In recent years, more and more startups have worked to disrupt traditional industries by leveraging technology and big data. Oscar was founded in 2012 to improve health insurance, and today it received a $375 million investment from Alphabet.
Similar to other startups, Oscar Health applies new technologies to an infamously static field. A mobile app allows members to find doctors, get lab results, and see prescriptions, while telemedicine allows users to talk to a “Concierge” team and 24/7 doctors that can send medication to a pharmacy for immediate pickup.
The company is applying big data and machine learning for preventative care and making sure patients get in touch with doctors ahead of time. In a Wired interview, CEO Mario Schlosser noted how 80% of Oscar members that end up in an ER have used the app or talked to Concierge in the previous week.
The goal is to get patients in front of doctors before emergency care is needed. Another example detailed reduced MRI costs by scheduling appointments at times when a hospital is less busy.
Earlier this year, Alphabet’s late-stage investment fund CapitalG and Verily Life Sciences participated in a $165 million investment round that valued the company to the tune of $3.2 billion, according to CNBC.
Alphabet is now investing an additional $375 million, which according to Wired results in a 10% stake. The investment will help Oscar expand to more cities, hire more staff, and provide more plans, notably Medicare Advantage aimed at senior citizens in 2020. The strategic partnership also results in a board seat for former YouTube CEO Salar Kamangar.
Meanwhile, a rumor from earlier this year pegged Verily as also looking into a part of the health insurance market. Specifically, the Alphabet company wants to apply data analysis to drive down cost by finding various efficiencies through home visits from nurses and making sure patients fill out prescriptions.
For Alphabet, the investment reflects how the influx of technology into health care is very lucrative. Meanwhile, other parts of the company, like Google Cloud, are well suited to become a big player by providing data infrastructure and analysis capabilities.