Lessons from Sachin Jain, CEO of SCAN Group & SCAN Health Plan, building an innovative and leading quality Medicare model

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Welcome back to the Pear Healthcare Playbook! Every week, we’ll be getting to know trailblazing healthcare leaders and dive into building a digital health business from 0 to 1.

This week, we’re excited to get to know Sachin Jain, CEO of SCAN Group & SCAN Health Plan. Sachin Jain is charged with leading the organization’s growth, diversification, and emerging efforts to reduce healthcare disparities. Founded in 1977, SCAN Health Plan is a not-for-profit, Medicare Advantage plan that provides healthcare coverage to Medicare beneficiaries in California, Arizona, Texas and Nevada.

SCAN’s revenues top $4.3B and the organization serves 300,000 patients. Under Sachin’s leadership, SCAN has grown its revenues by more than $1B.

Previously, Dr. Jain was President and CEO of CareMore and Aspire Health. Dr. Jain is also an adjunct professor of medicine at the Stanford University. Prior to joining CareMore, Dr. Jain was global Chief Medical Information & Innovation Officer at Merck & Co. From 2009–2011, Dr. Jain worked in leadership roles at the US Department of Health and Human Services, where he was senior advisor to the administrator of the Centers for Medicare & Medicaid Services (CMS) and many other leadership positions in healthcare policy.

Dr. Jain graduated from Harvard College with a BA in government and continued on to earn his MD from Harvard Medical School and MBA from Harvard Business School. He trained in medicine at the Brigham and Women’s Medicine and Harvard Medical School, and continues to practice medicine.

This is a packed episode. Sachin shares his thoughts on how SCAN scored the highest Medicare Star rating, SCAN and CareOregon merger, partnering with startups, toxic positivity in the healthcare industry, impact over virtue signaling, clinician burnout, and his predictions for the future of healthcare.

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Sachin’s background in health:

• As the son of physicians, Sachin felt the pressure to have a career in medicine — but this decision would actually lead to a highly fulfilling career. He shares that throughout his career, he’s been trying to find the place where he can make the biggest difference that he can in the care of people — “both through the direct service we provide to patients, and the change that we inspire in the industry.”
• In Sachin’s junior year at Harvard, he took a class called Quality of Healthcare taught by Don Berwick and Howard Hiatt, giants in the modern healthcare quality movement. Inspired by their careers, he crystallized a vision for himself: a practicing physician who could use his insights from clinical care to drive change in the delivery of healthcare.
• After his tenure at CareMore and Aspire Health, Sachin came to SCAN because he thought it was the best opportunity to drive inspirational change in the care of older adults. SCAN stands for the Senior Care Action Network, and he believes that the most important word in the acronym is Action: the team is wholly dedicated to driving action and change in the healthcare ecosystem, because it is in such desperate need of it.

SCAN Health Plan is one of the nation’s largest and fastest growing not-for-profit Medicare Advantage plans, serving more than 285k members across CA, NV, AZ and TX. SCAN Group has launched 4 distinctive care delivery companies and community services.

• Sachin shares that in the 80’s, SCAN was in the business of “social determinants of health” before the term had even been coined. They started as a social HMO (social health maintenance organization), a demonstration program of the Health Care Financing Administration. SCAN’s goal was to demonstrate how integrating social care and medical care could lead to better outcomes to patients, and they were the most successful and longest running demonstration project in the program.
• HCA eventually retired that program, and SCAN became a Medicare Advantage plan (the private provision of the Medicare program). Over the last 20 years, SCAN has become one of the largest not-for-profit Medicare Advantage plans in the US and is currently the only plan in California to earn a 4.5-star rating* from the Centers for Medicare and Medicaid Services (CMS) six years in a row.

Sachin joined SCAN 2.5 years ago, and under his leadership, SCAN has undergone tremendous growth and transformation

• SCAN recently announced their intent to combine with CareOregon, SCAN’s “Medicaid twin in Oregon”. HealthRight will bring together the expertise and resources of SCAN Health Plan and CareOregon, two nationally renowned organizations, to improve access for people traditionally underserved by the US healthcare system.
• Sachin shares that both CareOregon and SCAN have remarkable programs focused on Medicare and Medicaid dual eligibles. CareOrgeon has a significant number of patients that are just in the Medicaid program and SCAN is primarily focused on the Medicare population, but their common alignment is a focus on vulnerable populations. As regional health plans competing against incumbents, their goal for the partnership is to serve vulnerable populations in all possible geographies.
• There are four delivery arms: Welcome Health, focused on home based geriatrics, myPlace Health a focused on the PACE program, Homebase Medical, focused on palliative care, and the fastest-growing: a medical group focused on people experiencing homelessness. This group is called Healthcare in Action, which now has a presence in six counties in California.
• On top of all these advancements, SCAN’s health plans have grown from just Southern California to also serve patients in Arizona, Nevada, and Texas. This year, SCAN has launched the first LGBTQ+ focused health plan in the country, SCAN Affirm.

