Mark Cuban, entrepreneur known for transforming the prescription drug market with Cost Plus Drugs, has quietly shifted focus towards the employer-sponsored healthcare sector. Since January, his initiative, Cost Plus Wellness, aims to bring transparency to employee health benefits.
This new initiative connects self-funded employers directly with providers such as ambulatory surgery centers and specialty groups. Contracts with these providers are publicly available on the website, detailing terms and pricing upfront. Employers can adapt these contracts to meet their specific needs. As of May 21, 31 providers have shared their contracts on the platform. However, given its open-source nature, it is unclear how many employers have utilized these contracts for direct negotiations.
The goal is to disrupt the existing payment structure between insurance companies, providers, and employers, potentially reducing the influence of benefits consultants who typically work with large self-funded organizations to design employee benefits. “We believe it should be simple and straightforward, not convoluted and opaque, as it currently is,” Cuban stated in an email to MedCity News.
Cuban has been vocal on social media about large employers not doing enough to rein in healthcare costs or scrutinize their contracts with Pharmacy Benefit Managers (PBMs) and insurance companies. In this context, he hopes to serve as a bridge connecting providers directly with large self-funded employers.
However, it remains to be seen whether employers will adopt this approach. Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health, considers the Cost Plus Wellness initiative a welcome starting point for discussions between employers and providers. “It’s necessary, and both parties are eager to find a way to collaborate directly,” she said. Yet she stressed the importance of ensuring that this approach can scale beyond Texas and address issues related to quality, access, and results within contractual agreements.
Cost Plus Wellness was specifically designed for self-funded plans. Using the models provided, employers can negotiate directly with their chosen providers and sign a “framework agreement,” according to its website. The employer’s third-party administrator (TPA) processes claims, with providers submitting invoices to be paid at rates specified in the contract found on the Cost Plus Wellness platform. Payments must occur within 30 days of claims submission.
This initiative benefits employers by providing clear expectations on payments without hidden costs or administrative fees. For providers, it alleviates concerns about chasing payments or delays. Currently, employers are not charged to use Cost Plus Wellness, although this could change in the future.
“This is an open-source project. It’s not a profit-making endeavor for us… It is something we felt was necessary to initiate transparency and awareness around direct contracts,” Cuban stated. One of the contracts available on the site is between Southwest Physician Associates and Mark Cuban Companies. Amy Cooney, COO of SPA, remarked that she was “impressed by the concept of Cost Plus Wellness,” which offers easier administration for medical staff compared to larger payers often requiring extensive administrative work.
Collin Street Bakery, a Texas-based company, has contracted directly with SPA through Cost Plus Wellness.
Self-funded employers prioritizing pricing and transparency may find Cost Plus Wellness appealing, noted Ellen Kelsay, president and CEO of the Business Group on Health. However, for the initiative to succeed and attract more employers, certain critical elements are necessary, including scalability and the establishment of quality data for providers. “Currently, the offering focuses on low-cost contracted providers, with no indication of provider quality,” Kelsay added. “It’s important to note that most direct contracts employers have entered into previously prioritized quality.” Mitchell echoed these sentiments, emphasizing the need for tracking contract performance to include quality and access metrics.
Mark Cuban is not the only advocate for direct contracts. Aligned Marketplace operates similarly but lacks a focus on quality as well. Glen Tullman of Transcarent has long expressed interest in eliminating intermediaries, akin to Cost Plus Wellness, though Mitchell noted that Transcarent is beginning to resemble a traditional health plan as it expands its services.
Nomi Health, which means “No Middlemen,” is also developing a network of directly contracted providers. Their program has reportedly led to a 16% reduction in emergency visits and up to a 29% decrease in costs for participating employers and their employees.
Despite the considerable potential for growth, Mitchell believes that Cost Plus Wellness sparks a necessary dialogue in the healthcare sector. “What Mark is doing is very important, and it catalyzes much-needed discussions that have been overdue,” she said. “He rightly highlights the lack of transparency and responsiveness, making a significant move towards making contracts transparent. Why should contracts be confidential?”
Employers often struggle to access their own medical data due to restrictive insurance contracts. Cost Plus Wellness aims to change this dynamic. When asked if he envisions a future without intermediaries in healthcare, Cuban replied: “No, but their relationship can be transparent, honest, and straightforward.”
Photo: Mykyta Dolmatov, Getty Images
