Late last month, staff from Amazon Care, the company’s in-person and virtual primary care service, were summoned to a meeting and given the bad news: Amazon shut it down. I was. Others left. Everyone was promised a salary by the end of December.
The news took Amazon employees by surprise. This includes employees who have used services as patients. A human resources officer at the company was touting Amazon Care as a health benefit the same week the company closed, an Amazon employee told the Washington Post.
“This is a huge shock to many of us,” said the employee, who spoke on condition of anonymity to protect her job.
The demise of Amazon Care also shocked industry insiders. After its general availability in 2019, it expanded rapidly and was touted as one of the company’s most important innovations. But there were also signs of trouble. To understand where Amazon is headed next in healthcare, the industry is looking for clues from the other direction. It’s an Amazon acquisition.
Amazon’s healthcare ambitions sometimes collided with medical best practices
Amazon is in the process of buying primary-care startup One Medical for $3.9 billion, but regulators said Friday they were scrutinizing the deal. It’s unclear exactly how the e-commerce giant will enter healthcare, but Amazon is likely to be involved in providing home health care for seniors (a burgeoning opportunity as baby boomers age), as well as telemedicine and mental health services. Shows continued interest in primary care markets, including health sales. Services to Employers.
Over the years, Amazon has experimented with different models for expansion and growth. Amazon Web Services, its primary cloud division, was born out of unique needs, but became a huge revenue center when Amazon started selling to other companies. But after years of failing to make a breakthrough in the grocery space with Amazon Fresh, it acquired Whole Foods in 2017 to boost the business side.
Healthcare may fit the latter model. The Post previously reported that a former Amazon Care employee was concerned about the tech giant’s fast and frugal approach to healthcare, and that the medical professionals hired to provide care criticized the company over the company’s approach. It was reported that there was a conflict with And in a memo to staff announcing the closure, the current head acknowledged that Amazon Care wasn’t pleasing corporate customers.
Amazon sees you now: tech giant buys healthcare chain for $3.9 billion
Health care consultant Paddy Padmanabhan said of the Amazon Care closure, “It must mean something went wrong in the math.”
“There are no shortcuts,” says Ali Parsa, CEO of digital health company Babylon Health, when building primary care services from scratch.
“I don’t know if anyone can reproduce this overnight,” he said. “I think the acquisition of One Medical acknowledges that they need to learn that knowledge.”
Some industry experts and current and former Amazon employees say Amazon will need to narrow its healthcare goals and sharpen its focus. Others say Amazon’s plans to eventually take full control of consumer healthcare, as well as efforts in e-commerce, logistics, and cloud services.
The Washington Post spoke to six current and former employees and four industry experts about where Amazon’s health strategy is headed after Amazon Care. Some of the parties, who spoke on condition of anonymity, are still employed by Amazon and are not authorized to speak publicly or have previously signed non-disclosure agreements.
“We believe healthcare is high on the list of experiences that need to be reinvented,” Amazon spokesperson Julia Lawless said in an emailed statement.
Amazon founder Jeff Bezos owns The Post.
One way to understand where Amazon sees big opportunities in healthcare is to look at how Amazon wields influence in Washington, DC.
In March 2021, Amazon Care helped establish a lobbying group called Moving Health Home, along with other healthcare companies. Among them is Landmark Health, a home health care company whose founder Adam Boehler ran Medicaid and Medicare under his former President Donald Trump.
The Coalition has urged Congress to extend exemptions approved during the coronavirus pandemic that eased federal regulations on home health care. The Group’s ultimate goal is to make these waivers permanent.
It also encourages Medicare and Medicaid centers to cover treatment provided at home for the same rate as care provided at a medical facility. .
According to OpenSecrets, which tracks the impact of money in politics, Moving Health Home will spend $440,000 lobbying the federal government in 2021, and another $220,000 in the first half of 2022. It’s unclear how much of that funding came from Amazon.
Amazon Care is Amazon’s only home health care business and One Medical does not provide home health care. Lobbyist Christa Drobak, who heads Moving Health Home, declined to be interviewed about Amazon’s intentions, but the group said at the time that she had not been informed of Amazon Care’s closure before the official announcement. .
An Amazon spokesperson said that even after Amazon Care shuts down, it “will continue to work with industry stakeholders, including Moving Health Home, as part of this transition.”
