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The news stunned Amazon employees — including those who used the service as patients. The company’s human resources staff was promoting AmazonCare as a health benefit during the closing week, an Amazon employee told The Washington Post.
“This is a big shock to many of us,” said the employee, who asked not to be named to protect his job.
The loss of Amazon Care was a shock to industry observers. In the year Since its official launch in 2019, it has expanded rapidly and has been called one of the company’s most important innovations. But there were also signs of trouble. To understand where Amazon is headed next in healthcare, the industry is looking for clues from a different angle than Amazon’s acquisitions.
Amazon is in the process of acquiring primary care startup OneMedical for $3.9 billion, though regulators said Friday they are watching the deal closely. While the e-commerce giant’s exact path to healthcare remains unclear, Amazon has shown steady interest in the primary care market, including offering home health care for seniors (a growing opportunity for the baby-boom generation) and selling telehealth and mental health. Services for employers.
Amazon has long tried different models for expansion and growth. Its main cloud division, Amazon Web Services, grew out of its own interests, but it became a major revenue center when Amazon started selling it to other companies. For years, however, Amazon couldn’t get into Fresh Groceries, and in 2017 it acquired Whole Foods to grow that side of the business.
Health care can lend itself to the second model. The Post reports that former Amazon Care employees are concerned about the tech giant’s fast and affordable health care, and that medical professionals hired to provide care sometimes clash with the company over its approach. And in a memo to employees announcing the shutdown, the current executive admitted that Amazon Care failed to keep its corporate customers happy.
“Something went wrong in the math,” said health care consultant Paddy Padmanabhan of the Amazon Care shutdown.
“There are no shortcuts,” says Ali Parsa, CEO of digital health company Babylon Health, when it comes to building a primary care service from scratch.
“I’m not sure anyone can replicate this overnight,” he said. “I think having a medical is the introduction they need to learn that knowledge.”
Some industry experts and current and former Amazon employees say Amazon needs to narrow and focus its health care goals — perhaps for employer-based models, or virtual mental health care, or caring for the 65+ population. Others said Amazon’s plan, like its efforts in e-commerce, logistics and cloud services, is still to control consumer healthcare across the board.
The Post spoke with six current and former employees, as well as four industry experts, about where Amazon’s health strategy will go after AmazonCare. Some spoke on the condition of anonymity because they are still employed by Amazon and are not authorized to speak publicly or have previously signed a non-disclosure agreement.
“We believe healthcare is high on the list of practices that need to be reinvented, and Amazon is committed to supporting our customers, employees and policymakers on issues that matter,” Amazon spokeswoman Julia Lawless said in an emailed statement.
Amazon founder Jeff Bezos owns the Post.
One way to understand where Amazon sees the biggest opportunities in healthcare is to look at how it is making an impact in Washington, DC.
In March 2021, he helped found a lobbying group with other healthcare companies called Amazon Care Moving Health Home. That includes a home health company, Landmark Health, whose founder, Adam Boehler, ran Medicaid and Medicare under former President Donald Trump.
The coalition has pushed for an extension of restrictions passed during the coronavirus pandemic that would have weakened federal laws on home health care. The team’s ultimate goal is to make those releases permanent.
He also encouraged the Centers for Medicare and Medicaid to cover home care at the same rate as facility-based care, a change that could have significant financial benefits for health and technology companies, especially if private insurers follow suit.
Moving Health Home He spent $440,000 lobbying the federal government in 2021 and an additional $220,000 in the first half of 2022, according to OpenSecrets, which tracks political influence. It’s unclear how much funding came from Amazon.
While the investment was modest, Amazon Care was Amazon’s only home care operation, and One Medical did not offer home care. Lobbyist Krista Droback, who heads the House of Moving Health, declined to be interviewed about Amazon’s intentions but said at the time that the group was unaware of AmazonCare’s closing before the public announcement.
Even after AmazonCare closes, the company will “continue to work with industry stakeholders as part of this transition,” an Amazon spokesperson said.
Amazon has shown interest through potential acquisitions. The Wall Street Journal reported last month that Amazon was among the bidders for an in-house risk assessment company called Signify. Signify, which is also a member of the Moving Health Home coalition, employs a staff of clinicians who visit private homes to assess seniors.
