Cleveland Clinic, Oscar Insurance to JV individual coverage in Ohio
The Cleveland Clinic will enter the individual insurance market later this year through a joint venture with New York-based Oscar Insurance Corp., a health insurance tech startup.
The venture, called Cleveland Clinic | Oscar Health, will offer its new insurance during open enrollment in 2017, and will begin coverage starting Jan. 1, 2018. The new individual plans will be available on the public exchange, off the exchange or directly through Oscar in five Northeast Ohio counties: Cuyahoga, Lake, Medina, Lorain and Summit.
“We think this is really going to rock the healthcare world,” said Joel Klein, Oscar’s chief policy and strategy officer.
The two companies will work together on patients’ care, scheduling and communication and will rely heavily on the technology offered by Oscar. The companies expect to use telehealth virtual visits and preventive care to keep patients from making visits to the emergency department, which is more expensive, said Steven Glass, CFO of the Clinic.
“This is one of those things where we’re trying to provide more cost-effective care to our patients,” Glass said. But people will still be able to get the care and information they need through more traditional venues if they do not have access to technology.
Each person insured in the new venture will be paired with a team, who will be their points of contact in the system and who will be familiar with the patient’s health history.
Mario Schlosser, CEO of Oscar, called the Clinic’s move into an integrated insurance partnership “bold.”
Notably, the new venture will offer individual plans on the Affordable Care Act exchange.
“I do want to acknowledge the turmoil and the uncertainty around the public exchange and the public marketplace,” said Kevin Sears, the Clinic’s executive director of market and network services. “That said, the individual insurance segment is not going anywhere. We expect it will grow for some.”
Just last week, Anthem announced it was exiting the exchange in Ohio in 2018, citing marketplace uncertainty. Oscar itself has opted to stop selling individual plans on the Obamacare exchange in Dallas and New Jersey.
But Glass, from the Clinic, said the hospital system has done its due diligence on five-year-old Oscar.
“We’re certainly well aware of the challenges that Oscar has had in the past and in other markets,” Glass said.
The Clinic sees the endeavor as a “manageable risk,” he said and has confidence in the way the new offering between the two companies is structured.
Oscar’s Schlosser said some of the company’s earlier problems were tied to expected turmoil in the new insurance market as it was established.
“The markets we quit had instability,” Schlosser said. “When we look at the Ohio market, I think we see a stable market.”
The Clinic sees entering the individual market as a way to attract more people to its hospital system. All of those with the plans will primarily have access to Cleveland Clinic doctors and services with limited benefits outside of the system.
The Cleveland Clinic network now only is available on the exchange through a broad network offering provided by Medical Mutual of Ohio, Sears said.
The Clinic and Oscar plan to debut the new offering in the five counties before looking at options for expansion, Sears said.
“We will be working to make sure that everything operates smoothly and then we will evaluate other opportunities for expansion geographically and potentially into other insurance segments,” he said.
The Clinic also will continue to maintain partnerships with other insurance companies and will look for other insurance segment-specific arrangements with other companies.
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