How Technology is Supporting Cost Containment in Healthcare

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Fierce Healthcare | Cost Containment


Traditional Fee for Service

Pre-Admit /Transport

Consult / Admit

Inpatient

Post - Acute

HospitalRISK

RISK

RISK

RISK

RISK

Payor

Patient


Bundling

RISK

Pre-Admit

/TransportConsult /

Admit

Inpatient Post -

Acute

Hospital / Care CoordinatorPayor

Patient


Total Cost of Work per Adjusted Patient Days:

Analysis of a Large, West Coast System

Analysis of HIMSS data published April 2017


Simplifying ERP Technology:

Cross-Section of a Large, West Coast System

Analysis of HIMSS data published April 2017


Cost Containment | 3 Big Ideas

Reporting and

Accountability

People and

Supplies

Technology

• Exercise Scope of

Control

• Prevent Leakage

• Resource Stewardship

• Ongoing Monitoring

• Share Cost Data

• Encourage Competition

• Strong Business System

• Ability to Pivot

• Simplification

Hi, we’re Oscar.

Healthcare doesn’t work for

consumers.

Complicated

Consumers

want simple

and digital.

Fragmented

Consumers want

one platform for

their health.

Expensive

Consumers

want care at a

lower cost.

Who we are.

Founded in 2012

Headquartered in New York with over 600 employees

2018 markets include New York, New Jersey, Ohio, Tennessee, California, & Texas

20% individual share in NYC, 35% in San Antonio in 2017

Experienced team Over $750 million raisedWorld-class partners

Built for consumers…We guide members to the care they need with a consumer-driven platform

and the best engagement in healthcare.

…on custom-built, integrated networksWe operate our own entry points (virtual doctors, concierge teams, clinics)

and build integrated networks with partners.

…using full stack insurance technology.We built our own proprietary technology stack to power every aspect of our operations.

The Oscar model:

PCP

Specialist

ER

Hospital

Data Sharing

Oscar Triage

Layer

Doctor on Call

Appointment

Scheduling

Provider Data and

Discovery

Friends

A single co-

ordinated system,

but little control

over what

happens outside

of it

Google Other

OON Inpatient

OON ER

Insurance

carrier

Urgent Care

Unnecessary

tests & drugs

Hospital

PCP Specialist PCP + Spec

The Ecosystem We Built

The Oscar Way

Members start their care

with Oscar, and their

dedicated concierge team

supports them every step of

the way.

The Old Way

Patients have few resources

to navigate a fragmented

healthcare system, leading to

frustration and bad outcomes.

Digital tools

build engagement and trust

Concierge support at your

fingertipsChat with a doctor 24/7

Connect directly with

partner physicians

Engagement and guided care

leads to a better healthcare experience.

Digital from day one

Almost all of our subscribers

create online accounts, no

matter how they got to Oscar.

96%Online Account

Creation

55%Use

Mobile App

0

10

20

30

40Concierge guidance

Every member gets a

dedicated concierge team,

powered by full access to

Oscar’s tools and risk

analytics.

Oscar

Concierge

Oscar

Control

Industry

Average

Net Promoter Score

Engagement builds trust

Members trust us and tell

their friends. 40% of

enrollments come through

word of mouth.

Enrollments by

word of mouth

40%

Opportunities for intervention

Ease of use drives 80-90% of

members to interact with their

concierge team, 50% through

the app or online

0%

25%

50%

75%

100%% of members with interactions

26-35

yrs

56-65

yrs

The Data That Powers It

Real-time Data

Internal and external

data sources build a

complete picture of a

member's health.

EMR

Claims

Prescriptions

Labs

Engagement

calls/chats

Demographics

+

Modern Data Tooling

Internal and external

data sources build a

complete picture of a

member's health.

→

Actionable Insight

Incoming data automatically

triggers downstream actions

for members, providers and

concierge teams.

Clinical guidance

powered by better insights.

Curated Networks

designed by data

The Outcomes It Delivers

Highly Utilized

30-40% of Oscar's

members use our

virtual care in a

given year.

