Q1 2021 Oscar Health Inc Earnings Call
Conference operator today at this time I would like to welcome everyone to Oscar Health's first quarter 2021 earnings call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there'll be a question and answer session issue I'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question press the pound key thank you I will.
I would now like to turn it over to Cornelia Miller, Vice President of Corp, Dev in Investor Relations to begin the conference.
Thank you, Mike and good afternoon, everyone.
Thank you for joining us for our inaugural earnings call, which will focus on our first quarter 2021 earnings results recent developments in our business and our outlook for the full year 2021, Mario sponsor Oscar co founder and Chief Executive Officer, and Scott Blackley.
Financial Officer will host this afternoon's call, which can also be accessed through our investor Relations website, IR Dot hi, Oscar Dot com.
Full details of our results and additional management commentary are available in our earnings release, which can be found on our investor Relations website at IR Dot Hi, Oscar Dot com.
Any remarks that Oscar makes about the future constitute forward looking statements within the meaning of Safe Harbor provisions under the private Securities Litigation Reform Act of 1095 actual results may differ materially from those indicated by those forward looking statements as a result of various important factors, including those discussed in our prospectus dated March 2nd place.
Total one filed pursuant to rule 420, <unk> and our other filings with the SEC.
Forward looking statements are based on current expectations as of today after anticipates that subsequent events and developments may cause estimates to change while the company may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so.
We will also refer to certain non-GAAP measures a reconciliation of these measures to most directly comparable GAAP measures can be found in our first quarter 2021 press release, which is available on the company's investor website at IR Dot Hi, Oscar Dot com with that I would like to turn the call over to our CEO Mario Schloesser.
Thank you Julia I'd like to welcome all of you to our first earnings call we are.
Thrilled to share with you our strategic position, our first quarter results and our guidance for the full year 2021.
Hi, I want to start by grounding everyone in our distinctive positioning of the health care industry since.
Since day, one that we set out to be a different kind of health insurer using data in a modern technology stack to make healthier.
Portable and easier to understand for the consumer.
It is our own technology to provide a superior experience for members, but also to create a platform that will allow us to power more of the health care ecosystem around us.
And we should also create a unique brand that people value because it's a simple transparent and relatable.
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Think of the business.
One an insurance business that includes our risk based individual small employer and Medicare advantage product lines.
Two hour plus Oscar platform business, where we generate revenue by making our technology stack available to providers and third party payors and enable others to grow risk revenues.
Over the past nine years, we have built an impressive business, we have delivered 73% year over year direct policy premium growth in 2020, and 44% year over year direct policy premium growth in the first quarter 2021.
While simultaneously achieving meaningful improvements in our medical loss ratio or MLR and our administrative expense ratio.
We can tie those improvements directly to our technology investments and through our growing scale.
This insurance business is strengthened by the growth in the individual markets and a strengthened by our diversification across insurance product lines.
Now our superior consumer experience and our performance is powered by a plus Oscar.
Technology platform that enables the full suite of interaction from our members and our providers have with us.
The strength of our brands and the power of the technology is drive industry, leading member engagements and as of 2028, 9% of our members have engaged digitally with Oscar 47% of our monthly active users and 75% of subscribing members with a medical visits us Oscar towards to search.
A new provider.
And we saw a 7% reduction in total cost of care for those members that accept our key recommendations, where they look weighted provider.
Now, let me spend some time on our key business metrics in the first quarter and the positive momentum we are seeing.
Today.
We started this year from 41 with a strong quarter marked by both solid top line growth and bottom line growth with direct policy premiums up 44% year over year, and a 10 point improvements combined ratio the metric that measures the profitability of our insurance companies.
Now one click the low that's I'd like to share. Some what do you think about the growth and the performance of our three different product lines in insurance business.
Our individual business performed well in the first quarter with above market growth during open enrollment.
Florida, Texas, and California, other states with now the largest number of Oscar members.
Of note, we attracted strong membership growth in markets in these states, even when we were not the lowest price plan, reflecting the value of our products and the strength of our brands.
