Toxic Positivity in Healthcare: Dr. Sachin Jain's Call to Stop Normalizing the Abnormal

Speaker A: Foreign. Hey Sachin, Nice to see you again and thanks so much for joining Architect Health's the Front Door newsletter.

Speaker B: My pleasure. Thanks so much for having me.

Speaker A: Soam awesome. So for our podcast audience, let me share a bit of context. My name is Som Shah. I'm the co founder and CEO of Architect Health. At Architect Health, we improve cost savings and relieve point solution fatigue for health plans by aggregating, evaluating and managing virtual care solutions. As the front door for digital health, we cut through the noise of point solutions so plans know which ones truly add value. In our newsletter series, we interview healthcare executives and founders on their experiences with digital health, healthcare innovation and preventative care. Our goal is to identify pain points in these spaces and paint visions on how to address them, hopefully inspiring change makers in our industry. Today we are fortunate to have an incredible guest health plan executive and healthcare thought leader, Dr. Sachin Jain. Dr. Sachin, great to be with you CEO.

Speaker B: Great to be with you Sam. Um, thank you.

Speaker A: Dr. Sachin Jain is CEO of Scan Group and Scan Health Plan, where he is charged with leading the organization's growth, diversification and emerging efforts to reduce healthcare disparities. Scan revenues top $4.8 billion and the organization serves more than 300,000 members. From 2015 to 2020, Dr. Jain was President and CEO of CareMore Health and Aspire Health, Innovative care Delivery Systems with more than $1.6 billion in revenues, which serve 200,000 Medicare and Medicaid patients in 32 states. Dr. Jain graduated with a BA, MD and MBA from Harvard University, is a contributor to Forbes and Healthcare thought leader on LinkedIn, and serves on the boards of America's health insurance plans, Advantage Healthcare Services, and the Paul and Daisy Soros Fellowship for New Americans. Thanks again for being here, Sachin.

Speaker B: Great to be with you. Thanks for having me.

Speaker A: Cool. Ready to get started with 10 questions?

Speaker B: Let's go. Let's go. Rapid fire.

Speaker A: Awesome. Let's do it. So let's discuss the current state of healthcare. You previously brought up the term toxic positivity at, uh, AHIP 2024. What does this mean? Where are we actually in healthcare today and why do we need to stop normalizing the abnormal?

Speaker B: Yeah, thanks for the question. Toxic positivity. It's everywhere you go. Everywhere you go, people are wildly positive about digital health, wildly positive about value based care, wildly positive about new technologies and their impact. These days, everyone's toxically positive about AI and it's just how we talk about things and there's almost no space. I call it toxically positive because there's almost no space for dissent, there's no space for alternate perspectives. There's no space for healthy skepticism that actually drives decisions and thoughts to be more sharp and more precise. And I think we ultimately are a uh, less good healthcare ecosystem because of it. Um, I first heard the term toxic positivity as it was applied to the culture uh, of a large, well known healthcare startup. And it was the perspective that it was impossible to state a view that was contrary to the founders, impossible to actually reconcile the on the ground reality with the vision of the people leading the company and they felt completely stifled by it. And when I heard those two words together, toxically and positive, uh, I knew that I'd stumbled on something very important as it relates to commentary about the culture of the healthcare industry where it's nearly impossible to have a viewpoint that doesn't articulate that whatever is hot right now is going to solve all the problems that ail us. And I think how you define problems ultimately influences how you solve problems. And I think that's the missing piece here, is that we don't have very sharp definition of our problems in our industry in part because many people are doing super well profiting off of this viewpoint that is ultimately grounded in toxic positivity. So that's the origin story of toxic positivity and um, normalizing the abnormal. That's an expression I use to describe the phenomenon by which we normalize things that are completely abnormal. Best example in healthcare utilization management you've got a sick person, person with a new cancer diagnosis who really needs a battery of tests. And what we do is we now normalizing the abnormal, we write a requisition, we fax it. In 2024, uh, many people your age soham have never even met a fax machine. But there uh, is a thing, it's called a fax machine. And you know, you actually write a requisition, you fax it to someone, seven days later, they give you a denial. Then you go through a 24 day appeal process only to get to where you were going to go anyway, which was the PET scan, the MRI or whatever it was that was denied. We have normalized the abnormal. Uh, we've normalized people going to a doctor's office and the, and people talking to computers instead of actually talking to patients. Um, we've normalized fundraises, you know, in the hundreds of millions of dollars with valuations of multiple billions of dollars for companies whose products don't even work. So yes there is a normalizing the abnormal phenomenon and it's deep, closely connected to toxic positivity. So, uh, so there you have it. That's, you know, pulling it all together.

Speaker A: No, this is, this is wonderful. And this actually perfectly leads and segues into our next question, which is, you know, at a. You also mentioned how we haven't changed as a health care industry in 20 years and that that should be abnormal. Right. What are your calls to action to the broader health care ecosystem on how to improve and what is SCAN actually doing itself to take part in this?

