Interesting piece from CNBC as it analyzes Amazon's decision to shut down its Amazon Care business, described as "its effort to tackle telemedicine and primary care for the employer market on a national basis – which Amazon itself trumpeted as gaining more and more clients."
"Is that all the proof we needed of what many people have said over the years: health care is just harder to disrupt than most industries?
"Maybe not," CNBC writes, "though maybe it is a signal of a change in the approach to how Amazon will attempt to gobble up more health industry market share. The shutdown of Amazon Care may come back to a simple choice that companies, especially those with a lot of cash, have to make when it comes to breaking into new markets: build or buy?
"For some health-care industry watchers, it’s no surprise that Amazon Care is going away as a stand-alone entity. When Amazon made the decision in July to acquire primary care company One Medical, which does what Amazon Care was hoping to ultimately do on a national basis, it was the writing on the wall that something was going to change. And for a cash-rich company looking for opportunities to buy into a stock market that had pushed down the value of recently public health companies – One Medical had traded as high as $58 in 2021 and Amazon announced plans to buy it for $18 a share – Amazon may have been more opportunistic than anything else in plotting the next stage of its future in health."
At the same time, Fierce healthcare writes that "analysts at Forrester called the shuttering of Amazon Care 'a strategic move' rather than a failure.
"'We believe the closure of Amazon Care comes at an opportune time alongside Amazon’s planned acquisition of One Medical and entry into the bidding war for Signify Health,' wrote Forrester vice president and research director Natalie Schibell along with researcher Kara Wilson in a blog post.
"Amazon has reportedly put in a bid for Signify Health, a home health technology and services provider.
"'This is unequivocally not the end of the retail titan’s healthcare ventures. Instead, the shut down of Amazon Care is a strategic plan to move the focus of their healthcare offerings from the employee to the consumer,' Schibell and Wilson wrote.
"Citi analysts agree, writing in a flash note last week that Amazon's move to get rid of its virtual care solution 'is far from the death knell for Amazon's healthcare ambitions' but is 'more like just the beginning,' Seeking Alpha reported."
"It’s clear Amazon still plans to be a formidable player in the health-care space. It can leverage its ability to personalize its offerings, connect to its pharmacy, and ultimately pose a threat to many other retail giants aiming to upend healthcare. Walmart acquired telehealth company MeMD in 2021; CVS, which already offers telemedicine through a deal with American Well, is another rumored bidder for Signify; and Walgreens has VillageMD and is opening up hundreds of offices in markets around the country.
"That retail disruption is only going to grow, for a bottom-line reason. When you look at the share of wallet, from consumers to employers, the health-care market is a big part of spending. Amazon is already in almost every chunk of the wallet, maybe not banking (though it does have credit cards)."
- KC's View:
If the Amazon Care shutdown is really about the company finding its way closer to the consumer, representing a pivot and not a failure, then I think it would be very much in character for Amazon.
There does seem to be a little bit of a throwing-spaghetti-against-the-wall aspect to its fits and starts in health care, but Amazon never has been afraid to take chances and even risk looking bad if it moves the company closer to its eventual goals.