Amazon, one of the ultimate market disruptors, can now add another health care failure to their resume.
The first was the short lifespan of Haven, its highly publicized attempt to change the healthcare system with JPMorgan and Berkshire Hathaway.
Amazon Care, a national initiative to address telemedicine and primary care for employers that Amazon itself said was getting more and more clients, is now being shut down.
Is that sufficient evidence to support the claims made by numerous people over the years that the health care industry is more resistant to disruption than most others?
Maybe not, but it might be an indication of a shift in Amazon’s strategy for capturing more market share in the health sector. The demise of Amazon Care may be traced back to a straightforward decision that businesses, especially those with a lot of capital, must make when entering new markets: develop or buy?

It comes as no surprise to some observers of the healthcare sector that Amazon Care is ceasing to exist as a standalone organization. It seemed obvious that something was going to change when Amazon decided to buy primary care provider One Medical in July. One Medical now provides the kind of nationwide primary care that Amazon Care hoped to provide in the future. One Medical had traded as high as $58 in 2021, and Amazon announced plans to buy it for $18 per share. For a cash-rich business seeking possibilities to buy into a stock market that had knocked down the value of previously public health companies, Amazon may have been more opportunistic than anything else in laying out the next phase of its destiny in healthcare.
Amazon has a history of entering markets where it wants to gain market share and when doing so necessitates having a physical presence. As the five-year anniversary of Amazon’s acquisition of Whole Foods approaches, it’s important to keep in mind that on the day the deal for the ailing high-end grocer was announced, the value of Amazon’s stock increased by the same amount.
“It’s not surprising they’re shutting it down,” Sari Kaganoff, general manager of consulting at Rock Health, which includes a division for health advising and research and invests as a VC in health start-ups, stated. “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.

The fact that Amazon announced the shutdown even before the One Medical transaction was finalized was perhaps a little shocking, but One Medical has far more markets, offices, and clients than Amazon ever had (it had to boast about signing up Whole Foods, which it owns, as a client for Amazon Care). Unexpectedly, One Medical was rebranded right away to become a part of Amazon Care. Its pharmacy acquisition PillPack still has a name, but it is now a part of Amazon Pharmacy.
Amazon Care was a failure, at least according to the company’s internal memo that was released to the media in conjunction with the closure. There is no doubt that it had difficulty acquiring corporate clients, staffing in a field where it had no experience, and developing a nationwide in-person care component. While telemedicine is a nice perk, it is not a comprehensive healthcare solution. For Amazon to create a truly national hybrid health-care practice with locations, doctors, and clinics, funding would have needed to increase significantly.
Let’s assume that Amazon Care served as a test run for a company, and that after learning enough to understand its long-term goals, it acquired the superior business at a period when its worth was low.
“I don’t think they failed, because One Medical is great,” Kaganoff said.
Amazon discovered a lesson that has helped many health disruptors succeed in recent years: it’s challenging to build a stand-alone startup in the industry, even if you’re one of the richest firms in the world. Consolidation is becoming more and more the preferred strategy.
“Amazon Care was no different than any other stand-alone health startup in terms of needing to be consolidated,” Kaganoff stated. “They played around with it a bit,” she continued, enough to know their goals are still supported by the market, but not in the right direction.
“One of the ways we’ve worked towards this vision for the past several years has been with our urgent and primary care service offering, Amazon Care. During that time, we’ve gathered and listened to extensive feedback from our enterprise customers and their employees, and evolved the service to continuously improve the experience for customers. However, despite these efforts, we’ve determined that Amazon Care isn’t the right long-term solution for our enterprise customers,” said the internal memo.
The market should be more concerned about Amazon completing a series of purchases that speak to bigger goals, according to Wall Street analysts, than it should be worried its direct conflicts with previous health disruptors (such as Amazon Care vs. Teladoc).
It appears as though something is taking place
Recent headlines claim that Amazon is one of the bidders for Signify Health, which overlaps with One Medical’s Iora Health business and is focused on a more complex, Medicare-centric market than standard national care practices. This indicates that Amazon is not yet finished using its money to invest in healthcare.
It is evident that Amazon still intends to be a major force in the healthcare industry. It can use its capacity to tailor its services and connect to its pharmacy to ultimately threaten other retail behemoths trying to reshape the healthcare industry. Walmart purchased the telehealth business MeMD in 2021; CVS is another rumored bidder for Signify; Walgreens owns VillageMD; and American Well already provides telemedicine through a partnership with CVS.
A bottom-line factor will only cause this retail disruption to intensify. The health-care sector accounts for a significant portion of spending when you look at the share of wallet from consumers to employers. Amazon is already present in almost all wallet categories, with the exception of banking (though it does have credit cards).
What is the largest market segment they are not currently serving?
“It’s healthcare, and they already have so many things consumer-health oriented, it just makes sense to go big in health care,” Kaganoff said.
People believed the combined power of Berkshire Hathaway, JPMorgan, and Amazon could result in a significant driving down of costs throughout the healthcare system, which Warren Buffett has called a tapeworm on the national economy, when Haven, which disbanded after three years, debuted to much fanfare.
And that still figures into the narrative. Any action Amazon does has a cost-cutting and efficiency-boosting component. The paradigm shift for all stakeholders in the market, according to Cano Health CEO Marlow Hernandez, is “better care at a lower cost.”
Although Amazon’s consumer internet company may be the apex of transactional disruptors, people do not want to approach health care like a mere extension of retail since it is in danger of becoming a transactional system as well. “What patients have been demanding is that integrated platform where they can build relationships and no longer be a number,” Hernandez said.
This is known as value-based care, and it is causing a lot of consolidation. It may be a sign of how broken the American health-care system is that “value” for the patient is a fresh concept. By 2030, Hernandez predicts that the market for primary care would increase from $1.8 trillion to $3.7 trillion.
And that illustrates the fundamental goal of any large corporation, including Amazon and its competitors.
“I think it’s just market share,” Kaganoff said.
It did seem hurried when Amazon Care ended. Everyone from private health start-ups to Teladoc to retail rivals and established healthcare providers should continue to be concerned as Amazon expands from primary care into more complicated care and possibly even chronic care, and integrates pharmacy and over-the-counter medication with all its offerings. Even to some within Amazon, the failure of Amazon Care may have been costly and unexpected, but what the company is ultimately purchasing and expanding upon may still make it the more potent disruptor.