Speaker B: Yeah, I thought I was almost going to get in a, into a steel cage match with panelists. Right. You, if you remember that panel, um, you know, I think there was a sharp disagreement about whether things had actually changed. You know, the context was we were talking about narrow networks as being a solution to healthcare costs. And I said we've been trying this for 20 some odd years. Just because we layer on an AI tool doesn't necessarily mean that those networks are going to be any more precise or any more accepted by patients. Uh, and you know, the counterargument to it was the counterargument that we often get, which is, and that we've been getting for 20 years, uh, which is now is different. Costs are just so much higher. People have so much out of pocket exposure. But people have been saying that for 20 years. I'm sad that I'm old enough to actually say that people have been saying that for 20 years. But the reality is, is that we need to think more fundamentally. We need to think in more basic terms about how to attack these problems. And you know, I go back to what I said earlier. How you define the problem actually influences how you solve the problem. And I don't think our problem definition is high resolution enough. And it is a bit of the fox guarding the head house. We are simultaneously saying that health care costs are high. We have speakers that we pay hundreds of thousands of dollars to come to these conferences. I'm not one of them, I spoke for free. But we pay hundreds of thousands of dollars to people to say health care costs are high. There's something wrong with that picture. Uh, we say that we want to manage health care costs, uh, but at the same time we don't want to make the trade offs that you have to make to actually lower health care costs. And so something's got to give.

Speaker A: Soham.

Speaker B: Um, something has to give. And that's what's missing right now is I think, uh, we're not actually having honest conversations. And so I will tell you there's a number of people who go to conferences and they say it's a big snooze fest. I don't actually go to panels anymore because it's the same conversation today as it was 10 years ago, as it was 20 years ago. And like every day there's a new health care conference promising great dialogue, promising great discourse. Eventually they're going to stop inviting me to these conferences because I take so many shots at them and that'll be okay. Uh, then that'll be okay. Um, because I don't want to go to a conference where most people are just spouting corporate pablum, you, uh, know, because it serves their, you know, narrow business interest to do so.

Speaker A: Totally agree. And to think that people think that some of your kind of perspectives are contrarian is absurd in my, my head because it's reality. And uh, I think people um, are kind of stuck in the positivity mindset when they go to these conferences trying to share what they're thinking that they're doing kind of to improve it when uh, in reality the buck hasn't changed. Um, so this is really interesting and something that we're really focused on, Architect Health, is the concept of digital health. And I'm curious to get your thoughts on how perspective, perhaps digital health has changed across those 20 years. What is your view on these kind of telehealth apps? Virtual first care? Um, how have you seen it change pre pandemic versus post pandemic? And looking at your crystal ball, what does the future hold in store for tele?

Speaker B: Look, I think there's two words I think of with that question and it's dramatic underperformance. I worked in the Obama administration at the dawn of the High Tech Act. I know was uh, at the office of the National Coordinator. And I remember the conversations then and I remember the ecosystem of startups that were built then and I have watched the ecosystem only grow and blossom. And the reality is, is that the pandemic gave us a window into what might be possible for about five minutes and we've largely gone back to business as usual. Uh, and that has a lot to do with public policy. It has a lot to do with behavior, but it also has a lot to do with the fact that healthcare is not best practice through a series of transactional episodes over your, over your phone or iPad. Um, I think there's certain pieces of the care delivery equation that can be well executed over a video format. But the reality is the thing we need from digital health is continuous asynchronous engagement with patients around chronic conditions. And that's people aren't paying for that right now. Uh, and what they're paying for instead is fee for service visits over video screens, which often lead to additional in person visits. When there's a physical exam maneuver that you need to do or, uh, there's a diagnostic test that you need to perform, there's labs that need to be drawn. And so, you know, some of the best studies of digital health, uh, actually show that it increases health care costs, lo and behold, because it increases the number of visits, increases consumption, increases utilization, some uh, of which would be obviated with analog health. Now, does that mean that we should do away with digital health? Of course not. But we have to think about how and where to deploy it. And I think within our industry there's a check the box thing that goes on. Oh, I need a patient portal. Check the box. Uh, never mind if it actually does anything valuable for the patient. Oh, I need a digital health solution. Check the box. Never mind if it actually doesn't connect to people's traditional care paradigms. Oh, I need a, um, member service model that's Omni channel. Check the box. The worst disease we have here is we've got a lot of analog people who don't know what questions to ask implementing these solutions in health care settings. So they'll say, oh, we have 93% of people have downloaded our app. That's one of the things that people love to cite. And then you ask the next question, which is, what's the utilization of that app? Um, what's the persistency of the utilization of that app? And again, we haven't trained people to even ask these basic questions, which is one of the reasons why the work you, you do at Architect has, uh, the potential to be, to be valuable. I've never used it, so I can't endorse your product on this podcast. Can't tell you if it's useful or not. But I like the problem space that you're operating in, uh, because I think you can help make consumers of these solutions more sophisticated and better inform them how to use it.

