Americans are facing the highest inflation since 1990, with the consumer price index rising 6.2% in October. Many experts expect high inflation to last a while longer.
As the cost of pretty much everything goes up, healthcare is no exception. According to the U.S. Bureau of Labor Statistics, healthcare services got approximately 2% more expensive this October compared to last year, with services such as doctor and dentist visits and hospital stays rising even more.
But one healthcare company is bucking this inflationary trend.
According to the company, its users saved an average of 67% on dental care, 60% on cardiology services and imaging, 40% on dermatology, and 31% on psychiatry.
Sesame users pay cash for a range of healthcare services through the platform rather than going through health insurance. Without third-party health insurance bureaucracy and administrative rules, doctors and other healthcare providers can theoretically serve patients more efficiently.
“Less work can translate into lower cost to the practice and therefore a lower price for the patient,” said David Goldhill, Sesame’s cofounder and CEO.
But even Goldhill was surprised by how quickly prices have come down. He credits provider ingenuity—enabled by Sesame’s online marketplace—for the results.
“It was a little bit of a revelation to us just how actively many of the physicians who are listing on Sesame are using the platform,” Goldhill said. “One of the things we\’re doing here is unlocking physician entrepreneurship.”
Without constraints on how to price or package services for cash-pay patients, Goldhill says, doctors and dentists can be flexible and adjust their fees based on how busy they are. If a doctor’s calendar is full in a particular week, they don’t have to list any appointments, but if they have availability, they can price that availability more aggressively.
Demonstrating financial value to consumers is part of Sesame’s purpose, but for Goldhill, lower prices aren’t Sesame’s only—or most exciting—impact on the market.
Innovations in packaging and service bundling may prove even more important in delivering value to consumers.
Providers can, for example, offer a bundled rate for all the various services that need to happen in a particular visit. Or, they can offer appointments at odd hours and see whether consumers value those options.
Even charging more for weekend or evening visits could provide value to consumers who otherwise need to take off of work and lose income to visit the doctor.
“The key point in creating value in a consumer economy where you’ve got 325 million consumers…is that you need genuine diversity in services and offerings,” Goldhill said.
Traditional health insurers don’t offer the diversity of options to meet the wide range of consumer needs and preferences, according to Goldhill.
“All of these one-size-fits-all approaches to managing a complex consumer economy means that one size fits almost nobody,” Goldhill said. “Healthcare needs market dynamics.”
Though Sesame has experience rapid growth, raising a total of $50 million and building a network of several thousand providers and serving more than 100,000 patients, Goldhill notes that it didn’t take long—or even huge scale—to have an impact on healthcare costs and options for its users.
“All Sesame does is say, for the direct pay patient, you can innovate as much as you want,” Goldhill said. “And if you\’re doing interesting things, whether it\’s dynamic pricing, whether it\’s high-value pricing, whether it\’s interesting packaging that works for some patients, but not others, a marketplace lets that happen.”
Now, the company is introducing membership tiers—one free and one for $7 a month—in exchange for additional savings and customer support.
But Goldhill is most keen to see the innovations that come from its participating providers.
“Having a platform means that interesting things are going to happen,” he said.