Amazon Really Believed It Could Sell You a Health Care Fantasy

What if you could get health care as quickly and easily as you order socks and cat litter? It sounds fanciful in a country where people die waiting to see a doctor, but Amazon believed it could do for health care what it had done for shopping. Hailed as “the future of medicine,” the Amazon Care telehealth and house-call service was pitched to employers as “high-quality care, convenience and peace of mind.”

Last week, though, the company announced it would shut down Amazon Care at the end of this year. For the second time in two years, Amazon has had to concede failure in an effort to take on the American health care system. It might be possible to deliver a spatula to someone’s apartment in 24 hours, but applying the same approach to health care seems a taller order.

Yet Amazon is not giving up: It plans to purchase One Medical, a membership-based primary care provider with in-person and telehealth services in 19 cities. One Medical could prove a better business bet, but there’s no grand fix for the health care system to be achieved here.

Any company claiming its innovation will revolutionize American health care by itself is selling a fantasy. There is no technological miracle waiting around the corner that will solve problems caused by decades of neglectful policy decisions and rampant fraud. And a fix aimed at just the upper crust of employer-sponsored health coverage has no hope of making health care more accessible to those who are truly being left behind.

Amazon Care and One Medical saw the same market opportunity within the crisis-ridden American health care system: a paid escape hatch for the better-off. Not the really wealthy — they have always had concierge care on demand — but the middle- to upper-middle-class worker who has a job and insurance, yet who can’t believe how hard it is just to see a doctor.

One Medical, pitching itself as “no ordinary doctor’s office,” lets people with means leapfrog some of the hassles and waits of American health care, while promising longer appointments and friendlier doctors. Its offices are concentrated in wealthier areas and do not accept Medicaid, which reimburses providers far less than private insurance and tends to cover sicker patients who require more costly care.

Amazon will have a big task on its hands to make One Medical work: The company, which charges $199 a year for membership, has not been profitable, losing $91 million in the first quarter of 2022.

Amazon Care hoped businesses would pay for their employees to have on-demand telehealth and in-home care, allowing them to skip the process of finding a provider in their insurance network, making an appointment that may be weeks away and taking time off work to go to it. Amazon would send a nurse to you, to “give people back valuable time in their day,” its website promised.

But those promises outstripped reality. Shortly before the announcement of Amazon Care’s closing, The Washington Post reported that former clinical employees alleged that the service had “prioritized pleasing patients over providing the best standard of care,” trying to scale up too quickly to establish good practices. The telehealth providers struggled with regulations and the logistics of caring for patients in many states, unsure if they could prescribe antibiotics or where to refer patients for X-rays.

The Post also reported that Amazon asked nurses to “store and dispose of medical supplies at home and stabilize patient blood samples using centrifuges in their personal cars.” (Amazon told The Post that mobile nurses were provided with disposal equipment. The company said it prioritized patient and employee safety).

The venture’s approach to labor was characteristic of Amazon. One nurse formerly at Care Medical, the independent company founded and essentially controlled by Amazon that provided the actual health care for Amazon Care, told The Post that the contract nurses used were “essentially gig workers, and their training was really subpar.” She also said that an Amazon staff member told her that nurses were considered “the warehouse workers of Amazon Care.”

That is chilling to hear, given the years of complaints from Amazon warehouse workers about oppressive, even dangerous working conditions. Amazon’s entire brand is speed and convenience — for the customer. The price for that speed is relentless toil and sometimes impossible-to-meet standards for workers, leading to extremely high turnover. Such a model is harder to maintain for a health care company, with workers who typically require years of training, and in the middle of a nursing shortage.

One Medical has faced accusations of putting profits ahead of patient care, too, with staff members complaining that executives have cut appointment lengths and placed unrealistic expectations on call center employees since the company went public in 2020. (One Medical has denied those accusations.)

Replacing the easy parts of primary care is, well, easy. But part of why Amazon Care had difficulties is that not all aspects of primary care are so simple that they can be performed in your home or through a video consultation (which is nevertheless a valuable service that is no doubt here to stay). For anything more complicated, patients would still have to visit a traditional clinic, meaning they would have to contend with all the things that are most tiresome about American health care: insurance, phone calls and drug prices — if they can get the time off to visit the doctor at all.

At the same time, Amazon Care struggled to offer enough services to compete with other telehealth and in-person providers, including One Medical, which has about 200 physical locations and partnerships with over 8,000 companies.

Amazon is right about one thing: American primary care is troubled. Reams of evidence show that good primary care improves health and lowers costs, yet primary care is one of the worst-paying fields in medicine. Independent practices are increasingly being absorbed by larger hospital systems, which can more easily make money on referrals to their specialists; this process further drives up health care costs. America spends more than twice what other wealthy countries spend on health care, while also having worse health outcomes. We have it all backward.

This imbalance results from a thicket of incomprehensible financing systems. Hospitals say they lose money on treating Medicaid and Medicare patients, and therefore must charge private insurance more to make up the shortfall. Prices are negotiated with insurers for thousands of individual procedures and services, but even the hospitals themselves might not know how those numbers relate to any real costs incurred. Insurance companies make an increasing portion of their huge profits running Medicare Advantage plans, which have received billions in inflated payments for claiming their patients are sicker than they are. Wealthy hospitals abound in rich areas while rural hospitals close.

Amazon might think it can fix anything with enough money, technology and logistics, but Amazon Care didn’t have a hope of untangling this mess. Against most companies that sell products in America, Amazon is a Goliath. Put it up against the problems of the American health care system, and it looks like David with a slingshot made of wet spaghetti.