Amazon Care and Care Medical are closing.  Is it really that big of a deal?  - MedCity News

On Wednesday, Amazon confirmed it was closing Amazon Care and Care Medical, which were the backbone of his employer-sponsored hybrid primary and urgent care business. The business dates back to 2019 when the e-commerce giant decided to start offering its own employees 24/7 virtual clinics. Amazon later expanded the personal and a telehealth platform for employers and workers in all 50 states.

Ironically, however, Haven also closed three years after creation. Recall that Haven, a joint venture between Amazon, JPMorgan Chase and Berkshire Hathaway, was supposed to usher in a new era in managing healthcare costs for employees on the run through technology and innovation. That failure was probably something of a humbling for the marquee trio — all the pep talk and hype aside, who knew healthcare could be so complicated? Channeling deranged Trump here…

For Amazon, the shutdown of the healthcare delivery service represents a second setback. Less than six months ago, the doctor who runs the Care Medical business praised Amazon for being “customer obsessed” and a haven for burned-out doctors. Now with the admission of failure there is a lesson. For all the tech bros looking to slam tech into the inefficient, hopelessly fragmented and in-need-of-rescue healthcare industry, this should serve as a stark cautionary tale. You cannot change the quality of health care delivery as the Washington Post so sharply reported on Amazon Care, to satisfy a corporate mantra of faster, better, cheaper.

But is the closing of Amazon Care and Care Medical anything but a second and perhaps more public humiliation after the Haven saga? Does it fundamentally change the Seattle company’s ambitions in healthcare, its quest for a piece of the large and lucrative healthcare pie, its ability to bring about change, its chance for success?

Before we get to that, let’s dig into the details of the news first.

The death knell for Amazon Care and Care Medical comes on Dec. 31, after which the businesses will cease to exist, according to a memo that Neil Lindsay, senior vice president of Amazon Health Services, sent to the company’s health services team. The memo was shared with MedCity News by an Amazon spokeswoman. Essentially, it was decided that the business had no long-term future for Amazon’s employer customers. To calm what should have been consternation among the affected employee base, Lindsey added that many Amazon Care and Care Medical employees would find work in the company’s health services business.

It’s unclear how many people work at Amazon Care or Care Medical, although a search for the latter person on LinkedIn linked profiles of 94 employees. A spokeswoman who shared Lindsay’s communications with employees did not respond to further inquiries about the number of employees.

It’s also unclear how many customers Amazon Care and Care Medical have — beyond what has been publicly reported by MedCity News and others — Whole Foods Market (an Amazon subsidiary), Precor, Silicon Labs, TrueBlue and Hilton. Lindsay’s note seems to hint at the obvious — Amazon Care never gained traction, and that’s why Amazon deemed it inapplicable.

A healthcare venture capitalist praised the “rational decision” Amazon made in deciding to close Amazon Care and Care Medical.

“I like how Amazon continues to try to break into the employer health market — first with Haven, then with Care and now with One Medical,” said Michael Yang, managing director of OMERS Ventures, the venture arm of the municipal employee pension plan of Ontario , in email.

The retailer is within anticipation of a pretty penny – $3.9 billion — to acquire One Medical, although the deal has not yet closed. Yang noted that the San Francisco company has a “far more substantial footprint in the employer market” than Amazon Care.

In other words, the fact that Amazon is admitting failure and moving on isn’t really a big deal, and it doesn’t change the company’s growing ambitions in healthcare. So does failure even matter?

“Well, healthcare is hard, so we have to expect failures, but if anything, their ambitions are getting bigger,” Yang said of Amazon. “Whether they kept Care or closed it is irrelevant. The big deal is One Medical and everything else they’re going after.

Another healthcare industry player and leader agreed.

“[Amazon] before that there were skunk works (Amazon Care and Care Medical) and [it] basically acquired a large-scale, clinical operation with the right clinical and regulatory controls (One Medical),” said Sachin Jain, CEO of SCAN Health Plan, a Medicare Advantage plan. So that might just be a fancy way of saying that they’re collapsing this Amazon Care into One Medical,” [Note that the One Medical acquisition is not complete yet.]

In other words, “they’re playing to win, and they realize that building it organically isn’t going to cut it,” Yang said, adding that he won’t bet against Amazon despite this setback.

Even after the much-touted Haven failed, there was a similar sentiment: You can’t count Amazon out, you can’t bet against it. But selling healthcare isn’t like selling books or other supplies, and faster, better, cheaper may not lead to great results.

“I’m not close to the story with Amazon Care, but there is a broader trend in our industry that is replacing specialists with general practitioners, replacing doctors with nurse practitioners, replacing nurse practitioners with RNs, replacing RNs with community health workers,” Jane pointed outside. “And unless you’re founded with really strong clinical DNA, a lot of organizations are going to make a lot of mistakes and, you know, it’s not, it’s not clear where that DNA would have come from, you know, at Amazon.”

Perhaps that’s why Amazon isn’t exactly stopping with its acquisition of One Medical. It is also reported one of the candidates bidding for Signify Health it is a value-based care company with a market cap of $6.6 billion. Based in Dallas, Signify Health provides home healthcare services, the next place teeming with healthcare opportunity. Within Signify Health is another company it bought called Caravan, which supports accountable care organizations. In fact, Caravan has in its customer base more than 200 health systems and 100 federally qualified health centers with more than 10,000 primary care providers who collectively manage more than 500,000 patients, according to February MedCity News article.

If Amazon succeeds in buying Signify Health, it gets another piece of the complex healthcare puzzle, along with the primary care and pharmacy businesses. But acquiring a new business does not guarantee success. Amazon Pharmacy, created after the PillPack acquisition, reportedly appears to have much less traction in the major overhaul of the prescription drug market. However, Amazon is trying to build a continuum of care, with a focus on the customer in the middle. Only time will tell if its healthcare efforts can add to its top line while improving patient outcomes and lowering healthcare costs.

“Building a continuum is much easier to put in a press release than it is to do in real life,” Jane stated. “I think the question is going to be like, how do you really make one plus one equal three?

Advertising corporate efforts through classified news is in the DNA of all corporations, and Amazon is no exception. But given two major failures, perhaps Amazon’s marketing people need to rethink their messaging.

The soon to be defunct Amazon Care’s LinkedIn page unashamedly states that the business is “to make healthcare easy for everyone”.

There is no easy button in healthcare. Period.

[Editor’s Note: Author owns stock in Amazon]

Photo: DragonImages, Getty Images

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