7 connected strategy in the health insurance industry Advantage market, which is growing faster than the Individual market and for which its customer-centricity and focus on value-based care should be an advantage given the capitated reimbursement structure. Moreover, Oscar Health entered into a partnership with Cigna in 2020 with the purpose of expanding its footprint in the employer-spon- sored insurance market by targeting small businesses,7 but it had limited success so far in that endeavor and more time may be needed to assess whether that expansion will be successful.8 While Oscar has been growing well in its niche, its profitability has been negative and decreasing over time in the most recent two years from -55% to -87%.99 Oscar Health started trading publicly on March 3, 2021, but share price declined 38.5% from IPO since April 27, 2021.10 Even more worryingly, its net loss has widened from 2019 to 2020, from $261.2M in 2019 to $406.8M in 2020.11 This suggests that while its adoption in niche Individual segment has been successful due to the value it creates thought connected strategies, it has not been able to capture that value yet. The reasons for its poor recent financial performance are twofold. First, Oscar hasn’t ex- panded its member base fast enough, given the large capital expenditures on technology and connected strategies and its high SG&A. In other words, it incurs large fixed costs that it hasn’t been able to spread over enough members to reach profitability. While it has been successful in the Individual segment, that represents a much smaller market size than Medicare Advantage, where Oscar hasn’t been able to make significant progress, reaching only 3,548 members through February 2021.12 Meanwhile, legacy companies continued to grow in the Medicare Advantage market: UnitedHealthcare, Humana, and CVS-Aetna all grew by 8% to 13%. Oscar may be struggling in the Medicare Advantage market because it cannot affect enough levers on the provider side in terms of incentiviz- ing them to do process change and tech adoption. Without affecting these levers, Oscar’s connected strategies focus may not be able to perform well in a capitated environment.13 Second, Oscar’s gross margins in the Individual segment are low, as its medical spending is high relative to competitors. That is due to the fact that its members are less federally 7 https://www.cigna.com/about-us/newsroom/news-and-views/press-releases/2020/cigna-and-oscar-announce-strate- gic-partnership-to-offer-differentiated-health-solutions-to-small-businesses-in-select-us-market 8 https://seekingalpha.com/article/4405155-oscar-health-insurance-deeply-unprofitable-company-cant-break-through 9 https://www.sec.gov/Archives/edgar/data/1568651/000119312521030955/d28906ds1.htm. 10 https://www.cnbc.com/2021/03/03/oscar-ipo-oscr-starts-trading-on-nyse.html 11 https://www.sec.gov/Archives/edgar/data/1568651/000119312521030955/d28906ds1.htm. 12 https://www.linkedin.com/pulse/built-fail-oscars-business-model-ari-gottlieb/ 13 https://medium.com/@abhasvc/the-medicare-advantage-startups-unicorns-or-donkeys-a8acf3881ee5