We love inventing to make what should be easy easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years.”
One Medical CEO Amir Dan Rubin — who will continue to run the company after the purchase is finalized — described the deal as presenting “an immense opportunity to make the healthcare experience more accessible, affordable, and even enjoyable.”
Not everyone sees the deal as a positive “opportunity” for healthcare consumers — including some members of Congress and advocacy groups who cited antitrust considerations, others who raised privacy concerns and suggested the deal could undermine Medicare.
Amazon ‘Has a History of Engaging in Business Practices That Raise Serious Anticompetitive Concern’
Amazon’s purchase of One Medical is subject to the normal regulatory approval process, according to The Lever.
But the deal immediately raised red flags among some members of the U.S. Senate, including Sen. Bernie Sanders (I-Vt.), who demanded the U.S. Department of Justice reject Amazon’s acquisition of One Medical.
The function of a rational health care system is to provide quality care to all in a cost-effective way, not make billionaires like Jeff Bezos even richer. At a time of growing concentration of ownership, the Justice Department must deny Amazon's acquisition of One Medical. https://t.co/ekpJdTbf2N
— Bernie Sanders (@SenSanders) July 21, 2022
Sen. Amy Klobuchar (D-Minn.), who chairs the Senate Judiciary Committee’s antitrust subcommittee, formally requested the U.S. Federal Trade Commission (FTC) investigate the deal.
Klobuchar said the acquisition “raises questions about potential anticompetitive effects related to the pharmacy services business Amazon already owns and about preferencing vendors who offer other services through Amazon.”
In a letter to the FTC, Klobuchar wrote:
“Amazon has a history of engaging in business practices that raise serious anticompetitive concerns, including forcing small businesses on its site to buy its logistics services as a condition of preferred platform placement, using small businesses’ non-public data to compete against them, and, as was recently disclosed in new documents from the House Judiciary Committee’s Big Tech investigation, potentially restricting advertising by competitors who could offer lower prices and better service.
“In addition, Amazon has been accused of misrepresenting facts when testifying under oath to Congress, a matter which has been referred to the Department of Justice for further investigation.“
Legislation is pending before Congress that would strengthen antitrust regulations, but it appears to be stalling, according to Eleanor M. Fox, professor of trade regulation at the New York University School of Law.
Fox told The Defender:
“There’s a lot of legislation pending recognizing this conservative nature of our law, trying to expand it and to make it more elastic and to cover more acts, [such as] the Klobuchar-Grassley bill [proposed October 2021] against a small group of big platforms for preferring themselves over all of their rivals on their platforms.”
Unsurprisingly, Fox said, “Big Tech firms are spending billions of dollars to try to prevent the legislation from being passed.”
According to OpenSecrets, Amazon is the eighth-highest spender on lobbying in the U.S. this year, and has hired a high-powered lobbying firm run by the brother of Steve Ricchetti, counselor to President Biden.
Amazon also reportedly joined a “lobbying coalition” with the aim of encouraging “legislative change regarding home health” — a move that may already be paying dividends for the company.
‘Terrifying’ That Amazon Could Control Healthcare Data for Another 700,000 People
Barry Lynn, executive director of the Open Markets Institute (OMI), voiced harsh criticism for Amazon’s proposed deal.
“U.S. enforcement agencies should block this deal,” Lynn said, and “should move swiftly to establish a basic set of rules to protect every corner of America’s health industry from the power of the manipulation platforms.”
“Every medical professional and medical business in the United States should also play close attention to this deal. Every time Amazon and Google expand their control over the delivery of healthcare to Americans, they also expand their power over doctors, nurses, and rival practitioners.”
Krista Brown, senior policy analyst at the American Economic Liberties Project, voiced similarly scathing criticism, telling The Lever:
“Allowing Amazon to control the healthcare data for another 700,000+ individuals is terrifying. Acquiring One Medical will entrench Amazon’s growing presence in the healthcare industry.”
Brown also said:
“Amazon has no business being a major player in the health care space, and regulators should block this $4 billion deal to ensure it does not become one.
