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Amazon Care Goes Away? What do we make of this?


Today in health, it, Amazon care is shutting down. At the end of 2022 today, we're going to talk about what that means. My name is bill Russell. I'm a former CIO for a 16 hospitals system and creator of this week health. I set up channels dedicated to keeping health it staff, current and engaged. We want to thank our show sponsors who are investing in developing the next generation of health leaders, Gordian dynamics, Quill health tau site nuance, Canon medical, and current health. Check them out at this week.

Alright, interesting story. Amazon pulls the plug on Amazon care services for employers. So, , Amazon care, we've talked about this a fair amount and with the. Amazon acquisition of one medical. First of all, when you hear this healthcare systems are going to say, see another case of Amazon coming in, Amazon going out, we don't need to worry about this. I don't think that's the case. We'll get back to that.

, I think this is more a case of cleaning up the healthcare business. One of the things that happened in Amazon along the way. Is that Amazon had different divisions and every division had their own healthcare initiatives and they all went out and did their own little thing. Right. And so Amazon care was one of those things. You had PillPack, you had Amazon pharmacy, you had AWS doing their own stuff.

In the data side and hosting side and, and things to that effect. And now that they're starting to really target healthcare. In my opinion, for the first time with a cohesive, singular strategy for going after healthcare, I think you're seeing their CEO say, all right. , this is how we're going to grow market share. This is how we're going to, , take our market cap up because at the end of the day, a company with this kind of market cap needs.

To be in healthcare. So they're not pulling out of healthcare. Don't read into this, that they're pulling out of healthcare. What I see this as is they are repositioning. And potentially it could just be as simple as a branding thing. One medical is a better brand than Amazon care. It could be one of those things. The other.

Is that they're just going to do a clean slate from the Amazon care where they had a handful. Have a corporate clients and go to one medical where they had a couple thousand. , clients, , corporate clients already. Let me give you a couple excerpts from this. Three years ago after it began piloting primary care services for employees that blended tele-health and in presence, medical services, Amazon plans to eat cease operations.

Of it's Amazon care services. Amazon announced Wednesday afternoon that it would end Amazon care operations after December 31st and an email. Amazon provided a copy of the email to, for yourself care. That's where the stories coming from. The decision only impacts Amazon care and care medical teams and not Amazon's other healthcare services while operating Amazon care, the company gathered and listened to extensive feedback.

From its enterprise customers and their employees. And evolve the services to continually improve an experience for customers. And by the way, I don't think they're going to lose that knowledge base. I think that knowledge base is going to be applied to the one medical acquisition. However, despite these efforts we've determined that Amazon care isn't the right long-term solution for our enterprise customers.

And I have decided that we will no longer offer Amazon care after December 31st, 2022. The 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 large enterprise customers. We have been targeting and wasn't going to work longterm. All right. So they went out to the market. They had conversations. Employers were saying, yeah, there's not enough there.

And, , they weren't going to be able to sustain it long enough. They buy one medical and it changes the landscape. The online retail company, piloted virtual urgent care and primary care services with its employees and their families in Seattle. In 2019 Amazon care has since expanded rapidly. And they are now in all 50 states, Dallas, DC, Baltimore, and others, our focus areas.

, as part of the ambitions in healthcare, Amazon then focused on ramping up its partnership with employers and sign on a couple of companies, Silicon labs, true blue. Whole foods market, which is them. Pre-core a Washington based fitness equipment company that was acquired by Peloton and Hilton. , some industry.

Some industry insiders have said that Amazon care struggled to gain a foothold with employer clients. Which would obviously be the case, given that they only have a handful. The company was on track to rapidly expand its hybrid care model to more than 20 additional cities in 2022. Including major Metro areas like San Francisco, Miami, Chicago, New York.

CEO, Andy Jassy. So this is what we need to listen to has made health care top priority. Naming Amazon care as an example of iterative innovation in his first letter to shareholders earlier this year in July, the company announced plans to buy concierge primary care provider, one medical and a deal valued at approximately $3.9 billion.

If the one medical deal goes through, it would significantly expand Amazon foothold in a nearly $4 trillion healthcare market, specifically in the competitive primary care market. One medical markets itself as a membership-based tech integrated consumer focused primary care platform. The company operates 188 offices in 29 markets. At the end of March one, medical has 767,000 members. The deal also gives Amazon rapid access to the lucrative employer market as one medical works with 8,000 companies. So you're going from five companies to 8,000.

You just have to get this deal closed. All right. So let's go back to just some of the, some of the key points here. Which are Amazon is not pulling out of healthcare. They are full speed ahead in healthcare. It's too big of a market. They have to have a piece of it. If they want to grow their, their market cap and their valuation of their company.

, their stock price. Simply if they want to grow their stock price, they have to be in the healthcare market. , they have hired around this and they are building out a leadership team that is going to focus in on healthcare instead of going down a strategy of each individual department, figuring out what they're going to do in healthcare.

They have now consolidated that leadership to come up with a cohesive strategy to go after healthcare. The first foray into that is the one medical act acquisition that will not be the last acquisition that they make. And they will be. , continue to focus in on that primary care market. , the, , for lack of a better term, the consumer market, they may focus in on the Medicare advantage market as well. They're going to focus in on those markets and they will then control the, the.

, the spend within healthcare, if you're, if you're one of the, one of the larger primary care providers and you are. , getting that first call. You're the first phone call for a patient or a consumer. Then you're going to control an awful lot of the spend within that space. So they want to get in between the consumer and the healthcare provider. That's why I don't think you can brush this one off. We need to get better at our consumer strategies at our outreach, at our marketing.

There's an awful lot of things that we are not doing well. We have to get better at our experience. , because this is the competition. This Optum is the competition. CVS is the competition for healthcare providers. And if you choose to pull back from this. Then, , somebody is going to get in between you and your consumer.

And they're going to direct care and then you are going to have another. Challenging negotiation on your hand. So that's a that's what's going on here? What happens to the technology since we do live at the intersection of technology and healthcare?

One medical has a pretty sophisticated technology platform and experience, , layer, if you will, that, , they've been taken to market. They don't make money yet, but they have a very good platform that they have. I think you could take the things that Amazon care had and, , learn from it and potentially incorporate that into the one medical operation.

, I'd have to look at both of them to see if there's anything specific that you would move across. But at the end of the day, I don't think we're gonna lose anything from a technology perspective. And I don't think we're going to lose anything from an experience perspective, anything they learned in Amazon care is going to be moved over.

And, , I think the, so what on this is, don't read too much into this Amazon care going away could just be a brand move. , it could be. , just cutting ties and starting over. , the new leadership team really putting their, mark on the future direction of. Healthcare and the services that they are going to provide at Amazon.

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