Oscar snaps up ACA market share

More recently, it has partnered with HCA and Ascension to serve members in Austin, Texas and Nashville.

Oscar also developed a joint venture health plan with Cleveland Clinic in Ohio, where it enrolled 11,000 members for 2018, and partnered with Humana in Tennessee to sell small-business plans.

Oscar has already mapped out where it will expand in 2019 and will finalize its expansion plans for 2020 in the next six months. The company, which expanded to six states from three in 2018, will move into four or five new cities per year, Schlosser said.

It isn’t lost on observers, however, that Oscar is rapidly growing its footprint even though it hasn’t yet turned a profit in a market that hasn’t been very friendly to health plans. The insurer recorded a $96 million loss across its three states in the third quarter of 2017, compared with a $128 million loss in the same states in 2016. Oscar did record a $4 million underwriting profit in the third quarter, compared with a $36 million under- writing loss in the same period during the previous year. Fourth-quarter results are not yet available.

Oscar executives brush off the losses as the cost of developing the first health insurance platform that consumers actually want to use, which is their goal.

“We’re trying to build out a different kind of experience for our members—in other words, we are not trying to replicate what major insurance companies do,” Klein said. “We are trying to build out a tech-driven platform that enables people to actually see us as the entry to the healthcare system. To do that, you’ve got to invest heavily in technologists, data scientists, people who really can put in the time and energy to build it up.”

Savings will surface over the long run, he said.

Oscar chooses its provider partners based on quality and cost, and its markets based on whether it can find the right kind of partner. Of course, not every provider is willing to sign on. But those that do receive an influx of Os- car’s members in return.

Oscar’s members trade a broad network with lots of doctors in exchange for fewer doctors, but easy web-based scheduling and a personal concierge team to help them navigate the system. Members are on the hook for the whole cost if they seek care outside of Oscar’s narrow network, except in emergencies.

Oscar is hardly the only health insurer using narrow networks to lower costs, nor is it the first insurer to pair up with brand-name health systems.

“Narrow networks are very common in this (individual) market,” said Chris Sloan, senior manager at consulting firm Avalere Health. “‘Narrow network’ gets thrown around a lot as intrinsically a bad thing, but it doesn’t have to be. If you have a narrow network of high-quality providers and your patient can get in to see them, and they have systems in place to improve continuity of care … then they can be good and drive better patient care and outcomes.”

A November analysis by Avalere found that 73% of the plans offered on the public exchanges have narrow networks, while 27% are PPOs or point-of-service plans with broader networks.

Other insurers that have relied on narrow provider networks have run into network adequacy issues. Managed Medicaid insurer Centene Corp., which is also the dominant insurer on the individual exchanges with 1.6 million members, has managed to turn a profit in that market in part because of its narrow networks.

But St. Louis-based Centene’s Washington state subsidiary was fined $1.5 million in December after more than 140 consumers complained to the Washington commissioner’s office about having trouble finding in-network providers and the surprise medical bills they received because of the inadequate network.

Oscar isn’t worried about that. “If you narrow a network and hurt your members, that’s like a bait-and-switch kind of game. We’re far from that,” Klein said. “We’ve got some of the most sophisticated data scientists and analysts doing really powerful work on adequacy, not just legal adequacy but member adequacy.”