Speaker A: Yeah, no, I completely agree with you. And to think that health plans are accepting of single digit percentage utilization and considering that to be good is really surprising for me. And one of the cup long of philosophies that we have at Architect Health is about how can you leverage telehealth as part of the care journey and as part of thinking about a certain member patient's outcome if you can kind of put telehealth as a tool that can be leveraged. It doesn't have to be leveraged, but to drive that positive outcome. In addition, with the rest of the infrastructure that the healthcare system has to offer, that's a great way to leverage it. It could be a great way for folks that don't necessarily have access to certain types of care, do not have transportation to in person care, or can't take time off because they're hourly workers. And so getting an uh, app allows you to at least get one touch point with a provider. That is a great way to triage a lot of patient care. And even if you can triage 1% of that, that's huge in terms of cost savings for the health plan and great in terms of the, the patient experience. So it's really being thoughtful about it and not over using it, underusing it, not just checking the box, but really understand why you're doing it and how it kind of goes with your existing strategy.

Speaker B: Yeah, but so there's a real tension here that goes unstated, which is you, you just described a simplified, unified member experience.

Speaker A: Right.

Speaker B: Where patients could actually access all the things that they need to access, you know, from the health plan, where they could actually access their food benefits, access their transportation benefits. And here's a dirty little secret no one actually talks about. So we don't, a lot of health plans don't actually want people to use those services. Um, they want them to be available to them, but they don't want them to use it because, you know, you know this from your, from your work.

Speaker A: Yeah.

Speaker B: These things are all priced at like $0.99 per member per month or $0.49 per member per month, or $2 per member per month.

Speaker A: Right.

Speaker B: And that low pricing is available predicated on the idea that only a small fraction of people are going to use the ride, use the food benefits. Uh, and so, you know, when people get all high and mighty and they talk about all the supplemental benefits that they're offering, uh, there's a health plan that loves to talk about their pesticide benefits. The key question to ask is how many people are actually using that benefit? Right. And the answer, the answer is very few. So if you were to simplify it and make it really easy, you were to actually create the experience that's possible today. This is not like putting a man on the moon. This is just integrating it, simplifying it, putting it in an app and making it easy for m me to request an appointment, request a refill, get my appointment. What's going to happen on the other side of that? Utilization would go up.

Speaker A: Right?

Speaker B: Well, we talked about utilization management and the arcane way in which a lot of health plans actually manage utilization, which is denied, deny, deny, make it really hard for me to actually, you know, get the thing that I need to get right. And then you're in this kind of territory where the simplifying the consumer experience is at odds with what I would try to do actuarially, which is to manage costs. And so when I double and triple click why basic things don't happen. You know, there's an explanatory model which is like, up. You know, some people like you sometimes saw them will be like, oh, well, we just need to simplify it. Or we just need to, we just need to simplify the experience. We need to get them the ratings data on, um, the different digital health tools. You may be missing the lead, which is that some of these folks don't actually want people to use the tools. They don't want people to use the solutions. They want to say that those things are foundational parts of products, uh, but they don't necessarily want to actually deal with it on the other side of it. So, uh, that's, that's the raw truth of what's going on and why I think, you know, simple stuff isn't happening. Uh, and why people who have the best of intentions, start out in this industry, bang their heads, ah, you know, a couple years later, uh, just because they, they realize that common sense is not very common in, in a lot of organizations.

Speaker A: Totally. That. You're completely right and it's absolutely brutal. Um, in fact, we see this in MA all the time, right? With the $0 premiums, the silver sneakers, benefits, the transportation. You said it all. So, and uh, to think that who are, who are the folks that are actually accessing, that are aware of those benefits is pretty interesting. Um, but SCAN has been very transparent with the benefits and the organizations they partner with. Kind of going to our next question. Scan, uh, made a number of strategic investments like Orion, uh, Safe Ride Health, Guaranteed Monogram Health, Metarive and Safely youy. What is SCAN's philosophy on corporate development? Uh, what is SCAN's overarching thesis behind these investments and the vision that you're trying to achieve?

Speaker B: Look, Soham, we're not a venture fund, so we are, uh, not writing huge checks to, uh, entities like the ones you described. What we're doing is we're saying if we're going to partner with an early stage startup, then we're going to be creating a lot of IP with and along those companies, um, because we're going to be giving them real world data on how things work and how to improve their product. And we believe that if we create that kind of value, that in addition to a customer relationship, we want to partner with these entities and actually ride the increase in value that we're actually creating. And that's why we make small passive investments in entities that we partner with. On the customer side, I think it's gone pretty well so far. We like all the companies that are listed there. Um, but you know, we also have a fiduciary responsibility on behalf of our members to make sure that, you know, the vendors that we've selected are the best vendors. And I will say that there's a tension that sometimes exists when you are running an operation like ours, um, which is, you know, sometimes a vendor is not showing up the way they're supposed to and you're an investor in that vendor. Do you terminate that vendor and potentially impair the value of your investment? Uh, or do you smile and say, okay, we're a part owner of this thing and we've got to run long with this partner and actually help them get better? Uh, and I think that that's a tension that doesn't get acknowledged as more and more health systems and health plans actually have gotten into the business of venture investing.

