Amazon jumps into health care with telemedicine initiative

Amazon is making its first foray into providing health care services, announcing Wednesday that it will be offering its Amazon Care telemedicine program to employers nationwide.

Currently available to the company’s employees in Washington state, Amazon Care is an app that connects users virtually with doctors, nurse practitioners and nurses who can provide services and treatment over the phone 24 hours a day. In the Seattle area, it’s supplemented with in-person services such as pharmacy delivery and house-call services from nurses who can take blood work and provide similar services.

On Wednesday, the tech giant announced it will immediately expand the service to interested employers in Washington who want to purchase the service for their employees. By the summer, Amazon Care will expand nationally to all Amazon workers, and to private employers across the country who want to join.

In the Baltimore, Washington, D.C., and northern Virginia market, where Amazon is building a second headquarters that will house more than 25,000 workers, Amazon Care will include the in-person services that are currently limited to Seattle.

“Making this available to other employers is a big step,” said Amazon Care Director Kristen Helton in a phone interview. “It’s an opportunity for other forward-thinking employers to offer a service that helps bring high-quality care, convenience and peace of mind.”

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 launched the service 18 months ago for its Washington state employees. Helton said users have given it superior reviews, and business customers were inquiring about being able to buy into the service for their own workers.

Helton said the product is designed to be a supplement or an additional benefit to existing coverage provided by an employer.

Consumer demand for telemedicine and virtual health care has exploded during the pandemic. Stephen Morgan, a medical professor at Virginia Tech and chief medical information officer at the Carilion Clinic in southwest Virginia, said virtual visits increased there from about 100 a month before the pandemic to about 800 a day within a two-week span.

He said research has shown that telemedicine can provide quality on par with traditional in-person care, all while making services available to people who otherwise might not be able to get them or would have to travel great distances to do so.

But he said it’s critical that providers build in checks and balances to ensure that quality does not suffer.

“It is a concern that anyone who wants to do telemedicine, Amazon included, puts those checks and balances in place,” he said.

Helton said that when users log in to the Amazon Care app, they are asked a couple of questions that serve to triage the call, and route it to a nurse, nurse practitioner or physician as appropriate. She said it usually takes 60 seconds or less to connect to a health professional.

The health care providers are supplied by Care Medical, a contractor that works with Amazon on an exclusive contract.

While Amazon has launched initiatives in the health field such as Amazon Pharmacy and Amazon Halo, a wristband that measures vital statistics, Amazon Care will be the tech giant’s first foray into providing health care services beyond its own workforce, Helton said.

“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 U.S. under its own brand, building on PillPack, a mail-distribution pharmacy Amazon had acquired. The company also sells office equipment and some medical supplies to hospitals and clinics through its Amazon Business commercial sales program.

The company’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 Inc. and American Well Corp. both fell about 7% Wednesday. Amazon was mostly unchanged.