Amazon Care in the News

As Credit Suisse notes, Amazon Care in the news is not a surprise. Business Insider is reporting that Amazon Care has approached Aetna/CVS and several regional insurers like Premera Blue Cross, Blue Cross Blue Shield of Massachusetts etc., to join their networks as a covered benefit.

The article also notes that the reason Amazon Care is approaching health plans is partly because they were asked to do so by the companies, they work with which includes Amazon itself. This underscores Credit Suisse’s analysts view that it is an increasingly uphill  battle for the e-commerce giant in terms of contracting directly with large employers.

Even with respect to health insurers, their partnerships with telehealth vendors have only become stronger over the last several years. (AET-TDOC, ANTM-AMWL, Cigna buying MDLive, HUM-Doctor On Demand, UNH with AMWL, TDOC, and Doctor On Demand, etc.)

Credit Suisse analysts don’t see any reason for health insurers to disrupt existing partnerships only to work with an entity without a proven record in healthcare. This might very well be the reason why Amazon Care seems to be focused on joining health insurers’ provider networks rather than displacing the existing telehealth partnerships. More importantly, as has been the case with Amazon Pharmacy. Amazon Care continues with a “See What Sticks” strategy especially during the large group selling season.

The Business Insider article also notes that Amazon has run into problems in their conversations with health insurers with respect to how they want to be paid. In particular, Amazon initially reportedly approached health plans seeking to set up “value-based” arrangements, but some of the health plans have asked for “fee for service” arrangements instead.

One reason is that the insurers want to see for themselves whether Amazon can really lower costs. Given that Amazon Care has extremely low volumes and lack of operating history, the desire to go into a value-based arrangement with a health plan seems to be an aggressive start to their telehealth service, especially given that the incumbent telemedicine vendors (which have been in existence for several years with millions of visits) are just now exploring/entering risk-sharing and value-based payment structures.

Notably, health insurers have several value-based care arrangements on their Medicare book of business but such arrangements are less common in the commercial book (the market Amazon Care is focused on).

Separately, while Cigna has partnered with Amazon on the Amazon Pharmacy side with the PrimeRx discount card product, it remains to be seen just how far health insurers will go in terms of partnering with Amazon as the big tech company looks to expand across several aspects of healthcare (e.g., telehealth/in-person care, pharmacy, diagnostics, etc.). the more traction Amazon gains across all aspects of care, the more it learns how to operate/navigate the complexity of healthcare, and the more likely it is that Amazon could disrupt the health insurers themselves.

By way of background. Amazon partnered with JP Morgan and Berkshire Hathaway three years ago to create the JV, Haven which was seen as a threat to health insurers. Haven was disbanded earlier this year.

For more information, ask questions, provide feedback or news, email Jailendra Singh at or call 212-325-8121.


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