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Amazon Care Farewell | KeyCare Series A August 25, 2022
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Together with
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“You’ve heard me say it before, but I believe the healthcare space is ripe for reinvention… However, none of these reasons make this decision any easier for the teams that have helped to build Amazon Care, or for the customers our Care team serves.”
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Amazon Health Services SVP Neil Lindsay’s heartfelt goodbye to Amazon Care.
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What a week for Amazon. Just when you think that entering the bidding war for Signify Health would be enough excitement for one top story, the tech giant had to overshadow the news with another major announcement:
Amazon Care will shut down at the end of the year.
In an internal memo obtained by The Wall Street Journal, Amazon Health Services SVP Neil Lindsay explained that the primary care offering wasn’t “the right long-term solution” for its enterprise customers.
- The move comes as quite the surprise given that CEO Andy Jassy recently highlighted Amazon Care in his first letter to shareholders, as well as the fact that we just covered a new partnership with Ginger that would’ve brought behavioral healthcare to the service.
- Although Lindsay didn’t give too many details on the matter, earlier this month The Washington Post reported on a growing tension over Amazon Care’s ability to balance growth with proper medical safeguards, as well as a nursing shortage that’s been hampering expansion.
Amazon said that its decision to pull the plug on Amazon Care was made prior to last month’s $3.9B acquisition of One Medical, but the company’s second major headline from this week might cast some light on the course correction:
Amazon is on the list of heavy hitters competing for the Signify Health acquisition.
- Other companies vying for Signify include CVS Health and UnitedHealth Group, with the latter bringing the highest reported offer (so far) to roughly $8B – implying a 20% premium at $34 per share.
- We covered Signify’s core home care business in our initial writeup, but Amazon’s angle could center more around the treasure troves of data that the company collects on the Medicare Advantage population that just so happens to be the same patients served by the Iora segment of One Medical.
The Takeaway
Regardless of the outcome of the Signify acquisition, Amazon’s interest in the company and the abrupt end to Amazon Care seem to signal that it’s done its diligence and has decided to hone its focus on a combination of senior care (Signify + Iora), primary care clinics (One Medical), and prescription delivery (Pillpack).
We’ll leave further speculation alone for now since we luckily shouldn’t have to wait too long for an official update. Signify is set to have a board meeting on Monday to discuss the offers, and negotiations are expected to conclude shortly after Labor Day.
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