Amazon One Medical and Cleveland Clinic plan to open hybrid primary care clinics, pointing to a rising trend of digital health disruptors partnering with traditional providers.
The healthcare landscape has changed significantly since the onset of the COVID-19 pandemic. While new opportunities emerged, particularly for digital health players, the sky-high funding and enthusiasm of the early pandemic years have given way to more cautious investments. In this more somber landscape, collaboration has become an increasingly necessary step to further the digital transformation of an, at times, unyielding industry.
That appears to be the motivation behind the recent collaboration between Cleveland Clinic and Amazon One Medical. According to an announcement in October, Amazon One Medical will open the first of many primary care offices in affiliation with Cleveland Clinic in 2025, combining its in-person and virtual primary care model with Cleveland Clinic's existing services.
Though this is not a novel collaboration -- Amazon One Medical has itself collaborated with numerous health systems -- it points to a trend that some market experts believe we will see more of in 2025. The collaboration offers unique advantages to both organizations, indicating that these types of partnerships may become even more popular in the near future.
"It really feels like there's potentially kind of a Venn diagram between the world of healthcare incumbents like providers, payers, pharma companies, and some of the new entrants like retailers, big tech or digital health startups, [and] that they're all kind of moving toward the center of this Venn diagram where they work with each other increasingly," said Chris Lew, a principal on Rock Health Advisory's Consulting team, in an interview.
What the collaboration means for Cleveland Clinic and Amazon
Cleveland Clinic and Amazon One Medical's collaboration is focused on primary care. The organizations plan to build a jointly owned and operated set of primary care clinics in the northeast Ohio region. Like other Amazon One Medical locations, the clinics will offer same-day and next-day primary care appointments, onsite laboratory services and 24/7 virtual care support.
Healthcare consumers can access virtual care services through the Amazon One Medical mobile app. These services include video visits, secure provider messaging, symptom checker capabilities, medical record access, prescription renewals and reminders for follow-up care and referrals.
According to Lew, though this type of collaboration is not new, it offers a new data point within the trend of health systems partnering with primary care disruptors. This trend is growing more prominent within the healthcare industry because it provides two strategic benefits to the organizations involved: boosting customer acquisition and creating a one-stop shop experience.
In terms of customer acquisition, the collaboration could help Cleveland Clinic reach a broader group of customers and form earlier relationships with them, Lew said. Additionally, the collaboration could help Cleveland Clinic tighten the referral funnel to more profitable specialty and inpatient care services, increasing its revenues.
For Amazon One Medical, joining forces with a prestigious health system like Cleveland Clinic could help the company move from the major metro centers it currently operates in and reach new healthcare consumers, Lew said. Essentially, Amazon One Medical will be able to use Cleveland Clinic's brand awareness in the region to its advantage.
"Then, in terms of the one-stop shop point that I mentioned, I think a partnership like this really enables both the health system and the primary care disruptor to really kind of simulate the convenience and simplicity of addressing most of a consumer's health needs within one provider group," Lew said. "Of course, they're sort of simulating [a one-stop shop] since they're not one provider group per se, but … I think it's really kind of feeding into what we know is a key driver of provider selection among consumers."
Ahmed Albaiti, principal and practice lead at consultancy firm ZS, agreed with Lew's overarching view, adding that the collaboration points to a need for a transformation within primary care.
It feels like Amazon is now reaching a point of being able to consolidate the different assets they have in the care delivery space in a way that really makes sense with what consumers are demanding from primary care.
Chris LewPrincipal on Rock Health Advisory's Consulting team
"It's always hard to make those businesses work financially," he explained in an interview. "The engagement levels are not there, the licensure is not there. So, you'll see things like using nurse practitioners to lead some of the charge, [such as] having an urgent care [service], extra open hours, 'We're open until 10,' that kind of thing."
Though technology has played a critical role in transforming care delivery in other areas, like chronic disease management, Albaiti noted that the healthcare industry does not yet have financially lucrative virtual-first primary care models that work.
Thus, collaborations like the one between Cleveland Clinic and Amazon One Medical offer a path to this transformation by enabling the primary care disruptor to gain existing patient trust and the care integration expertise of established health systems; the health systems, in turn, gain access to a referral engine and the ability to extend their reach beyond the region they operate in, Albaiti stated.
For Amazon, which has been working for years to establish a successful digital care service model, the collaboration with Cleveland Clinic shows how far the tech giant has come in its healthcare journey, learning from past missteps, including its joint venture with JPMorgan Chase and Berkshire Hathway that dissolved in 2021.
