Podcast: Evolution in value-based care and its impact on medicine

June 17, 2024
Podcast, Value-based care

Sachin Jain, MD, discusses what industry consolidation means for patient care

The backdrop of rapid innovation, consolidation, and evolving patient needs means value-based care and its impact on medicine is changing. Think AI and robotics, emerging health disparities, and new corporate competitors challenging the status quo. What does all this mean for the present and future of patient-centered, integrated care?

In the 2024 season finale of the Permanente Medicine Podcast, Sachin Jain, MD, CEO of SCAN Group and SCAN Health Plan, joins Chris Grant, COO and executive vice president of Kaiser Permanente, The Permanente Federation, to survey the shifting landscape of the health care industry and explore its impact on patients and communities. Dr. Jain also suggests ways organizations can better address health care disparities to pave the way for a brighter future in medicine.

Dr. Jain’s role leading SCAN Group and SCAN Health Plan’s growth, diversification, and emerging efforts to reduce health care disparities led to Modern Healthcare recognizing him as one of the “100 Most Influential People in Healthcare.”

Speaking with Grant, Dr. Jain shares how his roles in academia, nonprofits, and the private sector influence his present perspective on health care. He also delves into the important role physician leadership plays in guiding industry best practices so that they best serve patient needs.

This leadership challenge is a prodigious one because it is fundamentally about making people feel seen and heard.

– Sachin Jain, MD

“Part of our job is to make it easier for doctors to actually provide the kind of care that patients want and making it more accessible by having the benefit design align with patient preferences,” says Dr. Jain.

Dr. Jain offers insights on how competition and the need to scale operations are driving recent mergers and acquisitions in health care. He also discusses the importance of ensuring the unique needs of patients are adequately addressed as health care systems get larger and care becomes more standardized.

We’re in the land of giants where companies have tens of millions of lives.

– Sachin Jain, MD

Speaking to positive disruptions, Dr. Jain highlights how new and emerging technologies such as AI have the potential to help doctors focus more on practicing medicine by freeing them from certain administrative tasks. He adds that integrated, value-based care systems like Kaiser Permanente have an opportunity to invest in these technologies to improve the long-term health of patients.

“I think that there are real opportunities for us to create simplification if we can get into a much more long-term view of our systems as well as a long-term view of the patients that we serve,” says Dr. Jain.

In this episode

3:48 Thoughts on the role of physician leadership in shaping best practices

5:18 Addressing health care disparities across patient populations

7:16 Assessing the impact of mergers and acquisitions in health care

13:40 How industry tension can inspire impactful change

17:43 Creating positive disruption through innovation

23:15 Pressing community health challenges facing the nation

27:28 Bright spots for serving patient and community needs

Connect with Chris Grant by following him on X (formerly Twitter) at @cmgrant or LinkedIn.

Follow us: Subscribe to the Permanente Medicine Podcast on your favorite streaming platform.

Podcast transcript

Transcript is autogenerated. Although edited for clarity, it should not be considered an exact replication of the podcast and may also be updated as needed.

Sachin Jain (00:03):

One of the wonderful things about being a health care practitioner is a sense of purpose. A calling healthcare. The care part, I think is what draws individuals to the industry that they really want to be a caregiver and they want to make a difference. We’re in the land of giants where companies have tens of millions of lives where their revenues sometimes enter the triple digit billions. And so I think people are looking at this and saying, we need to be able to compete more effectively.

Chris Grant (00:38):

Hello and thank you for tuning into our 2024 season finale of the Permanente Medicine Podcast. I’m Chris Grant, your host and the chief operating Officer of Kaiser Permanente, The Permanente Federation. On today’s episode, we’re taking a closer look at the business of health care and how it’s evolving, and what industry consolidation means for the practice of medicine. I’m excited to welcome a thought leader who’s at the center of many critical conversations shaping health care right now. Dr. Sachin Jain is CEO of SCAN Group and SCAN Health Plan, where he leads the organization’s growth, diversification, and emerging efforts to reduce health care disparities. I’m a big fan of Dr. Jain’s columns for Forbes, which are widely read and frequently referenced by health care leaders. Among his many accomplishments, he’s been recognized by Modern Healthcare as one of the 100 most influential people in healthcare. Welcome to the show, Sachin. It’s so great to have you on the program and sharing your industry insight today.

