Amazon plans to sunset its Amazon Care employer offering at the end of the year, according to an internal memo first reported by GeekWire and Fierce Healthcare. 

The email from Neil Lindsay, senior vice president of Amazon Health Services, said the service will officially shut down on December 31. The decision only affects Amazon Care and its Care Medical group of providers, not the company's other healthcare projects.

"This decision wasn’t made lightly and only became clear after many months of careful consideration," Lindsay wrote to Amazon Health Services employees. "Although our enrolled members have loved many aspects of Amazon Care, it is not a complete enough offering for the large enterprise customers we have been targeting, and wasn’t going to work long-term."

THE LARGER TREND

Amazon Care launched in 2019 as a virtual clinic for its own employees, but the service later expanded to outside employers. Earlier this year, the company announced it was adding in–person care options in more than 20 new cities in 2022, including New York, San Francisco, Chicago and Miami.

Just weeks ago, Insider reported on a live website that detailed the addition of behavioral health services to Amazon Care, including a partnership with digital mental health company Ginger. 

But the tech and retail giant has already made big news in healthcare this year. In late July, Amazon announced plans to acquire hybrid primary care provider One Medical in an all-cash deal worth approximately $3.9 billion. The deal hasn't yet closed.

Amazon is also reportedly one of the bidders for in-home health technology and services provider Signify Health, according to The Wall Street Journal and Bloomberg News. Other interested players include UnitedHealth Group, CVS Health and Option Care Health.

The Amazon Care shutdown isn't the company's first failure in the healthcare space either. Its employer-focused joint venture with Berkshire Hathaway and JPMorgan Chase wrapped up operations early last year.

Paddy Padmanabhan, founder and CEO of healthcare and technology advisory Damo Consulting, said success as a stand-alone primary care provider is difficult to achieve, even with Amazon's consumer focus and analytical abilities. 

"Amazon Care was launched on the back of lofty promises of superior customer service and a focus on primary care," he said. "Primary care is a loss-making business with low reimbursements for most organizations, and healthcare enterprises keep score by whether they lose less money on primary care than the hospital down the street. In addition, the challenges of scaling in a tight labor market must have made it extremely hard for Amazon to continue to remain invested."

ON THE RECORD

"As we take our learnings from Amazon Care, we will continue to invent, learn from our customers and industry partners, and hold ourselves to the highest standards as we further help reimagine the future of healthcare," Lindsay wrote.