To: team@hioscar.com
From: Mario Schlosser
Subject: Oscar 2017
From Oscar’s earliest days, I’ve described how essential it is for us to work with the right hospitals and doctors. It’s the only way we can ensure our members get the best care. We’ve now done that in New York: we’ve completed our 2017 network, built with three world-class hospital systems–Mount Sinai, Montefiore, and the Long Island Health Network–and over 20,000 first-rate physicians. Together, we’re creating an integrated and carefully curated network unlike any that’s existed in New York.
We didn’t start Oscar to make marginal improvements to how health insurance works today. We started it because we saw how a new kind of health insurance, powered by advanced data science, thoughtful product design, and passionate people, could create a seamless end-to-end healthcare experience, coalescing a fragmented system and creating clarity from confusion. That’s what our 2017 New York network is all about.
Our new network will not contain every hospital or doctor we have today, but this is a good and necessary change. Nevertheless, there will be some healthcare critics, entrenched in their views on an outdated system, who will say we are only changing our network to improve our bottom line. In the next few pages I’ll explain why that story, while easy to write, both fails to understand the basic problems in healthcare and underestimates the tools we have built–and are building–at Oscar.
What We’re Building
We’ve constructed a network specifically designed to ameliorate what President Obama recently described in the Journal of the American Medical Association as “fragmented, poorly coordinated care” in the American healthcare system. It allows us to innovate on our product in ways we have never been able to do before.
When my daughter Siena was 12 months old, she spiked a 102 degree fever. With our Doctor-on-Call service, I didn’t have to make an expensive, late night trip to the emergency room. Instead, a doctor called me back within minutes, for free. Her notes, with detailed instructions, were immediately memorialized in the Timeline feature of the Oscar app.
A few months ago, my son Noah needed his tonsils removed due to sleep apnea. Our data science team quantified who the best surgeon in New York was for this procedure. In this case, we chose a Mt. Sinai facility with excellent quality scores, and the doctor who, as it turns out, does the highest number of tonsillectomies in New York City–data I would have never had access to as an individual trying to navigate healthcare (and data that every member has access to in our new network).
So Oscar got me a doctor on the phone late at night when I needed one. Oscar made the doctor’s notes on what to do next readily available. Oscar found me the best surgeon to take out my son’s tonsils without relying on hearsay, but instead a strong understanding of the healthcare system. I could go on. But there are still things that don’t work. I can’t see a doctor’s availability without going through Oscar’s team. When I called my son’s surgeon on the Saturday morning after his tonsillectomy (because he was running a fever), I couldn’t get him on the phone because he didn’t have an emergency number. I could go on here, too.
With our new network we can solve these problems and more, because we have chosen partners who are committed to the same vision of better end-to-end healthcare–and who are willing to work closely with us to create it.
Our Concierge teams already provide dedicated service to most of our members in New York (and by 2017 will cover all of our members), ensuring that each member has a nurse and support team to ask for help. In the fall, we are going to launch our reinvented Doctor-on-Call service, with Oscar doctors working with our concierge teams and our provider partners to care for our members directly. We’re creating a virtual primary care experience to rival the types of care members have only been able to get in person, and we couldn’t do this without the direct access to facilities and providers that our new network provides us.
We will also be able to improve our members’ real-world care experience. Our system partners’ healthcare data allows us to personalize our doctor directory and understand their strengths and weaknesses. We’re doing all of this to empower our members to choose the best doctor for them. With prescription refills and lab results directly available in the Oscar product, our members won’t have to spend time waiting in the doctor’s office. That kind of insight and functionality can’t happen unless we dig deep into the operations data of our providers.
Hospital Networks and Physicians
Now let me explain how we constructed our New York network to ensure that it could provide the sort of care I’ve just described. We started by insisting on high-quality providers. All three of our core hospital system partners are leaders in New York and in the world.
