After disrupting the prescription drug market with Cost Plus Drugs — which now has the White House seal of approval — Mark Cuban has quietly turned to the employer market. Since January, Cost Plus Wellness has been on a mission to bring transparency to the world of employee benefits.
The initiative connects self-funded employers directly with providers, including ambulatory surgical centers, single-specialty groups and multi-specialty groups. Real contracts with these providers are published on the website, showing terms, rates and pricing upfront. Employers can copy the contracts and adjust them to their needs. As of May 21, 31 providers have published contracts on the site. Because the site is open source, it’s hard to say how many employers have used the site to cement contracts with providers.
The goal is to disrupt the payment structure between the insurance company, provider and employer. And perhaps to undermine the influence of benefits consultants who typically work with large self-insured companies to design employee benefits.
“We think it should be simple and direct. Not convoluted and opaque, as it is now,” Cuban told MedCity News in an email.
Cuban has been on a tirade on X about large employers not doing enough to lower their healthcare costs and not scrutinizing their contracts with PBMs and insurance companies. So it’s in this context that he wants to be the one helping to directly link providers with large self-funded employers.
But is this something employers will actually use? One employer expert believes that the Cost Plus Wellness initiative is a good conversation starter between the two parties.
“I think that is welcome. I think it is needed, and both employers and providers want to find a way to partner directly,” said Elizabeth Mitchell, president and CEO of Purchaser Business Group on Health. “What is less clear is if this approach is scalable. Right now, it’s in Texas, and it provides some baseline terms, which are great, but … it’s got to be more broadly available. Also our members are really focused on quality, access and outcomes, and I think we need to address those in any contract arrangement.”
How does Cost Plus Wellness work?
Cost Plus Wellness is built specifically for self-funded plans. Using Cost Plus Wellness’s templates, employers contract directly with each provider they choose and sign “one master agreement,” according to the website.
The employer’s third party administrator (TPA) processes the claims. Providers submit the claims and then the TPA pays them at the rate published in the contract on Cost Plus Wellness. Employers and TPAs are required to pay within 30 days of the claim receipt.
The initiative benefits employers as they’ll know exactly what they’ll pay without having to deal with spread pricing or hidden administrative fees. For providers, the benefit lies in the fact that they don’t have to chase down payments, or worry about delays in payments.
Currently, employers are not being charged for Cost Plus Wellness, though that may change in the future.
“This is an open source project. It’s not a business for us. … It’s something we felt needed to be done to start to bring transparency and awareness to direct contracting,” Cuban said.
One of the contracts on the site is between Southwest Physician Associates and Mark Cuban Companies. SPA’s COO, Amy Cooney, told MedCity News that she was “impressed with [Cost Plus Wellness’s] concept which provides ease of administration for the physician staff as opposed to the larger payers, referred to as BUCA, which requires a ton of administrative time.” BUCA refers to four large insurance companies that also act as third party administrators for self-insured employers — Blue Cross and Blue Shield, UnitedHealth Group, Cigna and Aetna.
Cooney added that Collin Street Bakery, based in Texas, selected to contract directly with SPA via Cost Plus Wellness.
Which employers might show interest?
For self-insured employers concerned with pricing and transparency of current health plan provider network arrangements, Cost Plus Wellness is likely of interest, according to Ellen Kelsay, president and CEO of Business Group on Health.
However, in order for this initiative to be successful and appeal to more employers, a few important features are necessary, she added. This includes the ability to scale to other regions and the inclusion of provider quality data.
“The offering currently focuses on lower-cost directly contracted providers without any indication as to the quality of the providers,” Kelsay said. “It is important to note that most direct contracts employers have pursued to date have quality as their north star. In addition, transparent price is not the same as high quality care.”
Mitchell of Purchaser Business Group on Health echoed these comments.
“There has to be a way to monitor the performance of these contracts, so data to populate the performance metrics,” she said. “These have to include quality and access. Price is critical. But there is no price for unsafe care. No one wants to pay anything for care that is unsafe or low quality.”
Cuban isn’t the only one supporting direct contracting, noted Mitchell. Another is Aligned Marketplace, though this company, similar to Cost Plus Wellness, is also not addressing quality.
Glen Tullman of Transcarent, a navigation and virtual care company, has also long talked about his interest in cutting out middlemen, similar to Cost Plus Wellness. However, according to Mitchell, Transcarent has essentially become a middleman itself.
“I think Transcarent is doing some real innovative work, but the more they grow and acquire more and more layers, the more they look like a traditional health plan,” she said. “They’re doing PBMs, they’re doing navigation, and they merged with Accolade, so they’re just growing into this traditional intermediary.”
Nomi Health — which stands for “No Middlemen” — is also growing a direct-contracting provider network. Its program — which is going into year two — has seen a 16% drop in ER visits, 34% decrease in urgent care and 45% increase in primary care utilization, according to Nomi. In addition, participating employers and their employees have seen costs reduced by as much as 29%.
“People are willing to try something different because they know what the current system is going to give them. They’re like, ‘I want a better solution. I want my patients to get good care. I’m willing to pay for good care, but I don’t want to overpay for care, because 19 people are taking their money out of the pot before it ever makes its way to the provider,’” said Brian Woods, senior vice president of market strategy and insights at Nomi Health.
Starting a conversation
While Cost Plus Wellness has much room for growth, Mitchell does believe it’s starting a necessary conversation in the healthcare industry.
“What Mark is doing is very important, and I think he is catalyzing totally different conversations that were long overdue,” she said. “He is absolutely right to point out the opacity, the lack of responsiveness, the lack of value. We are in total agreement there, and to take a step to make contracts transparent is exactly what is needed, because why are contracts confidential anyway?”
She noted that employers often struggle to access their own medical data because insurer contracts can restrict it, and said Cost Plus Wellness aims to change that dynamic.
When asked if he envisions a world in which the middlemen are cut out entirely from healthcare, Cuban responded, “No, but their relationship can be transparent, honest and simple.”
Photo: Mykyta Dolmatov, Getty Images
