{"id":193015,"date":"2021-03-03T14:10:00","date_gmt":"2021-03-03T11:10:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer\/"},"modified":"2021-03-03T14:10:00","modified_gmt":"2021-03-03T11:10:00","slug":"oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer\/","title":{"rendered":"#\n  Oscar Health is going public: Five things to know about the digital insurer"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3f91ccb7553\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3f91ccb7553\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer\/#Deal_was_upsized_and_priced_above_the_proposed_price_range\" >Deal was upsized and priced above the proposed price range<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer\/#Oscar_has_a_large_market_opportunity\" >Oscar has a large market opportunity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer\/#Oscars_founders_will_retain_control_of_the_company\" >Oscar\u2019s founders will retain control of the company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer\/#Oscar_is_not_profitable_and_may_never_be\" >Oscar is not profitable and may never be<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer\/#Oscar_is_highly_exposed_to_the_Affordable_Care_Act\" >Oscar is highly exposed to the Affordable Care Act<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer\/#Oscar_has_no_plans_to_pay_dividends\" >Oscar has no plans to pay dividends<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/oscar-health-is-going-public-five-things-to-know-about-the-digital-insurer\/#Ciara_Linnane\" >Ciara Linnane<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Oscar Health is going public: Five things to know about the digital insurer<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Deal_was_upsized_and_priced_above_the_proposed_price_range\"><\/span>\n  Deal was upsized and priced above the proposed price range<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000175740\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Oscar Health Inc., the digital health-insurance company well known to New Yorkers thanks to a subway advertising campaign, is going public in a deal that priced above the proposed price range, suggesting strong demand from investors.<\/p>\n<p> The company<br \/>\n        OSCR<span><\/span><br \/>\n       offered an upsized 37 million shares, priced at $39 each. The expected pricing of the initial public offering was increased early Tuesday to between $34 and $38 a share, from $32 to $34. The company raised $1.4 billion. Underwriters can purchase an additional roughly 4.65 million shares. <\/p>\n<div class=\"paywall\">\n       The original price range implied a market cap of $7.05 billion to $8 billion, according to MKM Partners analyst Rohit Kulkarni, assuming it will have about 234 million shares outstanding. The final pricing has given it a market cap of $9.126 billion.<\/p>\n<p>Oscar was valued at $3.2 billion in a funding round in early 2019, and Google parent Alphabet Inc.<br \/>\n        GOOG<span><\/span><\/p>\n<p>        GOOGL<span><\/span><br \/>\n       is its biggest shareholder with about an 18% pre-IPO ownership stake, the MKM analyst wrote in a note.<\/p>\n<p>MKM is not participating in the offering and is not making a recommendation or initiating coverage, said Kulkarni. <\/p>\n<p>However, \u201cwe watched Oscar\u2019s roadshow presentation as well as accompanying product demo, and were impressed by a fairly comprehensive set of tech-enabled user experiences and Oscar\u2019s ongoing focus on rethinking every building block of [the] healthcare insurance supply chain,\u201d he wrote in the note. <\/p>\n<p>Oscar was founded in 2012 by Joshua Kushner, Kevin Nazemi and Mario Schlosser, who is currently chief executive. Kushner is a brother of former White House adviser Jared Kushner, son-in-law of the previous U.S. president, and is married to supermodel Karlie Kloss. <\/p>\n<p>Kushner is also managing director of the New York venture-capital firm Thrive Capital Management. <\/p>\n<p>Today, Oscar has more than 500,000 people signed up to its platform in 18 states, offering individual and family, small group, and Medicare Advantage plans, with benefits that include telehealth visits at no extra cost and a network of doctors and hospitals to choose from. <\/p>\n<p>There are 10 banks underwriting the deal, led by Goldman Sachs, Morgan Stanley, Allen &amp; Co. and Wells Fargo Securities. Proceeds will be used to repay debt and for <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> corporate purposes, including growing the business and for <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> development, according to filing documents. <\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>The company has <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lied to list on the New York Stock Exchange under the ticker symbol \u201cOSCR.\u201d<\/p>\n<p><strong>See now:<\/strong> A great technology wave is cresting over America because of the pandemic \u2014 and it\u2019s largely a good thing<\/p>\n<p>\u201cWe created Oscar because of our own frustrations with U.S. healthcare,\u201d <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/1568651\/000119312521049832\/d28906ds1a.htm#toc28906_6\" class=\"icon none\">says the prospectus.