The following is a guest post from Daniel Black, a strategy consultant at brand strategy firm Vivaldi.
Oscar Health is an ambitious organization. Founders Mario Schlosser and Josh Kushner strive confidently to disrupt health insurance, a notoriously bureaucratic industry with a net favorability of -32, a score nearly as poor as big banks during the 2009 recession.
Schlosser built a crisp brand around consumer-friendliness because he hates health insurance. In a sense, Oscar has accomplished that, and perhaps only that.
In the gig economy, fewer millennials are covered by employers. Instead, WebMD lets them self-diagnose, albeit inaccurately. They came of age watching senators brawl over healthcare and lament their 26th birthdays, when millions lose their parents' coverage.
Oscar's user interface has reimagined how people discover and select health insurance. Millennials love sleek apps and pastels — Oscar has both. With just a ZIP code, age, and income, Oscar can give a tiered monthly insurance quote. And their ads are meant to provoke, featuring a focus-grouped degree of snark. New Yorkers chuckled at this subway wrapping:
Few were surprised to learn that targeting millennials made ages 26-35 Oscar's largest subscriber decile. For a health insurer whose business survives by coercing young, healthy people to cover the costs of older, sicker people, that's a godsend.
But a brand or an app doesn't make an insurance provider; for Oscar they're merely veneers. Beneath it, the same kind of health insurer patients have long complained about. This isn't fashion, it's health. What's at stake is life or death.
Oscar mastered how consumers compare and purchase coverage, but those are just a handful of early interactions patients will have over a lifetime with their insurer.
The critical touchpoints between a subscriber and their insurer lie in the actual provision, validation and payment of healthcare. And countless reviews of Oscar's products reveal immense dissatisfaction.
To be clear, plenty of subscribers marvel about their experiences, citing the speed in which they are contacted by a physician and the accessibility of Oscar representatives.
Yet user testimonials are littered with anger about inconsistent ER coverage, of headaches getting wheelchairs, of denied MRIs and of visiting network physicians who had never heard of Oscar Health. These are classic symptoms of the information-hoarding silos endemic to healthcare. Worse, they’re the same grievances people utter about UnitedHealthcare, Aetna and Humana.
Oscar bills itself "a new kind of health insurance company," framed differently from the ground up. Yet it still fails to address interoperability failures head-on.
Oscar subscribers learned that their physician networks would be cut for 2017. New York's network, for example, was halved from 40,000 doctors to 20,000. Hospitals were slashed — from 77 to 31. Schlosser claimed that real-world data ensured that the best providers remained. But the net impact is that there wouldn't be a doctor on every corner.
In exchange, Oscar touts elite network partners, like Mount Sinai in NYC and the Cleveland Clinic in Ohio, who lend instant pedigree. But taken alongside Oscar's steep network cuts, brand is clearly prioritized over everyday physician accessibility. These should not be trade-offs.
Most Oscar plans have high yearly deductibles to limit in-person consultations, relying on telemedicine instead. That’s another false equivalency. App-based telemedicine can revolutionize global health. But when it replaces clinic visits, care quality can suffer.
Telemedicine has obvious limitations. A patient can stick an iPhone down their throat and say "ahh," but who knows what doctors see. FaceTime call quality shouldn't be a limiting factor in discovering signs of esophageal cancer, for example. And though seniors aren’t Oscar's target, tech illiteracy could disadvantage them. It's why plenty of doctors firmly object to virtual consultations.
So, we must keep asking ourselves — if patients don't like small networks and data silos, what has Oscar truly done to revolutionize health insurance? A sleek app can lure subscribers, but they'll ultimately realize Oscar's flaws are the industry's. For a self-described disruptor, the innovation bar must be higher.
Doctors know it's rarely advantageous to join small networks like Oscar's, ceding immeasurable advantage to insurers like Aetna. Independent practices don't want to be managed, and the best ones are already booked with patients from existing networks.
Oscar's struggle to assemble a unified network is evident in their booking platforms. Among 1,300+ primary care doctors in Los Angeles, just 16 offered online booking through Oscar.
For innovations aimed directly at inefficiencies like this, look at Aetna, Anthem, PNC Bank, and IBM, whose inclusive blockchain network will enable simple and secure data exchange. Humana, UnitedHealthcare, Optum, and Quest Diagnostics have long been collaborating on a provider directory. These ventures innovate from within, and millions could feel their benefits instantly. Oscar, in contrast, established a colony of health insurance refugees starting to find the limits of their network.
Schlosser is learning that millennials demand consistency, convenience and complete integration. They require meaningful value from every interaction. Brands and apps will attract them, but downstream interactions must deliver on lofty expectations. Haven (Berkshire-Amazon-J.P. Morgan) was formed to solve problems greater than one company could tackle. Oscar faces those and should work more extensively with its industry to eradicate common woes. Otherwise, they're a rebel without a cause.