Mark Cuban calls health care prices ‘horrible’ — and says hospitals and doctors are ‘prime lenders’ — but suggests a way to fix things
Mark Cuban doesn’t hold back when it comes to his thoughts on the US health care system. On Bluesky, on December 10, he explained exactly why he believes the system is broken How to take steps to fix it.
His biggest gripe? Hospitals and physicians are forced into the role of “sublenders” because they bear 100% of the credit risk for unpaid deductibles, copayments, and coinsurance. “This is crazy,” he wrote, adding: “When they can’t collect payments, they raise prices to make up for that loss.” According to him, this leads to “horrific” health care pricing.
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the The ripple effects don’t stop there. According to Cuba, hospitals have to act like mortgage loan servicers, navigating a maze of administrative costs to collect those unpaid amounts. This cycle pushes many patients into medical debt, which often leads to bankruptcy. In Cuban’s view, this is not only incompetence, but a humanitarian catastrophe.
Insurance companies don’t get a free pass on his criticism either. Cuban notes that for more than 50 million Americans under these plans, insurance companies do not provide traditional insurance. Instead, they act as “care authorizers and payment processors,” determining approval and cost of care, with a primary focus on fraud prevention and medical necessity assessment.
Data from Statista indicates that in 2023, nearly 65% of American workers were enrolled in self-funded health insurance plans, with employers bearing direct financial responsibility for employees’ medical claims.
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Cuban doesn’t think that role should fall to insurance companies at all. “This licensing process is a process we should not be asking in-house companies to go through,” he said. Instead, he believes that independent third-party administrators (TPAs) who have no financial incentives to approve or deny care should handle the process. “The first step is for self-insured entities to use third-party third parties and move away from insurance companies for this service,” he said.
As an employerCuban isn’t just theorizing — he’s putting his money where his mouth is. For its employees, it carries out direct contracting with service providers.
He explained: “We stipulate that there will be no prior authorizations. We will trust the provider.” His company will immediately cover the full cost of in-network care, with no out-of-pocket costs to employees.
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hunting? Providers should charge much less than they normally do, and even less than their stated cash rates. Cuban is confident that this model will save money and time while making employees happier.
It’s a bold move, but it’s in line with his philosophy behind Cost Plus Drugs, the company he launched to revolutionize the pharmaceutical industry. Cost Plus Drugs eliminates the middlemen and offers medications at much lower prices. As Cuban puts it, his employee health care plan “is effectively…single payer, paid for by me.”
Furthermore, Cuban intends to publish his company’s live contracts, ensuring transparency in pricing. His final vision? A health care system in which companies contract directly with providers, cutting out unnecessary middlemen and intermediaries Cut costs for everyone included.
“There are a lot of things on this topic that we can agree or disagree with,” Cuban said, encouraging debate. But one thing is clear – he is not waiting for the system to fix itself.
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This article Mark Cuban calls health care prices ‘horrible’ — says hospitals, doctors ‘prime lenders’ are forced to raise prices to cover losses Originally appeared on Benzinga.com
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