Amazon.com Inc., a leader in e-commerce and cloud computing, has unveiled its latest strategy to expand into the healthcare industry by targeting its substantial Amazon Prime subscriber base.
The tech giant on Wednesday announced plans to offer a low-cost annual membership to One Medical, a primary-care business it acquired earlier this year for $3.9 billion. This move marks a significant step in Amazon's long-term goal to establish a stronghold in the healthcare sector.
According to the announcement, Amazon Prime subscribers will now be eligible to become One Medical members for just $9 a month, or $99 a year, a substantial discount from the regular annual fee of $199. Neil Lindsay, Senior Vice President of Health Services at Amazon, explained that the initiative is part of the company's broader effort to create diverse pathways for customers to access primary care services.
One Medical, known for its blend of virtual and in-person healthcare services, operates clinics across the U.S. and offers a range of medical services, including medical testing. Members can access some virtual-care services included in the annual fee, while in-person visits and other services may require additional payments through insurance or out-of-pocket.
This latest venture by Amazon represents a deeper foray into the healthcare industry, an area it has been eyeing for years. The company has experimented with various healthcare initiatives, including pharmacy services and medical-drone deliveries, but has faced challenges in gaining a foothold in the market. Chief Executive Andy Jassy has identified healthcare as a potential new pillar for Amazon, alongside its core retail and cloud computing businesses.
However, industry experts note that Amazon faces significant challenges in establishing itself as a credible player in healthcare. Lyndean Brick, CEO of healthcare consulting firm Advis, pointed out that the company needs more providers and bandwidth to make a significant impact. "They are unproven, and it's a really hard system to break into," Brick said.
The launch of the discounted One Medical membership comes as Amazon faces slowing growth in its Prime subscription sign-ups. The company has more than 200 million Prime members globally and has been continuously adding benefits to the Prime program while increasing the membership price.
While Amazon has laid off employees in its pharmacy unit and shuttered other healthcare initiatives like a telehealth service named Amazon Care, the company remains optimistic about its healthcare prospects. Amazon has reported substantial growth in its pharmacy business and is in the early stages of developing its healthcare strategy.
In addition to One Medical, Amazon has expanded its Amazon Clinic business nationwide, offering a marketplace of virtual care providers for common conditions. Moreover, the company recently started delivering prescription medicine by drone in select cities, showcasing its innovative approach to healthcare logistics.
As Amazon continues to integrate One Medical services and build customer trust, the success of this venture could be pivotal in defining the company's role in the healthcare industry. The discounted One Medical membership for Prime subscribers is seen as a critical step in this direction, potentially paving the way for a more comprehensive 'Amazon Prime Health' offering in the future.