Speaker A: Totally agree. It's hard to play the investor and the um, customer and when you have great alignment with a fantastic, uh, product that actually is generating real revenue and serving the needs of your members, that is the ideal case and that's a win win. So um, it's exciting.

Speaker B: It sounds pretty, sounds pretty toxically positive to me.

Speaker A: So.

Speaker B: But yes, that is the win win. That is what that is. That is the win win.

Speaker A: Totally agree. But speaking about something that's perhaps more toxic than positive, um, when it comes to all these different vendors that exist in the digital health ecosystem. A concept that's brought up time and time and again is this concept of point solution fatigue. And we're seeing that across payers, providers and patients. Um, what is SCAN approach to addressing point solution fatigue? Is SCAN experiencing any point solution fatigue? Um, as an organization?

Speaker B: Yes. Uh, and the way we deal with it is by um, first of all streamlining the intake process of these point solutions. So our corporate development team is the single point of entry for the most part for these um, types of uh, vendors and solutions. Doesn't mean that others don't Sneak by or peek by. But we definitely uh, have our corporate development team. If you were to kind of take every call or every email that you got, um, you would lose many lifetimes. Um, and the truth is the longer you're in healthcare, the more favors you have, um, to repay, the more relationships you have, the more of those calls you have to do. So streamlining the input through our corporate development team creates a standardized channel that I think ultimately avoids, you know, kind of the multiple door problem that uh, you know, a lot of vendors end up facing. So that's, I would say one way we deal with it, the other way we deal with it is actually honestly not doing very much. Which, which, you know, which, which, which was, there's, that was a little bit of a mic drop moment. But the point I, I'm trying to make is like there are some plans, uh, you know, that for a period of time will like sign 25 vendor partnerships. And my, my experience in my career is like, it takes a lot of work to make one of these vendor partnerships really, really work. Uh, especially if it's know, a new and emerging company and you know, when you're doing too many things at once, it's actually really hard to know what's working. Um, one of my favorite kind of responses to the value based care, you know, kind of conversation and every conversation about shared savings is get your head out of my pocket. Right? Get your head out of my pocket. Why are you reaching in for dollars that I'm producing in shared savings and saying that you created it with your little widget or tool or technology or ambient listing device or whatever it is that you're selling on that particular day. Because everybody wants a shared savings contract and I advise a number of different startups and the digital health ecosystem and I always say please just do a basic fee for service or you know, PNPM contract. Even if you're selling to a value based care provider, I know your investors are telling you to share, you know, get a shared savings contract. But I can administer one shared savings contract at a time on a population, not two, not three, not four, not five, not six, not seven, not eight. And everybody knocking on my door is asking for shared savings. So if you want to get a contract, best thing you can do is price your product at cost plus a little bit of margin and get on with your life and your day. One of the reasons I also advise that is because the adjudication on the other side, having been on the, on the kind of receiving end as a provider of Shared savings conversation from a health plan. Man, nobody wants to pay out that shared savings. Even if you credit it honestly, uh, they'll find seven ways to not pay you that shared savings. And you know, look, you'll occasionally meet the CEO or the, you know, actuary who can run circles around your team, and you end up having to write that check, uh, to pay the shared savings. But more often than not, you get into an attribution discussion or you get it into a churn conversation, or you get into a, you know, uh, hey, um, you know, uh, the actual utilization wasn't that high, so how could you have actually created the savings? So look, there's a number of ways that, uh, shared savings sounds great on the front end, but on the other side of it ends up being a nightmare for most people. So consider, um, that free consulting advice for your listeners.

Speaker A: That's fantastic. We'll, we'll make sure, we make sure that we provide some kind of, uh, equity grant for you. For all other founders that are listening

Speaker B: to this advice, I'll take it. I'll take it.

Speaker A: Uh, that's super interesting and it's surprising as well, because when you think about how you're trying to drive incentives for health plans, you think of all the different kinds of ways of reducing admin costs, medical costs, driving revenue, and then being able to say that we can drive KPI based outcomes if you're able to kind of create a partnership and uh, hoping that that kind of gets health plans to kind of perk up their ears. But this is really interesting as the Star Truth.

Speaker B: A Hard thing about hard things. The hard thing about hard things.

