News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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In New York City, innovative clinical laboratories have the opportunity to become a network provider for the region’s newest health insurance company

Three Generation Y entrepreneurs are ready to take on traditional health insurers with their own innovative health insurance company. They claim their novel start-up can better meet the new consumer expectations and behaviors within the insurance industry. If correct, their venture could disrupt the post-Obamacare insurance world.

Game-changing Health Insurance Company?

The Gen Y trio is made up of Josh Kushner, Kevin Namezi, and Mario Schlosser. They recently launched Oscar Health Insurance, based in New York. Kushner is the founder of the tech investment firm Thrive Capital. Kevin Nazemi, Oscar’s president, is a former director of healthcare for Microsoft Corp. (NASDAQ: MSFT). Mario Schlosser is a former McKinsey & Company computer scientist.

“We understand technology, data, and design,” stated Kushner in a recent story published in Business Week.

Vision of Consumer-centered, Technology-based Platform

Oscar will be different from longstanding entities in the health insurance industry. The strategy at Oscar is to use technology and data to create a more consumer-oriented healthcare company. Telemedicine, transparency, design, functionality and capabilities to support price comparison also play a big part in Oscar’s innovative model for health insurance. The company hopes to redesign health insurance so that a consumer’s first impulse will be to seek out his or her insurer, even before contacting his or her doctor.

Oscar co-founders (from left) Kevin Nazemi, Josh Kushner and Mario Schlosser are banking on solving the challenges of traditional healthcare with technology. According to the Generation Y trio, they understand technology and data and how to present them in a design context that will change how consumers interact with their healthcare insurers and providers. Pathologists and clinical laboratory scientists can expect to see more innovative—and potentially disruptive—products and business models coming from these younger generations who have grown up in the era of technology and social media. (Photo by Marcus Santos, copyright by Daily News.)

Oscar co-founders (from left) Kevin Nazemi, Josh Kushner and Mario Schlosser are banking on solving the challenges of traditional healthcare with technology. According to the Generation Y trio, they understand technology and data and how to present them in a design context that will change how consumers interact with their healthcare insurers and providers. Pathologists and clinical laboratory scientists can expect to see more innovative—and potentially disruptive—products and business models coming from these younger generations who have grown up in the era of technology and social media. (Photo by Marcus Santos, copyright by Daily News.)

The inspiration for Oscar came from the founders’ real-world frustrations with existing healthcare services, noted Forbes in a recent story. Kushner was frustrated when he had to wade through confusing coverage options for his employees at Thrive Capital.

In a similar fashion, Schlosser experienced lack of user-friendly healthcare services when dealing with the finances associated with the birth of his two children. “Amazon [NASDQ: AMZN] and Target [NYSE: TGT] knew when Mario’s wife was having a baby,” exclaimed Kushner at a recent breakfast presentation, according to a story published by Crain’s New York.”[B]ut his health insurance company didn’t know until three months after [the birth of their child].

“The existing players don’t care about satisfying the customer,” stated Kushner in the New York Times coverage of the story. “We want consumers to feel like they have a doctor in the family.”

Opportunity to Add New Players in Individual Insurance Marketplace

The health insurance exchanges formed under Obamacare allow new players with new ideas to compete directly with established health insurance industry titans. “The Affordable Care Act was an opportunity to sell something different than the usual consumer products offered to individuals,” stated Kushner at a recent media event, reported a story at Fastcompany.com.

According to Oscar’s Namezi, building a health insurance company from scratch that is customized expressly for the individual market has its advantages. “If you’re doing group plans, 99% of your focus is on the needs of human resources and brokers,” he observed in a story published at Businessweek.

Big Data—and Knowing How to Use It—Is Key to Oscar’s Approach

Oscar’s operation and consumer focus is data-driven. The young, tech-savvy entrepreneurs tracked and analyzed years of medical claims data, Forbes reported. They used the information to help assess how technology and telemedicine could provide better care and patient outcomes.

“Big data is interesting only if you can light up consumer experiences that point you to the type of doctor that you’re looking for, the type of care that you’re looking for, or give you the context for what the care might cost relative to your specific plan,” noted Nazemi.

Additional Oscar features include:

  • doctors on call 24/7 to talk with patients online or on the telephone through the telemedicine company, TeleDoc;
  • ability to check prices for procedures ahead of time;
  • three, free in-person doctor visits;
  • free generic drugs; and
  • symptoms and treatment options database with price estimates.

Well-known Investors Lend Credibility to Oscar’s Platform Concept

To fund Oscar, Kushner, Namezi and Schlosser raised $45 million in venture capital last year, according to a story published by Nightly Business Report. They added another $30 million in January.

Investors included Sun Microsystems (NASDAQ: JAVA) co-founder Vinod Khosla and Founders Fund’s Peter Thiel. “I think… people see the potential of a company coming into an industry that has had a history of giants, that are slow moving in what they do,” stated Nazemi.

For now, Oscar sells health insurance plans in New York’s nine southern counties. Its network includes 82 out of the 85 hospitals in its service area. In addition to the telehealth provider TeleDoc, it also contracts directly with physician groups.

Oscar Enrolling Beneficiaries through Health Insurance Exchange

Through the end of last year, Oscar had captured 2% of new enrollments on the health insurance exchange, according to Crain’s. Nazemi revealed that enrollment numbers are in the tens of thousands. The average age of its members is 42. They boast an enviable 90% bill payment rate. Some other health insurance carriers have complained that as many as 30% of new members have not paid their bills.

This e-briefing is noteworthy for pathologists and clinical laboratory managers for two reasons. First, it is evidence that technology platforms will likely continue to bring sweeping changes to healthcare delivery. Secondly, it signals that Gen X and Gen Y are ready to use sophisticated technology-based solutions to challenge traditional industry models.

—Pamela Scherer McLeod

Related Information:

With An Eight-Figure Run Rate, Oscar Doubles Down on Health Insurance Through $30M In New Funding

Oscar touts its startup approach to insurance

Oscar Is A Health Insurance Startup For Digital Natives

Joshua Kushner Has Quietly Amassed 25 Employees And $40 Million To Shake Up Health Care with A Startup, Oscar

Why Tech Guys Think They Can Sell Health Insurance

Venture-backed Oscar off to a good start under Affordable Care Act

Oscar, a New Health Insurer, Raise $30 Million

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