Despite the United States spending more per capita on healthcare, life expectancies are the same or worse as compared to other developed nations. One of the reasons that outcomes are not better is the organizations that sit between doctors and patients, mainly in the form of insurance companies and healthcare institutions. This added layer creates a compounded principal-agent problem where the best treatment and options for patients may not be used as they are not necessarily in the best financial interest of the other stakeholders. Sesame, a direct-pay marketplace, simplifies healthcare with its digital platform that allows patients to find, book, and pay for care (virtual or offline). Featuring over 1,000 providers offering nationwide coverage, Sesame focuses on telehealth visits, video dental consultations, and virtual prescription refills to cover an array of conditions. By directly establishing a link between patients and doctors, the platform saves patients up to 60% on the cost of care without the added headache of dealing with complicated insurance claims.
AlleyWatch caught up with CEO and Cofounder David Goldhill to learn more about how Sesame makes healthcare more accessible, the company’s strategic plans, recent round of funding, and much more.
Who were your investors and how much did you raise?
With this additional investment of $24 million, we’ve now raised just under $50 million since launching in 2019. Our newest investors include Giant Ventures, Industry Ventures, and Coefficient Capital, along with some exciting existing investors who’ve contributed additional funds like General Catalyst, Entree Capital, and Atreides Management.
Tell us about the product or service that Sesame offers.
Sesame is a direct-to-patient healthcare company making quality care more accessible, affordable, and transparent for all. By connecting providers and patients directly on sesamecare.com – separate from health insurance – Sesame clears away the confusion, restrictions, and unnecessary costs of traditional healthcare to save our patients up to 60% on care across 40+ specialties. Sesame offers telehealth specialty care in all 50 states, with integrated telehealth and in-person care like imaging, dentistry, and primary care in New York City, Houston, and Kansas City.
And we’re just getting started. By the end of the year, Sesame will offer almost everything a patient could need. No matter where you live, Sesame will find you quality, affordable care in everything from specialists to diagnostics, from meds to lab work, and even same-day surgical procedures.
What inspired the start of Sesame?
My personal interest in improving healthcare started in 2007 when my father died because of a preventable hospital error. Digging into the healthcare system, I was shocked by how many different ways it fails patients – from high prices to confusing bills, from difficulty finding needed care to the inaccessibility of your own records, from inadequate follow-up even to fatal mistakes. With more Americans now expected to pay for so much of their care directly – even if they have insurance – the healthcare system must change. After years of research and publishing several best-selling books on healthcare reform, I connected with Mike Botta, a long-time McKinsey analyst in the healthcare sector who worked closely on the Affordable Care Act, and John Fontien, a tech and financial analyst, to create a company that would solve for these inefficiencies in the healthcare system. Through Sesame, I knew there was an opportunity to bring these two together in a marketplace that transforms healthcare for the better.
How is Sesame different?
Sesame provides upfront, transparent prices for patients, regardless if they have insurance, making it easier and more affordable for all Americans to access high-quality health care. By clearing away the middlemen, confusion, restrictions, and unnecessary costs of traditional healthcare, we’re able to connect patients with trusted doctors and specialists in their area at considerable savings. Many of our patients are highly value-conscious and aware of the out-of-pocket costs for care, so we aim for radical transparency to clearly communicate what goes into the cost of a visit and relieve the financial burdens of traditional healthcare. Sesame is also the first health care company to work with Affirm, a popular buy now, pay later (BNPL) solution, allowing for increased flexibility for patients to secure the services they need now, and pay over time.
What market does Sesame target and how big is it?
Sesame’s mission is to ensure quality health care is accessible to all Americans who need it, regardless of their insurance status. Sesame aims to target two groups: patients and providers. The two primary targets within the patient category include those without insurance who pay in cash for healthcare services, and those with insurance (often with high deductible plans), who may find that paying in cash is more cost-efficient. Targeted providers include independent doctors and healthcare providers looking for the opportunity to innovate and meet the needs of their patients. Because Sesame is built for self-pay, there is less administrative work allowing providers to spend less time on paperwork and more time treating patients.
What’s your business model?
Sesame’s platform connects patients to trusted local healthcare providers who can treat a multitude of services. Providers use Sesame to help them fill available times. If their schedule opens up, they use Sesame to set a fair price for an appointment slot that would otherwise go unused. Sesame is prepaid and given directly to the provider, separate from health insurance. Since they know exactly what services they’ll be providing, this allows providers to charge less.
