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Dive Brief:
- Oscar Health will stop pursuing full-service contracts for the +Oscar information technology platform for the next 18 months, CEO Mario Schlosser told investors Thursday, following an agreement with Florida-based insurer Health First Health Plan.
- The 10-year-old insurtech now signs one to two new +Oscar deals each year. The technology platform aims to help healthcare organizations transition to risk-based payment models, better engage patients and control medical costs.
- The decision to end new technology deals will not change Oscar’s financial outlook for 2022, as the insurer plans to reallocate its resources to achieve profitability and overall profitability in its insurance business next year and is focused on overall profitability in 2025.
Dive Insight:
Payers and providers are investing in and developing digital tools to deliver cheaper, longer-lasting patient care.
New York-based Oscar touts the success of +Oscar, where sharing the platform has reduced emergency room visits by 13%, no-shows by 20% and annual wellness visits by 15% — something that’s possible. Forrester analyst Kyle said it meant “significant cost savings and increased profitability across the industry.” Rybarczyk commented on Oscar’s second quarter earnings.
But Oscar +Oscar is facing problems in implementing it widely. The Health First Health Plans Partnership, which was announced last year to provide access to the platform for payer Medicare Advantage and individual members, is slated to go live in early 2022.
But he faced the deal. The challenges after the start-up are “the complexity of the whole integration at this scale,” Schlosser said.
Seven months later, Oscar is still working on implementation and doesn’t want to overextend itself by taking on new full-service clients anytime soon, CFO Scott said. Blackley told investors.
“Because of the big growth we’ve done and because we want to support our existing customers in that performance, we’re not going to be implementing a really big full-service deal for the next 18 months,” Blackley said. However, Oscar continues to see hospitals and payers as more at risk and need the infrastructure to support that, so the guarantee continues to negotiate for +Oscar, the CFO explained.
“At this point, with these full-service contracts, we’re talking about 2025 and beyond,” Blackley said.
Oscar reported revenue of $1 billion in the second quarter, up 93 percent year-over-year. Net loss increased to $112 million compared to the same period last year.
Membership has nearly doubled year over year to more than 1 million people, mostly as a result of individual and small group registrations.
Enrollment in Oscar’s co-branded plans with Cigna for small businesses has grown tenfold to 46,000 members. The plan is currently available in select markets in seven states, and will be available in Philadelphia next year, Schlosser said.
The CEO said he was pleased to see the Senate pass the Democrats’ comprehensive health care and climate change legislation, which includes subsidies for the improved Affordable Care Act. That, along with Medicaid decisions that Oscar expects will largely take place next year, should be a tailwind for the expanding ACA marketplace next year, Schlosser said.
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