"This is not Tumblr. This is not Spotify. This is not Square. This is a really complicated business," says Josh Kushner of his new startup Oscar. "It's a real business."
In the world of tech startups, those are fighting words. It's a good thing, then, that the only thing bigger than Kushner's opinion of the nearly one-year old startup is its ambition. Oscar is New York's first new insurance company in 15 years, and it's on a mission to make health insurance truly consumer-friendly.
Kushner, who has also invested in startups like Instagram and Warby Parker through his venture capital firm Thrive Capital, conceived of Oscar before the Affordable Care Act was signed into law, inspired by his own confusing experiences with his insurance company. The new healthcare law, however, proved to be a very fortunate coincidence.
Kushner joined forces with serial entrepreneur Mario Schlosser and Microsoft veteran Kevin Nazemi to found Oscar in 2013. The company has since raised $75 million from the likes of Khosla Ventures, Founders Fund, and General Catalyst, and has recruited top talent to its 60-employee team, including Foursquare co-founder Naveen Selvadurai.
What makes Oscar unique is its dead-simple design and commitment to transparency. It has reinvented the sign-up process so that potential subscribers can get a quote in seconds. It combines the best parts of WebMD and Google Maps, by allowing subscribers to search for doctors in their area, as well as search for symptoms as simple as "my tummy hurts." Oscar's technology will then serve up possible diagnoses and recommend doctors who treat those symptoms. The most impressive feature, however, is the fact that members can see an estimate for how much a doctor visit will cost before they go to the appointment. The plan comes with other consumer-friendly perks, such as free email access to board-certified doctors 24-7, free generic prescription drugs, and three free physician visits per year. Meanwhile, Oscar feeds valuable patient history information to physicians to help them better treat their patients.
Already, Oscar has signed up thousands of patients in New York State, but it still faces plenty of obstacles ahead. After all, one reason insurance companies traditionally keep patients tied up with red tape is because healthcare costs are so high. It's better to drown patients in paperwork than foot the bill themselves. Oscar's founders want to break that cycle for good.
"There's a difference between what insurance companies want, and what's right," says Nazemi. "Our ambition is if we're successful, other companies will copy what we're doing."