Making ethical healthcare decisions: Exclusive interview with Dr. Sachin Jain

How can healthcare professionals make ethical decisions while following business regulations?

In this article originally published by our sister magazine, Healthcare Innovation, Contributing Senior Editor David Raths discusses ethics in healthcare with SCAN Group’s Sachin Jain, M.D., M.B.A. He elaborates on what he defines as “ethical erosion,” what it means to speak up, and making healthcare better. Read the full interview from Healthcare Innovation below.

SCAN Group’s Sachin Jain, M.D., M.B.A., on Ethical Renewal vs. Ethical Erosion

In a recent Forbes article, Sachin H. Jain, CEO of California-based SCAN Group and SCAN Health Plan, one of the nation's largest nonprofit Medicare Advantage plans, explored the concept of “ethical erosion,” He describes that healthcare leaders, under relentless financial and regulatory pressures, end up rationalizing practices that conflict with the values they publicly promote. Jain sat down with Healthcare Innovation to delve into this topic further and discuss how people can challenge practices they don't agree with. 

Healthcare Innovation: You wrote this piece in Forbes that's pretty provocative. I want to ask first, what prompted you to write it now? Is it something that's more prevalent now than it was five or 10 years ago?

Jain: Well, there are a few things. One is, I'm more aware of it. Early in my career, I was still collecting experiences. Now I feel like I've been in enough environments, I've sat in enough board rooms, that I understand this phenomenon for what it is. Two other things influenced me to write it. One was our advertising campaign that says health insurance is broken. Some industry colleagues have reacted by saying it's the whole system that’s broken. And I wonder if we are seeing the same thing. The third was that I read this book, “Empire of Pain” about the history of the opiate crisis. How does a whole industry, a whole group of people, convince themselves that they're doing something really good when, in fact, they're doing something really bad? That got me steeped in some of the psychology literature about cognitive dissonance and where that arises from, and how we resolve our cognitive dissonance.

HCI: Can you think of an example from your own career where you might have felt this pressure to rationalize something that would be good for the organization, but maybe not so good for for the patients?

Jain: If you work in a publicly traded company, you will hear things like “the business is underperforming, and we need to cut some costs.” Sometimes you can cut costs without hurting anyone. You can freeze travel; you can cancel some meetings; you can negotiate on your vendor contracts. Or you might say, we're just going to hire fewer people. But that's going to increase access time for patients...

I don't want this to sound arrogant, but I've achieved conventional success, and I'm starting to ask deeper questions about what real success looks like. Conventional success is about positions, compensation, and industry reputation. Real success is about actually doing the right thing.

The reality is that some of us don't pause to ask these questions. Here is one example. I recently got a call from a friend who's a cardiologist in Northern California. He said that one of his colleagues had heard from a big national payer that the length of stay of a hospitalization that was approved for a patient after an ST elevation myocardial infarction was 1.7 days. I'm sure somebody somewhere thought that was a good idea. But ST elevation MI is a major cardiac event. And we know that after you've had a heart attack, you're at higher risk for more cardiovascular events. Do I think that the national payer would authorize more time if someone appealed? Sure. But why are we creating that horrible, circular situation where you approve this thing, then I've got to push the patient out of the hospital or I've got to appeal. These are the tough situations that we find ourselves in.

HCI: I recently interviewed Ceci Connolly, the CEO of the Alliance of Community Health Plans, about their analysis comparing their member plans to big national plans on risk adjustments in MA and and showing this huge variation. Is that an example of what we're talking about here? Could the large national insurers have a justification for why their risk adjustment is so much higher?

Jain: It's hard to make generalizations, and it's hard to really get meaningful data sets that allow you to compare x vs. y. But what I will say is that not-for-profit healthcare allows you to make decisions that may be financially inconvenient in the short term, but are the right thing for patients in the in the long term.

