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Guest Commentary

Straight Talk: SCAN Health Plan

From Issue: Volume XXI - Number 19
9/20/2013




Art: Good evening, and welcome to Straight Talk. Our guests is SCAN Health Plan President/CEO Chris Wing. This year you are celebrating your 35th Anniversary of SCAN. What is it like 35 years and going strong?

Chris: Well, I think the mission and vision that was constructed by our original founders, the 12 angry seniors, is alive and well. And I expect it to be our mission and vision 35 years from now.

Art: Just for those viewers who are not familiar, tell us what SCAN, which is an acronym for Senior Care Action Network, what does SCAN do?

Chris: Well, our mission is to help seniors maintain their health and stay independent. And independence to us means staying out of nursing homes, if at all possible.

Art: And provide certain types of benefits unique for seniors.

Chris: Yeah, we’re a Medicare Advantage Part D Plan, so all of our members have to be seniors, and they have to be Medicare eligible.

Art: And they will assign to SCAN their Medicare benefits. And in return, they get what?

Chris: They get a great experience. They get great customer service, they get the services from 1,200 employees who are there for one reason. We don’t have Wall Street to support. The seniors are our bosses. So that’s how we measure success.

Art: And I know that you poll regularly user satisfaction, member satisfaction, as you call your enrollees. And it comes out very high.

Chris: Well, this year we got surprised. Medicare did a polling last year, Art, and we set out to prove that SCAN was going to be one of the best Medicare Advantage Plans of the United States. And we were going to measure that success not by market share. We weren’t going to measure that success by profits. We were going to measure that success solely by customer satisfaction. So for the 2013 annual election period, Medicare published in their Medicare new booklets the overall satisfaction rates for each and every MAPD Plan. And the best in California is Kaiser, God bless Kaiser. Ninety-one percent of Kaiser’s members were satisfied with Kaiser. SCAN came in, we were tied for number two with Inner Valley, but only one point behind.

Art: It was 90 percent.

Chris: So Kaiser is really good, but Kaiser should be looking out their rearview mirror [brief laughter]. We’re coming on strong. They set a great example. They’re a great competitor. But we are not set out to tie Kaiser. We are set out to beat Kaiser.

Art: And that polling was done, as you said, by Medicare, not by SCAN.

Chris: Not by us.

Art: It kind of reminds me of JD Powers in cars and other fields with – has a lot of confidence when an independent polling agency is doing the polling. You mentioned you’re not concerned about Wall Street. My implication, bringing up the fact that SCAN is a nonprofit it gives me comfort to know that I’m going to a non-for-profit entity rather than something run that has a responsibility to shareholders. Now, I know you’ve worked for for-profit as well.

Chris: Most of my career.

Art: And you have some nice things to say about that. But just one man’s opinion, I like the idea that you guys are non-profit.

Chris: I think there is a difference. We don’t have to think quarterly. We can think in terms of years. Also, it’s nice to know that we’re here purely to satisfy seniors. There’s nobody else that’s our primary stakeholder.

Art: And we’re going to speak with the founding CEO, Sam Ervin, in the next segment. But SCAN was early in on this whole field.

Chris: Well, we were founded 35 years ago. And we had a very unique mission and vision. To help seniors manage their health, and help seniors stay independent. The mythology, which is true, is that SCAN was founded with Sam as the Founding CEO and 12 angry seniors [brief laughter] who were based here in Long Beach. Who were very unhappy with the care being rendered to seniors who were ending up in nursing homes that didn’t need to be there. That resonates very personally with me as when I was a young man, we had to put my dad in a nursing home where he withered away for four years.

Art: And I remember on an earlier show you mentioned visiting him each weekend, actually.

Chris: Every Saturday morning for four years. And it was the most painful time because he just kept getting strokes and so forth. And there’s a place for nursing homes, but if we can keep one person out of a nursing home, maintain their dignity, their social... And often times you can do it just with a little bit of help.

Art: And there’s less cost to the system because nursing home care is far more expensive than the additional at-home care that you’re able to provide.

Chris: Last year Kaiser Foundation reported that 13 percent of American seniors who are living in nursing homes consumed 30 percent of the total Medicare spending. And that doesn’t include the state spending on the residential care. The board and care for the long-term care, for the nursing home itself, which could be up to $6,000 to $8,000 a month. So what could be more noble than to keep seniors out of a nursing home when they can be kept safely in their home or in the community? And we’re all talking about how do we reform Medicare? You can’t reform Medicare without reforming the flow of seniors in nursing homes.

Art: So you improve the quality of life of the senior by keeping them out of the nursing home. And you reduce the cost to the whole system collectively because it’s much less costly to provide these additional services at home than pay the monthly nursing home fee.

Chris: That is correct. What a novel concept.

Art: You mentioned Medicare and Obamacare, but there are a lot of elements of this that need to be finalized, are there not?

Chris: Well, I think there’s still 1,500 pages of original statute that’s being challenged and interpreted. And it goes into effect, you know, seven months. But I think there’s some very noble elements of Healthcare Reform. There is, the way it got constructed, very partisan in nature, but there are some very noble precepts. As far as, you know the triple aims of healthcare. Improving quality, improving service, and reducing cost. We believe in those. And I think the Obamacare – in 10 or 15 years – we’ll look back, and we may continue to debate the effectiveness of the policy itself, but I don’t think we will debate the fact that it provided the impetus for the healthcare system to reform.

Art: We are joined now by a healthcare icon, the legendary Sam Ervin. Sam, welcome to our show.

Sam: Thank you, Art. It’s really a pleasure to be here.

