SCAN Health Plan is teaming up with big-box retailer Costco to offer members notable cost savings on medications, key vaccinations and other over-the-counter essentials.
Costco will become a preferred pharmacy for SCAN, offering competitive prices for drugs and vaccines to SCAN's Medicare Advantage members. SCAN enrollees can also use their eye wear allowance to make purchases at Costco, establishing a new avenue for affordable access to vision care.
SCAN is also launching a new rewards program in which members in certain plans can earn up $125 in rewards for completing health-related activities and embracing healthy habits. Those rewards can be used at Costco to purchase healthy groceries, personal care products or fitness equipment.
Senthu Arumugam, chief commercial officer for SCAN Health Plan, told Fierce Healthcare in an interview that as the team considered potential retail partners, it learned that about 75% of members shop at Costco, making for an opportunity to reach a wide swath of members.
He added that the two organizations discovered that Costco brought to the table a central focus on value and quality, which is "so congruent with how we think about our business."
"Being able to build a partnership with a retailer that is so important to so many of our consumers just made so much sense to us," Arumugam said.
Sachin Jain, M.D., CEO of SCAN Group, told Fierce that it's not a new trend for health plans to team up with retailers to roll out new products or programs for members. But, in this case, the two partners engaged in a fairly intensive "dating process" before deciding to move forward on the partnership, ensuring that the two were aligned on mission and approach.
Arumugam said an example of this at work was learning that Costco takes feedback from consumers and ensures it's presented to senior leadership. That is a point of emphasis at SCAN, too, where, for instance, quarterly member newsletters include Jain's direct email for members to reach out to him.
"Coming through that process, I think we built a really strong relationship that is culminating in this first-of-its-kind partnership that we're excited to get off the ground for this annual enrollment," Jain said.
In addition to the new offerings under the partnership, SCAN said that beginning Jan. 1, members living in Washington state will be able to use their over-the-counter benefits within their plan at Costco locations, creating greater flexibility for how they use those funds.
Jain said OTC benefits are generally among the most popular and widely used for Medicare beneficiaries, and, at times, plans can inflate the price of products to drain those benefit dollars more quickly. Partnering with a retailer like Costco, members have an easier time shopping smart.
Beyond the member-specific programs, the insurer will also launch SCAN Health Day in certain Costco stores, providing Medicare Advantage resources and health guidance to the places seniors are already shopping.
Arumugam said the events will be hosted in 50 Costco stores across SCAN's geographic footprint.
"We're really trying to do our best between the two companies to inform our shared customers about the nature of this partnership," he said.