Amazon to Shutter Telehealth Business Amid Plans to Buy One Medical
Amazon will shut down its telehealth business by Dec. 31 after leaders determined it wasn't a "complete enough" solution for the enterprise customers it was targeting, an internal memo states.
Just one month after sharing plans to buy One Medical, Amazon announced it will close its Amazon Care telehealth business by the end of 2022, according to an internal company memo shared with mHealthIntelligence.
The memo, shared internally by Amazon Health Services Senior Vice President Neil Lindsay Wednesday, states that company leaders determined Amazon Care was not "the right long-term solution for our enterprise customers," leading to the decision to shutter the service by Dec. 31.
"This decision wasn’t made lightly and only became clear after many months of careful consideration," Lindsay said in the memo. "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."
It is unclear how many employees will be impacted by the closing of the service, but some will have the opportunity to join other roles within Amazon Health Services or the larger company, the memo states.
Launched in 2019, Amazon Care includes both telehealth and in-person care. Initially, the service was only open to the company's employees in the Seattle area. Amazon rolled it out nationally in 2021, offering it to other businesses. Earlier this year, Amazon announced that it had signed deals to extend Amazon Care to Silicon Labs, TrueBlue, and Whole Foods Market employees and bring in-person services to 20 new cities.
This expansion, along with its planned multibillion-dollar acquisition of virtual and in-person care organization One Medical, indicated that the company was in a prime position to disrupt the virtual care landscape, if only for a niche few.
While the move is unexpected, Sanjula Jain, PhD, senior vice president and chief research officer at market research firm Trilliant Health, believes it may be due to lagging telehealth use and an enduring preference for in-person care.
"At the broadest level, our national analysis has shown that approximately a quarter of Americans used telehealth in two years of the pandemic," said Jain in an email. "The signals in the market have been clear: Telehealth use is limited to a small, discrete consumer population. For anyone that has been tracking what the actual utilization data (not surveys) has been clearly showing, it isn't a complete surprise that Amazon hasn't seen much traction with its virtual care offering, which was primarily focused on the employer market and had a limited in-person care component."
The company's plans to buy One Medical also point to a more integrated, hybrid care strategy.
"It suggests that Amazon's revised virtual care strategy will likely align with what the data shows: integrating virtual care within an in-person care delivery platform, which is what One Medical offers and one focused more on going directly to a specific segment of consumers," Jain continued.
Further, Amazon has made inroads into various aspects of the healthcare industry — including pharmacy and clinical communications — indicating that it will continue to be a major player in the space.
"As we take our learnings from Amazon Care, we will continue to invent, learn from our customers and industry partners, and hold ourselves to the highest standards as we further help reimagine the future of health care," Lindsay said in the memo.
