SCAN always had principle, but David Schmidt has helped it

regain focus and follow through. Jennifer Morrell reports.

American Executive - Aug. 2004

Few companies have the deeply rooted commitment to its mission as Senior Care Action Network (SCAN). Almost 30 years ago, a group of 12 senior citizens who were fed up with inadequate medical care and social support systems united to form what was then a grassroots organization. Today, SCAN is a $700 million company that still manages to have a heart.

SCAN is a 401C not-for-profit corporation operating under the direction of CEO David Schmidt. His background stems from the financial world to healthcare informatics consulting. In August 2002, Schmidt joined SCAN, which at the time was in the midst of severe financial distress. Profits that were already only marginal were further hurt by a significant loss in 2001.

"There was a lack of focus on the core business," said Schmidt. Following a round of layoffs, a refocus was in order. Schmidt took the reins to build the company up, focusing on the primary function of SCAN as a social HMO while investing in much-needed technology. Once the company was on the upswing, investments went toward true growth. "In the fall of 2003, we had 52,000 members," Schmidt said. "Today we have 60,000." The growth is undeniable and isn't expected to waiver again.

Take the power back
SCAN's specific offering is for senior citizens with Medicare. One of only a few Social HMOs in the nation under contract with Medicare, SCAN offers a unique combination of healthcare and personal care services called Independent Living Power. This service is probably what elevates SCAN above the rest in the eyes of its members, having already helped more than 20,000 seniors stay out of nursing homes.

When a senior is nursing home certifiable (each state has criteria to be met), he qualifies for a realm of services that allow him to remain in his home versus moving into a nursing home. This provision of independence and self worth can extend a senior citizen's life in more ways than one. The senior is most often happier, which leads to better emotional and physical health than might otherwise be the case in a nursing home.

SCAN provides the services that make staying home longer possible. These services include light cleaning in the person's home, transportation escorts, and meal preparation. It is funded through Medicare, and 25% of SCAN's members receive Independent Living Power.

Other more common benefits SCAN members receive are nominal co- pay amounts for healthcare services, such as $10 per doctor visit and $8.50 per Independent Living Power service.

Creating touch stones
SCAN is based in Long Beach, California and employs 700 people in positions varying from sales and marketing to customer service to contracted physicians and social workers. Known as "personal care planners," the social workers are case managers for the members, providing evaluations and creating customized care plans for them to follow. "The personal care planners become a part of an individual's care team," said Schmidt. "They are resources for the members and their families."

With the Baby Boomer generation often having to care for their teenage children as well as their aging parents, SCAN is able to provide good advice and support for its members' families as well. "Our mission is to provide the right healthcare at the right price in the right settings," said Schmidt. "The most [distinctive] thing about this company is its highly mission- driven employees. We are universally committed to the mission."

That's not just a company line; there are facts to prove it. A company survey conducted at SCAN showed 85% of employees believing in the company's mission, 84% believing that their supervisors believe in the company's mission, and 84% said upper management believes in the company's mission. These percentages are extremely high and reflect positive company morale.

Beyond providing a rewarding working environment, SCAN also offers opportunities for career advancement. It promotes from within and makes educational opportunities available through a tuition reimbursement program.

"The entire company shares a few basic principles," Schmidt said. "There is a focus on the issue and the behavior, not on the person. We all take the initiative to make things better, and everyone is required to speak up and address issues. We stay focused on the company's mission."

Lock it in place
Schmidt says technology plays a significant role at SCAN. Investments were made in the enhancement of administrative technology to improve the company's ability to handle the accumulated data of its members. This leads to better interaction with partners and overall higher quality managed care.

Regarding the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Schmidt feels it was a good thing. "People are more cognizant of handling information and the importance of privacy," Schmidt said. "A secondary effect is from the investment in better systems; companies were forced to upgrade."

The team at SCAN is a fantastic example of how a focused company can become powerful and extremely productive. SCAN's staff believes in helping people in a real way and protecting the interests of seniors. With Schmidt at the helm, SCAN is run with the discipline necessary for any business to thrive.

Jennifer Morrell is a magazine editor and freelance writer in Atlanta. She can be reached at jennmorrell@hotmail.com