Oscar Health posted gains on several key financial metrics last year and beat analyst expectations for the fourth quarter, sending its share price up on Friday.
Insurtech’s medical loss ratio improved from 88.9% in 2021 to 85.3% last year, and management expense ratio fell from 21.8% to 20.6%, the company reports. on Thursday. Oscar Health recorded a net loss of $226.6 million in the fourth quarter, beating analyst expectations of a net loss of $261.3 million.
Not a Modern Healthcare subscriber? Sign up today.
Oscar Health suffered a net loss of $610 million in 2022, up from $571 million the previous year, but the health insurer predicts a better 2023. The company expects a loss of between $75 million and $175 million this year. Executives say Oscar Health is on track to turn a profit by the end of next year and will continue to improve margins.
“We believe we are in a better position than ever to achieve profitability based on disciplined execution,” said Mario Schlosser, CEO and co-founder of Oscar Health.
Wall Street welcomed the news: Oscar Health opened at $3.90 a share on Friday and closed at $4.95, up 30.7%.
Schlosser said Oscar Health will continue to focus on efficiency and profitability without major investments. The company has downsized its operations amid financial stress.
In December, Oscar Health announced that href=”https://www.modernhealthcare.com/insurance/oscar-health-new-florida-members”>will discontinue sales in the Florida private market a few weeks before closing. End of open enrollment on health insurance exchange. A month ago, the company effectively closed its Medicare Advantage business. And in August, Oscar Health stopped providing technology services to insurers and providers shifting to risk-based payment models.
Some remain skeptical about the insurer’s prospects. Ari Gottlieb, principal at A2 Strategy Group, said the fundamentals have not changed. “I don’t think being an individual player is really a viable business model in the long term,” he said. “They will never have the scale in the local market to negotiate with suppliers for really attractive rates.”
Oscar Health’s recent finances have been boosted by high interest-related investment income, executives admitted on a call with investors. Oscar Health raised $25 million from investments in the fourth quarter, up from $334,000 in the final quarter of 2021, an increase of 7,385%.
This story first appeared in Digital Health Business & Technology.