Additionally, we feel confident about our growth driven by the binding administrations special enrollment periods, which as you know began on February 15th and will run through August 15th.
We applaud the support of steps that the administration has taken to expand access to affordable health care.
The country and between January and until the end of the first quarter for the end of March we have signed up an additional 50000 individual members for auto insurance.
That is growth that is in line with what the overall market is seeing.
Anticipated further growth through the year driven by the enhanced advanced premium tax credits that took effect on April one.
And our focused efforts to grow and retain membership.
As you know, we believe that our platform plus Oscar which we also used to drive our own insurance business enables us to consistently build the best products and that has been a key driver of our growth in insurance business as well. An example, here that I'd like to actually points to as Oscar virtual primary care.
Which is not available in 82 counties and our approach to growth for primary care that aligns incentives across Oscar as insurance company and the providers on a virtual care platform and our members by offering downstream cost savings for those numbers using virtual care and attributed themselves from Oscar.
Virtual primary care physician and Oscar Medical group virtual primary care physician.
Those members, who use the virtual primary care in 2020 of them were actually about 10% more likely to stay with Oscar the insurance company year over year, and those who are not using Oscar virtual virtual primary care.
From other early results and ask you about your primary care.
It might be we can show that these kinds of innovations will continue to help us grow while improving our combined ratio. So a couple of additional steps on Oscar virtual primary care.
Oscar Medical group, that's the medical group that delivers the virtual primary care is not one of the top three largest primary care provider groups by volume of Oscar patients who lose.
In those states, where the group is practicing.
Our members with chronic conditions have actually had higher adoption rates from health numbers hubs using Oscar virtual primary care.
Finally, 45 per cent of members using Oscar virtual primary care tell us they did not have a PCP prior to using the virtual offering and an additional 21% were explicitly looking for a new PCP. So.
We're getting the volume we're attracting the rights were clinically of members into the virtual primary care service.
And members, who have chronic conditions and otherwise didn't have a PCP. You also have a good chance of getting themselves to the Oscar Medical group physicians here.
Moving on to Medicare advantage, our other insurance product line, we have approximately 3600 members in eight counts that you said at the end of the first quarter of 2021 more than doubling year over year.
In our M&A plans and at the core EBIT providers to take risk enabled by the great member experience and the efficient tech stocks plus Oscar our platform provides.
We're pleased with our performance in Medicare.
Medicare advantage heading into the year in this past annual enrollment period, we were the fastest growing HMO plan in the Bronx, and we expect to see continued organic growth from our existing markets.
We are also seeing strong engagement rates with our digital tools. Among our members for example, more than 50% have utilized our care rounding to help them find in network here.
Finally, we have significantly it also improved our quality measures. This year from implementation of low quality programs. For example, as a result of one of these programs, 88% of our New York Medicare advantage members are adhering to the critical medications prescribed by their physician.
<unk> puts us among the top performing MAA health plans.
We are importantly, thrills to take on an additional 37000 Medicare advantage lives through our health first partnership starting one 122.
The health first agreement provides validation of our plus Oscar platform strategy, particularly in the context of Medicare advantage.
These additional 37000 members provide us with scale Medicare advantage, bringing the total number of <unk> members using class Oscar to more than 41, thousands even before the results of this year's coming in AEP in Ma.
Looking ahead, we expect growth for the business to be driven organically to be Oscar insurance business.
And additional class Oscar platform in Medicare advantage.
And finally in small group our third controller product line. We are in the early phase four hour Signup as Oscar products and there was a lot of runway in front of us in Q1, we successfully launched three new states for the products, California, Connecticut, and Arizona building.
Building on the two states we had launched in late 2020, so in the seven months since we launched per stage and picking up as Oscar we have launched five states overall, reflecting our platform's ability to launch rapidly in these kinds of platform relationships. It is early and growth will be driven to existing markets.
Preservation and expansion into new geographies.
Now going back to the comprehensive power of our model and our platform I think the.
The numbers I just went through show that our platform is enabling a better product offering that's powering our growth and just as importantly, the platform is also enabling us to continue to improve our unit economics.
