Goodroot Chief Revenue Officer Michelle Frank recently discussed innovation in healthcare live on 94.9 News Now. The station’s Real Estate Radio show explored Goodroot’s approach to reinventing healthcare following news of the dissolution of Berkshire Hathaway’s healthcare partnership Haven. The interview was also broadcast on One + Company’s Facebook live. Watch the full discussion and read highlights below.
Our Audacious Goal
Host Byron Lazine introduced Michelle by stating Goodroot’s goal is to “disrupt the healthcare industry, which is what J.P. Morgan Chase, Berkshire Hathaway and Amazon recently failed to do” with their Haven endeavor. Michelle responded:
It is our audacious goal, I would say, because we have committed publicly on record for taking out $30 billion in waste in the next five years. And we understand — our expertise is understanding that there’s no big bang theory here. There’s no big, magic easy button and it’s solved, and no one’s hitting it. It’s a matter of reinventing healthcare one system at a time. And so that’s how we’re tracking to it.
We have a community of companies that are all committed. They’re individually run, but they’re all committed to the same mission of more access to better healthcare for everyone at the lowest cost possible. And so, each one of that community of companies has their angle on how they’re doing that, but then also how they’re reinventing healthcare to solve the problems that were there in the first place.
So an example I would give you is Penstock, our payment integrity reimbursement consulting company. And unlike the very, very large players out there, they not only do the payment and integrity and reimbursement, but then they go back and solve the problems that caused that issue in the first place. The very large companies can go solve that problem and collect their fee, but then are happy to do it again next year. And the next year and the next year. So it just keeps exacerbating the problem as opposed to solving it.
A Better Product
As a small business owner, Byron asked a question we hear a lot: Why are healthcare costs always rising for small businesses and what can be done about it? Healthcare is an essential product, but as Byron put it, “It’s a terrible product because there’s not a lot of flexibility. Not a lot of people have had a good experience.” Michelle explained that Goodroot really understands this because for now, we’re in the same boat. By making improvements at the level of self-insured companies, we aim to drive change for fully insured employers as well.
Mike Waterbury, our founder, will talk about how he’s got 41 employees. He knows this industry, has experts all around him about this industry, yet we know we’re being overcharged. We know we’re paying more than we need to pay. But what can you do as a 41-employee company? What are your options?
If you look at the self-funded groups, self-funded employers, they’re the ones that we feel have the power, and that was the hope with the Amazon-Berkshire Hathaway-J.P. Morgan Haven. They had 1.2 million lives — way more than our 41 — to be able to leverage and drive change for everybody. I love our country. I thank God every day I was born in this country, and yet three out of 10 Americans don’t fill their prescriptions for drugs they need because they can’t afford them. That’s just tragic in our country with what we have available to us here to accept and not take on the challenge of changing.
A Different Approach
Co-host, financial planner Pat Kenny, asked what went awry for Haven. Michelle broke down how these large companies were mired in the status quo.
I think they quit. I’m not sure they failed. For the definition of fail, they would have had to try to do something. They didn’t do anything besides form a company and hire people who, over time, actually resigned. They weren’t designed to disrupt, No. 1. There were competing priorities. You just heard Amazon partnered with a large PBM to bring Amazon Pharmacy to market. So how did that skew what they were willing to do? Are they willing to disrupt now that they’ve gone into that partnership? Berkshire Hathaway is one of the largest shareholders of DaVita Dialysis. Are they willing to lower costs on those services and go against their shareholders for this mission? I don’t know. I don’t know how many other things we don’t even know about that they discovered.
We’ve Got the Grit
Byron’s final question was a simple one: What is Goodroot’s mission for 2021? Michelle said it comes down to two things: Eliminating unnecessary healthcare spending, and empowering healthcare innovation.
Eliminating waste. We’ve already started the clock and we have eliminated over $800 million in waste to date. And one of the things that I would add to that is I mentioned that community of companies. We are always looking. It’s what we call free and amplified talent. We believe there are very smart people with great ideas to help us move that needle. But they’re stuck in their bureaucratic systems, and they’re stifled with their creativity and what they can do. We want them to come to us. We’ve started businesses based on this principle. We believe there’s even more out there. We just need to get the word out there more for those people to come to us and say, ‘I’ve got a great idea that’s going to get better access.’ Or ‘Here’s how it’s going to lower cost.’ Or ‘Here’s how it’s going to solve problems.’
We want them to come to us and we’ll help them start their business. A lot of people, that’s a hurdle. But we’ve got the infrastructure. We’ve got the financial. We’ve got the grit. We’ve got the ambition to help them start those businesses and put them under our umbrella of community companies. If you’re one of those people that wants to innovate but you’re stifled where you are; nobody’s listening, nobody cares. We do. So come talk to us.