COVID opens new door for Amazon health care ambition
Attitudes toward healthcare shifted during the pandemic — providing Amazon a new opportunity to keep going with its health ambitions.
Why it matters: The company hasn't had much success with its existing attempts in the space — but experiences during COVID have made consumers more willing to try different forms of health care and to share associated data.
Catch up quick: The tech giant announced a $3.9 billion deal today to acquire One Medical, which offers virtual health care and operates close to 200 primary care offices.
State of play: The deal adds to Amazon's already-booming health conglomerate, Axios Pro’s Erin Brodwin and Sarah Pringle note.
- Among existing services: diagnostics, prescription delivery and virtual on-call pharmacists, as well as virtual, in-person and in-home health care through Amazon Care.
- None, however, have significantly improved on traditional pricing or experiences.
Nevertheless, "Anyone competing with [Amazon] should be terrified," one source told Erin and Sarah.
Hope's thought bubble: Today's news is giving me flashbacks to the day Amazon announced it was buying Whole Foods and then shares of grocers like Kroger and Walmart tanked.
- Health care is much more complicated to operate than grocery stores. But the strategy seems similar in that Amazon gains more physical real estate and proximity to consumers.
- Lastly, boosting the benefits of Amazon Prime can never be underscored enough when it comes to understanding how the company thinks about changing its business. The membership could become even more attractive if health care services were somehow included down the line. Amazon already offers discount pricing at Whole Foods and of certain prescriptions to Prime members.
What to watch: Regulatory hurdles and One Medical's shareholder approvals.
- Amazon's stock closed up 1.5% today, while shares of One Medical's parent company, 1Life Healthcare, shot up 69.5%.