Nonprofit health plans are better poised to address beneficiaries' needs, SCAN Health Plan exec says

Karen Schulte, president of the Medicare division for SCAN Health Plan, believes the nonprofit model brings unique advantages when working to reach populations in need. 

SCAN, a nonprofit plan specializing in Medicare Advantage (MA) based out of California, hopes to lead a movement to recognize nonprofit healthcare and help it clinch a larger share of the MA pie, Schulte said.

“We need to increase that sliver so that we can make a much broader impact,” she said during a keynote Friday morning at the Fierce Health Payer Summit in Austin. 

One way it aims to do so is through the merger of its parent company, SCAN Group, and CareOregon. The resulting HealthRight Group aims to be a mission-driven organization helping protect and preserve nonprofit healthcare, Schulte noted. She hopes the merger can grow to a consortium of nonprofits that can collectively reach a bigger share of MA members, an area Schulte noted is currently dominated by for-profit plans. 

Standing out as a nonprofit 

Being a nonprofit means that SCAN is "not beholden to shareholders," Schulte said. Instead, "we can reinvest back into benefits and services that matter,” she explained. 

As an example, the plan found that though more than a third of its beneficiaries are women, more than half reported being discriminated against in the healthcare setting. In response, the plan recently launched SCAN Inspired, a women’s health advocate to help guide members.

After finding that many members were not taking their medications because of cost barriers, SCAN also recently launched a new tier on its formulary that covers 13 brand-name drugs for either $0 or $11, Schulte said. The drugs are mainstay treatments for common diseases like stroke, diabetes and heart failure. 

The plan feels a duty to serve not only its members, but the communities it is in more broadly, Schulte said. To that end, SCAN looks for strategic partners to invest in that want to lean into the toughest challenges facing the senior population. That’s why SCAN recently invested in Dina Care, an AI-powered care coordination platform, after finding it can service its members in their home within a few hours compared to other providers that could only do so in a week, she said. 

Yet another area SCAN is focusing on is eliminating disparities in flu vaccination rates and medication adherence among certain members. The plan’s executive leadership’s bonuses are tied to achieving this goal, Schulte said. 

Still, it can be hard for nonprofits to stand out in a world where competitors have seemingly endless investments in growth and marketing, Schulte acknowledged.

While SCAN cannot compete with the for-profits in that arena, “we focus on our core,” Schulte said. “That means we have to be truly experts in aging and understanding the needs of members through every stage of aging.”

Through its customized benefits and customer service, SCAN hopes to live out its core belief that there is no one size fits all in healthcare. “It’s our aim to make sure that our members feel like they are our only member,” Schulte said. She believes that approach matters and gets noticed.

Doing more with less 

This year’s open enrollment period has been interesting, Schulte said. The past few years had seen explosive growth in MA penetration rates, but 2023 has been off to a slow start. Perhaps too much complexity has entered the system, Schulte suggested. 

“Have we created so much noise that it’s caused confusion and just paralysis in wanting to know more about Medicare Advantage?” she asked. From flex cards to pest control to dog walkers, not all benefits out there offer real value when it comes to the health and well-being of beneficiaries. “Seniors have become a target of consumerism, and we have to stop this madness,” Schulte said.

Some big policy items Schulte has her eye on include the Inflation Reduction Act, changes in the risk adjustment model and changes in star rating policies. While changes in policy are not new, these are happening all at once as opposed to one by one. 

The confluence of factors will undoubtedly impact revenues and drive up administrative expenses, consolidate staff and potentially divert resources away from serving members first and foremost, Schulte said. The result is increasing variability instead of consistency for members, which indeed is what regulators themselves want to avoid, Schulte noted. 

“What if value-based care takes a backwards slide because there’s fear of a risk of inconsistency?” Schulte questioned. 

Though as a nonprofit, SCAN can weather revenue declines, the plan will have to make difficult decisions that may impact its benefits or innovative new programs, Schulte said. “We’re going have to figure out how to do more with less,” she said.