So while we're growing the top line and insurance business. We also saw these improved unit economics coming through.
One of the things that we are most proud of is that we grew our direct policy premiums from one 3 billion in 2019 to two 3 billion in 2020.
At the same time, we have seen our MSR to our medical loss ratio decreased from 87, 6% in 2019 to 84, 7% from 2020 now this wasn't just a COVID-19 improvements as the same powerful medical loss ratio trends continues into the first quarter of this year at <unk>.
Without the COVID-19 tailwind we saw in 2020 in fact, we view our improving MLR performance as a validation that our technology powered model. It's working to just give you a few examples from the last few months, we estimates or virtual visits.
Urgent care to save 22 basis points of MLR by reducing unnecessary ER visits during the year 2020.
And another example of a technology support our risk adjustments workflow, which resulted in about 70 basis points in savings in 2020 in a medical loss ratio.
We see the same impact that is helping us on the medical loss ratio sites also driving an improved admin ratio, which we also believe were compounded in the years to come.
<unk> Tech enhancements have delivered savings directly to our bottom line for example of building our own claims system has saved us roughly 90 basis points when compared to the costs, we incur when using a common industry vendor.
<unk> lowered our auto adjudication rates of claims the automatic possessing of claims in the first quarter is now up to 95%.
In Q1 of this year.
So in summary on the insurance business. Our priority is to deliver continued revenue growth with tightly managed administered costs and lower medical loss ratio. That's a simple formula and we're very focused on that and to ensure that this business becomes profitable.
Now I'd like to spend time talking about plus Oscar.
Key elements of our growth strategy, plus Oscar is our technology and our services platform and we designed that to help health care clients grow risk based revenues with a great member experience.
That we branded this platform as plus Oscar a few weeks ago building off the organic interest we had historically seen from the markets. We have historically seen from the markets and of course, our successful provider sponsored health plans that we built with the likes of the <unk> clinics.
It's N and South Florida month of Europe.
And with the markets. The overall U S health care market shifting towards value based care to whats delegation of risk towards virtual here. We really believe we have been and are well positioned to serve this growing segments.
Part of what the plus Oscar provider clients are looking for is enablement and we are delivering on that needs for example.
I'll give you a couple of examples here, we can send data from a virtual consultations with attributed members directly into health system. It's ours, we have fire integrations or in the health first and pace, our utilization management and our clear routing seats.
Using these class Oscar towards to help sort of health first time, there isn't an innovative way.
The next phase of our growth for this business for the platform business. The plant Oscar business will come to the arrangement will provide us looking to bear risk either through provider sponsored health plans or did I get it from payers, particularly in Medicare advantage individual and <unk>.
<unk> employer.
This represents a near term addressable market of more than 230 billion of premium revenue and we expect plus Oscar to be a meaningful growth driver for Oscar in the years to come with a long term target EBITDA margins, reaching 20% plus.
And as you all know the plus Oscar arrangements with Health first Health plan was announced in January and here. We are on track to transition approximately 37000, Medicare advantage lives and 20000 individual market dies onto the glass Oscar platform for plan year 2022.
So with this transition we estimate that starting in 2022 were beyond our own at risk lives. We will have 72000 individuals accessing plus Oscar to platinum arrangements.
Even before the results of that.
The coming year.
The AEP period.
Pulling up.
We continue to believe that our past investments in technology stack will be critical to our plans from a T. One expense plus Oscar.
Going forward, we expect our investments will be targeted towards the most high impact areas that will help us Oscar scale, and so with that I would like to turn it over to Scott Blackley our.
<unk> to take us through the numbers.
Thank you Mario and good afternoon, everyone.
Again by walking you through our Q1 financial results and then I'll provide some guidance for 2021 full year financial metrics.
Turning to slide three of the earnings presentation, I'll start with a discussion of our membership.
And in first quarter membership of 542000 increased 29% year over year, driven by growth in our individual Medicare advantage and Cigna plus Oscar books of business.
Membership growth exceeded our initial expectations.
Consumers selected Oscars innovative plans through the end of open enrollment and into the special enrollment period.