“[The One Medical acquisition] won’t make Amazon the largest player in healthcare, but will further dissolve integrity that is already on shaky territory with the health care system.”
Amazon Will Be Able to Collect ‘Most Intimate and Personal’ Information
Some described Amazon’s healthcare strategy as going “beyond providing care and access” to also gain “data on users.”
Klobuchar, in her call for an FTC investigation into the deal, also raised concerns about privacy and personal health data.
“I also ask that the FTC consider the role of data, including as a potential barrier to entry, given that this proposed deal could result in the accumulation of highly sensitive personal health data in the hands of an already data-intensive company.”
Commenting on the deal, NPR correspondent David Gura tweeted: “Is there anything this corporation won’t know about your day-to-day life?”
Is there anything this corporation won't know about your day-to-day life? https://t.co/HIH9rNmEOM
— David Gura (@davidgura) July 21, 2022
OMI issued a similar warning, highlighting Amazon’s significant and still-expanding ability to surveil and collect data about its customers and influence their decision-making and purchasing decisions.
“Amazon’s takeover of One Medical is the latest shot in a terrifying new stage in the business model of the world’s largest corporations.
“The deal will expand Amazon’s ability to collect the most intimate and personal of information about individuals, in order to track, target, manipulate, and exploit people in ever more intrusive ways.
“Every American should stand against this radical extension of corporate power into our lives. In addition to manipulating how we talk to one another and do business with one another, Amazon, Google, Facebook, and Apple are moving fast to manipulate our perceptions of our own health and wellbeing.”
Brown said the deal “will also pose serious risks to patients whose sensitive data will be captured by a firm [Amazon] whose own Chief Information Office once described access to customer data as ‘a free for all.’”
Similar concerns about the amount of data consumers are giving up for the sake of convenience arose earlier this year in the U.K, where Amazon already works with the publicly run National Health Service (NHS).
Amazon’s agreement with the NHS allows Alexa to trawl the NHS database for answers to common health questions. However, testing conducted by Privacy International found that, in numerous instances, Alexa provided answers that did not come from the NHS — further indicating privatization of health services.
According to Lynne Dunbrack, group vice president for public sector for the International Data Corporation (IDC):
“Over time, one could envision these consumer devices connecting with Amazon Care: think ‘Alexa, I’d like to schedule an Amazon Care appointment.’ Or the Halo Band could be used to support chronic condition management by sending data from patients with chronic conditions for monitoring, and alerts could be sent to Amazon Care healthcare providers to flag up when clinical intervention is required.”
“As they start to get more into that space, there’s a lot of data that could suddenly become very important and could find its way into AWS, for instance, and it could be used to help train analytic models, or as a commercial data set that is provided to AWS clients, in an anonymized and privacy protected way, but that could be a really valuable asset.”
Does the Deal Pose a Threat to Medicare?
With Amazon’s acquisition of One Medical, Brodwin said “now Amazon’s got a clear foothold there.”
Amazon just set its health care efforts to warp speed. in addition to One Medical's primary care clinic network, it now has: pharmacy (Amazon Pharmacy), fitness trackers (Halo), and even more IRL/virtual care (Amazon Care, Crossover). what's left?
— Erin Brodwin ✨ (@erinbrodwin) July 21, 2022
According to The Lever, Amazon’s purchase of One Medicine could allow it to “use its new platform to advance the cause of Medicare at a much more aggressive pace.”
“The consequences,” according to The Lever, “wouldn’t just mean more taxpayer dollars funneled to the mega-corporation, but also Medicare recipients facing a healthcare system with ever more resources being allocated to profit instead of care.”
Such privatization would continue an ongoing trend in which a Medicare privatization scheme known as ACO REACH assigns Medicare patients involuntarily to private health plans operated by for-profit companies, which then receive a set amount from Medicare for the care of each patient.
This incentivizes the private health providers to limit the amount they spend per patient.
In fact, according to One Medical’s most recent quarterly report, more than half of its revenue already comes from Medicare — and from programs such as ACO REACH and Medicare Advantage plans provided by private health insurers.
The company’s most recent annual report states that a “significant portion of our revenue comes from government health care programs, principally Medicare.”
