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Costco announces $29 primary care

Costco and healthcare disrupter Sesame announced a new partnership to deliver primary care to Costco members for $29, no insurance needed.
By admin
Oct 2, 2023, 7:48 AM

Sesame, a health care company offering telehealth and in-person visits for a low cash cost, has announced a new partnership with retail giant Costco, Bloomberg first reported on Monday. Costco members will now offer $29 primary care visits via telehealth to all members with no insurance necessary.  

Half-priced healthcare

In fact, Sesame doesn’t accept insurance at all – much like its competitor Amazon Clinic – and caters to people without health insurance, with high-deductible plans, or who simply want the ease and convenience of a telehealth appointment. In addition to offering primary care appointments, Sesame offers mental health appointments for $79 and annual “health check-ups” with a standard blood panel for $79.  

“We call it ‘half-price health care,’” said Michael DiLorenzo, Chief Marketing Officer of Sesame. “With hundreds of millions of members in the US, Costco is a ubiquitous consumer destination; the ability to create awareness and distribution for ‘half-price health care’ for uninsured and high-deductible plan Americans will make a real impact on what Americans pay for outpatient health services like primary care visits, prescription refills, lab tests, mental health and the like.” 

Unlike other giants that have entered the primary care space – like Walgreens’s VillageMD, CVS’s Oak Street Health, and Amazon’s One Medical – Costco’s partnership with Sesame doesn’t leverage insurance. Instead, Sesame leverages convenience and the newest kid on the healthcare block – price transparency.  

“Quality, great value, and low price are what the Costco brand is known for,” said David Goldhill, Sesame’s co-founder and CEO, and author of several books on American healthcare reform, in a press release. “When it comes to health care, Sesame also delivers high quality and great value – and a low price that will be appreciated by Costco Members when it comes to their own care.” 

Healthcare marketplace driven by consumers

Sesame, unlike traditional telehealth services, operates on a marketplace model. Patients can scroll through clinicians while instantaneously comparing prices, availability, and star ratings and reviews.  

While most telehealth platforms either set doctors’ fees or negotiate with insurers, Sesame says they enable providers to compete to serve patients. Competition is key: Sesame claims this helps keep prices low and transparent.  

“The beauty [of our model] is in its simplicity. Marketplaces are a time-tested model for consumer-centric outcomes around price and quality,” DiLorenzo continued. “That’s why economists regard markets as perfect. Years ago there was a mortgage company called Lending Tree that said, ‘when banks compete, you win!’  Sesame’s ethos is quite similar.” 

The consumer-driven platform is not dissimilar to other gig economy staples like Fiverr, Taskrabbit, and Uber. Sesame has about 46 employees but the Sesame platform is home to approximately 3,500 physicians, nurse practitioners, and other providers. Clinicians can fill their schedule through Sesame, much like an Uber driver can ‘turn on’ their availability.  

“An empty airplane parked at a gate makes no money for the airline. An airplane in the sky full of passengers makes money,” DiLorenzo explains. “ It’s no different than an MRI tube or a doctor’s calendar. An occupied MRI tube and a full doctor calendar make money. So let’s say a doctor has a free Thursday afternoon and wants to monetize his open time in the Sesame marketplace. Now let’s say there are 10 doctors that are free on Thursday afternoon. One of the ways that doctor can stand out from the other nine is to have the best price.” 

Advancing tech infrastructure

Another way Sesame is looking toward the future is in the technological infrastructure supporting physicians. While providers and patients currently have access to fundamental tools such as clinical notes and prescription refills to aid their interactions, there’s room for improvement. Sesame will invest in product development to introduce innovative features and functionalities that facilitate the provider-patient relationship like a mobile app, asynchronous messaging, and more robust intake forms, DiLorenzo said.  

“We are taking a crawl, walk, run approach here.  To start, the most important benchmark to both Sesame and Costco is that Costco Members are receiving from Sesame the same type of quality, value and price they are accustomed to getting from Costco on virtually every SKU and service in its warehouse stores,” said DiLorenzo.  

“When we get the Costo Member experience right, the rest will take care of itself.  Sesame has by far the best price on outpatient care, and Costco has the scale to make a difference. Those two things taken together have the potential to move the needle significantly.” 

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