Moving to slide four first quarter direct and assumed policy premiums increased 44% year over year.
$823 million, driven by higher memberships as well as business mix shifts towards higher premium plans and modest rate increases.
On mix, specifically, we saw a move from bronze to silver plans in our individual book and we also saw modest mix benefit from higher M&A membership.
You can see the walk from direct policy premiums to premiums earned on the right side of slide five which reflects the impact of risk adjustment and reinsurance on our revenues.
Premiums earned of $369 million increased 332% year over year in the first quarter as we reduced our utilization of quota share reinsurance.
I wanted to provide a brief update on quota share reinsurance under our quota share agreements, we cede a percentage of our premiums to our reinsurance partners, which reduces our premiums earned and therefore, our risk based capital requirements.
As you can see on slide six historically, we've used a higher level of reinsurance per risk management and for optimizing capital.
Our recent IPO and improving profitability, we chose to decrease our utilization of quota share reinsurance for this year.
Moving to slide seven our overall combined ratio.
Some of our medical loss ratio and an insurance company administrative expense ratio was 94, 2% in the quarter, reflecting a consolidated profit across our insurance companies.
This metric improved by roughly 1000 basis points year over year, demonstrating progress across both our medical loss ratio and our insurance company administrative ratio, while improving our innovative model is working.
Turning to slide eight our medical loss ratio of $74 seven or 74, 4% was down 670 basis points year over year from the first quarter of 2020, primarily driven by six basis points of net reserve strengthening in the first quarter of 2020 ahead of COVID-19.
Prior period development largely related to the second half of 'twenty also had an 80 basis point favorable impact on the MLR this quarter.
Compared to the adjusted MLR in Q1, 2020, and absent a favorable prior period prior period development in the quarter. The MLR would be roughly flat year over year. We believe this was a strong result, given our membership growth and COVID-19 variability.
Let me spend a minute on COVID-19 and overall utilization environment.
Non COVID-19 utilization was slightly below baseline levels, but was offset by higher than expected COVID-19 treatment and testing cost in the first quarter COVID-19.
COVID-19 costs peaked in January and net decline throughout the quarter.
On slide nine you can see our first quarter insurance company administrative ratio of 19, 8% improved 380 basis points year over year.
This metric reflects the administrative expenses that are necessary to run our collective insurance companies, which are included in the other insurance cost line items in our GAAP P&L.
In contrast general administrative.
That line item in our P&L largely consists of expenses at the holding company or Holdco and includes tech development and overhead costs.
The meaningful year over year improvement in the insurer co Administrated ratio was driven primarily by operating leverage and operating efficiencies as well as the removal of the health insurer fee.
Moving to slide 10, our adjusted EBITDA loss of $26 million decreased by $16 million year over year. As you can see on slide 10. This improvement is largely attributed to higher underwriting the repeal of the hip fee.
Lower quota share impact.
These benefits were partially offset by increased administrative costs across the insurer co and holdco due to higher membership and greater development and a plus plus Oscar platform respectively.
Turning to the balance sheet, we ended the quarter with $1 3 billion of cash and investments at the parent and another $1 7 billion of cash and investments at our insurance subsidiaries.
To summarize our first quarter results demonstrate our continued topline growth and improving profitability across our businesses.
Let me now turn to our 2021 guidance, which you can find on slide 11.
We expect direct and assumed policy premiums for 2021 will be approximately 3.0 to 75 billion to $3 75 billion largely driven by membership increases.
We expect our MLR will be in the range of 84% to 86% from $40 for the full year, which is roughly flat with 2020, despite headwinds from continuing to COVID-19 costs and a return to baseline utilization levels.
We expect the MLR will be lowest in the first quarter and highest in the fourth quarter as individuals meet their deductibles throughout the year.
We project, our insurance company and administrative expense ratio will be between 22, 5% and 23, 5% an improvement of 300 basis points year over year at the midpoint low.
Like the MLR, we expect the administrative ratio will be highest in the fourth quarter, driven by sales and marketing expenses for OA.
And HP.
