“Based on past form, the jury is out as to whether Amazon can actually achieve this. “Amazon will need to work extremely hard and be extremely innovative if it is to do more than shake things up a little at the margins,” Saunders said in a statement. But making a big splash isn’t always easy. Healthcare, which is complex but extremely lucrative, is an attractive option. The company’s retail and cloud-computing businesses are becoming more mature and it’s looking to find new opportunities for growth, Saunders said. Neil Saunders, managing director at GlobalData Retail, said it is unsurprising Amazon is expanding its footprint in healthcare. And last year, it began offering its Amazon Care telemedicine program to employers nationwide. In 2018, it bought the online pharmacy PillPack for $750m before opening its own online drug store that allows customers to order medication or prescription refills and have them delivered to their front door in a couple of days. Employers and insurers think that by connecting people to regular care, they can prevent expensive hospital stays from happening or keep chronic conditions like diabetes from leading to bigger problems.įor Amazon, the acquisition deepens its foray into healthcare services, the latest industry the company has sought to disrupt. Healthcare costs have risen faster than wages and inflation for years and represent a huge expense to employers that offer coverage. Healthcare bill payers like employers and insurers are also becoming more focused on improving access to patient care and making sure their patients stay tuned in to their health, see their doctors regularly and take their prescriptions. Overall, consumer demand for telemedicine and virtual health care care visits exploded during the Covid-19 pandemic. “We love inventing to make what should be easy easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years,” Lindsay said. Neil Lindsay, the senior vice president of Amazon Health Services, said in a statement the acquisition is geared toward reinventing the healthcare “experience“ for things like booking an appointment and taking trips to the pharmacy. The total deal value announced Thursday includes One Medical’s debt. It also works with more than 8,000 companies to provide its health benefits to employees.Īs of March, One Medical had about 767,000 members and 188 medical offices in 25 markets, according to its first-quarter earnings report, which also showed the company had incurred a net loss of $90.9m after pulling in $254.1m in revenue. So, even though the telehealth pioneer is trading at just 3.2 times sales right now, its fresh underperformance, combined with intense competition from the well-funded tech giant, makes it a dicey play at the moment. While the opportunity in the telehealth market is massive, I think there are better investments available to investors now.One Medical, whose parent company is the San Francisco based 1Life Healthcare, Inc, is a membership-based service that offers virtual care as well as in-person visits. And while buying at today's lows could lead to monstrous returns down the line, I'd like to see a bit more consistency on the operational front before pulling the trigger. Is now an optimal time to buy Teladoc stock?įor several quarters now, Teladoc's management has lacked visibility of the business, which is extremely concerning from an investor's standpoint. If the deal is approved, Amazon's healthcare footprint will become significantly larger, which could serve as a major threat to Teladoc. One Medical is a membership-based primary care provider with almost 200 locations and roughly 770,000 patients nationwide. To add fuel to the fire, Amazon announced on July 21 a plan to acquire One Medical for $3.9 billion in an all-cash transaction. Although those aren't necessarily horrible growth rates, management's lack of visibility around the company's business in recent quarters should be of great concern to investors moving forward.
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