Amazon’s $3.9 billion acquisition of One Medical moves a step forward

The Oregon Health Authority has given Amazon the green light to acquire primary care company One Medical, removing a major obstacle from their path.

On December 28, the Oregon Health Authority’s (OHA) Healthcare Market Oversight program granted its approval to One Medical’s transaction, albeit with a few conditions. This was necessary due to the fact that One Medical already runs five clinics in Portland.

After a thorough analysis, the OHA concluded that this transaction is unlikely to drastically lower access to cost-effective healthcare in Oregon.

In the areas where One Medical is present in Oregon, there are a plethora of other options which offer similar services. Consequently, the Oregon Health Authority doesn’t think that this transaction will cause prices to rise.

By joining forces with Amazon and its innovative supply chain, One Medical could experience improved productivity while still not needing to pass any savings on to consumers, according to the agency.

As long as Amazon and One Medical submit regular reports to provide information on the services they offer, their patients, quality of care and any changes with regards to their governance or organization every six months for a period of five years after this transaction is approved, then it may proceed.

The OHA further stated that they would be observing the ramifications of this transaction over a span of five years, conducting evaluations annually and bi-annually to properly assess the outcome.

The Federal Trade Commission is yet to approve Amazon’s multimillion-dollar purchase of One Medical, valued at $3.9 million.

Commenting on the matter, an Amazon spokesperson provided this statement:

“We continue to work cooperatively with OHA and the FTC in their reviews of this transaction.”

In late July, news of the intended acquisition spread like wildfire.

In late autumn, the FTC commenced an inquiry into the deal between 1Life Healthcare (parent company of One Medical) and Amazon. On September 2nd, both companies received requests from the FTC for additional details as per a filing with the Securities and Exchange Commission.

In December, Seeking Alpha reported that One Medical’s stock decreased by 0.5% due to a report about the FTC sending out inquiries relating to Amazon’s planned acquisition.

The FTC allegedly sent subpoenas both to current and previous customers of One Medical enquiring about Amazon Web Services as part of its inquiry.

If authorized, this agreement would represent another instance of a business outside the regular healthcare sector making headway into primary care. One Medical is a membership-based primary medical service that provides both virtual and physical consultations.

At the time of its announcement, Neil Lindsay, SVP of Amazon Health Services confidently declared his enthusiasm for the potential acquisition saying-

“We think healthcare is high on the list of experiences that need reinvention.”

Neil further added-

“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.” 

Hospitals are being impacted by the “retailization” of healthcare, where pharmacies are becoming formidable competitors.

And Amazon is at the forefront of this movement.

It remains to be seen whether the FTC will approve this acquisition and what its impact will be. In the meantime, it’s safe to assume that Amazon is on an unstoppable mission to revolutionize healthcare.

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