Art: SCAN is the second largest nonprofit healthcare entity in the country and the fifteenth largest in America. And Sam, you were here at the early stages. You were the founding CEO of SCAN. How does it feel to see how this company has evolved and developed?

Sam: Well, it’s very gratifying, Art, to see, you know, what’s continued from the legacy SCAN, you know, from that – those first seniors who said, “We want a better system of healthcare”. And to see now that that DNA is still very much a part of what SCAN Health Plan is today.

Art: And a lot of people don’t know that SCAN was actually founded here in Long Beach. This is an outgrowth of Long Beach people who were dissatisfied with the healthcare seniors were getting. Tell us how you first got involved with SCAN.

Sam: Well, I was the deputy director of an area agency on aging that served Ventura, Santa Barbara and San Luis Obispo Counties. I saw the plan that SCAN was putting together. But it arose from this study that was done by USC and Cal State Long Beach back in the late ‘70s, ‘76, ‘77, funded by the City of Long Beach. I was excited about the idea of the plan they wanted to put together to be a more comprehensive approach to linking seniors with all the services that are available. And especially, as Chris said earlier, to help keep people out of nursing homes as long as it’s safe and practical and cost effective.

Art: We take it for granted today, the social HMO. But this was a new concept back then.

Sam: It was. Yeah, it was state of the art. This team had studied 40-some programs around the country and come up with an analysis and a recommendation for starting this new agency.

Art: And as Chris mentioned there are benefits, obviously, to the seniors in quality and life and also a savings to the system cost wise.

Sam: Absolutely. Yes. And the savings to individuals. For example, most people spend down once they went into nursing homes and then become eligible for MediCal, which puts more pressure on the Medicaid or MediCal system. So by helping people to stay at home where they really want to be, you’re also reducing and delaying spend down, which keeps people more capable of covering their own expenses. And puts more money back in their pocket.

Art: Chris, having a legacy from someone like SCAN must be special to you and the folks that work at SCAN today.

Chris: Well, it was great. We celebrated our 35th Anniversary last September. And we invited Sam. We want to make sure the legacy – and it’s not just about Sam. We love Sam, but it’s the legacy of Sam and these 12 angry seniors and the mission and vision that they created. You know, again, it held true 35 years ago. It’s holding true today. And it’s going to hold true the next 35 years.

Art: And Sam, you and your wife Margaret are members of SCAN.

Sam: Yes, Art. We’ve looked at all the other plans, and we could join any plan we choose. And we choose SCAN Health Plan for all the reasons that we’ve just talked about. It has that legacy, that rich legacy and experience of serving seniors that I think is unique.

Art: And Chris, I think you told me once that when you become eligible, you will join SCAN [brief laughter].

Chris: Ten years, I’ll be joining SCAN as a SCAN member.
Art: Where do you see the future going, Sam? You’ve seen the evolution from the ‘80s with the social HMOs. And we see the Healthcare Bill, Obamacare. From your standpoint, where’s it all going to go?

Sam: That’s a huge question, Art, but I’ll just say relating to the SCAN experience, that I would hope there would be more focus in the future on assisting people with staying at home, with all those community-based services that SCAN pioneered. And that there would be more provision for those things. And keeping people out of nursing homes when appropriate and when safe and so on, obviously, in the future. I would hope so.

Art: Chris mentioned that one thing Obamacare certainly did was put this issue front and center on the American agenda. And different people have different views of whether it was a good idea or a bad idea, but it’s here. And it will evolve over time.

Sam: Yes, no doubt about it. I agree, I think, with what Chris said. That I believe it’s an attempt to have a better healthcare system. And there are flaws. We can see some of the flaws. Let’s learn from them and move on.

Art: You must take a sense of real personal satisfaction out of seeing an idea that you helped incubate. And you were there at its genesis. And see how it’s developed over the last 20 years or so.

Sam: Yes, it’s very exciting to see the changes. And Medicare is different today, you know. Back when the social HMO started, there was no drug benefit in Medicare. Then that was added. And then it was expanded under Obamacare. So there have been changes in the basis from which health plans like SCAN Health Plan get paid and so on. And in what benefits they provide. And so the benefits today that are available in California, for example, with a health plan like SCAN Health Plan are terrific.

Art: On the moral issue side of things, a lot of folks feel that as an advanced industrial country that the United States is that we owe our citizens an obligations to provide a form of healthcare. Would you share that view?

Sam: I believe that healthcare is something that people absolutely need access to. And that there should be an opportunity to everyone, for everyone to have some form of healthcare insurance.

Art: Well, Sam, we thank you so much for joining us. And thank you for the contribution that you made to this very important area of our economy. And obviously, your work and the work of SCAN changes lives. Chris, you’ve been in this job almost two years. How does it feel?

Chris: It feels great. It’s a great company, a great legacy, as you heard from Sam. A great group of people that share that same passion. So it’s very rewarding.

Art: Well, you know, we all just have one time to go through in life. And we have to choose what we’re going to do with the limited amount of time God has given us on this good Earth. And if you’re doing something that you really believe in that’s helping people, you probably sleep better at night.

Chris: Actually, this is going to sound trite, but I think at SCAN, we are doing just that. We are doing God’s work, to help seniors ... manage their health and to stay independent of a nursing home. Can’t get much better than that.


Straight Talk airs in Long Beach and 40 surrounding cities on Saturday and Sunday at 9 a.m. and 7 p.m. on LBTV Channel 3 and FiOS 21, and at 10 a.m. and 8 p.m. on Charter Channel 101. The show is Viewable on Demand at www.StraightTalkTV.com.