Sachin Jain (01:48):

Chris, it’s great to be here with you. And hello to all my friends who are in the Kaiser Permanente family.

Assessing through multiple lenses

Chris Grant (02:01):

Alright, we certainly are excited to have you. And I want to start a little bit with letting our listeners understand your background and how you became the physician leader that you are today. In addition to practicing medicine, you’ve held roles in academia, nonprofits, and the private sector. Could you share a little bit about how your path influenced your perspective on health care today? And please tell us your thoughts on the role of physician leadership within our industry.

Sachin Jain (02:38):

Thanks, Chris. I grew up in northern New Jersey, the son of an immigrant physician father. My dad was one of the early pain management physicians and started the pain service at Memorial Sloan Kettering Cancer Center. So I grew up in a medical family, and I was the kind of kid who when he came back from college and told his dad that he was thinking about law school, my dad said, it’s great that you’re thinking about that, you should go to law school after you go to medical school.

So, there was always a bit of a family expectation around a career in health care. And I would say my parents knew something about me that I didn’t know about myself, was that if I did go to medical school, I would really love it. And I would say one of my earliest influences was Don Berwick, who was an undergraduate professor of mine at Harvard College alongside the late Howard Hyatt. And they did a very clever thing. They organized a course by having several of their physician leader friends lecture. So, it wasn’t much work for them. For those of us who had the privilege of being in the class, it was just incredible. I got a tour of what physician leadership looked like and really set my sights on having a career where I could have broader impact on health care.

You asked this question about physician leadership, Chris, and what I would tell you is I think the only way that health care gets better in America — and it needs to get better — is if physicians take on a broader role in leading change in American health care.

Sachin Jain (03:48):

And I would say that we have unfortunately focused a little bit too much on our stitching. We’ve focused on clinical care to the exclusion of actually shaping the future of health care. And we’ve ceded the profession in a lot of cases to others. And I think that is a little bit of how we got to where we are today, which is a place where many physicians are feeling disempowered, disconnected, where we feel like everything is going in the wrong direction. Where lots of people are successful but aren’t feeling particularly good about where we are and the care that they’re able to deliver. I think the time is right for a physician leadership movement in health care, and I think we’re starting to see seedlings of that. And I think the job over the next 5 to 10 years is to nurture those seedlings and so that we do have more and more physicians and positions of leadership in health care thinking about the bigger picture in highly principled ways.

Addressing gaps in care

Chris Grant (04:47):

I love it, and I agree there can be no greater advocate for patient health and patient well-being than the doctor. Yet, it’s a complex environment that we live in today. In your current role with SCAN Group and SCAN Health Plan, you focused on leading the organization’s growth, diversification, and emerging efforts to reduce health care disparities. What role do you see physicians playing as we look to identify and address the gaps in health care?

Sachin Jain (05:18):

I think a lot of it is just awareness. And I think many of us live in a little bit of oblivion about the kinds of disparities that exist, in part because I think there’s a tension between acknowledging the presence of disparities and a big part of the physician ethos is treating everyone the same. And I would argue that we have to maybe turn that truism that we should treat everyone equally on its head a little bit and really recognizing the unequal circumstances of people’s lives and personal situations and cultural backgrounds and how they actually influence attitudes around the delivery of care.

And I actually think a deeper understanding of those differences will lead us to further customize care for the patients that entrust us with their care. We are doing that at SCAN through the launch of several new health plan products that are actually tailored to specific populations. In the last couple of years, we launched the industry’s first LGBTQ+ Medicare Advantage plan, it’s called SCAN Affirm. We launched something called SCAN Inspired, which is the first MA plan for women by women, something that I’ve been particularly passionate about. And the other thing that we did is we launched the SCAN Compass product in collaboration with ApolloMed, which is a medical group that focuses on the Asian American population in Southern California, Nevada, Texas, and other geographies. And part of what we’re doing is introducing into the benefit design key elements that acknowledge cultural differences. We’re building in alternative providers into our Asian product.

Sachin Jain (06:52):

We’re building in behavioral health providers that are focused on serving the LGBTQ+ population into our Affirm product. We’re making changes to our formulary that align with different cultural preferences. And again, I think part of our job is to make it easier for doctors to actually provide the kind of care that patients want by making it more accessible, by having the benefit design align with patient preferences.

