Oscar Health CEO Mario Schlosser came on stage with me at Disrupt yesterday at our annual New York conference to talk about his company and the more than $200 million it took in net losses last year. Though he mentioned the Feds still owed his company the equivalent amount in Obamacare subsidies it still wasn’t a good look for a startup struggling among bigger insurance firms with more resources.
But a new SEC filing shows the tech-focused health insurance upstart may be taking a turn for the better. Oscar lost just under $26 million in the first quarter of this year across three markets, or about half as much ($49 million) as it lost last year.
The reason is likely due to the swift move Oscar made right before the beginning of the year to drop two markets in Dallas, Texas and New Jersey and raise premiums in more profitable markets.
But those changes have also caused the company to lose a chunk of its customers. Oscar rose to 150,000 customers at the beginning of this year; 106,000 of whom were in New Jersey, Texas and California, or the same three markets responsible for Oscar’s major losses last year. Oscar’s customer base in those three markets is now down to about 90,000.
In New York, the company’s biggest market, Oscar raised premiums a whopping 20 percent and cut doctors and hospitals it didn’t think served customers best. The result? The platform went from 54,246 to 46,281 New York customers in Q1, 2017, according to a Politico report.
Schlosser told me on stage he was positive this would be the year Oscar would turn it around. Though the CEO also predicted in 2015 Oscar would hit profitability by 2016, based on a trajectory of adoption of his company’s technology-backed insurance offerings.
We know now the company continued instead to lose in every market. But this year is the year, according to Schlosser. “In 2017 I feel for the first time that all those pieces are in place,” he said. “I think we will have a much better performance than in 2016.”
It’s not clear if profitability is in the cards yet for this year, but at least it seems the startup is starting to get a handle on some of the leakier buckets.