Amazon Is Secretly Testing a Direct-to-Consumer Health Bet
- Insiders have learned that Amazon is testing a new health bet code-named “Katara.”
- It’s designed to treat common ailments online without going through employers and health plans.
- This is in stark contrast to what Amazon Care is doing, a closed primary care bet that didn’t pan out.
Amazon is testing yet another healthcare business, in a sign of the tech giant’s continued attempts to disrupt the industry.
The latest project, code-named Katara, is a virtual nursing effort that is being tested on Amazon’s own employees, two current employees said. It aims to provide people with online care for common ailments like acne or hair loss, according to one of the employees.
Amazon is also testing Katara at the same time it acquired One Medical and shuttered Amazon Care, a sign that the tech giant is struggling to find its way into the $4.1 trillion U.S. healthcare market. In recent years, Amazon has accelerated its healthcare ambitions by acquiring online pharmacies and building out lab testing infrastructure.
Katara’s approach could pose a big challenge for direct-to-consumer healthcare companies like Hims and Ro, similarly selling treatment plans on the internet for health problems like erectile dysfunction.
Amazon said it does not comment on rumors or speculation.
Companies like Hims, Ro, and Thirty Madison started out as companies with less serious health conditions, but are all expanding into broader services such as anxiety and depression, migraines, and fertility care.
Ro recently raised $500 million in a funding round at a $5 billion valuation, According to Bloomberg, saying it is building a “patient-centred healthcare system.” Many of its plans require monthly cash payments and prescriptions sent in the mail.
Amazon’s Various Approaches to Healthcare
Amazon’s intentions with Katara stand in stark contrast to the way it built Amazon Care, a primary and urgent care business that decided to shut down in August.
Amazon Care has nursing teams who see patients through an app and sometimes in person through home visits. Its clients are other employers who pay a monthly fee. Amazon said that while Amazon Care has ambitions to bring health plans online and sell services directly to consumers, the effort has not gained enough traction and will end operations in December.
Katara was overseen by Aaron Martin, who worked under Amazon Health Services boss Neil Lindsay, two employees said. Amazon Health is a growing health segment that includes One Medical, the primary care startup Amazon bought for $3.9 billion.
A former Amazon Kindle executive, Martin rejoined the tech giant in March from Providence, a health system in Washington, where he led digital health efforts.
In a statement to Insider about the closure of Amazon Care, a spokesperson said the company continues to reimagine the future of the healthcare industry.
The spokesman said its long-term vision is to make it easier for people to get the health products and services they need.
“We are proud of the work we do and will continue to invent, learn from our customers and industry partners, and hold to the highest standards as we further help reimagine the future of healthcare and the role Amazon can play,” the spokesman said.