Case Study: Lessons from the Oscar and Mount Sinai Partnership

Payer-provider partnerships are a hot topic across the industry. At the 2016 Oliver Wyman Health Innovation Summit, Mario Schlosser, co-founder and CEO of insurance start-up Oscar, and Niyum Gandhi, executive vice president and chief population health officer at Mount Sinai Health System, discussed the building blocks of their newly formed partnership. Here, Oliver Wyman’s Josh Michelson and Tom Robinson reflect on the innovative collaboration – examining it within the context of today’s landscape, and summarizing key learnings for payers and providers that may be exploring their own partnership options.

Together, Mount Sinai and Oscar are launching a new product that is based primarily on an integrated and carefully curated provider network. It will include three hospital systems (Mount Sinai, Montefiore, and the Long Island Health Network), more than 20,000 physicians (a substantial reduction from Oscar’s original provider network), and an Oscar-branded primary care center in New York City set up exclusively for members. The Oscar Center (with care provided by Mount Sinai physicians) recently opened in Brooklyn.

The partnership is receiving industry-level attention because it represents the pairing of the largest integrated health system in New York City with a newly created health insurer that is looking to deliver a fundamentally different member experience. When first announced, the news had many wondering why would Mount Sinai partner with a start-up in the insurance space? And why would Oscar seek out Mount Sinai, whose DNA is that of an Academic Medical Center? What will this achieve? Is it really any different?  

The possible repeal of the Affordable Care Act insurance provisions (specifically, the individual mandate and federal subsidies) may make the individual and small group business challenging, and no one knows for certain what additional regulatory changes might be in store. But closer-payer partnerships – like the one between Oscar and Mount Sinai – help to increase the odds of success in any regulatory environment by creating a product that is fundamentally better for consumers.

An in-depth look at the partnership provides valuable lessons for organizations considering a payer-provider partnership.

How the Mount Sinai-Oscar partnership is not your typical partnership

Collaborative design. While it might seem obvious to state that collaboration is key to a successful partnership, Oscar and Mount Sinai moved beyond mutually agreeable terms to a truly collaborative design. Working backwards from the hoped-for outcome, the two jointly determined which aspects of the partnership would be shared, which would be delegated, and who would do what. This was true down to setting the price and performance dashboard, and jointly creating a financial model that works for both organizations. “Everything from step one was co-design,” Gandhi said at the Health Innovation Summit. “That’s different than the way these are often approached in the market.”

“There's a joint roadmap we're working against, with an expectation as to when which step needs to happen, who needs to do them. And if they don't happen on either side, then we say, ‘All right, let's cut through it and just put a manual process in place,’" Schlosser said.

Senior-level engagement. From the very beginning, this was viewed as a strategic dialogue and partnership, and much more than a contracting discussion. Senior leadership maintained open lines of communication; and when there were issues, they were escalated early, so as to avoid the discussion devolving into a protective or adversarial dialogue.

Fully integrated consumer experience. Every aspect of the consumer experience is integrated. The goal is to offer a seamless experience, and eliminate the frustration consumers experience when they bump into payer/provider border fences. This reaches as far back as the initial enrollment, and includes scheduling, care management, virtual care, and more. It also requires a dose of humility and the ability to be honest about which brand matters locally and which will best be able to carry a continuous experience for the member.   

Rapid-cycle innovation trumps perfecting the offering. Oscar is a start-up, so it wasn’t much of a reach to adopt the start-up mentality of rapid iteration. But a key part of the partnership is its tolerance of iteration, and agreement that versioning is the norm.

Transition is top priority. Altering the provider-consumer relationship through network levers can be very disruptive; both partners agree that a critical success factor will be communicating the transition to members. Branding must occur early and flawlessly, and members must receive the message that a narrow but deep network will provide more high-touch access and consumer-centric care. “If you just say, ‘this doctor is leaving, but this guy also exists,’ that's not a very powerful story,” Schlosser said. “The story becomes, ‘This guy's leaving, but here is a doctor who has been on the New York magazine Best Doctors' Lists. And this doctor has availability. We can make the appointment for you right away.’ That becomes a very powerful story.”

Unencumbered by legacy mindset. As the new kid on the block, Oscar is unencumbered by “old-school” mentality. Mount Sinai, meanwhile, was able to discard the traditional legacy mindset and came to the partnership with a fresh perspective. Both players came to the partnership moving away from thinking “I need to do this because I'm a payer/provider; I can't do this because I'm a payer/provider.”

A different end-game vision. This partnership is not simply about deploying a narrow network to lower costs, Schlosser and Gandhi emphasized. It is about delivering an unparalleled experience, one that is realized by leveraging a narrower network for more concentrated relationships – both provider-to-payer and physician-to-consumer relations. “We had to architect a financial model that worked for both organizations, but that got to growing the pie rather than splitting the pie,” Gandhi said. “That's how the value equation has to work.”

While we cannot know the ultimate outcome for this particular partnership, the unwavering focus on the consumer experience and the philosophy of true partnership that is transcending the typical provider-plan negotiations is building the right foundation for success. We can expect more partnerships in this ilk will continue to emerge, and the most successful of them will harness the best from all partners to overcome the barriers of getting historical adversaries to operate effectively together.