Amazon Care and Care Medical are shutting down. Is it really that big a deal?

On Wednesday, Amazon confirmed that it is shutting down Amazon Care and Care Medical that were at the heart of its employer-sponsored hybrid primary and urgent care business. The business dates back to 2019 when the e-commerce giant decided to begin offering its own employees virtual clinics 24/7. Later, Amazon expanded the in-person and telehealth platform to employers and workers in all 50 states.

Ironically enough, Haven also shut down three years after inception. Recall that Haven, a joint venture between Amazon, JPMorgan Chase and Berkshire Hathaway, was supposed to herald a new era in managing runaway employee healthcare costs through tech and innovation. That failure was likely a humbling of sorts for the marquee trio — all the happy talk and promotional news releases aside, who could know that healthcare could be quite so complicated? Channeling a flummoxed Trump here….

For Amazon, the shuttering of its healthcare delivery service represents a second failure. Less than six months ago, the physician leading the Care Medical business was lauding Amazon for being “customer obsessed” and a sanctuary for burned out physicians. Now with the acknowledgment of failure there is a lesson. For all the tech bros out there eager to ram technology down the inefficient, hopelessly-fragmented and in-need-of-rescuing healthcare industry, this should serve as a clear cautionary tale. You cannot shortchange the quality of healthcare delivery as the Washington Post so incisively reported about Amazon Care, to satisfy a corporate mantra of faster, better, cheaper.

But is the shuttering of Amazon Care and Care Medical anything besides a second and perhaps greater public humbling after the Haven saga? Does it fundamentally alter the Seattle company’s ambitions in healthcare, its urge to get a piece of the large and lucrative healthcare pie, its ability to usher in change, it’s chance for success?

Before we get to that, let’s delve into the details of the news first.

The death knell for Amazon Care and Care Medical is coming on December 31, after which the businesses will cease to exist, according to a memo that Neil Lindsay, senior vice president of Amazon Health Services sent to the the company’s health services team. The memo was shared with MedCity News by an Amazon spokeswoman. Essentially, the determination was made that the business had no long term future for Amazon’s employer customers. To calm what was bound to cause consternation within the affected employee base, Lindsay added that many Amazon Care and Care Medical employees will find work within the company’s Health Services business.

It isn’t clear how many people work at either Amazon Care or Care Medical though a search of the latter entity on LinkedIn connects to profiles of 94 employees. A spokeswoman who shared Lindsay’s communication with employees did not respond to additional queries about headcount.

It’s also not clear how many customers Amazon Care and Care Medical have — beyond what has been publicly reported by MedCity News and others — Whole Foods Market (an Amazon subsidiary), Precor, Silicon Labs, TrueBlue and Hilton. Lindsay’s memo appears to hint at the obvious — Amazon Care never really gained traction and therefore Amazon deemed it dispensable.

A healthcare corporate venture capitalist lauded the “rational decision” that Amazon took in deciding to shut down Amazon Care and Care Medical.

“I love how Amazon keeps trying to crack the employer health market – first with Haven, then with Care and now with One Medical,” said Michael Yang, managing director of OMERS Ventures, the venture arm of the the pension plan for Ontario’s municipal employees, in an email.

The retailer is spending a pretty penny — $3.9 billion — to acquire One Medical though the deal hasn’t closed yet. Yang noted that the San Francisco company has a “far more substantive footprint in the employer market” in comparison with Amazon Care.

In other words, the fact that Amazon is acknowledging failure and moving on, is really not a big deal and doesn’t change the company’s growing ambitions in healthcare. So does the failure even matter?

“Well, healthcare is hard, so we should expect failures but if anything their ambitions are only getting bigger,” Yang said of Amazon. “Whether they kept Care going or shut it down is immaterial. The big deal is One Medical and whatever else they pursue.”

Another healthcare industry player and thought leader agreed.

“[Amazon] previously had a skunk works (Amazon Care and Care Medical) and [it] basically acquired a scaled, clinical operation with the right clinical and regulatory controls in place (One Medical),” said Sachin Jain, CEO of SCAN Health Plan, a Medicare Advantage plan. So, this might just be a fancy way of saying that they’re collapsing that Amazon Care into One Medical,”  [Note that the One Medical acquisition is not complete yet.]

In other words, “they are playing to win and realize that building it organically wasn’t going to cut it,” Yang declared, adding that he won’t bet against Amazon despite this setback.

Even after the much-touted Haven floundered, there were similar sentiments: you can’t count Amazon out, you can’t bet against it. But selling healthcare services isn’t like selling books or any other consummable and faster, better, cheaper may not exactly translate to great outcomes.

“I’m not close to the Amazon Care story, but there’s a broader trend in our industry that is replacing specialists with generalist doctors, replacing physicians with nurse practitioners, replacing nurse practitioners with RNs,  replacing RNs with community health workers,” Jain pointed out. “And unless you’re kind of founded with really strong clinical DNA, lots of organizations are going to make a lot of mistakes and it’s, you know, it’s not, it’s not clear where that DNA was going to come from, you know, within Amazon.”

Perhaps this is why Amazon isn’t exactly stopping with the acquisition of One Medical. Reportedly, it is also one of the suitors bidding for Signify Health that is a value-based care company with a market cap of $6.6 billion. Based in Dallas, Signify Health is powering in-home health services, the next place rife with opportunity in healthcare. Sitting within Signify Health is also another company it bought called Caravan, which supports accountable care organizations. In fact, Caravan has within its client base more than 200 health systems and 100 Federally Qualified Health Centers with more than 10,000 primary care providers that collectively manage over 500,000 patients, according to a February MedCity News article.

If Amazon is successful in buying Signify Health, it gets another piece of the complex healthcare puzzle, along with primary care and a pharmacy business. But acquiring a novel business doesn’t guarantee success. Amazon Pharmacy, created after the acquisition of PillPack reportedly seems to have much less traction in fundamentally overhauling the prescription drug market. Still, Amazon is trying to build a continuum of care with the customer smack dab in the middle. Only time will tell if its efforts in healthcare can add to its top line while also improving patient outcomes and lowering healthcare costs.

Photo: DragonImages, Getty Images