Amazon Acquires One Medical in Move to Expand Telehealth Services

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The world knows Amazon for its ecommerce business. Its subsidiary, Amazon Web Services, is also a top cloud services provider. Now, the company is expanding into the broader primary healthcare business.

Amazon announced on Thursday that it’s going to buy primary-care practice group, One Medical. The all-cash acquisition is valued at $3.9 billion. This will add to the existing healthcare services of the company, which include an online pharmacy, telehealth services, and a developing diagnostics business.

Senior vice-president of Amazon Health Services, Neil Lindsay, said that the deal will help reinvent the company’s healthcare-related services and significantly improve healthcare experiences.

Meanwhile, One Medical’s CEO, Amir Dan Rubin, said that the acquisition would be an opportunity to combine One Medical’s expertise in healthcare technology and Amazon’s “customer obsession.”

One Medical is based in San Francisco. Its parent company, 1Life Healthcare, established the business in 2007. Currently, One Medical boasts 188 medical offices in 25 markets and more than 8,500 business clients across the United States. Its platform puts every step of the medical treatment process online, from patient intake and triaging to diagnosis, treatment, and outpatient aftercare. One Medical was in a good position to deliver its services when COVID-19 hit. Its ability to adapt allowed it to go public in 2020.

Amazon’s two other major acquisitions were Whole Foods in 2017 and MGM Studios in 2021. The company bought the grocery chain for $13.7 billion and the film and video distributor for $8.45 billion. Business experts see its newest buy-out of One Medical as a growth strategy where it buys businesses adjacent to its core competencies.

SaaS and Emerging Technology in the Healthcare Industry

Amazon’s acquisition of One Medical demonstrates the company’s focus on medicine’s digital revolution. We can trace this shift to COVID-19 in 2020. Many healthcare providers had calculated moves to transition medical processes online. But it was the pandemic that accelerated the move.

One Medical is just one of the many healthcare companies leveraging software and technology in their operations. Other practices use virtual reality (VR) to aid in online patient consultations. For example, doctors are using VR to assist in telesurgery. Telesurgery uses video streaming to enable remote medical staff to assist in operations by having a virtual interactive presence.

Moreover, healthcare providers have been relying on software to deliver their services. This is where SaaS healthcare solutions come in. SaaS dominates the healthcare industry and will continue to do so. Experts project the healthcare software-as-a-service market to reach $152 billion by 2028.

Hospitals and healthcare companies use digital tools such as healthcare CRM and EHR systems—two enterprise apps that are commonly included in healthcare IT spending. They also invest in mobile health apps and remote patient monitoring systems.

Medical technology is not limited to patient-facing apps. Healthcare providers, for example, use non-clinical information systems (NCIS) in administrative processes. These include medical billing, claims management, and employee workflow.

All these software solutions and cloud-based services are driving the growth of cloud computing in healthcare. Market analysts estimate that global cloud computing in the healthcare industry will reach $911.6 billion by 2028 at a double-digit CAGR of 10.8%. And with a conglomerate like Amazon pursuing aggressive growth in this industry, we can only expect that the future of healthcare will be in the cloud.