In 2017, behind the closed doors of a secret meeting, Amazon gathered the “who’s who” of healthcare to learn about patient care. Whatever was said, Amazon became convinced it could disrupt the healthcare industry.
Amazon’s latest partnership with Omada Health comes after years of trying to make a dent in a system in dire need of change.
January 2018: Haven Healthcare
In 2018, corporate giants Amazon, Berkshire Hathaway, and JPMorgan Chase pooled their technology and expertise to create Haven, a not-for-profit joint venture to tackle rising employee costs for healthcare.
The companies sought to provide simple, high-quality, and affordable healthcare, starting with their own employees. Haven made multiple high-profile hires, including world-renowned surgeon and award-winning author Dr. Atul Gawande, who was selected as CEO.
With an all-star executive team, combined resources of three perennial Fortune 50 companies, and a clear mission statement, Haven looked promising. But two years into the operation, Gawande departed, and the entire company disbanded a year later. Haven found the complexity and opaque incentives of the US healthcare system too difficult for Haven to overhaul.
Amazon quickly realized that scaling affordable healthcare wouldn’t be as easy as it seemed. Haven’s 1.2m employee population proved ineffective at convincing providers to lower prices, as health systems have experienced significant consolidation over the past few years. It may have worked if patients were centralized, but that wasn’t the case. Employees worked from all over the country, having little influence on a given market. COVID-19 also interrupted the rollout of Haven’s healthcare solutions as numerous providers were resistant to taking on new ideas during the pandemic.
However, Haven’s efforts were not in vain. Its original purpose—to increase access to primary care, simpler insurance benefits, and lower prescription drug prices—would inform Amazon’s healthcare roadmap for the next decade.
June 2018: Amazon Acquires PillPack
Shortly after launching Haven, Amazon acquired PillPack—an online pharmacy that delivers medications directly to customers’ doors in pre-sorted packaging—for just under $1b.
Before selling to Amazon, CEO TJ Parker had already built PillPack to be a formidable rival to large pharmacy chains such as RiteAid, Walgreens, and CVS. PillPack works directly with insurers to manage customer refills and sort them into containers making adherence simple.
Amazon has always threatened the drugstores and pharmacy benefit managers that have historically dominated the pharmaceutical industry. Combining its consumer-centric approach and distribution capabilities with PillPack’s existing infrastructure, Amazon now has the potential to pressure drug manufacturers into lowering prices.
The acquisition ultimately led to the launch of Amazon Pharmacy in 2020, allowing customers to complete entire pharmacy transactions on a mobile device directly through the Amazon app.
September 2019: Amazon Care
Amazon Care started as a pilot program for employees in the Seattle area and was the first iteration of Amazon’s primary care efforts. Services included virtual primary and urgent care, preventive wellness visits, and at-home testing and vaccinations.
The telehealth service eventually expanded and became offered as a health benefit to other employers including Whole Foods and Hilton. However, the service soon shut down in 2022 as described in a company-wide email.
“Although our enrolled members have loved many aspects of Amazon Care, it is not a complete enough offering for the large enterprise customers we have been targeting, and wasn’t going to work long-term”.
~ Neil Lindsay, SVP of Amazon Health Services
August 2020: Amazon Halo
As both a technological powerhouse and consumer brand, Amazon was always poised to develop its own health wearable. During the pandemic, Amazon released a wrist-worn device called the Halo Band as part of Amazon Halo, a fitness brand for personal health and wellness.
The band connected to an app that tracked everything from sleep and physical activity to a user's emotional states via tone inference. Based on sleep scores, body composition analyses, and activity levels, Halo provided customers with personal insights and recommendations to improve their well-being.
A suite of wellness gadgets that mimicked competitors, however, wasn’t enough to hide the fact that Amazon was “late to the party”. Most of Halo’s features were already offered by the likes of Apple, Garmin, Fitbit, and Whoop.
What’s more, voice-based emotion inferences and body composition analysis—capabilities that should’ve differentiated Halo from other wearables—led to concerns over privacy and body dysmorphia.
Halo was expected to fuel the growing consumer wearable market—projected to reach $142b by 2030—but the competition proved too fierce. Amazon finally discontinued Halo in August 2023.
Prior to Halo’s termination, Amazon had been working on new features including an AI-powered trainer and celebrity-led fitness classes as part of a revamped Halo Digital subscription service.
June 2022: Prime Air Program
Jeff Bezos introduced the idea of drone delivery over a decade ago on a 2013 episode of 60 Minutes. His vision—to deliver packages in less than a half hour—sparked an important conversation around medical supply and drug delivery.
In 2022, the Prime Air Program finally became operational in Lockeford, California, and College Station, Texas. Amazon also recently announced a new MK30 drone model that will bring drone delivery to three US locations as well as Italy and the UK by 2024’s end.
It’s tempting to think of a world where drones will bring life-saving medications to patients during emergencies, but we are still a ways away. Strict regulatory requirements stifled Amazon’s goal of 10,000 drone deliveries in 2023. They fell well short, having delivered just 100 packages by the summer.
July 2022: Amazon Acquires One Medical
Amazon acquired technology-driven, membership-based primary care provider One Medical for $3.9b, the same year they shut down Amazon Care operations.
One Medical combines digital health services with in-person care at any of the 200+ brick-and-mortar locations across 20 US metros. The acquisition has seemingly fulfilled Amazon’s aspirations to make healthcare more accessible, affordable, and patient-centric.
Late last year, Amazon granted Prime members discounted access to One Medical’s clinics and provider network for $9/month or $99/year.
January 2024: Health Condition Programs
Amazon just released “Health Condition Programs”, a collaboration with digital health companies to help customers find virtual care benefits available through their employer or health plan at no extra cost.
Almost 25% of all US adults are unaware of health benefits available to them through insurance coverage, yet many consumers are eligible for connected devices, personal care teams, health coaching, and nutrition planning.
Amazon has tapped virtual care provider Omada Health as its launch partner for the new program. Omada differentiates itself from other digital chronic care platforms through a focus on measurable health outcomes (value-based care) such as a reduction in A1c.
There are already 20 million members eligible for one or more of Omada’s clinically validated programs for conditions such as diabetes and hypertension. These customers will now be able to access home health products such as continuous glucose monitors and wireless smart scales.
Omada’s position as the preferred virtual care platform for over 1900+ enterprise and health plan customers makes the partnership a no-brainer. Amazon will be playing a massive role in increasing the accessibility and visibility of chronic disease care, helping shift the focus of healthcare to prevention. Chronic disease afflicts 6 in 10 US adults and is the leading driver of death and disability.
The program will generate tons of valuable data on health outcomes, consumer health behaviors, and engagement, helping to inform future public health strategies.
Looking Ahead
Since that secret meeting in 2017, Amazon has been knocking on the door of healthcare for the better part of the last decade.
Though some ventures have been more successful than others, Amazon is well on its way to building an integrated healthcare ecosystem—one that will span primary care, pharmacy services, digital solutions, and fitness and wellness.
Haven may have failed, but Amazon continues to hone its identity in healthcare as a serious change-maker improving outcomes and transforming the patient experience.
This week in healthcare:
General Catalyst to buy and convert Ohio's Summa Health to for-profit, Axios
Closing the women’s health gap: A $1 trillion opportunity to improve lives and economies, McKinsey
Should You Use ChatGPT for Medical Advice?, WSJ
What the Child Care Crisis Does to Parents, NYT
New limits on prior authorization hailed as good first step, Axios