Capital Rx
Capital Rx’s co-founder & CEO, AJ Loiacono, spoke alongside an esteemed panel at HLTH 2024. The session, appropriately titled Owning the Boardwalk, included Dr. Robert Pearl, MD (Professor at Stanford University Medical and Business School), Randi Seigel (Partner, Manatt, Phelps & Phillips, LLP), Elizabeth Jurinka (Operating Director, Healthcare Policy, VISTRIA PRG), and moderator Seth Joseph (Managing Director and Forbes Contributor, Summit Health Advisors), covered the healthcare ecosystem’s competitive dynamics, antitrust guardrails, strategies to drive innovation, and the potential for innovation to thrive and disrupt the status quo.
Thank you to the team at HLTH for hosting another amazing annual event and having Capital Rx co-founder & CEO AJ Loiacono on stage!
Here are some highlights from Owning the Boardwalk...
The Importance of Resilience When Starting a Disruptive Healthcare Business – Especially in the Early Days
A recurring topic throughout the panel discussion was the idea of “resiliency” and how startups can weather difficult circumstances (and potentially some hostile competitors) to establish a foundation for sustainable growth.
AJ detailed his experience co-founding Capital Rx back when the company was run out of a cramped office and comprised ten employees. As he explains, “For us, the lesson that I always say is you have to be able to fight, take those hits, and deliver back the next day, and the next day, on your promise of finding that product market fit and achieving scale.”
He also mentions that while the Federal Trade Commission (FTC) and the Department of Justice (DOJ) have a protective duty, businesses should not get in the habit of expecting those government entities to bail them out when the going gets tough.
“I was taught never to rely upon the government to make your business work. You know, my mentor said, you just need to find a solution people want, add that value, and continue to grow. And I think oftentimes, it becomes a convenient excuse to say, ‘Hey, someone took my lunch money, and now I'm gonna fail.’ Your job is to kick them in the shins.”
Legacy Pharmacy Claims Processing Infrastructure Must Be Upgraded
It’s no secret that legacy pharmacy claims processing infrastructure is in need of innovation. That’s why Capital Rx’s mission is to deploy the electronic infrastructure our nation needs to deliver the healthcare we deserve: JUDI®.
During the panel, AJ explained some of the inherent issues with those legacy pharmacy claims processing platforms, and he also explained how fixing this problem – and evolving Capital Rx’s business alongside it -- is a key part of the company’s growth and success.
“But at the same time, I think every company that's here, you know, that's small and emerging, including myself, the reminder is your job -- over and over again -- is to hit your last quarter's numbers to continue to grow, to find the right market fit, and always observe. You know, just because you start with a product doesn't mean you finish with that one. You evolve. You look at what the market is telling you. I mean, this is bidirectional communication happening in real time. Figure out where your product's moving.”
Breaking Down Barriers to Build a Disruptive Enterprise Health Technology Company
AJ also expanded on the barriers to entry that come with trying to fix a broken system like pharmacy claims processing. The first challenge is that many health plans have had their legacy technology in place for decades, and switching isn’t common.
“It's hard to replace platforms. And what I mean by platform is administrative systems. You know, the average health plan, when we go in and swap out their legacy technology, it's been there anywhere from 18 to 26 years. And they're not gonna change it again in my lifetime, which creates a very valuable LTV because they're gonna stay put. But to get someone there, to have that level of confidence that you are gonna process Medicare, Medicaid, Commercial claims at scale, and do it better -- cheaper, better, faster.”
But the biggest barrier to entry is the sheer amount of work, time, and resources that go into creating a platform like JUDI, which has six million lines of code and is being updated and improved upon daily via new feature deployments and process enhancements.
“You know, to create enterprise frameworks or enterprise software -- enterprise defined as security and scale, enterprise defined as single source of truth running multiple work streams – that takes 7 to 10 years to build out that system, and I'm gonna throw out a number of half a billion dollars,” AJ said. “It's not cheap. And so, that's your moat.”
The Future of Pharmacy Benefit Administration is Here
Capital Rx has redefined what it means to be a pharmacy benefit manager and is advancing the role technology plays in the administration of Medicare, Medicaid, and commercial pharmacy programs. Owning the Boardwalk at HLTH was an incredible opportunity to share what the journey has been like among a panel of true experts on competitive market dynamics. The full replay is available to watch here.
To learn more about JUDI and Capital Rx's approach to aligned pharmacy benefit administration, click here!
Feel free to contact us – with any questions - we'll be happy to answer them.