Amazon recently sent shock waves through healthcare when they announced their of One Medical. This follows its 2018 acquisition of PillPack and 2019 Amazon Care launch. With into digital health in 2021, this may seem like just another headline -- but we feel this one is different.
In placing their bet on a primary care network that delivers a hybrid of in-person and virtual care, Amazon chose a path that positions it to be a front-runner in primary care innovation.
A Changing Primary Care Landscape
Primary care offices are drowning in high patient volumes, low reimbursement, and slow adoption of care-enhancing technology. Meanwhile, the workforce is declining, with a shortage of expected by 2034. This is especially troubling given that access to high-quality primary care . The greatest gaps in primary care access exist among people in low-income rural and urban communities, non-English speaking populations, and the uninsured.
Recent innovation in primary care aiming to address these issues falls into two camps: "hybrid care" and "virtual-first."
The Hybrid Care Model
One Medical Group is part of a growing number of "click and mortar" hybrid care clinics, which provide longitudinal care with a consistent team through both in-person and virtual care enabled by engaging technology. The core thesis is that primary care works because of a long-term provider-patient relationship that begins in-person. One Medical operates in and partners with health systems for integrated specialty and hospital care. Modern tech features enable patients to instantly connect with doctors via video without an appointment and to schedule same-day visits. The company also invested in a bespoke Electronic Health Record (EHR) with clinical decision-support for busy providers. While many traditional primary care practices and providers now also offer hybrid care (following the COVID-19 response), cultural, workflow, and technology barriers oftentimes led these practices to merely "turn on" video visits as substitutes for office visits, additional patient engagement or care team support capabilities.
One Medical's model has key limitations. "Click and mortar" hybrid clinics are popular with wealthier patients who self-pay or have employer benefits covering membership fees. Vulnerable, low-income populations may not be able to . Given this focus on young, healthy, urban professionals, it's unclear how well One Medical engages populations such as those with more complex needs.
The Virtual-First Model
Virtual-first primary care, in which telehealth is the first touch-point, took off during COVID-19 as an alternative to hybrid care. It rests on the thesis that no long-term relationship is needed or that it can be established virtually. Included Health, Accolade, and Aetna/CVS are a few companies innovating in this space. CVS recently virtual-first primary care where patients are assigned a virtual PCP, and while patients can still seek in-person care, it would be offered at a retail Minute Clinic pharmacy and not with a long-term care team or provider. To its credit, virtual-first primary care can leverage scale to more easily deliver multidisciplinary care, for example integrated behavioral health. However, the virtual-first primary care model remains largely unstudied in terms of patient engagement, outcomes, and costs, in contrast to the large evidence-base for traditional primary care.
Optimal primary care should combine a long-term relationship with a care team who knows the patient and their medical history, manages their preventive care and chronic conditions, and is available to address acute issues. This is the proven model. Despite data showing Gen Z is to have a long-term primary care relationship, virtual-only care isn't really what most patients want -- according to a , 68% of consumers surveyed still want in-person primary care visits, and many prefer telemedicine for "quick things."
The Amazon-One Medical Deal
This brings us to Amazon. As a large employer, Amazon knows what patients and employers want: compassionate, personalized, and accessible care, delivering the best outcomes at the lowest cost. The acquisition of One Medical shows Amazon making a clear bet that they believe in the necessity of the hybrid care approach. To achieve that vision, Amazon sees synergies with One Medical.
First, Amazon has the potential to improve One Medical's primary care focused, homegrown EHR. Since HITECH more than a decade ago, our current generation of EHRs have not yet delivered on enabling clinical decision support through machine learning and data interoperability. Amazon's expertise in leveraging big data to drive insights, personalization capabilities, and efficiency of information could bring One Medical's EHR to the next level, including producing advances in clinical decision support and precision health.
Second, Amazon's business model is one that identifies customer need and offers convenient, affordable, and accessible product options -- all features badly needed in a healthcare system with too much friction, cost, and inconvenience. Such operational expertise could bring needed relief to the healthcare supply chain. Starting with PillPack, Amazon has stepped into addressing consumer pain points in medication workflows. The next stop could be durable medical equipment (DME), such as remote monitoring services (e.g., home blood pressure monitoring). Amazon has built a logistics infrastructure that delivers tens of thousands of products across categories to your front door in hours -- could Amazon create an intelligent digital care navigation and logistics system to meet broader patient healthcare needs?
Finally, as a large employer Amazon feels the pain of high healthcare costs. Starting with Amazon Care --which, according to , is shutting down at the end of 2022 -- and now with the additional infrastructure of One Medical, it will be fascinating to see how they leverage a national care delivery network to negotiate costs of drugs, diagnostics, and other care services. Through owning the clinics (and potentially the supply chain), Amazon could cut out many layers of healthcare "middlemen." Passing savings onto consumers through efficient infrastructure is Amazon's strength.
Together, Amazon and One Medical have the potential to take hybrid care to the next level, but concerns exist too. Many have raised questions about and potential misuse of data. For example, will Amazon mix data from their healthcare and consumer businesses, a valid worry given the tech industry's checkered track record on privacy? But, Amazon already hosts numerous healthcare businesses and data, and is already trusted by many to keep these data separate from its consumer businesses, as they are bound by data privacy laws encoded in HIPAA. While the law is clear, we think Amazon could quell consumer fears by explicitly articulating its data privacy protections and intentions.
As it wades deeper into healthcare, Amazon will have an important voice in health policy issues. It could play a major role in advancing health data interoperability standards and use. And, with government payors limiting innovation through restricting use of telehealth (although temporarily revoked during the pandemic) and , Amazon could be another loud voice calling for telehealth payment parity and other payment reforms. This has been one impediment to groups like One Medical offering care to Medicaid and Medicare populations -- no pathway to reimbursement for the virtual components of the care.
Whatever direction the Amazon acquisition of One Medical takes, we are optimistic it brings much needed progress. Overnight, Amazon entered the world of brick-and-mortar healthcare, acquiring an infrastructure to serve as the scaffolding for more to come. We are hopeful that one day, Amazon clinics will offer a primary care experience where patients are seen quickly, either in-person or virtually, by a long-term provider, and where care is integrated with a larger care team that addresses health equity and chronic conditions.
is chief medical officer at Omada Health, a virtual-first chronic care provider, and an associate professor at the University of California-San Francisco (UCSF). is vice president of digital health at University of California-San Francisco (UCSF) Health, and an associate professor at UCSF.