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Oscar's Vision and Strategy
CEO Mark Bertolini presented on our long-term strategy, company vision, and trends that are shaping healthcare.
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We recently hosted our 2024 Investor Day where we shared updates across our business and mapped out Oscar’s longer term company strategy. Below we will take a deeper dive into CEO Mark Bertolini's presentation on Oscar's vision and strategy. In the coming weeks, we will also share session spotlights on Oscar Insurance and Oscar’s technology. Read the full event overview here (opens in new tab) and watch the recap here (opens in new tab).
Transforming Healthcare through Mission-Driven Work
Mark opened the session by grounding everyone in Oscar’s mission to make a healthier life accessible and affordable for all. We are building an insurance marketplace that:
Reorients healthcare around individuals and families.
Gives people greater choice and buying power.
Grows with individuals and families at every stage of life.
Oscar is helping people take charge of their health like never before: their way, through our technology.
Our mission drives every aspect of our work, and has enabled us to make significant strides across the business.
“We achieved full year insurance company profitability in 2023,” Mark noted. “We are positioned very well, with our start in the first quarter to hit our full company profitability this year. We also delivered 42% membership growth year-over-year in the first quarter of 2024.”
We are proud to serve more than 500k external client lives through +Oscar and ~1.5M lives through Oscar Insurance. The Oscar team is driving exceptional engagement, superior health experiences, tech-enabled growth and affordability – as evidenced by our industry-leading Net Promoter Score (NPS) of 66 as of 1Q2024, 82% member retention for Open Enrollment 2024, and consistent Medical Loss Ratio (MLR) improvement and SG&A efficiencies.
“It's about the tools. It's about being personalized. It's about being accessible and not putting people through the drill that most other health plans put them through,” Mark said.
Trends Shaping the Future of Healthcare
Our efforts are driving Oscar’s next phase of growth. We are addressing accessibility and affordability issues in the U.S. healthcare system that plague individuals and families. As we look to the next decade, there are several key issues that will shape the future of the market.
Consumer Expectations for Affordable Healthcare: Healthcare represents a growing share of consumer and employer wallets.
Stable Individual Market Risk Pool: Growth of the Affordable Care Act (ACA) market has created a larger risk pool than any employer, state, or subdivision of the economy, which has resulted in a more stable cost trend than the rest of the industry.
New Disruptive Technologies: The industry is identifying opportunities to lower medical costs and improve experiences using artificial intelligence (AI) where appropriate.
Oscar’s tech-enabled model – Oscar Insurance, +Oscar, and ICHRA (Individual Coverage Health Reimbursement Arrangements) – is uniquely positioned to address these market trends and meet the rising expectations of individuals and families.
ACA Expertise: We have a decade of proven products, experience navigating changing marketplace dynamics, and a track record of delivering a high NPS.
Expansion of the Individual Market: ICHRA creates an opportunity for the ACA to serve the needs of the ~75M Americans employed by small business (SMB) employers, those with less than 1,000 employees.
Consumer-Centric Brand: The Oscar brand, powered by our purpose-built technology, delivers industry-leading consumer experiences that differentiate us in the market.
Innovative Technology powering our growth and profitability: Our technology platform, with a robust data infrastructure and one source of the truth, enables us to attack healthcare challenges faster than the market. Our tech strength shows up in our membership growth, admin efficiencies, and retention.
Oscar’s Long-term Strategy
Our long-term strategy, like everything we do, has our members at the forefront. As Mark noted, “Everything we do when we invest in our platform, in our business, in our products, and in our distribution relationships is to enhance our member experience and keep our lead against our competitors.”
Our strategy is guided by four objectives:
Deliver market-leading, sustainable, and scalable operations: Our goal is to grow at ~20% revenue compound annual growth rate and achieve ~5% operating margin by 2027, assuming enhanced subsidies are not extended.
Build on our superior member experience: Focus on the experience in everything we do, by asking the question, “what can we do to enhance the member experience and keep the lead against our competitors?”
Harness our technology to power others, through +Oscar.
Innovate market offerings to expand the individual market, with the addition of small group and middle market employers.
Expanding Access Through ICHRA and Disrupting Traditional Group Coverage
ICHRA represents a fundamental shift in how employers finance employee health plan costs, and it has a compelling value proposition for both employers and employees.
ICHRA has the power to:
Disintermediate traditional employer group coverage by mitigating unsustainable rising costs.
Expand individual health insurance beyond the traditional ACA market – increasing the individual market opportunity by ~75M SMB (<1,000 employees) employer lives.
Transform health benefit experiences for both employers and employees.
Oscar is positioned to be the dominant player in building the ICHRA ecosystem, unlocking growth in a new market and making ICHRAs the chosen attractive alternative to employer-based models. We are focused on: activating strategic partnerships with technology platforms in different segments, launching new ICHRA products through Oscar Insurance in 2025, and scaling our ICHRA offerings in current and new markets to accelerate growth in 2025 – 2027.
The employer adoption of ICHRA has grown quickly; many employers are either too small or too dependent on outside experts, consultants, or insurers with misaligned incentives to effectively manage their employee healthcare costs. ICHRAs allow employers to move their employees into the stable ACA risk pool with a defined benefit contribution, creating a greater level of cost stability. Employees gain greater choice, flexibility, and control over their health benefits, which allows them to select coverage that better fits their own financial and health needs. We believe when people have more choices, they make more informed decisions about their health.
Driving Long-Term Growth and Value
As we look to the future, Oscar is focused on sustaining our growth trajectory while enhancing shareholder and consumer value. By deepening strategic partnerships, expanding our footprint, and prioritizing member experience, we aim to achieve sustainable growth and profitability. At Oscar, we are not only observers of the healthcare industry; we are catalysts for change. Through innovation, expertise, and a relentless commitment to our mission, we are transforming healthcare for the better. Together, let's build a healthier, more accessible future for all.
This blog post contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained herein are forward-looking statements. These statements include, but are not limited to, statements about our vision, financial outlook, estimates, targets and prospects, our management’s business strategy and plans and objectives for future operations, and general healthcare industry market conditions and trends. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other similar expressions. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict and generally beyond our control. Although management believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, there are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the factors set forth under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”), and our other filings with the SEC. You are cautioned not to place undue reliance on any forward-looking statements made in this blog post. Any forward-looking statement speaks only as of the date as of which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise.
