A full 28 million Americans do not have health insurance, according to the 2020 census. Among Americans who were covered by private health insurance through their employer in 2020, 53% were enrolled in high-deductible health plans, an increase of more than 33 percent in just five years. High-deductible health plans typically offer lower premiums but require patients to spend more out-of-pocket before insurance begin covering their care.
Sesame, an online marketplace offering healthcare services, was founded in 2018 to bring affordable healthcare to people who have been historically priced out of receiving the care they need. On Tuesday, the New York City-based startup closed a $27 million Series B funding round, bringing its total funding since inception to $75 million.
The round was led by GV (formerly Google Ventures). It also featured Virgin Group, TeleSoft Partners and FMZ Ventures as new investors and General Catalyst, Industry Ventures, Coefficient Capital, Giant Ventures and Alumni Ventures Group as existing investors.
Through its online marketplace, Sesame offers healthcare delivered both in-person or via telehealth. The platform allows patients to book appointments for various health needs, such as primary care, chronic care management, specialty medicine, acute care consultations, dentistry and imaging.
To CEO David Goldhill, Sesame’s mission is to create “true consumer-driven healthcare.” This is why the company works to make the process of funding and receiving care in the direct pay healthcare market as easy as possible.
When patients shop for care on Sesame’s platform, they can view clinicians’ reviews and select the provider who best fits their needs. Users are also met with “simple, easy-to-understand prices that don’t change after the fact,” according to Goldhill. He said the average price users pay for care in Sesame’s marketplace is less than $40.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Sesame makes its money from two core revenue lines. For the first, the company takes a fixed fee for appointments booked. For the second, Sesame offers a membership program in which users pay either $99 annually or $10.99 monthly. Membership benefits include saving $20 on telehealth and primary care visits, saving $30 when seeing a dentist or specialist in-person and a free lab or blood test each year.
The recent funding round helped Sesame evolve its membership product from beta to general availability. The rest of the funds will be used to fuel continued company growth, particularly to expand the availability of care options and settings that are relevant to a broader range of conditions.
As Sesame continues to grow, the company is working to ensure that consumers are aware of its platform and the savings they can get from it. As a direct-to-consumer company, Goldhill said Sesame is “meaningfully advantaged against traditional healthcare offerings” when it comes to marketplace awareness.
He said Sesame branded itself as the company that “invented a new healthcare system while no one was looking,” to distance its platform from the traditional healthcare system’s baggage of bureaucracy and add-on administrative expenses. The company actively disseminates this messaging via organic search, email marketing, digital and performance advertising, social media, influencers and press releases.
Still, Sesame is not the only company offering affordable direct-to-consumer healthcare — PlushCare, K Health and Teladoc aim to do the same. Goldhill said Sesame differentiates itself from these companies by offering a wider variety of primary care and specialty care options on its marketplace, including services for mental health, gastroenterology, gynecology, cardiology, dermatology, urology, labs and imaging.
By offering full-scope healthcare on its platform, Goldhill said Sesame addresses a historically unmet need and provides a viable alternative for Americans who struggle to afford care in the traditional system.
“Think of us as an Expedia for medical care,” he said. “Doctors and providers list their services with a specific cash price, just like an airline might list a flight on Expedia, and consumers can buy what they want directly and simply online, without the middleman of an insurance company. Providers can price dynamically, modifying and varying pricing to offer affordable rates at all times of day and all days of the week. This concept has not existed yet within healthcare.”
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