This week, Amazon announced plans to pay US$3.9 billion (AUD$5.6 billion) to acquire US healthcare company One Medical.
One Medical would provide primary care on a membership basis to some 800,000 people across the United States. In his own words, he claims to be “on a mission to make obtaining quality health care more affordable, accessible and enjoyable for everyone”.
But why is Amazon – the company that helps you get a cheap home projector or toaster – investing in this?
What is a medical?
With subscription fees of just US$199 per year, One Medical helps bridge the gap between the United States’ inefficient public healthcare system and people’s need for (expensive) health insurance.
It provides a comprehensive set of online resources for paying members, including a mobile app to request medical assistance and “24/7 access to virtual care.”
Clearly, the company has done well, recording net revenue of over $250 million in the first quarter of 2022.
Meanwhile, Amazon has been building its presence in the healthcare industry for the past few years. In 2018, it acquired PillPack, which became Amazon Pharmacy. And in 2020, he launched Amazon Care, a virtual healthcare company that connects patients to a range of telehealth and primary care services.
By acquiring One Medical, which was a competitor, Amazon is advancing into the American health market. It’s no different than it did with book retailers, when it first launched as what was essentially an online bookstore.
Is it just data?
Amazon knows a lot about its customers. Through user browsing and purchases made on its website, it collects large amounts of data to better understand what people need and want – with the ultimate goal of selling more products and services. .
Amazon also has the ability to tap into a global network of Amazon-branded devices, such as Echo and Alexa. Recent research has suggested that Amazon uses voice data collected through Alexa to target potential customers with advertisements.
Often, tech companies claim that they collect data to generate a more positive experience for customers. They might be able to present you with personalized product options, which will save you time and effort.
But what about when you combine that data with more privileged and sensitive information related to your health?
Read more: Amazon Echo privacy concerns go far beyond voice recordings
Join the dots
Amazon isn’t just a giant online shopping mall. It is also a leading provider of artificial intelligence (AI) services.
While there may be legislative protections in some jurisdictions, it wouldn’t be difficult for Amazon to link people’s health data with all the other data it already collects.
An Amazon spokesperson said One Medical customer information protected by the Health Insurance Portability and Accountability Act (HIPAA) would be “treated separately from all other Amazon businesses as required by the law”.
This indicates some basic level of privacy protection; HIPAA is designed to protect people’s personally identifiable information, medical history, and other sensitive health data.
But Amazon’s ability to assure customers that this is being respected will depend on its transparency. Without it, it will be difficult for anyone outside to understand the inner workings of data management.
The spokesperson said:
As required by law, Amazon will never share One Medical customers’ personal health information outside of One Medical for the purposes of advertising or marketing other Amazon products and services without the customer’s clear permission.
As for the need for “clear customer authorization”, this ideally means that Amazon will ensure that the authorization process is absolutely transparent. But transparency around data-sharing requests remains a murky issue in the big tech space.
After all, voice data collected by Amazon devices can be deleted – but how many people do? How many are aware that they can?
Will Amazon start targeting Amazon Pharmacy ads for lifesaving drugs at One Medical patients who have provided “clear permission” for data sharing?
In the past, Amazon has admitted to passing people’s personal data (collected through its Ring doorbells) to US police, without consent or a warrant.
Expand his empire?
As Amazon moves into the healthcare space, it’s not a stretch to think it could combine its AI capabilities and Alexa voice data to target sick people with medical products or drugs. Amazon Care services.
In the worst-case scenario, we could see Amazon monopolizing the US healthcare industry, with its usual practice of undercutting competitors and aggressively selling to customers. It lures customers in with low prices, before enticing them to buy more.
Amazon Pharmacy already offers discounted drugs to Prime members. And one would imagine that those willing to pay higher fees could get better health care from Amazon, opening a door to health insurance services.
The wealth of information that Amazon aggregates also makes it a more attractive target for cyberattacks and data breaches. Information that was previously held in various disparate networks is now contained within the servers of a single organization. Criminals will inevitably take an interest.
The sensitive nature of patient information, coupled with the fact that many healthcare organizations are still using outdated digital infrastructure, means the healthcare industry is primed for exploitation.
Read more: Australian hospitals face constant cyberattacks. Consequences could be deadly
Could it happen here?
Fortunately, the Australian health system is not like the American model, where there is no universal health program.
Currently, just over half of Australian residents have private health insurance. But take-up of private healthcare has dwindled, from time to time, since the country’s state-funded universal healthcare system was introduced in 1975 (as Medibank), before being replaced by the Medicare system in 1984.
Australia has over 30 health insurers offering around 3,500 different health insurance products. With so much competition, Amazon is unlikely to be interested in entering the Australian market with healthcare products, at least for the foreseeable future.