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How Amazon Might Defeat Teladoc Health

By Taylor Carmichael - Updated Jun 26, 2021 at 10:29PM

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Currently Amazon is shopping its Amazon health insurance to corporate clients. But what happens if Amazon starts competing with Teladoc directly?

Teladoc Health (TDOC -6.16%) is top dog and first mover in providing virtual healthcare to people, insured or not. Right now, Amazon (AMZN -2.86%) is not competing directly with Teladoc, but that might change. Amazon now insures all its own employees, and it is offering its health insurance solution to enterprise customers. Amazon may want to contract with Teladoc to provide virtual healthcare to its insured clients. Or Amazon might want to build out its own virtual healthcare system. Or it may want to acquire a virtual healthcare player and build on that.

Is it possible that Amazon might start competing directly with Teladoc? If the company builds out a virtual healthcare solution, what will that look like? How much of our healthcare will move to the internet? In this video from Motley Fool Live, recorded on May 14, Corinne Cardina, bureau chief of healthcare and cannabis at Fool.com, and Motley Fool writer Taylor Carmichael discuss some limits of virtual healthcare, and the competitive threat of Amazon to Teladoc Health.

Taylor Carmichael: I've mentioned this before, the big -- what we don't really know is how many people, if you're one of these people who have a relationship with your doctor and you like your doctor and you want to see your doctor, Teladoc is not it for you. Because that model, you get to see a doctor, you don't get to see your doctor. It's a great model for 24/7 healthcare, for an emergency in the middle of the night, go to Teladoc and talk to a doctor super quickly. If you're just talking about relationships, there are a lot of people who like a relationship with their doctor, particularly the older people who are less inclined to try new things, maybe, or to try new healthcare, certainly. They might be the last group to shift. We don't know how big this market is going to be. One way, Amazon does have it easier, is they're a very trusted brand. They've been around for a long time. People know them, were intimately involved. I assume you're a Prime subscriber, Corinne.

Corinne Cardina: Of course.

Carmichael: So many people are. I can just imagine them packaging health insurance as part of their prime subscription rate. It would be more expensive, maybe a double of what it is now. But they (might be) figuring out the math and figuring out how to package those two things together, which is bizarre. Like faster delivery plus health insurance.

Cardina: They're the king of logistics. If anybody can do those kind of things, it is Amazon, certainly.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Corinne Cardina owns shares of Teladoc Health. Taylor Carmichael owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and Teladoc Health. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Teladoc Health, Inc. Stock Quote
Teladoc Health, Inc.
TDOC
$32.90 (-6.16%) $-2.16
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$138.23 (-2.86%) $-4.07

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