We expect that we are very focused on driving further improvement in this metric over time, and we believe that it will be possible by continuing to deliver operating leverage through disciplined fixed cost management and scale efficiencies from our technology, both of which were drivers that we saw in our Q1 performance.
We also expect that our 20, our full year 2021 and share Coke combined ratio will be between 107% and 109% an improvement of approximately 280 basis points year over year at the midpoint.
And finally, we expect a meaningful improvement in our 2021 full year adjusted EBIT loss as compared to 2020 with a loss in the range of 300 million 380 million to $350 million.
And with that let me turn the call back over to Mario for some final remarks.
Thank you Scott.
I would like to close with a reiteration of our strategic priorities.
One we are dedicated to growing our insurance business, while at the same time managing costs over the years.
We have created a platform that will continue to push the most innovative and the most engaging products into the markets.
And continue to penetrate Medicare advantage, and small employer markets and keep growing and individuals.
Growth in all three of these product lines will be driven by increasing market share in our current counties and by future market expansion.
Two we are focused on expanding the reach of plus Oscar our platform by adding new arrangements with providers moving to bear risk, particularly in Medicare advantage individual and small group.
Free we are fully committed to becoming profitable as our businesses are reaching scale. This will be driven by our growth coupled with reductions in medical costs and meaningful improvements to our admin ratio given our progress to date and plans for further improvements we expect our insurance company to be profitable in 2023.
<unk> posting a combined ratio of less than 100%.
Finally, I would like to give a heartfelt. Thank you to the entire Oscar team they work tirelessly day.
With unparalleled compassion as we'd like to see with genius and with grids at the same time to ensure our members have access to the tier day needs as we all work towards our vision of making a healthy life affordable and accessible for all and with that I'll ask the operator to open up the line for questions.
At this time I would like to remind everyone in order to ask a question press star one on your telephone to withdraw your question press the pound key.
Pause for a moment to compile the Q&A roster.
Your first question comes from Stephen Baxter from Wells Fargo.
Hi, Thanks, good afternoon.
Just wanted to get your MLR guidance, just wanted to get a little bit of health.
Thinking about COVID-19 and the balance of the year. So I appreciate the comments about Q1, where you were relative to the baseline as we see COVID-19 costs likely moving loans to the balance of the year. How should we think about whats your models by debt MLR per core utilization against the baseline level.
Yes.
Hey, and thanks for your question, we really appreciate you joining us Tonight Steve.
So as I talked about in our prepared remarks. The MLR. This quarter was in line with our expectations with lower utilization.
This quarter offsetting higher COVID-19 costs.
As I also talked about COVID-19 costs actually were highest in January and then trended down through the quarter and so when I look at our full year MLR. What were anticipating is that we will continue to see a heightened level of COVID-19 expenses that will will.
Work its way through the year.
Probably going to be in the range of 3% to 4% of MLR and then on the other side of that we expect to see that some of the deferred care from 2020 is going to start to to come in as increased utilization.
In 2020, but then we also anticipate that we may see some of that we may see some additional deferred care. So net net we would expect kind of utilization levels to be around.
What I would call baseline levels kind of pre COVID-19 2019, as a comparable so.
With all of those things kind of going on we expect COVID-19 to be roughly flat year over year, which as I said, we think is a pretty good performance given that we do anticipate that we're going to have some headwinds from COVID-19.
MLR.
Got it that makes sense.
And then just wanted to ask about the special enrollment period members from obviously, it's early there, but I was hoping you can maybe talk a little bit about what youre seeing there in terms of utilization and how that compares to what you might see for your other new members this year or new members from prior cycle. Thank you.
Yes, I think that with respect to.
The members coming in with S&P.
So far we've seen and obviously these are early days, but we've not really seen any major differences in.
Morbidity or.
What we're planning for the full year is that we're expecting.
Our guidance that we won't see a significant differential.
So between the FTP members from our base population of.
Of course, there is some risk there and I think that one of the reasons why our guidance range and MLR is a little bit broader than what we might.
Wanted to be is that we're trying to make sure that we've got some room for variation in the performance of those new members Steve.
Steven This is Mario.