“Our vision of ourselves was really a California focused entity, but when you have a good thing, you’ve got to take it to more people… We’re trying to take high quality care to all these other geographies where some people don’t have access to it. And to go back to where we started, our plan continues to integrate social determinants of health at a very high level.”

On the future of SCAN: providing differentiated care and unlocking new potential for people

• Sachin’s priority is to look at the inflection points in the lives of older adults, identifying where the biggest opportunities are to make a big difference. It might be a new diagnosis, managing the death of the spouse, enrolling in Medicare in the first place, transitioning from palliative care to hospice… These are the moments when Sachin sees SCAN showing up, providing something differentiated, and unlocking new potential for people.

“Where are people most scared? Where are people most frustrated? Where do people have the biggest challenges that they have accessing the healthcare system?”

• Sachin shares his personal experience: last fall, his dad fell in the middle of the night and fractured his hip. They got him in an ambulance to the ER where he received a ton of pain medication. In his delirium, he was deemed ineligible to have an operation that day and his surgery was delayed. The durable medical equipment they shipped to his house was also delayed, and the care manager was of no help.

“Unfortunately, the system did what the system does — instead of really listening to you, instead of really caring about the things that are top of mind for patients and families.”

• Sachin believes that in the course of industrializing healthcare, we’ve moved far away from actually solving people’s problems. Quality measurements introduced by regulators might be more focused on checking boxes than helping you with the things that you need help on.

“One of the biggest problems we have in healthcare is that most healthcare entrepreneurs don’t need healthcare and don’t realize how dystopic some of the things that they’re creating are — until they actually need them on the other side of things.”

Sachin’s bar for startups is high. The priority needs to be quality, delivery, and active and engaged users.

• Sachin believes that unfortunately, the industry is populated with people who are chasing dollar signs or cutting corners. By scaling a bold vision into an MVP too early, the MVP is a shadow of what they imagined.
• Sachin has a hot take: there are “too many consumer buffoons running around healthcare” — people who believe a nice, shiny interface will be an effective product without beta testing with the actual people and vulnerable populations they want to serve.
• Startups that pitch Sachin frequently flaunt the number of total users they have. That’s not what he wants to see — he wants to see the internal dashboard and how many people logged in this morning. He’s an advocate against toxic positivity: saying everything’s going great when it’s not.

“I think we have an authenticity problem in healthcare. Everyone starts out with the greatest intent to drive the most change, and then before long, the pressures start to circulate around you and you’re just trying to survive, and then you build something that’s just as mediocre as the things that you’re trying to replace.”

Focus on the problem space, outcomes, and delivery. No BS. Have a clear eyed look at the issues and the problems in order to solve them.

• For Sachin, a compelling problem space is key. This year, SCAN partnered with SafeRide, in efforts to reduce barriers that seniors face in getting to healthcare appointments. They’d always found the non-emergency medical transportation space so fraught — members being dropped off in the wrong place, dialysis patients waiting for a long time to get a ride.

“I think if you’re in a good problem space, I think your chance of getting traction is much higher. And sometimes you’re ahead of the customer and you understand the problem at a higher degree.

• Sachin shares that especially in an undefined problem space, an important part of the work you do as an early startup is educating the person across the table from you about the problem.

Sachin’s take on the future of healthcare

“I’ve now been 20 years in the business of trying to make healthcare better, and when I look around, it feels like it’s only getting worse. Healthcare is one of the few industries where you can be really bad at delivering your services, but still very profitable and very successful.

• Sachin believes that a certain degree of impatience with the status quo is required. Many healthcare organizations have a lot of embedded latent potential: programs that are outstanding, but need to be scaled to reach more people.

On government healthcare standards:

• Every Annual Enrollment period between October 15 and December 7 when people buy Medicare Advantage plans, health plans compete on small differences in benefits — dental benefits, a cash card, etc — meaning that people switch year to year based on what they need. Sachin believes that there should be standardized benefits built around the things that people need most (standardized dental, audiology, and vision benefits, for example, all of which Medicare Advantage plans provide). Plans should compete on the quality of administering benefits as opposed to small dollar to dollar variations, especially given that some of these benefits are often deceivingly advertised.
• There have been various limitations on how much you can change benefits year to year, but it doesn’t necessarily limit the confusion. Other plans will then introduce new plans with big benefits, people often don’t understand what they’re switching into, etc.

