Shalom Life | April 13, 2014

Startup Club: Oscar

The New York startup co-founded by Thrive Capital founder Josh Kushner uses technology to make health insurance simple, intuitive, and human

By: Zak Edwards

Published: April 10th, 2014 in Business » World

Over the past few decades, a growing number of small businesses involved in various industries have popped up around the world meeting the needs of an ever-growing, ever-changing market.

Jewish businessmen and innovators continue to excel throughout these industries, displaying their prowess as creative, forward-thinking entrepreneurs, and tapping into continuously developing markets with 'startup' companies.

In a bid to recognize these decorated entrepreneurs for their ongoing contributions and advancements to these fields, Shalom Life is pleased to present: Startup Club, highlighting the best and the brightest of Jewish entrepreneurs who continue to provide our community with new, influential and innovative ideas that will forever change the way we interact with the world, and with one another.

Follow our lead and we’ll follow yours – send us tips or suggestions via email, comment below or tweet us @ShalomLife, in our mission to celebrate the most visionary of Jewish entrepreneurs.

Check out last week's inductee into the Club here.

Business: Oscar

Base of Operations: New York, NY

Entrepreneurs: Kevin Nazemi, Joshua Kushner and Mario Schlosser

Industry: Healthcare Insurance

Founded: 2013

Not exactly a secret, the American healthcare system has undergone some serious changes and only more are on the way. Affordable healthcare is being provided to many Americans in need, a decision a citizen of Canada like myself can only look at and say, “Seriously, it took this long?” Whatever the politics of healthcare in America, one company is taking advantage of ‘Obamacare,’ using “technology, design and data to humanize healthcare,” to use their own words. That company is Oscar and they are already helping tens of thousands of Americans get affordable and decent healthcare insurance.

Oscar targets the major problems the founders - Kevin Nazemi, Joshua Kushner and Mario Schlosser - saw with most healthcare insurance providers: old information, terrible customer service, and ignoring cost saving measures their patients can take. In an interview with Crain’s Magazine, Kushner, founder of Thrive Capital, talked about how technological innovation can solve all of these issues. "Amazon and Target knew when Mario's wife was having a baby," Kushner told Crain’s, "but his health insurance company didn't know until three months after." In that, there is a major problem, so Oscar's objective has to become the Amazon of healthcare.

This started with amassing $40 million from venture capitalist firms, including Kushner’s own Thrive Capital. At 28, Kushner was already a millionaire, the son of a successful real estate developer, and a graduate of the Harvard Business School. Healthcare insurance provider is simply the next step, so Kushner quietly amasses a team of specialists, a Google engineer here, a CTO from Instagram there, and set up shop in SoHo.

Oscar has invested that $40 million into developing an easy interface for consumers, a network of doctors, and acquiring services in 82 of the 85 hospitals in their first operating area of New York. Plans already exist to expand into more markets and more regions. The real money, after all, is in corporate dealings. As it stands, Oscar reportedly has “thousands” of users and most of their initial investment in reserve is through healthcare regulations.

And while Oscar is looking to expand, their focus remains on the people at hand: their new customers looking to take advantage of the changing face of American healthcare. Oscar plans to use big data to optimize customers’ experience while employing a vast network of healthcare workers to get people the help they need as fast as possible. This includes cutting down enrollment times but also working through the state department’s red tape: Oscar can sign a new customer in 20 minutes, but New Yorkers must sign up through the exchange, and that takes a 70 minute phone call with the New York State of Health.

When a person does sign up for Oscar, they are given a $10 gift card to fill out a detailed health history questionnaire. This, of course, lets them know who of their users are chronically ill and therefore expensive, but also encourage people to seek options that is effective in cost and treatment. Patients can do this with Oscar’s online symptom database as well, where they can type in symptoms and see what their treatment options are with price estimates.

The options think of cost for the patients so Oscar can encourage cost-saving habits in their customers. As Crain’s points out, “by showing consumers that a visit to an asthma specialist could cost $200, but a primary care visit costs $100, they [Oscar] hope to subtly encourage cost-saving behavior.”

Detractors have not referred to Oscar as the Amazon of healthcare, but only the Facebook of healthcare, but those opponents cannot boast Oscar’s 90% bill payment rate. Most companies are reporting that 30% of their new customers aren’t up-to-date on their bills. Since Oscar only got their licence in July, all their customers are new and staying in the green. For Oscar, that means they too will probably see a lot of green very soon.

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