A $20 aspirin “doesn’t happen by accident. It was designed that way.”
American entrepreneur Mark Cuban used that line as he relaunched his personal blog, according to a Feb. 26 report by Benzinga. Rather than writing about startups or investing, he focused on the roughly $5 trillion U.S. healthcare system.
In a post titled “A Few Words About Healthcare,” Cuban extended the model he introduced with Cost Plus Drugs: make costs public, apply fixed markups, and expose margins. The deeper problem in American healthcare, he wrote, is not technology but what he called “profit engineering.”
Healthcare ‘made complicated’
Healthcare, Cuban wrote, “is a simple business that has been made complicated.” He said innovation itself is not the issue. Advances in surgical robotics and medical supplies, he noted, are central to improving patient care.
His criticism centered on the financial architecture built around treatment: bundled billing, upcoding, margins embedded in invoices, and multiple layers of insurance processing. The complexity, in his telling, shows up in the movement of money more than in the practice of medicine.
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He sketched an earlier model in plain terms: “Let’s go back to 1955 — a patient goes to the doctor, the doctor provides treatment, the patient gets a bill, and if they can afford it, they pay. It’s that simple.”
The question, as he framed it, is straightforward: when someone cannot afford to pay, who covers the cost?
Working backward from $5 trillion
Cuban described his math as preliminary. Beginning with roughly $5 trillion in annual healthcare spending, he worked backward to identify where structural reductions might occur.
Publishing prices alone, he wrote, is insufficient. Hospitals can still adjust totals through bundling and coding practices. What he called a true “bill of materials” would break out labor costs for doctors and nurses, patient-specific supplies, capital expenditures, administrative overhead, and overall gross margins.
He also floated a more disruptive step: removing insurance companies from the payment chain and shifting to a cash-pay model.
Payment management, he noted, is often estimated at 20 percent to 30 percent of total costs, with fraud and overbilling adding roughly another 10 percent. Eliminating those layers, in theory, could bring total spending down from $5 trillion to about $2.5 trillion, not counting potential reductions in drug pricing.
Debate over insurance’s role
The proposal to bypass insurers has drawn pushback.
CNBC has reported that Cost Plus Drugs can offer lower prices largely because it concentrates on generic medications. Medical services operate under a far more complex cost structure.
The Wall Street Journal has also pointed out that insurance functions as a risk-sharing system, not merely a payment intermediary. For high-cost care such as cancer treatment or organ transplants, the question of how risk would be pooled under a fully cash-based structure remains unresolved.
At the same time, data from the Kaiser Family Foundation show that administrative expenses in the United States exceed those in most developed countries, reinforcing arguments that structural inefficiencies contribute to higher spending.
Closing the gap
After outlining possible savings, Cuban turned to funding.
He assumed Medicare and Medicaid would continue at their current levels — approximately $847 billion and $570 billion, respectively. Under a hypothetical $2.5 trillion system, about $1.1 trillion would still require coverage through other means.
With roughly 160 million Americans enrolled in employer-sponsored insurance, that would equate to about $6,875 per employee annually.
Cuban identified several routes: employers converting premium payments into federal contributions with Medicare administering payments; companies increasing wages while individuals shoulder costs through taxation; or the federal government acting as a reinsurer while employers fund health savings accounts.
All of these, he acknowledged, depend on structural changes occurring first. The calculations, completed in about 90 minutes, are “far from perfect,” he wrote.
Households face current costs
Benzinga noted that large-scale reform remains uncertain, but household healthcare expenses are immediate.
Estimates from Fidelity Investments indicate that a retired couple at age 65 may need roughly $330,000 in savings to cover healthcare costs, a figure that has continued to rise.
Premiums, supplemental coverage, out-of-pocket expenses, and tax exposure remain central factors in retirement planning. Policy debates continue. Household budgeting proceeds regardless.