Making sense of mergers and acquisitions

Chris Grant (07:16):

I love it. I feel like I’m talking to a Permanente leader quite frankly, because that is our philosophy, right? Making the right thing the easiest thing to do and really meeting patients where they are and recognizing that the differences in the uniqueness and tailoring care delivery to meet their needs. Sachin, one of the things I always look forward to is hearing your industry predictions. And one of your predictions that you discussed was the return to mega mergers in health care.

We saw mergers and acquisitions with CVS Health, UnitedHealth, and even here at Kaiser Permanente disrupt the health care landscape in 2023. What are your thoughts on these developments and what do you think that means for the industry at large and for patients?

Sachin Jain (08:07):

Well, that’s a great question and I’ll add what does it really mean for doctors? I think we’ve seen a lot of consolidation in the health care industry. We’ve seen health plans come together. We’ve seen retail pharmacy together with a health plan. We’ve seen that a lot of rumored consolidation between the big national health plans, most recently, Cigna, Humana…some people are suggesting that there may be a Cigna Centene in the works. Of course, Kaiser [Permanente], big splash when it acquired Geisinger, a very proud central Pennsylvania health system. And SCAN, we had our own proposed merger that did not make its way through regulatory approval with CareOregon.

So, I think everyone’s trying to match up to try to get more scale and try to create further sustainability. Health care is an industry where if you’re a $5 billion revenue company like we are, you’re small. You’re not only small, people think you’re quaint. They’re like, oh, you have 300,000 lives. That’s nice, that’s cute. And we’re in the land of giants, where companies have tens of millions of lives, where their revenues sometimes enter the triple digit billions. So I think people are looking at this and saying, we need to be able to compete more effectively. We need more scale. We need more G&A (general and administrative) leverage over a larger number of lives. We need more strategic diversification so that when Medicare Advantage is under the microscope, we may get revenues from other lines of business. And so again, I think that there’s a bit of a hedge that’s playing out, and that’s what’s happening from a macro structure perspective and a macro strategy perspective.

Sachin Jain (09:40):

Now, the thing that makes me worry about all the consolidation, frankly, is that there are differences in communities, there’s differences in geographies, there’s differences in clinical cultures. And a lot of what happens when people start to do large scale M&A (merger and acquisition) in health care is they start to look for uniformity and creating mass uniformity over and across a larger organization. And I think what that does to doctors and patients alike is that patients start to feel more and more like numbers. And then I think doctors start to feel more and more like numbers. And when that happens, I don’t think doctors are able to deliver their best. And I don’t think patients end up receiving their best. So I think the job of anyone who’s leading consolidation in health care is to try to make a really big organization feel small. I see this in all of my travels.

Sachin Jain (10:36):

I visit all the large health systems. I visit with health plan leaders around the countries. And I think this challenge, this leadership challenge is a prodigious one because it is fundamentally about really trying to make people feel seen and heard. And if I had to contrast what it was like to be a doctor in my father’s generation versus what it’s like to be in my generation, my dad felt a true sense of pride and ownership in the clinical institutions that he was a part of. He felt like his voice mattered. He felt like if he needed to get something done on behalf of his patients, he could pick up the phone, call the president of a hospital, call the head of the ORs, and he could make things happen. And I think today people feel like when they’re trying to make things happen, they encounter red tape, they encounter bureaucracy, they encounter a lot of regulatory capture and hiding behind regulations.

Sachin Jain (11:31):

HIPAA is the excuse for almost anything these days not happening in most health care organizations. And so again, I think the job of anyone leading a large-scale health system that is consolidating or a large health care organization that’s consolidating, is to try to do this work to make it feel small, to give people that sense of agency where they really feel like their voice matters. And I think that’s a lot of where the burnout comes from. My dad worked harder than I’ve ever worked in my career, to be super clear. And I don’t think he ever talked about burnout because he felt like he mattered. He felt like the work that he did mattered. And I think some of what’s happening as health care organizations have gotten as big as they’ve gotten — and I’d be curious to hear how you think about this from a Kaiser [Permanente] perspective — is that I don’t think people feel like they matter.

