• Alan Shoebridge

Healthcare hype or real healthcare disruption: How can we tell the difference?


During the last five years – at least – it seems as if just about any announcement about a non-traditional healthcare provider coming up with a product or service is met with breathless anticipation. “The next gamechanger has arrived. Hospitals, you’ve been warned!”


Big tech, big retail, big everything – they’ve all been entering the healthcare space or dropping hints of a future plan to do so. Three years ago, it was Amazon, Chase and Berkshire Hathaway (aka Haven) that set off an industry-wide panic when they announced plans to address healthcare costs. Last year, it was Walmart Health, CVS and Dollar General creating all the buzz with their respective plans for the healthcare space. And don’t forget about CrossFit and the metaverse, too. They'll be major disruptor forces in healthcare in the years to come. Maybe.


And now we have this:

So far, 2022 is continuing the disruption trend with another splashy entrant into the field: the Mark Cuban Cost Plus Drug Company. I’m still debating whether that name is brilliant or terrible. I’m leaning toward the former, which surprises me.


But will Cuban's effort work? Maybe.


According to various industry insiders, this is either the biggest change in the last 10 years or it really won't amount to anything at all. Those two extremes capture much of the commentary I've read following the announcement of Mark Cuban's new venture. I think the reality will land somewhere in the middle.


From the news coverage so far, which is mostly drawn from the company's press release, I think this is a well-intentioned effort that will have some impact on reducing prices for certain medications.


If you missed the announcement with everything else going on last month, this NPR story provides a good basic overview.


"The Mark Cuban Cost Plus Drug Company announced the opening of its online pharmacy Wednesday. The pharmacy says it will bypass health care industry middlemen and help consumers avoid high drug prices by charging manufacturers' prices plus a flat 15% markup and pharmacist fee."
"Cuban's pharmacy says it will negotiate drug prices directly with manufacturers to lower costs for consumers. The pharmacy doesn't accept health insurance but says prices will still be lower than what people would typically pay at a pharmacy."
"The website currently offers 100 generic drugs to treat a variety of illnesses, including diabetes, asthma and heart conditions."

There has been some debate already about the accuracy of prices posted for comparison by the MCCPDG (OK, maybe the name isn't that great after all). However, there do seem to be many significant discounts on a variety of medications.


It will be interesting to watch the latest healthcare disruptor develop. At this point, I think either declaring that it will absolutely succeed and revolutionize the industry, or predicting that it's destined to fail, are both way too premature.


Separating hype from real disruption

We need to back away from the hype and use the measure I wrote about back in 2019 to look at Mark Cuban’s new company and other disruptors that will follow this year.


The best way to do this is to simply ask whether a specific disruption to healthcare is going to improve access, improve quality or decrease cost for a significant portion of the population. Basically, some take on the concept of the Triple Aim in healthcare. If the answer is yes to one or more of those factors, than I am all for the disruption. If not, I start to question the value and wonder whether we should pay any real attention to it.


Overall, ventures like this one from Mark Cuban are a good thing. It's just that we need to be realistic about how much impact it can really have, let the hype die down and watch the results. I hope we learned a lesson from the Haven situation. From the Harvard Business Review,


"Haven, the venture to disrupt U.S. health care formed by Amazon, Berkshire Hathaway, and JPMorgan Chase, is disbanding less than three years after its launch. When it was formed, the three companies had a lofty goal: to “provide U.S. employees and their families with simplified, high-quality, and transparent health care at a reasonable cost.” Atul Gawande, the famous author and surgeon, was hired as CEO, and Jack Stoddard, who served as general manager for digital health at Comcast, took the COO job. What transpired next was a slow drain of talent. Stoddard left only nine months after being hired, and Gawande departed a year later."
"Despite the companies’ combined 1.2 million U.S. employees and incredible market power, it just didn’t happen."

If that effort can fail, anything can fail. Nothing is a sure bet.


81 views0 comments