Speaker A: So fantastic. Well, um, pivoting a little bit and getting a little bit more into kind of what Scan is offering. Um, you mentioned that Scan launched three new products, inspired the first women's product, affirmed the first LGBTQ product, and an Asian focused product as well. Why did Scan take a population specific product approach? Are there value drivers like improvement outcomes, reduction in costs that are correlated to population specific products? And perhaps this could be a teaser. Any new products on the horizon?

Speaker B: There's always new products, so there's always new products. But let me say the following. Uh, growth, number one, growth is hard in Medicare Advantage, plain and simple. And so you got to unlock new segments and be able to speak to new segments. Number two, there are deep pockets of patients in the US healthcare ecosystem who are underserved, who don't look like everyone else, whose health care needs are different from everyone else, whose, um, life experiences require a different approach. To thinking about health care. And, you know, we have a tension in our industry between standardization and customization. And, uh, I think the flex. One of the great things about the flexibilities of the MA industry is you can build these customized products. Now. I. I do think we should drive more towards benefit standardization. But. But stay with me on the set, on the, uh, on the customization piece for a second. Think about an LGBTQ plus senior. Think about, you know, there's a guy at, uh, you know, his name is rg. Rg you know, came out late in life, um, had a lot of shame about being, uh, a gay man, uh, a gay minority man. And, you know, all of a sudden, his health plan introduces a product that's specifically meant for him, right? That has features and supplemental benefits and a provider network that specifically understand his issues, understand his needs. That's a big deal. That's a big deal. And I'll say health plans all across the country missed out an opportunity to speak to a large number of LGBTQ patients, LGBTQ seniors, by actually offering them something specific for their needs. And I can tell you, we thought we were going to maybe grow 100 members in year one. Uh, for those of you who've done MA, sometimes you get slow product launches. Everyone knows that. We thought we were gonna get 100 over the course of 18 months. We got close to a thousand. And, uh, and, you know, frankly, we got a lot of goodwill from people who are already our members who said, you know what? Scan's doing the right thing. They're serving LGBT plus members. I also got hate mail. So, um, I got hate mail saying, seriously, that we were a WOKE company and, you know, we needed to, um, align with American values. And, uh, so that happened, too. I'm not worried about that person. You don't need to be my member. Um, I'm. I'm more interested in making sure, you know, everyone who needs to feel seen is. Is seen, uh, women's product. You know, it's kind of crazy. 2023 was the first year that Medicare Advantage beneficiaries at any county in the country, uh, had access to a women's focused product. Imagine that. Uh, that's the scan inspired product. And what we really wanted to do was to have a product that spoke to a modern woman aging into Medicare. People who I think of as being in the sandwich generation. At 65, you're probably still taking care of a parent who's older than you, but you've also got, you know, aging, you know, children who are in high school or older or uh, you may even have grandkids at that point. And you need a product. But you might be, but you're very active and you're different than your grandmother was, your mother was, and you know, you may use Peloton more than you use silver sneakers. And so we got to work thinking about how do you design a product that's going to appeal to a modern age and woman, uh, in the counties in which we operate. And that was the genesis of Inspired. And then finally, uh, we partnered with Estrada Health on the creation of a joint product with them focused on the Asian American population. Last year was year one. We got started very quickly on that because we just wanted to learn, you know, what was going to work and what wasn't going to work. And we learned a ton. And now, um, we've made a number of product modifications. And so the real last year was a soft launch. This year is going to be the hard launch of that product. And we're very, very, very, very excited about it. Uh, and we learned a ton and we learned about what we didn't know. Um, and you know, I think you think you're culturally competent until you're confronted with the fact that you're not. We didn't even have a scanned name in, in Mandarin or Cantonese. Um, and so we had to go to work and finding a name.

Speaker A: Wow.

Speaker B: For our company in Mandarin and Cantonese. And the truth is, is we've got a lot of, you know, innate. All of these companies have a lot of innate diversity and a lot of innate diverse talent who can actually help you understand how to position these things in the marketplace. We oftentimes just don't ask them. And so we, you know, started to work with our team to identify some experts. Moon Long was a long time scan employee, 25 years. He's our chief data officer. Uh, and he helped us select exactly the right name. So look, we're, we're pretty fired up. We're pretty fired up. It's going to be a great aep. A lot of disruption in MA right now. A, uh, lot of people slashing benefits, a lot of people withdrawing from markets. People are starting to get edgy and sensitive. Uh, you have a lot of, a lot of, you know, churn in a lot of different ways.

Speaker A: Yeah, no, totally heard that. What I think is really impressive is I've seen other health plans that have, you know, one specific focus and perhaps their focus is on, uh, you know, the Asian American population. And that's their entire thesis of their plan. But for SCAN to be able to do all of this I think is a true testament to this focus on health equity. Um, and we recently had uh, John Blum, the CEO of the CMS on the podcast and he was talking about this disruption in MA and he was saying that there really needs to be uh, kind of greater kind uh, of guardrails and understanding of what these helplines are able to deliver. And if there isn't then traditional Medicare is going to try, might take a long time to kind of provide as many benefits in a competitive marketplace as much as they can. So um, I'm excited to see what happens.