Chris Grant (12:17):

It’s such great insight. And one of the wonderful things about being a health care practitioner is a sense of purpose, a calling. And health care, the care part, I think is what draws individuals to the industry, that they really want to be a caregiver and they want to make a difference. And you’re absolutely right, Sachin, that in big institutions, consistency and uniformity are often the overarching goal, especially if you leave it to the accountants and the finance folks because you can drive efficiency. However, health care is local, as you’ve nicely pointed out. And I can tell you within Kaiser Permanente, how we approach patient populations in rural Maui or on the west side of Oahu, is very different than in downtown Washington D.C. at Union Station. The cultural expectations, the design of the clinic, the application of alternative medicine, you have to design care delivery to meet the population that you serve. It is something within Kaiser Permanente, we work incredibly hard to do, and sometimes there is a tension between the corporate office and the local market.

Sachin Jain (13:40):

I think the tension is in some cases a feature, not a bug, because I do think that the kind of splinter part of the organization can actually challenge the status quo and drive the whole organization forward. I’ll tell you, my whole career has been being an outsider inside a large organization. So when I was at CMS, I was part of the founding team of the Innovation Center, and there was a clash culture between the Innovation Center and core CMS. But when I was at Merck, I led the digital health division as the CMIO at Merck, and there was a tension between our little group and broader organization. We were living in this different domain with different rules and sometimes the large corporation applies frameworks that don’t necessarily apply to other things.

Again, the job of senior leadership in large organizations is to really operate in a nuanced way. And I think that’s where actually a lot of organizations fail to incubate innovations, fail to scale new models of care, fail to challenge their own status quo, is that they’re not able to simultaneously create loyalty to the broader enterprise with conformity to the most important legal and compliance directives. It’s one of the hardest things about changing health care is creating room and space within large organizations to enable innovation and allow distinctive models to actually flourish.

Chris Grant (15:10):

And for all of our listeners, I’m kind of famous within Kaiser Permanente [for] saying that the best ideas, the absolute breakthrough care delivery design or application of technology, have been developed in a single hospital or a corner of a clinic where there were innovative clinicians that came together and said, we can apply this this way, or here’s how we need to design care in order to meet patient’s needs to the greatest extent. And they did it. They tested it. And then what we try to do within our system is put a big bright spotlight on it and share the results, so that others can apply it, can learn from it, and can spread it quickly.

Sachin Jain (15:53):

You have a distinct advantage that the rest of the country doesn’t have, which is you’ve got aligned payer and aligned provider. And I think that changes the whole equation. And we used to have that on a much smaller scale at CareMore. And I think the marriage of payer-provider — I’m actually super amused that people talk about provider like it’s a new concept and ignore Kaiser [Permanente]. People talk about some of the newer companies that are “payviders”, and I’m like, there was Kaiser [Permanente], there was CareMore. It’s not such a new concept.

And I think when you look nationally, you look at so-called innovative systems, a lot of what they do is they develop these really great models, models to improve access to care or to improve inpatient rounding. And when they get written up and talked about in the pages of The New York Times or The Wall Street Journal and then you go visit the system and it was done in one ward or one clinic within a large system and fails to scale. I still remember reading an article about group visits at [Kaiser Permanente] and the power of group visits. And I thought, wow, this is the future. And then I was at a conference just this past Saturday where someone said, have you heard of group visits before? And I said, it’s funny, I’ve been following group visits for 20 years and I’ve been waiting for group visits to really become a thing. And so again, I think some of the work that we have to do is to really take concepts that we know work and just make it easier for people inside of organizations to adopt them.

Positive disruptions with medical innovations

Chris Grant (17:15):

Recent innovation such as AI and medicine has opened so many doors to thinking differently about care delivery. You’ve consistently been a strong proponent of challenging the status quo in health care. And a lot of our conversations so far today has been focused on how do you challenge the status quo and how do you really innovate? What do you see as some of the positive disruptions that could change our industry for the better when it comes to the use of technology in medicine?

Sachin Jain (17:43):

One of the ways I think about this is that we have an opportunity to take humans and turn them into superhumans, and allow people to enhance their humanity by pulling them out of some of the inhumane things that we have them doing. Documentation is a great example. Recently at SCAN we made an investment in a company called Abridge and it’s technology that’s been around for a while. It’s ambient listing that translates a conversation into a SOAP note.