How has COVID-19 impacted the business?
Issues with the healthcare system have been heightened due to COVID-19, with major strains on medical practices and millions of newly uninsured patients. As a result of COVID-19, we’ve launched Sesame video appointments to give providers a way to safely connect to patients virtually. Sesame can provide the virtual tools needed or integrate with existing systems, and Sesame’s virtual appointment technology is HIPAA compliant. Sesame has allowed patients to easily book COVID-19 tests and virtual screenings with trusted providers and labs. As the pandemic begins to recede, we’ll expand our in-person appointments in our core markets.
What was the funding process like?
Every round is different. In earlier rounds, our investors were focused on our team and on our vision. This time, both our existing and new investors focused on our “secret sauce” – what differentiates us in an otherwise crowded digital health playing field.
We’re raising in a very competitive landscape. Over the past few months, there have been so many digital health companies raising rounds. Inevitably, people want to peg us in a hole or compare us to something they’ve seen before. The reality is that nobody is doing what we’re doing: providing quality full-scope healthcare to those who are uninsured or who have otherwise been squeezed out of traditional healthcare with an innovative hybrid model of in-person and telehealth services. No other digital health company has built as robust and dynamic a marketplace as we have – with in-person, telehealth, labs, specialists, and soon prescriptions available to millions of Americans at such affordable prices.
What are the biggest challenges that you faced while raising capital?
First and foremost — and this is not just specific to Sesame — you cannot underestimate the challenge that comes from splitting your leadership team’s time and energy during a raise. There are no lulls when you’re scaling a new business, so to carve out the required focus to raise capital will challenge even the most seasoned of entrepreneurs.
Everybody understands healthcare is broken. But to many, the problem is too complex or they believe it involves too many players to be able to disrupt. We see it as just the opposite and needed to help our investors see it the same. In order to do so, we had to communicate to our investors (most of whom are not the target market for Sesame), the immense impact that we have on our customers, which we see in every patient we treat and every provider we onboard onto the platform.
What factors about your business led your investors to write the check?
Everybody has a war story when it comes to healthcare: an outrageous medical bill, a laundry list of surprise fees, a critical hospital error, and worse. Our investors – just like our patients and providers – immediately recognize and relate to the problems in healthcare we’re trying to solve. They’re also excited about our team, which has deep consumer experience at companies like Glossier, TripAdvisor, and more. Together, our team is uniquely positioned to scale Sesame’s offerings over the next year as we expand into prescriptions and greater full-scope care across the country.
What are the milestones you plan to achieve in the next six months?
This month, Sesame is launching prescription medication delivery, giving cash-pay patients convenient access to affordable medication. We’ll also be utilizing our new funding to strengthen our dynamic, full-scope marketplace and expand our nationwide telehealth offerings and in-person care.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Break down the problem you’re trying to solve into its simplest form. What hypothesis do you need to prove in order to show that your product should exist in the market?
New York is such a vibrant and exciting place. You’re in a city where you can uniquely speak to a wide array of people every single day. You can user test and get to product-market fit without having a million dollars in the bank. You can validate and test an idea across a wide range of life stages, socioeconomic backgrounds, and perspectives just by stepping out your front door.
New York is such a vibrant and exciting place. You’re in a city where you can uniquely speak to a wide array of people every single day. You can user test and get to product-market fit without having a million dollars in the bank. You can validate and test an idea across a wide range of life stages, socioeconomic backgrounds, and perspectives just by stepping out your front door.
Building a business is tremendously hard. You need everything to go right in the early stages to see even a modicum of success. But if you truly believe your product should exist, then you’ll find a way to persevere through the adversity and make it happen.
Where do you see the company going now over the near term?
For Sesame, we plan to maximize our efforts to provide in-person services in states nationwide, which will enable us to make our platform one of the more convenient and affordable telehealth options. With well over 1,300 providers treating patients across all 50 states, the business has already grown 25x in the past year. Our intention is to rapidly fill in services in the markets as telehealthcare demand grows. By the end of this calendar year, we hope to be a broad scope in the majority of greater metropolitan areas in the United States offering a full range of services from prescriptions to labs, in-person to telehealth specialists, and even same-day surgical procedures.
What’s your favorite outdoor dining restaurant in NYC
Locanda Verde.
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Source: https://www.alleywatch.com/2021/05/sesame-direct-pay-telehealth-healthcare-market-place-david-goldhill/
