Mark Cuban isn’t mincing words when it comes to his dissatisfaction with the U.S. healthcare system. He took to Bluesky on December 10 to share his thoughts on why it’s failing and what steps he’s taking to address the problem.
Cuban’s major point of contention? Hospitals and doctors are unfairly placed in the position of “Sub Prime Lenders.” They end up shouldering the entire credit risk for unpaid deductibles, co-pays, and coinsurance. “It’s crazy,” he notes, explaining that when providers are unable to collect payments, they have no choice but to hike up prices to compensate. This, in his view, is the root cause of the sky-high costs in healthcare.
But the impact doesn’t stop there. Cuban argues that hospitals operate much like mortgage loan servicers, juggling hefty administrative expenses just to chase down unpaid bills. This system often results in patients being saddled with medical debt that pushes them toward bankruptcy. For Cuban, this doesn’t just reflect inefficiency – it’s a humanitarian issue.
Insurance companies also come under fire in Cuban’s critique. For over 50 million Americans, he explains, insurers don’t act as traditional insurers. Instead, they’re more like “care authorizers and payment processors.” Their role is to approve or deny care and manage costs, focusing mainly on fraud prevention and determining medical necessity.
Statistics from Statista reveal that by 2023, around 65% of U.S. workers were on self-funded health insurance plans, with employers assuming direct responsibility for medical claims.
Cuban is adamant that insurers shouldn’t be involved in this process. “We shouldn’t expect insurance companies to handle authorizations,” he insists. He advocates for independent third-party administrators (TPAs) who lack financial incentives to either approve or deny care. “The first step,” he asserts, “is for self-insured entities to employ these third-party TPAs, moving away from insurance companies for this role.”
As a savvy business owner, Cuban isn’t just talking – he’s taking action. For his own employees, he’s initiating direct contracts with healthcare providers.
“We’re eliminating pre-authorizations. We will place our trust in the providers,” he elaborates. His company will cover all in-network care costs upfront, with employees bearing no out-of-pocket expenses.
There’s a caveat, of course. Healthcare providers need to charge considerably less, even below their cash price rates. Cuban is optimistic that this approach will not only save money and reduce time but also lead to happier employees.
Such a bold step aligns with his vision for Cost Plus Drugs, a venture he spearheaded to revolutionize the pharmaceutical industry. By cutting out the middlemen, it offers medications at much lower prices. As Cuban described it, his healthcare initiative for employees is ” essentially … single-payer, funded by me.”
Furthermore, Cuban plans to make these direct contracts public, ensuring transparency in healthcare pricing. His broader goal? A healthcare framework where businesses strike direct deals with providers, sidelining unnecessary intermediaries and slashing costs across the board.
“There are many points in this discussion to either agree or disagree with,” Cuban said, inviting conversation. But one thing is certain – he’s not standing by, waiting for the system to change itself.
