Q&A: Sachin Jain, M.D., M.B.A., on Ending Annual Insurance Enrollment
In a recent Forbes article, Sachin Jain, M.D., M.B.A., CEO of California-based SCAN Group and SCAN Health Plan, suggested that ending annual enrollment in health insurance would actually contribute to curing a lot of what ails the U.S. healthcare system. In an interview with Healthcare Innovation, Jain discussed the logic behind his proposal.
HCI: The headline of your Forbes article is: ‘Want Real Value-Based Care? End Annual Enrollment in Health Insurance.’ Can you explain why getting away from annual enrollment would help payers improve their focus on things that matter?
Jain: I first heard this idea in conversations with Sukanya Soderland, M.B.A., chief strategy officer at Massachusetts Blue Cross Blue Shield. For one, think about the healthcare innovation ecosystem and the challenges that many of the leading vendors face in getting contracts, which is that they've got to show actuarial returns within 12 months. But a lot of things that are going to improve long-term health outcomes have nothing to do with 12 months. If I invest in efforts to reduce your weight by 50 pounds this year, and I avoid the cost of heart attack and diabetes five years later, I'm not necessarily incentivized to do that, because you may not be my member in five years.
Even though we have a growing number of evidence-based interventions to improve healthcare outcomes over a five-year period, there's lower than ideal adoption. This is really a market inefficiency that's been created by how we've done policy in our country. We've created this regulatory and statutory mandate that people would have one-year plans. Now as I floated this idea in Forbes, on LinkedIn and elsewhere, people responded that consumers really want to choose. But I say that there are probably some consumers who say, ‘Hey, if you're invested in my health over a three-year period, and you gave me an enhanced benefit package that is more oriented around long-term investments in health, then I would choose to be locked in for five years or three years or seven years. I actually think the ultimate answer is that we need some regulatory relief from CMS. And then we need to be able to offer consumers the opportunity to opt into a plan that has a three- or five-year benefit cycle.
HCI: In the Forbes article, one of the bullet points about the benefits of your proposal is that health plans would stop offering shiny benefits that don't improve health. Why Is that happening now and why would it stop?
Jain: Well, look, the most competitive period in the healthcare industry is our annual enrollment period for Medicare Advantage October 15 to December 7 every year. We have seven weeks to try to get your attention and have you become a member. And, brokers and people who sell insurance are both aligned to try to find people the right plan, but they are also trying to sell as many people as they can in that period because they're paid based on commissions. Really smart sales reps and brokers focus on how quickly can I get your attention and give you something that you need and want and then move on to the next customer. The fastest way to close sales with people is to align a benefit with something that they need. If they've been holding off on $3,000 of dental work, they're going to choose the plan that gives them the $3,000 dental benefit. If they are strapped for cash, they may choose the plan that has the Part B rebate. But in many ways these shiny benefits have distracted us from the original intent of this plan, which was to optimize people's Medicare.
I think there's a broader argument that extends beyond this article, which is that we need to take a hard look at our Medicare program. This is a program that was originally invented to reimburse bills. It wasn't invented to actually keep people healthy. If you look at part A and Part B Medicare, it was originally intended to pay your hospital bills and your doctor's bills. It did not have a clinical perspective. If you were inventing CMS from first principles today, you'd probably hire 100 geriatricians to think about this. If the interventions were to keep people healthy and keep people independent, they would look very different from the benefits that we have today, which are primarily around payment and reimbursement.
HCI: Well, isn't that kind of what Medicare Advantage is supposed to be about — better coordinating people's care?
Jain: It is and it isn't. The truth is that we've failed on some level. The way I know that we've failed is that we've been engaged in the zero-sum debates about whether Medicare Advantage is better or fee-for-service Medicare is better. I would say if our industry had done its job, we would have settled those debates a decade ago. When we used to talk about the move to value, we talked about your feet being in multiple canoes moving in different directions. Now we've got 10 boats and we've got for only two feet and two arms, and we're trying to be in all boats. And some organizations are finding themselves falling into the water as a result, because there are so many different payment programs that have slightly different rules, incentives and models. We talk a lot about harmonizing benefits, but it doesn't really work that way.
HCI: How significant is the problem of churn to Medicare Advantage plans? Are they really losing a significant number of their current members each year to somebody else?
