Google is going big in health tech partnerships these days -- including agreements with Dexcom, Sanofi, and Novo Nordisk, which hold exciting potential for those of us with diabetes. Then in September, we saw the headlines about Google sinking millions into a new player that aims to turn our messed-up American health insurance system on its head.
Today, our correspondent Wil Dubois (a fellow type 1 himself) takes a look at Oscar Health's origins and what this new kind of health insurance company could mean for all of us in the D-Community and beyond.
Imagine this: You pay your premium and your health plan pays for all routine doctor’s visits and generic drugs. Fully. Including routine labs and immunizations. 100%. No questions asked. No co-pays. If you need to go to a specialist, you pay a discounted price until you reach your out-of-pocket limit, and then the plan covers everything 100%. Simple and straightforward. No co-insurance. No prior authorizations necessary. No denials. No doubletalk. No loopholes. No thousand-page policy books.
Oh, and what if this same outfit had their own doctors who could see you virtually via the internet or a smart phone in as little as 10 minutes for simple things? Got pink eye? “See” the doc on your smart phone and then order your prescription, all without leaving home.
And can you imagine a health insurance company that actually rewarded you for taking steps to keep yourself healthy, instead of blocking your every move when you try to do so?
Well, if you live in parts of New York, New Jersey, California, or Texas you don’t need to imagine any more.
Born of the Obamacare Health Exchanges, a new health insurance company called Oscar Health is staking itself out as a game-changer in the health insurance biz. It’s built around using technology to streamline care, on positive customer service experiences, and on simplicity.
Oscar Health is the brainchild of Joshua Kushner, a 30-year-old entrepreneur and venture capitalist, who according to the pub Business Insider, kept a low profile while “poaching” top engineers from Google, Tumblr, and Microsoft (including former Microsoft director of healthcare Kevin Nazemi) to build the innovative startup. Founded 2012, Oscar launched in 2013 and took the world by surprise. Since then, Oscar has steadily grown both in members and in capital investment and is currently serving customers in New York State and parts of New Jersey. Customers in California and Texas will be able to sign up this winter.
Oscar now has over 40,000 members. The startup claims they’ve covered 198,000 doctor’s visits, filled 310,000 prescriptions, squared away 401 births, and paid out more than half a million dollars in rewards to their members. CNBC listed Oscar as No. 17 on its Disruptor 50 list this year; it’s been called the Uber of health insurance; and Wired magazine says the startup is “making health insurance suck less.”
So who the hell is Kushner, and when does he get his Sainthood confirmed? He’s a moneyman, the son of a real estate developer, and a graduate of both Harvard University and Harvard Business School. Legend has it that Kushner was inspired to start Oscar when he couldn’t make heads nor tails of a statement from his health insurance company. And this is a guy with two Harvard degrees.
Kushner’s other investments include the apps Instagram and GroupMe, the 3-D printer company Makerbot, and, I recently read, a company called NastyGal. Naturally, I got excited thinking this could be a useful new app for me, but it turns out to be just a fashion retailer. Sigh.
In the gossip world, Kushner is noted for dating Victoria's Secret model Karlie Koss, so I guess maybe he doesn’t need Sainthood after all. Things seem to be working out just fine for him. In what could be viewed as a mixed blessing, he also has family ties to Donald Trump, as Kushner’s brother Jared is married to Donald’s daughter Ivanka.
Health Insurance Money Talk
Insurance is an expensive business to be in. Oscar was originally hatched by Kushner’s investment firm Thrive Capital, but is now backed by Goldman Sachs, Founders Fund, and most recently (and famously) by Google itself. The infusion of $32.5 million by Google Capital this fall raises Oscar’s war chest to 1.75 billion dollars. And while the money from Google isn’t all that large a percentage of Oscar’s value, the partnership with the aggressive internet giant might just be priceless to Oscar’s future.
Let’s face it: Google is moving into health in a big way. And their investment in Oscar sends the insurance industry a strong message. David Lawee, the head of Google Capital, has been quoted as saying that Oscar appealed to Google because they felt that Oscar was “well positioned” to “transform the cost curve” of healthcare “ through technology.”
And that’s what makes the Oscar battle plan unique.
Traditional insurance is simply a numbers game. Get a large enough herd, and the sick ones will number too few to hurt your profits. This is why traditional health insurance companies go after large employers as customers. Oscar, on the other hand, was built for the Exchanges. Oscar’s customers sign up as individuals, one at a time. This requires a different model to make money.
Oscar’s profit model comes from making a profit by making healthcare more efficient, and the vision is to use technology to do that. In press releases Oscar says it has hired 45 engineers to build better tools to match patients to doctors and develop better telemedicine systems.
The "technology stack" that powers Oscar's services includes database management system MySQL, Amazon EC2 Cloud Hosting, Twilio (bringing voice and messaging to your web and mobile applications) and business tools HipChat and Confluence, among others. It's quite the mix of developer and media platforms to create a rich experience for users.
According to USA Today, signing up is as easy as answering a few multiple choice questions. "There are discounts for being active, which is tracked by a free wearable (Misfit activity tracker). Customers get two free primary care visits a year and free generic drugs. All plans are the same, except that a higher premium gets you a lower deductible."
Although I couldn’t dig up any details, I suspect that there are some PWDs somewhere in the Oscar organization because the diabetes blue circle appears on many of the Oscar webpages and ads, and diabetes subjects show up in the company’s blog. Seriously? A health insurance company with a blog? Yep!
Maybe some of the top management are closet PWDs, or maybe it’s just one rogue graphic artist. Or perhaps the marketing department planted the images intentionally to make us feel at home, because we could be the key to the next big move in healthcare: dynamically priced polices. Dynamic pricing is already common in the airfare and hotel markets (think Expedia), and some believe it could be the next big thing in insurance.
Industry observer David Kliff of Diabetic Investor, in a piece in Forbes magazine last month, speculates that Oscar may be the first player in the insurance biz to link the cost of health insurance to diabetes outcomes using technology. In short, if your diabetes is in control, you’ll pay less for your health insurance. Kliff says that Oscar already has much of the infrastructure needed to do this and says, “It’s not unimaginable that Oscar could easily incorporate a TelCare, Livongo, or iHealth glucose monitor into their program, nor is it unimaginable that it could incorporate products developed by the Dexcom/Google partnership.”
Oscar hasn’t been free of criticism and customer complaints, and their competitors have been quick to pounce on those. That said, I think the health insurance company with no unhappy customers should be the one to cast the first stone. And Oscar brass is quick to admit their mistakes. CEO Mario Schlosser told Fortune magazine that Oscar had failed to properly communicate to their customers how the plans work.
But trolling the web, there is surprisingly little negative being said about Oscar.
Changing The Look of Health Insurance
But I, for one, gotta love a health insurance company that runs ads saying: “Health insurance that won’t make your head explode. And if it does, you’re covered.”