Name: Axial S-1 Club - Oscar Health
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Axial S-1 Club - Oscar Health

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SubscribeSign inShare this postAxial S-1 Club - Oscar Healthaxialobservations.substack.comCopy linkTwitterFacebookEmailMar 9, 2021Share this postAxial S-1 Club - Oscar Healthaxialobservations.substack.comCopy linkTwitterFacebookEmailOscar now has over 500K members across 18 states. Over 5 million healthcare visits have been supported by the company from pediatric care to treatments for chronic diseases. As Oscar expands to more states and insurance plans, the company is pioneering full-stack products for patients.Oscar builds software to make health insurance customer-friendly with the ultimate goal of becoming an iconic brand. The company’s products on engagement and loyalty rather and using technology to scale up these relationships.“Over the next five years, health care costs are expected to grow at 5% to 6% per year, outstripping both inflation and GDP growth estimates.” Healthcare spending in the US is over $T per year. Around $3T of this spending flows through health insurance companies. Oscar is leading the way toward consumerizing this insurance market and building a new brand. Right now the company focuses on 3 markets: individual, small group, and Medicare Advantage, which overs over 50M patients and over $450M in policy premiums.Oscar develops and sells their own health insurance plans. They started with individual plans and expanded into small group plans in 2017 and Medicare Advantage in 2020. Oscar has plans in 291 counties across 18 states in the US. Another key part of the business model is using partnerships to co-brand plans, share fee-based revenue, and do risk sharing. In these deals, Oscar provides options with the ability to buy up to half of the equity in a specific Oscar health plan entity. These levers give the company to engineer their risk and get to scale faster.Mario Schlosser is the Co-Founder and CEO. He built a gaming company Vostu that was focused on Latin America before starting Oscar. Schlosser also worked as an associate at Bridgewater Associates and as a consultant at McKinsey. The other Co-Founder is Joshua Kushner who is a Managing Director at Thrive Capital.&nbsp;Siddhartha Sankaran is Oscar’s CFO having previously been the CFO at AIG. The COO is Meghan Joyce who was Oscar’s EVP of Platform and worked at Uber and the US Treasury. Joel Klein leads strategy and was an EVP at News Corp and the Chancellor of the New York City public school system. Oscar’s Chief Clinical Officer is Dennis Weaver who was previously the CMO at The Advisory Board Company.Oscar’s S-1 didn’t disclose exact ownership percentages, but it seems Alphabet is the largest&nbsp; shareholder. Oscar also has Fidelity, Formation 8, Founders Fund, General Catalyst, Khosla Ventures, and Thrive Capital on its cap table.Oscar builds software to make health insurance customer-friendly with the ultimate goal of becoming an iconic brand. The company’s products on engagement and loyalty rather and using technology to scale up these relationships: “though our member experience would begin with trust, engagement, and the smart use of data, our ultimate goal would be to bend the cost curve by guiding members to the right care at the right time and at the right value”Some data to back up this focus:When someone signs up for Oscar, they receive a welcome kit to explain their benefit plan and the various features. The company’s care team, an important advantage composed of care guides led by a registered nurse, also personally welcomes the member.Oscar’s care team is a key part of personalizing care.They help members navigate the care Oscar covers and keeps them engaged. For customer service, the care team will not hand off a member off to another department, but solve problems directly. Oscar builds software to analyze patient profiles and predict their needs. This supports personalized guidance because Oscar has access to a patient’s longitudinal health data. Across 100Ks of members going to millions, Oscar is building a powerful population health platform that can be integrated with genomics, primary care, and other tools.&nbsp;COVID-19 is an interesting case study for the value of care teams:Oscar’s platform is fully-integrated connecting health insurance with care teams, routing, and virtual care: “today this platform provides the foundation for [Oscar’s] personalized data insight and analysis as well as our critical cost structure savings. For example, in 2020, 92% of claims below $30,000 were auto-adjudicated without human intervention.” The company is building more features like real-time prior authorizations and automated claims.