91%

87%

82%

78%

73%

71%

68%

66%

62%

58%

50%

50%

41%

26%

0% 25% 50% 75% 100%

Acute bronchitis

Other upper…

Inflammation; infection…

Urinary tract infections

Other skin disorders

Viral infection

Allergic reactions

Back problems

Other lower…

Superficial injury;…

Abdominal pain

Other connective…

Sprains and strains

Nonspecific chest pain

57 227 0 87

56 277 0 104

54 181 0 120

53 798 0 164

52 300 0 140

53 306 0 166

49 262 0 155

51 1,010 0 224

54 3,438 0 275

41 597 0 215

42 2,703 0 460

57 1,124 0 222

45 1,241 0 292

43 2,979 0 375

Oscar Cost

($)Member Cost

($)

with w/o with w/o% of Cases Fully

Resolved

Case Study: Creating Virtual Care that is...

Effective

More than 50% of

cases fully resolved

across a wide range

of conditions.

Efficient

Both Oscar and our members save, even

when in-person followup is required.

thanks.

BrianLeClaireChiefInformationOfficer

August30,2017

OurStrategyWestrivetoimprovethehealthofseniorslivingwithchronicconditionsthroughanIntegratedCareDeliverymodelthatbringssimplicityandconnectivitytothehealthcareexperience

Wepartnerwithproviders toevolvetheincentivesystemfrom episodictreatmenttoholistichealth

How we win ProviderjointventuresAlliancesOwnedclinicsMSO1

Bypartneringwithproviderstoevolveincentivesfromtreatinghealthepisodicallytomanaginghealthholistically

HomehealthBehavioralhealthPharmacyPrevention

Throughbuildingtrustedrelationships withourmembersandmakingiteasierforthemtoengageintheirhealthbyprovidingclinicalprogramsthatintersecthealthcareandlifestyle – helpingthematkeymomentsofneed

AdvancedanalyticsProvider-facingworkflowsConsumerapplicationstoreducefrictionpoints

Byleveragingtechnologytointegratesystemsandsimplifyprocessessothatmembersandprovidersmayengagemorefullyandeasilyinmanagingholistichealth

1.ManagementServicesOrganization

Risinghealthcarecostsaredrivenbyanagingpopulationandgrowingchronicdiseaseprevalence

Populationwithchronicdiseaseisgrowing…

…especiallyamongMedicare-eligibleseniors...

164157149

141

2015 2020E 2025E2010 50–64

75

65+18–29

60

34

30–49

20

...pressuringsustainabilityandaffordability

$3.2

2025E2020E2015

$2.6

$5.5

2010

$4.2

ChronicdiseaseisaprimarydriverofincreasingcostsintheUShealthcaresystem

1.PartnershiptoFightChronicDisease20072.PewResearch20133.CentersforMedicareandMedicaidServices(CMS)2015

#ofpeopleinU.S.withatleastonechronicdisease(M)1

%ofpeopleinU.S.withatleastonechronicdisease,byagegroup2

USNationalHealthExpenditures($T)3

Thecurrenthealthcaresystemisnotsuitedtoaddressthegrowingneedforchroniccaremanagement

Incentives Structure Capability

Over60%oftraditionalMedicarepaymentsarestillnottiedtovalueorquality1

Numerousbarrierstochroniccaremanagement:§ FeeForService(FFS)paymentsinherentlyepisodicinnature

§ Weakincentiveforholisticandpreventivecare

§ Limitedquality-basedpayments

Fragmentedinformationmakesitchallengingtointegratetheholistichealthjourney

Managementoflifestyleactivitiesisnoteasilyintegratedwiththehealthcaredeliverysystem

Siloednatureofindustrycausessignificantcomplexityforprovidersandfrustrationforconsumers

Mostprovidershavelittleexpertiseinvalue-basedcare(VBC)

Maturityoftechnologyislowduetosiloed platformsandnumerousbarrierstoimplementation

Interoperabilityoftechnologyislimitedduetolackofstandardizationandmisalignedincentives

1.CMS2017,Numerof PopulationHealthSurveyReport,January2017

Understandingthemembersweserveandtheirexperienceswiththehealthcaresystematkeymomentsintheirhealthjourneys

Steven Juan Don

Adjustingtonewprescriptions

followinghospitaldischarge

Copingwithacuteandchronicconditions

simultaneously

Managinghealthwithlimitedsocial

support

Movingbeyondtreatmenttoimprovehealthvialifestylemanagementcreatestremendousvalue

Severitylevel

HighSeverity

MediumSeverity

LowSeverity

AtRisk

Time

PreventionDiagnosis

CardiacRelatedcomplications

RenalRelatedComplications

VisionRelatedComplications

DiabetesRelatedWounds

Amputations

QualityoflifeandcostimplicationsofunmanagedType2diabetes1

$4,059

$1,852

$613

Cost(PMPM)2

1.AnalysisofinternalHumanadata20132.PerMemberPerMonth

OurleadingHealthPlanandHealthcareServiceplatformspositionustouniquelymeettheneedsoftheMAmarket

