E-commerce giant Amazon has stepped up the national rollout of its primary healthcare chain, a challenging business that Walmart retreated from and Walgreens Boots Alliance is looking to exit.
Securing a place in the primary healthcare arena became a goal for some retailers as Americans age. However, several companies have learned that offering primary care to patients is a difficult and often unprofitable endeavor. Amazon is taking a different track than others, however, by partnering with prominent hospital chains to operate its centers and even making care available as part of Prime memberships.
San Francisco-based Amazon One Medical, with over 200 locations in more than 20 U.S. cities, opened its first center in New Jersey on Wednesday at Edgewater Towne Center in Edgewater. Later this year, One Medical—a hybrid virtual and in-person primary care service—plans to launch two more Garden State locations, in Jersey City and Englewood.
Earlier this year, One Medical announced it intends to open centers in Westchester County, New York, as part of its expansion. One Medical centers are also planned for the Cleveland area this year.
Walmart’s exit
Amazon and One Medical may have better luck than discounter Walmart, which last April pulled the plug on all 51 of its Walmart Health centers.
"Through our experience managing Walmart Health centers and Walmart Health Virtual Care, we determined there is not a sustainable business model for us to continue," the retailer said at the time. "This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time."
Meanwhile, there's uncertainty surrounding Walgreens's next move regarding clinics inside its stores.
In November 2022, Walgreens' VillageMD said it was buying Summit Health and CityMD, an urgent-and-primary-care chain, for $8.9 billion. Last week, Walgreens said it is going private in a $10 billion deal with Sycamore Partners, and is exploring divesting VillageMD.
Amazon has made a major investment in the primary care business. In February 2023, it purchased One Medical for $3.9 billion, one of its biggest acquisitions ever.
To open clinics in the Garden State, One Medical is partnering with Hackensack Meridian Health, New Jersey’s largest health network. One Medical is teaming up with Montefiore Health System in Westchester and Cleveland Clinic in Cleveland.
“Members have been asking us to open up offices in New Jersey for some time," Dr. Evelyn Chu, district medical director for Amazon One Medical in New Jersey, said in a statement.
The Edgewater location offers same- and next-day, in-person appointments and 24/7 virtual care. One Medical provides preventative care, treats immediate illnesses like cold and flu, and handles managing chronic conditions like diabetes.
Amazon Prime benefit
“We know a majority of people do not even have a primary care physician," Robert Garrett, Hackensack Meridian CEO, said in a statement.
In New Jersey, the One Medical centers will also make referrals to Hackensack Meridian’s network of specialists, hospitals and facilities. Patients can use One Medical's app to book appointments, renew prescriptions, message their doctor and access their medical records.
Amazon One Medical memberships can be added as a benefit for Amazon Prime for $9 a month or $99 a year, or purchased online. The chain also works with over 10,000 U.S. employers that offer it as a benefit for their workers and their dependents.
One Medical's use of virtual medical visits sparked a wrongful death lawsuit last year that raised questions about the reliability of telehealth in diagnosing problems. The malpractice litigation alleges that One Medical hires poorly trained staff, resulting in negligent medical care. The suit involves a case where a diabetic patient coughing up blood was told to buy an inhaler during a video consultation. He died several hours later in a hospital emergency room.
One Medical didn't respond to several emails from CoStar News seeking comment.
Earlier this month the chain lost its CEO, Trent Green. He is leaving to become CEO of National Research, a global insights and strategy firm.