Sesame CEO: Direct Payments Inject Innovation Into Healthcare

Healthcare in the United States is an undeniably expensive proposition.

As of 2019 (the last full year data is available for) Americans spent $3.8 trillion, or a little under 20 percent of the nation’s gross domestic product (GDP) on healthcare alone. It’s a high price to pay, particularly considering that very few people actually like what they’re getting for the money. According to one survey conducted in the middle of the pandemic last year, only 36 percent of consumers were satisfied with their healthcare plans.

And it’s not an issue that’s limited to a certain type of healthcare plan. When one digs in and asks consumers about their experience with the industry, direct-to-health platform Sesame Founder and CEO David Goldhill told Karen Webster in a conversation for the latest edition of PYMNTS Connected Economy series, no one is relieved that they get access to healthcare via the insurance their employer provides. Employer-based health insurance exists because of a quirk of U.S. tax law, not because anyone thinks employers are particularly well qualified to be making healthcare decisions for their workers.

Moreover, he said, the insurance experience is far from a winner.

“I know very few people who love their insurer or benefits administrator in terms of the role they play in their lives,” he said. “The way we’ve architected their role is mostly to say, ‘no,’ not to say, ‘Here’s how we can help you.’ I don’t think there’s a lot of satisfaction with that sense of a front door to healthcare at all in this country.”

The pain from a patient’s point of view, he said, comes from the fact that buying healthcare is both expensive and confusing in our third-party reliant system. Unlike nearly every other part of the economy, suppliers and sellers are dealing with insurance companies, not patients, ultimately making it much more complicated for a person who needs care to acquire that care. There’s an enormous amount of dysfunction around that one major pain point.

It also makes providers’ lives more complicated by making it that much harder for them to deal directly with the patient they are attempting to treat. The system we have today, in which care is offered to a patient and is decided by what an insurance company will pay for, kills creativity in care. There are so many barriers in the system that issue from third-party payment and the requirements of insurance that providers have relatively few ways to be innovative.

“I’m a big believer that one-size-fits-all solutions in healthcare for 330 million people is one of the problems with the system,” Goldhill said. “And the reality is that the line between wellness and care is often defined by what’s covered by insurance and what isn’t. It’s not about your healthcare experience or even a therapeutic journey or path. It’s about here’s what’s paid for by someone else.”

It is system obviously in need of fundamental change, he said. The good news, however, is that change is coming, pushed by the pandemic, which gave healthcare the massive shove it needed to become a player in the burgeoning connected economy, and by players like Sesame dedicated to redesigning the front door to healthcare to be something that is both digitally accessible and under the patient’s control.

The Aspirin Versus The Vitamin

When taking on fixing healthcare, Webster said, there are two possible paths discussed. One is the aspirin approach, which relieves a specific pain point in the system. The other is the vitamin approach, which seeks to strengthen the system as a whole for better function. Sesame offers a direct pay option for customers for medical care in lieu of using insurance at all, Goldhill said. It started as an aspirin but, like most healthcare innovations, has evolved into being a bit more of a vitamin in some cases.

“But what we’ve seen in the past year is that by making things more convenient for customers, by enabling healthcare doctors and nurse practitioners and clinics to do innovative and creative things, we’re also doing a bit of the vitamin,” he said. “We’re creating a better experience, a more customized experience, something closer to the patient’s specific needs. We see people access our service just because it’s more convenient or it’s easier, less complicated, or it’s even cheaper paying out of pocket than it is with insurance as the co-payor.”

And although he said he believes his company is wonderful and unique in many ways, Goldhill said it is also far from alone in bringing innovative takes on expanding care and access for patients combined with an improved experience. The bar for creating a better healthcare experience in the U.S. is “extremely low.” It’s an unfortunate reality, but one that has set a host of innovators against it searching for pathways to improvement.

“And I think that will show a pathway for even broader improvements that are possible,” Goldhill said.

Creating The Connections

There are challenges in building a new digital front door to medicine given the incredible sensitivity of the personal data involved. Consumers are more concerned about this data being private and protected than any other kind, he said. But that focus on privacy is playing out such that consumers can’t even get access to their own electronic health record (HER), making data a pain point for patients when it should be a benefit to their care. A better happy medium is possible and needs to be more widely implemented.

Ultimately, he said, a patient’s care should be driven by two main players: the patient themself and the provider they work with. The degree to which the connected future can enable that direct relationship and take the third-party decision-maker out of the driver seat in the process, has a direct effect on the quality of healthcare.

The ideal healthcare system “allows for much greater individualism because that’s the reality of a patient population of 330 million people,” Goldhill said.