Amazon-One Medical deal could affect the future of primary care

Table of Contents

Amazon’s announcement this week that it would acquire One Medical, a primary care provider, for $3.9 billion — its largest health care acquisition to date — was for many Americans likely just another item on the ever-expanding news ticker tape. But an acquisition of a primary care company of this size by a tech giant like Amazon should be taken seriously because of its massive implications for the future of primary care, health care delivery, and health equity.

One Medical is a membership-based (members pay $199/year) primary care company that currently cares for nearly 800,000 people. The company’s medical offices are strategically placed near where people work, and members can use apps and other technology to track their health and book their appointments. The company operates across the country, but for now mostly in large urban centers.

Amazon’s acquisition of One Medical will grant it access to not only a physical set of offices and providers but also the technology that enables primary care. Few data are available on the care One Medical provides to its patients, but from one study of employer based primary care, in which One Medical patients were compared to other patients, total medical expenses were lower for One Medical patients for whom the money spent on primary care was twice as high. We were not able to find data on the company’s impact on quality, burnout of care teams, population health, or equity, but we believe there is much to learn from the One Medical model of care.

Amazon has long been hoping to enter the health care sector, and is wise to enter through primary care, which is both the front door and the foundation of health care. Indeed, primary care is at the epicenter of the delivery of the future of health and health care for the U.S. A 2021 report from the National Academy of Sciences, Engineering and Medicine (NASEM) emphasized that primary care is the only component of health care for which an increased supply is directly associated with better population health, lower death rates, and more equitable health outcomes.

Research done by colleagues of ours in the Center for Primary Care at Harvard Medical School has demonstrated primary care’s impact on equity and life expectancy. In U.S. counties with fewer than one primary care physician per 3,500 persons, life expectancy is nearly one year shorter than in counties with a larger number of primary care physicians. The NASEM report also recommended that the country increase investment in primary care to provide more comprehensive care and higher quality care to patients, and that it move to value-based payments — a system in which hospitals and physicians are paid based on patients’ outcomes rather than procedures performed — or prospective payment in the form of a per member per month fee that is paid through insurance rather than being paid by the individual.

As primary care physicians who care for patients and who also study and lead innovations in primary care, we have witnessed the increased involvement of venture capital and the growth of for-profit entities in the primary care space. We believe this increased interest reflects an appreciation of the value of primary care, as well as an opportunity to generate profits from it. These investments are supporting efforts to improve technology, rethink approaches to working in teams and team member responsibilities, provide additional services such as behavioral health or community health workers to address social determinants, and to implement of value-based payments and, in some cases, the opportunity to improve coding and billing.

One Medical seems to be a case study showing that the NASEM report’s suggestions are true: A doubling of investment in primary care can save the system money in the setting of prospective payments that can be used for things such as health coaches and advanced technology that are not supported by the fee-for-service system and are often inaccessible to usual primary care practices.

Yet it’s important to keep in mind that better population health, lower death rates, and more equitable health outcomes can be achieved only when there is equitable investment throughout all of primary care and across all populations. Big tech takeovers of companies like One Medical — primary care delivery systems already set up to cater to those who have more resources, better access to technology, and stable office-based employment in urban centers — not only perpetuates health care disparities but threatens the stability of other primary care practices nationally. These practices are based on taking care of the whole population with a payer mix that includes commercially insured patients whose care is paid for at a higher level and government-insured patients, such as those on Medicare and Medicaid, whose care is paid for at a lower level.

Primary care is currently responsible for 50% of medical visits each year in the U.S. But it is also the least-resourced specialty in the country, receiving only 6 cents of every health care dollar. By taking a large portion of healthy, well-educated patients who require less-complex care out of the usual primary care system, tech companies such as Amazon will leave primary care, a specialty essential to the future of health in the U.S. that is already on life support, even more desolate. Assuming the continued growth of One Medical, “traditional” primary care will no longer be able to take care of people all ages, all populations, all health conditions, and all backgrounds, but will be left responsible for the health of those who cannot afford to buy into primary care, who do not work in white-collar office jobs, and who live with complex chronic conditions.

If traditional primary care is left caring mainly for patients whose insurance pays at lower levels, investment in primary care will dwindle, widening the disparities between those who have access to the primary care services provided by companies like Amazon and those who do not, putting at risk the health of those who are older, or poorer compared to those with commercial insurance and access to companies like Amazon for care.

For primary care that is accessible to all to compete with companies like Amazon, it will be necessary to pay more for primary care by doubling or even tripling investment in it (for people covered by Medicare, only about 3% of total medical spending goes to primary care) while moving away from the fee-for-service system that perpetuates inequities across medical specialties, and does not cover needed services in primary care.

It is time for legislators, leaders, and citizens to learn from what One Medical has achieved as, indeed, investing in primary care can save the system money; however, we cannot stop there. For true population health and equity to be achieved, investments must be made in primary care practices that are caring for all patients.

Katherine A. Gergen-Barnett is a primary care physician, vice chair of Primary Care Innovation and Transformation in the Department of Family Medicine at Boston Medical Center, and a clinical associate professor of medicine at Boston University School of Medicine. Russell S. Phillips is a primary care physician and director of the Center for Primary Care at Harvard Medical School where he is also a professor of medicine and global health and social medicine.