A Conversation with Mark Cuban About the Healthcare Dollar

A public discussion about insurance costs led to a thoughtful direct exchange with Mark Cuban about healthcare affordability, transparency, and where financial risk truly sits.

By Steve McGovern, President & CEO, McGovern Executive Search

I was enjoying a conversation between Mark Cuban and one of my favorite comedians, Tom Papa, on Breaking Bread. Their discussion of healthcare premiums and major insurers prompted me to examine how insurance administration, medical claims, and underlying healthcare prices contribute to the costs borne by employers, taxpayers, and patients.

Afterward, Mark and I exchanged views directly. We discussed the economics of insurance, the distinction between self-funded employer coverage and fully insured products, the financial risk involved, and the pressure hospital and other provider prices place on everyone paying for care. I appreciated his willingness to engage. We do not have to agree on every point to recognize a shared concern: American healthcare is too expensive and far too opaque.

Mark deserves credit for bringing attention to prescription-drug pricing and pursuing greater transparency through Cost Plus Drugs. His willingness to engage substantively on complex healthcare issues is valuable. The analysis below considers additional dimensions of healthcare financing and cost. It does not quote or reproduce our private correspondence.

First, Who Actually Bears the Risk?

One important distinction in our discussion was employer-sponsored coverage. In a self-funded arrangement, the employer generally pays its employees' medical claims, while a health insurer or another administrator may handle networks, claims processing, and other services. Treating every dollar administered by a carrier as a fully insured premium, or every dollar of corporate revenue as earnings retained by the insurer, obscures that distinction.

Fully insured products are different: a carrier takes on contractual claims risk, subject to the applicable regulatory and risk-sharing arrangements. Medicare Advantage and managed Medicaid also involve substantial insurance and medical-cost responsibility, although program-specific rules change how risk is borne. Whether the financial risk sits with an employer, a health plan, or taxpayers, the prices and volume of medical services ultimately matter.

Take One Dollar. Where Does It Go?

Start with the Centers for Medicare & Medicaid Services' national health expenditure data, not total corporate revenue.

The chart requires careful reading. Retail prescriptions do not include all drugs administered in hospitals or physician offices. Retail durable equipment does not capture implantable devices and supplies buried in hospital charges. And the 21¢ for physician and clinical services is not simply physician income. The account tells us where spending is booked, not every company that captures value along the way.

Why the Hospital-System Economics Matter

Hospital care is the single largest spending category. RAND researchers found that commercial purchasers paid hospitals an average of 254% of Medicare's rates for comparable services in the same facilities, based on 2022 claims.

Hospital systems frequently argue that Medicare and Medicaid reimbursement falls short of costs, leaving commercial patients and their insurers to make up the difference. That dynamic is part of the financing debate and should not be dismissed. At the same time, the Congressional Budget Office found that hospital market power more consistently explains high commercial prices than the share of government-insured patients alone. Public-program reimbursement and provider consolidation both warrant serious attention; a simple cost-shifting explanation is incomplete.

Meanwhile, many sprawling health systems operate as tax-exempt nonprofits, acquire physician practices, charge facility fees, and support substantial corporate management structures. Federal income-tax exemptions and, frequently, state and local tax privileges are justified by community benefits. Those privileges deserve examination alongside prices, executive compensation, and actual charity care. Dutch Rojas has documented that tension in The Charity That Pays Like Wall Street.

Pharmaceutical manufacturers, medical-device companies, PBMs, and distributors deserve a hard look as well. Their economics cannot be reduced to a single category in the CMS chart, but their pricing power is part of what employers, taxpayers, and patients ultimately finance.

Billions in Revenue Are Not Billions in Margin

UnitedHealthcare served 49.8 million people in 2025, generated $344.9 billion in revenue, and reported a 2.7% operating margin. The $9.4 billion in operating earnings is a large absolute number because the business is enormous. It is about 2.7 cents of operating earnings on each revenue dollar.

That margin is not a defense of every insurance-company practice, and it does not capture all earnings elsewhere in a vertically integrated parent company. PBMs and healthcare-service subsidiaries can be profitable; plans and their parents should answer for inappropriate claims denials, administrative friction, limited transparency, and incentives that may work against patients. But the insurance function pays or administers medical claims whose amounts are shaped by prices and utilization across the delivery system.

Where Our Concerns Meet

We should also distinguish the clinicians delivering care from the health-system corporations and intermediaries operating around them. Physicians, nurses, nurse practitioners, physician assistants, and other caregivers are the people patients rely on. Their work should not be conflated with corporate pricing or contracting decisions.

Mark's efforts to make drug pricing more transparent address a real problem. Insurers must be held accountable for their own conduct, including how they contract, administer benefits, and treat patients and physicians. Employers should understand what they buy and what they pay. On those broad objectives, there is considerable common ground.

Where I place greater emphasis is on the cost of the underlying care: hospital consolidation and negotiated commercial rates, pharmaceutical and device pricing, intermediary economics, and incentives that reward greater spending rather than better outcomes. These forces affect employers, government programs, individuals, and the insurers that bear claims risk.

Our exchange helped clarify the distinction between the entity that collects or administers the premium and the organizations whose prices and services determine much of the ultimate expense. Following the healthcare dollar means holding every participant accountable, including insurers, without mistaking revenue for profit or treating any single industry as the whole explanation.

Editorial update, October 30, 2026: Updated to reflect the subsequent direct exchange, clarify insurance risk, and broaden the discussion of healthcare cost drivers. Private correspondence is not reproduced.

Sources

1. Breaking Bread with Tom Papa, October 27, 2026.
2. CMS, The Nation's Health Dollar, 2024.
3. RAND, Prices Paid to Hospitals by Private Health Plans.
4. Congressional Budget Office, Commercial and Medicare Prices.
5. UnitedHealth Group, 2025 results.
6. IRS, Charitable Hospitals and Tax Exemption.
7. Dutch Rojas, The Charity That Pays Like Wall Street.