Health Plans Healthcare Services§ LeadingMedicareposition with30+yearsofMedicareexperienceandexcellentconsumersatisfaction– 3.3millionMAmembers1;5.2millionstand-alonePrescriptionDrugPlan(PDP)members2

– 18%totalmedicalmembershipgrowth from2012-20163

– Ranked#1nationalhealthinsurer inconsumerexperiencein2017survey4

– Strongbrandcommitmentwith>38%ofseniorspositiveorcommittedtoHumana5

§ PrimaryCare andPrevention&Wellness Services6

– ~150ownedandjointventure(JV)clinics– 65%ofIndividualMAmembersmanagedbyphysiciansinvalue-basedrelationships7

– >99%ofMAnetworkadequacygapsclosed– 4.9Mmembersingo365Wellnessprogram

§ HumanaPharmacy and HumanaAtHome– 4th largestPharmacyBenefitsManager8 (PBM);integratedwiththeclinicalmodel

– ConsistentlyrankedoneofthetopmailorderpharmaciesincustomersatisfactionaccordingtoJDPower9

– Approximately1MmembersengagedinHumanaAtHome;createsplatformforfurtherexpansion

§ IntegratedClinical&ConsumerAnalytics platform– AdvancedanalyticmodelsrunonallMAmembersdaily– Quantifies~50dimensionsofclinicalrisktoenablepersonalizedmanagement

– 2.5BpiecesofclinicaldataanalyzeddailythoughCareHub

1.June30,2017;includesGroup&IndividualMA.2.June30,2017;includesIndividual,Group,andLimited-IncomeNewlyEligibleTransitionprogram(LI-NET)3.Acrossalllinesofbusiness(LOB)4.Temkin.Rated#2overall;#1Nationalplayer.5.Basedonbrandcommitmentscorecodes01-04:ArdentandAdopter;38%respondentsage65+onaveragein2016.6.Q12017unlessotherwisenoted.7.June30,20178.Basedontotalprescriptionclaimsmanagedin2016;PembrokeConsulting,Inc.andDrugChannelsInstitute2017EconomicReport9.JDPower2015(1st)and2016(2nd)

Strongorganicgrowthrequiresaconsumer-focused,clinicallysound,andcost-effectivestrategy

QUALITYMEMBERSHIPGROWTHisdrivenby…

• Improvedclinicaloutcomes• Simplifiedexperience• Productiveplatform• Affordableproducts

Wewillenablethetransitiontoholistichealthbyremovingfrictionpointsthroughprocessandtechnologyinnovation

Dis-integrated.Conflicted.

Focusedonepisodiccare.

Urgentcare

Specialistcare

Patient

Caregivingprograms

HospitalsPrimarycarephysician(PCP)

Othercareandtherapies

Pharmacy/medicationmanagement

Wellnessprograms

Labsanddiagnostics

PCP

Urgentcare

Pharmacy/medicationmanagement

Chroniccareprograms

Othercare/therapies

Specialistcare

Caregivingprograms

Wellnessprograms

Hospitals

Labsanddiagnostics

Patient

Currenthealthcaresystem Integratedcaredelivery

Simple.Personalized.

Focusedonholistichealth.Rightcareatrighttime.Convenientaccess.

Face-to-face.Alignedincentives.

Torealizeourstrategy,weareinvestinginourIntegratedCareDeliveryplatform

Anintegratedplatformdeliveredinalocalmarket

IntegratedCareDelivery(ICD)Model

Provider:Motivatingthetransitionfromtreatmenttohealth• Primarycareclinics• MSO

Clinical:Extendingproviderreachbeyondtheoffice– tothemomentandplaceofmosteffectiveinfluence• ImplementthroughPharmacy,

BehavioralHealth,HomeHealth

Experience:Buildingtrustedrelationshipstodriveengagement• Removefrictionpointsthrough

improvedprocesses• Facilitateintegrationatpoint

ofcare

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