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Scan Group’s deal-maker, Binoy Bhansali, dishes on the importance of creating ‘competitive moats’ to accelerate growth

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Scan Group has made a push over the past few years to invest in new companies in an effort to diversify its business beyond Medicare Advantage plans for seniors.

In July, Scan Group announced its fifth major investment, taking a stake in a non-emergency medical transportation broker MedArrive in a push to ease access to healthcare appointments for seniors.

Healthcare Dive caught up with Binoy Bhansali, who leads the charge on dealmaking for Scan. He was previously at venture capital and private equity firm Sandbox Industries, managing investments for the nation’s Blue Cross Blue Shield plans.

Editor’s note: This interview has been edited for clarity and brevity.

INDUSTRY DIVE: Tell us more about Scan’s investment strategy and how it fits with its traditional business of selling insurance to seniors.

BINOY BHANSALI: So this is a question that we’ve pondered in a whole lot of detail over the last year and a half, two years. If we take a big step back, our mission as an organization is to keep seniors healthy and independent. There are a lot of different ways to keep seniors healthy and independent … and through the insurance lens is great, it makes sense. But there are lots of different other ways to keep seniors healthy and independent. And so that’s really the focus of our diversification strategy; to explore and invest in those areas to broaden and really amplify the scope of impact that we can make on people’s lives.

Why diversify now?

BHANSALI: As a nonprofit health plan, we are getting squeezed on both sides — by really large for-profit publicly traded health plans on one side and private-equity, venture-backed health plans that have gotten started with gobs of cash and are giving us heat on the other side.

If we believe we got a great thing, we want to bring that great thing to as many markets across the country. We can’t do things the same way that we’ve done them over the last 20 years. We have got to keep diversifying and creating competitive moats that allow us to get our fair share of people to serve in all the markets in which we operate.

How do these investments benefit Scan financially?

BHANSALI: We are taking a financial stake and investing at a certain valuation and if that organization is successful in their efforts and grows … we will be able to see some financial return that comes back into the system that allows us to reinvest those dollars into our mission.

I would contrast it to my prior role, which was at a venture capital firm where the goal was very simply to buy low and sell high.

Financial is certainly one of the goals. You know, we can’t invest in money pits. We have to make sure that these enterprises are sustainable, but the thresholds are lower, and it’s one of several goals.

Tell me more about your work at a venture capital firm Sandbox Industries. What did you learn and how does it influence your work at Scan?

BHANSALI: I was a partner on the healthcare team [at Sandbox Industry] that had about a billion dollars under management from the Blue Cross Blue Shield plans from across the country. The key learning that I had there that I’ve learned maybe 50 times over in this job is that the status quo exists for a reason.

Sometimes I’d just be banging my head up against the wall thinking like, ‘Wow, why is it so difficult to do this? This is such a compelling value proposition of a company. They’ve got proven outcomes, a great team. Why is it so hard?’

And so I think what I brought forward here is: taking time to understand why the status quo is the way that it is; taking time to understand the administrative complexities of bringing a new vendor on board.

When you’re in an organization of this scale, there are real lives at stake that will be impacted by minor decisions.

Does that mean that we should be complacent? Absolutely not. We have got to keep pushing the ball forward and finding opportunities to make those lives better. But it’s got to be methodical. You’ve got to follow the right process.

Of the deals that you have made so far, can you explain how they execute on your mission of keeping seniors living independently and healthy?

BHANSALI: We spent a lot of time last year thinking about the disparity gap between our Black and Latinx members as it relates to medication adherence in comparison to non-Black and Latinx members. Arine actually helped us figure out why those disparities exist and helped us with the engagement strategies to ensure better medication adherence, which dramatically improved our scores on those measures.

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