How Amazon’s One Medical Deal Makes Buying Doctor Practices More Expensive For CVS, Walgreens And Walmart -

How Amazon’s One Medical Deal Makes Buying Doctor Practices More Expensive For CVS, Walgreens And Walmart

News Amazon will spend $3.9 billion on doctor-staffed clinics will make the business of buying primary care physician practices much more expensive for retail rivals.

Amazon’s proposed acquisition of One Medical comes amid an unprecedented period of competition for primary care doctor practices with Walgreens opening hundreds of physician-staffed clinics with partner VillageMD while Walmart launches its doctor-staffed clinics under the Walmart Health brand in several new markets. Meanwhile, CVS, which has long staffed its more than 1,100 in-store clinics with nurse practitioners is also rolling out more models that include physicians.

“Coinciding with physician workforce shortages, volatility, and workplace disaffection is the growing presence of non-traditional players such as retail outlets, insurance companies and private investor groups that now actively recruit physicians and/or acquire their practices,” the doctor staffing companies AMN Healthcare and Merritt Hawkins said in their recently released review of physician recruiting incentives.

Physician compensation is already on the rise as patients return to see their doctors in-person after the Covid-19 pandemic and government shutdowns caused practices and clinics to close in 2020.

The average starting salary from Merritt Hawkins’ 2019/2020 report for internal medicine physicians was $276,000, which tumbled to $244,000 in the 2020/2021 report at the pandemic’s peak and before vaccines against Covid were widely available. Though internal medicine starting salaries aren’t quite back to where they were before the pandemic hit, the average starting salary for 2021/2022 was $255,000.

With Amazon’s backing, One Medical will have a huge financial war chest to expand into a primary care market that already includes well-capitalized hospitals and health systems that are buying up doctor practices and the new retail rival entrants.

In the case of Walgreens, the company is opening hundreds of doctor-staffed clinics through its $6 billion investment in the primary care company VillageMD while CVS has an array of outpatient expansions in the works from creating in-store HealthHubs with hundreds of new items to forming relationships with physicians to adding new healthcare services to the more than 1,100 CVS MinuteClinics across the U.S. that are staffed by nurse practitioners.

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