Amazon Clinic (AMZN) announced a nationwide expansion of its virtual health visit service to all 50 states, after an initial launch in select states in November.
The expansion is a result of customer demand, according to Amazon Clinic general manager Dr. Nworah Ayogu.
"We've built a marketplace for third-party providers, for provider groups. Our goal has always been ... to follow customer demand and customer feedback," Ayogu told Yahoo Finance in an interview.
In the way a customer can purchase goods and services on Amazon, healthcare visits are now part of the product offerings.
Customers can get an appointment via video or messaging — the latter only available in 34 states — for 30 common problems and easily get a prescription sent to their local pharmacy or through Amazon Rx, the company's generic pharmacy service.
The strategy isn't new, as other companies like GoodRx (GDRX) have deployed similar services. But this also puts Amazon in competition with legacy telehealth players like Teladoc (TDOC) and Amwell (AMWL). All three companies' stocks were down more than 6% Tuesday following the news.
Health market attempts
Amazon has been trying for years to disrupt healthcare with several failed ventures in the rearview mirror. They include Haven, the disbanded joint effort with JPMorgan (JPM) and Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B). Amazon also shuttered Amazon Care, which was a similar telehealth service but for its own employees, shortly before it launched Amazon Clinic.
It also acquired OneMedical, a primary care provider that has New York City's Mount Sinai as a partner health organization, for $3.9 billion. OneMedical now offers $199 annual memberships for primary care.
Similarly, Clinic is a cash-pay offering. Virtual video visits cost $75 and messaging visits cost $35 — and Amazon does not accept insurance.
Ayogu said the customer base includes those who are uninsured but also underinsured — that is, those with high deductible plans.
"The reality is, accessing healthcare in this country is harder than it should be. The average wait time to see a doctor in a lot of locations is over three weeks," Ayogu said, noting that customers have said the Clinic is a rapid solution that is also useful for doctor visit follow-ups to get questions answered.
Amazon declined to provide data that would quantify the demand for the product that resulted in its decision to expand.
"We talk a lot about price, convenience, and selection at Amazon. We've really brought those same principles to Amazon Health," Ayogu said, referring to the business segment that also houses the pharmacy and primary care segments.
"We think those same principles are working for Amazon Health," he said.
Follow Anjalee Khemlani on Twitter @AnjKhem.
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