By Mark Cuban
Healthcare is a very simple business. We go to the Dr. The Dr tells us what we need (if anything). The ONLY questions are:
1. What does it cost
2. How will the patient pay for it
Everything else is a complication.
Unfortunately, those complications have removed all alignment between patients and the economics of healthcare
The big insurance companies and the PBMs they own, create almost all of the complications.
They are able to do so because they control the flow of patients for hospitals/providers and drug manufacturers. They are the gatekeepers for trillions of dollars of healthcare spending. Everyone has to kiss their ass and accept the complications. And they know the more they can complicate it, the better the financial engineering they can do
They do this via their control of networks of providers and drug formularies. That’s it.
It’s a simplification. But if we end their control of networks and formularies , healthcare can be transparent. prices will come down.
Then the only question becomes how do patients that can’t afford their care pay for it
Answer: We use the trillions we just saved to help them.
The best place to start is by getting Self Insured Employers to stop using the big companies that create the complications. The alternatives are better. But the employers are stuck in the old “no one ever got fired for using IBM mindset.
Next, we need to get CMS to end PBM controlled formularies and to make the Medicare network of providers available to everyone and anyone. Not just Medicare and Medicaid patients.
Of course they will be paid more. But if we significantly reduce all the complications , they can make money on less. we have seen this with our direct contracts.
This is of course an oversimplification in a lot of ways. But CMS and employers have to start looking at the big picture so interests can be aligned and the complications removed. It will create better solutions for them and everyone.
It’s absolutely insane that insurers create plans that are optimized for their own profitability, doesn’t matter whether it’s an ACA, MA or employer plan. And as part of those plans they effectively get to decide the amount of cost and risk that the employer, consumer and provider take. .
They create new plans as often as they want with whatever features they want and everyone else from employer to patient to provider has to absorb the administrative costs and all the complications associated with them
Is it any wonder that overhead is anywhere from 20 to 30 percent of our 5T spend ?
Sorry for the rant. and I’m sure a lot of people disagree. But healthcare truly is a simple business.
It’s time for CMS and all of us to make decisions that simplify the industry
