Managing Growth & Balancing Sustainability for Regional Plans

The Double-Edged Sword:Managing Extreme Growth and Balancing Sustainability for Regional Health Plans

Sachin Jain’s recent article in Forbes magazine, “Nonprofit Health Plans Are Dying. Here’s How to Save Them,” discusses an important and pressing topic in our industry regarding the mounting challenges that regional and mid-sized health plans. The CEO of SCAN Group and SCAN Health Plan raises important points about the pressures nonprofit health plans face:  
 

• A growing capital divide: Smaller plans struggle to compete with larger entities that have greater access to capital and investment.  

• Subscale operating costs: Smaller plans often face higher per-member operating costs due to a lack of economies of scale.  

• Leadership conservatism in a fast-moving market: Aversion to risk and slow adoption of innovation hinders their ability to adapt.  

• Innovation seen as a risk rather than a necessity: This prevents them from leveraging new technologies to improve efficiency and member experience.  

• Thin margins and actuarial vulnerability: Smaller margins leave them susceptible to financial shocks and pricing miscalculations.

   

Understandably, Jain argues these interconnected pressures create a significant challenge for the sustainability of these mission-driven organizations created to service Medicaid and Medicare populations. While his analysis is valid, Jain overlooked a critical challenge: the unexpected influx of members that threatens regional health plans’ operational and financial stability.

The Challenges and Opportunities of Rapid Growth

As national plans exit markets, regional plans are gaining thousands of members without adequate reserves or infrastructure to support them. This creates a new challenge – scaling operations without the infrastructure or financial backing of larger, national organizations.

While capital, costs, and innovation are crucial, the often-overlooked challenge of rapid, unexpected membership growth is equally, if not more, pressing for regional plans right now.

The challenge is that many health plans believe they can handle the growth, but the reality of rapid expansion often strains their organization and ultimately hinders long-term, sustainable growth. Therefore, a critical question plans must address is when to strategically pause their growth trajectory to invest in the necessary infrastructure.

One client grew from 13,000 to 26,000 members in a year, with a projection of over 40,000 by next year. A growth that’s trending at nearly 200% in two years needs a solid plan with experienced partners to avoid overwhelming the system. When an organization sets specific memberships goals and is operating in an extremely competitive marketing environment, the need for rapid scalability falls to the wayside.

With UST HealthProof’s support, our client maintained service quality while focusing on member management rather than administrative burdens.

How Can Small and Mid-Sized Plans Manage Growth?

As a strategic partner, UST HealthProof addresses these challenges with you through:  
 

• Economies of scale through our partner network: There’s cost savings in numbers. With our ecosystems, expertise, and access to so many experts within our organization, we’re able to provide better pricing on certain services and products.  

• Innovation capabilities without the associated risks: With UST HealthProof as a partner in growth, we take on many of technology and investment risks when it comes to innovation. The health plan reaps those benefits without the cost.  

• Predictable PMPM costs for better financial planning: Predictable costs mean predictable budgets. While you address the care and well-being of members, the increased financial demands of a larger members can mean more capital for growth.  

• Operational expertise to scale administrative functions We have a team of experienced and knowledgeable experts. Collectively, UST HealthProof associates average nearly 20 years of industry experience. Health plans benefit as we work together to address operational challenges. Additionally, we can automate and create efficiency in claims processing, enrollment, members service, IT and more.

Knowing When to Slow

Every plan aspires to grow. But if that growth is unsustainable, it could be disastrous. Time and time again, the industry has seen plans propel forward without addressing the question of “How do we maintain this growth?” Assessing current capacity, financial stability and quality of care is crucial to stay on a positive growth trajectory.  
 

• Chances are there won’t be a big red sign saying “Stop” or a yellow sign indicating it may be time to “Slow Down.” It’s important to look for the clear signs that a strategic pause is needed. Small and mid-sized plans should pay attention to signs that it’s time to re-evaluate, like:  
   

• Member complaints are rising, KPIs are falling
  A spike in complaints and slipping service metrics—like slower claims processing or longer call wait times—are red flags. They signal operational strain and risk eroding member trust and satisfaction.  

• Costs climb while reserves shrink
  If cost per member is rising and reserves are shrinking, growth is a liability. This trend threatens long-term financial health.  

• Staff burnout and high turnover 
  When teams are stretched too thin, errors increase, service quality drops, and turnover accelerates. That instability makes it harder to scale effectively and retain critical expertise.  

• Technology can’t keep up
  System slowdowns, outages, and data overload point to infrastructure limits. Without modern, scalable technology, growth creates more friction than progress.

Embracing a Strategic Partner Like UST HealthProof

The fact is that working with regional health plans is in our DNA. We understand that space really well. As a strategic partner, we build a winning strategy together that includes:  
 

• Ensuring health plans are ready to grow to manage the market changes 
   

• Managing operating expenses to accommodate new members 
   

• Knowing where to invest in growth – even if that means reallocating to invest in infrastructure and operations to support new members

   

Navigating growth opportunities, especially when it’s happening at a faster-than predicted pace, demands a thoughtful approach. As the market continues to shift, there’s a lot of opportunity to capitalize on changes. Over the long term, health plans need to invest in sustainable and attainable growth and finding operational efficiency - all while focusing on the care of the member.

Our entire suite of products and services are designed for these very challenges including strategic advisory services, Core Administration, BPaaS, Risk Adjustment, Quality and Stars, and more. Contact us to learn how we can work together to ensure your plan is prepared for growth. 

For a direct comparison of various operating models, check out Untangling Operating Models. You'll find an easy-to-understand breakdown and pros and cons of each.