This morning we learned that Google Capital, the company’s growth-equity fund, has invested $32.5 million in Oscar Health Insurance. Oscar is an innovative start-up who is trying to transform the health insurance market. Unlike major players like UnitedHealth or Anthem, Oscar’s target market at the moment is individuals rather than large groups of patients. Another key difference is at least for the moment the company is focused on the New York/New Jersey market.

Yet what we see as truly intriguing here is that Oscar could become the first health insurer to dynamically price their policies. As interconnected diabetes management (IDM) moves closer to becoming a reality this technology can not only transform how patients manage their diabetes but also what they pay for their health insurance. As we have noted in the past just as drivers receive a discount on their car insurance for attaching a monitoring device to their car, so to could patients with diabetes receive discounts on their health insurance for achieving better outcomes.

The folks at Oscar seem to be in line with this philosophy as the company has hired 45 engineers who are building tools that not just help gather data but match patients with physicians. The company already gives away free fitness tracking devices and access to free unlimited telemedicine services. It’s not unimaginable that Oscar could easily incorporate a TelCare, Livongo or iHealth glucose monitor into their program nor is it unimaginable that could incorporate products developed by the Dexcom (NASDAQ:DXCM)/Google partnership. The same can be said for the way cool glucose monitoring contact lenses being develop by Novartis (NYSE:NVS) and Google.

It’s interesting to note that David Lawee, the head of Google Capital stated; “What we’re most excited about is companies that can transform the cost curve through technology.”

Well the simple fact is diabetes is the posterchild for dynamic pricing as there is near universal agreement on what defines good control. It’s also true that gathering verifiable data is also a snap. As we’ve been stating all along the problem isn’t getting the data to the cloud the problem has been transforming that data into patient relevant actionable information. Well given that Oscar is already providing free telemedicine to their patients it’s not unimaginable to see them do the same for their patients with diabetes yet instead of seeing a doctor they would hook up with a Certified Diabetes Educator (CDE).

Imagine that training or helping patients virtually, either in the comfort of their home or via a smartphone. Virtual training removes many key barriers not the least of which is where the patient is located. Using such a system a CDE located in Montana could assist a patient in New York, London or Singapore. Physical location is meaningless in today’s interconnected world, technology such as Skype or FaceTime have made this possible.

Much has been made of Google’s push into healthcare and even more as they have made diabetes a cornerstone of their healthcare strategy. Besides the contact lenses, the company has partnered with Dexcom and Sanofi (NYSE:SNY).  Yet we suspect they aren’t done making deals just yet in diabetes. Think for a moment what it might mean if Google acquired or partnered with one of the many way cool whiz bang glucose monitoring companies whose system transmits data to the cloud. As we’ve stated all along what these companies lack is scale and Google could solve that problem.

This is where the Google strategy gets even better as by having their own health insurer they have a platform from which they can distribute drugs and devices. And let’s be honest here while Oscar may not be big today Google wouldn’t be making this investment if they did not believe the Oscar platform wasn’t scalable.

While the old guard continues to fumble about desperately clinging to outdated business models and strategies some have seen the light. Dexcom and Sanofi know that Google has the scale, cash and desire to forever change the business of diabetes. Google should also be commended for knowing what they don’t know, rather than trying to build from scratch they have partnered with well-established leaders in diabetes.

Although we have to be honest we’re still scratching our heads over the Sanofi partnership and can only assume that Google approached others first who couldn’t or wouldn’t make a commitment.  This wouldn’t be all that improbable and let’s be even more honest Sanofi needed this partnership in the worst way. Listen we know we’ve been harsh on Sanofi but give them credit for not screwing this up, Google opened the door and Sanofi was smart enough to run through it. The question now becomes can Sanofi execute or will this partnership fail just as their partnership with Medtronic (NYSE:MDT) did.

It’s getting clearer by the day where the battle lines are being drawn and just how dramatically this wacky world is about to change. Keep in mind that Google isn’t the only high-tech company in healthcare or targeting diabetes. Apple, Samsung, Phillips and Facebook are just some of the others in this category now. These companies not only have the scale and cash to change the diabetes market forever they also understand people and patient behavior.

They also bring with them something diabetes companies have never understood, device companies in particular, that technology is not the solution it’s how this technology is used that’s impactful. They understand that design matters that patients shouldn’t have to have an advanced degree in mathematics to use a device. They are driven not by their technology but by the people who use this technology.

There was a day when diabetes companies were driven by the needs of the patient, however sadly with a few exceptions, this is no longer the case. We see this everyday as the old guard, again with a few exceptions, just cannot break from the past. The future is coming whether these companies like it or not, whether they are prepared for it or not. Those who accept this change have a chance at surviving, those that don’t will become extinct as dinosaurs.

Change is coming and as Momma Kliff was fond of saying “Deal with it, adapt to it or get the hell out of the way for you can’t stop it.”