You can’t keep big retailers out of the healthcare industry.
Costco Wholesale Corp.
COST,
is offering its members access to medical care, including $29 virtual primary-care visits, through its recent deal with online marketplace Sesame, joining a growing number of retailers who are dipping their toes into the healthcare industry.
As part of the deal, Costco members will get access to Sesame’s marketplace and its “best pricing,” which includes $79 in-person medical visits surrounding a person’s mental health and 10% off other services, among other perks. On Sesame, clinicians set their own prices and patients pay them directly through the platform, cutting out insurance companies.
Sesame’s service is aimed at people who don’t have healthcare coverage or who typically pay cash for wellness services because they have a high-deductible plan. Only Costco’s roughly 125 million members will have access to Sesame’s marketplace, which is available in all 50 states. Costco memberships cost $120 or $60 a year depending on the plan, and Sesame’s marketplace is immediately available for members, and is included with a membership, according to its website.
See also: Costco is selling out of small gold bars ‘within a few hours,’ CFO says
“We still have 7% of the American population who is uninsured, or have high-deductible health plans, and they prefer to pay cash for their healthcare,” Natalie Schibell, vice president of product marketing at health platform Zyter, told MarketWatch. “This shift of retail health into primary care are shifting from those episodic appointments, those coughs, sneezes and the flu, now to full-blown primary care.”
Several other major retailers have also been venturing into the multi-trillion dollar healthcare industry in some capacity.
Amazon
AMZN,
acquired primary-care company One Medical this year for $3.9 billion, for example, as part of the company’s overall growing healthcare business, which also includes its online drugstore Amazon Pharmacy, and its doctor-patient communication service called Amazon Clinic.
Walmart
WMT,
created Walmart Health in 2019, which has set up centers inside some of the retailer’s “Supercenter” locations that provide services such as primary care, dental care, behavioral health, labs and X-rays, audiology and telehealth. Walmart,the world’s largest retailer by revenue, plans to have 75 of these centers running by the end of 2024. And it is also exploring buying a stake in primary-care chain ChenMed, according to Reuters.
CVS
CVS,
has also been trying to expand its retail locations into a more robust healthcare company ever since it acquired health insurer Aetna in 2018 and home-health provider Signify Health for $8 billion in 2023. Signify Health works with doctors, nurses and physicians assistants to facilitate house calls, among other services.
After a string of acquisitions that included VillageMD, Summit Health and CareCentrix, Walgreens has introduced more primary-care opportunities for customers, as well. Walgreens
WBA,
now operates roughly 570 clinics that offer primary care or urgent care.
Other wholesale brands like the Walmart-owned Sam’s Club offer health-related services including walk-in immunizations, hearing tests and dental discounts through its partnership with Humana
HUM,
and BJ’s offers discounts on items including eyewear.
Of course, all these brands getting into healthcare in some fashion could come with some drawbacks, as Schibell thinks “there are questions over quality for retail health.”
And while providing great care to customers is a goal of these companies, of course they see ways to boost revenue in an untapped market.
“There’s profit to be made,” Schibell added.
See also: The big bet: Can retail pharmacy chains remake themselves into healthcare providers?
“If you fast-forward 10 years from now, people are not going to believe how primary care was administered,” Amazon CEO Andy Jassy said about the company’s acquisition of One Medical.
Walgreens CEO John Driscoll told MarketWatch last year that “what traditional retail gets right is trust, convenience, price and meeting the consumer where they are.”
Unlike other retailers listed above, Costco is not acquiring Sesame, instead opting for a partnership that gives Costco members access to Sesame’s medical marketplace. And Costco is well-known for this type of offering. The wholesaler provides members discounts on travel packages, eye care, gift cards and gas as benefits.
Costco reported its quarterly earnings on Tuesday, revealing results that topped estimates. Shares of Costco are up 24% in 2023.
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