Mark Cuban Says Healthcare Has to Have More of a ‘Netflix Model’

  • Mark Cuban recently appeared on the a16z podcast “Bio Eats World” to talk about healthcare. 
  • He and a16z general partner Vijay Pande talked about how to improve the healthcare industry.
  • Cuban believes healthcare systems need to adopt more of a “Netflix model” to “truly work.”

Mark Cuban has been disrupting healthcare with his low-cost online pharmacy, but there are other areas of the industry that can be improved upon too, he believes. 

Cuban, the outspoken billionaire investor, “Shark Tank” judge and owner of the Dallas Mavericks, recently shared his thoughts on the state of healthcare with Vijay Pande, general and founding partner of Andreessen Horowitz’s bio funds, on one of the firm’s podcasts “Bio Eats World.”

Early last year, Cuban released Mark Cuban Cost Plus Drug Company – the only of his companies to bear his name – which buys generic prescription drugs directly from the manufacturers and then sells to the consumer via its online pharmacy. It cuts out pharmacy middlemen, which then lowers the costs of drugs. 

All of the costs of the medications on Cost Plus’ website are available for anyone to see – and it’s that kind of transparency that Cuban thinks will help improve the US healthcare system.

Now, what does that have to do with Netflix?

With Netflix, subscribers can pay one price and get access to all of its content available at that time. Cuban believes that this model, in some ways, can also be applied to a local hospital or healthcare system. 

If a hospital has a set number of doctors or number of specialties, they typically know how much it costs to operate to provide those services and break-even – in essence a set cost for those services akin to Netflix’s monthly subscription fee. 

The hospital can then share the price to operate with its community – local and state governments, businesses, wealthy individuals – and they can all figure out a way to come up with the money it needs to operate. 

“Now you can start looking at a market-based model that truly works,” Cuban said on the podcast. 

But with the way hospitals operate now, they process payment claims through health insurance providers and in some instances, Cuban says there are things “designed only to get revenue from the insurance companies.” 

But it all goes back to transparency – something that hospital and healthcare systems aren’t necessarily willing to do. 

“If we’re going to change healthcare,” Cuban said. “That’s what its going to take. You have to extract all the ancillary costs that aren’t aligned with the better patient outcomes or better costing. And the only way to do that is to extract the way payments are done today.” 

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