The Wall Street Journal reported last week that CineFie could be bought by CVS, but Amazon’s initial interest, coupled with its continued lobbying, suggests it may have plans in the home care space.
Amazon’s other acquisition target, One Medical, in June 2021 acquired Iora Health, a primary care provider focused on adults 65 and older, which is growing rapidly as the baby-boom generation ages. Treating that population at home is a lucrative market: Home health care revenue grew more than fifty percent between 2013 and 2020, according to the Census Bureau.
An Amazon spokeswoman said the company could not comment on a deal with a medical until it is finalized, a process that could take several months. The Federal Trade Commission issued a request for more information from both sides on Friday.
Amazon’s healthcare investments are aimed at serving its own employees. As the second largest private employer in the US, healthcare is a big value for Amazon.
By building an internal health service, the company hopes to cut costs while creating a niche product to sell to other major employers, just as its internal cloud computing business grew into the highly profitable Amazon Web Services.
According to ratings, reviews and interviews with patients, Amazon Care succeeded in pleasing patients, but the real customers of the project – corporations – did not feel the same way. In an email to employees, Amazon Health vice president Neil Lindsay said Amazon Care “isn’t a complete offering for the large enterprise customers we’ve been targeting.”
A medical deal would help Amazon acquire primary care workforce and physical infrastructure, as it did with Whole Foods and Groceries.
“They’ve decided that it’s too difficult to build from scratch on their own, so they’re getting someone to start for them the same way they tried to do perishables with Whole Foods,” Babylon Health’s Parsa said. He has no direct knowledge of the agreement.
As a medic, Amazon can help reduce employee health care costs. It mostly provides benefits to consumers as an employer, former Amazon employees said. Before the shutdown, Amazon Care announced a deal with online therapy company Ginger, which also uses an employer-based business model. Although the status of that partnership is unclear and Ginger declined to comment, it’s another sign that Amazon is looking for employer-based models.
“Virtual mental health works really well,” says health consultant Lyndon Brick [Amazon is] He is one of the only players to do so.
Amazon has a long history of trial and error. In the year In 2015 He killed off the Fire phone, the answer to the iPhone, after spending a year and $170 million on the project, according to the New Yorker. Recently, Amazon CEO Andy Jacey announced that the company is moving away from bookstores and other brick-and-mortar retail investments to focus on growth areas.
Amazon’s healthcare division in particular has seen high-profile projects come and go. In the year In 2018, Amazon announced a partnership with financial behemoths JP Morgan and Berkshire Hathaway on a health insurance project called Haven, which would revolutionize the employer-based health care model. But in January 2021, Haven announced its closure, although JPMorgan chief executive Jamie Dimon said in a letter to staff at the time that the lessons learned were “invaluable”.
Haven wasn’t the end of Amazon’s ambitious health ambitions. In the same month he closed shop, Amazon’s outgoing senior vice president Dave Clark wrote a public letter to newly inaugurated President Biden asking him to help organize his administration’s coronavirus vaccine efforts. The company tried to sell its own coronavirus testing kit online after completing more than a million coronavirus tests for its employees, prompting it to close the lab in June.
In recent months, Amazon has given every indication that Amazon Care is a growing and important part of its overall healthcare business.
According to LinkedIn posts and Amazon’s own website, the company will be recruiting and attending industry conferences this summer. It launched its home mobile services in San Francisco in June, saying it would soon expand to 20 US cities. In a letter to shareholders earlier this year, Jassi called Amazon Care and Pharmacy among the company’s most exciting examples of innovation.
Amazon Care’s sudden shutdown has health care providers scrambling to explain to patients who heard the news in the media, said a current Amazon employee who spoke on condition of anonymity because he was not authorized to speak publicly.
Amazon’s inpatient and primary care services will close at the end of September, while urgent care will be available via video and chat until the end of the year, according to an email sent to patients this week, a copy of which was obtained by The Post.
“There was, and still is, no guidance on how to counsel medical patients on their ongoing care,” a current Amazon Care worker said in a message. The company continues to make it “hard to give patients the complete care experience they deserve.”
Yaganeh Torbati and Christopher Rowland contributed to this report.
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