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Amazon may own your doctor's office next


Amazon has a pending deal to buy a chain of health clinics - a company called One Medical. That means before long, Amazon might be running a medical company with almost 800,000 patients, in addition to its many other businesses - selling clothes, groceries, streaming TV and movies, supporting websites. We should note that Amazon is among NPR's financial supporters. Joining us now is Chrissy Farr. She's a health tech investor at OMERS Ventures and used to cover Amazon for CNBC. Welcome.

CHRISSY FARR: Thanks for having me.

SELYUKH: You've been tracking Amazon's inroads into health care for years. How surprising is this nearly, I guess, $4 billion deal to buy One Medical?

FARR: I would say not at all surprising. They've made pretty clear with moves over the past four or five years that they are deadly serious about the space. And in my mind, it makes a ton of sense. It has been, for 20 years, the missing gap in their retail empire. You can buy almost anything on What you couldn't buy was prescription drugs. They changed that with their acquisition of PillPack a few years ago, which they've now integrated and rebranded as Amazon Pharmacy. This makes a ton of sense to be thinking about kind of brick-and-mortar clinics and then primary care as the linchpin of their efforts.

SELYUKH: So if both the shareholders and the federal regulators do approve this deal for health care in the U.S., what could it mean that Amazon might own One Medical?

FARR: So I think what they've acquired is a direct-to-consumer asset because One Medical has apps. It has a website. One of the things that they've boasted for years is that you can get same day appointments. So One Medical has always kind of had that technology aspect to what it's been doing but then also sells into employers, as well. The on-site, near-site clinic option works with companies as big as Google to provide health care to their own employees. I think from here, Amazon will have some big questions about whether or not they push down this kind of direct-to-consumer angle or they try to kind of conquer more of these big employers. And there are competitors that do kind of also have on-site, near-site clinics and sell into this market, as well. My gut sense is really that they'll embrace more the direct-to-consumer angle.

SELYUKH: Financially, One Medical - it's a pricey membership service, but it is not profitable yet. What is in it for Amazon? Or is it not a financial play as you're describing?

FARR: Amazon is not afraid of low-margin offerings, and that's what One Medical is. It takes a lot of money to staff up and build, like, a physical clinic. And they've got a bunch of them now across the country in a lot of urban centers. So I think this was an expensive buy. But for Amazon, you know, it's a recognition that I think the future of health care is hybrid. It's not just virtual. You can't do everything from home. People still need to get physical exams, and you can do a lot of that at One Medical.

SELYUKH: When the news of this deal came out, a number of One Medical members who, you know, pay big fees to be part of this clinic went to social media and started posting that they were quitting the service now because they don't love the idea of going to a doctor who, you know, works for Amazon. What are the biggest worries you've heard about maybe data privacy or other concerns from patients or from doctors?

FARR: Yeah, I've heard it all. You know, the big concern around data privacy - I've seen this a lot. The idea that, you know, I don't want to see a doctor owned by Amazon. I think there are certain kind of rules and laws to be aware of here - firstly, just corporate practice of medicine. Our laws mean that, you know, specific companies like Amazon will not be able to own doctors. That's why, you know, with their existing medical practice, which is called Amazon Care, they have to have a separate legal subsidiary that technically kind of owns and operates this practice.

And none of this is perfect. I mean, this is still something that Amazon pays for, and it's part of their business, and it's called Amazon Care. But the doctors themselves are not owned by Amazon, and that will be the same in a One Medical context. And then with privacy, as well - I mean, this kind of information that flows through a doctor and is covered by a medical claim if you have insurance and you use insurance is PHI. So that's the type of information that the HIPAA kind of rules will actually oversee. These are very strict, very clear rules about how this information can be managed in any health care context. You don't get kind of your health information texted to you or emailed to you. It has to go through these secure portals that are HIPAA compliant, and that will be the same in a One Medical context.

That said, you know, I do still worry about health care information in privacy context, particularly the kind of data that doesn't have these protections. And that's the information that consumers gather on their own. So every time you use a period tracking app or you use a wearable, that information has some protections but far fewer. That's where we may see much more views as it pertains to things like advertising and marketing and more.

SELYUKH: Amazon had bought PillPack, done the pharmacy service. They have medical services already. From what you've seen Amazon grow in health care over the last few years, where do you think the company is headed? What is its ultimate goal in the medical world?

FARR: I think it's really to create that consumer-oriented service that doesn't quite exist yet in the health care context. For a long time, nobody thought that consumers cared about, you know, health care - would ever shop for health care because everything was just covered through insurance. And so we were really shielded from prices. And that's all changed with the rise of high-deductible plans. Consumers are now paying more than ever for their health care, and they're starting to wonder, you know, what is the quality of this care that I'm receiving? Could I get better care elsewhere? What type of care do I actually need? And is there something cheaper? And I think that is really what Amazon plans to build.

It's something in that realm of kind of the digital front door or navigation layer for health care. And they do now have, like, this full-stack offering where they've got pharmacy through Amazon Pharmacy and they now have primary care, both telemedicine and now brick-and-mortar with their clinics, which - I suspect that they will add more clinics in more and more cities - in addition to, you know, work that they've done during COVID, which I think could potentially bring them closer in to kind of more lab services and diagnostic services. But they will end up with something that you can get a lot of kind of primary care through Amazon. And that's a pretty exciting vision. And really, the sky's the limit there.

SELYUKH: That's Chrissy Farr, a principal at OMERS Ventures and a former reporter for CNBC. Thanks for joining us.

FARR: Thanks for having me.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

Alina Selyukh is a business correspondent at NPR, where she follows the path of the retail and tech industries, tracking how America's biggest companies are influencing the way we spend our time, money, and energy.