Businessmodel of Oscar Health

Customer Segments

Oscar Health provides health insurance coverage to individual consumers, couples and families.

Oscar Health only serves customers in a handful of counties and states across the US. Its principal market is New York, the location of Company’s headquarters, where it has around 69,000 members. In 2015 the Company was reported to have a 10% market share for the health care exchange in New York. Oscar Health has also served customers in New Jersey since 2015, where it has around 28,000 members, and moved into parts of California and Texas in 2016. The Company, however, is reported to have had difficulty gaining traction in California, enrolling just 5,000 members in the Los Angeles and Orange County area.

Value Propositions

Oscar Health’s provides value to its customers through its simplified insurance products, the convenience and accessibility of its services, its use of technology, and its flexibility.

The Company offers custom quotes to its customers, which can be obtained either online or from direct sales representatives.

The Company allows its customers to use technology to track activity and health performance through its mobile app, which also enables members to contact qualified medical practitioners from anywhere.

Oscar Health’s key selling point is that it claims to simplify the notoriously complex process of buying health insurance, purporting to offer a no-surprise experience to its customers with easily understood insurance plans.

Channels

Oscar Health operates a website at www.hioscar.com, through which customers are able to generate a custom insurance quote, select an insurance plan and becoming an Oscar Health member.

In addition to its online channel, Oscar Health operates a hybrid sales model. The Company sells insurance plans to customers both directly through its own sales teams, through third-party partner brokers and through health insurance marketplaces. The Company’s products are available on health exchanges – organisations set up to facilitate the purchase of health insurance in accordance with the Affordable Care Act – in New York, New Jersey, California and Texas.

Oscar Health members are also provided access to the Company’s mobile application, available on iOS and Android, through which they are able to manage their health history – including doctor visits, and view prescriptions, and laboratory work.

Customer Relationships

Oscar Health’s health insurance products are available on a largely self-service basis, with customers able to get a custom quote, select a coverage plan and register an Oscar Health account via the Company’s website. Customers are also able to contact the Company’s sales team directly, in order to receive a more personalised service.

Oscar Health maintains a relationship with its members through its mobile app, which allows customers to manage their healthcare histories, contact doctors and arrange prescriptions. The Company also operates Facebook, YouTube, LinkedIn, Instagram and Twitter accounts through which it is able to interact directly with its members and keep them updated with company developments.

Key Activities

Oscar Health operates as a subsidiary of Mulberry Health. The Company provides a range of custom health insurance services to individuals, couples and families. Its plans cover a range of services and outcomes, including free doctor visits, free generic drugs, routine care services, immunisations, pregnancy screenings, and laboratory tests.

Oscar Health also provides its members with discounted rates for specialist visits, brand-name drugs, urgent care, and other common care needs, as well pregnancy, surgery, and recurring illness coverage.

Oscar Health’s insurance services are supplemented by the Company’s Doctor On Call, through which members are able to access short consultations with qualified doctors, enabling them to receive advice and prescriptions without leaving their home.

Key Partners

Oscar Health partners with a range of companies in the provision of its insurance products, principally comprising:

• health insurance brokers, including independent sales agents and third-party insurance brokers;
• healthcare providers, including primary care practices, hospitals, urgent care clinics, and pharmacies, as well as drug providers and pharmaceutical companies; and
• healthcare practitioners spanning the entire medical sector, including primary care physicians, psychiatrists, dermatologists, orthopaedic surgeons, cardiologists and dentists. Among Oscar Health’s partners are Tenet Healthcare, Baylor Scott & White Health, Jacobi Medical Centre, Coney Island Hospital, Nassau University Medical Centre, and Plainview Hospital.

Oscar Health also has a tie-up with technology company Misfit, which provides Oscar Health-branded activity tracking products for the Company’s members.

Key Resources

Oscar Health’s key resources are its network of provider and broker partners, its mobile customer relationship platform, and its personnel.

The Company employs a workforce of almost 200, of which its sales staff play a key role.

Oscar Health does not have any patent applications filed with the US Patent and Trademark Office.

Cost Structure

Oscar incurs costs in relation to the payment of medical and network fees, maintenance and operation of its offices, implementation of marketing and advertising campaigns, and retention of its personnel – who number around 185 as of April 2015.

Oscar accrues substantial costs in the form of medical bills and start-up costs as it expands into new states and counties. Chief Executive Officer Schlosser attributed the Company’s 2015 losses evenly to start-up and expansion costs and New York medical losses.

Oscar, as a newly-established insurance firm, has also had to pay high fees for access to health networks and hospital contracts. These costs, however, are expected to decrease once the Company’s initial high-fee contracts have expired and new agreements can be negotiated.

Revenue Streams

Oscar Health generates revenue through the provision of health insurance plans that cover routine and specialist care provisions, as well as through a Doctor On Call service that enables customers to access short consultation over the phone. The Company’s plans are priced on a case-by-case basis.

As a privately-owned company Oscar Health does not publicly disclose its financial results. However, the reports have attempted to estimate the Company’s revenue figures using available figures. Coverage in 2016 suggested the Company has around 145,000 customers, with each customer paying an average of $5,000 per year, resulting in an approximate annual revenue of $750 million.

While Oscar Health continues to attract investors it is yet to make a profit, with operating and set-up costs outstripping the Company’s revenue generation. The Company was reported to have lost around $105.2 million in 2015.