"It feels like Amazon is now reaching a point of being able to consolidate the different assets they have in the care delivery space in a way that really makes sense with what consumers are demanding from primary care," Lew noted.
Earlier this year, the tech giant folded its nationwide virtual care service, Amazon Clinic, into One Medical, creating Amazon One Medical. Now, joining forces with Cleveland Clinic could help boost the brand further and meet evolving patient demands.
"I think Amazon has the ability to trial lots of different ideas," said Sheila Shah, managing director at L.E.K. Consulting, in an interview. "I really think this idea could be very impactful, so I'm excited to keep a close eye on it. Collaborating with a reputable name like Cleveland Clinic really enhances Amazon's credibility in the healthcare space, which is huge."
What the collaboration tells us about the direction of the digital health sector
Total venture funding in the digital health sector has dropped significantly since the pandemic heyday. In 2021, venture funding in digital health soared to a record high of $29.2 billion, according to Rock Health data. By 2023, this figure had fallen to $10.8 billion; in the first three quarters of 2024, it had just about cleared $8 billion.
Though this paints a subdued picture of the digital health landscape, Albaiti highlighted the nuances in the data. While some digital health tech areas, like digital therapeutics, suffered, others, like AI-powered digital tools and those focusing on condition management, held steady. According to Albaiti, this will likely prompt more consolidation in the industry around the platforms that are proving themselves clinically and financially.
"I think we'll probably see a whole bunch of them tripping over themselves and getting consolidated …. It's not just the systems that are going for it, like the Cleveland Clinics, [it's] the pharma companies," he said, referencing Eli Lilly and Pfizer launching direct-to-consumer telehealth platforms in 2024.
Lew echoed Albaiti, adding that "ultimately, the funding environment in digital health will still be really keenly focused on solutions that are able to demonstrate profitable unit economics. And I think for some categories of digital health companies, these types of partnerships with healthcare incumbents will prove to actually solve some of those challenges that they encountered in the past."
Collaboration between healthcare incumbents, that is, traditional brick-and-mortar healthcare providers, and digital health disruptors is not necessarily a panacea for funding challenges, but it could help attract investors and calm their concerns, Lew added.
Partnerships like this provide a strong benefit for patients, as well as allow each individual organization to leverage their strengths, while relying on a partner to bring theirs to the table.
Sheila ShahManaging director of L.E.K. Consulting
This collaboration trend also appears to extend to newer clinical care arenas, including obesity care and food-is-medicine interventions.
"We're seeing grocers like Kroger, who are of course relatively newer entrants to the space, partner with both new entrants to the space, like startups -- they recently just announced a partnership with Bitewell, for example, that's doing innovative food nutrition quality product scoring -- as well as partnering with the incumbents like health plans to actually deliver value-based food-is-medicine programs," Lew said.
Though Amazon, with its wealth of resources, will likely not be too affected by the ups and downs of digital health funding, its ongoing collaboration with health systems, especially prominent ones like Cleveland Clinic, could offer a path forward for digital health companies that are struggling to find a foothold in the formidable digital health landscape and require funding to survive.
Further, amid the ongoing patient demand for in-person care plus digital care, collaboration is vital to meeting clinical needs and improving the patient experience. Shah noted that combining Cleveland Clinic's healthcare network with One Medical's technology-driven primary care model offers patients the comfort of face-to-face consultations and the convenience of digital care as needed.
"Partnerships like this provide a strong benefit for patients, as well as allow each individual organization to leverage their strengths, while relying on a partner to bring theirs to the table," she said.
Not only could the rising collaboration trend in the digital health sector boost patient care, but Lew also noted that if these collaborations prove successful, they could pursue long-held goals to enhance healthcare, like value-based care.
"I'd be curious to see whether value-based care models really emerge from this," he said. "So, in the longer run, are provider partners like One Medical and the health systems they're working with able to coordinate care tightly enough across the care continuum such that they can really kind of take on risk and do some sort of value-based contracting?"
The future benefits of an increasingly collaborative digital health sector are yet unknown; however, it is becoming apparent that stakeholders might find it more helpful to view one another as potential partners rather than competitors.
Anuja Vaidya has covered the healthcare industry since 2012. She currently covers the virtual healthcare landscape, including telehealth, remote patient monitoring and digital therapeutics.