Speaker B: This AEP look, it's going to be wild. It's going to be wild. That's all I'm going to say.

Speaker A: So getting on to something, I think we cannot not talk about this. Um, on June 6th of this year SCAN announced that it prevailed in the 2020 four star rating lawsuits against the CMS reverting to four stars from 3.5 and yielding Ah, a deserved $250 million bonus. Briefly walk us through your experience in this lawsuit, whatever you can share and kind of the impact of the Tukey outlier rule and the guardrail rule. And looking forward, how does SCAN plan on continuing to improve the star ratings?

Speaker B: So let me, let me make this super clear. Um, the $250 million that landed in our AT with SCAN lands in the form of higher provider payments and more, more that we're able to spend on benefits for our members. The impact on scan's financials are actually very modest because we are mostly a fully delegated risk entity meaning we give most of our revenue from CMS gets passed through to our at risk providers. So we filed this lawsuit on behalf of our providers. The lawsuit was really a last resort. We, when we've discovered we had projected a four star rating, we, you know we have been uh, including inclusive of this year. We've had a four plus star plan 11 years in a row. So when we, when we projected our star rating we projected a star rating of 4.0 and we were shocked when we, to be candid with you that we um, fell to 3.5. And when we started to look at what happened we saw that our projections were wrong because CMS had implemented this Tukely outlier methodology to set the guardrails for some of the measures and, and set the cut points for some of the measures. And the truth is, is that CMS did not signal that it was going to do that in the federal Register. So uh, it had signaled it in some other places, but it never made its way into regulation. When we went to talk to CMS about it, they said we had, we had, we had signaled this in the comments to something at some point. And we said, no, that's not the same thing. And they said, well it is the same thing. Um, and then we talked to a bunch of other plans and we said, they said that they similarly thought that their star ratings were going to be better and the fall was, was higher. We, um, we appealed to, we also at the same time found that there were a couple of measures where there was some doubt. Uh, and one of them was a, a French foreign language phone call which was a little frustrating to us because first of all, we don't have a ton of French members here in Southern California.

Speaker A: Right.

Speaker B: And second of all, there was a bit of, you know, CMS uses secret shoppers and these secret shoppers follow a script and this person, when they, with a secret shopper called, they stumbled in some of their language and it caused a delay in the call. And CMS judges you based on whether you answer member's inquiry, you know, within a certain time frame. And we were 34 seconds off. And guess what? When we clocked the stumble, it was about 34 seconds. CMS said you should have answered the call earlier and it wouldn't have been an issue. And we said, we answered the call with plenty of a time to answer the question if there wasn't a stumble. What I would say about that call is reasonable people could disagree about whether the call, there was a stumble and whether, you know, the call should have been included in our sample. So we appealed to CMS on two fronts, the two tukey outlier methodology as well as this French foreign language call. And we talked to the examiner who listened to the call, we talked to, you know, people up and down the bureaucracy and the political appointees at CMS and they all said, we understand but we can't help you. And we felt a lot of conviction that we were going to know our providers were going to lose hundreds of millions of dollars, uh, as a result of this and, and most importantly, benefits would have to be cut from our members. So we felt like we were fighting for our providers and fighting for our, our members. And to our credit, our board agreed and gave us permission to sue. They encouraged us to find other plans to do this with us. We went ahead and we pursued, presented this at ahip and none of the other, like general counsels of other health plans were interested in joining us in this Lawsuit. Um, we did. We did end up calling our colleagues at Elevance. I previously worked at Elevance, so I had reached out to the head of the government business division. She looped in the general counsel, um, and they were not aware of this issue. We made them aware of this issue, and they went ahead and decided, um, to file suit as well. So in some ways, we kind of were trying to build a little bit of a movement within the industry. And it was just us and Elevance, and we both filed. We ended up drawing different judges. Our case was ruled earlier. Um, and then Elevance's case. They had three separate claims, and then I believe one of their claims was accepted. And then CMS had this decision to make. Do we just kind of change scans and Elevance's star ratings?

Speaker A: Or.

Speaker B: Or do we have to really look at. Now two judges have told us that we kind of didn't do this the right way. Um, and so then what. What they ended up doing is on one fine day during hlth, you know, they announced. Not hlt, it was at hlt.

Speaker A: It was.

Speaker B: It was during ahip.

Speaker A: It was.

Speaker B: It was during ahab.

Speaker A: They.

