Oscar Health taps former Aetna chief Mark Bertolini as new CEO

Oscar Health is making a big move at the top, one that signals a renewed focus on building up its core insurance product as it charts a path to profitability.

The insurtech on Tuesday announced that industry veteran and former Aetna CEO Mark Bertolini will take over as its CEO on April 3. Co-founder and current chief Mario Schlosser will transition to serve as President of Technology, where he will lead product and engineering, including the strategy around its +Oscar product.

Schlosser will continue on as a member of Oscar's board, and the board will expand to include Bertolini.

Insurtechs like Oscar position themselves as disrupters, companies that infuse an industry with new approaches, technology and ideas, and Bertolini made his reputation by being a disrupter himself.

“I have worked closely with Mark in his role as a strategic advisor to Oscar for the past 18 months and it’s become clear that we share a vision for the future of healthcare,” Schlosser said in the release. “By pairing my passion in tech with Mark’s extensive expertise in building and scaling companies, we are well-positioned to continue to execute our strategy for profitability, set Oscar up for continued growth, and deliver enhanced value for our members and shareholders.”

Bertolini’s resume includes executive positions at Cigna, NYLCare and SelectCare, but it was during his time at Aetna that he gained a reputation as a national thought leader who wanted to shake up the insurance space.

For instance, a 2017 story with the defunct magazine Managed Care that focused on healthcare’s heavy hitters said that he's well known for going off-script while at conferences, once famously saying: “I think insurance is a nasty word. We may not even call it that when we’re done with it.”

His personal healthcare experiences also shaped his leadership style, as Fierce Healthcare previously reported. He left his role at Cigna after his son was diagnosed with an aggressive form of cancer, and later was in the role of patient himself after breaking his neck in a skiing accident.

“Oscar Health is an established challenger brand in the healthcare industry, pushing the boundaries of how insurance operates and delivers for members,” Bertolini said in the release. “I am proud to join the company at this pivotal time, and excited to cement Oscar’s future as a leader in the industry.”

Taking over as the CEO of Oscar Health is not an easy task. It's not much of a secret that the insurtech market is heavily volatile, and that its main players have struggled to turn a profit. Oscar, which was founded in 2012, has never been profitable, though it has made several moves in the past year it says put it on that path.

“Insurtechs, at least some of them who are not mature and are still incurring operating losses and negative cash flow, are living on lines of credit and venture debt and equity rounds,” Duane Fitch, the national healthcare management consulting leader at Plante Moran, told Fierce Healthcare. “And those kinds of liquidity moving forward are going to be much more difficult to secure. The insurer tech industry, and those players who haven’t achieved the fundamentals of positive cash flow and earnings are going to have a difficult time securing the liquidity to keep investing in the operation.”

For one, the company pumped the breaks on sales for its +Oscar technology stack, which struggled out the gate with implementation challenges. Though it has not fully abandoned the business, the insurer is now taking a more measured approach to +Oscar, and is making it available piecemeal.

Osar banked its first partner for the Campaign Builder tool last month.

In addition, Oscar largely shed its Medicare Advantage business to focus on its individual market plans, which have seen huge growth amid record enrollment on the exchanges. It also pressed pause on new ACA signups in Florida, its largest market, as enrollment swelled past 1 million.

The company expects to reach profitability in 2024, and has circled 2023 as a pivotal year on that path, so it's likely more changes are to come. Oscar posted a loss of $609.6 million in 2022, according to its latest financial report, though executives said they believe the insurer remains on track for its goals.

“Oscar was started with the premise that they were going to create a health plan entirely focused on the individual market at the start of the ACA,” Ari Gottlieb, a nationally known healthcare strategist, told Fierce Healthcare. “They were going to go and build a whole new operating platform for the health plan, and really invest in the consumer experience.”

However, Oscar can survive, and even prosper, in the current financial atmosphere. Gottlieb said that Oscar has substantially cut its growth ambitions and will shrink this year.

“They seem to be serious about cutting costs,” said Gottlieb.