Mark Cuban discusses his plans to reimagine health insurance at 32BJ event presented by City & State

With exorbitant costs placing essential health care coverage out of reach for most Americans, industry leaders from across the country gathered to address concerns and propose avenues towards affordability at “Changing the Playbook on Hospital Prices,” an event hosted by 32BJ’s Health and Labor Industry Cooperation Funds and presented by City & State on Oct. 9. 

The event’s major keynote speaker, no stranger to disrupting industries through innovative startups, was businessman and television personality Mark Cuban. The billionaire investor showcased his most recent venture: Cost Plus Drugs, a public benefit corporation aimed at driving down the cost of generic medications for U.S. consumers.

The Dallas-based corporation came to be in 2022 after radiologist Alex Oshmyansky sent a cold email to Cuban, seeking investment in a pharmaceutical startup designed to make generic drugs more affordable by removing middlemen from the supply chain. 

“I realized nobody knew what price they paid for anything in healthcare, which I thought was insane,” he said. 

“We all know (high healthcare costs) suck, but we all accept that there’s certain things we can’t do,” he added. “And that’s the problem. If you don’t know the price you're paying for healthcare or medications, you’re being ripped off.”

Cuban said that even when people and organizations realize they’ve been cheated by pharmaceutical middlemen, they still go back for more. “Why would you do a contract with a (pharmacy benefits manager) or an insurance company that’s taking advantage of you or that you’ve seen take advantage of the state or other unions or other employers?” he asked. “Stop doing business with them, that’s how we gain control.”

Cost Plus Drugs is now rapidly expanding to hospitals around the country. Cuban said the catalyst for this expansion was when he came face-to-face with the discrepancy between out-of-pocket costs and the rate that insurance pays. 

“My daughter plays basketball, she fell and broke her hand. I had the choice of using my credit card to pay for the X-ray or running it through insurance,” he recalled. “I made a couple calls while we were on our way and the price that the insurance company had negotiated was far higher than just a walk-in. To me, (it) made no sense that the biggest insurance companies can’t negotiate a price that’s as good or better (than a walk-in).”

Cuban reached out to hospital executives to ask how their payment systems worked, but they didn’t have clear answers. This struck a nerve, since he said that health care is (or should be) “a simple, easy business.” He said patients should be able to get answers to two questions: How much does it cost, and how am I going to pay for it? According to Cuban, the inability to easily answer these question starts with insurance companies and their complex, unfavorable plans. The solution? Direct contracts. 

“We’ll pay cash price for things already published (at) cash price, and then we’ll use a reference-based price for everything else. For things that are really bad, we’ll negotiate (a rate) in real time,” he said. 

Cuban said that Cost Plus Drugs would consult multiple hospital systems to receive the best quote. If there’s a doctor already seeing patients under Cost Plus Drugs, the organization would conduct its own pre-authorization, foregoing an ASO (Administrative Services Only plan) altogether. 

“Once the person gets to the provider, we’re paying the cash rate, right there and then. If your billing site prefers 30 days, okay, we’ll take 30 days. But, if you want to pay it right there and then, that's why we’re getting the cash price. No negotiation, no administrators, none of the games … so you get your money right away and it’s at the contractor price,” he explained. 

Cuban implored chief executives to request and rigorously review their contracts with pharmacy benefit managers, going so far as to suggest they should “stick your contract into ChatGPT or Perplexity or Gemini” and ask the AI tools to identify areas of renegotiation.

Cuban criticized the ongoing government shut down and the current political landscape concerning health care reform. “Democrats and Republicans, neither side wants to solve problems, they just want the P.R.,” he said.

Despite the partisan deadlock, Cuban believes changemakers like himself can better communicate initiatives to the public by simply, “talk(ing) about solutions. That’s what people really want. People want to know that you’re going to solve the problem that changes my life.” 

In addition to the keynote speech from Cuban, the event featured remarks from local industry decisionmakers and legislators, including 32BJ SEIU President Manny Pastreich, 32BJ Health Fund Director Cora Opsahl, 32BJ Benefit Funds Executive Director Peter Goldberger, state Sen. Liz Krueger, Assembly Member Chantel Jackson, New York City Council Member Julie Menin, Realty Advisory Board on Labor Relations President Howard Rothschild, New Jersey Lieutenant Governor nominee Dr. Dale Caldwell and Health Transformation Alliance Chief Strategy Officer Lee Lewis. 

Pastreich discussed his work leading 32B and how the union has worked to ensure affordable living standards for labor workers in an increasingly expensive city.

“We had to dig in our heels so that workers who keep New York City running don’t have to choose between going to the doctor and putting food on their table or paying their rent. That’s an unacceptable choice and it became our responsibility to do something about it,” he said.

The conference also included two discussions. The first featured Employers’ Forum of Indiana President and Chief Executive Randa Deaton, Vermont Education Health Initiative Director of Benefits Mark Hage and Unite Here Health Vice President of Healthcare Delivery Ivana Krajcinovic, with 32BJ Health Fund Assistant Director of Policy Misha Sharp serving as moderator.

The discussion focused on nationwide perspectives on hospital price control. Deaton spoke about her experience working with employees in the Indiana automotive industry who came together to demand answers for high health care costs. Krajcinovic offered insight on how the hospitals in affluent Monterey, California charge 40% more than the most expensive hospitals in New York City, leading to little money left over for pensions and wage increases. Hage highlighted similar issues in Vermont, asserting that “there is no way to address this affordability crisis unless we address (the) hospital crisis.”

The afternoon panel featured director of government relations at the New Jersey Education Association Director of Government Relations Deborah Cornavaca and New Jersey Municipal Management Association President Jillian Barrick and was moderated by 32BJ New Jersey State Director and Vice President Ana Maria Hill. 

Sharp, Cornavaca, and Barrick all spoke of the importance of cross-sector partnership, with Cornavaca stressing that it’s “unacceptable” that anyone should be deterred from seeking the help they may need because of their finances. “Even with insurance, people are scared. ‘I don’t know what they’re going to charge me,’ or ‘I know I’m gonna get a huge bill,’ or ‘Don’t put me in the ambulance,’” she said.

Local legislators brought the audience into their world, speaking about how skyrocketing healthcare costs constrict local communities and what they’re doing to lighten the burden. Krueger highlighted the Fair Pricing Act, which she said will “address the growing crisis being expanded upon by the federal government’s cuts in funding for healthcare.”

“There are millions of New Yorkers who are on the verge of seeing their insurance rates go up because they’re going to lose their tax deductibility … there are millions of New Yorkers who are on the verge of potentially losing their insurance altogether because of changes in federal laws,” she said.

Jackson, a sponsor of the bil who represents a mostly working class district in the Bronxl, is very familiar with some of those vulnerable communities.

“When you tell (at-risk New Yorkers), ‘Okay, you have to get your regular checkups’ and one year, they can afford it (but) the next year, they can’t afford it, you can believe that the next year, they won’t be back,” she said. “For me, (the) Fair Pricing Act is important to save lives.” 

City agency leaders were also present at the event to share insights into the work they’re doing around health care accountability. Department of Health and Mental Hygiene Director of Healthcare Accountability Emma Clippinger and Office of Labor Relations Deputy Commissioner on Health Strategy Claire Levitt joined with Milliman Principal and Consulting Actuary Suzanne Taranto to give a brief presentation on the issue.

“From our perspective, health care accountability is not strictly about monitoring whether key health care actors, mainly providers and payers, are in compliance with state and federal regulations. Our ultimate goal is affordable, equitable and high-quality healthcare for all New Yorkers,” Clippinger said.