Since billionaire businessman Mark Cuban entered the health care space with Cost Plus Drug Co., which he launched in May 2020, he has gotten a new perspective on the value that most CEOs place on their group health insurance benefits.
And what he has found is a lot of waste and a lack of health care buy-in among corporate chieftains, according to one of his recent posts on X, formerly known as Twitter.
Most chief executives of self-insured companies, he wrote, “don’t know and don’t really want to know where their health care benefit dollars are going.”
In other words, employers — with some effort — should be invested in their health plans so they can find ways to reduce costs for themselves and their employees while improving health outcomes for their workers.
While his comments were aimed at CEOs of self-insured companies, business leaders can use them to look a little closer at the health plans they offer their employees and opt for ones that are focused on reducing costs and driving positive health outcomes.
Poor management buy-in
After engaging in discussions with numerous CEOs of companies that have contracted with Cost Plus, Cuban concluded that most chief executives pay little attention to how well their self-insured health plans deliver positive health care outcomes because that is not viewed as a core competency of their companies.
“As a result they waste a s**tload of money on less than quality care for their employees,” he wrote on X, “and more often than not it’s their sickest and lowest-paid employees that subsidize the rebates and deductibles. (Sicker employees have to pay up to their deductible, healthy ones don’t.)”
Cuban likened poor management buy-in to their health plan to lackluster execution of diversity, equity and inclusion (DEI) programs.
“Like health care, DEI is not seen as a core competency in most companies. It’s just a huge expense. Intellectually, [CEOs] see the benefit of DEI. But they don’t have time to focus on it,” he wrote. “So it turns into a check box that they hope they don’t have to deal with beyond having HR do a report to the board and legal tells them they are covered.
“When anything that impacts all of your employees is pretty much a check list item to the CEO, there is a good chance that it’s not going [to] work well and you are going to have employees who are not comfortable for a lot of different reasons.”
Taking a different approach
Taking a hands-off approach to your company’s employee benefits may be costing you and your employees. And in 2024, when group health insurance premiums have increased 8.5% on average from the year prior, it’s important that employers don’t treat their benefits as just an unavoidable expense.
As the health care and insurance industry innovates, there are growing opportunities for cost savings and better outcomes. For example, some new health plans may have narrow-provider networks with perhaps not as many physicians, however those physicians provide care at centers of excellence that have better outcomes for patients.
Additionally, there are a number of cost-containment strategies available that employers have been loath to use in order to retain and attract talent. As the labor market loosens and costs continue to rise, employers looking to arrest cost inflation may start considering their options.