A medical clinic
For the better part of a decade, One Medical was my primary care provider. It’s convenient, with locations in the Bay Area, and I like being able to schedule a same-day medical or get a quick referral to a specialist.
One Medical knows a lot about me. In addition to many years of clinic visits and virtual chats, I use the mobile app to log my blood pressure and resting heart rate, check my lab results, and refill my prescriptions as needed. For this I pay a membership fee of $199 per year.
But I never considered the possibility that Amazon might one day own One Medical.
The same company that sends me countless boxes every week, sprinkles 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 buys from Whole Foods is about to provide my medical services and owns the portals with my most sensitive information.
I’m not the only person who had this deeply concerning thought on Thursday after learning that Amazon had agreed to buy One Medical for around $3.9 billion. At $18 per share, Amazon is paying a 77% premium where the primary care company was valued a day earlier.
As one member wrote on Twitter, “After a largely positive experience with One Medical, I canceled my membership today. I do not trust Amazon to act in good faith with my health data.”
Founded in 2007 and based in San Francisco, One Medical offers clinical services in 16 U.S. markets, with three more coming soon, according to its website. At the end of last year, the society had 736,000 members.
Amazon did little to allay my fears with its acquisition announcement. The company said nothing to reassure One Medical customers, and there was no conference call to discuss the acquisition, as is customary in many large transactions. Completion of the deal will require regulatory approvals.
In response to an investigation into this story, Amazon offered the minimum level of assurance that it will comply with government regulations, under the Health Insurance Portability and Accountability Act. (HIPAA), which limit how the company can use protected health information, or PHI. This includes all personally identifiable information as well as medical history, lab test results, and other health data.
“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 clear permission of the customer,” an Amazon spokesperson said in an email. “If the agreement were to go through, the HIPAA-protected health information of One Medical customers will be treated separately from all other Amazon businesses, as required by law.”
In other words, everything One Medical knows about me is supposed to stay in this protected silo. Whatever profile Amazon has built on me and my family, from our shopping habits and travel preferences to the shows we watch together on weekends, won’t mingle with my health data.
Despite the laws, Amazon will have to work hard to convince consumers – and probably politicians – that its intentions are pure and that its primary goal is to help “significantly improve the healthcare experience over the next few years”, as Amazon Health Services head Neil Lindsay 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 that money comes from brands paying big bucks to promote their products on Amazon properties, where the competition for eyeballs is getting more and more expensive.
Amazon controls about 13% of the U.S. online advertising market, behind Google and Facebook, according to Insider information.
“I don’t think Amazon can do anything to get people to trust the company with their health information,” said Caitlin Seeley George, campaign manager for fight for the futurean advocacy group focused on technology and digital rights.
Seeley George said in an email that the issue of health privacy is particularly important after the Supreme Court overturned Roe v. Wade, who ended the constitutional right to abortion. Some decisions related to reproductive health that were, until very recently, protected by law can now potentially be considered illegal.
Amazon has already restricted sales of emergency contraceptive pills after demand surged following the Supreme Court ruling. And Google said it would work to quickly delete the location history of people visiting abortion sites.
“Advancing in health care raises serious red flags, especially 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, outside of HIPAA regulations, Amazon could deploy a fertility or mental health tracking app and collect information that “can be used to create assumptions about an individual that could be used against them.” .
Amazon already has a health tracker called Halo which gathers information such as body fat percentage, activity levels and sleep.
“It’s not their first rodeo”
Techno-optimists will probably scoff at such cynicism. The status quo in health care is miserable. Systems are old and don’t talk to each other, billing is notoriously opaque and complicated, and medical care is ridiculously expensive.
Amazon has been pushing in healthcare for years, acknowledging the system’s many flaws and inefficiencies and trying to provide better care for its massive employee base, which grew to 1.6 million last year from 1. .3 million in 2020.
Amazon bought online pharmacy PillPack in 2018 for $750 million and launched Amazon Pharmacy two years later. The company has invested in a telehealth service called Amazon Care, which launched as a pilot for some employees in 2019 and is now available for other employers to offer the service to their staff.
Deena Shakira partner at venture capital firm Lux Capital and an investor in numerous health-tech startups, noted that for Amazon, this is “not their first rodeo in health.”
“Amazon is fully aware of how to handle HIPAA considerations and has experience on multiple products with this,” Shakir wrote in an email. This type of agreement “should encourage additional partnership between large companies and major health technology players,” she wrote.
Shakir’s company is an investor in Carbon Health, which offers primary care and urgent care facilities in 16 states. The company serves approximately 1.1 million patients and, compared to One Medical, generally targets a less affluent population.
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 deeply limited in how it can use data. Compared to other big tech companies like Facebook and Google, he says Amazon receives a healthy dose of consumer trust.
But Bali understands why the worry can exist. Healthcare 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 give personal information to doctors and nurses than to other types of service providers.
And while there are strict regulations on how this data can be used, consumers may reasonably wonder what would happen if a company like Amazon broke the rules.
“Unfortunately, there are no solid technical solutions to enforce data access, which is a big weakness,” Bali said in an interview. Whether patients should care is a “personal decision”, he said.
Bali is generally optimistic about Amazon’s jump into space. When Amazon makes a big announcement signaling its entry into a former market with big incumbents, existing players find themselves 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 traction in the drugstore space, entering the market has prompted companies such as Walgreens and Walmart to bolster their digital offerings in ways that benefit consumers, it said. bali. The One Medical deal could also drive improved products and services in the primary care world.
“Big companies generally don’t feel threatened by small startups,” Bali said. “But they are really threatened by Amazon.”
– CNBC’s Annie Palmer contributed to this report.
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