Sachin Jain, M.D.: U.S. Healthcare System Faces Authenticity Crisis, Leadership Vacuum

May 19, 2021
“I think we've corporatized American medicine too much, and we're paying a huge price for it,” says the former CareMore and CMMI executive in NAACOS talk

Sachin H. Jain, M.D., president and CEO of the SCAN Group and SCAN Health Plan, said he believes the U.S. healthcare system is facing an authenticity crisis in the shift to value-based care as well as in the drive for healthcare equity. “Many C-suites are talking out of both sides of their mouths,” he said. “They say one thing, but most organizations operate like they’re about something else completely. They’re simultaneously trying to drive up admissions while saying that they care about value-based care.”

Jain was speaking April 23 in a “fireside chat” with Clif Gaus, president and CEO of the National Association of ACOs, during NAACOS’ spring meeting. He had plenty of provocative things to say about why hospital systems have been slow to move to value-based care, how ACOs are treated as side initiatives rather than core to the mission of organizations, the lack of authenticity around health equity, and the dangerous impact of health system and physician group consolidation. Jain’s SCAN Health Plan is a not-for-profit Medicare Advantage plan serving more than 220,000 members in California. He previously served as CEO of CareMore Health, which built and scaled programs to address loneliness, deliver hospital and primary care at home, and address the clinical needs of the highest-risk, highest-need patients. He also served as the first deputy director for policy and programs at the Center for Medicare and Medicaid Innovation (CMMI).

Gaus noted that 42 percent of all practicing physicians in the United States are part of a Medicare ACO but currently only 17 percent of hospitals are. He asked Jain why he thought that was and what should be done about it.

Jain responded that if you’re the chief financial officer of a healthcare organization, and you’re looking for reliability from a financial management perspective, there’s nothing more predictable and reliable than just looking at bed day occupancy. Moving away from bed day occupancy to an uncertain payout in some longer-term reconciliation of your finances is a very scary notion. “So it doesn’t surprise me at all that hospitals have dipped their toe in the water on ACOs, but haven’t dived in, because I think it does represent such a significant change,” he said.

When he led CareMore, Jain recalled, the company partnered with a large academic health system around managing their Medicare Advantage population. It was challenging for the leadership at that organization to get their head around the idea that they didn’t want the patients in the hospital, that they could be more efficiently and more effectively managed on an outpatient basis, and that a hospital admission for many patients with chronic disease is a statement of failure as opposed to the right thing for that patient, he said. “I think it’s very hard for many folks to actually see that world for what it could become, and that’s why I think change management ends up being such an important skill set.”

There are some organizations that have strategic clarity, that decide that they’re going to do something and succeed at it, Jain said, and then there are other organizations that just check a box on value-based payment and they get mixed results. Then they say they are not sure this ‘risk stuff’ works, or they’re not set up to do it, or they don’t have enough resources to do it. “I just think that there’s a failure of leadership in U.S. healthcare. We don’t have a ton of leaders; what we have is a lot of administrators, and we’ve confused being an administrator with being a leader,” he added. “A leader sets direction and drives strategic clarity. What we have, I would say, are order takers as opposed to order givers in U.S. healthcare.”

Many health systems have value-based care initiatives, but they’re also trying to consolidate as much volume in their system as they can. “The bigger issue that we have to deal with right now is antitrust enforcement,” Jain stressed. “The amount of hospital and physician group consolidation and acquisition, under a few different banners and names, is really going to drive costs up and is going to create a lot of extra waste in the healthcare system. I think that we have to take a harder look at how consolidated the healthcare industry is becoming at the market level and also at the national level.”

ACOs not seen as core to business

Another problem the ACO movement has had, Jain argued, is that they are largely seen as an initiative, as opposed to being seen as core strategy. “This a repeatable theme across all industries, and all businesses: if you build this new thing within the old, the antibodies swarm around it to reject it. We have to think about how you create the ACO as core strategy, as opposed to having an initiative on the side. And if you look at the way that these things get structured, the way that they get funded, the way that they get staffed, it’s an initiative, it’s not a core strategy. If you had leaders with conviction and clarity of purpose, we would have seen a lot more progress on this over the last 10 years than we did.”

