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Amazon’s One Medical acquisition passes regulatory hurdle in Oregon

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Amazon cleared a regulatory hurdle in Oregon as it advances its plans to acquire primary care provider One Medical

The Oregon Health Authority approved the deal in late December, saying it’s unlikely to substantially decrease access to affordable healthcare in the state. One Medical currently operates five clinics in the Portland metro region.

However, the agency did provide conditions for the acquisition’s approval. It will require the tech and retail giant to report information about the services it provides, the quality of care, and any governance or organizational changes every six months for five years after the deal. The OHA will also conduct follow-up analyses for several years after the acquisition closes. 

The agency reviews healthcare deals to determine the impact on cost, access, quality and equity under state regulations. In the OHA’s review, it only found potential concerns with health equity, arguing Amazon’s purchase of One Medical could pull commercially insured patients with higher payment rates from clinics that serve Medicaid and Medicare patients.

“In the locations where One Medical operates in Oregon, patients have many other options to access similar types of services. OHA does not anticipate that this transaction will result in increased prices,” the agency wrote in the report. “Combining with Amazon, with its advanced supply chain and purchasing power, may generate efficiencies and savings for One Medical, though any savings would not necessarily be passed to consumers.”

The OHA received 36 public comments during its review, largely opposing the deal. SEIU Local 49, a local chapter of the Service Employees International Union that represents some healthcare workers, argued Amazon has a history of mistreating workers, and pointed to an NPR report indicating that One Medical had prioritized profit over patient care.

THE LARGER TREND

Amazon announced its plans to acquire the primary care company this summer in an all-cash deal worth approximately $3.9 billion. The Federal Trade Commission is also investigating the deal

The company has been expanding its ambitions in healthcare over the past several years, though it has rolled back some of its initiatives. Not long after it announced the One Medical acquisition, it said it would shut down its employer-focused hybrid-care service at the end of 2022. 

But in November, Amazon revealed Amazon Clinic, a virtual service geared toward treating common conditions like hair loss, heartburn, acne and allergies.

The deal demonstrates another move into healthcare delivery for big retail and pharmacy players like Walgreens, CVS and Walmart.

“What Amazon and other new entrants mean is that they provide the consumer with more care options,” Sanjula Jain, senior vice president of market strategy and chief research officer at Trilliant Health, told MobiHealthNews in December. “But it also creates a need to coordinate care better and create these really strong referral relationships.”

ON THE RECORD

“We continue to work cooperatively with OHA and the FTC in their reviews of this transaction,” an Amazon spokesperson wrote to MobiHealthNews.



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