Speaker B: They announced that they were going to, um, change everyone's star ratings. And the end result of that was that, you know, more than a billion dollars in payments would be paid. You know, the form of bonuses. I think it was about 1.4 to 1.6 billion. Um, you know, a more. More than a million beneficiaries would benefit in over 60 plans from better benefits. And I have to tell you, it feels great. Uh, it feels like we did something important for Americans. Uh, I will say the funniest text message I received about it. And this is funny just in the context of everything that's going on right now was from, you know, a senior former Obama administration official who said, you may have just saved Biden the election. Um, which was funny because, uh, you know, there have been a lot of, like, cuts to Medicare Advantage over the last couple of years. The base, base rates didn't grow as much as anyone expected them to. There was clear star ratings compression that we're talking about, uh, which results in lower payments and fewer benefits to beneficiaries. And the risk model changes are well known in the industry. And so, you know, all of which will hit in the form of, you know, Medicare Advantage, uh, withdrawals of MEDI plans, as well as lower benefits that will hit on 101 in an election year. Uh, and so the interesting thing about the star ratings lawsuit and the reason this person said, I thought I may have saved by the election was, was because I'm not sure anyone was tracking all of these things together and the impact of the beneficiary at the plan level. Um, I think there's sometimes overly simplistic thinking, uh, applied to ma, which is like, oh, we can do all these things and the plans are going to hold the benefits. And the truth is we wouldn't and we couldn't. Um, this was before the debate and everything that's ensued since then. I won't comment on any of that. I don't think I've saved any elections. That's it. But what I will say is, um, you know, I feel really good about the beneficiary impact, the provider impact. I'm still waiting for my congratulatory gift basket from my fellow plan CEOs, but, uh, I've stopped waiting, actually. I'm not holding my breath anymore.

Speaker A: Well, I'm going to check in with you in a couple of months and see if, uh, any of the other plans have kind of sent out a gift box or anything like that. But I really, I seriously applaud you for you and the entire scan team for being a first mover here and for really kind of challenging the status quo and being open to that. Uh, I think that's really incredible and it says a lot about you and the scan team. Um, so thank you.

Speaker B: Thank, thank you. I mean it was our legal team, Rene Delphin Rodriguez, our general counsel. Um, Oren Rosenthal, our Associate General counsel. Mike Plumb, our cfo, Moon Lung, um, our Chief Data officer. I mean, there was a lot of work that went into all of this and a lot of persistence, a lot of courageous decision making, huge support from our board. So, um, it's been exciting, to say the least.

Speaker A: Fantastic. Well, we're quickly approaching kind of the near end of our, our interview and uh, we recently had Sekonya Soderlin, the Chief Strategy Officer of Blue Golf Blue Shield Massachusetts on. And this is a conversation that we actually had which was about value based care and the issue of frequent member based changes. Um, tell us more about your perspectives on how long term enrollment can drive value based care and how a shift towards that system could be approached and what it might look like.

Speaker B: Look, value based care is a euphemism today for coding. Value based care today is a euphemism for coding. If you actually want to do real value based care, you actually have to move health outcomes over years. Uh, and most health plans measure things actuarially in terms of actuarial impact in a year. And if you ever met a patient, you can actually, there's very few health outcomes you can actually move meaningfully in a year. You can move some admissions, you can move some readmissions, um, you can certainly move coding, uh, but you can't, you know, really kind of change the arc of someone's chronic disease within, you know, an annual life cycle. And so I think we have sub optimized investments in people's care and chronic disease management and prevention. Because we all, we oftentimes only have members for one year. I'm not going to go ahead and give you lots of expensive tools and technologies in your home as well as access to a lot of coaching and, and other resources. If eight months from now you're going to leave Scan Health Plan and go to United Right or Humana or Devoted. Uh, so I believe that we have to think longer term health outcomes are produced in longer term horizons. I think you, we have to meaningfully move the needle on outcomes over the long haul and the only way we do that is if we own the patients for long periods of time. I think longer enrollment in health plans will unlock more investments in biologics, more investments in pharmaceuticals, more investments in digital health tools and technologies, more investments in primary care. Because the value based care horizon will be three to five years. That's why I think Sukada's proposal or recommend idea was brilliant. I've run with it and have developed the idea further, but it was her who first mentioned it to me on the commercial side. She said we have to get into commercial products that are, you know, three years, four years, five years. I was like, oh, we should do something similar on the MA side. So, um, yeah, so Kanye has been, um, you know, somebody I've really enjoyed and you know, I think who has a lot of fresh thinking on a lot of topics. I think that's, you know, so huge kudos to her for advancing the idea. I'd love to see it come to life somewhere.

Speaker A: Likewise. Well, last two questions. So, parent organization of Scan Health Plans of the SCAN Group. Additional initiatives include Home Based Medical Healthcare in Action, welcome Health and My Place Health, which is a partnership with Commonwealth Care Alliance. What is the thesis behind these medical groups? How does that fit in with the SCAN Group and Health Plan's mission? And is there a world where SCAN starts to structure itself or become kind of, uh, perceived as a pay viter?