Great by the way thanks for joining here one additional day that behind just observation this perhaps than.
It appears that there was a little bit more of a shift what sort of like self service. Among these members we would like to post on the website.
Whether people would rather talk to brokers and call center or to kind of do research themselves.
And we'll now actually smoothed compared to open enrollment.
30% more members who are in the upcoming interest to do that.
So that growth besides kind of look at health at Augusta and so on so it might be indications.
Indications are that it's bit of a different segments of numbers from now volume.
Interesting okay. Thank you I'll get back in line with your question. Thanks, a lot.
Thanks.
Your next question comes from Kevin Fischbeck from Bank of America.
Alright, great. Thanks.
I guess.
Couple of questions.
How are you moving I hope it screens that are determined this but how is your share of the enrollment coming into the equity versus your share.
The enrollment overall I guess this is the first time, we're seeing.
People buying insurance with the higher subsidies just trying to get a sense as you know.
Right.
If your model is resonating as well now that crisis, such as the <unk>.
Factor or whether it's resonating more or less.
Yes, so Kevin I think what we do is we look at how much is the market up.
In terms of overall enrollments as compared to the same period last year.
Then how much are we up in terms of overall enrollments as compared to the same period last year and those numbers are about the same.
And so essentially that that market share gains we've achieved in open enrollment is essentially appears to be continuing throughout special.
Special enrollments I think what we are generally seeing in the marketplace is that there is as we talked about a bit more of a share.
Towards.
Zero dollar clients there was a shift towards.
Higher pigment plants.
I think that generally makes us think that.
It's important that a model where you deliver a great member experience where people with volume more than price, we sold that even pre the spend the tax credits right as I think we've talked about in the Roadshow EBIT.
We will only have the lowest price plans and about 10% per markets, even in <unk> and <unk>.
We delivered 44% revenue growth and that we get.
I expect to continue to see the <unk>.
<unk> what situations where.
Delivering a great experience innovative feature since the one will end up winning the day and so we're preparing for that.
Okay. That's helpful.
And I guess.
The commentary I know that the bill in each.
The standard.
Terry.
Our cost of trended through.
For the quarter is that largely the thing in Medicare and small group or would you highlight any differences there.
So I think that I wouldn't highlight any other differences.
Okay and then you mentioned you had changed your view on reinsurance.
Can you live.
And is that recurring what exactly you've reached committing that theory.
And then I guess, how should we think about your use of reinsurance going forward in the out years is a good percentage there should we expect this percentage to kind of steadily rise.
You get to profitability.
Sure.
Kevin Thanks for the question.
But quick quota share.
We obviously leaned into that you saw that in our results in 2020 as.
A way to hedge.
Health capitalized the companys growth and to reduce our cost of capital. After we did the IPO. We now have the proceeds of that and we have the capital from NAV. So from my perspective.
Deploying that cash into.
Reducing our going ahead, and using that as capital and reducing our quota share actually is was the best decision in terms of creating the best financial outcome. The consequence of reducing the reinsurance is that we're actually able to keep the fee that we otherwise would have paid on that quota share.
So in in <unk>.
Our 2021.
The guidance, we do expect that quota share as part of the favorability that we're seeing through the year and in terms of going forward.
We're not saying that we won't go back and use quota share, but I think in the near term, we're comfortable having a lower percentage and I would expect that we would dynamically manage that going forward.
Okay. That's helpful.
Non.
Keeping more debt.
I'm just sort of your premium is there a benefit as far as the percentage that you are paying a net debt of the day per quota share or is that relatively the same as a percentage of premiums.
I think that the structure of the <unk>.
Arrangements that we are retaining is roughly similar.
And before so not a significant difference there but.
Just being having.
Stronger view towards profitability.
Just gives me more confidence that we don't need to have quite as much quota share.
Alright, perfect. Thank you.
Your next question comes from John Youre seeing from credit Suisse.
Hey, good afternoon, guys as Carlos Ghosn and jumping in from Elektra.
So my question a quarter you guys is can you provide more color on your Sigma Cigna partnership.
