Sep 22, 2017 · 27m · 20vc
20VC: Raising Over $700m From The World's Best Investors, How To Innovate In Highly Regulated Markets & The 3 Superpowers of Insurance Companies with Mario Schlosser, Founder & CEO @ Oscar
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In this episode of The 20 Minute VC, host Harry Stebbings interviews Mario Schlosser, co-founder and CEO of Oscar Health, about transforming the highly regulated healthcare industry through full-stack technology and direct consumer engagement. Schlosser shares key insights on raising over $700 million in venture capital, navigating legacy infrastructure, and aligning health insurance business models with long-term patient wellness.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 22.6% of the talking time here. How this is scored →
Harry as informed peer 2.0 Guest teaching 4.0 Guest disagreement 0.8 Harry pushing back 0.8
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 13:40 Dismissing photo-sharing VCs
Mario openly dismisses traditional VC investors who focus on viral photo-sharing apps, contrasting them with sophisticated investors capable of understanding complex systemic risk.
Hardest push from Harry ▶ 17:54 Naivety vs industry experience pushbackHarry pushes back against Mario's reliance on health insurance veterans, offering the counter-thesis that industry experience breeds conventional thinking and that naivety is required to innovate.
Biggest teaching moment ▶ 7:26 Healthcare macroeconomics and market failureMario delivers a detailed statistical breakdown showing how the US spends 18% of GDP on healthcare yet yields worse outcomes like higher infant mortality and diabetic amputations compared to peer nations.
Harry holds his own ▶ 16:58 Host citing Mattermark scaling dataHarry demonstrates strong preparation by citing specific Mattermark data on Oscar's scaling to 600 employees, using it to press Mario on organizational breaking points.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| The Founding Story of Oscar Health | 1 | 3 | 0 | 0 | Harry asks a standard introductory question about Oscar's origin story. Mario explains the core problems of US healthcare by contrasting its 18% GDP spend against lower-spending peer nations like Switzerland and Germany. | |
| The Technological and Regulatory Complexity of Healthcare | 2 | 4 | 0 | 0 | Harry relays a specific question from investor Brian Singerman about backend complexity. Mario educates on the technological backwardness of healthcare, noting the industry's continued reliance on fax machines and legacy mainframes. | |
| Market Failures and the Case for Startup Innovation | 2 | 6 | 1 | 1 | Harry prompts Mario on why startups are better suited than governments to fix healthcare. Mario presents a data-heavy breakdown of market failures, showing how the US spends twice as much as peer nations while delivering worse health outcomes. | |
| Fundraising Strategy, Risk Management, and Insurance Superpowers | 2 | 5 | 2 | 0 | Harry asks about Oscar's fundraising history after raising over $600M. Mario outlines the three superpowers of insurance companies and sharply contrasts their hundred-million-dollar risk profile against simple photo-sharing apps. | |
| Pitching Investors and Incumbent Vulnerabilities | 2 | 4 | 1 | 0 | Harry asks how Oscar educated early VCs without sounding patronizing. Mario relates an anecdote featuring former governor Charlie Baker to demonstrate how incumbent health insurers lack consumer product orientation. | |
| Scaling the Organization, Full-Stack Integration, and Public Transparency | 4 | 4 | 1 | 3 | Harry cites Mattermark data showing Oscar's growth to 600 employees and explicitly challenges Mario by arguing that too much domain expertise could be detrimental compared to founder naivety. Mario defends their balanced approach and explains their full-stack strategy. | |
| Quick-Fire Round: Books, Mentors, and Startup Culture | 2 | 3 | 1 | 2 | Harry guides the quick-fire round and gently pokes fun at Mario's news habits. Mario uses the platform question to criticize venture capital's obsession with young founders when building in complex industries. | |
| Oscar's Five-Year Vision and Long-Term Value Alignment | 1 | 3 | 0 | 0 | Harry asks for Oscar's five-year vision. Mario outlines a future centered on real-time proactive interventions and long-term economic alignment with member longevity. |
Statements from this episode (14)
Schlosser: US spends 18% of GDP on healthcare versus 10% elsewhere
“The U.S. Spends about 18% of GDP on healthcare. You know, Germany, Japan, Switzerland, other rich countries in the world spend maybe 10, 11% on healthcare, and those countries, by the way, tend to not have single-payer systems either.”
Schlosser: Healthcare is the last industry relying primarily on fax machines
“It's the last, I think, bastion pretty much anywhere in industry where the fax machine is still the primary means of communication. That is how healthcare works.”
Oscar Health was NY's first new commercial health insurer in 20 years
“The first year of Oscar was really mostly spent getting a license, and we ended up being the first newly licensed commercial health insurance company in New York State in about 20 years, and California later on about 25 years or so.”
Schlosser: Matching foreign healthcare efficiency would save the US $1 trillion annually
“If we became merely as efficient as, say, Switzerland is, or Germany is, or Japan is in delivering healthcare, we would save a trillion dollars a year In the US.”
Schlosser: Medicare is more cost-efficient than commercial private health insurers
“Ironically, it is to the point where the government run part of healthcare, in this case, actually Medicare, tends to be on the cost side, at least, more efficient than the commercial part of healthcare.”
Schlosser: Oscar Health was the first health insurance startup ever
“We, I think, knew fairly early on that given that we were literally the first insurance company startup, health insurance company startup ever, I mean, we essentially defined the category of insure tech, if you want to think about it that way.”
Schlosser: An insurance company's three superpowers are money, data, and care flows
“Three superpowers I think you have as an insurance company are you manage the flow of money, you manage the flow of data, and you manage People are able to make decisions. We manage the flow of money because we are the ones who set incentives for members and f…”
Schlosser: Healthcare incumbents cannot easily innovate due to legacy COBOL code
“If you come into this by having first and foremost in your DNA that you want to serve members and create the best experience for them, get their costs down, you suddenly start developing new technology and products. That the other guys will not get around to d…”
Schlosser: Oscar Health's early team was 70% experienced insurance industry veterans
“We would have not even gotten licensed as an insurance company had we not had in the early team about 70% experienced insurance hands. The early team was about 70% people who had run insurance companies, been in insurance companies.”
Schlosser: Oscar Health transitioned to fully owned internal networks in five years
“We had a grand plan from the very beginning, and it was actually about a five-year plan as it happens. And in that five-year plan, we basically mapped out that early on, we largely want to rely on outside vendors where we want to be the matchmaker. You know, w…”
Schlosser: Oscar Health must publicly file its revenues and costs quarterly
“We file on a quarterly basis, regulatory reports with all of our revenues, all of our costs.”
Schlosser: Startups tackling complex industries need older, experienced industry veterans
“I think that as startups go more and more into a more complex world, parts of the world, and out of, hey, I've got a cool viral app, which I think is a path we need to continue to walk down, it's very important that we are able to pull in, I don't know, people…”
Schlosser: Oscar Health tracks member emergency room visits in real time
“We know in real time when you're in the emergency room and make, can make sure that you get discharged from the ER with knowing what to do next and don't go back in there.”
Schlosser: Oscar Health will use connected device data for proactive care
“In five years from now, I think it means that we are able to look at data coming from your inhaler, let's say if you're an asthmatic, and are able to come in there with our nurses, with our doctors, much more proactively when we see something that might be tak…”