Costco Starts Offering $29 Health Care Service for Members

Around 125 million Costco members globally can gain access to the medical services.

Shoppers walk out with full carts from a Costco store in Washington on May 5, 2020. Nicholas Kamm/AFP via Getty Images

Retail chain Costco has begun offering online health care services for $29 to members in partnership with Sesame, a direct-to-consumer health care online marketplace connecting medical providers with customers.

Costco’s partnership with New York-based Sesame offers “special discount pricing” to all Costco members on a wide range of outpatient medical care, according to a Sept. 25 post by Sesame. Costco members will receive virtual primary care for $29, health checkups for $72, and virtual mental health therapy for $79. In addition, members receive a 10 percent discount on all other Sesame services, including in-person appointments.

The health checkup bundle offers “lab testing for a Standard Health Panel” that includes a complete blood count, comprehensive metabolic panel, cholesterol, and urinalysis. A virtual follow-up appointment with a provider is also included.

According to Sesame, the platform makes service providers “compete to serve patients.” And this competition “lowers the price of care, drives complete price transparency, provides ready access to health providers (the majority of appointments on Sesame take place within two hours), and ensures a high-quality consumer experience with top-rated providers.”

Sesame does not accept health insurance, which it says contributes to keeping prices low. This makes the service ideal for Costco members who wish to pay cash for health care in case they are enrolled in high deductible insurance plans or are uninsured, according to the firm.

“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,” said David Goldhill, Sesame’s co-founder and CEO.

Sesame is backed by Alphabet, which owns Google. The company’s partnership with Costco gives it access to around 125 million Costco cardholders globally.

Founded five years ago, Sesame lists roughly 3,500 clinicians and has seen around half a million unique patients use their platform, Mr. Goldhill said in an interview with Bloomberg.

When the company was founded, the idea of doctors selling their services was “very foreign and very uncomfortable” to many people, he said.

“Health care is increasingly becoming a consumer business,” Mr. Goldhill stated. Sesame aims to upend “this idea that every single thing in health care needs something between doctor and patient to mediate.”

Though Sesame caters to people without health coverage, he said many doctors on the platform take insurance. Some doctors use the platform to consult during evenings or weekends.

Despite gaining access to many prospective customers through the Costco partnership, Mr. Goldhill said there are no plans to recruit more physicians to the platform to deal with the surge in demand. He added that Costco does not plan to open Sesame clinics at their stores.

Demand for Urgent Care Services

Costco’s partnership with Sesame comes as many retailers want to tap the urgent care medical service business. Urgent care centers aim to treat nonemergency conditions like ear infection, rash, or common cold.

They are helpful when patients cannot secure a quick appointment with their primary care service. It offers medical treatment outside of a doctor’s visiting hours and costs less for a trip than going to an emergency room.

Some experts have raised concerns that urgent care centers may encourage people to stop visiting their primary care provider, fragmenting their health care.

“It’s a reasonable solution for people with minor conditions that can’t wait for primary care providers,” Vivian Ho, a health economist at Rice University, told CNN. “When you need constant management of a chronic illness, you should not go there.”

Primary care practices maintain the health care history of patients and have access to all such records. In contrast, urgent care centers are focused on offering episodic care.

Demand for urgent care services has risen due to multiple factors, such as the high cost of emergency room visits, gaps in primary care, and convenience. Urgent care centers tend to be primarily staffed by nurse practitioners and physician assistants.

Among the multiple retailers that have started their own health care service is Amazon, which launched its “Amazon Clinic” service in November last year.

The service expanded to 50 states and Washington in August. Amazon Clinic is a virtual healthcare marketplace providing care for over 30 common ailments like pink eye, urinary tract infection, and erectile dysfunction.

“Depending on the state in which they are located, customers can connect via messaging or video call—all without an appointment or insurance. Through Amazon Clinic’s secure message portal or video call, the clinician will provide a recommended treatment plan, which may include a prescription,” according to the company’s website.

“Customers have the flexibility of filling their medication at Amazon Pharmacy with free shipping or at any other pharmacy of their choice.”

Amazon’s messaging-based consultations cost $35. Video visits cost $75.

In February this year, CVS Health announced that it was acquiring primary care provider Oak Street Health, thereby expanding its business into offering physician services. Oak Street has around 600 primary care providers and 169 medical centers across 21 states.

Meanwhile, Walgreens has established doctor’s offices at hundreds of its stores following a deal with VillageMD, a primary care network. Walgreens also took a majority stake in the firm.