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Nov 19, 2018 | 5 min read


From health insurance to health care

Meeting with Alan Warren (Oscar Health).

Patrícia Silva

Project Analyst

Oscar Health is a health insurtech company founded in 2012. The company has a 1 million customer base in the US and has raised a total of 1 billion dollars in investment, including from Google’s parent company. As of March 2018, Oscar had a 3,2 billion valuation.

We met Alan Warren, the CTO of Oscar Health, at Web Summit, in Lisbon. He shared how the company built a direct relationship with their members by offering a full experience in healthcare. A broader approach that goes beyond insurance.

What are the main differences between Oscar and a traditional insurance company?

In a normal model the only time the insurance company is involved in the system is at the back-end payment claims.

A patient goes to see a doctor or a provider and when he got things done the provider generates claims and those go to the insurance company. The insurance company finds out what’s going on with their members well after everything happen. All they can do is control how much money is getting paid and to whom.

We moved upstream to get directly connected to our members. When something happens, they come to us first to ask us for help and guidance through the system. This way they can get to the right level of care whether they need urgent care, an emergency room or to see a specialist. We help them find the best doctor in the network. After they’ve gone to the doctor, we help them with follow-up care and make sure everything gets handled all the way through.

We help them with a lot more of the entire part of getting health care rather than just payments on the back-end.

So you act like an intermediary, an entry point to health care?

Yes, exactly. I think about it as a shepherd, as a guide through the health care system.

What are the main services provided?

Telemedicine and secure messaging are some key features of the digital experience. Once you have the app installed you can push a button and get a call back from the doctor within 10 minutes around any medical issue. That’s completely free there are no charges to our members. The doctors can help you over the phone they can look at pictures if you got a cut or a rash.

You get medication set to your local pharmacy without having to go to a doctor’s office at all.

The second is around secure messaging. If you got some question about something that is going on with you or you’ve heard you should be going for some kind of treatment, you can message our team. Anytime you call or message our team, they help you with whatever you need whether it’s finding a doctor, check for appointment availability in the next week, the closest emergency room, or whatever medical need you have. It’s your medical concierge service.

You are able to collect a huge amount of data about your members. How do you use it to inform and improve the experience?

The primary use force internally is for our concierge teams. When you call in on the phone you get routed directly to our concierge team that have all the information about the member displayed on a panel. It could be the visits you’ve gone, last conversations you’ve had or the last lab results. All of that is available so the concierge knows what’s going on with you and can help you as quickly, as accurately as possible.

It’s very personalized and very pro-active. We don’t just answer the question you called in about. We could say either: « Oh, by the way, you don’t have the app installed, can I help you to get it so you can message us or send you your results?” or « We notice you haven’t got the primary care physician in your annual checkup yet can I help you find a doctor and set you up with?. »

A relational approach more than transactional one…

Yes. The call center from a normal insurance company answers questions about claims. Members only call in when they want to know what’s going on with the claim or whether they are going to be paid. 5% of the conversations with our concierge teams are about this; the other 95% are all around taking care of the members.

How many members do you have?

We had 90.000 members in 2017. For 2018, we recorded 1 million members. That’s across 6 states and about 9 different metropolitan markets in those states. For 2019, we’re adding additional 3 states and 6 markets. We’re growing very rapidly. In 2019, we’ll have 9 states and 14 markets.

You just got a big investment from Alphabet, 375 million dollars. On what will you invest the money in?

Actually, we’ve taking in almost a billion dollars in investment in the company. But the thing about being an insurance company is that a large fraction of that goes into state reserves that the states hold on to allow insurance companies to operate in their states. For instance, from that 375 million, two thirds are going to state reserves and the other third we are going to use for growing the technology team and expanding in the Medicare Advantage.

Are you considering a partnership with Verily for instance?

They have their own health care interests. We may do some things with them down the road, but we have nothing in the present.

What’s your long term vision to keep growing?

We want to provide Oscar Health for everybody. Starting in the US with the individual market and right now we are at the small group as well. I’m hoping we can get at the large group market by making it become more consumerized and individualized to where employees and large companies can take their benefit dollars and buy whatever insurance they want. If Oscar is a good fit they can buy our service rather than buy to the benefits administrators. We want to go direct to our members.

The technology that my teams are building out can be applied in any geography. I don’t expect us to start operating an insurance company outside the US but eventually long term I expect our technology to be underpinning insurance companies around the world.

How Oscar sees the competition from other players?

I don’t see anybody as a threat. This is a big pie and there’s lots of room. We’re hoping more people jump in and try to figure things out to move this all space forward. If we thought that we would be the only insurance company in the world and we had to be that to be successful we shouldn’t have done it. This is not going to be the way this world works whether is for large companies or individuals who find their own insurance. There will be a lot of players out there and we’re trying to raise awareness on changing the model, be more consumer/end-user focused and use data and technology to help improve that experience and ultimately the outcomes.

Do you think traditional insurance companies are being able to compete with the new entrants?

I’m not worried about them. They are doing a good job of copying our applications and our messaging. They understand that consumer engagement is important but at their foundational level they’re transactional claims processing companies.

How do you envision the future of healthcare insurance?

I don’t think people will think about it as health care insurance. They’ll think about it as health care. People are coming to Oscar Health not to « Oscar Insurance » to cover the payments when they go to the doctor. They are coming to Oscar for a full health care experience and to make sure they have the right doctors at the right time, but take care of all the payments is a background piece as well.

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