As hospitals come into compliance with new price transparency rules, one startup is betting on future demand for cash-pay appointments.

Sesame, a New York-based startup that built a marketplace where people can pay for appointments at a set price, recently raised $24 million in funding. It initially started with in-person appointments, but the Covid-19 pandemic quickly changed its growth trajectory.

“That’s driven a much more rapid expansion of Sesame that we had planned,” Co-founder and CEO David Goldhill said in a Zoom interview. “Instead of being a company in five or six markets, which is what we expected today, we are all over the place with telemedicine.”

Sesame claims to now have more than 1,000 providers on its platform across all 50 states. That sudden growth led the startup to raise its current funding round, which included new investments from Giant Ventures, Industry Ventures and Coefficient Capital.

The company also saw interest from a broader range of providers than Goldhill initially expected. Its platform doesn’t just include independent primary care providers, but also mental healthcare, dermatology, dental and imaging.

Physicians don’t just use it as a way to meet with direct-pay patients, but they also see it as a way to package together multiple services under one price or fill appointments opened by cancellations, he said.

Goldhill, former CEO of the Game Show Network, co-founded Sesame in 2019. The idea was to make a marketplace that is easier for patients to “shop” in, without worrying about unexpected costs. For independent physicians, the appeal was to avoid some of the administrative burden that comes with insurance. The startup has raised nearly $50 million in funding to date.

To start, Goldhill piloted the concept in Kansas City, where he worked closely with direct primary care physicians to learn more about how the business would work from a provider’s standpoint.

At the time, “…the idea that a provider would price openly on a marketplace, the idea that consumers would buy on a marketplace was not obvious,” he said. “To this day, we’ve had this tremendous advantage of being a healthcare marketplace where physicians were extensively involved.”

Most urgent care telehealth visits on Sesame’s site range between $25 and $50, while in-person visits range between $50 and $200. Because it is a prepaid platform, in the event that a patient needs an additional test or a more complex treatment than expected, physicians must get approval from them first.

 In the future, Sesame plans to offer a prescription delivery option for cash-pay patients, as many appointments end with a prescription. Sometimes, patients specifically book appointments for a prescription refill.

The company also plans to roll out its own quality rating system in the second half of this year, Goldhill said.

In the longer-term, he hopes to offer a full scope of video and in-person appointments across the U.S.

“The pandemic created a certain immediate urgency,” he said. “The reality is, over time, telemedicine video appointments can’t exist as a separate vertical. They’ve got to be integrated into the broader practice and a patient’s care journey.”

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