Small businesses and how many languages from from that partnership in 2021, and any outlook you can share in long term.
Yeah, Hey, this is Scott I think that the.
That the key peso partnership as Mario talked about in his comments.
We're off to a really good start we've we've rolled that out in a number of new states and markets.
<unk>.
New states and I would say debt for that it is it is included in our premiums that the guidance that I gave you our expectations about the growth in that business as part of the drivers there and we're not going to comment about the specific buckets of membership only to say that we're excited to have the partnership.
Cigna and we're looking forward to continuing to roll that out.
Okay. Thanks.
As a reminder to ask a question press Star One. Your next question comes from Joshua Raskin from that from research.
Hi, Thanks, I appreciate you guys taking the question.
To the first line is just on the recent rebranding of the play faster segment I'm curious what the catalyst was for sort of that change in branding and if we should read into there going to be more disclosures around revenue and segment profitability at some point.
Yes, that's what I feel like later in the call as well and thanks for joining so.
So really two drivers one is.
Essentially we have built out five clients I would say over the past couple of years. There that has also been total bottomed and relationships, we have built an insurance business where providers.
So what we bring to the table, how we enable them to grab market share with team members.
Help them shift more towards value based care and risk based revenues really yet.
And as we talked about the roadshow as well has been moving more and more to what's really going on the offense, there and saying we're building a pipeline.
We want to make sure that the margin understands that the health care market in the sense, that's an easier way of talking about the <unk> class Oscar branding. The second point is we have been organizing tons, a little bit differently, and Megan <unk>, our COO and executive Vice president of platform over as soon as that business.
<unk> has continued to build the pipeline beyond <unk>.
We're excited about what's to come and obviously are heads down implementing and continue to grow.
Interest rates and the arrangements we have already built slide many of these health first.
Montefiore ACTH and these are all plants.
Or have just started growing and thats exciting to US now in terms of reporting Scott you can yes, Josh. Thanks for thanks for joining us and I'll, just say that on the reporting side.
Sure.
I do think that at some point the company is going to look to as those businesses grow and become more meaningful we're going to start to want to do more to help you and others understand them certainly as we've stood up plus Oscar while youre going to start increasingly looking at the results of both of those business separately.
As we do that debt.
Will that will start to trickle its way into our financial reporting as well.
Yeah, I think that'd be helpful.
The 850000 of other income per them I'm not sure that's really representative of what Youre doing so I think that would be helpful.
And then just my second question on the 3600 lives I understand you don't want to talk too specifically about cigna, but maybe just help us relative to expectations.
And as you think about the year in a small groups a little less dependent on one one renewal date, so would it be reasonable to expect.
Yes.
More meaningful growth as the year progresses.
Well look I think that again and I'm not trying to be stubborn by not telling you the membership numbers, but we're not we're not trying to break the buck apart.
Any other detail with respect to see but so we do expect that book to be growing we do expect that it's going to continue to grow throughout the year.
And accelerates.
In the certainly the second half so.
It's early days, so we don't want to get too far ahead of ourselves in terms of projecting where that book is going to be going but we do think that debt. We've got all the right.
Tools into the market to see some acceleration in terms of the numbers of memberships from where we are today.
Maybe I'll sneak in one last one just the PDR the $9 5 million what line did that relate to.
On the PDR.
When you say what line does that relate to was that and was that an individual and small group of.
Individuals that small group, but that MA I guess I am just curious if it's early in the year to see a PDR. So I was just curious.
Yeah, Yeah, I think it was really across all of the different product lines.
Okay.
Our next question comes from Ricky Goldwasser from Morgan Stanley.
Yeah, Hi, good evening and congrats on the quarter.
The first question is on the virtual primary care clearly from the data points you provided on the call it having a meaningful impact on our members' behavior could you maybe share with US what percent of members are under circle care offering and also what type of incentives do you offer members.
To get them to join.
Yes.
So let me start with that.
The last part of the question that by the way thanks for being on the call as well and thank you for the congratulations.
So the incentives.
This is one where we have been ahead of the <unk>.
The cutting edge sort of like of incorporating virtual in the plan design.