<\/a> \u201cThe U.S. healthcare system is the world\u2019s largest and most expensive \u2014 estimated to have cost over $4 trillion in 2020 \u2014 yet health outcomes are worse than in other advanced economies.\u201d<\/p>\n<p>Costs are so excessive that medical bills contribute to roughly 66% of all personal bankruptcies in the U.S.<\/p>\n<div data-layout=\"header\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaVideo\n            header\n  article__inset\n          article__inset--type-InsetMediaVideo\n            article__inset--header\n  \"><\/p>\n<figure class=\"media-object-video article__inset__video media-object-video--standard\">\n<div class=\"wsj-media-summary clearfix\">\n<div class=\"strap-container\">\n<h4 class=\"strap\" itemprop=\"description\">\n<\/h4><\/div>\n<\/p><\/div>\n<div class=\"video-container article__inset__video__player\" id=\"http:\/\/www.marketwatch.com\/news\/32B4F068-E6AC-4DC6-AC91-E2923962763E\" data-src=\"http:\/\/www.marketwatch.com\/news\/32B4F068-E6AC-4DC6-AC91-E2923962763E\" data-format=\"standard\" data-esplash=\"\" data-msplash=\"\" data-suppressheadline=\"\" data-verticalstill=\"\">\n  <\/div><figcaption class=\"wsj-article-caption article__inset__video__caption\">\n          Telehealth and the digitalization of healthcare services became essential as a result of the COVID-19 pandemic. Here&#8217;s what investors should know about the long-term growth of the industry.<br \/>\n        <\/figcaption><\/figure>\n<\/div>\n<p>       <strong>Read now: <\/strong>How telemedicine can help diabetics stay healthy through the pandemic<\/p>\n<p>\u201cIt doesn\u2019t have to be this way,\u201d according to the Oscar prospectus. \u201cAccording to a report published in the\u00a0Journal of the American Medical Association\u00a0in 2019, nearly 25% of healthcare spending in the U.S. is wasted, the result of a system plagued by misaligned incentives, lack of coordination, and administrative complexities.\u201d<\/p>\n<p>Health insurers play a key role in this set-up, because they disburse 75 cents of each healthcare dollar spent. But after decades of effort, the incumbent insurers have failed to rein in costs or incentivize key stakeholders to improve the system.<\/p>\n<p>\u201cWe founded Oscar to solve these problems and to provide consumers with access to the affordable, high-quality healthcare they deserve,\u201d it continues. <\/p>\n<p>In a letter from the founders included in the prospectus, they explain the name Oscar is that of Kushner\u2019s great-grandfather, an immigrant who is said to have acquired the name at Ellis Island. The name was also inspired by the doctor who took care of Schlosser during his youth in a small German town, a doctor who made home visits to patients most weekday afternoons. On arriving in the U.S., Schlosser was surprised to learn that \u201cfamily doctor\u201d model was not available.<\/p>\n<p><strong>Don\u2019t miss:<\/strong> It took a pandemic for Americans to use this healthcare innovation<\/p>\n<p>\u201cHe saw that the reason wasn\u2019t any lack of dedication among American caregivers,\u201d said the letter. \u201cIt was because of the\u00a0fee-for-service\u00a0system \u2014 a system that produces worse outcomes than in other countries, and at a higher cost.\u201d \u00a0<\/p>\n<p><strong>Here are five things to know about Oscar ahead of its IPO:<\/strong><\/p>\n<h6><span class=\"ez-toc-section\" id=\"Oscar_has_a_large_market_opportunity\"><\/span>Oscar has a large market opportunity<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>The U.S. health-insurance market is a huge one, accounting for about $4 trillion in annual spending, or 18% of GDP. As a new, tech-savvy company, Oscar has a pretty strong market opportunity, assuming it is able to compete with incumbent insurers.<\/p>\n<p>The company believes it\u2019s the third biggest for-profit health insurer in the 18 states it operates in. The company may also benefit from the shift to telehealth that has accelerated during the coronavirus pandemic and saw 62% more telehealth visits per 10,000 members in March 2020 compared with the year-earlier month. It may also benefit from an overall positive reception of other recent telehealth IPOs, including Teladoc Health Inc.<br \/>\n        TDOC<span>,<\/span><br \/>\n       Lemonade<br \/>\n        LMND<span><\/span><br \/>\n       and American Well Corp.<br \/>\n        AMWL<span>,<\/span><br \/>\n       according to MKM\u2019s Kulkarni. <\/p>\n<p><strong>See:<\/strong> Lemonade logs best U.S. IPO debut of 2020 with more than 140% gain<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Oscars_founders_will_retain_control_of_the_company\"><\/span>Oscar\u2019s founders will retain control of the company<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>The IPO envisages a dual-class share structure with Class A and Class B stock, with the latter carrying 20 voting rights per share compared with the Class A\u2019s one vote per share. The Class B shares are to be held by co-founders Kushner and Schlosser, and Kushner\u2019s Thrive Capital, which together will own about 82.9% of voting rights once the deal is completed. <\/p>\n<p>That means regular shareholders will have little say in the running of the company. <\/p>\n<p>Other investors include Tiger Capital, Coatue Management and Dragoneer Investment Group, which have said they are interested in purchasing $125 million of shares each, or $375 million in shares in total.