What I think that does is it actually gets us out of clickmania, which is where most appointments are right now, someone clicking through something and actually sometimes missing important details of what’s actually going on with someone because they’re too focused on what’s on the screen. And so again, Abridge is an example of something that takes humans and turns them into superhumans. We have similar technologies that we’re implementing on the member service side, where you’ve got an ambient assistant listing to what’s actually going on in the call and providing on-the-spot decision support to the member based on what’s in their record as well as what’s being described in the call. And I think when we start to provide those types of technologies, it allows us to actually be more present and it allows us to be more anticipatory in terms of the individual needs that people have in specific circumstances.

(19:10):

And I think that therein lies the great opportunity for us. It’s not about how do we take hundreds of billions of dollars of costs and hundreds of thousands of health care workers and put them out of jobs? It’s actually how do we take the health care workers that we have and have them return to being more human in service of other people?

Chris Grant (19:30):

Yeah, it’s beautifully said, and you and I definitely share a common vision around technology. 25 years ago, I helped co-found a health care venture capital fund that we operate within Kaiser Permanente. We’ve invested in a hundred-plus medical technology companies and while they’re venture capital-backed and high-yield return, the single greatest impact is the impact on care delivery and the strategic impact to the patient.

Sachin Jain (20:00):

I think places like Kaiser [Permanente] have an opportunity to do things really differently. Because most of my clinical experience post-residency has been the VA [Veterans Affairs] as well as a practicing [doctor at CareMore], what I can tell you is that one of the horrible inflection points in American medicine is when we tied documentation to reimbursement. It created excessive requirements around reimbursement. And I think in environments that are single payer, you actually have opportunities to change that equation dramatically. Of course, there there’s exceptions like the Medicare Advantage line of business where even if you are a single payer, you’ve still got to submit codes to CMS [Centers for Medicare & Medicaid Services] to get reimbursed appropriately.

I do think that we don’t necessarily always take advantage of the fact that we’re in environments where you don’t necessarily need to produce all the documentation that every other environment requires us to produce to actually get paid. And that’s just something I would urge everyone in the listening audience to think about is, how do you simplify it? One of the pitches that we make to provider groups and delivery systems is why don’t you go single payer with us? Meaning terminate your relationships with some of your other health plans, partner with SCAN in a deeper way, in a longer way, in infrastructure that you wouldn’t necessarily be able to invest in if you were doing one-year contracts with a bunch of health plans.

I just think that there’s real opportunities for us to create simplification if we can get into a much more long-term view of our systems as well as a long-term view of the patients that we serve.

Chris Grant:

I couldn’t agree with you more. I think it is one of the wonderful things, and perhaps a significant advantage within Kaiser Permanente is we have at a record low attrition, when patients join us, they stay. And so to your good point, it allows us to really invest in their long-term health.

Sachin Jain (22:04):

Yeah, you’re not looking at the one-year actuarial value of your member. You’re not saying, we’re not going to do X, Y, or Z even though it’s in the best interest of the patient, because we’re not going to get the benefit of it in 5 or 7 years actuarially. You’re taking that longer view of patients. We do the same thing when somebody who’s been a SCAN member for a year. After that point, the likelihood that they’re going to be a member for 9, 10, 11 years and pass away as a SCAN member is very high. And so when we’re looking at our benefit design, we are thinking long-term, not just about what’s happening this month or next quarter. Which I think brings us to another topic worth touching on for a second, which is the importance of not-for-profit health care, which is something where Kaiser [Permanente] and SCAN are really very aligned. I think a lot of health care being under a for-profit tent is really aligned to hitting monthly and quarterly earnings targets as opposed to sometimes saying, we’re going to lose money because it’s the right thing to do for our patients right now, which is something we have the freedom and flexibility to do in our environments that I don’t think people who work at the big 5 national health insurance companies would say that they can do right now.

Urgent needs for community health

Chris Grant (23:15):

It’s absolutely in the interest of patients to be able to invest in their needs in the long run and not be beholden to quarterly financial reports or targets. And we view our not-for-profit structure, much like SCAN, as a huge advantage, and the greatest beneficiaries of that are shareholders. the greatest beneficiaries of that are patients. Staying with that nonprofit theme, in your early work with government services, you founded several nonprofit health care ventures, including Homeless Health Clinic, the Harvard Bone Marrow Initiative, and the South Asian Healthcare Leadership Forum. What do you see as some of the most pressing community health needs currently facing the nation?

