Is Insurance going Uber? Oscar Case

On leaving his Manhattan apartment at dawn, Jonathan Coe, an attorney with a New York law firm, has what feel like the first signs of flu. Given his pace of life, he says to himself that he should see a doctor. He decides to log on to Oscar and ask to speak to a doctor to describe his symptoms. After the telephone consultation, Jonathan is directed to a nearby pharmacy to buy the medicine prescribed. The doctor is advised that Jonathan has collected his medication. Jonathan arrives at work, starts the treatment, and throughout the week the Oscar application reminds him to take his pills.

Is this some sort of Orson Welles hoax? No. In fact, it is a new take on health has been invented by the American start-up, Oscar. 

The example of Oscar in the United States 

As an offspring of the Obamacare* reform in the New York area, Oscar Health offers users health insurance policies on the basis of their geolocation data. In the space of just a few weeks, the start-up has grabbed a 10% share of the health insurance market (over 40,000 clients) in the places it covers and also aims at rolling out its offering in California and Texas. 

Its valuation has just topped $1.5 billion and the company announces turnover of $200 million. How can such a success be explained?

User experience at the core of strategy

Oscar, just like other stakeholders in the market, places the client experience at the core of its operational strategy. To start with, its simple, transparent offers, combined with services closely tailored to the real needs of its clients, are radically changing the market. In addition to this, the application interface has been carefully crafted to be particularly intuitive and easy to use.  Oscar thus stands clearly apart from the traditional American insurance companies which are suffering from a poor image as a result of the complexity and lack of readability of their health insurance policies.  

New technologies to serve the client

Oscar Health has innovated thanks to new digital technologies combined with a logic of prevention. For example, the cell application enables each policy-holder to find a health professional through Google Maps, matching the health problems entered. He or she can also contact the doctors, compare their fees and book an appointment via the platform.

Like other digital players, Oscar uses an incentive system as part of the prevention programme to encourage policy-holders to reach the objectives they have set themselves.  

An interconnected health network 

By putting doctors, hospitals and pharmacies in contact with its own clients, Oscar is constantly collecting data. For example, that data enables the application to advise the doctor that his patient has in fact bought the medicine prescribed or that he or she has consulted another health service. In return for such data; the insurer offers users a complete health-care network and a certain number of free examinations (check-ups, vaccines, generic drugs, prevention activities, gymnastics and yoga). 

Can this model of health uberisation be adapted to France?

The health insurance approach proposed by Oscar differs from that with which we have been familiar hitherto. Certain stakeholders on the insurance market are positioned upstream of health contingencies (prevention), even if they do also act as insurers of those contingencies. What might the obstacles be in France? 

The issue of data use and confidentiality 

As a result of medical confidentiality, the exchange of data on patient health is a sensitive issue for French legislation. To that must be added the supervision of the National Commission on Information Technology and Freedom (CNIL) and the reluctance of policy-holders to share such information with their insurance company. There is, however, an increasingly wide dispersion of personal data, whether provided voluntarily or otherwise, which will become all the greater with the arrival of the internet of things.  

Examples in France and Europe

The economic model of the insurance sector in France is changing with the advent of the internet of things, such as the units that measure the level of driver safety. With that system, the insurance company can streamline its offering and rates according to the behaviour of each policy-holder**.

In the United Kingdom, the employees of Barclays Bank have been fitted with activity monitoring bracelets to encourage them to be more active. The aim is to reduce expenditure related to a lack of exercise and a low level of physical activity***.

The insurance profession face with uberisation

As evidenced by the Oscar example, such difficulties do not rule out innovation. On the contrary. Just as life styles are becoming increasingly digital, clients are increasingly clamouring for new tools and services designed to simplify matters. 

Insurers must therefore take advantage of the increasing emergence of connected health objects to offer innovative services integrating the benefits related to e-health. The “self-care” trend is also a precious lever for all insurers to promote prevention. “Self-care” is essentially structured around the collection of health data and the monitoring of user life styles. This provides a glimpse of what could be a new relationship between insurers and the insured where the latter are made fully responsible and encouraged to adopt forms of behaviour that are beneficial to their health. 

* Obamacare: implementation of compulsory health insurance for all Americans under pain of a tax fine. 16.5 million citizens without health cover are likely to benefit from a policy

** Source: Le Monde

*** Source: ADN’co, Press release, 20 October 2015