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Oscar_is_not_profitable_and_may_never_be\"><\/span>Oscar is not profitable and may never be<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>The company has never made a profit and had an accumulated deficit of $1.427 billion as of Dec. 31, 2020, according to its prospectus. <\/p>\n<p>\u201cWe incurred net losses of $261.2\u00a0million and $406.8\u00a0million in the years ended December\u00a031, 2019, and 2020, respectively,\u201d says the prospectus.<\/p>\n<p>Revenue fell to $462. 8 million from $488.2 million. <\/p>\n<p>The company\u2019s adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) losses are also growing, rising to $402.4 million in 2020 from $222.2 million in 2019. <\/p>\n<p>Its medical loss ratio stood at 84.7% at end 2020, while its administrative ratio stood at 26%, giving it an overall combined ratio of more than 110%, which \u201cimplies negative operating margins despite rising scale,\u201d said MKM analyst Kulkarni.<\/p>\n<p>The company intends to make \u201csignificant investments\u201d to further market, develop and grow the business, with a focus on its technology platform and member-engagement engine. That effort will mean hiring more people. As a public company, it is also expecting higher legal, accounting and compliance costs than has been the case as long as it was private.<\/p>\n<p>\u201cWe may not achieve or maintain profitability, and we may continue to incur significant losses in the future,\u201d the company says in its list of risk factors. <\/p>\n<h6><span class=\"ez-toc-section\" id=\"Oscar_is_highly_exposed_to_the_Affordable_Care_Act\"><\/span>Oscar is highly exposed to the Affordable Care Act<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Oscar is highly exposed to the Affordable Care Act, the signature piece of healthcare legislation achieved during the presidency of Barack Obama, which continues to be the subject of lawsuits and efforts to change its provisions. Plans that are subject to regulation under the ACA accounted for 95% of its revenue in 2020 and 96% in 2019, says the prospectus.<\/p>\n<p>While the act may remain safe under President Joe Biden \u2014 Obama\u2019s vice president \u2014 there is no guarantee a future Republican administration would not seek to overturn it and with it, a large part of Oscar\u2019s business.<\/p>\n<p>A constitutional challenge brought in Texas in December 2018 is still working its way through the system and is now captioned California v. Texas and awaiting a Supreme Court decision, said the prospectus.<\/p>\n<p>\u201cIn the interim, Congress and President Biden may consider other legislation and\/or executive orders to change elements of the ACA, including for example, the January 28, 2021 Executive Order issued by President Biden directing the Secretary of HHS to consider opening a Special Enrollment Period for the Health Insurance Marketplace as well as directing federal agencies to examine all existing regulations, orders, guidance documents, policies and similar agency actions to determine if any such actions are inconsistent with the policy set forth in the Executive Order to protect and strengthen Medicaid and the ACA and make high-quality healthcare accessible and affordable for every American,\u201d it said. <\/p>\n<p>Those changes could materially impact Oscar\u2019s business, results and financial condition, it concludes.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Oscar_has_no_plans_to_pay_dividends\"><\/span>Oscar has no plans to pay dividends<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Like many companies when they first go public, Oscar does not plan to pay dividends in the foreseeable future. That means shareholders will have to rely on price gains for returns.<\/p>\n<p>The ability to pay dividends in the future is also restricted by some of the terms of its revolving loan facility, which may be embedded in future credit agreements, says the prospectus.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Ciara Linnane\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Ciara_Linnane\"><\/span>Ciara Linnane<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D2AE7C646E2F%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Oscar Health is going public: Five things to know about the digital insurer &#8221; Deal was upsized and priced above the proposed price range Oscar Health Inc., the digital health-insurance company well known to New Yorkers thanks to a subway advertising campaign, is going public in a deal that priced above the proposed price&#8230;<\/p>\n","protected":false},"author":1,"featured_media":193016,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-193015","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/193015","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=193015"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/193015\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/193016"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=193015"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=193015"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=193015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}