If Mark Cuban bought a hospital, he says he would run it like a startup: eliminate unnecessary overhead, prioritize radical transparency, pay physicians well and use AI to root out inefficiencies.
Speaking on “The Healthcare Bridge” podcast with Nathan Kaufman, managing director and founder of Kaufman Strategic Advisors, Mr. Cuban — co-founder of Cost Plus Drugs Co. — discussed how he believes hospitals could be operated differently.
“You’ve got to be able to get down like any other startup,” he said. “You’ve got to think of your hospital as a startup, and your first doctors as your first employees or your partners.”
Mr. Cuban questioned traditional hospital cost structures, pointing to what he sees as unnecessary spending.
He said he would design a hospital with minimal overhead: no lavish amenities, fewer consultants and no unnecessary administrative layers. Instead, he suggested a lean model that avoids expensive infrastructure, relies on essential technology and outsources services when necessary.
The foundation of his approach would focus on simplifying operations, eliminating ancillary services and building trust.
“It is the same with Cost Plus Drugs. Our margins are only 15% but I know that the key element for me is how I build trust, and the way to build trust is by having a set margin,” Mr. Cuban said. “If I did buy a hospital … I would get rid of all the ancillaries and market it much like we do Cost Plus Drugs and pay my doctors more. We don’t have many employees, but we pay them well.”
Transparency would also be critical to the model. Rather than treating pricing and physician compensation as confidential business information, he argues that making the hospital’s costs and reimbursements fully visible would offer it a competitive advantage.
“I would put out there and market, look, here’s what we pay our doctors. Here’s our overhead — down to the penny — so that you can see what it costs. And here’s what we get reimbursed by Medicare, and we’ll charge you the same, and we’ll grow,” he said. “I know that practice would grow, because even though basic Medicare doesn’t make you much money, the people who have real issues, you can make money from.”
He framed hospital economics as largely dependent on market leverage, arguing hospitals typically fall into one of two categories. In his view, negotiating power — not necessarily operational efficiency — often determines financial success.
“One, I have market dominance, and I get to say, ‘f— you,’ to everybody and the insurance companies, right? I don’t need you, because I’m going to get my own patients too,” Mr. Cuban said. “Two, I don’t have enough patient flow, so I need you insurance companies to send me patients, and so I’ll do the deal that you want me to do, because otherwise I don’t have a patient funnel.”
He also argued that hospital executive incentives often drive expansion for scale rather than long-term sustainability.
“I think part of the challenge is [how] most CEOs are rewarded. Hospital CEOs are rewarded by revenues and scale, and so they default to more buildings,” he said. “If this 100-bed hospital is not my final destination, I want to be the 60-hospital, 6 zillion beds, because that’s where I’m making $10 million a year.”
Mr. Kaufman noted that consolidation can provide negotiating leverage with payers but cautioned that scale alone is insufficient.
“If you have beds [but] insurance companies aren’t paying anything, you have no negotiating cloud at all,” Mr. Kaufman said. “So you do need to consolidate to get big, but you have to know how to run that business.”
Mr. Cuban pointed to AI as a major opportunity, particularly in contract and revenue oversight.
“One of my clients just acquired a 250-bed hospital. It was bankrupt, owned by a [private equity] firm, but that hospital had over 3,000 contracts,” Mr. Kaufman said. “That’s not a 600-bed hospital. It’s a 250-bed private hospital, so that just gives you some idea of the magnitude of management that needs to occur.”
Mr. Cuban said automation could quickly and effectively solve that complexity.
“Imagine all those processes associated with all those contracts could be automated with AI agents, because there’s nobody verifying all the financial information associated with transactions from each one of those contracts,” he said. “No chance you can’t hire enough people to do that.
“That’s what agentic AI is really going to do for hospitals and clinics and practices’ low hanging fruit.”
Ultimately, Mr. Cuban said his approach would center on a simple entrepreneurial question.
“I put my entrepreneur ‘Shark Tank’ hat on … [and ask], ‘What would it take to get people to choose me?’”
Click here to listen to the full episode of the podcast.
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