Speaker B: Yeah, and, and we are a pay lighter. I mean that's exactly who we are. Uh, at the same time, our, our clinical assets have been built in a way that's par. Agnostic. So, you know, we, uh, all those entities are contract. There's a firewall and there's. They're all contracted with other health plans. Um, you know, because what we're trying to build is world class clinical assets. And we'd like those clinical assets to be available to anybody who wants them, even if they don't want to be a scan health plan member. Uh, so. Yes, but, you know, the real unlock, and I saw this from my time at CareMore, is the close alignment of payer and provider. CareMore was the first mapider, despite hype, uh, to the contrary. Actually Kaiser might have been the first MA provider. Um, but, but my point is, is, you know, caremore was early in this and, you know, there's something special you can do when the payer and the provider are under the same roof. Um, and there's a degree of integration, a degree of seamlessness that is completely impossible when organizations are primarily aligned through a contractual relationship. So, um, you know, I think, I think it's exciting. And you know, the nice. The interesting thing about it is, you know, your competitors are becoming partners and your partners are becoming better betters. You know, I'm, we're, you know, we buy our, uh, our health, uh, plan. We buy our, uh, PBM benefits from Cigna esi, who we compete with, uh, you know, as our, uh. And then we buy our health benefits for our employees from Aetna. Um, so it's a weird. It's a weird. And we contract with caremore, which is now an entity, you know, in Carillon, uh, which is part of Elevance. So again, it's a, It's a weird world out there, uh, where, you know, your former competitors are now your collaborators and vice versa. So, um, you know, but that's, that's the world we live in.

Speaker A: It's fantastic. It's so integrated and interconnected and it's interesting to see kind of the, the back end side of that. Um, last up, what are you most looking forward to for the rest of 2024? Any, you know, changes or trends in health care that you're tracking and you're excited to witness.

Speaker B: Look, um, let me say the following. I am on a mission right now to try to get our industry speaking truth, speaking in plain language. It's what I try to do in LinkedIn every day. Um, stop, uh, normalizing the abnormal. And I think it's catching on, you know, is what I really feel Like I feel like people are finally starting to get a little bit. And um, you know, I think a lot about moral clarity is the framing piece of it. You know, we have to operate with a higher degree of moral clarity and that means that there is right and wrong. And I think the problem is, is we've kind of convinced ourselves that a lot of wrong things are right. And I'm hopeful, very hopeful, that we're turning the corner and we're starting to see solutions where we previously saw only problems or where we didn't even, or to be more accurate, where we didn't even see the problems at all. So we're starting to find the problems more clearly and then as a result we're going to start to get to some more solutions.

Speaker A: That's super interesting and I feel like you need to put this on a shirt somewhere as to start off with and I will proudly rep that. But uh, this has been an amazing session. Thank you so much for the insights and words of wisdom. But um, I have a surprise question for you. Who are one or two other folks that you look up to in the health care ecosystem that you would like to see us interview next on the Front Door newsletter?

Speaker B: So, um, you know, number one would be Aman Bhandari. Uh, Aman Bhandari is um, uh, the chief data officer at Vertex Pharmaceuticals. He was a colleague in government as well as when I was at Merck, uh, and is now leading an end to end data program at Vertex Pharmaceuticals. And he's changing everything from how they do HR to how they do commercial deployment to how they do scientific discovery through advanced data. And, and I, I think um, has also more recently had some of his own experiences as a patient. And I think um, is one of the leading, quiet, leading lights in healthcare. You know, he's not uh, you know, kind of big on punditry. He's more big on action. So I, you know, huge fan of, of, of Aman Bendari. Um, and I think you should talk to Brian Powers. Brian Powers is at Humana. He's ah, you know, uh, been a close collaborator of mine for years. Uh, he was, was um, director of clinical operations at Caremore when he was a medical student. He and I wrote probably two dozen papers together. Um, and so he's, he's just somebody who I think is a very clean and sharp and deep thinker again, one of the rising talents in the industry. That gives me a lot of optimism for um, for where we're going.

Speaker A: Fantastic. Well thanks so much. We'll get, I'LL give you one more.

Speaker B: I'll give you one more.

Speaker A: Yes.

Speaker B: Uh, I'll give you one more. Simmy, uh, Singh, who's the chief people officer at Blue Cross Blue Shield of Massachusetts, was also, um, chief people officer at Snapchat. So, uh, I, so I think you could, you could have a rich con. I think that healthcare problems begin and end with the people. And so I think we don't give enough attention to the people who, uh, are in charge of the people. And so I think, I think you should think about some people officers actually, and do some segments on the talent, the state of talent, the healthcare industry.

Speaker A: That'd be fantastic. I mean, all the people that we're interviewing are incredible talent, but, uh, it'd be interesting to see how they bring on and incentivize and, uh, other folks that are innovative in this space.

Speaker B: Awesome.