What Oscar Does

By Mario Schlosser, co-founder and CEO of Oscar
Member in Oscar "O"

America's healthcare system spends twice the portion of its GDP on healthcare than any other rich country in the world for results that are no better - and in many instances worse. Despite its high cost, our healthcare system is full of nightmarish stories - of complex, impossible to read bills and unpredictable prices, and bad outcomes for patients.

The core issue with U.S. healthcare is that it is theoretically structured as an open marketplace, but without any of the transparency or competitive pressures that an open marketplace entails. So we end up in the worst case scenario: no universal access, high costs, and little consumer-orientation.

Oscar aims to make a healthier life accessible and affordable for all.  We believe every American deserves access to affordable, high-quality healthcare that fits their life.

The Overview

    • It’s no secret that healthcare in the U.S is deeply flawed and inefficient. If we want to address the systemic issues within healthcare and drive innovation, the market needs to become more digital and interoperable. The core activities that an insurer performs are necessary components of the healthcare system –– but they should be simpler, more tech-driven, and API-accessible. At Oscar, we put this practice into play by unbundling the core building blocks of the insurer, to ultimately create a more consumer-centric, economic healthcare system. 

      We are well-positioned to deliver on this vision in large part because we have invested heavily in the modernization of the core activities of a great health insurer: sales personalization, member experience, care routing, and claims systems. We also believe in enabling a “decentralized” risk-based model that leverages the new world of APIs and interoperability by delivering brand trust, ubiquitous care delivery, personalized health incentives, and the ability to develop personalized campaigns to drive behavior change for our members. When looking at the macro level, healthcare may seem to be evolving slowly –– but we’ve been seeing meaningful shifts toward individualization, digitization, and value-based care. 

      The machinery we’ve been building since Oscar’s founding allows us to be uniquely suited to take advantage of these trends, power more of the system, and one day, transform the industry. 

A model for why U.S. healthcare doesn't work:
(1) Financial incentives are misaligned because most healthcare services still get reimbursed as fee-for-service.
The healthcare system still relies heavily on fee-for-service

This graph breaks down organizations' reliance on fee-for-service reimbursement. The light green bar is the proportion of respondents who said over 75% of their organization's revenue comes from fee-for-service reimbursement.1

(2) Most consumers can’t vote with their feet and thus put competitive pressure on the players within the system. In entirely elective procedures, where consumers can vote with their feet, prices have developed very differently.

Consumerized Healthcare Costs Rise Slower Than Healthcare Index

Inflation of cosmetic procedures 2011 - 20202

(3) As a result, cost and value don’t align: unlike in every other consumer-driven market, there isn’t as strong of a market mechanism to force costs and quality into line.

Physician Cost and Quality Don’t Necessarily Correlate
(4) There is little incentive to build longer-term economic relationships and build a great member experience:
  • The average insurance member tenure is ~3 years3
  • Private payers spend $27.1B a year on marketing and sales, while hospitals and physicians only spend about $3B.4
  • With an average Net Promoter Score, or NPS, of three, according to Forrester Research, customer satisfaction for health insurers ranks among the lowest of any industry. For comparison, Oscar's NPS is 40.

We believe that healthcare today is not structured to incentivize the build of great tech solutions that will eliminate inefficiencies and allow for more of a consumer focus.

Mobile app download percentage of all insured members as of December 31, 2020. Image shows that Oscar has the highest app download compared to Aetna, United, Molina, Cigna, Humana. 

Source: App Annie

This chart represents the percent deviation to the average of total app downloads by membership as of December 31, 2020 from App Annie and regulatory filings.

Insurers are needed for four core things.

They do four things that are critical within the system:

Dollar sign


Insurers acquire premium revenue. 

They are sales engines of risk in today’s healthcare system. Today, that mostly means building sales pipelines into HR departments and managing brokers and general agencies.



They identify and reduce risk per member.

Today, that means underwriting, capturing risk scores, and making limited wellness investments in members.

Case manager


They guide people to appropriate care.

Today, that means using either authorization (prior authorization, utilization management) or persuasion (customer service) to steer people to the right care.

Today, that means contracting a provider network without gaps, and at competitive unit costs.


They manage cost of care delivery.

Today, that means contracting a provider network without gaps and at competitive unit costs.

