Amazon Restructures Healthcare Business Amid Mixed Performance and Executive Exits
TL/DR –
Amazon has restructured its healthcare business, Amazon Health Services (AHS), following mixed performance and the departure of several top executives. The restructure, completed in May, was intended to simplify AHS’s structure, with executives from Amazon and One Medical, Amazon’s care delivery arm, chosen to oversee the new divisions. Despite previous setbacks with ventures like Amazon Care and Haven, the company has seen recent growth in its healthcare division and plans to continue its expansion.
Detailed overview:
- After both successful and failed attempts in the healthcare sector, Amazon has overhauled its healthcare business, a move completed in May in response to mixed performance and the exit of top executives. The restructuring aims to streamline Amazon Health Services (AHS), according to Neil Lindsay, AHS’ senior vice president, and an official spokesperson.
- Seasoned Amazon executives, along with select leaders from One Medical, AHS’ care delivery arm, have been appointed to manage the new divisions.
Deep dive:
Amazon ventured into the healthcare industry a decade ago. It has since developed a range of services, including online platforms for telehealth, chronic condition management, and pharmacy, as well as a nationwide physician network acquired via One Medical in 2023.
Despite some unsuccessful initiatives, such as Amazon Care and Haven, Amazon recently reported growth within its healthcare division. The tech giant is expanding One Medical offices across different states and seeing increased adoption of its pharmacy services, thanks to investments in consumer-focused solutions like same-day medication delivery and caregiver-controlled drug orders.
As part of its growth, Amazon is completely revamping AHS to stimulate further expansion. The overhaul has resulted in six new divisions led by long-serving Amazon executives, many of whom joined from the $3.9 billion acquisition of One Medical.
AHS’ six new divisions and their leadership
“The restructuring aims to better serve patients and accelerate business innovation. We’re excited about the momentum within Amazon Health Services and remain committed to making healthcare easier,” said Lindsay. According to a spokesperson, the restructuring did not result in any extensive layoffs, although last year, the company laid off hundreds of employees across Amazon Pharmacy and One Medical.
Ann Allen, One Medical’s chief operating officer, has been reassigned to manage Amazon’s partner relationships with health systems. Amazon plans to fill Allen’s vacated position.
The restructuring, first disclosed by CNBC, happened three months after One Medical CEO Trent Green departed to lead a healthcare analytics company. Amazon’s Vice President of Healthcare, Aaron Martin, and Chief Medical Officer, Dr. Sunita Mishra, also exited in May, a same month when restructuring took place. The spokesperson declined to comment on whether their departures were related to the restructuring.
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