Amazon Care scores its first employer customer

The company's virtual primary care business will be providing healthcare services to the fitness equipment manufacturer Precor.

Amazon Care home

Amazon Care landed the first employer deal to provide its app-based care services to fitness equipment manufacturer Precor.

The news comes shortly after Amazon announced it’d expand Amazon Care beyond its own employees to include companies in all 50 states. It also marks a breakthrough after a previous deal with potential customer Zillow fell through. For context, Precor has nearly 1,000 employees and was acquired by Peloton for $420 million in December.

Why does it matter?

As a healthcare arm of one of the most valuable companies, Amazon Care has the potential to shake up the entire employer-catered telehealth market.

Employers are desperate to curb their shares of rising healthcare costs, and many are betting on virtual care to get the job done. In that sense, Amazon Care’s pay-by-usage business model could help because it comes with less risk and upfront cost commitments.

Instead of charging fixed costs based on the size of a company’s employee base and the number of services offered, Amazon Care charges employers based on how many employees use its service each month. This should be an appealing proposition for large employers since they wouldn’t have to pay a large upfront fee based on the size of their workforce, and are only charged when the service is actually used.

Furthermore, Amazon’s mindshare could make employers feel even more confident their workers will use an Amazon-branded virtual care service since the ecommerce giant already has a ton of consumer loyalty. Right now, Amazon Prime users make up over 57% of the US population and that’s expected to grow to over 60% by 2025, according to Insider Intelligence’s forecast.

The context

Amazon Care started out as a pilot program aiming to cut the high costs of insuring Amazon employees. The virtual offering kicked off to a segment of Seattle-based Amazon employees and their families starting in 2019. It included app-based telehealth visits, secure messaging with providers, and at-home visits. After a successful pilot, the program expanded to all Amazon employees in Washington state in September 2020, and then in March – Amazon Care announced it would be offered to all Amazon employees and employers in the US.