Health insurance startup Oscar is expanding out West and cutting New York jobs—at the same time it's slashing its New York network in half for next year.
Oscar said last week it is laying off 31 workers from its member- services team in Manhattan and creating new positions in its customer-service division in Tempe, Ariz. The layoffs were scheduled for Dec. 31 or the following two weeks, according to a filing with the state Department of Labor. “This move allows us to meaningfully extend our operations beyond NYC as we transition our customer experience into a new model, called Oscar Concierge,” an Oscar spokeswoman said. The model for Oscar Concierge includes assigning to each plan member a four-person team made up of one nurse and three member-services staffers who will handle all of that member's contact with the insurer.
The company has raised $728.5 million from investors, including a $400 million round from Fidelity Investments in February 2016.
Oscar lost a combined $83 million in New York, Texas and California in the first half of 2016 and has tightened its purse strings to improve its financial situation.
Oscar announced its plans to open a Tempe office in June and hire 200 employees, citing the attractions of “a skilled workforce, high quality of life and pro-business climate.” The insurer doesn't sell insurance in Arizona currently, but it does have customers in Los Angeles and Orange County, California. The company also plans to begin providing coverage in San Francisco on Jan. 1.
In July, the insurer said it would reduce its New York network in 2017 by working exclusively with Mount Sinai Health System, Montefiore Health System and the Long Island Health Network, a coalition of 10 hospitals. Then in August, Oscar said it would pull out of Dallas and New Jersey, where its broader network made it more difficult to coordinate care and keep members' medical costs low.
"Oscar shifts New York jobs to Arizona" originally appeared on the website of Crain's New York Business.
