Amid the mega-merger frenzy, one health insurer is setting itself apart.
The website of New York City-based Oscar Health touts its offering of "smart, simple health insurance." But Oscar's impact goes deeper than that. Fortune dubbed it the "hipster" health insurance company, and Wired called it the start-up that "is making health insurance suck less." Founded only a few years ago, Oscar is still relatively new to the game. It only has plans in parts of four states: California, New Jersey, New York and Texas.
How did this young start-up insurer get off its feet? Who took the initiative to create it? And what's with the name "Oscar"?
The man behind Oscar Health, CEO Mario Schlosser, has the answers to these questions and more. Here, Mr. Schlosser took the time to discuss the health insurer's history, diverse team and biggest goal for 2016.
Q: What is your personal background prior to cofounding Oscar?
I am from Germany originally. Both my mother and my sister are pediatric nurses, so I have a connection to the world of healthcare through them.
But I am a computer scientist by training. I've spent a lot of time trying to find systematic ways of understanding the world, invent something and improve something in the world. One of the things about Oscar is we see so much data flowing through the system. From a scientific view, insurance companies should do more to help members get higher quality and more efficient care.
Q: You cofounded Oscar in 2012 with Kevin Nazemi and Josh Kushner. Where did your idea come from and what inspired you to create Oscar?
Josh and I were sitting together in February 2012, and we got to talking about what was going on in our lives. At the time, my wife was pregnant with our first child. We started launching into the pregnancy — which pediatrician we should get, which OB/GYN and whether we should have a natural birth. Josh had also sprained his ankle recently. It occurred to both of us that we spent a lot of our lives trying to build products and technology. Healthcare is such a big part of our lives, and everything seemed so user-unfriendly. It was not only unsimplified, but was made more complicated by the insurance company.
From the beginning, we asked, 'How would we build something that would give us a good experience? How can this be improved?' It took a few months of researching.
In the middle of 2012, the Supreme Court reaffirmed the Affordable Care Act. We thought, 'Now is the time to build an insurance company.' Insurance companies are now going directly to their members, which was very powerful to us. We wanted to build something people are happy using and that they'd tell their friends about.
Q: Where does the name 'Oscar' come from?
It's actually Josh's great grandfather's name. We loved the name from the beginning. We had working titles, but then Josh started calling it Oscar — it was a nice, personal name.
Q: As a young start-up insurance company, what are some of the biggest challenges you've faced while serving as Oscar's CEO?
We've faced plenty.
It just doesn't happen that insurance companies get started. We were the new first health insurer in New York state in about 15 years. There's so much regulation, so many capital requirements and very complicated rules — it simply doesn't happen. [Health insurance] is something that's the most precious thing in people's lives. In the blocking and tackling, making sure Oscar operates flawlessly is a never-ending challenge.
We've also begun to build a very diverse team. I'm a computer scientist, so I'd hire more computer scientists, designers and data people. But from the beginning, we've had actuaries, medical personnel and people coming over from insurance companies. The diversity of the organization and operation have been breathtaking from the beginning. To make sure that flows together is a really big challenge.
At some point we became an insurance company — it happened. People liked the products, and they talked to their friends about them. Sometimes I would wake up at night and think, 'Wow, we are maybe 3 percent done with what we need to do.' It's a constant reminder that there's a lot left to be done.
Q: What drives you to work hard and continuously pursue success?
The biggest thing is the reaction by the members. From what we can tell, we're one of the most — even the most — beloved insurance companies across the nation. We're the first virally growing insurance company. That is the most powerful driver of all. We are helping real people and simplifying this horrendously complex system.
The second thing is the people in the company. Companies typically don't get started from the ground up. We brought in data people and others who wouldn't typically [go into] insurance. But they're here because they love the intellectual challenge and they realize it's a very real thing, at least as far as technology companies go.
Finally, it's the importance of the challenge. We can't keep having the healthcare costs we have now. We can't keep giving people the same nonsensical experience.
Q: What is your biggest goal for 2016?
The big thing internally is the year of the Oscar magic. We have a fast turnaround time and the most visibility of customer service agents. We've seen how some of the benefits we offer have [changed] healthcare. For example, we offer free televisits, and we're the only insurer in New York that gets real-time signals when patients go to the ER. Now is the time to drive more of that.