Dive Brief:
Amazon’s One Medical is partnering with academic medical giant Cleveland Clinic to expand the primary care company’s reach in northeastern Ohio.
One Medical and Cleveland Clinic will open their first joint primary care office in 2025 in the Cleveland area, and plan to build additional facilities over the next several years, according to an announcement from the companies on Monday.
Under the deal, Cleveland Clinic will invest funds to build out new One Medical offices, which will be clinically and digitally integrated with the system. The new clinics are meant to increase the system’s primary care offerings for its patients while creating a new referral stream to its specialists and hospitals. Meanwhile, One Medical members will benefit from better access to specialty care, according to a spokesperson for the primary care chain.
Dive Insight:
Cleveland Clinic is the latest health system to notch a deal with One Medical that both sides tout as mutually beneficial.
The Amazon subsidiary has similar relationships with roughly 20 other health systems on specialty care referrals, including Boston-based Mass General Brigham and the University of Miami Health in Florida.
The partnerships help One Medical offset the cost of expansion — the steep investment required to build, market and make profitable medical clinics has been one factor behind major primary care chains recently slowing or reversing growth — and receive help in managing the needs of higher acuity patients.
For hospitals, linking up with One Medical increases access to primary care while bringing more patients — and the revenue they represent — in their doors. Health systems have recently seen utilization stabilize, a boon after a handful of difficult operating years defined by a pandemic, labor shortages and record-high inflation, but continue to seek new ways to shore up volume.
Cleveland Clinic operates 23 hospitals and almost 280 outpatient clinics globally, though its locations are concentrated mostly in Ohio. Like its peers, the nonprofit has benefited this year from rebounding demand for inpatient and outpatient care. That increasing volume drove the system’s operating income to $95.5 million in the first half of this year, up more than eightfold from $10.9 million in the first half of 2023.
However, weaker investment income shrunk the Cleveland Clinic’s year-over-year net income growth to 8%.
Amazon acquired One Medical for $3.9 billion last year, and has leaned on the division to steadily weave its healthcare ambitions into its core e-commerce business. That includes offering One Medical memberships to users of Amazon’s Prime subscription service at a discount and rebranding its other healthcare offerings under One Medical’s umbrella.
However, One Medical has not been immune from cutbacks as Amazon looks to trim costs. Earlier this year, Amazon closed several One Medical corporate offices and moving its chief financial officer to a role focused on growth. The e-commerce behemoth also laid off several hundred employees at One Medical and its online pharmacy business, called Amazon Pharmacy.
Along with One Medical and Amazon Pharmacy, Amazon also operates an online telehealth marketplace and a chronic condition management portal.
