There is, sometimes, a tendency on the part of young, ambitious entrepreneurs, to be overly optimistic and assume that they can gatecrash an industry they know nothing about, set up a slick website and disrupt the big, bloated, uncool incumbents.<p>Sometimes that works out but I believe that a new entrants chances of success are a lot higher if they have somebody on board who is actually familiar with the industry sector they're trying to disrupt.<p>None of Oscar's founders have worked in health insurance previously. They come from tech entrepreneur/VC, consulting and technology backgrounds.<p>Edit: Here's a good example of where some industry expertise might have been useful: <i>"..it was a design decision to limit the information presented to hospital's on what is covered in detail (like inhouse labs)."</i><p>There's currently a big trend in design towards making things simple. But there's a difference between making stuff simple and dumbing it down. Sometimes, stuff looks complicated <i>because it's complicated</i>.
"So I went to my new Oscar-approved doctor, who recommended routine blood work. The hospital called up Oscar and Oscar's operations department assured both the in-hospital labs and administrators that this blood work would be covered by my plan so we went ahead with it."<p>Urgh American health care is just so <i>weird</i>. It makes my skin crawl.
I had a conversation with a friend recently who was a doctor. He was telling me that he had 3 patients in a fairly short period of time that had come in with mysterious symptoms (they were all in their 70's) and that had died soon after being admitted. While he knew that he had technically done everything by the book to treat them, he worried that he had made a mistake along the way that possibly could have been the cause of their death.<p>It made me appreciate that the code that I produce as a web developer most of the time would never have me facing those same ethical dilemmas -- there are very few times a bug in a web app would cause people to die or to be financially ruined.<p>In this case, however, you can see what happens when an ambitious startup ends up trying to apply things web developers had done for years (A/B testing, "design" decisions) to avenues of life where people's livelihood or health is at stake -- people can end up getting hurt. "Failing hard and fast", the motto many people have regarding startups, cannot be taken with the same arrogance. If you want to change the world in ways that impact people on a personal level, be ready to be very careful with the trust your customers put in you.
The problem with insurance companies is that they are fundamentally conflicted. As for-profit businesses they have a fiduciary responsibility to maximize profits. Unfortunately the only way to maximize profits is to decline coverage.<p>The problem with Obamacare is that it does nothing to fix this problem. Who wants to be the guy responsible for that many lost jobs?? So, instead they propped up the insurance companies and made everything more complicated for everyone.<p>The only solutions I see are to have non-profit insurance companies or a single payer system.
This is actually a Valleywag article, which is a banned domain on HN so the original link is using a workaround to show the article. (<a href="http://valleywag.gawker.com/what-happens-when-a-healthcare-startup-leaves-you-with-1598186714" rel="nofollow">http://valleywag.gawker.com/what-happens-when-a-healthcare-s...</a>)<p>In this case, the article is actually pretty good.
I have posted it before, but any time a healthcare thread pops up I like to mention a project I co-founded (before Obamacare/Affordable Healthcare Act).<p>Primary care coverage for $20/month $10 copay for ARNP/PA visits and $25 copay for Doctor visit. Even if someone is covered on the exchange this type of primary care plan can be far more cost effective than paying the copays under many of the plans. See: <a href="http://pfccmember.com/Membership_Plans.html" rel="nofollow">http://pfccmember.com/Membership_Plans.html</a><p>>So I went to my new Oscar-approved doctor, who recommended routine blood work...On April 28th 2014, I received a first bill from the hospital detailing how Oscar covered none of the in-hospital labs and I would need to pay $1640. A second round of labs before April 28th pushed the total bill to over $2000.<p>Even our little start-up was able to negotiate $99 for blood work labs, which is out of pocket to the patient. If the same patient uses insurance that rate skyrockets, usually requiring patients to pay out of pocket anyway because of giant deductibles.
I find the phrase "Don't A/B test with people's lives" to be in search of something catchy, or a zinger. The reality of big insurance has always been to be paid more than they pay out. Simple. You've always been a number to an insurance company.
