The US healthcare sector has undergone rapid digital transformation in recent years, driven by a combination of regulatory changes, consumer demand and technological advances.
The pandemic has accelerated the adoption of telehealth, remote surveillance and artificial intelligence (AI)-driven diagnostics, making digital health a key component of modern care delivery.
Against this backdrop, healthcare technology company Oscar Health reported its financial results for the fourth quarter of 2024 and for Tuesday (February 4th). The strategy is consistent with broader market trends.
“We're looking forward to seeing you in the future,” said Mark Bertolini, CEO of Oscar Health. “Our strong top-line and bottom-line performance, our best membership ever and consistent execution demonstrate our ability to deliver sustained, profitable growth.”
The company's total revenue for fiscal year 2024 was $9.2 billion, up 56.5% from the previous year. Oscar reported a profit of $25 million a year despite losing $153.5 million in the fourth quarter.
Since its founding in 2012, Oscar has yet to make a profit for a year. The current question is whether Oscar can continue to carry out his profitable vision while maintaining his commitment to innovation.
The company's shares fell nearly 18% after opening hours at the time of reporting.
Read more: Unlock the future of digital health at the World Economic Forum
Rising digital health represents a change in the industry
The healthcare industry is at the intersection of innovation and evolving patient expectations.
The focus of Oscar Health on leveraging technology to enhance the member experience and streamline operations is central to its strategy. The company's full-stack technology platform aims to provide outstanding experience, deep engagement, high value clinical care and earn the trust of a growing member base.
Oscar's significant annual revenue growth was driven primarily by increased membership during the 2024 open enrollment period, strong membership retention and additional registrations for a special enrollment period (SEP).
As of December 31st, Oscar Health membership had increased by approximately 1.7 million people from the 1 million at the end of 2023. This growth was primarily in the individual and small group segment, with membership increased to 1,650,000 from 967,000 the previous year.
The slight increase in healthcare loss rate (MLR) was partially offset by favorable previous period development due to growth in SEP membership and increased risk-adjusted transfers. The improvement in SG&A's expense ratio was due to better fixed costs leverage and more efficient variable costs.
Looking forward to 2025, Oscar introduced new performance metrics and revenue from the business. Oscar Health has earned a total revenue range of $10 billion to $10.2 billion, MLR of 80.5% to 81.5%, SG&A expenses ratio of 18.0% to 18.5%, and profits from operations of $150 million to $200 million It is predicting that.
Read more: Personalized Digital Campaign attracted 600,000 members to Oscar Health
Oscar Health's digital first model
Still, Oscar has successfully made a membership base but struggles to achieve consistent profitability.
Unlike many in-service insurance companies, Oscar has prioritized its tech-driven approach to health insurance since its inception in 2012. The company is increasingly trying to differentiate itself with an emphasis on mobile engagement, telehealth integration and AI-driven decision-making. A crowded market.
“Healthcare consumers are smarter than ever today, and they shop and want to work with providers who are not only involved in providing a solid medical experience, but also managing costs. I'm thinking,” Erin Gadavi, senior vice president of the class-wise wellness general manager and general manager, told Pymnts.
Oscar Health works with a consumer model with a focus on user-friendly technology. Its app-based experience provides policyholders with a variety of digital health services.
Pymnts Intelligence found that the Digital Healthcare Gap: Streamline Patient Travel Report found that two-thirds of consumers use patient portals, particularly millennials and high-income people. Among non-users, 32% expressed interest in using such a platform when available.