The weighted works is that if you take as a member and a primary care physician in the Oscar Medical group among the virtual primary care physicians from the group than the cares Act that Doctor driver, whether it's lab tests or prescription drugs.
It was from radiology test this one as well they essentially get dynamically discounted.
And gets them.
<unk> become become free.
Physician tells you the Oscar.
Good because it tells you will get this lab tests, and then that lab tests cost share with bit gateways dynamically.
That was a.
I would say of using our play systems that we business certainly in the dynamic configuration benefits. They are in conducting the connected up with our electronic medical record system that these physicians operate on that we also built internally. So that's working it's working well.
It's growing now in terms of who is using it.
<unk> right now.
In a number of our states and in the states that it's in as I mentioned before the occupancy to group is actually in the top three of all physician groups.
That are seeing Oscar patients, which is it's a really nice statistic we think.
It's ramping throughout the year, it's ramping actually pretty linear leesville. So let me keep you posted there I will get back to you in the next couple of quarters as to how people are using it.
We haven't published it yet to put that out there yet.
We'll consider doing that for the next earnings call.
Thank you and then my next question sort of on the Tech stack offering.
You've probably said it looks quite low.
From a skills a year.
What does the pipeline look like and how are the conversations with with health plans going.
So let me ground you first from the offering again so.
Class Oscar and Thats, what we call them outright as our technology debt from a service platform.
What we've designed it to do it really interest starting with ourselves as health health.
<unk> clients grow risk based revenues and do that with a really great member experience.
I think I mentioned it in the near term, we think that is the growth rate will be fueled by a range of providers providers looking to de risk.
Either through provider sponsored health plans were actually delegated from payers, particularly in Medicare advantage individual and small group. We think what this does the kind of free areas. We typically talk about the <unk>.
Can drive.
And efficient cloud infrastructure are the area, we've seen some provider sponsored health plans about a 10% to 50% reduction on the <unk> basis for admin overheads flat kind of number one the second thing. We think we can do well is to provide some more effective medical cost management because of high number of engagements.
For example, new debt if you remind people of what are in that broke out of network labs and things like that so we can drive 15 point reduction on the total.
Utilization in the third thing is growth and retention of membership in market share of a system a provider group in the given markets.
The impact from virtual primary care or the impacts from our interest was on member retention, which we talked about in the past.
You apply to them books of business space by providers.
So those are the kind of the three big pinch points, we have there we have a pipeline.
Clients are really at all stages in the pipeline, we're going to call out throughout the year or two at the time that passes when new arrangements.
From there and we're building a macro pipeline as I mentioned, the total individually as needed.
That business for us.
<unk>.
I think it fits very well into the sort of like sign of the times in the U S Health care post pandemic, you've got the shifts as we saw what's Russell is delivery of clear, but you've also got the shift towards more value based care more risk taking often starting obviously in government business Medicare advantage, but I think maintenance way more.
And more into the commercial business as well.
And finally, all of that has to come with agreement with Experian, because too often I think this kind of.
Just on provider in increments, which we are also will be put to move from four but it comes and not necessarily with a great great tight interim member experience and so I think that's the part we are adding to the stack there. So thats, where we are and we'll keep you posted.
Great. Thank you.
And last question on this.
We look to health for instance, do we think about the pipeline as we incorporate in our models should we should we look at health versus sort of kind of like a typical size deal.
I think that's a tough one to answer I think we will see deals debt.
Obviously that would be a pretty.
Typical deal for a system of that size I think that we are open to two really different types of deals and arrangements. So I don't want to say that thats going to be typical I think that that would be kind of a typical deal. If you think about the way that we would like to position.
<unk> arrangement, the economics, and what we're bringing to the table.
And so I.
I think that will just say that.
We are open for all kinds of different arrangements as long as we're able to bring our full capabilities to the table.
Thank you.
Thanks Ricky.
That was our last question at this time. This concludes today's conference call. Thank you for participating you may now disconnect.
Thank you very much to everybody on the call and so we're looking forward to continue the conversation with you.
Thank you.
Everyone else has left the call.
Right.
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