Big picture - seeing states like Georgia pass bills like these, or even Texas introducing exchange bills in both chambers of Congress is the clearest signal that the ACA will receive continued political support.
Finally, the growth of ICHRA, while a much more minor point on this list, is another data point in favor of the ACA sticking around.
Oscar’s Demise: Bear Case
Oscar’s bear case really revolves around a couple of key points.
Can Oscar hit its profitability goals?
The biggest question facing Oscar today on its odyssey is whether it can continue to hit singles and doubles, grow responsibly, and optimize its existing, leaned-up footprint. Can Oscar get the core direct insurance business to breakeven?
Oscar’s most significant bear case rests on this narrative. If, for whatever reason, Oscar can’t get the numbers to work right (e.g., continues to get risk corridors and adjustment wrong, prices poorly), Oscar will follow the path of other struggling insurtechs. I guess Bertolini could always sell to BUCA at that point.
Will investors believe the growth story?
Of course Oscar can skinny up and achieve profitability in core markets. But is it investable from that point? Is there a compelling growth story moving forward, and is that narrative believable after investors getting burned by both initial insurance growth objectives but also the + Oscar rollout?
To add to that point, is there a wider market appetite for insurtech investment in general given recent, high-profile failures and scalebacks from the likes of Bright and Friday Health Plans?
Conclusion: Hit the singles and doubles, not the home run
What can we learn from Oscar’s hero’s journey?
In healthcare, especially in an arena like health insurance or healthcare services, it’s much more important to focus on hitting the singles and doubles rather than pulling your back swinging for the fences.
Instead of pulling out your driver on the tight, narrow golf hole, aim for the wide part of the fairway with your fairway finder.
Understand your core competencies, and have a thorough, comprehensive understanding of your market - like understanding how premium prices affect the type of member you’re attracting to your platform. For Oscar and others in health tech, at certain times, tech hubris gets in the way of good business decisions (e.g., “let’s rip out this insurance company’s entire tech stack since we know we can do it better”).
Sometimes the simplest solution is the right answer rather than doing it your own way and reinventing the wheel. In many arenas, we’re trying to reinvent the wheel.
In healthcare, patience is key. These executives and health plans don’t get to the top by taking massive risk. They get there by following the rules. And yes, some rules need to change, but we need to find a balance between attempting major disruption and status quo.
The singles, doubles, and even walks add up to a significant number of runs over time. And the keyword is time in healthcare. Execute today!
Will Oscar return to glory? Respond with your thoughts, and I’ll include them in the online version with Akiff’s response below (with any attribution as desired, can also be anonymous!)
Subscriber Commentary from Part 1
Just read your Oscar series part 1! Good stuff and liked it. As someone who was there relatively early (2016-2018) I’ve definitely seen the bumps and obstacles. Always was concerned it was over hyped and market seems to agree. I think ACA is a tough game to play and the real game becomes risk adjustment. Navigating care within a narrow network sounds cool but very very hard to do (esp in geo outside of nyc) - Akiff Premjee