Image outlining insurer revenue module. Premium revenue minus risk per member multiplied by member utilization of care multiplied by cost per utilization
The core activities that an insurer performs are indeed necessary components of the healthcare system - but they should be simpler, more tech-driven, and API-accessible, and thus enable others in the healthcare system to perform them. It’s possible that they don’t need to be done by an insurer at all.This is why we think that the healthcare market needs to become more digital and interoperable. Competition with other industries with better member experiences, starting with the “plumbing” of healthcare - the basic incentives and the “reg”(ulatory) tech around it - is required. We aim to be a great health insurer and unbundle the core building blocks of an insurer, which will enable us to help others in the healthcare system build on those to create a more consumer-centric, economic healthcare system.
For us, the two activities of building a great insurer and unbundling it are synergistic.
Unbundling the health insurer into 4 core components is a direct evolution of modernizing the 4 core activities of a great health insurer. We can build a piece of technology once, and use it twice - to grow our own risk business, and to help others build/grow theirs.We are unique in our approach because we put the member experience first. Our overarching belief is that in a consumer-centric healthcare market, the company offering the lowest predictable total cost of care with the best member experience wins. So, improving the Oscar experience is core to our business model. When people have a better experience - armed with more confidence about the choices they are making - they can save money and become healthier.In summary, we aim to be a great health insurer focused on the member, unbundle the core building blocks of an insurer, and let others in the healthcare system build on those to create a more consumer-centric, economic healthcare system.

Modernizing the core activities of a great health insurer

These are the components we have built for our insurance business:
    • Differentiated Brand VoiceWe build member trust through a differentiated brand voice that results in reliable member engagement, no matter their health status or background.MyIdentity is functionality that allows all members – including those who identify as transgender or non-binary – to freely input their name, pronouns, and gender identity in the Oscar experience as a part of the company’s ongoing efforts to ensure that members get the access to care they need in an equitable way.
      • On a weekly basis, almost a quarter of our members engage with one of our outbound communications.
      Simplify the Buying JourneyOur broker platform enables a renewal process that is fast and seamlessly shares member engagement stats.The Oscar Broker Portal is a one-stop-shop for doing business with Oscar. It allows brokers to get appointed in under 5 minutes; view and download commission statements; update personal details and payment information; easily access Oscar policies across all product lines; quote and enroll clients in minutes; search by name or Oscar ID, or filter by status to find clients; export books of business to see more details; and, click on any client to view more details, including plan information, dependents, contact information, billing & payment history, and engagement.
      • ~25.6% of our active brokers pay their clients’ bills through the broker portal, giving us a direct and regular communications link to them.
    • Digital ExperienceWe've developed a digital experience that is easy-to-use for members so we can maximize the share of healthcare shaped by Oscar. Oscar’s member app is designed to help our members with common healthcare problems by providing the kind of simple, straightforward experience consumers expect.
      • 47% of our members are monthly active users.
      Logged in homepageTech-Enabled Customer ServiceOur technology weaves clinical and non-clinical conversations in a single platform for members.
      • Our custom-built CRM tool to support our Care Team, Rosco, is a comprehensive management platform that empowers teams as they guide members on the path to better health. Handling member, provider and facility data sources, Rosco provides care guides with key insights to meet our members’ needs every step of the way. RTM (real-time task manager) is our Care Guide intervention platform that provides recommendations to the Care Guide for the member who is calling in.
      RTM conversion rate
    • Care Routing Machinery We help members find the best providers for them, with clear line of sight into quality and cost.Our care routing tools recommend the best providers at the most affordable price to our members. The underlying algorithms use provider performance and personalized patient data to guide patients toward the providers and care options best suited for them, based on member satisfaction, care quality and cost efficiency. High member engagement is a necessary precursor to do this well.Care routing percentage over timeCampaign Builder Engine Our workflow tool allows us to quickly customize, test and optimize campaigns based on member behavior and preferences. Campaign builderNumber of campaigns reaching number of members
    • Modern, Cloud-Native Core Payer Administration Solution Our offering lowers costs and drives efficiencies while enabling growth and innovation. The efficiency of our claims payments ensure speed and accuracy simultaneously, while building trust with provider partners.Payment over time
      • Note: The spike from January 2020 - February 2020 is attributed to the fact that we used to hold claims when we launch new markets to make sure we have no errors.
      Better Financial Planning CapabilitiesFinancial planning, including cost transparency tools across multiple interfaces, give members visibility into their current and future costs.
      • In a pilot of 5,000 members, people who saw our total cost of care comparison tool while shopping were 2% more likely to renew their plan with us than those who did not see it.
      Our ability to enable innovative plan designs allows for downstream cost savings for members based on their needs.  In our Virtual Primary Care plan offering, our core payer administrative platform allowed us to dynamically waive cost shares for certain visits referred or ordered by members’ virtual providers, creating a first-of-its kind virtual plan design that promotes adherence to obtaining necessary follow-up care.
      • We see 84% primary medication adherence for Oscar Virtual Primary Care patients

So these are our versions of the core components of the “classical” health insurer.

