Mark Cuban’s Top 3 Lessons for Benefits Brokers

If you've ever wondered just how deep the rabbit hole goes in the U.S. healthcare system, you're not alone. We at SmithRx have seen the landscape evolve—or, more accurately, mutate. Drug costs, which were a manageable 15% of our healthcare spend when our company was founded, have now ballooned to over 30%. With today’s specialty medications and advanced treatments, we're on a trajectory that could see these costs soaring to 40-50%.

But here's the kicker: the substantial increase in spending isn't just because of these medical advancements. The real story is about the middlemen—the big three PBMs—who've mastered the art of making money by raising costs and overcomplicating the system with unnecessary fees and services. It's a setup that rewards greed, entrenches anti-competitive practices, and, frankly, goes against everything we believe in as proponents of a free market.

When we look at this behemoth of a system, with its vertically integrated juggernauts hoarding profits and stifling innovation, it’s clear that we're staring down a crisis that's not just financial but fundamentally un-American. The DOJ's poking around these practices is a sign that change is in the air, but we can't wait around for regulators to clean house.

That's where you, the benefits brokers and the consultants, come into play. You’re not just navigating these choppy waters for clients; you have the power to steer the entire ship toward a more equitable and transparent future. 

At this year’s Brown & Brown “Benefits Evolved” event in Dallas, our Founder and CEO, Jake Frenz, took the stage with Mark Cuban to discuss exactly how you can take action and reshape the healthcare landscape. 

Lesson 1: Build Trust Through Transparency

The role of a benefits broker needs to go beyond simply finding the next best deal for clients. It’s about digging deep, challenging the norms, and asking, “Are we really doing the best for those we serve?” Let's be honest; when was the last time your clients felt genuinely relieved or satisfied with the direction healthcare solutions were headed?

“I've been in a lot of disruptive businesses, many [of which] I’ve started,” said Cuban. “This is the easiest of them all, simply because the big three PBMs are so opaque. The number one rule of PBM Fight Club is that you don't talk about PBM Fight Club.”

Imagine a scenario where every detail about healthcare plans—costs, coverage limits, the fine print—is laid out clearly for your clients. 

Herein lies your opportunity to redefine the norm. By adopting a stance of unwavering transparency, you open a channel of trust that reassures clients they are fully supported in making informed decisions. 

“Our real product is not medications,” Cuban said of Mark Cuban Cost Plus Drugs. “Our real product is trust, and that’s your product. That is everything that makes or breaks your business. And what's the quickest way to get that trust? Absolute transparency.” 

Lesson 2: Ditch the Rebate Ruse 

Rebates might seem like a win-win on paper, but peel back the curtain, and you'll see a different story: The rebate model inadvertently prioritizes short-term gains (most of which traditional PBMs end up claiming in fees) over long-term health outcomes and financial sustainability for the most vulnerable employee groups. Instead, brokers should focus on educating their clients about how to reduce overall costs. 

Pharmacy benefits aren’t just numbers on a balance sheet; as benefits brokers and consultants you’re in the business of helping real people facing real struggles.

“The question becomes, are you going to keep on doing it the same way? Cuban said of rebates. “There are a lot of downstream impacts… [and] CEOs don’t fully understand their healthcare costs. They think that when they get a rebate, that's cash in [their] pocket. What they don't understand is those rebates are being paid for not by the brand manufacturers, but by their sickest and oldest employees.” 

Lesson 3: Challenge the Status Quo 

Clients are struggling to make sense of a system driven more by greed than by people's well-being, and are growing increasingly disheartened. With each passing day, the cracks in the system widen, leaving little room for genuine satisfaction or meaningful progress.

Brokers and consultants need to start asking themselves the tough questions: Why do we do things this way? Can we do them better? What if we tried something new? These questions are the fuel that drives innovation, propelling the industry forward and opening doors to new possibilities. By challenging the status quo, brokers not only transform their own businesses but also inspire others to follow suit, creating a ripple effect of innovation that reverberates throughout the industry.

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Reduce the Complexity of Pharmacy Benefits with SmithRx

As Cuban said of the big three, “It's not about keeping people well. It's not about putting companies in a position to…provide the best support for their employees. It's about how much they can extract. And every time you look at the big three PBMs, they're making it worse. I can't emphasize this enough, particularly for your small and medium-sized clients: if you put them through the big three, because it's the path of least resistance to get a yes, then you're contributing to the problem. If you work with a PBM like SmithRx, then you're part of the solution.”

Check out the full talk between Jake Frenz and Mark Cuban below. 

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