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- Oscar Health will stop pursuing new full-service contracts for its +Oscar information technology platform for the next 18 months due to problems implementing a contract with Florida-based insurer Health First Health Plans, CEO Mario said. Schlosser told investors on Thursday.
- Historically, 10-year-old insurtechs signed about 1-2 new +Oscar deals each year. The technology platform aims to help healthcare organizations transition to risk-based payment models, increase patient engagement and control healthcare costs.
- The decision to halt new technology contracts will not change Oscar’s financial outlook for 2022, Schlosser said, adding that InsurTech will achieve profitability in its insurance business next year and overall profitability by 2025. We plan to reallocate resources to focus on achieving profitability.
Payers and providers alike are investing in and developing digital tools to provide cheaper, longer-term patient care.
New York-based Oscar touts the success of +Oscar, where the platform reduced emergency room visits by 13%, reduced no-shows by 20%, and increased annual wellness visits by 15% share that. Forrester analyst Kyle said it means “significant cost savings and increased profits across the industry.” Rybarczyk’s comments on Oscar’s second quarter earnings.
However, Oscar struggles to implement +Oscar widely. The Health First Health Plans partnership, announced last year to provide payers Medicare Advantage and individual members access to the platform, was set to launch in early 2022.
But the deal faced Schlosser describes post-launch challenges due to “comprehensive integration complexity at this scale.”
Seven months later, Oscar is still working on the implementation and doesn’t want to overextend with new full-service clients any time soon. CFO Scott said: Blackley told investors.
“Because of our significant growth and the desire to support existing client executions, we really said we would not take on another execution of a large full-service contract for the next 18 months,” Blackley said. said. However, Oscar continues to see hospitals and payers wanting to take on more risk and needing the infrastructure to support it, so insurtech said it will continue to invest in the +Oscar deal, according to the CFO. We are still negotiating.
“At this point, we are talking about these full-service contracts for 2025 and beyond,” said Blackley.
Oscar reported second-quarter revenue of $1 billion, up 93% year over year. Net loss increased to $112 million from his $73 million in the same period last year.
The number of members almost doubled compared to the previous year, exceeding 1 million. This is primarily due to an increase in individual and small group registrations.
Enrollments to Oscar’s co-branded small business plan with Cigna increased tenfold to 46,000 members. The plan is available now in select markets in seven states, and will be available in Philadelphia next year, Schlosser said.
The CEO said he was pleased to see the Democratic Party’s sweeping health care and climate change bills pass the Senate, including expanding Affordable Care Act subsidies. , Schlosser said, should be a tailwind for the expanding ACA market next year, along with the Medicaid redefinition, which Oscar expects to happen most next year.