Sachin Jain wants the healthcare industry to stop normalizing ‘the abnormal’

Sachin Jain has earned a reputation for speaking bluntly about the shortcomings of the American healthcare system.

Jain is the CEO of SCAN Group and SCAN Health Plan, which operates nonprofit Medicare Advantage plans in California, Nevada, Arizona and Texas.

SCAN made headlines this week for announcing plans to offer co-pays no higher than $11 on a monthly supply of common treatments for stroke, diabetes, and heart failure, such as Jardiance, Xarelto, and Eliquis. For some, there would be no co-pay. SCAN is moving ahead of the Biden administration’s plan to begin price negotiations on these and other drugs. In a post on LinkedIn, Jain described it as “radical common sense,” a phrase he employs about the need for change in healthcare.

Jain contributes columns to Forbes where he calls for changes in the healthcare industry, and he’ll be speaking at the HLTH Conference in Las Vegas next week.

In an interview with Chief Healthcare Executive®, Jain discusses a range of problems in the healthcare industry. He talks about the prevalence of middlemen in healthcare, the lack of progress in improving outcomes, and the need for more integration in healthcare with a greater focus on patients.

“We've normalized the abnormal in American healthcare,” Jain says. “I think the fact that we don't even call out some of that abnormality is a function of the fact that we've just accepted it as being a necessary part of our landscape.”

(See part of our conversation with Sachin Jain in this video. The story continues below.)

‘Middle madness’

Jain outlined his concerns about the growing use of middlemen in a column for Forbes in August.

In calling out the surge of middlemen in healthcare, Jain acknowledges an obvious irony. He’s the head of an insurance company, which, as he says, “Many people could argue is the middleman of all middlemen.”

“I think a lot of the journey that we're on here is to try to create a more integrated experience,” Jain says.

Hospital systems and health plans are partnering with “middlemen”, or companies touting solutions to improve the patient experience or connect with patients.

“One need only to walk the exhibit hall at any major healthcare conference to recognize the extraordinary amounts of middle madness in U.S. healthcare,” Jain says.

In some cases, health systems are making a mistake in finding vendors to do some functions, Jain says, and he suggests more organizations should “take on the work of the middlemen themselves.”

“That may be the path to true value-based care in the long run, which is, I think, doing more and more in-house, building tight linkages between different parts of one's network,” Jain says. “I think you see large health systems that operate their own skilled nursing facilities, that have their own homecare agencies. But when you actually look under the hood, what you see is that they're actually not as integrated as they could be.”

Too often, patients are dealing with a system where different caregivers aren’t talking to each other. Jain says the health system needs more integration for patients.

“I think one of the most challenging parts of our middleman healthcare economy is how often it feels like the right hand is not speaking to the left,” Jain says.

Jain says he witnessed the lack of integration in healthcare when his father fractured his hip a year ago. Jain says his father received great care from his team of doctors. But in a home assessment, a caregiver didn’t have the full history and “didn’t know anything about what happened to him.”

“In the end, we had a well-intentioned stranger who was now meeting another stranger, trying to do the very best they could, when in fact, I think, had there been a deeper level of integration between what was happening in the inpatient side and what was now going to happen in the home-care side, we would have had a much better and more seamless experience for my Dad,” Jain says.

‘A leadership crisis’

The lack of integration in the healthcare system isn’t so much a technology problem, in Jain’s view.

“I think it's a leadership issue at the end of the day,” Jain says. “I think what's happened in healthcare over the last 10 years, and nobody is saying this truth, is you can be incredibly mediocre and be very, very successful.”

“We're one of the few industries where there's almost unlimited demand,” he continues. “There's local monopolies now, so you don't have to be very good … or getting better. You don't have to be very good at doing the thing that you do.”

As a result, Jain says the pace of improvement in healthcare is comparable to molasses.

“I think we have a leadership crisis, wherein we've normalized a very slow pace of change,” Jain says. “That, unfortunately, isn't yielding the kind of results that we'd like to see for patients.”

Due to what Jain described as the combination of cost pressures, outsourcing trends and the “vendor-ization” of healthcare, Jain says the industry is getting more disjointed.

And he says that’s a contributing factor in the failure to see better outcomes.

“In every other industry, the outcomes get better year after year after year, the products get better,” Jain says. “You know, the next version is better than the last version. In healthcare, we don't see that kind of progress.”

In fact, Jain says, “I would argue that we're going backwards.”

Health systems should look at doing more in-house to create a more integrated experience, Jain says.

“At the end of the day, the explosion of middlemen in healthcare has largely kind of paralleled the explosion of waste,” Jain says.

Moving from annual enrollment

Health plans and health systems should also be thinking more about the long-term. And he says longer partnerships would lead to deeper investments.

Jain says in negotiations with provider partners, he asks what it would take to get into a 10-year deal.

“That 10-year deal is going to give me the comfort to make the deeper investments to actually enable a partnership to be far more successful,” Jain says.

Jain has advocated for moving consumers away from the annual enrollment in health plans. He says that would enable health plans to invest in programs to help keep people healthy and avoid long hospital stays. Insurers could use the money they’re spending on marketing and sales into providing richer benefits to patients, he says.

The question is if people would be willing to lose the ability to change insurers every year. But Jain says consumers would sign up for a three-year plan if it meant paying less out of their own pockets.

“I think consumers will love it if it simplifies their care experience,” Jain says. “They won't like it if they're locked into something terrible.”

Moving away from annual insurance enrollment would be a big step in the transition to value-based care, Jain says.

“When people talk about the rising cost of all these things, if we were actually able to shed some of the non-value added administrative functions, that are a function of the fact that we have to sell every year and keep our members retained on our plan every year, we could start to make longer term investments in their health and well-being,” Jain says.