Starting with the premise that health-insurance companies should relieve, not create, headaches, a group of venture capitalists and health care professionals believe they have the right prescription.
Josh Kushner of Thrive Capital and his partners — who this summer won approval from state regulators to open a new health-insurance company — have begun offering New Yorkers what they say is a simpler, clearer health-insurance model, called Oscar.
They have been working on the idea for the last decade, raising tens of millions of dollars to start up their company.
“We simply think that consumers deserve better,” said Kevin Nazemi, one of Oscar’s co-founders and a former director of Microsoft’s healthcare division. “We have found very few people who were happy with their existing experience with their health insurance. And that was the drive for us to create something that is transparent.”
For example, Nazemi says, “this will include letting consumers know . . . the price of a doctor on one side of the street and the price of a doctor on the other street. We also want to use technology so that the consumer feels like he or she has a doctor in the family.”
The company, which says it is the first private health-insurance company to begin operations in New York state in a decade, aims to ensure that the individual controls costs and care options. “You have the option of flicking a button to interact with a doctor and figure out what’s next,” Nazemi says.
Oscar (which was named after one of Kushner’s relatives) says its network now includes 35,000 doctors and 72 hospitals that Oscar policyholders can use. The company will also have service sites at CVS Caremark pharmacies.
Oscar, a privately held company, begins with considerable financial resources and expertise. Its board of directors includes billionaire venture capitalist Vinod Khosla and Charlie Baker, former head of Harvard Pilgrim Health Care.
But can it turn a profit? Oscar executives say the challenge of health care is the same as that of any other business — namely, finding and keeping customers.
“If you are treating your members badly and a large group of them are leaving each year, and then you have to spend a bunch of money to market [to] and get new members, then it’s hard to build a viable business,” Nazemi says. “But if you deliver great consumer experience and members stay with you for the long term, then it’s a very viable business.”