"One System at a Time"
Michael Waterbury, CEO,
Goodroot
Chris LaMadrid introduced Michael Waterbury, CEO of Goodroot, a company dedicated to optimizing efficiency within the health industry.
Mr. Waterbury and his family have been Avon residents for 10 years, and he also serves as president of the Golf Club of Avon. He has a background in health care and prescription pharmaceutical cost control and is passionate about reducing medical care costs to patients and families. Growing up in Newtown, Mr. Waterbury started his career with Oxford Healthcare before striking out on his own with his own innovative approach and ideas regarding cost controls. His company is based in the historic Collins Company Axe Factory in Collinsville, about which he noted the storied history of the Collins company, and how Elisha Root invented die casting in his very building [Ed Note - Learn more, here: https://connecticuthistory.org/elisha-root-changes-industry-who-knew/
Goodroot seeks to assist startups that attempt to provide lower costs to consumers, patients and families at a broad variety of points within the medical care industry. One such aspect is medical debt, and in addressing that, they created a foundation, Scholar Scripts, which in turn supports the Cancer-to-College program, assisting kids who must overcome both health challenges and medical debt to attend college.
Mr. Waterbury defined "PBM", pharmacy benefits management, as one of the aspects of health care costs he seeks to address. Three such firms exist in the US.
Payment for medicine is complicated by the involvement of so many levels of administration, and most people do not understand the various entities involved. Each level adds costs, costs that provide no benefit to patients or families.
Mr. Waterbury went on to describe the various companies he's fostered in the effort to reduce costs at multiple points in the process by which payment for medical care occurs. He has identified 5 systems that need to be fixed, and created 5 separate companies to address each one of these. He believes there are at least 15 more such systems ripe for solutions. So far his efforts have reduced medical costs by $525 million dollars, and he believes there is $5 billion more in expenses that also can be eliminated.
The 5 companies are: AlignRx, which optimizes medication costs to pharmacies, Famulus, which works to reduce drug ingredient costs, RemedyOne, which provides formulary optimization to companies, Penstock, which reduces inappropriate fees found on medical and pharmaceutical claims and finally, Coeorx a pharmacy benefits manager consulting company, which serves employers.
Goodroot has also established "Scholar Script", a charitable foundation focused on assisting various other health related charities, particularly Cancer-to-College, and others that serve young people with medical challenges. Learn more at: http://scholarscripts.org
For companies interested in reducing their health care costs, their CFO's should be asking certain questions of their health plan administrators:
To learn more about Goodroot, contact Mr. Waterbury:
Questions asked included:
Q: Arnie Goldman: Have you heard of Dr. Prashant Krishnan's and his advocacy for "Free Market Healthcare?", and do you have an opinion on reducing government's involvement in medicine? A: Haven't heard of him, but please do note there are many involved in trying to identify solutions.
Q: Kershwin Singh: Since 80% of health costs go to doctors, hospitals and other providers, and 20% to administrators, and you are addressing that 20%, what about the 80%? How will you tackle that larger pool of expenses that these current programs do not address?
A: Mr. Waterbury responded that the 80% can also be improved if we fix how medicine is paid for. Drug costs have increased due to the involvement of various "middlemen" as in, PBMs. Mr. Waterbury continued, "if we're successful in reducing PBM costs, it will benefit the 80%.
as well."
Q: Rollie Sterrett noted how costs can be adjusted seemingly arbitrarily, for example with GoodRX verses ordinary insurance or with AARP or through the VA. The seemingly arbitrary cost variation is bewildering, Rollie noted. A: Mr. Waterbury responded that these entities operate in very different ways and make their profit differently and it is difficult to compare or explain this thoroughly.
Q: Arnie Goldman, noted that pursuing maximal transparency in the industry will foster cost competition that consumers can see and understand, and also that less inhibition to introduction of competing drugs, will inevitably reduce the cost of the first entries to any given disease treatment market space. A: Mr. Waterbury agreed.
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