A medical clinic
A medical one
For almost a decade, One Medical has been my primary care provider. It’s convenient, with locations throughout the Bay Area, and I like being able to schedule a same-day exam or get a quick referral to a specialist.
One Medical knows a lot about me. In addition to long-term clinic visits and virtual chats, I use the mobile app to record my blood pressure and resting heart rate, check my laboratory values and renew prescriptions if necessary. I pay a membership fee of $199 a year for this.
But I never considered the possibility that Amazon might one day own One Medical.
The same company that sends me tons of boxes every week, peppers my Kindle with book recommendations and my smart TV with movie suggestions, tells my kids the weather forecast when they call Alexa, and offers Prime discounts when I shop at Whole Foods is standing about to provide my medical services and own the portals with my most sensitive information.
I’m not the only person who had this deeply troubling thought on Thursday after waking up to the news that Amazon had agreed to purchase One Medical for approximately $3.9 billion. At $18 per share, Amazon is paying a 77% premium to the basic utility company’s value the day before.
As one member wrote on Twitter: “After a largely positive experience with One Medical, I have canceled my membership today.
law and customer trust
One Medical was founded in 2007 and is based in San Francisco. According to its website, One Medical offers clinical services in 16 US markets, with three more to follow shortly. At the end of last year, the company had 736,000 members.
Amazon has done little to calm my fears with its acquisition announcement. The company said nothing to offer comfort to One Medical’s customers, and there was no conference call to discuss the acquisition, as is common with many large transactions. Regulatory approvals are required to complete the transaction.
In response to a request for this article, Amazon offered the minimum assurance that it will comply with government regulations under the Health Insurance Portability and Accountability Act (HIPAA) that restrict how the company can use protected health information (PHI). This includes all personally identifiable information, as well as medical history, laboratory test results, and other health records.
“As required by law, Amazon will never share the personal health information of One Medical customers outside of One Medical for the purposes of advertising or marketing other Amazon products and services without the customer’s express consent,” an Amazon spokesman said in an e-mail. Mail. “Should the deal close, One Medical’s customers’ HIPAA-protected health information will be treated separately from all other Amazon businesses, as required by law.”
In other words, everything One Medical knows about me should stay in this secure silo. Whatever profile Amazon has created of me and my family, from our shopping habits and travel preferences to the shows we watch together at the weekend, will not mix with my health data.
Despite the laws, Amazon has to work hard to convince consumers – and likely politicians as well – that its intentions are pure and its primary goal is to “dramatically improve healthcare over the next few years,” according to Amazon’s Neil Lindsay Health Services said in the press release announcing the deal.
After all, alongside its gargantuan retail and cloud divisions, Amazon has built a highly profitable advertising business that generated over $31 billion in revenue last year and grew 58%. Most of the money comes from brands that spend big bucks to promote their products on the Amazon websites where the competition for eyeballs is getting more and more expensive.
According to Insider Intelligence, Amazon controls around 13% of the US online advertising market, behind only Google and Facebook.
“I don’t think there’s anything Amazon could do to get people to trust the company with their health 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 issue of privacy is particularly important after the Supreme Court ruled Roe v. Wade, which ended the constitutional right to abortion. Certain decisions related to reproductive health, which until recently were protected by law, may now be considered unlawful.
Amazon has already restricted sales of emergency contraceptive pills after demand surged following the Supreme Court ruling. And Google said it will work to quickly clear location history for people going to abortion sites.
“The encroachment into healthcare raises some serious red flags, particularly in the post-Roe reality where people’s data can be used to criminalize their reproductive health decisions,” Seeley George said.
Seeley George also wonders if Amazon could launch a fertility tracking or mental health app outside of HIPAA regulations and collect information that “may be used to create assumptions about an individual that could be used against them.”
Amazon already has a health tracker called Halo that collects information like body fat percentage, activity level, and sleep.
“Not Her First Rodeo”
Techno-optimists are likely to scoff at such cynicism. The status quo in healthcare is miserable. Systems are old and don’t communicate with each other, billing is notoriously opaque and complicated, and medical care is ridiculously expensive.
Amazon has been pushing into the healthcare space for years, recognizing the system’s many flaws and inefficiencies, and seeking to provide better care to its massive workforce, which has grown to 1.6 million in 2020 from 1.3 million last year.
Amazon bought online pharmacy PillPack for $750 million in 2018 and launched Amazon Pharmacy two years later. The company has invested in a telehealth service called Amazon Care, which launched in 2019 as a pilot for some employees and is now available to other employers as a service to their employees.
Deena Shakir, a partner at venture firm Lux Capital and an investor in numerous health tech startups, noted that this is “not her first healthcare rodeo” for Amazon.
“Amazon is very aware of how to navigate HIPAA considerations and has experience with several products with this,” Shakir wrote in an email. This type of deal “should encourage additional partnerships between larger companies and major health tech players,” she wrote.
Shakir’s company is an investor in Carbon Health, which provides primary and emergency care facilities in 16 states. The company serves approximately 1.1 million patients and typically targets a less affluent demographic compared to One Medical.
Analysts say Amazon is poised to disrupt the $934.8 billion global pharmaceutical industry.
Carbon Health CEO Eren Bali agrees with Shakir that Amazon is severely limited in how it can use the data. Compared to other big tech companies like Facebook and Google, Amazon enjoys a fair amount of trust from consumers.
But Bali understands why concerns may exist. Medical supply companies have vast amounts of personal data, including social security numbers, driver’s license numbers, and insurance cards, in addition to all of the health information in their systems. Patients are much more willing to share personal information with doctors and nurses than with other types of service providers.
And while there are strict rules about how this data can be used, consumers can reasonably ask what happens when a company like Amazon breaks the rules.
“Unfortunately, there are no strong technical solutions to enforce data access, which is a major weakness,” Bali said in an interview. Whether patients should worry about this is a “personal choice,” he said.
Bali is generally optimistic about Amazon’s leap into space. When Amazon makes a sensational announcement that it’s entering an old market with large incumbents, existing players are forced to act to avoid being wiped out, Bali said.
He cited Amazon’s purchase of PillPack as an example. While Amazon has struggled to gain a foothold in the pharmacy business, market entry has prompted companies like Walgreens and Walmart to bolster their digital offerings in ways that are beneficial to consumers, Bali said. The deal with One Medical could similarly lead to improved products and services in the world of primary care.
“Big companies don’t usually feel threatened by small startups,” Bali said. “But they’re really being threatened by Amazon.”
— CNBC’s Annie Palmer contributed to this report.
CLOCK: Amazon’s deal with One Medical is part of a ‘package of options’