Mark Cuban: How I’d Reform Healthcare If I Were in Charge

“That’s what this whole conversation is about — how can we get doctors to be able to golf on Wednesdays like they used to?”

Mark Cuban is a business mogul, the “Shark” every entrepreneur wants to make a deal with, the former owner of the Dallas Mavericks, and, most recently, an online pharmacy CEO. In 2022, Mark co-founded Cost Plus Drugs in an effort to lower prescription drug prices. The direct-to-consumer company makes generic drugs affordable by cutting pharmacy benefit managers out of the distribution chain.

But, once Mark starts talking about tackling the pharmaceutical market, you get the sense he has his sights set on an even bigger goal: reforming the healthcare system at large.

Offcall co-founder Dr. Graham Walker recently got the chance to interview Mark on How I Doctor, a podcast that explores the lives and careers of physicians who are practicing medicine differently. Mark, of course, is not a physician. But, as Graham notes, “I'm talking to him because I think he actually gives a damn about healthcare, and more importantly, he's doing something about it.”

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Mark pulls no punches in this episode, and frames American healthcare as a David- and Goliath-style fight between good and bad actors.

Physicians are on the good team: “I happen to be a fan of people who save lives and make other people feel better, you know? Call me crazy.”

Who’s on the bad team? Anyone trying to game the system and extract money from it for their own benefit — insurance companies, hospitals, private equity firms, and others: “In healthcare, that $4.9 trillion wherever anybody can arbitrage whatever they can out of the system, that's exactly what they are going to do.”

With clarity of conviction and a hard-charging spirit, Mark shares his vision for how to fix healthcare. Here are nine ways Mark would change the system if he were in charge.

1. Pay doctors more

“Let me just tell you: Doctors are underpaid. When I look at individual bills, like a heart transplant: $25,000. Amount paid to the doctor: $2,200, for literally taking a heart out. If I’m getting a heart transplant, I want that motherf*cking doctor to make $10,000, so that he or she is paying attention, and not worried about getting to the next heart transplant or worried about the patient who’s got a boo-boo. It’s a f*cking mess.”

2. Criminalize insurance practices that screw over doctors

“Insurance companies are the worst of the worst of the worst of the worst of the worst. If you look at how insurance plans are designed, it should be criminal. It’s the antithesis of trying to optimize for patient care. If they design a high-deductible health plan and they make it available to somebody with a take-home pay of $25,000, and there's a deductible of $5,000, [doctors] are screwed. Even if the patient is broke as a joke and doesn't have two nickels to rub together, you still have to care for them. That risk of debt default is something [doctors] have to take on and now you're the one also responsible for figuring out a payment methodology if there is one.”

3. Make medical school 100% free

“Would it be worth it so that we can expand — not only expand, but also make med school free? So you truly get the best of the best as opposed to the best of the people who can either afford it or are willing to take on the debt? If you put me in charge, I’m like, $24 billion is nothing, but it changes the dynamics considerably to improve the quality of care.”

4. Eliminate residency programs to help stem the physician shortage

“If you can add 10,000 doctors and there were residencies for them, or you create a different program that doesn't require a residency, you're just an apprentice in a primary care organization, great. You have to deal with some of the most simplistic things first.”

5. Get rid of prior authorizations

“Prior auth is designed to drive doctors crazy. But here’s the real reason: If you have a billion dollars a year, let's just say you work through prior auths and you just extend them as long as you can, 4% of that is a shi*load of money, that's $40 million. If you're a bigger insurance plan, it's $10 billion and now it's $400 million. So if I can keep a bunch of doctors pissed off at me, but I'm making an extra $400 million, what am I going to do?”

6. Ban hospitals from charging facility fees

“Now the hospitals are playing all kinds of games in how they over-charge. So you've got facility fees. Are you kidding me? Like, I'll pay for what I need. I had my hips replaced, bam hit me. But a facility fee for the doctor that’s coming? Anybody who complicates the program, who complicates the economics takes responsibility, at least at some level, for being the bad guy in all of this.”

7. Allow direct contracting between employers and hospitals/physicians

“If a hospital or a doctor or a practice walked into Shark Tank, how would I redesign their business? Do a direct contract deal with the employers. There’s going to be no deductible from the employee. We'll cover all of it so you have zero risk. Now, in exchange, I want a better price than you’re giving insurance companies.”

8. Get rid of RVUs (Relative Value Units, a method that determines what physicians get paid from reimbursements)

“RVUs? That stuff's insane. You're getting paid based off an RVU that's going to the hospital, who then has to pay you. But what if all that just came to you?”

9. Do everything we can to restore trust and empower the good guys, aka doctors

“I happen to be a fan of people who save lives and make other people feel better, you know? Call me crazy. You guys bust your ass. You guys go through a whole lot of shit to get where you are and it's so stressful just trying to keep up.”

Mark's big idea …

To finish off the conversation, Mark puts on his "Shark Tank" hat and proposes a big idea for how doctors can truly take back their power: Unite to form a virtual hospital that eliminates insurance from the equation.

He didn’t pull this out of thin air — in recent years, more doctors are moving away from traditional insurance-based care and turning to alternative practice models such as direct care and concierge medicine. But Mark is pushing to go a step further: “If you're able to aggregate enough doctors, you can create a virtual hospital network.”

For hospitals and doctors, Mark points out, the primary value of big insurance companies is patient flow. “If the cause of most of these problems is insurance companies, and their value proposition is patient referrals, you need to look for other ways to get patient referrals. Instead of being in the networks. I would organize and take that as far as you can.”

Mark knows that this kind of epochal change won’t happen overnight. But, for now, Mark urges doctors to do two things:

• Only work for employers who treat you fairly. “I would identify the hospitals that really simplified things, that are being innovative with payments. Because as long as there's a shortage, you're gonna be in demand.”
• Be entrepreneurial and think differently about how to set up a practice today. “PE understands how to do arbitrage, that's what they do. And so they come in and they buy everybody up, and now you're working for the hospital. When that happens, where there’s change like that, that’s where there’s opportunity.”

This sentiment couldn’t be more perfectly aligned with Offcall’s mission: If doctors put on their Shark Tank hats, the best days of practicing medicine might still lie ahead.

Connect further with Cost Plus Drugs on LinkedIn here.

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Transcript

​​Mark Cuban:

Let me just tell you upfront, doctors are underpaid. When I look at bills, individual bills, and it might, just to pick one out of thin air heart transplant, right, $25,000. Amount paid to the doctor, $2,200.

If I'm getting a heart transplant, I want that motherfucker doctor to make $10,000. So he's paying attention or she's paying attention and not worried about getting to the next heart transplant or worried about the patient that's got a boo-boo. And so it's such a fucking mess, right?