Potential Impact of Amazon’s One Medical Acquisition on Doctor Buyouts in 2023

he market for purchasing physician practices is expected to become even more competitive if Amazon’s proposed acquisition of One Medical is approved by regulators. The $3.9 billion deal, which was originally slated to close by the end of this month, would give One Medical a significant financial advantage in the already crowded primary care market, where hospitals and health systems, as well as retail companies like Walgreens, Walmart, and CVS Health, are also seeking to acquire doctor practices. These retail healthcare companies are joining other non-traditional owners of doctor practices, like private equity groups, in the acquisition of physicians.

A report by the Physicians Advocacy Institute and consulting firm Avalere found that corporate entities, including hospitals, have significantly increased their ownership of physician practices between 2019 and 2021, particularly during the COVID-19 pandemic. “Hospitals and other corporate entities acquired 36,200 additional physician practices over the three-year period (a 36% increase),” the report showed. “Hospitals acquired 4,800 additional physician practices over the three-year period, resulting in an 8% increase in hospital-owned practices. Corporate entities acquired 31,300 additional physician practices over the three-year period, an 84% increase in corporate-owned practices.”

Such consolidation is a concern for some regulators, including those examining the Amazon-One Medical transaction. In Oregon, for example, the state’s health authority is conducting a 30-day preliminary review of the deal. Critics of the transaction are worried about the potential for Amazon to reduce competition due to its size and scale. “Vertical consolidation, where large companies buy up smaller ones, are particularly concerning due to the potential anticompetitive effects of having fewer and more powerful players controlling the market,” the Oregon State Public Interest Research Group wrote in a letter to the Oregon Health Authority. Neither Amazon nor One Medical have commented on the status of the deal’s closing.