Oregon Health Authority Approves Amazon-One Medical Merger

January 03, 2023 - The Oregon Health Authority (OHA) has approved Amazon's plans to acquire One Medical, a virtual and in-person primary care organization, for $3.9 billion.

After conducting a 30-day preliminary review of the proposed transaction, the agency concluded that the merger is unlikely to significantly reduce access to affordable healthcare in the state.  

"In the locations where One Medical operates in Oregon, patients have many other options to access similar types of services," the agency noted in an executive summary of the review. "OHA does not anticipate that this transaction will result in increased prices."

Further, the size of the merger does not warrant a "comprehensive review of the material change transaction," as One Medical only operates five clinics in the Portland metro area, and the transaction does not impact other areas in the state, the agency said.

But, while conducting the review, the agency found some gaps in its ability to assess the transaction. For instance, OHA noted that it has limited insight into care quality at One Medical facilities since it opened its Portland area clinics in 2020 and 2021. Additionally, One Medical does not participate in some state programs that require regular quality reporting.

The agency also identified potential health equity concerns related to the merger.

"This transaction could potentially result in One Medical siphoning off commercially insured patients with higher payment rates from clinics that serve more Medicaid and Medicare-covered patients," OHA noted.

Thus, the agency approved the transaction provided that Amazon and One Medical report information about their services, their patients, care quality, and governance or organizational changes. These reports must be submitted every six months for five years after the merger is completed.

The approval comes even as workers and organizations in the state urged OHA to scrutinize the merger, noting Amazon's history of worker exploitation in an emailed press release. In a comment submitted to OHA, Service Employees International Union (SEIU) Local 49 stated that both companies prioritize profits, which "may worsen and ultimately impact the care received by the residents of our state."

Last July, Amazon announced its intention to buy One Medical, which provides membership-based, direct-to-consumer primary care. If completed, the acquisition would add One Medical's 188 in-person locations, proprietary virtual care technology, and more than 8,000 employer clients to the technology giant's growing healthcare footprint.

"We think healthcare is high on the list of experiences that need reinvention," said Neil Lindsay, senior vice president of Amazon Health Services, in a news release announcing the merger.

He added that Amazon hopes to widen access to healthcare and "help more people get better care, when and how they need it," through its purchase of One Medical.

But experts told mHealthIntelligence last year that these plans to reinvent the healthcare experience would ultimately benefit only an urban, commercially insured niche of healthcare consumers.

"One Medical is really oriented around urban locales with a lot of density with its clinics," said Chrissy Farr, a principal at OMERS Ventures, in an email. "It's hard to imagine true equity if Amazon doesn't scale from there."

Further, receiving approval from the OHA is not the final regulatory hurdle facing the Amazon-One Medical merger. The companies need federal approval as well, which is not a given.

In September, a regulatory filing by 1Life Healthcare, Inc., One Medical's parent company, showed that the Federal Trade Commission (FTC) had requested additional information and documentary materials from both companies. The FTC has yet to approve the transaction.