Amazon and One Medical

One of the most outstanding retail firms in the world, Amazon, is willing to work with One Medical in a deal worth $3.9 billion. But what is so special about One Medical? What is compelling about this brand and how does it align with the Amazon system? Let us find out.

One Medical

One medical notes that it is a modernized, national, primary care organization. It offers inviting care settings and has over 900 firms that offer One Medical as a benefit for their employees.

The primary goal is to provide the most comfortable and accessible form of health care in-person and virtual offerings. In addition, the CEO of One Medical, Amir Dan Rubin, said they want to see the collaboration of One Medical’s technology with Amazon’s inventions, obsession, and willingness to invest in long-term projects for years.

How does One Medical make their care more pleasant? The CEO noted earlier that they have been able to re-design the customer experience. One way they have differentiated is the setting, the offices feel like living rooms. They are located in places that are near workplaces or shopping centers. The One Medical app helps individuals to obtain care within a few minutes. This has helped them to obtain a high NPS.

They also note that because of their technology, they can make the process simpler for physicians and the members. One intriguing aspect about One Medical is their modern technology stack that is supposed to make a difference with communications.

For instance, if an individual were to reach out to a provider, the machine learning component will read the messages and if it is possible for a general team member to answer that question it will delegate it. That is important as it is necessary for doctors to focus on care instead of regular back and forth on admin tasks. 

One thing that stood out to me was that the CEO made comments in the past that were in line with Amazon’s principles. The CEO noted on previous interviews that the firm sought to delight the customer and mentioned the impact of technology on providing this delight.

One Medical Is Not Profitable

The company is focused on sustainable growth but has yet to turn a profit. Investors who were looking at the company in 2020 would have been excited by the company’s digital healthcare offerings.

This was a compelling aspect for many companies during the initial days of the pandemic. But as the pandemic subsided, the investor excitement wore off as reflected in the firm’s stock price.

The business offers products to consumers with membership plan and provides its program as a benefit to companies. It served over 5000 companies in 2020 and had a presence in cities ranging from New York to Boston to Los Angeles and other key cities in the United States. The firm was focused on investing in the technology early on and seeks to lower the internal costs over time.

This indicates that decision makers at Amazon may think that One Medical has room to grow  and to provide a differentiated consumer experience that makes a difference over the long term.

The One Medical Acquisition Focuses on 

The One Medical purchase looks like it could be relevant because of its digital healthcare offerings. Firms like Teladoc focus exclusively on digital healthcare. Teladoc has a 5.76 B value at the time of this writing. One medical is valued at 3.32B at the time of this writing.

Interestingly, while Teladoc has seen negative sentiment from a share price standpoint, the business seems to be growing. The firm was able to raise revenues by over 15% in the second quarter, total visits has increased to over 4 million,  and average revenue is also trending up. That means that this is a growing sector, Teladoc and One Medical have a similar model with the subscription plan.

But One Medical also acquired a company called Iora Health. This company does also have a primary care focus but with an emphasis on Medicare. The company paid $2 billion in a stock deal. Now One Medical will be purchased by Amazon for $3.9 B, twice what it paid for Iora Health. 

While the Telehealth space can provide growth the real value may be in the  One Health Medical Medicare Advantage operation.