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Amazon Care Expansion Positions Company to Become Significant Healthcare Player

Analysis  |  By Mandy Roth  
   March 17, 2021

Company will begin contracting with employers this summer to provide telehealth services to their employees in 50 states plus in-home services in select areas, a move that has broad implications for the healthcare industry.

Amazon, known in part for its role as an online purveyor of retail goods that land on doorsteps across the nation, is now positioning itself to become a similar ubiquitous player in the world of healthcare.

Today, the company announced the expansion of Amazon Care, which dispenses "high-quality medical care and advice—24 hours a day, 365 days a year," with a goal of delivering the service through companies of all sizes to their employees nationwide.

The concept launched 18 months ago to Amazon employees in Washington and relies heavily on telehealth combined with in-person/in-home care to provide workers immediate access to medical services. This summer Amazon will expand the virtual care component of the program to "companies and Amazon employees in all 50 states across the U.S.," according to a news release. In addition, in-person services will be available in Washington, D.C., Baltimore, and other cities.

This move has broader implications for the healthcare industry, says Jeff Becker, MBA, principal analyst, healthcare, with CB Insights. One of the chief impacts is that it brings a company with brand name recognition into an emerging marketplace of medical care solutions aimed at helping employers reduce healthcare costs.

Employers are ripe for services that can help reduce their healthcare expenditures, the second biggest line item on the balance sheet following salaries, Becker says.

"The economic lever that they are tackling is overuse of the ER and urgent care centers," Becker says. By providing a mechanism to engage with employees early in the care-seeking process, individuals are directed to the most appropriate and cost-effective level of care, thereby saving employers money.

Differentiation Will Be Necessary to Distinguish Players for Employers

Startups that have gained traction in this space, he says, include DispatchHealth and Heal, which offer in-person and virtual services, as well as 98point6 and Buoy, which provide triage and telehealth services.

"It's going to ratchet up pressure for players to meaningfully differentiate themselves in this space," says Becker. "Telehealth is pretty much ubiquitous across these players." Some also offer chatbot symptom checkers that then triage callers to an appropriate level of care.

One way Amazon may distinguish itself is through Amazon Pharmacy, Becker says. "Not only can Amazon offer telehealth and increasingly in-person visits, similar to what Dispatch is doing, but then it can also get prescriptions out the door," he says. Amazon's announcement did not indicate whether it plans to incorporate its pharmacy offerings into its service bundle.

"The big race," Becker says, "is going to become who can add diagnostic testing to these platforms so that we really start to get a full, end-to-end on-demand healthcare platform."

It is less clear how Amazon Care may impact telehealth and virtual care programs operated by hospitals and health systems. "It's a bit speculative," at this point, Becker says. While some of these organizations directly contract with employers, their motivation for providing telehealth services is different, although cost reduction is part of the equation. "All stakeholders in the industry—not just the providers, but the payers, the employers and the direct-to-consumer new entrants—are all kind of having to grapple with 'Where does telehealth makes sense?' "

Lack of Healthcare Experience May Be Somewhat Offset by AWS B2B Success

One challenge Amazon may have moving forward is the company's lack of deep experience in healthcare, the analyst says.

"Healthcare is a beast unto its own," Becker says. "The reimbursement dynamics are more complicated than other markets that [Amazon] operates in." It will take time to establish whether contract terms with employers will be based on outcomes or consumption.

Yet the company has been savvy in its approach to Amazon Care, Becker says. "I like that they incubated in-house. They created a solution that worked for themselves." He says the approach is similar to the way the company developed Amazon Web Services, known as AWS.

As the retailer expanded from its original business as an online bookseller, "They had spiraling server costs, and they were struggling to scale," Becker says. When they stopped to solve that problem, they simultaneously created a solution that could help the way other businesses operate.

"That inflection point birthed the public cloud and has changed the way that we build and deploy technology," Becker says. "So that was Amazon addressing an internal cost problem, and then scaling it to support other large employers. It's not surprising that they would try and do the same thing here. Healthcare is a high-cost line item for them. They are incubating internally, solving for themselves, and now are bringing this to market to solve for other large employers."

While Amazon is recognized for its consumer-facing offerings, another factor working in the company's favor as it expands into healthcare is Amazon's experience contracting with businesses through AWS, the analyst says.

"AWS is one of the largest enterprise marketplaces in the world." Becker says. "I do feel like Amazon has the capabilities to lead in a B2B marketplace." And with AWS CEO Andy Jassy stepping into Amazon CEO Jeff Bezos' role later this year, "he brings that B2B mentality to the helm when he takes over, so I don't think they'll have a hard time from that perspective."

As Amazon positions itself to stake a growing claim of the healthcare market, the fact that it is using  using telehealth further cements the significance of this approach to care delivery, Becker says. "When you have a big incumbent like Amazon that sees a need for these kinds of services within its organization, it does a nice job of establishing the value that these tools offer to employers."

“They are incubating internally, solving for themselves, and now are bringing this to market to solve for other large employers.”

Mandy Roth is the innovations editor at HealthLeaders.

Photo credit: HONOLULU - JANUARY 12, 2017: Amazon logo on black shiny wall in Honolulu Best Buy store. Amazon is American international electronic commerce company. It's world's largest online retailer. / Editorial credit: Eric Broder Van Dyke /


With brand-name awareness, Amazon Care is positioned to become a key player in a growing market of solutions to help employers lower healthcare costs by intervening with patients early during the care-seeking process.

The long-term impact of Amazon Care on hospitals and health systems is not yet apparent.

Combining medical services with Amazon Pharmacy could offer an advantage.

Lack of deep healthcare experience could create challenges due to complex reimbursement dynamics.

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