One Medical clinic
For the higher a part of a decade, One Medical has been my primary care provider. It’s convenient, with locations across the Bay Area, and I like having the ability to schedule a same-day physical or get a fast referral to a specialist.
One Medical knows so much about me. Along with a few years of clinic visits and virtual chats, I exploit the mobile app to record my blood pressure and resting heart rate, check my lab results and renew prescriptions as needed. For that, I pay a membership fee of $199 a 12 months.
But I never took under consideration the likelihood that Amazon may at some point own One Medical.
The identical company that sends me countless boxes every week, peppers my Kindle with book recommendations and my smart TV with film suggestions, tells my kids the weather forecast after they call Alexa, and offers Prime discounts after I shop at Whole Foods is about to offer my medical services and own the portals containing my most sensitive information.
I’m not the one one that had this deeply concerning thought on Thursday after waking as much as the news that Amazon had agreed to purchase One Medical for about $3.9 billion. At $18 a share, Amazon is paying a 77% premium to where the first care company was valued a day earlier.
As one member wrote on Twitter, “After a broadly positive experience with One Medical, I cancelled membership today. I don’t trust Amazon to act in good faith with my health data.”
Founded in 2007 and based in San Francisco, One Medical offers clinical services in 16 U.S. markets, with three more coming soon, in response to its website. At the top of last 12 months, the corporate had 736,000 members.
Amazon did little to calm my fears with its acquisition announcement. The corporate said nothing to offer One Medical customers with any comfort, and there was no conference call discussing the acquisition, as is customary with many large transactions. Closure of the deal would require regulatory approvals.
In response to an inquiry for this story, Amazon did offer the minimum level of assurance that it can abide by government regulations, under the Health Insurance Portability and Accountability Act (HIPAA), that limit how the corporate can use protected health information, or PHI. That features all personally identifiable information in addition to medical history, lab test results and other health data.
“As required by law, Amazon won’t ever share One Medical customers’ personal health information outside of One Medical for promoting or marketing purposes of other Amazon services without clear permission from the client,” an Amazon spokesperson said in an email. “Should the deal close, One Medical customers’ HIPAA Protected Health Information might be handled individually from all other Amazon businesses, as required by law.”
In other words, all the things One Medical knows about me is presupposed to stay in that safeguarded silo. Whatever profile Amazon has built on me and my family, from our shopping habits and travel preferences to the shows we watch together on weekends, is not going to commingle with my health data.
Despite the laws, Amazon could have to work hard to persuade consumers — and sure politicians — that its intentions are pure and its predominant goal is to assist “dramatically improve the healthcare experience over the subsequent several years,” as Amazon Health Services lead Neil Lindsay said within the news release announcing the deal.
In any case, alongside its gargantuan retail and cloud divisions, Amazon has built a highly profitable promoting business that generated over $31 billion in revenue last 12 months and grew 58%. Most of that cash comes from brands paying big bucks to advertise their products on Amazon’s properties, where competing for eyeballs is getting pricier.
Amazon controls roughly 13% of the U.S. online ad market, trailing only Google and Facebook, in response to Insider Intelligence.
“I do not think there may be anything Amazon could do to make people trust the corporate with their healthcare information,” said Caitlin Seeley George, campaign director for Fight for the Future, an advocacy group focused on technology and digital rights.
Seeley George said in an email that the problem of health privacy is especially essential after the Supreme Court’s overturning of Roe v. Wade, which ended the constitutional right to an abortion. Certain decisions related to reproductive health that were, until very recently, protected by law can now potentially be considered illegal.
Amazon has already limited sales of emergency contraceptive pills after demand spiked following the Supreme Court’s ruling. And Google said it can work to quickly delete location history for people going to abortion sites.
“Pushing forward into healthcare raises some serious red flags, especially within the post-Roe reality where peoples’ data may be used to criminalize their reproductive healthcare decisions,” Seeley George said.
Seeley George also wonders if, outside of HIPAA regulations, Amazon could roll out a fertility-tracking or mental health app and collect information that “may be used to create assumptions about an person that might be used against them.”
Amazon already has a health tracker called Halo that gathers information similar to body fat percentage, activity levels and sleep.
‘Not their first rodeo’
Techno-optimists will likely scoff at such cynicism. The established order in health care is miserable. Systems are old and do not seek advice from each other, billing is notoriously opaque and sophisticated, and medical care is ridiculously expensive.
Amazon has been pushing into the health space for years, recognizing the system’s many flaws and inefficiencies and attempting to offer higher care to its massive worker base, which jumped to 1.6 million last 12 months from 1.3 million in 2020.
Amazon bought online pharmacy PillPack in 2018 for $750 million and launched Amazon Pharmacy two years later. The corporate has been investing in a telehealth service called Amazon Care, which launched as a pilot for some employees in 2019 and is now available for other employers to supply as a service to their staff.
Deena Shakir, a partner at enterprise firm Lux Capital and investor in quite a few health-tech startups, noted that for Amazon, that is “not their first rodeo in healthcare.”
“Amazon is keenly aware of find out how to handle HIPAA considerations and have experience across multiple products with this,” Shakir wrote in an email. This kind of deal “should encourage additional partnership between larger firms and major health tech players,” she wrote.
Shakir’s firm is an investor in Carbon Health, which offers primary care and urgent care facilities in 16 states. The corporate serves about 1.1 million patients and, in comparison with One Medical, is often targeting a less affluent demographic.
Analysts say Amazon is poised to disrupt the $934.8 billion dollar global pharmaceutical industry.
Carbon Health CEO Eren Bali agrees with Shakir that Amazon is deeply restricted in how it may possibly use the information. Relative to other big tech firms similar to Facebook and Google, he says Amazon receives a good amount of trust from consumers.
But Bali understands why concern may exist. Medical care firms have vast amounts of non-public data, including Social Security numbers, drivers license numbers and insurance cards on top of all of the health information of their systems. Patients are rather more willing handy over personal information to doctors and nurses than to other varieties of service providers.
And while there are strict regulations for a way that data may be used, consumers can reasonably ask what happens if an organization like Amazon were to interrupt the principles.
“There unfortunately aren’t strong technical solutions to implement data access, which is a giant weakness,” Bali said, in an interview. Whether patients should worry about that may be a “personal decision,” he said.
Bali is usually bullish on Amazon’s jump into the space. When Amazon makes a splashy announcement indicating its arrival into an old market with big incumbents, the present players find themselves forced into motion to avoid getting worn out, Bali said.
He cited Amazon’s purchase of PillPack for example. While Amazon has struggled to realize traction within the pharmacy business, entering the market pushed firms similar to Walgreens and Walmart to bolster their digital offerings in ways which might be helpful to consumers, Bali said. The One Medical deal could similarly spark improved services on this planet of primary care.
“Large firms don’t often feel threatened from small startups,” Bali said. “But they’re really threatened by Amazon.”
— CNBC’s Annie Palmer contributed to this report.
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