Friday short takes: was there a bidding war for One Medical? A concussion risk wearable tested. Get Well’s monkeypox digital care plan

August 19, 2022 | by

Amazon’s scoop-up of One Medical apparently was not all Skittles, Rainbows, and Unicorns. Large companies like Amazon, Walmart, Allscripts, and CVS are on the hunt to fill gaps in their portfolio and technologies, but only “healthy health tech companies at the right (discounted) price that fill in their tech gaps.” Of course, some of these companies have more chips on the table and in the safe than others.

We know from earlier reporting [TTA 7 July] that One Medical and CVS had some talks, but that One Medical spurned the offer. It did establish that One Medical was in play. Some digging by Heather Landi at FierceHealthcare, taking a walk through SEC documents according to a regulatory disclosure with the US Securities and Exchange Commission (SEC) filed 10 August, found that CVS (identified as Party A) and 1Life Healthcare, the parent of One Medical, started their acquisition talks in October 2021. 1Life was short on cash, getting shorter, needing to expand, and was having trouble raising the $300 million they estimated they needed. Starting this past February, 1Life management started to negotiate with Amazon. On 1 June, CVS offered $17 per share, boosting it by $1 the following day, but were informed by 1Life that there was another suitor. By 2 July, Amazon put $18 in an all-cash deal on the table. When news leaked via Bloomberg on 5 July that CVS was in discussions, CVS bowed out. By the end of July, 1Life and Amazon closed on the deal [TTA 27 July].

It came down to this–Amazon needed One Medical more than CVS. Watch for CVS and Walmart to make more provider/primary care moves by the time the snow flies this year. We’ve already noted that CVS inked a deal with Amwell a few days ago as their provider for Virtual Primary Care and that Walmart outright owns a telehealth provider, MeMD, though their overall strategy remains a bit murky.. CVS also has resources through Aetna that are integratable, such as provider networks.

And speaking of Amazon, they just inked a deal with Ginger to add telemental health as an option for Amazon Care. Healthcare Dive

In the US, we are very close to football–and concussion–season. Multiple concussions lead to CTE, which took a long time to recognize as a cause of premature dementia. A mHealth wearable has been tested to measure head kinematics–head movement–and detect sudden neck strain, such as whiplash. Current systems are embedded in helmets or the X-Patch, which uses accelerometers.  According to the report in AAAS’ EurekAlert!, Nelson Sepúlveda of Michigan State University and colleagues developed a novel patch sensor using a film layer of thermoplastic material, a ferroelectret nanogenerator or FENG. “This produces electrical energy when physically touched or pressure is applied. The electrical signal produced is proportional to the physical strain on the neck and can be used to estimate the acceleration and velocity of sudden neck movement, two important markers for predicting concussion.” For this test, a dummy was used. Nature Scientific Reports, mHealth Intelligence

Monkeypox, its transmissibility, and treatment have also percolated this summer.  Get Well Network, which we noted last month in a JAMA study used its GetWellLoop RPM and monitoring in a Covid-19 home treatment study, released a new monkeypox digital care management plan. It will permit monitoring of symptoms from home using RPM, help direct patients to higher levels of care if and when needed, and aids hospitals in managing mandatory regulatory requirements for reporting and tracking infectious diseases. LifeBridge Health in the Baltimore area began offering Get Well’s monkeypox symptom monitoring tool last month. Release

Amazon moves to acquire One Medical provider network for $3.9B (updated)

July 27, 2022 | by | 1 Comment

Amazon joining the in-person provider network space for real. Amazon Health Services last week moved beyond experimenting with in-person care via provider agreements (Crossover Health, TTA 17 May) to being in the provider business with an agreement to acquire One Medical. Earlier this month, news leaked that One Medical as 1Life Healthcare was up for sale to the right buyer, having spurned CVS, and after watching their stock on Nasdaq plummet 75%.

