As part of a long-stated objective to disrupt the US healthcare sector, Amazon is shuttering its telehealth service, Amazon Care.
This puts a stop to an ambitious plan to roll out its homegrown platform to “millions” of patients across the nation. Amazon Care, which promised a doctor, nurse, or other health practitioner on demand, 24 hours a day, was not the best “long-term solution” for the external companies to which it had hoped to sell the service, according to a memo sent to Amazon Care staff on Wednesday by Neil Lindsay, head of Amazon Health Services.
Lindsay stated in the memo supplied to a publication, such choice wasn’t made lightly and only became evident after many months of serious study. Although many features of Amazon Care have been praised by their enrolled members, it is not a comprehensive enough solution for the large enterprise customers they have been aiming for.
According to analysts, Amazon Care’s impending demise at the end of the year shouldn’t be interpreted as a surrender of its efforts to establish a presence in the $4 trillion US healthcare market. By no means is this evidence of failure, according to Natalie Schibell of Forrester Research.
“It’s a strategic move.”
The decision by Amazon follows its previous agreement to pay $3.9 billion to buy One Medical, a sizable network of primary care doctors, marking its biggest transaction in the healthcare industry.
Photo Screenshot | Courtesy to One Medical
According to Christina Farr, a health-tech investor at Omers Ventures, that acquisition, if authorized by regulators, would give Amazon much of the access to corporate personnel it had been seeking with Amazon Care, rendering the internal platform unnecessary. One Medical is made available to employees by businesses like Google.
Farr noted that since One Medical already has all of these contracts and practices telemedicine, Amazon’s decision to buy an existing network made sense. Building insurance contracts, physician recruitment, and employer connections are all extremely difficult tasks. All of those things take time, but One Medical was on the market.
With a workforce of more than 1.5 million, more than 200 million Prime subscribers worldwide, and a sizable logistics and cloud computing infrastructure, Amazon has long been seen as being well-positioned to challenge some of the health care sector’s incumbents. However, whenever the company announces deals, their share prices fall, albeit momentarily.
Years in the making, Amazon has long had dreams in the healthcare sector, and under Andy Jassy, who took over as CEO from Jeff Bezos last year, those ambitions are expected to grow.
Another bidder for Signify Health, a company that delivers home health care services, is Amazon. The company’s willingness to investigate a merger, which would be the fourth significant health care sector transaction for Amazon in recent years, shows that it is willing to test whether antitrust regulators are willing to limit its M&A strategy.
According to a person who has worked with Amazon, the company is ready to withstand political and media reaction but is sure that its acquisition of Signify will be approved by regulators.
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