However, in our view, we believe the best insurer is a “decentralized” insurer that builds these abilities as a tech platform to power others, not just itself. The classical insurer isn’t necessarily the most effective place to deliver the 4 core components discussed above. That is because other entities in the healthcare system (doctors, health systems, digital health players) are structurally better positioned to build risk-based, direct-to-consumer, longitudinal relationships than employers or B2B-focused insurers - which means that the classical insurer is destined to become obsolete, unless it evolves its capabilities and unbundles.

Unbundling the health insurer

Today, the vast majority of providers have not built direct acquisition capabilities, people are still surprised by unexpected bills and charges, and insurers largely struggle to retain members for longer than 3 years. Thus, very few market participants have an incentive to invest in long-term health outcomes, and old-school claims systems and providers’ inability to set their own incentives severely limits using financial levers to drive behavior change.
A better healthcare system would be one where providers:
(1) Can attract members.(2) Save members money by engaging them directly.(3) Retain members in long-term relationships and invest in their long-term health outcomes, allowing providers to share financially in the outcomes.(4) Directly control and personalize incentives.

So these classic insurance capabilities will be powerful ways to enable a more “decentralized” risk-based model that leverages the new world of APIs and interoperability.

A decentralized insurer delivers the following capabilities:

Brand Trust

Health systems should attract members into branded plans and manage them there, but they lack member acquisition and retention capabilities - our tools can help them with that.

Ubiquitous Care Delivery

Digital health startups are a new, emerging channel, and they know how to reduce costs in a particular area of care, but they lack the capabilities and the “reg(ulatory) tech” to tap into risk payment flows - our tools enable that.

Personalized Health Incentives

Payers have powerful local market presence, but use a multitude of claims and utilization management systems to manage their business and can’t nimbly respond to market dynamics - our tools help them with that.

Programmable Routing

Risk-bearing physician groups have innovative clinical workflows and population health campaigns, but often can’t scale them and spread them to others - our workflow tools enable that.

Our +Oscar platform evolves the core components of a great classical insurer into the following components of a great decentralized insurer:

    • Novel Direct-to-Consumer Healthcare ExperiencesWe are building novel direct-to-consumer healthcare experiences that enable individuals across the healthcare ecosystem to capture risk for the membership that flows through it.
      • Health systems should deploy a “non-plan health plan” sitting on top of our novel claims system - a lightweight, direct-to-consumer, branded app that lets health systems take advantage of our cost-savings and attribution tools, including care routing, to engage a membership base as an eventual on-ramp for their health plan.
      • A simple version of this is a recent configurable campaign that we launched for an at-risk health system partner to drive members in select zip codes to their underutilized primary care providers, leveraging a series of different messages to assess which would most significantly impact behavior. 
      Relationships with provider networks Super-Fast Iteration of New Feature IdeasWe quickly iterate new feature ideas so that we can meet the ever-changing needs of the consumer markets.
      • When Oscar launched our Virtual Primary Care plan offering, our core payer administrative platform allowed us to dynamically waive cost shares for certain visits referred or ordered by members’ virtual providers, creating a first-of-its kind virtual plan design that promotes obtaining necessary follow-up care. Because of our system configuration, we were able to go from concept to launch in ~8 months.
      • Fast product iteration and the launch of member engagement campaigns that tested four hypotheses reduced first-time patient no-show rates for our Virtual Primary Care offering by 44% over 7 months.
      • High member engagement is a necessary precursor to do this well.
    • InteroperabilityInteroperability allows us to push data back into providers’ EHRs or share it with other insurers, so that they can better serve their members with real-time information and analytics.
      • A critical piece of our Cleveland Clinic partnership is our EHR integration, which allows us to quickly surface care and coding gaps for fast remediation. It also enables direct scheduling, so that members can book an appointment with their Cleveland Clinic provider right from our app. 
      • Fast Healthcare Interoperability Resources (FHIR) is a standard describing data formats and elements and an application programming interface for exchanging electronic health records. New federal rules will require payers and providers to make their data available in FHIR format to everyone else in the healthcare system. The chart below shows an estimate of how much data in U.S. healthcare will finally become available in machine-readable format.
      % Data Accessible via FHIRExtending Providers (With Data and With Member-Facing Actions)We have built an EHR that includes plan sensitivity, meaning that when an Oscar Medical Group provider uses the EHR to prescribe a new medication or order a lab, it pulls in real-time pricing information. EHR
      • In a recent survey, 76% of patients surveyed felt it was important to discuss the costs of their care with their physician, 21% said they received some, little, or no such information during a doctor visit.5
    • Personalized Discounts & BenefitsPersonalized discounts & benefits delivered in real-time can help improve medication and treatment plan adherence, eventually leading to improved outcomes for the member or patient and overall savings for the healthcare system.We have explored offering plans that feature “care couponing,” an incentives program that makes an incentive available to members searching for a new doctor to select a low cost option.
      • A recent study shows that an as-if-random increase of 33.6% in out-of-pocket price (11.0 percentage points change in coinsurance, or $10.40 per drug) causes a 22.6% drop in total drug consumption ($61.20), and a 32.7% increase in monthly mortality.6
      Deploy Our Payments Capabilities As SaaS, Including “Reg Tech”Include a self-service SaaS solution which will make it easy and accessible for the +Oscar customers. Such an offering will:
      • Reduce the setup and run costs for any new health plan
      • Increase options available to members due to ease of set up and management
    • No-Code Healthcare

