Amazon Once Inspired Fear in the Health-Care Industry. No Longer

(Bloomberg) -- Amazon.com Inc.’s Prime membership program began with speedy shipping, then video streaming. The latest perk—discounted access to a virtual doctor—is being pitched as another win for customers: medical care delivered as seamlessly as tube socks and television shows.

But it’s a capitulation of sorts. Having spent almost a decade and billions of dollars trying to re-invent American health care, Amazon has settled on a decidedly traditional approach. The company runs doctors’ offices and pharmacies itself, offering Prime subscribers a $100 discount on memberships at One Medical, the concierge primary-care chain it acquired in February. In the highly regulated business of treating colds and dispensing pills, the strategy is a familiar one, albeit with some technology thrown in, and it disappointed industry observers who had hoped the company’s long-awaited entry into health care would mean radical breakthroughs.

Over the past eight years or so, Amazon has started and abandoned multiple health-care initiatives. Haven, a joint venture with Berkshire Hathaway Inc. and JPMorgan Chase & Co. that sought lower corporate health insurance costs was shuttered after accomplishing little. Amazon Care, a telehealth service that promised virtual access to doctors in minutes, was abruptly closed last year just 17 months after it was widely launched. In July, the company axed a line of wearable health and wellness devices after they failed to catch on with consumers.

Today, Amazon mostly relies on a pair of pre-existing businesses—One Medical and PillPack, a mail-order pharmacy acquired in 2018. Both are well liked by patients but largely duplicate existing services and were unprofitable before Amazon bought them.

Fellow tech-industry behemoths such as Apple Inc. and Google parent Alphabet Inc. have also poured time, talent and billions of dollars into their own attempts to disrupt the famously entrenched health-care industry, with equally underwhelming results. Apple has started, delayed and abandoned multiple projects, including a glucose monitor and consumer health-care clinics. Google meanwhile has launched an array of initiatives such as glucose-measuring contact lenses and a platform for early heart-failure detection. None have significantly improved health-care offerings or outcomes for patients; all have been modified or scaled back.

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