Excellent piece. As a primary care physician who was at Kaiser Permanente Northern California for 15 years, what Oscar is building is Kaiser Permanente as you noted in a previous comment. If that is what they aspire to do, here is Oscar’s road map and potential pitfalls.
Manage the entire patient experience at every contact point. Being an insurer alone wasn’t enough (hence the heavy losses when starting just an insurer). Every contact point means the virtual call center that not only helps with billing but providing basic primary care. If many of the problems can be handled without an office visit, then it should be done.
Should an office visit be required, manage that experience as well by having trusted networks. Ultimately, however, you will have to internalize your network as well. First pass, contracting doctors in the community like other insurers didn’t work (Kaiser tried this in the 1990s when expanding to the East Coast and failed). Second pass, contract with a trusted partner like Mount Sinai (easier to do, Oscar does not have to oversee and manage the clinical team), but doctors have dueling priorities. Is it what Mount Sinai wants or what Oscar wants? Also note, it takes a special type of doctor to do what Kaiser doctors do — focus on prevention, focus on team work, focus on outcomes and providing value and not a fee for service volume mentality. There is a reason Kaiser is starting a medical school in Southern California. What medical schools and residencies provide is not what skills health care needs for the 21st century. Expect Oscar over the next few years to have its own in house primary care team employed by Oscar and as an option for patients to choose from.
Similarly expand to have a similar network effect when it comes to specialty care. With decreasing reimbursement as insurers try to make care more affordable, doctors on a fee for service basis will simply do more procedures / volume. Even with excellent primary care both virtually and physically, much of health care costs are due to specialty care / hospital care. Oscar could internalize specialty care, but more likely will contract with trusted network of specialists (see Toyota in Texas) and should it have scale then consider, though unlike Kaiser, have its own trusted contracted team of physician specialists.
What is missing from their team is a physician leader to instill a culture and expectation of what is possible and needed to make Oscar work ultimately. It is my observation from going to start-up conferences, engaging with others, that thinking about disruption and more importantly the “job to be done” as coined by Professor Clay Christensen at Harvard Business School, that you need a multidisciplinary team of business, technology, policy and medicine (physicians). It is the last group that somehow is overlooked in many of these new health care start ups.
In the end, it is about relationships. It is about having a trusted doctor patient relationship. It’s great and encouraging that Oscar has learned from its stumbles so far. It’s great and encouraging that Oscar plans on making the experience of getting care as frictionless as possible. But until its leadership understands the value of having an experienced physician leader who has done this before, who is able to recruit like minded mission oriented doctors, and who understands, embraces, and anticipates the challenges ahead, Oscar will fall short of its goals.
I’ve often told my Kaiser colleagues (see blog post below) that when it comes to health care, Kaiser is Apple (full stack = vertical integration; both Kaiser and Oscar refer to patients as members). If done well, this distinction will also apply to Oscar.
Davis Liu, MD
Chief Clinical Officer
Lemonaid Health
References — http://www.kevinmd.com/blog/2016/08/will-integrated-health-care-startups-make-health-care-better.html
http://thehealthcareblog.com/blog/2011/04/15/does-america-want-apple-or-android-for-health-care/
http://www.davisliumd.com/primary-care-best-care-america-kaiser-permanente/
