Interoperability will drive the success of Amazon's One Medical acquisition

By Cyrus Bahrassa  LinkedIn

Composite of a doctor using a smartphone and a smartphone with the Amazon logo on the screen

Arguably the biggest news in healthcare over the last four weeks has been Amazon’s planned $3.9 billion acquisition of One Medical. Plenty of debate abounds about what this move means for healthcare delivery and data privacy. (Fortunately for One Medical’s CEO, his estimated $119 million payout in the all-cash transaction hasn’t generated nearly as much buzz.)

There’s no doubt that Amazon is looking to make inroads in brick-and-mortar healthcare and to bring a more consumer-friendly and tech-first model to how we seek out and manage our care. Will they revolutionize the industry? No one knows at this point, though history is not on their side.

But what isn’t being discussed is how the success of this deal will be dictated by interoperability. Amazon is acquiring a company and a business model where integrations are crucial to their existence, and it faces a path that could lead to opportunistic wins or painful struggles.

A big fish to fry

Let’s establish one thing first: interoperability is vital to One Medical’s growth. It said so itself in its most recent annual report: "If the integration process with our partners is not executed successfully or if execution is delayed, we could incur significant costs, partners could become dissatisfied and decide not to continue a strategic contractual relationship with us beyond an initial period during their term commitment or, in some cases, revenue recognition could be delayed, any of which could harm our business and results of operations."

As a primary care-only provider, One Medical relies on health network partners to offer specialty services and inpatient treatment for its members. One Medical must be able to exchange patient data with those providers to arm the specialists with the necessary data for treatment, and likewise, those partners must be able to route notes, images, and a variety of other data points back to One Medical’s 1Life EHR in order to achieve a closed loop of care.

Even internally to One Medical, integrations are the lifeblood of its operations. The same annual report notes that "our members depend on our digital health platform, including our mobile app, web portal, and support services to access on-demand digital health services or schedule in-office visits." The healthcare-at-your-fingertips approach that keeps existing members happy and attracts new ones doesn’t work without every system being tightly interconnected.

Keep it simple

On the one hand, if there’s any work needed to enhance and expand One Medical’s internal interoperability capabilities, Amazon can make an immediate impact. It has the technical talent and resources to wholesale overhaul the 1Life platform to ensure it is primed for integrations. But such an effort would only address one half of the equation.

The challenge for Amazon as it adds virtual and physical care locations will be scaling and accelerating connections with its health network partners. These providers host a multitude of EHRs and ancillary software systems, all of which have varying integration capabilities, and their IT teams are likely already managing high workloads. Amazon can’t afford to open a location in a new city but then spend months faxing documents to-and-fro while it attempts to connect to the specialty clinics and hospitals in the area. That will simply inflate administrative costs, frustrate providers, and deter potential members and partners. The integration process must be efficient and cost-effective.

The key for the U.S.’s fourth-largest company will be making ease of integration a primary factor in its pursuit of partners. As it evaluates the players in the market, it should consider interoperability up there with traditional factors like prestige, accessibility, and quality of service. If the prospect’s EHR is challenging to connect to, then move on and target a relationship with someone else. This of course has the downside of limiting providers’ choices for where to refer patients, but it gives Amazon the certainty and repeatability needed to ensure it can rapidly scale operations. The alternative—pursuing laborious integration projects and creating and supporting heavily customized solutions—would be a momentum killer.

The better road

Building and perfecting integrations will be a significant source of friction as Amazon grows its primary care business. If it hasn’t experienced it yet, Amazon will quickly see why fragmentation, complexity, and availability make healthcare interoperability so hard. But it can find a happy path by elevating the importance of interoperability in its growth strategy and being selective in its partners. This is not an easy road to follow, but done the right way, it can lead to climbing mountains instead of laboring through mud.


Photos by The National Cancer Institute and Christian Wiediger on Unsplash

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