Amazon’s plan to buy a large national medical clinic network has generated an unprecedented volume of opposition and criticism from doctors, nurses, consumer groups and a labor union under Oregon’s new health care merger review program.
Skeptics of Amazon’s plan to buy One-Medical say the state should either reject the Oregon portion of the deal – for-profit One-Medical has five clinics in the Portland area – or subject it to an intensified level of review and post-approval monitoring.
Critics say Amazon’s poor treatment of workers, push for profits and quest for market domination make it unsuited to running a health care system.
Amazon, in its application, said it would improve health care delivery by One-Medical and that the deal met state criteria.
“The repeated assurances in Amazon’s application about what its intentions are should not reassure anyone, given its track record,” wrote Rick Staggenborg, a retired Veterans Administration psychiatrist in Linn County, to the Oregon Health Authority, which accepted public comment on Amazon’s proposal through Dec. 14.
Amazon’s application raises questions about whether a company’s behavior in non-medical fields will be taken into account in Oregon’s toughest-in-the-nation merger review process.
Amazon has proposed a $3.9 billion purchase of for-profit San Francisco-based 1Life Healthcare and its subsidiary, One Medical, a primary care provider with 182 offices in 25 markets — including five offices in the Portland area that are affiliated with the Providence Health & Services system. One Medical provides professional clinical services and management, operational and administrative services for Providence.
Amazon is seeking approval under the law passed by the state Legislature in 2021 to regulate increasing consolidation in health care. Oregon’s Health Care Market Oversight program reviews planned health care business deals to see if they meet state goals for controlling costs and maintaining equity, patient access and care quality.
The Oregon Health Authority launched the program earlier this year, after overruling complaints from hospitals that the rapidly written regulations were too vague and sweeping. So far, the agency has approved three acquisitions, and in one case – the sale of a nationwide hospice system with two facilities in Oregon – three advocacy groups questioned or opposed the deal.
Push-back From Public
The Amazon/1Life plan has triggered much more extensive public push-back.
A national anti-Amazon coalition, Athena Coalition, weighed in, along with the Service Employees International Union, the Oregon State Public Interest Research Group, and 34 individuals, all opposed to the purchase. Many of the critics favor a health care system run by the government and non-profits, and see Amazon’s bid to enter the field as a step in the wrong direction.
“It is the very presence of for-profit organizations like Amazon, private insurers, profit-drive hospitals and physicians, pharmacies middle-men etc. that is making U.S. health care inefficient and costly,” wrote Albany resident June Forsyth Kenagy.
The state program allows state officials to weigh in, not just on questions of anti-competitive market power, but on workplace conditions, as well as the provision of abortion and other services such as those restricted by Catholic health systems.
The state can approve a proposal in a quick review if the plan meets various criteria, such as that it is in consumers’ interest; is unlikely to substantially reduce access to affordable health care; is not likely to substantially alter delivery of health care in the state; and a more detail review is not warranted given the size and effects of the transaction.
A more comprehensive review could involve in-depth analysis of a proposal’s likely market effects, plus a public hearing.
The health authority expects to finish its preliminary review by Dec. 29.
Amazon argues its plan merits approval.
“The proposed transaction will improve health outcomes and access, including for patients in Oregon, by combining One Medical’s human-centered and technology-powered model with Amazon’s customer obsession, history of invention, and willingness to make long-term investments,” Amazon wrote.
Amazon hopes 1Life, founded in 2007, is the wave of the future in health care. One Medical is a subscription-based primary care system that uses technology to combine in-person, digital and virtual health care services that aim to be quicker and more convenient than traditional in-person bricks and mortar operations. One Medical has focused on expanding in major metro areas.
“Amazon does not intend to restrict or otherwise reduce the scope of professional medical services delivered by the One Medical,” Amazon wrote. “Amazon also has no intention of limiting any patient’s freedom of choice with respect to pharmacy, specialty care, or other health care services,” it wrote.
Oregon group leery of deal
In a comment, the Oregon State Public Interest Research Group noted that consolidation in health care has tended to increase prices. “Having such a big player in the Oregon health care market is not necessarily a bad thing, but the state should conduct this review with care,” urged Maribeth Guarino, the group’s health care advocate, in a letter to the health authority.
SEIU Local 49, which represents 15,000 workers in hospitals and clinics in Oregon and Southwest Washington, also urged careful review, given allegations around the nation of Amazon treating warehouse workers poorly, including denying disability accommodations and imposing heavy workloads.
If the deal moves forward, the authority should “explore imposing strict conditions to safeguard Oregon workers and patients,” the union wrote to the agency.
Athena, a California-based coalition of more than 50 organizations, urged the health authority to embark on a “comprehensive investigation” of Amazon’s proposal. Given Amazon’s extensive retail system, the giant could gain an “unfair advantage” in Oregon’s healthcare system, Athena said. Also, Amazon might crimp working conditions at One Medical, Athena wrote. “Within warehousing and logistics, Amazon forces an unsafe pace of work through surveillance, automated management and threat of termination,” Athena wrote. “In sectors where Amazon has expanded, we see downward pressure on working standards, including in grocery, logistics and warehousing sectors.”
Meanwhile, the Federal Trade Commission is investigating the market implications of the deal.
Amazon has struggled to get a foothold in the health care field, however. In 2019 it launched Amazon Care, a virtual health care system for Amazon employees and corporate customers. But Amazon this summer said it was shuttering the program due to lack of interest from corporate customers.
You can reach Christian Wihtol at [email protected].
