It's no secret that Amazon (NASDAQ: AMZN) is the sort of company that needs to have its fingers in many pots. And for years, the company has been trying to ease its way into the healthcare space.
Last year, the online giant launched Amazon Pharmacy, a service that allows customers to shop for medications at competitive prices and get access to pharmacy professionals. Now, Amazon is taking things one step further with its latest medical care app.
More than just an app
When Amazon introduced its Amazon Care app, only Seattle-area employees of the tech colossus were eligible to use it. Now, Amazon Care, which connects users with telehealth professionals, is going broad. Not only is it being offered to the general public, but it's also being introduced as a hybrid solution: Patients can access care remotely initially and then follow up with in-person care on an as-needed basis.
Amazon plans to offer in-person care options in up to 22 cities in 2022. Those include:
Addressing a growing need
Demand for virtual healthcare exploded during the coronavirus pandemic. Initially, patients were advised to stay out of medical offices for nonemergency purposes. And even once society opened up again, many patients came to realize how easy and convenient telehealth appointments were.
For people without access to a vehicle, seeing a doctor can be a major burden. Similarly, older people often have mobility issues that make it difficult to access the care they need. Telemedicine does a great job of bridging that gap.
But telehealth has its limitations. Patients can't get their blood drawn or their breathing analyzed over a computer screen. And so Amazon's solution makes a ton of sense. With Amazon Care, patients can attempt to resolve their medical issues remotely, but those who can't aren't then left to scramble to find a healthcare facility for follow-up. Instead, they'll have access to partner facilities through Amazon's network.
Will healthcare REITs take a beating?
Healthcare REITs, or real estate investment trusts, are poised to grow in the coming years. The U.S. population is rapidly aging, and with that will likely come the need for more skilled nursing and assisted-living facilities. Plus, there's a perpetual need for hospitals and medical facilities; that won't be going away anytime soon.
Does Amazon Care have the potential to take some business away from existing facilities? Maybe. But all told, investors in healthcare REITs really shouldn't be too concerned.
This addition to Amazon's offering could serve the very important purpose of putting less strain on healthcare facilities -- hospitals, in particular. And because the need for these institutions is perpetual, there should be plenty of room for more of them to enter the market.
Of course, there's always the fear that if healthcare facilities pop up at too rapid a pace, then the demand for them will start to decline. But that's unlikely to happen anytime soon, given that we're still grappling with a pandemic. So while it's natural for real estate investors to be wary of Amazon in this context, the reality is that, right now, there's no need to lose sleep over the online giant's latest venture.