I'll give you an example of something that we did that I'm really proud of. Karen Schulte, our president of Medicare, was meeting with some brokers, and they said, you guys put Prolia [a prescription medication used to treat osteoporosis] on tier four and not tier three, and it's out of reach for many of your patients because it costs too much at tier four. There are about 2,500 people who are going to be on Prolia, and it's going to cost a lot for them, and some of them are not going to take it.

Karen went to talk to my CFO, who said that's going to be a big hit to our plan, but it's probably the right thing to do. So we went ahead and brought Prolia down from tier four to tier three. That’s what I call ethical renewal, as opposed to ethical erosion — when you're organization is focused on doing the right thing, they're going to make the right decisions more often than not.

HCI: Here's another example I can think of: After George Floyd's death and the protests that followed, a lot of health systems made a big emphasis on health equity and eliminating disparities. But since this new administration has come in and there's a change in emphasis, we don't hear people talking about it as much. 

Jain: It's performative. At a recent conference, I ran a session on health equity, and they asked a question about whether or not health equity was performative, or whether there was real intent. And something like 75% of people thought it was performative. It has become performative, and we won't hold leaders accountable, and there's inauthenticity. 

When we talk about leadership in healthcare, we talk about the titles that people have, and what they sold their companies for. We don't actually talk about whether they made anything better or whether they did the right thing even when no one was looking. And did they do the right thing even when it might be the wrong thing for their financial bottom line? And in this time when healthcare is so complicated and when there are so many different actors and rent seekers in the system, we need more people who step up and do the right thing. Frankly, it’s the only protection we have from the healthcare system becoming even more of a profit center than it already is for people.

HCI: I would think that one thing that would be a giveaway is if your business practices are put on the front page of the New York Times, and the PR from that is so bad that it makes you reverse course, then you ought to get out in front of that — for instance, bankrupting your patients, going after them aggressively for medical debt.

Jain: But how many systems did that, right? And the various consulting firms that became complicit in this issue, and big, not-for-profit health systems that were involved in driving a huge disproportionate share of medical bankruptcy. That stuff is really, really bad for people.

HCI: Does acting on things in the way you are suggesting require some bravery and for people to be truth tellers within their own organizations? Could it be risky for them in their careers?

Jain: Absolutely. These people exist in organizations all over the country. I think the challenge is that when they do speak up, it's all the people sitting around them who sit silent. And then the focus is on the person rather than the substance of what they're saying. Because we've socialized a whole generation of healthcare leaders to go along to get along.

HCI: What kind of reaction have you received since the Forbes article has been published? Have you gotten pushback or encouraging remarks?

Jain: I would say I've gotten tons of encouraging remarks from patients. Our employees are inspired. But I would say a lot of people within our industry look at this and they say, “Why do you write these things?” Or they say they don’t agree with me. 

HCI: I want to switch gears and ask you about something else. There was an announcement from SCAN that it is announcing richer pharmacy, dental and vision benefits and caregiver support programs for 2026, across six states, while much of the industry is retrenching. We’re seeing MA plans pulling out of markets.

Jain: The reason the contraction is happening right now is because these plans have to deliver 5 to 6% profit to Wall Street. That's what a good MA book looks like to an equity research analyst on Wall Street. Two things allow us to do this. One is our star ratings, which have remained high, while other nationals have gone low. Our high star ratings enable us to invest in benefits and enhance our benefits. The second is, in this time of contraction, we're willing to invest to preserve benefit stability for older adults. Again, something that you can uniquely do as a not-for-profit, is really invest in benefit stability at a time when others are pulling back.

HCI: What do you think is going to happen in a lot of these markets? I was reading about how in Vermont, both MA plans that were serving big parts of the Vermont market are pulling out for 2026. What’s going to happen in those markets?

Jain: I think you're going to see a lot of people end up back in traditional Medicare and/or you’ll see others step in to take advantage of the opportunity over the next couple of years, I think CMS probably needs to take a hard look at the rates and how they're set. The rates are usually set against the previous year's trend from a fee-for-service benchmark. And I think in some ways, the rates may not be catching up to local market realities quickly enough, so good plans are forced to exit in the context of a changing rate environment.