Gaus also asked Jain why he thought the private payer space has been slower to adopt value-based payment mechanisms.

“There actually isn’t a ton of expertise to go around,” Jain said. “If you and I got a phone call from a search firm about who you’d recommend to lead value-based care payment policies at a national payer, like an Anthem, Aetna or Humana, there’s a list of like five people who really know how to think about this stuff at scale, and create the harmonization with federal programs. Instead you get what I would call ‘value-based care hobbyists’ in critical roles at national payers, who are learning on the job. And you see that all over the industry. As a result, you end up seeing these slow fits and starts because there’s not enough conviction about what ought to be done.”

Jain noted that many big hospital systems with tons of reserves are starting ventures to invest in new businesses. “They’re not taking those dollars and saying, ‘Hey, we want to actually build robust population health capabilities.’ They’re not actually making the investments that they ought to be making in the IT systems, the processes, and the change management. I believe the right kind of leaders would be able to bring boards around to this broader view. These are largely nonprofit organizations that, for the most part, have started to adopt a predatory, for-profit view of the universe. A state university health system in Virginia was suing not one or two or three, but literally thousands of patients for unpaid bills. We need a new culture around healthcare. There were lots of good things to learn from corporatizing healthcare. And what I mean by that is implementing process discipline and implementing metrics at every stage to ensure you’re delivering what you’re supposed to deliver. But I think we’ve corporatized American medicine too much, and we’re paying a huge price for it.”

Concerns about consolidation

Gaus described how new venture-funded medical group aggregators are making a big play in the physician space and driving their models more towards accountable care. He asked Jain what he thought of these aggregators and of what Optum and Humana and other bigger systems are doing to acquire practices. Is that a good thing?

“I’m really worried about it,” Jain said, “because while the consolidation can create management efficiencies and more consistency in clinical practice, I also see that it can really drive rate-setting behavior. As a precondition of competition in healthcare, you actually have to have a non-consolidated market. And the reality is, here in Southern California, for example, we’ve seen tons of physician group acquisition by the same aggregators. As a result you’re seeing a lot of upward rate pressure that’s being imposed. And if you think about that on a national scale, that’s not creating value. That’s just creating more profit for the downstream entities. And I don’t know that much of it flows to the frontline physicians who are truly creating the value by innovating on care delivery. The aggregators would much rather have physicians as employees rather than as partners. I know that because I’ve worked with them quite a bit. They’re interested in consolidating power, and keeping doctors as employees rather than partners. My view is that we should have a system that’s physician-led.”

Jain also believes that most people hate working for big organizations. “They make you feel like you’re a cog in the wheel. Most people don’t love that feeling,” he said. “Most people like autonomy, they like independence, they like creativity. And so I think eventually, there’s going to be more of a backlash to such things. I think it’s going to be up to the federal government to make it attractive to be independent, or practicing in small to medium-sized groups again. I think that’s where the highest quality of care is delivered.”

Do the right thing

Finally, Jain also wants to see healthcare systems put their money where their mouth is on equity. “We say the right things, but then we don’t do the right things,” he said. “After the George Floyd incident, every healthcare organization put out a big statement about how much they care about health equity.”

Jain asked his 100,000 followers on LinkedIn which of their organizations had made meaningful change in strategic focus in recognition of racial disparities and social inequities in the wake of George Floyd’s death and the protest movement it sparked. “I got no responses to that post,” he said, “because the truth is that our commitment to these issues is oftentimes very surface-level and our memories are very short. It goes back to the idea that we need to make real commitments, and they need to be measurable. If you’re in an ACO right now, you’ve got to look at your data. You’ve got to see how you’re doing with different populations. You’ve got to create action and transparency around disparities and performance. You’ve got to create action plans that close those disparities. And you’ve got to talk about your bad news more than you talk about your good news, which is an unnatural act for many of us. But I think it’s important in these times when there’s a greater recognition that we have these challenges to make the commitments real, as opposed to hiring great PR firms to put out nice statements about how much we care about things that we don’t really care about.”

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