Amazon has also demonstrated its intentions through potential acquisitions. The Wall Street Journal reported last month that Amazon is one of the bidders for a home risk assessment firm called Signify. A member of the Moving Health Home Coalition, Signify employs a staff of clinicians who visit private homes to assess older adults.
The Wall Street Journal reported last week that Signify was likely to be acquired by CVS, but Amazon’s initial interest combined with ongoing lobbying could lead to plans in the home care space. is suggested.
One Medical, another Amazon acquisition target, acquired Iora Health in June 2021. Iora Health is a primary care service for adults aged 65 and over, whose population is growing rapidly with the aging baby boomer generation. Dealing with the home population is a potentially lucrative market. According to the Census Bureau, home health care revenue has increased by more than 50% between he 2013 and 2020.
An Amazon spokeswoman said she could not comment until the deal with One Medical was finalized. This process can take months. The Federal Trade Commission issued a request for additional information from both parties on Friday.
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Amazon’s healthcare investments are meant to serve its own employees. Healthcare is a major cost for Amazon, his second-largest private employer in the US.
By building an in-house medical service, the company wanted to reduce costs while creating a convenient product that it could sell to other major employers. This is similar to how our in-house cloud computing operations grew into the highly profitable Amazon Web Services.
Ratings, reviews, and patient interviews showed that Amazon Care succeeded in delighting patients, but the companies that were the actual customers of the project didn’t feel the same way. Amazon Care, vice president of health at Amazon, Neil Lindsey, said in an email to employees that Amazon Care “isn’t good enough for the large enterprise customers we’ve been targeting.”
The deal with One Medical will help Amazon acquire the workforce and physical infrastructure for primary care, as it does with Whole Foods and Grocery.
“They decided it was too hard to build this from scratch on their own, so they bought someone and gave them a kickstart, the same way they bought Whole Foods and tried to do perishables. said Partha of Babylon Health, who has no direct knowledge of the deal.
Amazon just bought my clinic.
Also, One Medical Former Amazon employees say most of it is provided to consumers as employer benefits. Before Amazon Care closed, it announced a deal with online therapy company Ginger, which also has an employer-based business model. The status of that partnership is unclear, and Ginger declined to comment, but it’s another sign Amazon is interested in an employer-based model.
Health consultant Lyndean Brick said virtual mental health “works very well, [Amazon is] Just one of many players doing this. ”
Amazon has a long history of experimentation and abandonment. According to the New Yorker, in 2015 his Fire Phone, the answer to the iPhone, was famously killed after just a year and $170 million he spent on the project. Most recently, Amazon CEO Andy Jassy announced that the company would pull out of bookstores and other brick-and-mortar investments in order to refocus on growth areas.
Amazon’s healthcare division in particular has seen high-profile projects come and go. In 2018, Amazon announced that the financial giant was partnering with JP Morgan and Berkshire’s Hathaway on a health insurance project called Haven that was supposed to revolutionize the employer-based healthcare model. Did. But in January 2021, Haven announced its closure, but JP Morgan CEO Jamie Dimon said in a letter to employees at the time that the “learnings” were “invaluable.”
Haven wasn’t the end of Amazon’s high health ambitions. That same month, Amazon senior vice president Dave Clark left the company and wrote an open letter to newly elected President Biden, offering to help organize the administration’s coronavirus vaccination campaign. rice field. After processing more than one million of his coronavirus tests for its own employees, the company closed its lab in June after trying to sell its own coronavirus test kits online.
Why Amazon Is Acquiring One Medical
In recent months, Amazon has shown every sign that Amazon Care is a growing and important part of its overall healthcare business.
The company has been actively recruiting staff and attending industry conferences this summer, according to LinkedIn posts and Amazon’s own website. It says it will expand to 20 cities in the United States. In a letter to shareholders earlier this year, Jassy called her Amazon Care and Pharmacy one of the company’s most exciting examples of innovation.
Amazon Care’s sudden shutdown has caused healthcare providers to scramble to provide explanations to patients who heard the news in the media.
Inpatient and primary Amazon Care services will be closed by the end of September, with emergency care via video and chat available until the end of the year, according to an email sent to patients this week. Position.
“There was, and still is, no guidance on how to advise patients about ongoing care,” a current Amazon Care staff member said in a message. She went on to say that the company “makes it difficult to provide patients with the complete care experience they deserve.”
Yeganeh Torbati and Christopher Rowland contributed to this report.