Oscar was the first company to adopt the concept of narrow networks by market, which is a far better economic model than full-on networks that employers buy because the economics are fundamentally different. When I'm an individual buying, I don't have to take what my employer has. I get to look for my network in every market. And with 75% of all the providers in a network, the narrow network model is the best economic model for the individual marketplace.
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All right. Welcome to the latest edition of Scale Community Analyzing Healthcare podcast. I am honored to welcome and introduce Mark Bertolini, the current CEO of Oscar Health, the well-publicized Oscar Health that we've all grown up with, the former CEO of Aetna and EVP at Cigna. So, Mark, welcome.
Thank you, Roy. Great to be here.
So, just to frame Oscar, and I'll do a very poor job. So, this is my attempt for you to correct and improve upon. Quick research: 2.1 million members plus 10 billion of run rate revenue and trailing 12-month revenue. Two and a half thousand give or take employees. So very productive in terms of revenues per employee. 18 states last year and last year was a break-even year or plus break profitable year for the business which was a milestone achievement and optimism going into 2026 that the company can overcome some of these headwinds with ACA and go back to some of the trajectory that it's been on for some time. Is that a fair framing of Oscar?
We're about 12 billion. So that's our guidance to the street is around $12 billion in revenue.
I knew I would get it wrong somewhere. So, thank you for correcting me.
So, let's take a step back. How does Mark, a former auto engineer working in Detroit, end up running one of the country's largest payers and then leading one of the country's most, if not the country's most innovative payer? How does that transition happen?
My whole life I have been endlessly curious about things. So how is this thing made? How do we make this happen? And so throughout my life I was always asking questions about what if or why. And as a result, the heuristics that exist in my head about how the world works got larger and larger and I saw connections. I have a spatial OCD problem; if things aren't in the right place, that bothers me, like photographs or pictures hanging on the wall. And I also have a photographic memory. So the whole thing of trying to figure out how the world works and how I could make it work better was always something that attracted me. And so these jobs, you know, working on the assembly line at Ford, changing the work rules, putting things together, understanding how they're built. I did a wood model maker apprenticeship with my father before I went to the auto factory. He was a model maker as a pattern maker in the automobile industry and we worked with wood and how do we build shape and how do we measure shrinkage when you cast these things in metal. So all of that stuff was very just curious to me and as my career developed I learned that if I spent more time with people just asking questions I learned far more than always having the answers.
So the engineering mindset, almost the Deming approach to constant quality improvement. I want to ask you if you brought that optimization of everything mindset into the payer world and what did that do? What did that do to the payer world and what did it do with you and your journey starting with Cigna and then Aetna and then Oscar?
Well, actually I started a company with some friends out of graduate school called SelectCare in Detroit. It was the first physician hospital and management-owned for-profit non-publicly traded company. We grew it to a billion in revenue equivalence over a period of 10 years. And in that company, we tried all sorts of new things because we were going to disrupt the industry by coming to the market. And I remember people saying to me, why are you going to do that of all places in Detroit? Well, that's where I grew up. But why in that industry, the big indemnity carriers will crush you? And a mere 10 years later, they were all gone from the scene. And managed care companies were the highlight. And what I found was that the system was incredibly inefficient. And I learned later with my son's illness and my own accident that it was incredibly focused on break-fix and not really interested in the human condition. And so as I grew through the industry, I used to add on new things to my thinking, try new things with my company. And I was cleaning out my house in Hartford when I retired from Aetna and I found this box of acetates. And you probably don't know what acetates are, Roy, but there are these clear plastic films with cardboard rims around them that you would put on an overhead projector as you gave your speech. And that was before PowerPoint. It was before computers. You just stood up there and you threw these things up there. And I would throw a Gary Larson cartoon or two in there to prove a point, like somebody sitting at one end of a checkerboard and the other sitting at the other one's playing checker, one playing chess to describe how just difficult the industry was. And so I'm cleaning out, I find this box of acetates. I start flipping through them. They're from 1991. This is 2018. And I'm looking at them. I go, 'Oh my god, human genome project. Wow, virtual healthcare. Wow, social determinants of health.' And I'm looking at all of this and going, 'We have come so little in so long. It's amazing. I thought these things were on the edge when I was doing my speeches and people used to look at me like I had three heads and here we are still struggling with these very same issues.' Even though we've learned virtual health, we do have some preventative care, but we certainly haven't completed the mission, have we?
We haven't put it all together into a system that works together. Yeah.
We have episodes of it out of necessity. Virtual healthcare is around because of the pandemic.
Uncoordinated would be the way I would critique it. Is that fair?
And incredibly inefficient.
Okay. So, take these Rubik's cubes, take three-dimensional images, three of them. One is Cigna, one is Aetna, one is Oscar. How do you compare and contrast each to each other, strengths and weaknesses?
