Amazon Mulling Health Clinics for Seattle Employees

Amazon Mulling Health Clinics for Seattle Employees

Amazon is considering opening its own primary health care clinics for employees at its Seattle headquarters, CNBC reported on Thursday, becoming the latest in a series of major US companies pursuing innovative approaches to health care outside the traditional group insurance model. Two people familiar with the confidential discussions told CNBC that the company was planning to start with a pilot clinic for a select group of employees later this year, then expand the program in 2019:

Amazon was previously looking to outsource its clinics and brought vendors in to pitch their services. After numerous rounds of discussions, Amazon ultimately decided to develop clinics internally, one of the people said. Providers including Crossover Health and One Medical offer on-site or nearby services for other companies, including those in the technology sector. …

Amazon started its effort by hiring primary care experts, beginning last year with Christine Henningsgaard, who was previously vice president of operations at One Medical. In January, the company brought in Martin Levine from Iora Health, a primary care group with clinics in Seattle.

If Amazon moves ahead with this plan, it will be pursuing a similar path to Apple, which announced earlier this year that it was establishing a network of health clinics for its employees in and around its headquarters in Cupertino, California. To staff this initiative, Apple has since hired a number of employees away from the provider that operates some of its on-site clinics in other locations, along with a variety of wellness professionals and “care navigators” to help guide patients in choosing the appropriate care for their health needs.

Apple’s clinics have a secondary purpose as proving grounds for the health care technologies the tech giant is currently developing for consumers. Amazon has also been making forays into the health sector, including its recent $1 billion acquisition of the online pharmacy PillPack, which hammered the stock prices of major pharmacy chains. It is not clear whether Amazon’s plans are similarly connected to the development of its own consumer products and services, though Michael Yang, a health investor at Comcast Ventures, tells CNBC that the company might use them as a prototype for local clinics it may eventually scale up beyond its employee base.

Apple’s clinic project and the latest news from Amazon illustrate how US employers are responding to rising health care costs by pursuing new ways of providing health care to their employees. General Motors is trying a different approach, making a deal with a Detroit-based hospital network to offer its salaried employees in the area an inexpensive health plan wherein Henry Ford Health System will manage the majority of their health care needs directly. The number of businesses offering this type of direct-contract health plans is small but growing rapidly, from 3 percent of respondents in 2018 to 11 percent in 2019, according to a recent survey from the National Business Group on Health.

At the beginning of this year, Amazon partnered with JPMorgan Chase and Berkshire Hathaway to establish a non-profit entity dedicated to reducing health care costs for their employees. The well-known surgeon, professor, and author Dr. Atul Gawande was appointed to head the still-unnamed organization in June. This initiative is expected to use data and technology, along with the purchasing power of these huge companies in the health insurance market, to push for more transparent pricing of medical services and find ways to deliver them at a lower cost. Other companies may eventually join this partnership as well, though some experts are skeptical of how much impact it can have on the complex, heavily regulated, and locally-driven health care market.