Optum vs. Amazon after the $3.9B One Medical deal

Amazon furthered its reach into healthcare last week by announcing plans to acquire One Medical for $3.9 billion.

The deal will add significant services and data to Amazon's network and kick its direct-to-employer medical services offerings into high gear. Amazon is also becoming bigger competition for Optum, which also focuses on primary care with a digital and in-person platform.

Here are notes on both companies.

Amazon
Ahead of its acquisition, Amazon Care offered services nationwide and planned to expand in-person care to 20 additional cities this year, including San Francisco, Chicago, Miami and New York City. Employers including TrueBlue and Whole Foods use Amazon Care's platform for employees. With the addition of One Medical, services will reach even more people.

After the acquisition, Amazon will have in-person and virtual services associated with its Amazon Care platform as well as the One Medical membership. In addition to primary care and lab services, Amazon Care provides vaccinations, prescription requests, preventative care and urgent care. Amazon Care also has a service to dispatch a nurse to patient homes when in-person care is available.

One Medical is a membership-based primary care practice with direct-to-consumer services. Members can schedule visits through a mobile app, message with providers, and have virtual or in-person visits.

One Medical has more than 8,000 employer clients, and 45 percent of its members use digital services every month. One Medical has more than 125 physical offices in 12 major U.S. markets in addition to 24/7 virtual care access. One Medical reported having 767,000 total members at the end of the first quarter, including 39,000 at-risk members. The companies using One Medical include Google, Lyft, Yelp, Nasdaq, John Hancock, Georgetown University and more.

Optum
Optum has built out a sophisticated network of services, including healthcare providers, as part of Optum Health, pharmacy and prescription services as part of Optum Rx, and data as part of Optum Insight. Optum Financial is also a leading health savings account provider. UnitedHealth Group is Optum's parent company and the parent company of insurer UnitedHealthcare.

Within Optum Health, Optum Care focuses on primary care as well, both in-person and virtual services, that includes 19 million patients. It also has a network of more than 260 ASCs in its Surgical Care Affiliates business. Optum has a stated goal of bringing more providers and members into value-based contracts and focuses on making sure patients receive care at a high-quality, low-cost setting. In 2022, the company aims to bring 600,000 new patients into value-based arrangements.

Optum Health has more than 60,000 physicians and 1,450 neighborhood clinics across the U.S. and aims to boost its clinical services by adding physicians organically and through acquisitions. Optum also aims to enhance its digital and data capabilities through the acquisition of Change Healthcare if the deal clears regulatory hurdles

Financial outlook

Amazon reported a 7 percent net sales increase in the first quarter to $116.4 billion. The tech giant does not detail healthcare-related financials, but One Medical will likely add to the bottom line. One Medical reported first-quarter net revenue hit $254.1 million in May, a 109 percent year-over-year increase. The company also reported $92.6 million in loss from operations and a $90.9 million net loss for the quarter. One Medical anticipated revenue would reach $831 million to $853 million by the end of the year.

Optum reported revenue was up nearly 19 percent in the first quarter to $43.3 billion, driven by the success of its Optum Health unit. Revenue per customer was up 33 percent in the first quarter and the company aims to add digital offerings to complement and integrate with its clinic-based and outpatient services. Optum Rx reported 11 percent revenue growth in the first quarter, and Optum Insight's revenue hit $22.8 billion.

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