Where Amazon is heading in health after the Amazon Care failure

Chalk up another failure in health care for Amazon, one of the ultimate market disruptors.

First, its much-hyped effort with JPMorgan and Berkshire Hathaway to reform health care, Haven, ended its short life.

Now, Amazon Care, 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 being shut down.
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, 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.

Buying into a market where it wants more share and where it requires a physical presence isn’t new to Amazon, nor is being opportunistic in the timing. As Amazon’s acquisition of Whole Foods reaches the five-year mark, it’s worth remembering that Amazon’s shares went up in value as much on the day it announced the acquisition of Whole Foods as the purchase price for the then-troubled high-end grocer.

“It’s not surprising they’re shutting it down,” said Sari Kaganoff, general manager of consulting at Rock Health, which invests as a VC in health start-ups and has a health advisory and research arm. “Their vision always was to have a primary care integrated solution and now it will have a better solution than what they could build,” Kaganoff said.

It was a little surprising, maybe, that Amazon announced the shutdown before the One Medical deal even closed, but One Medical has many more markets, many more offices and many more companies that are clients than Amazon ever did (it had to boast about signing up Whole Foods, which it owns, as a client for Amazon Care). Maybe also surprising: it didn’t wait to rebrand One Medical as part of Amazon Care. PillPack, its acquisition in the pharmacy space, still has a brand but is…