Costco’s Partnership With Sesame Is Just The Beginning For The Wholesale Retailer’s Healthcare Ambitions

Costco is one of the most celebrated brands in the world, lauded for its powerful brand recognition, loyal customer base, and incredibly commanding market position. The company has positioned itself as an icon during both good and bad economic times, given that it provides daily household goods in bulk for members who pay an annual fee.

However, Costco is more than just a retailer for household staples; the company offers a variety of unique items that other retailers have not ventured into yet, ranging from insurance to vacation packages.

In this spirit, the retailer announced last week that it will be partnering with famed healthcare provider Sesame Health to bring affordable healthcare to its members. Sesame has an innovative healthcare delivery model: it connects patients directly with physicians rather than through middle men— the latter which are typically responsible for increased healthcare costs. As the company explains, “[doctors] on Sesame list their own prices, availability, and services – without insurance mark-ups or surprise bills. By putting power back in the hands of patients and doctors, Sesame cuts out the middlemen that drive up costs to save you up to 60% on your care.”

Now, with this new partnership, Costco members can easily access Sesame’s offerings, including virtual primary care services, lab services, and mental health resources.

David Goldhill, Sesame’s co-founder and CEO, explains: “[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 – and a low price that will be appreciated by Costco Members when it comes to their own care.”

This is just the beginning for Costco’s ambitions in healthcare. The company already offers a robust set of services in the health space, including a dynamic pharmacy footprint in addition to optical services. As it slowly enters the primary care space, the company has immense potential to truly make a difference. Reports indicate that Costco had nearly 119 million members in 2022, a number that has likely grown significantly since then. If even 10% of these members starting relying on Costco for healthcare services, this could be a significant opportunity for the company and for the communities it serves.

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.

With this new move, Costco joins the ranks of many other retailers that are slowly entering the healthcare delivery market. Best Buy, for example, purchased Current Health in 2021 with the ambition of entering the home healthcare industry. Walmart has expanded its own healthcare services significantly, now delivering healthcare across numerous states. Even technology companies are entering the healthcare market; take for example Amazon, which purchased One Medical to enter the primary care market, or Oracle, which purchased famed electronic medical records company, Cerner.

These companies are venturing into this space with one thesis in mind: patients are genuinely seeking high value, affordable, and easily accessible care. Indeed, with its market presence and significant footprint, Costco has an unparalleled opportunity to make an impact in the community and provide patients with the healthcare services they need.

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