The move to divide the business into six divisions comes after the company experienced a string of executive exits.
Amazon is making another significant pivot with its healthcare business, signaling a strategic reset.
In the wake of uninspiring results and a run of departures by high-level executives, the tech giant has restructured Amazon Health Services into six new units with the aim of being nimbler and more streamlined.
As a result, Amazon is integrating operations and narrowing its focus to offerings with clearer pathways to growth, namely One Medical and its pharmacy services.
Neil Lindsay, senior vice president of Amazon Health Services, shared with CNBCΒΈ which first reported the restructuring, that the decision improves the company's ability to serve and reach as many patients as possible.
"Our leadership team has been focused on simplifying our structure to move faster and continue to innovate effectively," Lindsay told the network. "One of the problems we're trying to solve is the fragmented experience for patients and customers that's common in healthcare."
The company has placed Amazon executives and leaders from One Medical at the helm of the six devisions:
- One Medical Clinical Care Delivery, led by Dr. Andrew Diamond
- One Medical Clinical Operations and Performance, led by Suzanne Hansen
- AHS Strategic Growth and Network Development, led by John Singerling
- AHS Store, Tech and Marketing, led by Prakash Bulusu
- AHS Compliance, led by Kim Otte
- AHS Pharmacy Services, led by John Love
"If we can make one thing a little bit easier for a lot of people, we'll save them a lot of time, a lot of money, and some lives," Lindsay told CNBC. "And if we stack these changes up over time, it'll feel like a reinvention."
Amazon's foray into healthcare has been ambitious, marked by a series of acquisitions and course corrections. Its $3.9 billion acquisition of primary care provider One Medical in 2023 was a major step in expanding its clinical footprint. The launch of Amazon Clinic, a virtual care platform, and Amazon Pharmacy, built on the 2018 PillPack acquisition, were similarly bold plays to vertically integrate healthcare delivery.
However, not all bets have panned out. The joint venture Haven, formed with JPMorgan Chase and Berkshire Hathaway, was dissolved in 2021. Internal projects like Amazon Care were also shuttered after failing to meet the company's standards for scale and impact.
Amazon is continuing to invest in One Medical and its pharmacy business though. One Medical is working to open new offices in New Jersey, New York, and Ohio, whereas Amazon's pharmacy offerings have experienced growth, allowing it to plan for pharmacy openings in 20 new cities this year.
Additionally, Amazon has seen executives in its healthcare business exit the company in recent months. One Medical CEO Trent Green left in April and followed the departure of Dr. Vin Gupta, who vacated his role as CMO of Amazon Pharmacy in February.
Meanwhile, Aaron Martin, Amazon's vice president of healthcare, and Dr. Sunita Mishra, Amazon's CMO, also internally announced their exits in May, according to CNBC.
It's unclear if Amazon's healthcare recalibration will provide it with the traction it's been seeking, but it could be an indictor for fellow disruptors and competitors of where consumer expectations and the industry are heading.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Amazon has restructured its healthcare arm into six units to streamline operations and accelerate innovation amid executive turnover and mixed results.
The reorganization serves Amazon's desire to respond faster to market demands and patient needs through clearer division of responsibilities and leadership.
Recent high-level executive departures highlight internal growing pains, but Amazon's continued investment in physical expansion and digital care signals long-term commitment to healthcare disruption.