It may seem as simple as “adapt or die” in the years following Obamacare’s passage, but there is huge financial risk associated with health care coverage and finding ways to reinvent it is exceedingly difficult in today’s market. Health insurance companies need to find innovative ways to manage the growing costs of health care and to minimize the hurdles to quality care.
The health insurance startup, Oscar is quickly proving that it can adapt by using technology to improve the most difficult consumer experience in the healthcare industry today: health care calls and claims. Oscar wants to engage its customers so that they can get the right kind of care faster. The Oscar app and website makes signing up for insurance simple by answering a few questions. Once signed up, there are discounts for being active, which is tracked by a free wearable device. Customers get two free primary care visits a year, free generic drugs, and 24/7 access to doctors on the phone within minutes.
One thing is certain, the health care system is in dire need of change with healthcare costs reaching nearly $3 trillion or 20% of GDP in 2013, much of which was wasted. Oscar is focused on reducing that waste by giving consumers higher ROI on their premiums through a simple interface to communicate with doctors, which is replacing costly ER visits. CEO Mario Schlosser said that 91% of calls to Oscar doctors about Bronchitis were resolved on the phone, for which Oscar pays physicians $57 compared to $230 for an ER visit and the consumer pays nothing.
Oscar represents a new type of health care insurance focused on making care more flexible and simple for consumers. The start-up has tripled in size covering 40,000 or about 15% of New York state's individual insurance marketplace and is already generating $200 million in annual revenue. Profits are exploding in health care with looming mergers and increasing health care investments by venture capitalists up 250% last year to $308 million. That number is still increasing as Oscar alone acquired some $300 million in funding and is set to expand operations to California and Texas this year.
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