  • The cash deal for $3.9 billion including assumption of debt is certainly a good one, representing $18 per share, a premium to their $14 share IPO in January 2020. (The stock closed last Wednesday before the announcement at just above $10 per share then plumped to ~$17 where it remains.)
  • The announcement is oddly not on One Medical’s website but is on Amazon’s here.
  • The buy is subject to shareholder and the usual regulatory approvals. The IPO was managed by JP Morgan Securities and Morgan Stanley. It is primarily backed by Alphabet (Google).
  • One Medical’s CEO Amir Dan Rubin will stay on, but there is no other executive transition mention.
  • Also not mentioned: the Iora Health operation that serves primarily Medicare patients in full-risk value-based care models such as Medicare Advantage (MA) and Medicare shared savings, quite opposite to One Medical’s membership-based concierge model. However, Iora’s website is largely cut over to One Medical’s identity and their coverage is limited to seven states.

There is a huge amount of opinion on the buy, but for this Editor it is clear that Amazon with One Medical is buying itself into in-person and virtual primary care for the employer market, where it had limited success with its present largely virtual offering, and entree with commercial plans and MA. One Medical has over 700,000 patients, 8,000 company clients and has 125 physical offices in 12 major US markets including NYC, Los Angeles, Boston, and Atlanta. It has never turned a profit. Looking at their website, they welcome primarily commercial plans and MA (but not Medicare supplement plans).

Amazon, with both a virtual plus provider network, now has a huge advantage over Teladoc and Amwell, both of which have previously brushed off Amazon as a threat to their business. There is the potential to run two models: the current Amazon Care pay-as-you-go model and the One Medical corporate/concierge model. This puts Amazon squarely in UHC’s Optum Health territory, which owns or has agreements with over 5% of US primary care practices, is fully in value-based care models such as Medicare shared savings through its ACOs, and is aggressively virtual plus integrating services such as data analytics, pharmacy, and financial. Becker’s

What doesn’t quite fit is Iora Health and the higher cost/higher care needs Medicare market that is less profitable and requires advanced risk management, a skill set that Amazon doesn’t have. This Editor will make a small prediction that Iora will be sold or spun off after the sale.

This Editor continues to believe that the real game for Amazon is monetizing patient data. That has gained traction since we opined that was the real Amazon Game in June and October last year, To restate it: Amazon Care’s structure, offerings, cheap pricing, feeds our opinion that Amazon’s real aim is to accumulate and own national healthcare data on the service’s users. Then they will monetize it by selling it to pharmaceutical companies, payers, developers, and other commercial third parties in and ex-US. Patients may want to think twice. This opinion is now shared by those with bigger voices, such as the American Economic Liberties Project. In their statement, they urged that the government block the buy due to Amazon’s cavalier attitudes towards customer data and far too much internal access, unsecured, to customer information (Revealnews.org from Wired). Adding PHI to this is like putting gasoline on a raging fire, and One Medical customers are apparently concerned. For what it’s worth, Senator Bernie Sanders has already tweeted against it.   MarketWatch

Whether this current administration and the DOJ will actually care about PHI and patient privacy is anyone’s guess, but TTA has noted that Amazon months ago beefed up its DC lobbying presence last year. According to Opensecrets.org, they spent $19.3 million last year. In fairness, Amazon is a leading Federal service provider, via Amazon Web Services. (Did you know that AWS stores the CIA’s information?)  One Medical is also relatively small–not a Village MD/Village Medical, now majority owned by Walgreens Boots. This is why this Editor believes that HHS, DOJ, and FTC will give it a pass, unlike UHG’s acquisition of Change Healthcare, especially if Amazon agrees to divest itself of the Iora Health business.

Treat yourself to the speculation, including that it will be added as an Amazon Prime benefit to the 44% of Americans who actually spend for an Amazon Prime membership. It may very well change part of the delivery model for primary care, and force other traditional providers to provide more integrated care, which is as old as Kaiser and Geisinger. It may demolish telehealth providers like Teladoc and Amwell. But as we’ve also noted, Amazon, like founder Jeff Bezos, deflects and veils its intents very well. FierceHealthcare 7/25, FierceHealthcare 7/21, Motley Fool, Healthcare Dive