No other system in New York has more top doctors than Mount Sinai, which accounts for over 750 doctors on the Castle Connolly list–a doctor ranking formulated by asking doctors who is best among their peers. North of Manhattan, we are partnering with Montefiore Health System. Its flagship hospital, Montefiore Medical Center, is ranked by US News as the top hospital in the outer boroughs and is on its New York State Honor Roll. The Montefiore Pioneer ACO has been a stunning success, implementing innovative holistic care management practices that have had lasting impact on patients’ healthcare and lowered healthcare costs. Our partner on Long Island, the Long Island Health Network, is comprised of ten leading hospitals, including St. Francis Hospital–the top hospital in Long Island per US News ranking. Overall, 85% of New York patients would definitely recommend hospitals in our new network, compared to 66% for all hospitals in New York state.
Those are great external validations of our network, but we built our own analytic tools to evaluate the quality of our partners in a specialized, data-driven way. We considered three key criteria:
- Collectively, would these doctors and hospitals provide a complete set of care,
- Would these doctors work together with each other and with our hospitals to provide a seamless care experience, and
- Would they provide great care and good value.
The most important objective in constructing our network was to ensure our members could access whatever type of care they need, easily and close to home. To do this, we’ve segmented the greater New York area into a series of 350 small sub-neighborhoods. Our proprietary tool scans each neighborhood, flagging any weaknesses in our offering and automatically suggesting a great doctor who should be brought into the network. This allows us to be sure that our members in each sub-neighborhood will have access to all the different types of care they need for all of the 10,000+ distinct medical procedures they might require and the 2,000+ medical conditions they might develop. While understanding and predicting physician referral patterns and operating privileges is a highly complex problem, we are confident that we have constructed a network that will offer a streamlined experience for our members. In other words, no matter what happens to you, we will facilitate high-quality care for you.
The Cost of Insurance
There is no point to creating an insurance plan that provides great care that no one can afford. At the same time, sitting in a hospital waiting room, no one should have to think about cost. Oscar needs to facilitate great care while managing costs for everyone. This is what makes our job so difficult, but it is also precisely what makes it so important.
As I’ve often said, America spends almost twice as much as any other industrialized country for medical results that are the same or worse. One of the hospital systems we tried to work with insisted on an automatic price increase of as much as 10% per year (when inflation is close to zero). Those are the kinds of rip-offs we need to squeeze out of the system.
Not surprisingly, we see these trends affecting the New York marketplace where individual insurers like Empire Blue Cross Blue Shield and United have requested rate increases averaging 25% and 52%, respectively. Oscar itself was affected by these market forces in New York, having to ask to raise our rates by an average of 16%. But it would have been far worse if we continued with the kind of network we have had until now - our rates would have gone up significantly. And there would be no end in sight.
By sharing financial risk with hospitals and doctors, we can get better prices and encourage better utilization practices, which ultimately leads to better premiums for our members. But we can only make it happen if we’re working with dedicated partners in a given geography–otherwise no single provider system can take clear responsibility for the health outcomes of our membership within that population.
The Path Forward
While I strongly believe in this path, redesigning our network in this way means that some members will no longer be able to see a particular doctor or visit a hospital they know and trust today.
Starting this fall, we will help every member find the care they need in our new network and make appointments for members with new providers that we’ll help them select. We will also ensure that those members who have conditions necessitating they maintain care with a provider who will be leaving the network in 2017 will have the opportunity to do so, uninterrupted, until their treatment is completed. We also understand that some members may feel a strong connection to a doctor that is leaving our network and would prefer to stay with him or her. We will assist those members, even if it means helping them find a competitor’s plan.
No one will be affected before January 1, 2017, since our current network remains as-is until then. But we’re talking about this now because we are excited about what we’ve built, and because we don’t want anyone to be surprised by these changes.
As I said at the outset, this is an incredible step forward in our company’s history. We are launching the Oscar in New York that we have been building towards since our early days–an Oscar that delivers the very kind of end-to-end services we want for ourselves and our loved ones.