Amazon is already in healthcare in a big way, and analysts that watch Amazon predict the company’s next move into healthcare will involve its Amazon Web Services cloud computing unit and its Amazon Business business-to-business marketplace.

For the past two weeks since CNBC broadcast a story citing unnamed sources as saying had a team code named “1492” working in secret on healthcare, there has been wide speculation that the world’s biggest online retailer has big ambitions for digital healthcare.

But the biggest question isn’t when will enter digital and mobile healthcare, say healthcare and e-commerce analysts that cover Amazon. The bigger question is just how far and in what directions Amazon will take its already substantial investments in healthcare.

In a series of stories, the latest of which ran in late July, CNBC reported that has quietly assembled a research and development staff named 1492 and is looking at developing a slew of digital healthcare applications that may include electronic health records designed for easy sharing and telemedicine applications that digitally connect patients and doctors. In May, CNBC reported that also was developing possible plans to get into the online pharmacy business, which would put the leading online retailer in direct competition with the likes of Walgreen Co. and CVS Health Corp or new startups such as

Amazon hasn’t said anything publicly about what it may do in digital healthcare—Amazon has yet to respond to an interview request from Internet Health Management. But Amazon is already in healthcare in a big way, and analysts that watch Amazon predict the company’s next move into healthcare will involve its Amazon Web Services cloud computing unit and its Amazon Business business-to-business marketplace.

Amazon has a long history of disrupting consumer industries and healthcare is becoming much more consumer-driven

“From an e-commerce perspective, I think it’s more likely that Amazon would partner with another merchant to offer prescription services because it’s a highly regulated industry with a lot of specialization required,” says analyst Colin Sebastian of investment firm Robert W. Baird & Co. “I think the company is more focused on product categories such as grocery, home and apparel, but I suspect as they do more B2B commerce, you will also see Amazon offer increasing selection in healthcare products for businesses.”


Amazon’s biggest move into healthcare thus far has been through Amazon Web Services, its highly successful business unit that offers other companies and government agencies data storage and computing capacity. Since 2014 Amazon Web Services has provided cloud computing and network support services to, the health insurance e-commerce network operated by the Centers for Medicare and Medicaid Services, a division of the U.S. Department of Health and Human Services. Under a multiyear contract Amazon Web Services has with the Centers for Medicare and Medicaid Services, Amazon has built several e-commerce programs that have enabled millions of consumers to comparison shop and purchase health insurance on Those tools include building an identity management system, a feature for comparing insurance plans, and a tool to determine eligibility for specific plans based on a consumer’s income and other variables.

Amazon Web Services, which generated revenue of $12.21 billion in 2016, or 9% of Amazon’s total revenue of $135.98 billion, has nearly three dozen publicly named big healthcare clients. They include big health systems such as Cleveland Clinic and Intermountain Healthcare, and health insurers such as Oscar Healthcare. For the Cleveland Clinic, Amazon Web Services helped to develop the Healthy Brains Initiative, which gives patients and neurologists a way to enter and analyze information about conditions and activities that affect brain health. For Intermountain, Amazon Web Services worked with oncologists across the U.S. to deliver precision medicine to cancer patients, while Oscar uses AWS to run its insurance platform, customer databases, and analytics program.

Amazon Web Services is teaching the parent company how to sell to healthcare institutions, says Dan Housman, a director with Deloitte in Boston and chief technology officer at ConvergeHEALTH by Deloitte, which applies new technologies such as mobile, geospatial, wearable/sensors, cognitive computing and predictive modeling applications  to healthcare.

“Historically the enterprise or back-end side of the business has not been Amazon’s thing, since they historically come at a market from the consumer side,” Housman says. “What Amazon Web Services is helping Amazon to develop is selling to healthcare from the ‘inside out,’ or learning how to sell to a big healthcare organization with a big infrastructure for information technology.”

Amazon doesn’t break out any public healthcare metrics. But analysts that cover Amazon say there are multiple signs that Amazon has a bigger appetite for more healthcare business. One indicator is the “help wanted” sign: Amazon is looking to hire a wide array of employees with healthcare expertise—or skills that can be leveraged for the healthcare market.

advertisement currently has 259 available openings for various healthcare jobs. Those jobs include positions for engineers and programmers with skills in healthcare cloud computing, network systems, network security and artificial intelligence, among others. There also are job openings for marketing and sales specialists that can sell marketplace services to business-to-business healthcare supply chain and procurement executives.

Amazon also is a factor in healthcare by virtue of the many health-related products it sells on A search on the term “healthcare” returns about 326,000 results across about 30 product categories.  Amazon also has the ability to introduce customers, including such healthcare providers as doctors, to its new communication tools, such as Alexa and Amazon Echo.  Alexa, Amazon’s virtual personal assistant technology that responds to voice commands, has been around for about two years and is getting smarter and more sophisticated in responding to health-related requests, says Ashraf Shehata, a partner in the Global Healthcare Center of Excellence at KPMG US.

For example, hospitals including Massachusetts General Hospital and Boston Children’s Hospital are experimenting with ways to use Alexa to help surgeons in the operating room with complying with safety checklist before a procedure, or for developing Alexa apps that will provide instructions patients can use at home.

In March healthcare content provider WebMD and Amazon announced a technology and marketing program that enables users of  Amazon Echo, Echo Dot and Amazon Fire TV to gain access to WebMD’s library of healthcare content, ask questions about conditions , treatments, drugs and other topics such as symptoms and get answers. Those answers also can be sent to a user via an Alexa app.

Because Amazon already has such diversity and depth in healthcare, the company could potentially play a much broader role in healthcare delivery, Shehata says. “Amazon has a long history of disrupting consumer industries and healthcare is becoming much more consumer-driven,” Shehata says.


But to move further into healthcare, Amazon will need to learn the ins and out of a highly fragmented and heavily regulated industry where technology adoption tends to be relatively slow, says Jason Gorevic, CEO Teladoc Inc., a large publicly trader provider of telehealth and other virtual medicine delivery services.

“They (Amazon) are not the first large technology-oriented company to potentially be interested or express interest in this space,” Gorevic, told analysts on the company’s recent second quarter earnings call. “As you know, Google tried to enter this area and Verizon tried to enter this area, and it is, as I think we’ve demonstrated, not as easy as it looks.”

Amazon will go deeper into healthcare but it will take the online retailer time and substantial resources to build a big base, he told analysts. “I would expect them to get into areas where they have clear capabilities to leverage their logistics and distribution capabilities, for example, with a pharmaceutical distribution and/or medical supply distribution,” Gorevic, told analysts based on a transcript from “The remote delivery of care, building doctor networks, dealing with the 50-state regulatory environment is pretty far afield from what they do, and even if they do decide to get into this space, it’s going to be many years before they have any real footprint.”