Amazon is learning that disrupting health care isn’t as easy as selling books and household goods. In a surprise move, the e-retail giant announced that it will close down its Amazon Care primary health services for employees at the end of the year, thus continuing a pattern of recent failures by tech giants like Google and Microsoft to gain a foothold in health care.

The Rise and Fall of Amazon Care

Launched in 2019, Amazon Care was a pilot program designed to provide care to Amazon employees and their families in the Seattle region, including virtual urgent care visits and telehealth consultations, as well as fee-based in-home nurse visits for testing and vaccinations. The telehealth service expanded to all 50 states and the in-person service became available in at least seven cities.

Amazon had great ambitions for the service and last year began rolling it out to other employers, signing Silicon Labs, TrueBlue, Whole Foods Market, Precor, and Hilton as clients. The plan was to expand the model to more than 20 additional cities in 2022, including major metropolitan areas like New York City, Chicago, Miami, and San Francisco. And with the July acquisition of primary care company One Medical for $3.9 billion, Amazon Care appeared positioned to make even greater inroads into the market.

But then it all changed on a dime. Company leaders concluded that the business model wasn’t working and on Aug. 24, Amazon Health Services senior vice president Neil Lindsay sent health service team employees a memo announcing that the service would be shut down on Dec. 31.

“This decision wasn’t made lightly,” Lindsay wrote. “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.”

Complete Memo from Neil Lindsay Announcing Shutdown of Amazon Care

Health Services team,   We are working on an important, missionary opportunity. 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.   One of the ways we’ve worked towards this vision for the past several years has been with our urgent and primary care service offering, Amazon Care. During that time, we’ve gathered and listened to extensive feedback from our enterprise customers and their employees, and evolved the service to continuously improve the experience for customers. However, despite these efforts, we’ve 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.   This decision wasn’t made lightly and only became clear after many months of careful consideration. 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.    Our work building Amazon Care has deepened our understanding of what’s needed long-term to deliver meaningful health care solutions for enterprise and individual customers. You’ve heard me say it before, but I believe the health care space is ripe for reinvention, and our efforts to help improve the health care experience can have an immensely positive impact on our quality of life and health outcomes. However, none of these reasons make this decision any easier for the teams that have helped to build Amazon Care, or for the customers our Care team serves.   Our priority right now is to support you, regardless of the path you take. Many Care employees will have an opportunity to join other parts of the Health Services organization or other teams at Amazon — which we’ll be discussing with many of you shortly — and we’ll also support employees looking for roles outside of the company.   To the Amazon Care and Care Medical teams, thank you for all of your hard work over these last several years. You should be very proud of what this team has been able to accomplish in a short period of time. I am also thankful to our members and business customers for entrusting us with their care; this is not a responsibility we take lightly. 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.   Sincerely,   Neil

What’s Next for Amazon

Amazon seems determined to maintain its healthcare disruption strategy. Lindsay suggested that building Amazon Care has deepened the company’s understanding of "what's needed long-term to deliver meaningful health care solutions for enterprise and individual customers." The decision to shutter Amazon Care doesn’t affect any of the company’s other health care operations, including the Amazon Pharmacy service launched in November 2020 following the $753 million acquisition of prescription-by-mail company PillPack.

The acquisition of One Medical, a membership-based, tech-integrated, consumer-focused primary care platform with 188 offices in 29 markets, expands Amazon’s access to the lucrative employer market. In addition to having nearly 800,000 members, One Medical works with 8,000 companies. Meanwhile, Amazon is reported to be bidding for home health services provider Signify Health.

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Here’s a summary of some of the key strategic diagnostic deals announced in August 2022:

Strategic Alliances, Partnerships, & Collaborations

Distribution, Sales, & Marketing Agreements

Licenses

Government Contracts