The emerging trend of retail giants venturing into the expansive world of healthcare now includes Costco, the retail giant. Its new health company, “COSTCO Health,” alongside competitors such as Walmart, Amazon, Dollar Store, and CVS Health, is making significant strides in healthcare, reflecting an increasing interest in revolutionizing patient care. Costco has collaborated with the New York City-based telehealth startup Sesame to enhance its healthcare footprint. Founded in 2019, Sesame aims to bridge the gap between patients and healthcare providers through a direct-pay model. They target the uninsured and those burdened by high-deductible plans, making quality healthcare accessible and affordable. The Sesame-Plus program offers incentives for its members to receive video therapy visits with a discount of $10 per session.
Costco’s Healthcare Expansion
Offerings to Costco Members:
Virtual primary care visits at a promotional price of $29.
Online mental health therapy sessions for $79.
Standard health checkups for $72, including a lab panel and a subsequent virtual consultation with a provider.
An additional benefit for members includes a 10% discount on all other Sesame services, whether virtual or in-person.
David Goldhill, Sesame’s co-founder and CEO, rightly mentioned:
“Quality, great value, and low price are what the Costco brand is known for. When it comes to health care, Sesame also delivers high quality and great value—ensuring Costco Members receive the best in healthcare offerings.”
The Sesame Marketplace
The Sesame marketplace includes primary care doctors, nurse practitioners, labs, imaging centers, and over 40 health specialties. It offers both virtual and in-person care, ensuring that patients have a plethora of options to choose from.
The unique proposition of the Sesame marketplace lies in its transparent cash pricing model. They provide direct access to over 10,000 healthcare providers, all offering services at a cash price, bypassing the need for insurance. A testament to their successful model, over 100,000 patients have availed services through Sesame.
Costco’s Strategic Differentiation
While other retailers focus on offering preventive and urgent care services in their stores and establishing pharmacies, Costco’s strategy diverges. Their collaboration with Sesame enables members to access a broad spectrum of healthcare services, in-person or virtually. Members have the flexibility to choose the care setting most suitable for them, fostering long-term doctor-patient relationships with Sesame providers.
Sesame’s Growth and Investment
Sesame raised $24M to further its mission, bringing its total investment to $75 million from eminent investors, including Google Ventures. This influx of funds has propelled Sesame to introduce employee healthcare offerings for small and medium-sized businesses, enabling a broader reach. Commenting on the partnership, Forbes said:
“Additionally, given its widespread presence, established supply chain, and incredible brand loyalty, there are numerous other auxiliary opportunities that Costco could potentially pursue within this industry, ranging from pharmacy delivery to healthcare-at-home and tailored value-based care.”
Costco Wholesale Corporation
Costco Wholesale Corporation, commonly called Costco, is an American multinational corporation that operates a chain of membership-only warehouse clubs.
Founding and Growth. Established in 1983 by James Sinegal and Jeffrey Brotman, Costco opened its first warehouse in Seattle, Washington. It has since expanded rapidly, and as of my last update in 2022, it operates over 800 warehouses worldwide, with