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Health startup Oscar enters Texas market with Baylor Scott & White Health

Oscar, the startup health insurance company that markets itself primarily on the health insurance marketplace, is now available in Dallas, Tarrant and Collin counties. The company is offering individual and family policies with Baylor Scott & White Health and Tenet Healthcare as the health care providers on the marketplace locally. Purchased Oscar health plan coverage began Jan. 1.

“We are thrilled to announce Oscar’s expansion to Texas,” said Mario Schlosser, Oscar’s chief executive officer. “This move represents an important step towards providing simple, intuitive, and affordable health care for Texans and people across the country. Texas has long been a focus for Oscar due to our belief in the need for a new and differentiated insurance offering in the market, and the depth of our partnerships with Tenet Health and Baylor Scott & White Health.”

Oscar began in New York in 2014, where it has as much as 19 percent of the state’s marketplace customers, and expanded to New Jersey this year, garnering 40,000 members so far. In addition to the three local counties, it is adding Bexar County in San Antonio, along with Los Angeles and Orange County, Calif. Oscar offers its members a host of no-cost services, including physician visits, telemedicine and generic prescriptions. The company’s founders have information technology backgrounds and seek to improve the user experience by providing an easier-to-use website, billing and mobile app.

The company is valued at $1.75 billion, thanks in part to a recent $32.5 million investment by Google Capital. It has raised over $350 million in venture capital to bankroll the startup. The venture expects to be profitable by the end of next year. Oscar ultimately wants to sell plans to employers as well.

According to Fortune, about two out of three Oscar members have participated in the program, walking a combined 2.5 billion steps in less than a year.

Oscar has partnered with Misfit Wearable to offer each member of its health plans a free wearable device. The insurer pays members $1 for every day they walk a targeted number of steps. According to Fortune, about two out of three Oscar members have participated in the program, walking a combined 2.5 billion steps in less than a year, according to Oscar chief executive officer Mario Schlosser. The company also offers cash incentives for flu shots.

The company told Wired that 60 percent of plan members who had bronchitis used telemedicine to diagnose and treat the ailment. Of those, 93 percent did not need a follow-up visit.

The selection of Baylor Scott & White and Tenet reflects the fact that Oscar wanted a narrow provider network in Dallas that provided the highest quality and the best enrollment opportunities, said Dianne Grussendorf, Baylor Scott & White Health senior vice president of managed care. Baylor Scott & White is a provider for about 60 percent of the health plans on the insurance marketplace.

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Grussendorf said the system’s arrangement with Oscar is traditional fee-for-service, although she believes the insurer may adopt a population health model in the future that pays based on quality and patient outcomes. Baylor Scott & White Quality Alliance — the system’s accountable care organization — would play a more prominent role in that scenario. Telemedicine services are being outsourced to a separate company.

Grussendorf said Oscar’s technology-based approach should appeal to Millennials (born between 1980 and 2000).

Oscar officials say the average age of their current customers is similar to that of other marketplace participants. In New York, Oscar’s average customer is 40 years old, compared with the average age of 43 for all marketplace enrollees in New York state.

About the author

Steve Jacob
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Steve is a senior marketing and public relations consultant for Baylor Scott & White Health. He spent nearly four decades in newspaper and magazine editorial and business management and is the author of two books on healthcare reform. He was also the founding editor of D Magazine's D Healthcare Daily.

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Health startup Oscar enters Texas market with Baylor Scott & White Health