Oscar first dipped its toes into the individual insurance market in 2013 with a plan offering in New York. Since then, the tech-driven company has expanded to nine states. And now it is eyeing growth in the competitive Medicare Advantage space and relaunching in the small business market. Co-founder and CEO Mario Schlosser spoke with Modern Healthcare Managing Editor Matthew Weinstock. The following is an edited transcript.
MH: How is your entry into the Medicare Advantage market going?
Schlosser: We’ve launched in Houston with a number of physician groups. We’ve launched in the Bronx with Montefiore Health System.
We’ve got about 1,700 members, which puts us I think in the top five of nonprovider entrants in the last year or so, which we’re happy with.
The reason we entered Medicare Advantage first and foremost has been that everything we did around member engagement—building a plan where members will naturally want to turn to Oscar to help them navigate the healthcare system—applies uniquely in the Medicare Advantage space.
We have highly (engaged) members who really care about their health and see physicians at a good clip. The real-time messaging, the real-time clinical alerts, all these things we built work supremely well in that space. It’s in the early days for sure. We’re excited about rolling that out more and building that up.
MH: What kind of growth do you hope to see and are there other markets that you’re targeting for Medicare Advantage?
Schlosser: We’re in the planning stages for 2021 and 2022, but it’s a little bit too early to (share).
MH: You’re teaming with Cigna to launch a small business product, too. You tried that with Humana in 2017 but had to pull back. What are you hoping to do with Cigna and what lessons did you learn from the Humana experience?
Schlosser: We’ve been in the market for the past few years building a small business plan. We have about 20,000 lives in that now and have grown that plan nicely.
We felt pretty strongly from fairly early on that the future of healthcare will be a closer relationship between the provider and the payer and blurring of the lines between those two.
Wherever we are, we built a specialized network around generally one health system and then built physician networks around that as well. That has … practical limitations in the small and large employer markets.
The limitation is: If you have a 10-person employer in the New York City market, two of those people will work in Connecticut and one or two of them might work … where we don’t have networks (but) where Cigna does. Cigna, which is not in the small employer market, and Oscar face a common strategic opportunity in growing a market that we’re both not big in. Cigna brings the network and brings additional knowledge and expertise around how to run and manage the network. We bring the Oscar operations—the awesome member experience in the end-to-end tools that we built, a member experience we built. As to what we learned with Humana, I think it was a bit too early for us to launch into new markets.
MH: What challenges are you facing right now?
Schlosser: Healthcare’s administrative side is moving too slowly, not testing enough new strategies for member engagement, for managing care. We noticed this recently when we were on the phone with regulators and many other payers started getting asked to take off co-pays for COVID-19 testing. The question payers asked regulators was, “Oh, can you let us pay our claims a little bit later because we’re going to have to change our claim system? It’s going to be difficult, it’s going to be operationally complex,” and so on.
Whereas we can go and we can flip a switch and it starts running right away.
A crisis like this is a reminder that we all need to become more versatile and quicker in acting and testing new access strategies because some parts of the member demographics are always under crisis. There’s always an underserved segment out there.
MH: In that context, how do you feel about the Trump administration’s push for greater price transparency and data exchange?
Schlosser: I’m a big proponent of that. I’m a computer scientist originally, so I build software based on open platforms and APIs.
I can’t think of any segments of technology and or industry where more transparency, more competition around transparency was bad for the end user. It just wasn’t. It may sometimes be difficult for the incumbents and it may be even difficult for the startups. I’m not saying that we’ve got this all figured out either, but it’s a necessary thing.