Amazon announces plans to acquire One Medical

Amazon recently announced plans to acquire primary care giant One Medical in its latest attempt to disrupt the healthcare industry. Amazon announced the cash deal as it intends to buy OneMedical shares at $18/share. 

One Medical, whose parent company is 1Life Healthcare, is a membership-based primary care company where members can access their services for a yearly subscription fee of $199. One Medical operates 188 offices in metropolitan cities throughout the United States. One Medical was founded in 2007 in San Francisco, and claims to now have about 767,000 paid members. The membership model includes in-person as well as virtual visits. As of the latest quarterly filing, One Medical remains unprofitable as it incurred a net loss of $90.9m after a $254.1m in revenue. The deal also includes One Medical’s debt.

Virtual healthcare companies have grown significantly during the COVID-19 pandemic, but their stock prices have decreased significantly as states eased stay-at-home restrictions. Teladoc Health, a telemedicine virtual healthcare company, saw its stock peak at $293.66 in February of 2021. As of today, Teladoc Health stock is selling at $41.18. Amwell, another telemedicine healthcare company, saw its stock peak during the pandemic years above $35. Amwell stock now sells at $4.57. 

This is one of many attempts of Amazon to enter the healthcare industry. In 2018 , Jeff Bezos (CEO of Amazon at the time), Warren Buffet (CEO of Berkshire Hathaway) and Jamie Dimon (CEO of JP Morgan Chase) announced a joint venture called Haven under the leadership of renowned physician and author Dr. Atul Gawande. The venture was disbanded in January 2021. 

Also in 2018, Amazon acquired PillPack for $750m and opened its own online drug store. In early 2019, Amazon announced its own telemedicine services and in-person offices under Amazon Care. Amazon has not yet announced plans on how Amazon Care and One Medical will be jointly managed.