Jain: Yes, we are. We literally lose tens of thousands of members a year and we have to resell a lot just to make up for the members we lose, because people are shopping more than they ever did before. Some of it is people moving geographies. Some of it is people are changing their preferences around provider networks, so they need to necessarily change their plans. But the bigger picture story is we've created a system that has a lot of associated overhead, much of which doesn't do anything for anybody. Think about how many federal taxpayer dollars go to Medicare Advantage marketing. It’s staggering, and I would say we could cut that into a third if people were on their plans for three years. I'm increasingly looking at practices that we've normalized that are actually quite abnormal. We want people who are laser-focused on doing the right thing for people. Annual enrollment doesn't enable that laser focus.
HCI: Do you think other Medicare Advantage plan execs would embrace this proposal?
Jain: I think there are certainly people who are interested in it, but we've got to start thinking like we care about people's health. And we've got to stop thinking like we're selling products like any other business. One of the biggest challenges we have is that we've commoditized Medicare Advantage, and we've commoditized care. This is one of the most important, if not the most important purchases an older adult is going to make, and sometimes it's the difference between life and death and sickness and health. On some level, I don't care if the industry is on board or not on board; but I think most people would see the rationale.
HCI: I'm just trying to figure out where the opposition to this idea might come from.
Jain: I think the opposition is that in aggregate we haven't earned the right to hold you for three years. There are, of course, some plans that do better on disenrollment than others. But this would have to be an opt-in program. We'd have to show people why they would want to opt in and do a plan that has a three-year benefit cycle. The way I think about it is there are people who lease cars for one year, two years, three years and four years. If they really like the car, and they know it's highly reliable, they're going to lease it for as long as they can, as long as they get a good deal with it.
HCI: Would this require changes in Congress or would it just require changes at CMS or state regulatory bodies?
Jain: My belief is that the Centers for Medicare and Medicaid Innovation could introduce a demonstration project because they have the authorities, but if for whatever reason CMMI doesn't get interested in it, I hope that a member of Congress will take this issue up, because it's pretty common sense that you can't invest in people's long-term health if you don't know that they're going to be with your health plan, right?
HCI: Your article also noted that commercial plans might be interested in getting on board but that such a change might require unshackling employment and insurance coverage. Why are those two things connected?
Jain: I think employers face the same sort of issues that Medicare Advantage plans do, which is that the average tenure for an employee may be just a couple of years, depending on the industry. If you're going to sign someone up for a plan, and that plan is going to make longer-term investments in someone's health, they want to know that that person's plan enrollment is not tied to their employment. I think the neat fix there is a defined benefit. You're going to be in that plan for three years, but who pays for it? Maybe your employer, maybe the state, maybe you as an individual. But right now, it's all tied to employment.
HCI: You also mentioned that this idea might lead to more investment in higher cost therapies by the plans. Again, that's about reaping the reward a couple of years out, right?
Jain: Yes, I used to work at Merck, and I think about all my former biotech colleagues and pharma colleagues, who are inventing truly amazing things, but they're expensive. The total lifetime cost for someone with severe sickle cell disease is in the millions of dollars because of all the pain crises and the hospital admissions that these folks experience. If you know a patient with bad sickle cell disease is bouncing to and from the hospital and emergency room, and you have a cure that costs hundreds of thousands of dollars to administer, you want to be able to pay for that and know that there's going to be some return on it. But unfortunately, I can cure you tomorrow, pay for your cure, and then next year, you can switch insurance or jobs and switch insurance. So there's a natural resistance within the system to funding things that have longer payback periods.
HCI: Let me switch gears a little bit. You just returned from the annual AHIP conference in Portland. What were your impressions?
Jain: One observation is that I think we have normalized inauthenticity. We talk about changing lives and we talk about improving lives and commitment to community and being better and supporting people and then you look at some of our industry's actions: we're putting people in a medical debt we talk about the benefits for social determinants of health, but then we put real barriers in front of people to actually access those benefits. I've heard about one health plan that has a pesticide benefit, but they require a physician's note to get the pesticide applied to your home, so the utilization of that benefit is incredibly low. But at the same time, you've got health plan executives on stage celebrating that they have a pesticide benefit. I think we've normalized inauthenticity. We make ourselves feel better to some extent by talking about all the small things that we do to make a small number of people's lives better, but the reality is that we've participated in complexifying the U.S. healthcare system to the point where we've eroded trust with people and communities, and I think it's time to turn it around.