“Any changes that limit or reduce the [ACO REACH model or] Medicare Advantage could have a material adverse effect on our business, results of operations, financial condition and cash flows,” according to the report.
The Lever further reports that Amazon Web Services (AWS), which is the recipient of substantial government contracts that significantly contribute to Amazon’s high profits, may seek to leverage its cloud computing services to obtain contracts that would essentially lead to further privatization of Medicare.
Programs such as ACO REACH and the backdoor privatization they encourage have caught the attention of the Congressional Progressive Caucus.
In May, Rep. Pramila Jayapal (D-Wash.), a member of the caucus, described ACO REACH as “Medicare privatization, hidden in layers of bureaucracy,” which allows third parties to take for themselves as profit “whatever they don’t want to spend as the patient.”
Nevertheless, according to The Lever, the Biden administration continues to implement the ACO REACH program.
One Medical Deal Part of Broader Amazon Healthcare Strategy
As part of this Amazon-run healthcare “experience,” the company appears to be looking to apply successful business models from its other products to medical services.
“Through services like Prime, Amazon has got consumers used to being able to expect to get things delivered in hours with just one click: it’s raised our expectations of how businesses should work and now we’re finding that old school business models – waiting on the phone to book a doctor’s appointment, travelling to their offices, waiting for the doctor to be free – are increasingly frustrating.
“That’s something that Amazon Care is looking to change, offering 24/7 consultations and healthcare professionals that will come to users where they are, rather than the other way around.”
As The Defender reported in April, Amazon Care was introduced in September 2019, and is characterized by the company as “a new kind of healthcare” that is “built around you, your life, and your schedule.”
Amazon described Amazon Care — whose mission is “to be the Earth’s most customer-centric company” — as an effort “to bring the most patient-centric health care to customers when and where they need it,” and combine “the best of virtual care and in-person services … as more and more organizations look for convenient, comprehensive, high-quality health care solutions.”
These services include “clinicians on your schedule” that would be available online, “care that comes to you” via “at-home follow-up” visits for “labs, tests, and treatment,” “convenient testing options” for COVID and “dedicated care teams.”
The company adds it is “working in lockstep with our customers to address their growing needs.”
Amazon Care was originally offered just to Amazon employees but has since expanded to other large employers. Silicon Labs, TrueBlue and Whole Foods Market (owned by Amazon) have joined the lineup of companies offering Amazon Care to their employees nationwide.
In 2018, Amazon purchased online pharmacy PillPack for $750 million and merged its services with Amazon Care. Two years later it launched Amazon Pharmacy and earlier this year it expanded Amazon Care Telehealth.
Earlier this month, Amazon announced it is collaborating with the Fred Hutchinson Cancer Center to develop “personalized” cancer vaccines for patients suffering from late-stage melanoma skin cancer and certain breast cancers that have metastasized or are unresponsive to other treatments.
As part of this collaboration, Amazon is providing “scientific and machine learning expertise.”
Amazon reportedly previously was part of a secret project to develop a vaccine for the common cold.
The company also was extensively involved in public health measures related to COVID-19 via:
- A partnership with CVS Health and Thermo Fisher Scientific to promote employer-based COVID-19 testing.
- Utilization of its AWS cloud computing infrastructure to make its COVID-19 “data lake” available to the public.
- Collaboration with the Yale School of Public Health and nonprofit consortium Volunteer Surge to recruit and train 1 million healthcare workers to provide COVID-19 care.
- Linking up with 17 large health systems and Big Tech companies to form the “COVID-19 Healthcare Coalition,” with the aim of coordinating pandemic response efforts via the use of data analytics.
Amazon also is venturing into primary care, utilizing its virtual digital assistant, Alexa, to provide an “at-home care model” for seniors.
According to ZDNet, Amazon Care was developed, in part, to “improve health outcomes for its staff” — but it could also be used to monitor employees.
ZDNet also quoted Arielle Trzcinski, a principal analyst for Forrester, a healthcare provider, who said monitoring devices such as the Halo, could help Amazon “track employees’ health over a long period.”
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