Fmr. Aetna exec and incoming Oscar Health CEO Mark Bertolini joins Yahoo Finance Live to discuss taking the helm of Oscar Health, the plan for profitability, the trajectory for technology in the healthcare space, and the outlook for Oscar Health.
Video Transcript
RACHELLE AKUFFO: Oscar Health has a new chief executive. The health insurance provider, announcing that former Aetna head, Mark Bertolini, will take the helm as CEO next month, where he'll be charged with the task of guiding Oscar toward profitability in 2024.
For more on what's in store, let's go to incoming Oscar Health CEO Mark Bertolini, joined by our very own Anjalee Khemlani. Thank you so much for joining us this morning. So talk about this decision now to take the helm of Oscar and really that plan to profitability.
MARK BERTOLINI: Yes, it's been a journey. I've been an advisor to Oscar for the last one and a half, two years. And as we have worked through a number of issues that set us up nicely for profitability in the insurance company in 2023 and overall profitability in 2024, we believe that now is a good time to have Mario, who has led this organization amazingly well, focus on the tech stack, which we think is the next chapter down the road once we get to profitability, while I help lead the company and think about strategy going forward.
So if there was a time in health care where we still need disruption, I think smaller companies focused on customer experience and moving the customer to a new place like a lot of industry disruptors do, is a great way to think about how we look at our future as a company.
ANJALEE KHEMLANI: I'd love to get to that in a second, Mark, specifically the positioning of the company. But let's start off with that tech part of it because I think that's a really interesting point. I know you're very tech-forward. Mario, of course, working on that now. But he did say that you share in the vision of what is wrong with health care and what needs to be fixed.
And I know when we're talking about technology and AI, there's been a lot of concern about what that means, especially for the insurance market. Cigna, in particular, one of your old stomping grounds, coming under fire recently about the volume of denial of claims. And so I wonder, looking at where the trajectory is for technology in this space, how do we balance that where companies, especially insurance companies, are good investments but also balance that patient burden?
MARK BERTOLINI: I think health care largely continues to suffer on a lack of a customer end point of view in the whole customer experience. And as a result, you have net promoter scores for all of these companies on the screen other than us that are near-zero or less than zero while Oscar has a 47 NPS score. That means we are valuable to the customer base. That is an opportunity to move customers to our company.
And I think we have to-- and what happens in the health care industry is we ignore the end user, the individual customer, when largely 70% of the now marketplace, when you look at Medicare, Medicaid, and the ACA, is now individual as a sale. We see individual expanding as an opportunity longer term, maybe even all the way to the point where employer-sponsored insurance is not as valuable to people as individual coverage could be.
Secondly, we see more digital. If the pandemic proved anything to us, it's people's willingness and providers willingness to work virtually. And so our virtual provider network that we have operating in a number of markets today is one that we believe we can expand beyond primary care into tertiary care.
And finally, when we talk about value-based care, the value base can't be just what we offer to the providers or how we reward them. It has to be how the customers feel about it. And so we believe that, as a company as nimble as ours with the kind of technology we have and the progress we've made on our own insurance business, that we now have an opportunity to look forward to using that technology and our experience to grow our business on the individual side, make it a customer experience that people want and will come to us, versus having to acquire it in any way, shape, or form.
ANJALEE KHEMLANI: Well, to that point Oscar definitely has struggled to sort of maintain that momentum it started off with, only in half of US markets as well as looking at the different segments that it sort of jumped in and out of, including in the employer space. I wonder, where do you see this opportunity with this push for digitization and consumerization that I know you're big on, especially what we saw with Aetna-- so it's now competing with these legacy players who are sort of mimicking that blueprint. So where does Oscar fit in and how does it grow there?
MARK BERTOLINI: It's a lot harder to change large organizations that are set in their ways, and get everybody rowing in the right direction. We don't have that problem here. As it relates to the number of markets in, we'll be expanding in some markets this year in the ACA as it looks at product opportunities. We need to harden the platform so it can move to other parts of the marketplace.
So we're not in a hurry to do that. We're focused about making what we have now work so that when we look at other market opportunities like Medicare and Medicaid, in the future we're prepared to take advantage of those marketplaces and provide the best customer experience versus anybody else in the field.
ANJALEE KHEMLANI: So you see this positioning the company as more of a competition rather than, say, an acquisition target in the future?
MARK BERTOLINI: Definitely.
ANJALEE KHEMLANI: And then finally, really quickly, early on when Oscar first came on the market, I know there were many legacy insurance executives and CEOs that kind of saw this as a temporary stay. Meanwhile, they've now started mimicking the blueprint with telehealth and bringing everything in for the various segments. Were you one of those early deniers?
MARK BERTOLINI: I was one of those early deniers, yes. But having spent time with Josh and Mario over the last year and a half talking about the business, what their goals were, where they thought the industry was going to go, I am now convinced that this is a place that can really ultimately begin that change in health care that we've found so elusive as an industry over the last 40 years.
RACHELLE AKUFFO: And obviously you're going to be reporting Q1 financial results after the close on May 9. So expectations here for investors leading into this-- we've already seen the stock popping, obviously, with this announcement here-- but what should investors be aware of heading into this?
MARK BERTOLINI: Well, we reaffirmed guidance today. So we're on track to deliver what we said we would deliver. We will spend some time thinking about strategy and how we're going to operate. We may have some information and news for that in May. It may take a little while longer. We don't want to rush just to meet a date. We want to make sure that we have a full and thoughtful plan when we move forward and start talking to the Street.
And as is my normal way of dealing with the Street, we don't talk about all of it at once and so far out. We let it come out as we are able to prove the point that we're delivering.
RACHELLE AKUFFO: We'll certainly be looking forward to checking back in with you. Incoming Oscar Health CEO Mark Bertolini and our very own Anjalee Khemlani. Thank you both for joining me.
MARK BERTOLINI: Thank you so much. Great to see you both.
