HBI does not often report on deals taking place “across the pond” so when something does make our pages, it’s significant, and a portent of things to come. Amazon’s staggering $3.9bn acquisition of One Medical which we covered earlier this month certainly fits the bill in both regards. Here come the tech disrupters.
The tech giant’s acquisition of the primary care provider is another huge step towards an inevitable global trend – the retailisation of healthcare.
Increasingly, players with no or a limited history of investment in healthcare – such as shipping company MSC (which bought into South Africa-based multinational hospital giant Mediclinic last year) or Wallgreen Boots Alliance or Wallmart – have been flashing the cash.
Amazon already has a telehealth platform, Amazon Clinic, on which patients can connect with health care providers in their area and book appointments. The platform helps patients locate and connect with health care providers, similar to Doctolib in France. And it has an online pharmacy PillPack.
But the One Medical acquisition is different. It means it will be the first big tech company to become an operator of bricks-and-mortar health care services. Paid annual memberships, set at $199, will give access to on-demand and virtual care.
The words of Amazon CEO Andy Jassy offer an interesting peek into how he sees the future – and traditional operators need to take note or risk being left behind: “If you fast forward 10 years from now, people are not going to believe how primary care was administered.
“For decades, you called your doctor, made an appointment three or four weeks out, drove 15-20 minutes to the doctor, parked your car, signed in and waited several minutes in reception, eventually were placed in an exam room, where you waited another 10-15 minutes before the doctor came in, saw you for five to 10 minutes and prescribed medicine, and then you drove 20 minutes to the pharmacy to pick it up – and that’s if you didn’t have to then go see a specialist for additional evaluation, where the process repeated and could take even longer for an appointment.”
He is not alone in sensing that things are about to change. By 2030, non-traditional players could own as much as 30% of the primary care market, according to a Bain & Company analysis.
Amazon has deep pockets and is already in the race. With Apple using its watch and phone tech to build relationships with payors and health systems, and Google leveraging its expertise in AI and its enormous data platform which connects its devices, it looks like the heavyweight tech disruptors are warming up to go toe to toe with the status quo.
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