Summary Bullets:
• Amazon caught both the tech and healthcare industries off guard when it announced it had reached an agreement with One Medical to acquire the tech-centric healthcare provider for $3.9 billion.
• The deal raised some regulatory red flags as critics questioned the data privacy implications of having a large retailer with a massive cloud platform having access to patient records.
Amazon’s planned One Medical acquisition stunned both the healthcare and technology industries. While the deal is not the retailer’s first foray into healthcare, the value of the deal and the pairing with Amazon’s other interests in both brick-and-mortar retail (Whole Foods and Amazon Fresh) and pharmaceuticals (PillPack) show just how serious the company is about pursuing an outsized role in the medical industry. One Medical, which operates just under 200 clinics, offers patients a subscription-based telehealth service, which dovetails with Amazon’s own Prime model.
One Medical could add a new prospect pool for Amazon’s cloud services arm. But this also begs the question of patient privacy with some legislators protesting the deal. Based on Amazon’s monopolistic reputation, Senator Amy Klobuchar (D-Minnesota), asked the Federal Trade Commission to investigate the deal. Both Amazon and One Medical rejected any concerns about patient data privacy saying that both entities would adhere to all Health Insurance Portability and Accountability Act (HIPAA) regulations.
Others flagged potential issues around patient care. Amazon, which has garnered a reputation of poor treatment of its own labor, is well known for hyper-efficiency. Associating that hypervigilance on removing costs and potentially streamlining patient care to the point of delivering unacceptable healthcare outcomes has critics and some One Medical patients crying foul.
Amazon has made several investments in healthcare over the years including the aborted Haven partnership with Berkshire Hathaway and J.P. Morgan Chase. But it may be its brick-and-mortar presence through Whole Foods and Amazon Fresh that has industry watchers question how expansive it will get in healthcare. Amazon could potentially sell pharmaceuticals through those outlets.
And through its Amazon Web Services unit, Amazon already has abundant access to consumer and corporate data. If the deal closes successfully, Amazon will now also own the data of some 750,000 patients.
IT Connection 