Building a Healthcare Company

Three venture-backed insurers, founded within six years of each other by people from outside insurance, show what building a healthcare company actually involves. Oscar Health was founded in New York in 2012 by Mario Schlosser, Joshua Kushner and Kevin Nazemi to sell individual plans on the new Affordable Care Act exchanges, with a clean app, free telemedicine and its own claims system. It lost money for a decade, went public in March 2021 at $39 a share, about $7.9 billion, and fell below about $3 by late 2022. In April 2023 Mark Bertolini, Aetna's former chief executive, took over, cut the lines that lost money (Medicare Advantage, most of its software platform, the Cigna partnership, California) and brought the administrative cost ratio down from above 25% to about 19% in 2024 (reported). Oscar earned its first full-year profit, about $25 million, in 2024, lost about $443 million in 2025 when the exchange risk pool turned sicker than it had priced, and entered 2026 with a record of about 3.4 million members.

Devoted Health was founded in 2017 by Ed and Todd Park, who had built athenahealth, to own a Medicare Advantage plan, a member-service team called Guides, its own virtual and in-home medical group and its own software. "It took us two years just to build the tech," its first chief medical officer, Bob Kocher, later told Fortune. Its first members joined in Florida in January 2019. Its Ohio plan earned five stars in its first year of eligibility, and it raised about $1.15–1.2 billion in 2021 at a valuation of about $12.6–12.7 billion. STAT reported in February 2024 that statutory filings showed no profit after five years. When larger insurers withdrew from unprofitable counties for 2026, Devoted grew to more than 466,000 members in 29 states, and in October 2026 it raised $550 million in a financing reported to value it at about $25 billion (verify). It publishes no audited group results.

Bright Health, founded in Minneapolis in 2015, raised about $1.5 billion privately and about $924 million in a 2021 IPO, grew to about a million members, then lost more than $2.5 billion in two years on exchange and Medicare Advantage risk and left insurance in 2022–23. What separated the three was not the app. It was underwriting discipline, regulatory capital, star ratings, provider contracts, and leaders who knew how insurance earns and loses money. This chapter covers what founders must build besides the product.