United States: towards an Uberization of the health insurance sector?

The American insurer Oscar is surfing on the transparency and standardization of health insurance offers on the Web.© Thinkstock Images

Spearheading innovation on the Internet, Oscar, the new American health insurer, is shaking up the codes and winning victories. The decryption of a success that French actors could one day draw inspiration from. The forum of Jean-Philippe Douchet, senior manager at Kurt Salmon.

As René Char wrote: “Impose your luck, squeeze your happiness and go to your risk. Watching you, they’ll get used to it.” The poet already held the motto of Oscar, a new American health insurer that the New York Times already qualifies as “the Spotify, the Airbnb, or the Uber of health insurance”. Born on the baptismal font of the Obamacare reform, in October 2013, the American start-up, equipped with a technological base that upsets the usual approaches, surfs on the transparency and standardization of health insurance offers on the Web. , incomparable agility, and voila!

In particular, it offers free teleconsultations and check-ups, and access to basic medicines and flu vaccines without a visit and at no cost. In a few weeks, this little Thumb won a 10% market share of health insurance in the region of New York and New Jersey, where he is established. The company, which announces an annual turnover of $200 million, has just seen its valuation exceed $1.5 billion. The start-up is now displaying its development ambitions before the end of 2015 in the most populous and richest states in the United States, California, and Texas, and is shaking up a somewhat dormant traditional sector in the process.

How to explain this rapid success? Is it reproducible? And above all, what lessons can be drawn for the French market at a time when an avalanche of regulations (ANI, responsible contracts, ACS, DSN, Solvency 2) is changing the situation of the health insurance market and when innovations and digital transformations are more and more significant?

Oscar’s rapid and seemingly lasting success can be explained by five levers…

1st rise: perfect timing

By making health insurance mandatory for Americans in pain of tax fines, the Patient Protection and Affordable Care Act (Obamacare) brought 16.4 million previously uncovered citizens into a contract. Young people, especially students, are mostly uninsured. They can now be attached to their parent’s health insurance until the age of 26 or receive subsidies to insure themselves. An increase in the insurable mass and publicity around the most important reform of health insurance in the United States, since the creation in 1965 by Johnson of the Medicare and Medicaid programs (1), constitute “a favorable sequence” with the arrival of new actors like Oscar. The latter, natively digital, is a light rider in a race where the historical players have to support cumbersome management processes and architecture of their information systems that are often not very scalable or even dilapidated and persistent difficulties in giving meaning to the transformation of the company.

to remember

  • The Internet makes it possible to completely rethink health insurance:
  • – readability and transparency of offers;
  • – focus on prevention;
  • – marketing packaging broader than strict insurance.
  • French regulations, which are certainly more restrictive than in the United States, still leave room for maneuver.

2nd lever: customer experience

Oscar has placed the customer experience at the heart of its operational strategy. His goal? A high level of satisfaction. Customers praise the clarity of the website, and the availability and professionalism of the telephone platforms, including free online access 24 hours a day to doctors and health professionals. In contrast, the complexity and lack of clarity of traditional insurers’ health insurance contracts (particularly in terms of deductibles and out-of-pocket costs), the length of management procedures, the opacity of sometimes misleading commercial practices, the habit of refusing to insure people because of their state of health and the price inflation of health insurance premiums in recent years have generated a real rejection of the Americans towards the historical actors of health insurance.

3rd and 4th levers: new technologies and self-care

With the use of new digital technologies combined with a logic of self-care and prevention of policyholders, “better care starts with technology”, announces the first page of its website. Here again, Oscar surfed on Obamacare, which placed digital at the heart of the reform. In support of the new regulations, each State has set up websites or marketplaces, and veritable virtual health insurance supermarkets. Thus, to subscribe to compulsory health insurance, Americans have become accustomed to connecting to the Internet, comparing the offers and promotions of standardized insurance plans, and selecting the contract corresponding to their needs.

In this regulated market, the logic is that only health insurance plans that respect consumer rights and guarantee predefined care baskets (bronze, silver, gold, platinum) could be presented on the site and benefit from federal subsidies. . The start-up has made it its credo: “We use technology to make medical care simple, intuitive and human. The kind of health insurance we wish we had.” With its mobile application, everyone can indicate their symptoms, find the different health professionals on google Maps, compare fee prices, and make an appointment. Oscar also allows, from its mobile application, to reach, via a telephone platform, health professionals online to answer questions from patients, and issue advice and ordinary prescriptions.

Pushing the paradigm shift even further, Oscar pushes the use of new technologies toward self-prevention. Last January, Oscar started giving away free pedometer watches to help customers track their performance: users who hit their daily step goals earn $1. The annual reward in the form of cash or Amazon gift vouchers can reach $240. The insurer even goes so far as to pay its customers to encourage them to get vaccinated against the flu and thus save a lot of money on treatment. It’s a completely different approach to health, it becomes almost simplistic to talk about insurance. Because if Oscar insures well against health hazards, he acts upstream so that they do not occur.

“The model capitalizes on the revenues of traditional American insurers with the benefit of a lightweight digital information system, all in an innovative New York socio-demographic environment. The ability to raise sufficient capital and manage risk remains to be seen over time. »

Isabelle Hebert, Insurance Director, MGEN

5th lever: an interconnected healthcare network

The company offers its clients a comprehensive care network, even if it is still modest. As well as a battery of free examinations: check-ups, flu vaccines, generic drugs, and other preventive care (gym, yoga, etc.) to keep its customers in good health for as long as possible.

But the insurer also uses and analyzes this shared data. By connecting practitioners, hospitals, and pharmacies, Oscar can collect data and indicate to the practitioner, for example, whether the patient has purchased the prescribed drugs, or whether he has gone to see another health service. Oscar is not the only personal insurer to have taken this turn. More traditional companies like John Hancock Life Insurance, established in 1862, have begun to follow suit, promising its policyholders to lower premiums, rewards, and discounts on travel, leisure, and shopping if they become proactive. in managing their health.

As Oscar shows, the regulation does not exclude innovation. Nor is the complexity of insurance processes a sufficient barrier to entry to block the arrival of new disruptive players. And even if the exchange of data on the health of patients remains delicate in France because of medical secrecy, the confidentiality of personal data monitored by the CNIL and the lack of appetite of policyholders to share information with their insurer, other levers such as innovation in the digital experience offered to customers, the promotion of prevention and the prioritization of listening to and satisfying customers are levers that can be immediately implemented by the various French insurers.

(1) Medicare targets the health insurance of the elderly and Medicaid that of the poorest people.