Last week’s $3.9 billion acquisition of One Medical (NASDAQ: ONEM) by Amazon triggered significant hyperventilating about the transformative and immediate impact of this transaction on the healthcare industry. Interestingly, Amazon’s market capitalization increased 1.4% or $18.3 billion on the day of the announcement, paying for the purchase a few times over. Undoubtedly there could be exciting near-term benefits for the 750k ONEM members as their Amazon Prime accounts are linked to their ONEM memberships, facilitating targeted Whole Food and Amazon Pharmacy coupons. But what might we expect to see over time is a provocative debate with powerful implications for how each of us manage the arch of our healthcare journeys.
Important Disclosure: Flare Capital was a significant investor in Iora Health and had a board seat. Iora Health was acquired by ONEM in September 2021 for approximately $2.1 billion and is an important part of the ONEM story going forward. Amazon now has an important foothold in the Medicare market. This is not meant to be a victory lap as the stars of the Iora Health story were squarely the management team, particularly the founding CEO, Rushika Fernandopulle. And while Rushika may have been the lead actor, the supporting cast numbering in the several dozens and too many to list here played a critical role in that company’s extraordinary success (raised nearly $350 million, sold for $2.1 billion).
Indeed, it does appear that Amazon is methodically stitching together a series of assets that over the next few years will (Read more…)