- Amazon is shutting down its Amazon Care telehealth company just 6 months after it launched.
- Experts say it appears that Amazon wants to go in a different direction in the healthcare industry, highlighting the company’s recent acquisition of One Medical and its attempt to buy Signify Health.
- They say all the moves are part of the changing landscape in the field of telehealth.
Just 6 months after announcing a nationwide expansion of its virtual health service, Amazon is now He says is closing Amazon Care by the end of the year.
In an email to employees, the company’s vice president said Amazon had worked with employers to improve Amazon Care, but those efforts weren’t going to work in the long run.
The company thrown out the telehealth service for its own workers in 2019 before a handful of other companies came on board. The hybrid service connects a person with a health professional through a video consultation. In some cities, the service included a home visit, if warranted.
So why is Amazon pulling the plug? We put that question to multiple analysts.
“It’s amazing because they had made promises to their employees, to the general public and to shareholders that they could figure out how to make this work,” he said. miguel abramsMPH, Ph.D., a senior health researcher at the nonprofit consumer advocacy group Public Citizen.
Abrams said Amazon’s decision highlights some of the challenges the company will face as it moves forward in the healthcare field.
“It’s not a good idea right now for Amazon to say that it basically failed at this venture,” he told Healthline. “It makes you wonder about the competition from Amazon to enter and compete in this space.”
Abrams says it’s understandable that Amazon wants to tap into the lucrative health care market, but says the company may have underestimated the cost of the home care component.
“I haven’t looked into it myself, but I suspect one of the main reasons it failed is that they couldn’t cover the home health part of it with subscriber premium rates,” he added.
Kirthi Kalyanam, Doctor. professor and executive director of the Retail Management Institute at Santa Clara University in California, believes that Amazon will re-enter this field.
“I think this is a one-time failure. The healthcare industry is too big for Amazon not to make a couple of changes,” she told Healthline.
“I think this is a strategic move of not investing money in an effort that is not promising,” Kalyanam added. “It’s also a mark of new CEO Andy Jassy, who is liquidating several previous failed investments, including some of the retail stores.”
Natalie Schibel, MPH, vice president and director of research at Forrester Research, sees it differently. He is a former public health analyst for the Centers for Disease Control and Prevention.
“My opinion is that this is not a failure by any means. It’s specifically a strategic move,” he told Healthline. “It’s a move to expand their footprint and reinvent the patient experience. They’re going to do that by teaming up.”
Schibell says that instead of turning to employers to provide its telehealth services, the company is restructuring itself to eliminate the middle manager.
“They want to have a bigger footprint by going directly to the consumer,” he explained. “That’s really where the greatest potential lies right now in health care.”
Schibell says that one of the reasons Amazon Care is closing is because Amazon couldn’t do it alone. They needed experts in primary care.
Last week, Amazon lost his offer to acquire Signify Health, a provider of home health care.
CVS Health beat out other suitors with an $8 billion offer. CVS already has clinics, so this acquisition will add home health services to its healthcare portfolio.
Last month Amazon Announced an agreement to purchase One Medical, a janitor-type primary care organization. One Medical was a competitor of Amazon Care. Its almost 800,000 members have access to both virtual and face-to-face care. Its members pay an annual membership fee of $199.
Amazon described the proposed acquisition as an opportunity to “transform healthcare and improve outcomes.”
“One Medical appears to be well developed and very similar to what Amazon would have to build,” Kalyanam said. “This could be a good accelerator, although I’m not sure what value Amazon would bring to One Medical. It seems they already have a pretty good model.”
For now, the Federal Trade Commission is doing research the proposed acquisition of almost $4 billion dollars. The agency has asked both companies for more information about the merger.
Experts agree that with the COVID-19 pandemic, telehealth is here to stay and that’s bringing more players to the arena.
“A lot of employers and insurers are partnering with telehealth companies… which is great because it increases access to care,” Schibell said.
“There will be those who really have staying power. They are the ones that are offering a wide range of services,” she added.
However, Abrams worries that a for-profit provider like Amazon could become too big a player in health care.
“You don’t want a phone provider in this country, do you?” he said. “That’s why ‘Big Bells’ broke up so many years ago.”
