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Does Oscar Sound Cooler Than Aetna?

According to Deanne Kasim, an analyst with IDC Health Insights, the formula for a profitable insurance company is actually pretty basic: Income from monthly premiums minus health-care costs minus operations costs equals bottom-line profit. Assuming a company can keep the costs down and the premiums up, the whole thing can be tremendously lucrative. “I think Oscar has got a shot, especially if they continue to stress transparency and being very up-front with consumers,” Kasim says. “But the bottom line is going to be the same with any small health-care company: How well are they able to manage risk over a long period? If they can’t do that, then all the technology in the world won’t help.”

Obamacare sign-up is structured on a series of open-enrollment periods. The first extended from last October to March 31. According to the Urban Institute, during that time, 8 million people signed up for insurance; by 2016, the hope is to enroll 9.5 million more for a total of 17.5 million.

The next enrollment period will begin in November and end in February 2015. For the Oscar team, the upcoming months will be used to shore up the existing infrastructure and explore expansion possibilities, almost certainly to New Jersey and, maybe after that, California and the rest of the West Coast. For the time being, and perhaps only the time being, Oscar has the tech-heavy version of the New York insurance market cornered. “You’ve got a situation where there’s a legal imperative to have insurance, and you’ve got a bunch of people flooding the marketplace for the first time without the relationships with established companies,” says Claxton. For new insurers, “this is a very big opportunity.”

So Oscar must continue to innovate to stay ahead. Outside the conference room, back at the big banquet table, Schlosser pulled up a chair next to Eddie Segel, the head of product. Segel had worked with Schlosser at the hedge fund Bridgewater Associates, crunching numbers. Today he was poring over usage statistics from Practice Fusion, a cloud-based medical-records company. The hope was to find a small group of doctors in the Oscar network that leaned on Practice Fusion particularly heavily; later, Oscar would reach out to those (presumably forward-­leaning) doctors and inquire if they might be interested in “further integrating with us,” as Segel put it.

That integration might take the form of sharing not just clinical records but X-ray and MRI charts via the Oscar software. “It’s an interesting thing—we’re an insurance company, and we pay the claims, right?” Schlosser said. “But there’s a next step, which is where we don’t just help you manage your health care but we guide you to care. And then there’s a third step, where maybe we provide some of the medical care ourselves. Maybe we set up our own MRI.”

He caught himself. “Right now,” he said, smiling, “we’re very much in the first bucket, and doing a little of the second, and none of the third. But maybe we progress over time. That’s the hope, anyway.”