Sachin Jain (24:01):

Homelessness was a passion of mine when I was in college because I couldn’t really understand how in a country like ours, people can be homeless. And so, I started out volunteering at a homeless shelter at Harvard Square and then went on to start a health clinic within that homeless shelter.

When I realized that homelessness is just as much a health care issue as it is a housing supply issue, I think one of the most important lessons I’ve learned is how you define a problem influences how you solve a problem. We oftentimes think of homelessness as a housing supplier or housing cost issue, but spend a week or a month or a year working with people experiencing homelessness and you realize that a lot of what they struggle with is a health care issue. Either a health care issue made them homeless or a health care issue exacerbated their homelessness and keeps them homeless. When you think about Southern California, when you think about Northern California, when you think about Oregon, when you think about every major metropolitan area in the country, Austin, Texas, we have a major crisis of homelessness because we haven’t necessarily built the behavioral health infrastructure that we need to build.

Sachin Jain (25:10):

We haven’t necessarily built the infrastructure of chronic disease management. And the fastest growing segment of people experiencing homelessness is actually older adults. And so, it’s one of the reasons we at SCAN launched something called Healthcare in Action, which is a medical group focused on homelessness that’s now scaling all over Southern California and Northern California. We believe that we need a street presence of medical care and we need housing navigation services that meet people where they are, and we have one quality metric, which is did we get the person housed? It’s the ultimate metric of whether we’re doing our job well, is did we get them housed? Did they stay housed? For me, that is social cause number one, two, and three. Especially living in the Los Angeles metropolitan area, where I feel a deep sense of sadness and embarrassment at the fact that it’s 2024 in the United States and we still have people sleeping in the streets in tent cities shooting up drugs, these are huge problems.

Positives in practice

Chris Grant (26:13):

I agree with you. I would put it at the absolute top of the list. We as well have been deeply focused on homelessness and underlying causes of homelessness and working hand in glove with social services within the community, and then applying our knowledge and capability and expertise and resources in partnership to make a difference.

I think that there’s unique opportunities to bring learnings from different geographies and different institutions together to accelerate, but also to align capabilities, right? There’s probably no one entity that can solve [homelessness] and the underlying causes, to your point, deep mental health needs and addictive medicine needs.

Let’s close on an aspirational note for the health care industry. Sachin, I so admire your work and you’ve consistently focused on putting people and communities first. As the health care landscape evolves and business practices change, what do you see as some of the keys to ensuring that patients and the communities in which they live remain at the heart of the medical practice, and could you perhaps point to a couple bright spots where you see this happening now?

Sachin Jain (27:28):

I would say the brightest spots for me, Chris, are health care interventions that are being developed for problems that we previously thought were completely insoluble. I think about diseases that we learned about in medical school, cystic fibrosis, sickle cell anemia, that previously used to be intractable diseases, and in some cases death sentences that are now fully treatable through novel therapeutics. I’m just super excited about them, and I’m super excited about the foundational work that’s now being done to figure out how to actually pay for these things in a sustainable way for the country. I think if we can start to match innovation and payment policies and the design and structure of health care with some of the amazing innovations that are happening at the biopharma and genetic side, we will meaningfully transform care and have a huge leap in life expectancy and health and well-being for the populations and communities that we serve. So, I’m very excited about that.

Chris Grant (28:24):

I love it. And perhaps a little of the way your father felt, I feel that this is the moment to be in medicine. Despite the challenges and difficulties and some of the things that we’ve talked about around wellness and burnout, I also believe that this is a point where the combination of public policy, medical technology, and care delivery practice is all coming together.

This has been a fascinating conversation, Sachin, your voice is one that I always look forward to hearing and your insight on the health care industry is just poignant and telling. I want to thank you for joining us. I hope we can have you back on the podcast to continue our conversation.

Sachin Jain (29:10):

Anytime, really appreciate the opportunity. Thanks so much, Chris.

Chris Grant (29:14):

Thank you, and thanks once again to our listeners for tuning in this season. If you enjoyed this episode, please take a moment to subscribe or share a review. We’ll see you next time.

The opinions expressed on this podcast are those of the speakers and are not necessarily the views of Kaiser Permanente, the Permanente Medical Groups, or The Permanente Federation.