Some businesses defy classification as competing in a single industry, but most people probably didn't think that way about Costco Wholesale (COST 1.01%) until recently.

On Sept. 25, the giant warehouse retailer announced that it will be partnering with a company called Sesame to offer low-cost health services to its members, including both virtual and in-person primary care visits as well as telehealth for mental health. It has already offered pharmacy services for humans as well as for pets, a selection of healthcare goods in bulk, and even optometry services out of its warehouses -- not to mention its own health insurance marketplace.

Does this new move mean that the business is competing in healthcare at sufficient scale for it to siphon revenue from other diversified players like CVS Health? Let's break down how much money it might make from providing healthcare services today and in the future to figure it out. 

Don't expect major sales growth right away

The first piece of the puzzle in seeing how important providing primary care will be for Costco is pricing. Customers are billed directly, and they can then request reimbursement from their insurance, if they have it. So the company doesn't need to negotiate with insurers, which saves a lot of red tape and claim processing costs. 

At the same time, its offering is likely the most appealing to people who are uninsured as they probably wouldn't be able to get basic primary care or checkups at as low of a price. People will need to cough up (no pun intended) $29 for a virtual primary care visit, $72 for an in-person checkup visit with a standard blood panel, and $79 for a telehealth talk therapy session. Those prices are a bit higher than the co-pays charged for similar visit types for people with average insurance plans, though they may still be cheaper in some cases. Currently it's unclear how much the income from each visit will actually go to Costco, and how much will go to Sesame.

Costco has nearly 128 million members worldwide. In 2021, according to the U.S. Census, around 28 million people in the country, or just over 8% of the population, do not have health insurance. Therefore, with some quick napkin math we can roughly estimate that there could be as many as 10 million uninsured people who are also Costco members, and who would therefore be the most inclined to want to regularly make use of the new healthcare services. 

Nationally, one out of five people gets an annual physical each year. Applying that proportion to the uninsured Costco members, we're left with 2 million people who would likely want to make use of the option to do a cheap primary care visit each year. If they all opted for the in-person visit, and there wasn't any revenue sharing with its partner Sesame, it'd make the company $144 million in new revenue annually.

This might just be the beginning

While $144 million might sound like a lot, against Costco's trailing-12-month sales of $242 billion, it's just a drop in the bucket. That big picture probably wouldn't change by all that much if we expand the calculation to include realistic guesses for the utilization rates of the other new healthcare services the company is offering, even if we somehow arrived at a sales figure in excess of $1 billion yearly. Investors should therefore expect only an incremental boost to its revenue, at least for now. 

Still, the question of Costco as a healthcare competitor is easier to address now that we have a ballpark estimate for one of its segments. It probably won't be threatening or dislodging other providers of basic primary care, prescriptions, and consumer health goods, like CVS or Walgreens Boots Alliance. CVS' health services segment was worth more than $46 billion in Q2 alone.

But with a few additional offerings added to the segment over the coming years, and with good uptake from its members, Costco's healthcare revenue could easily rival or surpass the size of well-known healthcare companies like GoodRx, a pharmacy benefit business, which had a top line of $766 million in 2022.

So is Costco a healthcare stock today? Not exactly. In the long term, however, its mass-market and high-volume business model could make it a wicked contender. Stealing at least some of the retail primary care services market from CVS, Walgreens, and others is practically a given. Branching out further into medical specialties could even lead to the segment helping to power revenue growth.

Given all of the other great features of Costco's business, its foray into primary care is yet one more reason that the stock is worth buying.