Mark Cuban Calls Healthcare Pricing 'Horrific'– Says Hospitals and Doctors Are 'Sub Prime Lenders' Forced To Raise Prices To Cover Losses

Mark Cuban Calls Healthcare Pricing ‘Horrific'– Says Hospitals And Doctors Are ‘Sub Prime Lenders' – But He's Proposing A Way To Fix Things

Mark Cuban isn't holding back when it comes to his thoughts on the U.S. health care system. On Bluesky, on Dec. 10, he laid out exactly why he thinks the system is broken and how he's taking steps to fix it. 

His biggest gripe? Hospitals and doctors are being forced into the role of "Sub Prime Lenders" because they bear 100% of the credit risk for unpaid deductibles, co-pays and coinsurance. "That's insane," he wrote, adding, "When they can't collect payment, they raise prices to make up that loss." According to him, this leads to the "horrific" health care pricing.

Don't Miss:

• Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you.
• I’m 62 Years Old And Have $1.2 Million Saved. Is This Enough to Retire Stress-Free?

The ripple effects don't stop there. According to Cuban, hospitals have to function 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 eyes, this isn't just inefficient – it's a humanitarian disaster.

Insurance companies aren't getting a free pass in his critique, either. Cuban states that for over 50 million Americans under such plans, insurers don't provide traditional insurance. Instead, they function as "care authorizers and payment processors," determining the approval and cost of care, with a primary focus on preventing fraud and assessing medical necessity.

Data from Statista indicates that in 2023, approximately 65% of U.S. workers were enrolled in self-funded health insurance plans, where employers assume direct financial responsibility for employees' medical claims. 

See Also: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here’s how you can earn passive income with just $100.

Cuban doesn't think this role should fall to insurers at all. "That authorization process is one we should not be asking ins comps to do," he argued. Instead, he believes independent third-party administrators (TPAs) with no financial incentives to approve or deny care should handle this process. "The first step," he said, "is for self-insured entities to use third-party TPAs and move away from insurance companies for this service."

As a business owner, Cuban isn't just theorizing – he's putting his money where his mouth is. For his own employees, he's implementing direct contracting with providers.

"We are stipulating that there will be no pre-authorizations. We will trust the provider," he explained. His company will immediately cover the entire cost of in-network care, with no out-of-pocket costs for employees. 

Trending: Deloitte's fastest-growing software company partnered with Amazon, Walmart & Target announces the deadline to invest this year is 12/20. – Last Chance to get 4,000 of its pre-IPO shares for just $0.26/share!

The catch? Providers must charge significantly less than they usually would, even less than their published cash prices. Cuban is confident this model will save money and time while making employees happier.

It's a bold move, but it aligns with his philosophy behind Cost Plus Drugs, the company he launched to disrupt the pharmaceutical industry. Cost Plus Drugs eliminates middlemen and offers medications at significantly lower prices. As Cuban put it, his health care plan for employees is "effectively … single payer, paid for by me."

What's more, Cuban intends to publish his company's direct contracts, ensuring transparency in pricing. His ultimate vision? A health care system where businesses contract directly with providers, cutting out unnecessary intermediaries and reducing costs for everyone involved.

"There are a lot of things in this thread to agree or disagree with," Cuban said, encouraging discussion. But one thing's clear – he's not waiting for the system to fix itself.

Read Next:

• Can you guess how many retire with a $5,000,000 nest egg? The percentage may shock you.
• Many are using this retirement income calculator to check if they’re on pace — here’s a breakdown on what’s behind this formula.