The news caught Amazon employees by surprise — including those who used the service as patients. The company’s human resources staff had been promoting Amazon Care as a health benefit the same week it shut down, an Amazon employee told The Washington Post.
“This is a huge shock to a lot of us,” said the employee, who spoke on the condition of anonymity to protect their job.
The demise of Amazon Care also came as a shock to industry observers. After launching publicly in 2019, it expanded quickly and was touted as one of the company’s most important innovations. But there were also signs of trouble. To understand where Amazon is headed next in health care, the industry is looking for clues from a different direction: Amazon’s acquisitions.
Amazon’s health-care ambitions sometimes clashed with medical best practices
Amazon is in the process of acquiring primary care start-up One Medical for $3.9 billion, although regulators said Friday they are taking a closer look at the deal. While the e-commerce giant’s exact path into health care is unclear, Amazon has shown sustained interest in the primary care market, including providing home health care for seniors (a burgeoning opportunity as the baby-boom generation ages) and selling telehealth and mental health services to employers.
Amazon has long experimented with different models for expansion and growth. Amazon Web Services, its dominant cloud division, stemmed from its own needs but became a huge revenue center when Amazon started selling it to other companies. For years, though, it failed to break through in groceries with Amazon Fresh, and in 2017 it acquired Whole Foods to boost that side of its business.
Health care may lend itself to the latter model. The Post previously reported that former Amazon Care employees had concerns about the tech giant’s fast and frugal approach to health care and that medical professionals hired to provide care sometimes clashed with the company over its approach. And in a note to staff announcing the closure, the current executive in charge admitted that Amazon Care was failing to please its corporate customers.
Amazon will see you now: Tech giant buys health-care chain for $3.9 billion
“It must mean something went wrong in the calculus,” said health-care consultant Paddy Padmanabhan of the Amazon Care closure.
Ali Parsa, CEO of digital health company Babylon Health, said when it comes to building a primary care service from scratch, “there are no shortcuts.”
“I’m not sure somebody can replicate this overnight,” he said. “I think the acquisition of One Medical is an admission that they need to learn that knowledge.”
Some industry experts and current and former Amazon employees said Amazon will likely have to narrow