Amazon expands telehealth services in the US

Amazon Care started as a pilot for company employees in 2019 but will now be offered externally

An Amazon warehouse in Staten Island, New York. The company will make its Amazon Care service available to other companies as a workplace benefit. AFP

Amazon is expanding digital medical consultations to its employees across the US and says it will start offering the service to other companies.

Together with the launch of an online pharmacy in December, the initiative marks Amazon’s entry into the gargantuan US health care industry. Medical services have long been seen as a target for Amazon, both to reduce the costs of caring for the e-commerce giant’s fast-growing workforce and as a potential source of revenue in an area that some say is ripe for digital transformation.

Amazon Care started in 2019 as a pilot for employees in and around the company’s Seattle headquarters, offering online and, in some cases, in-person medical services.

As of Wednesday, the company began offering the programme to other Washington-based companies, Amazon said in a blog post. From this summer, the company will expand Amazon Care to the rest of its workers in the US, as well as other companies.

“Extending care to other companies as a workplace benefit is a necessary part of Amazon’s quest to expand in health care, and it may be an early sign that it intends to develop related services over time,” Bloomberg Intelligence analyst Poonam Goyal said in a note. “It will also help Amazon compete indirectly against retail clinics, where rivals like Walmart, Target, Kroger, CVS and Walgreens are expanding.”

Amazon has various health care initiatives under way. Late last year, the company launched online pharmacy services in the US under its own brand, building on PillPack, a mail-distribution pharmacy it had acquired. The company also sells office equipment and some medical supplies to hospitals and clinics through its Amazon Business commercial sales programme.

Amazon’s interest in health care often tanks the share prices of industry incumbents as investors try to assess the impact of a big new competitor. The latest announcement was no exception. Shares of Teladoc Health and American Well Corporation both fell about 7 per cent on Wednesday. Amazon was mostly unchanged.

Amazon is known for launching experiments, only to abandon them later. That’s what happened with its first big health care endeavour, a joint venture with Berkshire Hathaway and JPMorgan Chase to explore novel ways to reduce health care costs. In January, the trio said they were shutting down the operation and would distribute its expertise among the venture’s backers.

And there is reason to be sceptical of Amazon’s ability to lure other companies to Amazon Care.

In December, Insider reported that the company had pitched the service to other companies, including Zillow Group. A Zillow spokesperson at the time confirmed Amazon’s outreach but said the Seattle-based real estate company had no plans to use the service. An Amazon spokesperson didn’t immediately say on Wednesday whether Amazon Care had signed up any corporate customers.

Amazon Care offers consultations, facilitated through a smartphone app, 24 hours a day. The company provides access to a range of urgent and primary care services, from Covid-19 testing to flu shots and prescription requests. The service, which is provided for Amazon by Care Medical, an office that exclusively works with Amazon, already includes the option of in-person visits to patients’ homes in the Seattle area.

It’s unclear how widely Amazon will offer physical visits. In Wednesday’s blog post, Amazon said its in-person service would expand to Washington DC, Baltimore, “and other cities in the coming months”.