Twenty-six years ago, AJ Loiacono was a consultant helping pharmaceutical manufacturers upgrade their supply chain systems. He assumed drugs made it to consumers at a fair price. Then a friend handed him a claims file—and his entire perspective on the industry changed.

What Loiacono discovered was a pattern of inefficiency so widespread that it revealed deep structural challenges within the system: drug prices fluctuating hourly, vendors duplicating and distorting claims data, and an industry built on misaligned incentives and conflicts of interest rather than patient outcomes. After eight years auditing pharmacy benefit manager (PBM) contracts and watching the industry resist reform, he reached a conclusion: to fix the system, one had to become part of it – and rebuild it from scratch.

In 2017, AJ co-founded Capital Rx on two principles that ran counter to industry norms: never profit from drug spend and build technology so efficient it could sustain a business without hidden fees. Today, Judi Health manages care and processes claims for over 58 million covered lives, maintains a 99% client retention rate, and is setting a new standard for what healthcare administration can look like when built on transparency and technology rather than complexity and conflict.

You spent years auditing PBM contracts before founding your own company. What made you decide to build rather than continue to consult?

What I realized is that change was slow to materialize. The dominant PBMs in the industry had established ways of operating that seemed generally, albeit reluctantly, accepted, and meaningful innovation in the business model seemed elusive at the time.

I felt the only way to really move the industry in the appropriate direction was to first become part of the problem. I would need to become a PBM. And I would start a company based upon two principles: one, our incentives as an administrator would never conflict with the cost of medications. And two, we would operate more efficiently than our competitors and put plan members first, so we built a hyper-efficient technology platform that allows us to administer claims approximately 70% more efficiently than competitors.

Why is the “no profit on drug spend” principle so foundational for both a transparent PBM and what you’re building?

In our view, it’s paramount to align incentives in pharmacy benefit management so the administrator’s sources of revenue and interests are fully transparent and in step with the plan and its members. When organizations generate revenue based on the amount spent on medications, it can create competing priorities.

Our approach is to ensure that our earnings are independent of drug costs, allowing us to focus squarely on delivering value and removing any potential for misaligned incentives. This principle echoes back to earlier eras in our industry, when PBMs primarily served as service providers rather than as intermediaries capturing multiple revenue streams from each transaction.

Over time, the industry has evolved. Many organizations have expanded their portfolios to cover everything from health plans and provider networks to mail order and specialty pharmacy services. While this vertical integration created efficiencies in some areas, it also introduced new complexities and new models for compensation. Our founding principle is to keep things straightforward and transparent, reinforcing trust for everyone involved.

You’ve built something called “Unified Claims Processing.” What problem does it solve?

Processing a healthcare claim can be complex, often involving many different stakeholders. These include providers, health plans, third-party vendors, and members themselves – each of whom needs clear, timely information. Traditionally, the flow of a claim is supported by a series of systems and vendors, each responsible for different parts of the workflow, whether the claim concerns medical, pharmacy, dental, or vision benefits.

As claims travel between systems, updates and changes can occur rapidly – claims may be paid, adjusted, or re-coded in real time, making it challenging to ensure that everyone is always working from the same set of facts. With this in mind, we saw an opportunity to build a unified system that brings together all the moving parts of the claims process, providing a single source of truth and reducing unnecessary administrative complexity.

We realized, if we could be the first company to build Unified Claims Processing, we would reduce cost by reducing overhead and administrative inefficiencies. We aim to streamline the entire experience for patients, providers, and plan sponsors – helping to control costs, minimize redundancies, and ultimately make the healthcare journey simpler and more transparent for all.

Can you share an example of the kind of confusion Unified Claims Processing is designed to solve?

I’ll share a story that illustrates the challenges here. An investor of ours – a highly educated professional – recently experienced some confusion after returning to work following the birth of her child. She received a bill from the hospital for her care, followed by a different amount from her insurance carrier, and then a third, different, figure from a separate payment integrity company. Despite her very knowledgeable background, even she found it difficult to reconcile these numbers, leaving her wondering how anyone could confidently navigate the process.

What often happens is that different organizations involved in the same episode of care are referencing slightly different versions of the same claim information at different points in time. This can lead to confusion for patients, frustration for providers, and additional administrative work for health plans.

That is exactly what Unified Claims Processing solves. It is one system, one source of truth, in real time.

How do you measure real-world impact?

For us, real-world impact starts with delivering cost savings for our clients. Many of the organizations we serve are sizable – on average, our clients’ plans cover around 20,000 lives. Achieving meaningful savings is imperative not just at the outset, but continually over the life of our partnership.

We are most proud to have supported long-term clients who have seen flat or even negative trends in their overall pharmacy spend, even as healthcare costs elsewhere in the US continue to rise year-over-year. Long-term cost containment is essential, especially when compounding can quickly double expenses.

Beyond the numbers, we put a strong emphasis on service. Our dedicated, in-house call center team, all full-time employees based in the US, helps ensure responsive, personal support. This commitment is reflected in the routinely high customer satisfaction scores our call center receives, as well as our 99% client retention rate.

Ultimately, our two most important measures of success are straightforward: clients who achieve sustainable savings, and members who are satisfied and well-supported in their healthcare journey.

What drives you to take on such an ambitious challenge in healthcare?

The scale of what we’re working on makes the mission even more meaningful. The broader and more complex the challenge, the greater the potential to improve outcomes across the system. I sometimes say this isn’t just a moonshot – it’s more like a Mars shot. Aiming even higher to create true, lasting impact in healthcare.

I also want people to understand who is hit hardest by inflation on drug spend or healthcare in general. It’s the most vulnerable parts of our population – the elderly and people who have lower incomes. This is not what healthcare should be. That’s precisely what keeps us focused on the mission at hand.

What are the most critical milestones for Judi Health in the next 12 to 24 months?

When developing Unified Claims Processing, we believed it was important to start close to home – so our first implementation was for our own employees and their families. Seeing firsthand how much our team appreciated the ease and clarity of this benefit gave us confidence to extend the offering to clients.

Within the first six months, we’ve welcomed both existing and new clients who are now using the platform for both pharmacy and medical administration. Their positive feedback has reinforced our conviction that a streamlined, unified system delivers real value.

Looking ahead, our ambitious goal is to help make Unified Claims Processing the new industry standard – where medical, pharmacy, dental, vision benefits, accumulators, and eligibility are all accessible in one place and in real time. Once organizations and members experience this level of integration and transparency, it’s hard to go back.

Ultimately, our mission is to help build the modern infrastructure that healthcare in this country deserves. True transformation depends on updating the foundational systems, and we’re committed to helping lead the way forward.