I'm not sure how you are determining that quality is lost since that's subjective. You don't mention the frame size or codec of the iPhone video or the canvas size of the ScreenFlow document. Both of which could be factors. Keep in mind the canvas is only a real-time representation and the ultimate quality depends on your ScreenFlow export settings and anything other than Lossless ProRes will have some quality loss.
The best way to ensure there is no loss is that source video, canvas size, and export settings must match frame sizes, the source is never scaled and Lossless ProRes is used as the export encoder.