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Amazon to shut down its telehealth offering

The tech giant will shutter Amazon Care, the in-person and virtual health service it initially built for employees, by the end of the year.

Amazon Care employees learned about the decision to shut down the service on Wednesday. (Michel Spingler/AP)

Amazon will shutter Amazon Care, the virtual and in-home health service it initially created for its employees, by the end of this year — a surprising move given the company’s recent investment in the health-care space.

People who work at Amazon Care learned the news in a meeting on Wednesday, according to two people with knowledge of the matter, who spoke on the condition of anonymity because they signed nondisclosure agreements.

Amazon Care initially rolled out as an internal health-care offering for employees of Amazon, which is the country’s second-largest private employer. Today, it is available to the employees of half a dozen corporate customers including Silicon Labs, Precor, Amazon-owned Whole Foods, and Hilton, its largest partner which only signed on with Amazon Care in December.

Workers were told the service was shutting down because those customers did not see the value in the service, one of the people said. Dozens of employees will lose their jobs, with some departing as soon as October, according to the people.

Amazon spokeswoman Christina Smith confirmed the decision and shared a memo announcing it.

“This decision wasn’t made lightly and only became clear after many months of careful consideration,” said Amazon senior vice president of health Neil Lindsay in an email to staff. “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.”

In his email, Lindsay said Amazon Care employees could be placed in other jobs within Amazon, and that the company would “support employees looking for roles outside of the company.”

Amazon founder Jeff Bezos owns The Washington Post. Amazon first provided the letter announcing the closure to GeekWire and Fierce Healthcare.

Amazon’s health ambitions sometimes clashed with best health practices

The decision to shutter Amazon Care is a surprise given Amazon CEO Andy Jassy’s commitment to expanding Amazon’s health-care investment. It follows Amazon’s $3.9 billion acquisition of concierge health-care start-up One Medical last month, a deal that could face antitrust scrutiny from the Federal Trade Commission.

Amazon Care allows patients to chat with health-care providers virtually, set up video visits and, in some locations, request a health-care provider visit their house to provide services including vaccinations and screenings for common health issues such as urinary tract infections. The convenience of the service was popular with employees.

In his 2021 letter to shareholders, Jassy named Amazon Care as an example of the “type of iterative innovation” that is “pervasive across every team at Amazon.”

Amazon Care’s human resources team learned the service was shutting down this week, according to people familiar with the matter. Meanwhile, in other departments of Amazon, HR staffers encouraged employees to sign up for Amazon Care as recently as Tuesday, according to an Amazon employee who spoke on the condition of anonymity to protect their job.

“This decision by Amazon to throw in the towel must come as vindication to those who believed that the healthcare business is just too complex, even for a company like Amazon,” said health-care consultant Paddy Padmanabhan in a message. “This raises the question of whether anyone can ever be successful as a stand-alone primary care provider in healthcare or whether you need to be part of an integrated health system to make it work.”

Amazon Care was born out of a secretive, internal Amazon incubator program called Grand Challenge. It is available virtually nationwide and was supposed to expand to 20 cities for in-home care delivered by mobile health nurses by the end of this year. To achieve that scale, the company was increasingly relying on third-party staffing agencies to provide its clinical workforce. Hiring is a challenge facing all health-care organizations in the midst of an ongoing labor shortage following the coronavirus pandemic.

On Wednesday, Amazon’s website had 20 job openings in Amazon Care posted.

One Medical is a high-end health offering that blends virtual care with brick-and-mortar clinics in cities including Boston, Chicago, D.C. and San Francisco, where the company is headquartered. Though the company has largely focused on a young, urban user base, its 2021 acquisition of Iora Health expanded its scope to include the growing and potentially highly lucrative market of Medicare patients ages 65 and up.

In acquiring One Medical, Amazon stands to gain staff, a retail footprint and a wealth of consumer health-care data. Some privacy advocates have concerns about how Amazon will handle that information, and some One Medical customers balked at the idea of their medical care being managed by the e-commerce behemoth.

It was not immediately clear whether the overlap between One Medical, which serves consumers directly, and Amazon Care, which is an employee benefit intended in part to help companies lower health-care costs, led to Amazon’s decision to wind the program down.

Last week, The Post reported on tensions between Amazon Care and the clinical staff the company brought on to treat patients. Those medical professionals work for an independent company called Care Medical that is also being shut down. Six former employees said the two sides clashed over Amazon’s fast and frugal approach to expanding Amazon Care, which some former employees felt prioritized the business over best medical practice.

Amazon will see you now: Tech giant buys health-care chain for $3.9 billion

A former Amazon Care executive said at the time that Amazon was going to “try to do what they do in every other line of business: They’re going to try and make it better than everyone else, make it less expensive and get crazy adoption because of convenience. But health care is different. It’s hard.”

In response, Amazon’s Smith said in an email that Amazon prioritized patient and employee safety and that “Amazon Care has evolved and improved for both patients and clinicians since the days of our pilot program.”

Lindsay — an Amazon veteran who took over the firm’s health services department last December — emphasized in his letter that Amazon remains committed to its health-care businesses.

“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,” he wrote.

This is the second major health-care investment Amazon has wound down. A health-insurance venture called Haven that it co-created with finance firms Berkshire Hathaway and JPMorgan Chase shuttered last year.

High-profile health-care venture backed by Amazon, JPMorgan and Berkshire Hathaway shutters

The company continues to operate Amazon Pharmacy, a prescription ordering and delivery service it spun out from its 2018 acquisition of Pillpack. Its cloud computing division, Amazon Web Services, also has a significant presence in health care, where it uses machine learning to analyze health-care data for large health organizations, among other enterprises.

Earlier this month, Amazon Care announced that it would be partnering with Ginger, a virtual-therapy start-up, to offer virtual mental-health services. Amazon also offers virtual health-care services via Alexa through a partnership with Teladoc.

In the year after taking the helm as CEO, Jassy has tried to focus Amazon’s business, shuttering some of its retail operation and slowing growth in its logistics division. The upheaval is not entirely uncommon for Amazon, which emphasizes flexibility and moves quickly to kill projects that aren’t working.

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