by Theo Schall

 

Would you trust a tech start-up to manage your health insurance?

 

Over 30,000 people in New York and New Jersey have decided to do just that by signing up with Oscar Health Insurance, a two-year old company founded by a group of techies and venture capitalists. The first new health insurance company in New York in over fifteen years, its roll-out was timed to coincide with that of the state’s Affordable Care Act insurance exchange, where Oscar’s products are sold alongside those of its better-established peers. Oscar has done well enough that it’s hoping to expand to California during the next period of open enrollment.

 

Accounts of the company’s culture describe a May-December marriage – young programmers in hoodies share space with more staid insurance experts – a tension that’s reflected in the product. Although its advertisements tout company distaste for traditional health insurance, Oscar pays for use of an established network of providers and another company’s telemedicine system, integrating access and improving user experience through the use of new media. Is this just repackaging of the same old insurance, or does Oscar offer something new?

 

Oscar’s primary selling point is simplicity. Patients have access to free primary care visits and unlimited 24/7 telemedicine with short wait times. Health data is recorded in a chronological history, like a Facebook timeline, intended to be easily understood by consumers. Explanations of benefits and claim statements are written in plain language. An intuitive search tool on the Oscar website and app helps patients find doctors and drugs by price and location. You may have noticed that none of these technologies are all that novel, but the execution certainly is: Oscar’s design is sleek, its messages friendly.

 

Oscar’s founders hope consumers interact with their company on a daily basis as a supportive part of a healthy lifestyle. To that end, Oscar has begun to give all its customers free Misfit Flash health trackers which integrate with its mobile app. The company even offers incentives, like Amazon gift cards, for doing healthy things like getting a flu shot and staying active. It remains to be seen whether daily interaction is something consumers want from their health insurance company. For many, these tools and incentives may constitute an encouraging nudge towards a healthier lifestyle. For others, Oscar’s post-modern socialness (even down to its human first name) may seem overly intimate, if not intrusive.

 

Oscar’s marketing and tech-heavy products are likely to attract young, upwardly mobile customers. Young, healthy people are of course highly desirable to insurance companies – their health needs are much cheaper than those of older, sicker people. But a true test of a company in the business of human health isn’t how it works for healthy customers, but how it works for the chronically and terminally ill. Will an easier interface, less confusing benefit statement, and incentivizing perks feel like meaningful improvements to patients who actually rely on health insurance for, well, health insurance?

 

The company’s youth makes it difficult to know whether Oscar is actually an improvement over its predecessors. Reputation is fundamental to the insurance industry, which is why style and ease of use have remained secondary concerns for most insurance companies. For patients, the most challenging experiences with insurance are those in which coverage is refused or benefits are denied despite unmet medical needs. Since Oscar simplifies and repackages more traditional healthcare, the underlying issue of what is – and isn’t – covered may remain undisrupted. Even simplicity itself may have drawbacks, as health and disease are ultimately very particular, individual experiences.

 

Critical reviews of the company’s coverage are already scattered around online – after all, early adaptors are digital natives. On Yelp, Oscar has climbed from a rating of 1 to 2.5 stars, with complaints about a limited provider network, a lack of transparency about what’s covered, and high deductibles. These are ordinary customer complaints about insurance, with a twist: complaints about Oscar tend to mention disappointment. Customers want Oscar to fulfill its promise to be better than its predecessors.

 

Whether or not this company succeeds at changing health insurance, it’s definitely spotted problems that consumers want solved. Oscar itself isn’t revolutionary, but hopefully it heralds the arrival of a new generation of health insurance companies interested in efficiency, customer experience, and supporting preventative interventions.

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Theo Schall

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