Daily Briefing

Amazon Care is shutting down. What's next?

Amazon on Wednesday announced it will shut down Amazon Care—its primary care service sold to employer health plans—by the end of the year. Advisory Board's John League and Ty Aderhold detail what this move suggests about Amazon's health care ambitions.


Amazon Care was first offered exclusively to Amazon employees in Seattle in 2019. In September 2020, the company expanded access to all Amazon employees in Washington state and then expanded telehealth services to its employees and other employers in all 50 states.

Amazon Care offers both virtual and in-person care. People can access virtual care through the Amazon Care app, which allows them to communicate with providers through videos and messages. For its in-person service, a medical professional is dispatched to a patient's home or office to perform exams, tests, or vaccinations.

Last year, Amazon announced it had reached deals with Precor and Hilton to provide its Amazon Care service.

Amazon announces it will shut down Amazon Care

In an email to employees, Neil Lindsay, SVP of Amazon Health Services, said the company has "determined that Amazon Care isn't the right long-term solution for our enterprise customers and have decided that we will no longer offer Amazon Care after December 31, 2022."

"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," Lindsay wrote. He added that the "decision wasn't made lightly and only became clear after many months of careful consideration."

Lindsay emphasized that Amazon remains committed to its health care businesses. "Our vision is to make it easier for people to access the health care products and services they need to get and stay healthy. We know accomplishing this won’t be easy or fast, but we believe it matters," he said.

Roughly 400 employees work for Amazon Care, the New York Times reports. According to Lindsay, "many" will find new roles within Amazon, and the company intends to "support employees looking for roles outside of the company."

Amazon did not say to the Times whether employees will be laid off if they can't find a new role within Amazon. But according to the Washington Post, dozens of employees will lose their jobs, with some departing as soon as October.


Many experts said Amazon's move was unexpected, especially in light of their recent expansion into health care, including their $3.9 billion purchase of primary care provider One Medical in July.

"I'm surprised," said Paddy Padmanabhan, CEO of Damo Consulting. "But I can think of a lot of reasons why they would do that."

Primary care can be difficult and is often a "loss leader" for health care organizations, Padmanabhan said. He added that he's curious to see whether Amazon decides to exit the primary care business entirely, including pulling its offer for One Medical, or if Amazon will elect to use One Medical as the foundation for all of its primary care efforts.

"This decision by Amazon to throw in the towel must come as vindication to those who believed that the healthcare business is just too complex, even for a company like Amazon," Padmanabhan said. "This raises the question of whether anyone can ever be successful as a stand-alone primary care provider in healthcare or whether you need to be part of an integrated health system to make it work."

Jacob Effron, a principal at venture capital firm Redpoint Ventures, said Amazon has likely realized it's easier to sell established brands like One Medical to employers, adding that Amazon Care and One Medical overlap, making it unnecessary to have both.

"When you're selling to employers, you can point to dozens and dozens of other employers that are using One Medical," Effron said. "That's why it makes sense to consolidate the employer side around it."

However, the decision may not be tied to Amazon's plan for One Medical at all, said Justin Norden, a partner at venture capital firm GSR Ventures.

"The deal for One Medical isn't even closed yet, so I would bet against that as a thesis," he said. "It's more likely that Amazon Care wasn't working and someone just decided to pull the plug." (Cohen/Perna, Modern Healthcare, 8/24; Dress, The Hill, 8/24; O'Donovan, Washington Post, 8/24; Weise, New York Times, 8/24)

Advisory Board's take

Our take: What does shutting down its national care delivery service mean about Amazon's health care ambition?

There's one thing that Amazon's latest health care move will surely mean: It will continue to be fashionable to mock Amazon. People may look at this, compare it to Amazon's Haven misadventure, and say that everyone (including Advisory Board) who speculated that Amazon could succeed in health care is either naive or delusional.

But there's more to it. 

In looking at what Amazon reportedly said about the challenges facing Amazon Care, we believe that the acquisition of One Medical is the clearest signal yet that Amazon intends to succeed at health care.

The problems with Amazon Care

Amazon Care appears to have struggled to understand the nuances and demands of care delivery, as detailed recently in The Washington Post. Clearly, the tension between expectations for growth and quality were real. This raised questions for us: Was Amazon going to truly "iterate" on its health care capabilities? When it came to care delivery, would Amazon get better, or would it do enough to get by?

Amazon concedes that its product was not comprehensive enough for its employer partners. It's unclear whether that means it simply wasn't saving them money, even if employees were using it. At the same time, we wonder how hard it was to persuade employees to embrace Amazon-branded health care or to attract employees to a product centered on virtual and home-based care—or some combination of the two.

Remember: Everyone had to try out telehealth in 2020 because, in many cases, they had no choice. There isn't any similarly powerful and pervasive force pushing anyone to virtual-first care today. People tend to like virtual visits, but that doesn't mean that they want to receive all their care that way. And even beyond that, it's entirely possible this product simply could not adequately satisfy users or keep care from fragmenting with its mosaic of services, channels, and providers.

What shutting down Amazon Care suggests about Amazon's health care ambition

Amazon's willingness to jettison its homegrown but underperforming health care business suggests three things.

  1. One Medical is the centerpiece of Amazon's health care strategy, not simply one component among many. When viewed this way, the details of the acquisition make more sense than they did four weeks ago. Knowing that a virtual and home-based model wasn't attractive for employers, we can understand more clearly why Amazon wanted a partner with both in-person and digital health capabilities. Knowing that its own product was struggling, we can see why it was willing to pay a huge premium for One Medical.

  2. Amazon is iterating on its health care capabilities, but it is iterating at an enormous scale. "Fail fast" is axiomatic in technology. It's usually applied to minimum viable products—applications and services that are quickly built, delivered, and assessed for their ability to meet customer demands and gain traction in the market. Products that don't meet those demands are replaced as quickly as possible. Obviously, Amazon Care was not a minimum viable product. It was rolled out three years ago, and it offered telehealth services in all 50 states and in-home services in seven markets. But when you look at the pivot Amazon seems to be making from virtual and home-based care with Amazon Care to in-person and virtual with One Medical, it's hard not to reach for the "fail fast" comparison.

  3. Amazon is a different kind of competitor in health care. We can't think of another organization that would spend years building out a care delivery enterprise, roll it out in 50 states, and then simply shut it down. We also can't think of another organization whose alternative care delivery plan is to spend nearly $4 billion on another company. It's not just the scale and the money—it's the willingness to throw around those assets that makes Amazon a potentially potent competitor.

There are still enormous execution challenges for Amazon and One Medical. Massive disruption of the industry is not a given, no matter how much money is spent or how many companies are bought and/or fail. It seems likely that the impact of Amazon on the market will be centered, at least for the immediate future, on the same direct-to-consumer approach that One Medical has taken and at which Amazon is expert in its other lines of business.

That does not mean Amazon can be dismissed as a dilettante or a dabbler in health care. Its mere presence in the market already seems to have sparked a bidding war for Signify Health. Amazon's continued iteration of its approach to health care demands ongoing attention.








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