“We’ve normalized the abnormal in the Medicare Advantage industry, and we’ve normalized the abnormal in health care more broadly. The opportunity for us is to try to simplify things on behalf of seniors.”

• There’s precedence to this kind of simplification proposal. Senators Ron Wyden and Pete Stark did this almost 40 years ago around Medicare supplemental policies, and Sachin believes the same needs to happen in the Medicare Advantage space.
• Critics of standardized benefits might say that what they’re doing is limiting innovation in benefits — many plans offer more out of the box perks, like an Apple Watch — but Sachin questions whether there is any direct health impact from “benefits innovation”. In his opinion, a lot of it is for sales benefit, not necessarily true patient benefit.

We created the clinician burnout problem in this country — and overloaded with complexity

“We do have a clinician burnout problem in this country, and we created it, you created it, and I created it, and I’m just being provocative for a reason. We’ve overloaded the system with complexity.”

• Sachin agrees that there is a ton of overhead creating a burden for frontline clinicians. His belief is that there will continue to be shortages if we layer more work on the frontline without taking anything off their plate.

“I would say that venture capital, private equity, and other business forces in healthcare have driven what I call the substitution effect of healthcare professionals.”

• The substitution effect is the idea that what we need is replacement: replacing specialist doctors with generalist doctors, or replacing generalist doctors with more nurse practitioners or physician’s assistants, or replacing them with community health workers
• What Sachin believes is the path forward is to think about how we organize teams, ensuring that the right kinds of decisions are being made by the right levels of people.

“We’re unburdening people who have lots of cognitive capacity to take care of patients from tasks that they shouldn’t be doing. But let’s not do that by just introducing scribes to take those tasks off their plates. Why don’t we eliminate a lot of that work together?”

• Sachin questions — what if there was a nationwide initiative to eliminate 50% of the non-value-adding healthcare documentation today? What if that increased our clinician capacity by 25%? His belief is that the clinician shortage is in part, created by a bad system and not just workforce shortages. Sachin predicts greater efficiencies in care, whether that’s propelled by AI-powered documentation or other ingenuities.

Finding an authentic effort to remove costs in the healthcare system

• Sachin shares that healthcare systems for years have managed their books through a combination of investment gains plus operating income. A lot of healthcare organizations balance their books through investment gains, and when the investment gains went away, some of the other financial faults were revealed.

“I would say that we’ve never had a real cost takeout movement in healthcare — never.”

• In his 20 years of experience, Sachin shares that he’s never seen an authentic effort to remove costs; the movement has always been to address growing costs by demanding higher revenue from payers or employers who pay health premiums. He believes a moment will come where the prices get too high and people will have had enough — and that maybe a reckoning is due, whether that be through the FTC or on the payer side or delivery side.

On focusing on moving outcomes in digital health

• Sachin was at UNC after the HITECH Act was passed and has watched the digital health boom play out over the last 10 years.

“I would ask: is there a digital health company that is moving outcomes like crazy for patients? I think there are a few, but I can’t name too many to be honest.”

• Sachin cautions against AI products that “solve this problem that you don’t really have”. If an AI product does a scribe’s job, every person who’s working as a scribe is going to disappear from the workforce and be reallocated to doing more high-value work. Sachin is wary of a culture in the healthcare industry of always asking for more, for doing less.

Take on food benefits in Medicare

“Either you’re going to develop a menu that’s going to take care of my parents and your parents and address their needs, or you’re going to give them the freedom to go get the stuff that they need if you’re going to actually provide a food benefit, otherwise don’t bother.”

America is a multiethnic, multiracial society where people eat a lot of different things, and we need to be able to give people benefits.”

On what’s overhyped in healthcare:

• Sachin is least excited about companies that virtue signal about what they’re doing, but under the hood, there’s not a lot going on. Companies that have been less focused on innovating on a care experience and more focused on exploiting the revenue model or loopholes in policy. There’s also companies that get celebrated
• Sachin believes we need to start talking about companies whose true impact and delivery doesn’t actually meet hype cycles. He says this because companies that aren’t actually solving a problem but claim to be solving it are actually crowding the problem space — ”I’m not gonna get into that problem space because there’s already 5 companies that are in that space that are doing a great job”.

On what needs more hype:

• Sachin draws attention to the inflection points. What are we going to do to help cancer patients navigate their experience? What are we going to do for the person who first experienced a fall so that we can prevent them from ever having a fall again?

Interested in SCAN or joining their team? Learn more on their website, LinkedIn, and Twitter.

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