News & Analysis

Could Amazon Affect Your Revenue...and Provider Planning?

Robert Jones

Amazon is on a hiring spree, and it could affect your plans for healthcare provider recruitment – not mention your revenues.

This month, Amazon executive Babak Parviz said his company would need to hire “thousands” of additional employees for the national rollout of its telemedicine service, Amazon Care.

For traditional healthcare providers, that might signal a squeeze on both hiring and revenue. Here’s why:

Amazon Care started in 2019 as a service exclusively available to Amazon employees in Washington State. In addition to same-day virtual visits with a primary care team, the service also offers in-home follow up by a mobile medic for services such as blood draws and vaccinations, plus two-hour delivery for medications. With this hybrid approach, Amazon Care looks like a formidable competitor to hospital-based telehealth programs – without all the costs or obligations of an actual hospital. (A 2019 study by AHA found that 76% of hospitals offered some form of telehealth.)

Parviz says the virtual component will be expanded nationwide this summer. In-home care has already been announced for the Washington-Baltimore corridor, with more markets on the horizon. As I write this, Amazon is currently advertising for nurses or nurse practitioners in Boston, Chicago, Dallas, and Philadelphia.

After the trauma that many doctors and nurses experienced in the hospital setting at the height of Covid-19, we anticipate that telework will be an attractive option for many. If you’re in a market where Amazon is currently hiring, you might want to take another look at your retention efforts. In decades of assisting clients with healthcare provider recruitment, we've never seen such a sharp increase in corporate hiring.

Aside from hiring and retention, we’re watching Amazon Care for its potential impact on healthcare margins. The service is being aggressively sold as an add-on to employee health plans, meaning there is minimal exposure to uninsured or underinsured patients. The company is currently advertising for account executives in 10 different cities from San Francisco to Tampa, tasked with selling the service’s “compelling value for the benefit buyer at large organizations.”

In every market, the job listing makes clear that the business model starts with payment rather than patients:

"Amazon Care is reimagining healthcare and building it around employee and employer needs to make healthcare easy and accessible for all. Amazon Care is Amazon’s virtual-first primary and urgent care service that helps people get quality medical advice and medical care whenever it is needed." (Emphasis added)

Traditional healthcare, of course, is built around the needs of entire communities – not just employees and employers. If Amazon Care is successful in luring away large numbers of patients with private insurance, then legacy healthcare providers could find it increasingly hard to compete in fee-for-service primary and preventive care.