“Over the next five years, health care costs are expected to grow at 5% to 6% per year, outstripping both inflation and GDP growth estimates.” Healthcare spending in the US is over $T per year. Around $3T of this spending flows through health insurance companies. Oscar is leading the way toward consumerizing this insurance market and building a new brand. Right now the company focuses on 3 markets: individual, small group, and Medicare Advantage, which overs over 50M patients and over $450M in policy premiums:The Individual Market: “primarily consists of policies purchased by individuals and families through the Health Insurance Marketplaces. These marketplaces, established in 2014, grew rapidly, following the 2010 enactment of ACA provisions that today, require health insurance companies not to discriminate against pre-existing medical conditions in coverage decisions and provide for premium subsidies for middle and low-income Americans through tax credits. Rules enacted in 2019 provide for Individual Coverage Health Reimbursement Arrangements, or ICHRAs, which enable employers to make tax-favored contributions towards their employees’ purchase of Individual plans. The Departments of Labor, Treasury, and HHS estimate that approximately 800,000 employers will use ICHRAs to pay for insurance for more than 11 million employees and family members in the Individual market. We expect employers will embrace this trend for the same reasons they have shifted away from pensions to 401(k) accounts and agree with the many experts who believe that the decoupling of health insurance from employment would be socially beneficial. On January 28, 2021, President Biden issued an Executive Order which led CMS to establish a Special Enrollment Period for the Individual market from February 15, 2021 to May 15, 2021. New Jersey and California have announced similar Special Enrollment periods for their state-based exchanges.”The Small Group Market: “consists of employees of companies with up to 50 full-time workers in most states and up to 100 full-time workers in California, Colorado, New York, and Vermont. Small businesses are not required to provide health insurance coverage, but those that do are interested in attracting and retaining talented employees and conferring a benefit that is subject to significant tax incentives. Small Group represented a market size of $76 billion of premiums in 2019, and is a part of the broader employer-based insurance market that accounted for an estimated $1.2 trillion of premiums in 2020 and is expected to grow at a 4% CAGR to approximately $1.7 trillion by 2028.”The Medicare Advantage Market: “plans are a type of Medicare health plan offered by private companies that contract with the federal government to provide benefits to consumers over 65 years old, giving them the option between traditional Medicare or low- or zero-cost federally-subsidized Medicare Advantage plans. As of December 31, 2020, there were approximately 25 million Medicare Advantage enrollees, and they are estimated to spend approximately $290 billion in annual premiums according to HHS. By 2025, Medicare Advantage enrollment could represent approximately 38 million members, according to LEK Consulting.”Oscar develops and sells their own health insurance plans. They started with individual plans and expanded into small group plans in 2017 and Medicare Advantage in 2020. Oscar has plans in 291 counties across 18 states in the US. Another key part of the business model is using partnerships to co-brand plans, share fee-based revenue, and do risk sharing. In these deals, Oscar provides options with the ability to buy up to half of the equity in a specific Oscar health plan entity. These levers give the company to engineer their risk and get to scale faster.Examples of deals are:The most important metric for Oscar is its membership growth. The company has around 10% of the individual health insurance plan market. As of January 31, 2021, the company had 529,000 members, up from 82,000 as of January 31, 2017, representing a compound annual growth rate, or CAGR, of 59%. “For the years ended December 31, 2019 and 2020, after taking into account reinsurance premiums ceded, premiums earned were $468.9 million and $455.0 million, respectively. [Oscar’s] direct policy premiums for the years ended December 31, 2019 and 2020 were $1.3 billion and $2.3 billion, respectively.”Oscar is building a large network of patients, physicians, hospitals, and care teams. This can help make price discovery more efficient in healthcare. As this network grows, the company will have a growing influence on the healthcare system as trillions of dollars flow through them.Like this postShare this postAxial S-1 Club - Oscar Healthaxialobservations.substack.comCopy linkTwitterFacebookEmailCommentsFor your security, we need to re-authenticate you.Click the link we sent to , or .No posts© 2022 Joshua Elkington ∙ ∙ &nbsp;is the home for great writingThis site requires JavaScript to run correctly. Please or unblock scripts

SubscribeSign inShare this postAxial S-1 Club - Oscar Healthaxialobservations.substack.comCopy linkTwitterFacebookEmailMar 9, 2021Share this postAxial S-1 Club - Oscar Healthaxialobservations.substack.comCopy linkTwitterFacebookEmailOscar now has over 500K members across 18 states. Over 5 million healthcare visits have been supported by the company from pediatric care to treatments for chronic diseases. As Oscar expands to more states and insurance plans, the company is pioneering full-stack products for patients.Oscar builds software to make health insurance customer-friendly with the...

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