This seems similar to third-party warranty companies. They offer full coverage for low amounts, but when the time comes for them to pay up, they're impossible to deal with. Can't reach them on the phone, they need things to be faxed(!) over, and then because of so-and-so reason, it won't be covered.<p>Healthcare shouldn't be handled by startups. Its too expensive and there's too much riding on it for something that could go belly-up at any moment to handle.<p>Of course, that brings up the question: How do you actually start an insurance company? I'd imagine that in a perfect world, the government could guarantee your coverage until you get enough in your coffers to handle things without a backup.
>In the emerging health and wellness markets, startups like Oscar intimately disrupt and destroy their customer's lives through incorrect datasets where an A/B testing mentality results in exorbitant fees, angry hospital administrators and patients with no recourse except to bankrupt themselves paying bills they didn't expect.<p>This doesn't make sense to me. How is an A/B testing mentality at fault for this? It has nothing to do with the incorrect datasets... you don't A/B test your data structure... I hope. A/B tests are blamed later in the article too, not really sure why.
This story seams par for the course when dealing with insurance companies regardless of if it's startup or not. I've had the same exact issue with everyone from "United" to "Humana" and more recently "HealthNet" You will be told something is in network and it's not, a lab location is listed on their website as in network and then they claim it's not covered later. Sadly, this seems to be an area where legislation needs to bring out the big stick and force them to cover services that they had listed as "in-network" bad data is no excuse.
With bogus physician bills my SOP is to call the office and tell them that I will let the bill run to collection and dispute it in court. This strategy never failed, physicians are mortally afraid of having to admit that their billing practice is questionable.<p>With refunds from the insurance company I have found that a nice letter "please pay up 10 days from now or I will get a title in court" works wonders. I never had to no, not once.
It happened to me ~10 years ago with another health care startup. The sign up booklet looks good and we switch to it. I was with a big company ( - Nokia )at that time. But when the time comes to pay hospital/doctor bill, it has all kind of reasons not too.<p>I documented the phone calls with them, put the detail on a yahoo group and make sure the group was opened to everyone who want to join and also invited their company's PR/Marketing to join that group.<p>The issue was resolved immediately. I don't think that company is alive today. Healthcare insurance start up is not easy. I don't trust them base on that experience.<p>The main issue with insurance is always how much you can trust them when they need to pay up. In the short term, they can always promise low rate to get your attention. But that only get the young folks to switch. After one been thru the experience I been thru, it is hard to trust that kind of company again.<p>In today's internet age, it is impossible for any "startup insurance" company to do that kind of "hack" to try keep their cash flow and not immediately to have their reputation out to everyone in the world.
In the U.S., insurance is regulated by the states and each state has a regulatory agency where one can go with complaints about insurance companies. I find it surprising that the abused customer in this story didn't file a complaint with the government. That would have probably made the insurance company stand up and take notice much more than complaining about them on Twitter.
With a healthcare startup, you will almost always pay more. Large insurance companies are able to bargain the best rates through many means based upon their size.<p>Even when the provider disagrees (with capitated services for example) and bills the member, the larger insurance companies will reimburse the member and then bill the provider.
Why not link directly to the article than that slow feed site?<p><a href="http://valleywag.gawker.com/what-happens-when-a-healthcare-startup-leaves-you-with-1598186714" rel="nofollow">http://valleywag.gawker.com/what-happens-when-a-healthcare-s...</a>
I'm sorry but I've had all these problems and many more with traditional health care companies. As a diabetic I'm intimately familiar with the health care system. It's a hard space to work in and I'm happy to see startups trying to tackle it. But it won't solved soon. Unlike Dropbox, where they "solved" sync more or less there is no one thing in health care, but many.
From the Oscar front page: "Free doctor visits via phone". WTF is this? How can a doctor visit by phone?
All this story is just a smell on how deeply broken the entire US health system is (together with all the healthcare-systems of 3rd world countries).