Olivia Cavallaro Tech 08.24.2022 21:Aug PM EDT

Amazon Care is Shutting Down at the End of the Year — But Why?

The ecommerce and tech giant Amazon is shuttering its three -year-old telehealth service by December.

On Wednesday, Amazon announced that it is shuttering its telehealth service called Amazon Care, which was launched as recently as 2019. The announcement over the decision to shut down the service was made by Amazon Health Services lead Neil Lindsay via company email.

According to CNBC, the Jeff Bezos-owned company will shut down Amazon Care after December 31, after it decided that it wasn't "the right long-term solution for our enterprise customers." Simply put, Amazon has decided that the telehealth service "wasn't going to work long-term."

This marks Amazon's major retreat in its attempts to break into the healthcare industry. Despite ending Amazon Care, however, the company said they gained a better understanding of the requirements to deliver "meaningful health care solutions for enterprise and individual customers."

What is Amazon Care?

Amazon Care began in 2019 as a service for the company's Seattle-based employees, providing virtual health care services with the option to have a nurse visit the patient in his or her home. Just this February, Amazon expanded the telehealth service nationwide, offering it to companies across the US who wanted to provide such healthcare services to their employees.

In fact, it appeared that Amazon was continuing to innovate with Amazon Care, as its website this month showed that it was adding mental health support after partnering with a mental health support organization called Ginger, The Verge reported. But shutting down Amazon Care at the end of the year appears to be more of a strategic move.

The decision to discontinue Amazon Care comes after news that Amazon is poised to acquire One Medical, a primary care company, in a deal that will cost the big tech giant up to $4 billion. NPR reported in July that the acquisition of One Medical is Amazon's biggest health care purchase yet.

Amazon and the Health Care Industry

Amazon has long been yearning to tap into the lucrative healthcare industry. In 2018, Amazon bought the online pharmacy company PillPack for $753 million. Two years later, it launched Amazon Pharmacy, a prescription and delivery service.

Amazon had also previously teamed up with Berkshire Hathaway and JPMorgan Chase to establish Haven, a nonprofit health care organization geared towards decreasing costs for companies' employees and improving their primary care experience. However, Haven was shut down in 2021 after just three years of operation.

In Lindsay's letter to employees about the shuttering of Amazon Care on Wednesday, he underscored how the health care space is "ripe for reinvention." However, he did not shed light on other projects Amazon is undertaking in the health care field at the moment.

Lindsey assured Amazon Care employees that they would have an opportunity to become part of the Health Services organization or other teams at Amazon and provide support for employees seeking roles outside of the company. The Amazon Health Services lead vowed that they would take their learnings from Amazon Care and continue to "reimagine" innovations for the health care industry.