Amazon Announces the Shutdown of Virtual Care Division Amazon Care

Aug. 25, 2022
Just under three years after mega-corporation Amazon had launched its virtual health services division, Amazon Care, the company is shutting it down

Just under three years after mega-corporation Amazon had launched its virtual health services division, Amazon Care, the company is shutting it down, after senior Amazon executives had determined that Amazon Care “wasn’t the right long-term solution for our enterprise customers.” The move will not affect Amazon’s announcement last month of its acquisition of One Medical.

As CNBC’s Annie Palmer wrote on Wednesday evening, Aug. 24, “Amazon is shutting down its telehealth service, Amazon Care, marking a major retreat by the retail behemoth in its efforts to break into the health care space. Amazon will shutter the service after Dec. 31, Amazon Health Services lead Neil Lindsay announced Wednesday in a company email. The e-commerce giant decided to make the move after determining it wasn’t ‘the right long-term solution for our enterprise customers,’ Lindsay wrote in the memo, which was previously reported by GeekWire. ‘This decision wasn’t made lightly and only became clear after many months of careful consideration,’ Lindsay said. ‘Although our enrolled members have loved many aspects of Amazon Care, it is not a complete enough offering for the large enterprise customers we have been targeting, and wasn’t going to work long-term.’ Even though the service is ending, Amazon gained a deeper understanding of ‘what’s needed long-term to deliver meaningful health care solutions for enterprise and individual customers’ through its rollout of Amazon Care, Lindsay wrote in the memo.” As Palmer noted, “Amazon Care launched in 2019 as a pilot program for employees in and around the company’s Seattle headquarters. The service provides virtual urgent care visits, as well as free telehealth consults and in-home visits for a fee from nurses for testing and vaccinations.”

Indeed, as recently as February of this year, Amazon’s executives had touted Amazon Care’s success in the market. In a Feb. 8 post on the company’s website, they noted that “In-person care services are expanding to more than 20 new cities in 2022, bringing even more care options to Amazon Care’s growing customer base. Amazon Care launched in September 2019 to bring the most patient-centric health care to customers when and where they need it. Amazon Care combines the best of virtual care and in-person services, and as more and more organizations look for convenient, comprehensive, high-quality health care solutions, we’re seeing growing demand and excitement for Amazon Care’s unique hybrid care offering. Amazon Care’s virtual health services are now available nationwide—and in-person services will be rolled out in more than 20 new cities this year. The expansion comes as we continue to invest in growing our clinical care team and our in-person care services to bring convenient, quality care to more customers across the U.S.”

Meanwhile, the Washington Post’s Caroline O’Donovan wrote on Wednesday evening that “Amazon will shutter Amazon Care, the virtual and in-home health service it initially created for its employees, by the end of this year. People who work at Amazon Care learned the news in a meeting on Wednesday, according to two people with knowledge of the matter, who spoke on the condition of anonymity because they signed nondisclosure agreements. Amazon Care has half a dozen corporate customers including Hilton, Silicon Labs, Precor, and Amazon-owned Whole Foods. Workers were told the service was shutting down because those customers did not see the value in the service, one of the people said. Dozens of employees will lose their jobs at the end of the year, according to the people,” she wrote.

O’Donovan added that “The decision to shutter Amazon Care is a surprise given Amazon CEO Andy Jassy’s commitment to expanding Amazon’s health-care investment. It follows Amazon’s $3.9 billion acquisition of concierge health care start-up One Medical last month, a deal that could still face antitrust scrutiny from the Federal Trade Commission. In his 2021 letter to shareholders, Jassy named Amazon Care as an example of the ‘type of iterative innovation’ that is ‘pervasive across every team at Amazon.’ Amazon Care is currently available virtually nationwide, and was supposed to expand to 20 cities for in-home care delivered by mobile health nurses by the end of this year. Originally a project of Amazon’s secretive Grand Challenge incubator, former employees the service was under pressure to scale quickly. Because Amazon can’t directly employ clinicians who treat its own employees, care is provided by nurses and doctors who work for a company called Care Medical, some of whom said Amazon put growth ahead of patient safety, The Post reported last week.”

Meanwhile, the New York Times’s Karen Weise wrote on Wednesday evening that “Amazon told employees in an email on Wednesday that it is shutting down Amazon Care, its in-house foray into providing primary and urgent health care. The move comes a month after Amazon announced plans to buy a much larger competitor, One Medical, in a $3.9 billion deal. Amazon for years has wanted to find its own ways to enter the health care industry, which company executives think provides a big opportunity for expansion. Amazon Care started in 2019 as an effort to serve Amazon’s own employees, initially just in Washington State. It has since expanded, offering virtual visits nationwide and planning to have in-person services in 20 cities this year, according to an announcement in February.”

Further, Weise wrote, “The company tried to build a bigger membership and sign up other employers to offer the services to their staff, but with limited success. It recently promoted Silicon Labs, TrueBlue and Whole Foods Market, which Amazon owns, as clients. About 400 employees work on Amazon Care, according to a person familiar with the program. Mr. Lindsay’s email said ‘many’ of the people who worked on Amazon Care will find new roles internally. The company would not say whether employees will be laid off if they are unable to secure a new role at Amazon. Mr. Lindsay said the decision to end the program had been under consideration for “many months” and that Amazon Care will stop operating at the end of the year,” she added.

The first publication to break the news was Geek Wire, whose reporters Todd Bishop and Taylor Soper broke their news report at 1:30 PM eastern time on Wednesday. Bishop and Soper had obtained the internal memo, and they reported that “The surprise move Wednesday is a major course correction in Amazon’s broader foray into healthcare. Amazon says the decision impacts only Amazon Care, and not its other health-care initiatives.” Indeed, they wrote in their report that “Amazon says company leaders determined that the Amazon Care business model wasn’t working prior to, and independent from, its agreement to acquire primary care company One Medical for $3.9 billion, which was announced July 21. That acquisition is still expected to move ahead, pending regulatory approval.”

The timing of the decision to shutter Amazon Care did indeed pique the curiosity of many in healthcare, given that the One Medical deal had just been announced a month earlier. As Healthcare Innovation Senior Contributing Editor David Raths reported on July 21, “Seattle-based Amazon (NASDAQ: AMZN) will acquire One Medical for $18 per share in an all-cash transaction valued at approximately $3.9 billion, including One Medical’s net debt. On completion of the deal, Amir Dan Rubin will remain CEO of One Medical.” And he noted that “San Francisco-based One Medical (Nasdaq: ONEM) is a membership-based and technology-powered primary care platform that offers digital health and in-office care. In addition to direct-to-consumer memberships, more than 8,000 employers have sponsored memberships on behalf of their employees and dependents.”

Raths wrote in that report that “Amazon has always been seen as a threat by traditional healthcare players if it could bring its success in retail customer relationships to the field. Its Amazon Care virtual health services are now available nationwide—and in-person services are being rolled out in more than 20 new cities this year. Teladoc Health recently teamed up with Amazon to launch Teladoc on Alexa. (Shares of Teladoc initially fell more than 7 percent on word of the Amazon-One Medical deal but steadily recovered those losses.) It also acquired drugs-by-mail startup PillPack. A much-vaunted collaboration with Berkshire Hathaway and JPMorgan Chase & Co. called Haven Healthcare disbanded in 2021. But clearly the company still has healthcare in its sights.”

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