MATTHEW WEINSTOCK April 04, 2020 01:00 AM
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.
‘Data is scattered all over the place’
MH: Oscar launched a COVID-19 screening site
early on, right?
Schlosser: What we jumped on fairly early was to, in a very careful
way, understand who among our members is exposed to any particular risk and in
which way. Then use our entire machinery as Oscar to find (targeted ways to)
help members. We quickly launched a risk-assessment tool in the mobile app and
on the website, which is available for nonmembers as well. That takes you
through a couple of questions and from there essentially designs a care journey
that’ll take you through the next couple of weeks and months.
If you’re somebody who has been exposed, who may
have symptoms, who is in a particular risk category, you’ll start getting
regular checkups from our virtual primary-care physicians. If you’re somebody
like me who fortunately has not been exposed—except for living in New York or a
high-risk area—hasn’t shown symptoms and isn’t particularly high-risk, then you
get a lighter touch there, but you have personalized messaging.
MH: The screening application is open to
anybody, but these more specific care regimens are only open to Oscar members,
right?
Schlosser: That’s right. Anybody can come to the site and can step
through the risk assessment and then get connected to or find a testing site
close to where they are. The orchestrated care plan is only for members.
MH: What kind of uptick have you had on it since
it launched in mid-March?
Schlosser: From my point of view, it’s been a pretty phenomenal uptake.
Something like 15% to 20% of subscribers have gone through the risk assessment
and people have been sorted into one of the categories of particular risk for
COVID-19.
From what I can tell, we have one of the
country’s biggest databases of testing locations—now up to something like 650
across the country. That to me is another indication that we were able to
repurpose our existing machinery at Oscar in a good way.
MH: How can the industry make better use of data
analytics?
Schlosser: We don’t have a long enough data trail and data history for
all of us in one readily accessible system. It would be good to understand not
only by age who was affected by this and was at risk, but also by prior health
history and prior way of utilizing the healthcare system, by the drugs you’re
on, by lab tests you’ve gotten in the past and things like that. That’s
typically difficult to query because data is scattered all over the place.
Nobody can pull this together.
Then I think about member behavior. We spend a
lot of time at Oscar understanding when do we call somebody, do we have
somebody who has the app downloaded or not. What’s the best way for us to reach
out to someone with website access?
I heard this from the clinical team the other
day—of Oscar members who have gotten COVID-19 positive testing, more than half
have the Oscar app and I think 90% have an Oscar web account. Right there we
have better access to those members and can better help them as they get the
diagnosis and if they fall sick.
MH: Have you done any calculations on what this
is going to do to your bottom line?
Schlosser: We’ve waived copays for testing. We’ve waived any kind of
cost of telemedicine at the moment, even delivered (out-of-network) physicians.
In terms of cost impact, it’s just too early to
tell. I think the industry as a whole is watching what others are expecting,
about 150 basis points or so this year on the medical loss ratio, but that will
be very different probably for plans that were more highly indexed to the
over-65 population versus those that aren’t.
What we’re also seeing right now is a reduction
in elective surgeries. In real time, we have about 25% lower
prior-authorization volume on a per-member basis compared with about a year
ago. We also have about a 25% to 30% drop in the number of claims on a
per-member basis compared with about a year ago at the same time.
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