      We have built highly configurable healthcare experiences that can be quickly spun up by a mix of clinical and non-clinical experts, without the extensive support of engineering or product resources. 

      We are building a FHIR integration with Campaign Builder to ensure that we can leverage a broader data lake and build even more personalized campaigns to drive behavior change for our members. That means we can code campaigns on other healthcare players’ data.

In healthcare, it is easy to convince oneself of thinking that the more things change, the more they stay the same. After all, almost everything we’re seeing today has in some shape or form been tried before. What was called capitation in the 1990s is now called risk contracting. The ACA’s Triple Aim used to be called the Iron Triangle. Humana used to be a hospital chain that owned an insurance company. The hottest healthcare model of the 1990s was risk-bearing physician practices in gatekept HMOs, the hottest model of the 2000s was the exact opposite (broad-network PPOs), and now we’re going back to the future. The first time Google Health shuttered was on January 1, 2012, and Apple once made a handheld called the Newton. Meanwhile, the only constant is that U.S. healthcare costs rose from 8% to 18% of GDP, and went from being in the middle-of-the-pack of OECD countries to exceeding every other OECD country by a factor of 2.But across industries, what drives step-changes in innovation is the confluence of several big, simultaneously occurring trends. Digital music required the confluence of fast broadband in student dorms plus the development of 10x higher compression with the MP3 format. Just one of them wasn’t enough, but both of them together transformed an industry.Similar shifts have been occurring in healthcare. Before the 2008 stimulus bill, most U.S. hospitals and physician practices didn’t have EHRs, now they all have them. In 2010, very few Americans were on deductibles over $1,000, now it’s more than half. Individual Coverage HRA (ICHRA) was introduced in 2020 and allows employers to reimburse employees for some or all of the premiums that the employees pay for health insurance purchased on their own. More Americans than ever are choosing their own health plans, in Individual and MA markets. CMS will continue to push the system toward value and data interoperability. Every other industry has been moving its data into the cloud, but Amazon Web Services wasn’t even HIPAA-compliant until June 2013. (And the Apple Newton now has some notable successors.)These seem to us like meaningful shifts. Healthcare is becoming more individualized, more digital, and more value-based, and there is a great chance that it isn’t just going back into one of its decade-long repetitive cycles. More non-healthcare companies than ever before are entering healthcare. Ultimately, every one of them will need to act like mini-insurers, taking risk and tapping into the existing payment flows in this $4T market.Others are trying to build shareable technology in healthcare, but it just hasn’t really been done from the insurer’s point of view - though insurers are still one of the most powerful entities in the healthcare system. A decentralized insurer is uniquely set up to enable others to build trustworthy entry points to healthcare, to compile the most intelligent & quantitative individual model of a member’s needs & behavior, to route care in optimal sequences, and to pave the way with microdosed incentives.
That is the machinery we have been building:
(1) As a health insurer enabling members and providers to navigate the system. (2) As a decentralized insurer enabling risk-bearing entities to refactor the system.
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Sahni, N., Mishra, P., Carrus, B., Cutler, D. (2021, October 20). Administrative simplification: How to save a quarter-trillion dollars in US healthcare. McKinsey & Company.
Kaplan, D. A. (2020, June 5). Discussing costs of care with patients. Medical Economics. https://www.medicaleconomics.com/view/discussing-costs-care-patients.
Chandra, A., Flack, E., & Obermeyer, Z. (2021, February). The health costs of cost-sharing - NBER. https://www.nber.org/system/files/working_papers/w28439/w28439.pdf.