Why Amazon Is Shutting Down Amazon Care

Quick Read

When the news hit Wednesday that Amazon (Nasdaq: AMZN) was shutting down its virtual and at-home care business – Amazon Care – there was reasonably some confusion among the health care industry at large.
The shutting down of Amazon Care is a failure if viewed in a vacuum.
In fact, it hadn’t even gotten to the point where it was offering Amazon Care to the general public.
Who knows whether Amazon Care ultimately would have been successful with Amazon’s influence and nurturing alone.
One Medical is already a company that values care in the home setting, but if Amazon were to acquire Signify Health (NYSE: SGFY), it’s shutting down of Amazon Care would make even more sense.

Why Amazon Is Shutting Down Amazon Care

When the news hit Wednesday that Amazon (Nasdaq: AMZN) was shutting down its virtual and at-home care business – Amazon Care – there was reasonably some confusion among the health care industry at large. The shutting down of Amazon Care is a failure if viewed in a vacuum. Amazon was unable to disrupt the health care industry – or at least the home-based care space – all on its own. In fact, it hadn’t even gotten to the point where it was offering Amazon Care to the general public. Who knows whether Amazon Care ultimately would have been successful with Amazon’s influence and nurturing alone. Amazon has just decided to buy highly valuable assets – they have the money and resources, after all – and try to disrupt the health care industry that way. Their run in health care is far from over, and instead, they’re just opting to buy versus build, though they will be obviously building out their own home care segment once their acquisition, or acquisitions, come to a head. One Medical has close to 200 medical offices and 800,000 members, It also owns Iora Health, which delivers value-based care for older adults enrolled in Medicare Advantage (MA) and alternative payment models. “This decision by Amazon to throw in the towel must come as vindication to those who believed that the healthcare business is just too complex, even for a company like Amazon,” Paddy Padmanabhan, the CEO of the health care-focused Damo Consulting, told Advisory Board. “This raises the question of whether anyone can ever be successful as a stand-alone primary care provider in healthcare or whether you need to be part of an integrated health system to make it work.” Padmanabhan’s analysis is correct, but again, it seems Amazon is more shifting strategies and going all in, and all in quickly, to execute on its health care plans. One Medical is already a company that values care in the home setting, but if Amazon were to acquire Signify Health (NYSE: SGFY), it’s shutting down of Amazon Care would make even more sense. Signify does in-home evaluations, has proprietary home-based technology and data, and allows plans and providers to conduct more care in the home. UnitedHealth Group (NYSE: UNH) and CVS Health (NYSE: CVS) are also rumored to be interested in Signify. CVS Health was also reportedly a bidder in the One Medical sweepstakes. “This whole thesis that we’ve heard for a decade or two about using data to reduce costs and improve patient outcomes — it depends actually more on the data than the analysis,” Erik Gordon, a business and law professor at the University of Michigan, told STAT News. “You’ve got to guess that somebody has looked at Signify’s data and said they have data points that we don’t have, that would be very expensive for us to gather.” Amazon was considered by some in the home-based care industry to be an existential threat. Others thought that Amazon would simply face the same challenges that they do already, and that its breadth wouldn’t help all that much in those trouble areas. Some even believed Amazon’s entrance would lift all boats. After all, Amazon Care is a part of the advocacy coalition Moving Health Home. But Amazon is not going away. It hasn’t decided home-based care is not worth pursuing. On the contrary, it’s likely to be very involved in the home for decades to come – both through its own technology and its own health care capabilities. “We believe investors will initially view this as a positive for other virtual care providers,” the investment banking company Jefferies Group wrote in an analyst note. “While it may be an incremental positive, we have a somewhat more tempered view, as we believe Amazon is likely to shift its investment dollars into ONEM’s virtual care platform, and accordingly view Amazon’s announcement more of a pivot than a retreat.”
The Original Article can be found on homehealthcarenews.com

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