Artificial intelligence could do more than transform how healthcare is delivered, and billionaire investor Mark Cuban believes it could expose the financial structures that keep costs high across the industry.
Speaking on a recent episode of the a16z podcast, Cuban argued that the biggest near-term impact of AI in healthcare may not be clinical at all.
Instead, he sees an opportunity to use AI to analyze the contracts and agreements that employers, hospitals and other organizations sign with powerful healthcare companies.
Cuban Explains How AI Could Tackle Healthcare Contracts
Cuban said the healthcare system is fundamentally inefficient, with companies often locked into complex contracts that can be difficult to understand or negotiate.
“The economics are broken,” Cuban said, arguing that AI could give employers a powerful new tool before those agreements are signed.
He described the problem as “contractual terrorism,” pointing to the enormous contracts governing relationships between employers, pharmacy benefit managers and healthcare companies. One contract he referenced involving the city of Dallas and a PBM ran 1,335 pages.
Cuban’s solution is to put those agreements in front of AI before signing them.
Employers could effectively ask an AI agent to examine a contract and identify where they are getting a bad deal, according to Cuban. The technology could then highlight problematic terms, explain what they mean and help employers determine what to negotiate.
“You could put it through AI and say, ‘Where are they ******* me over? What should I do about it?’” Cuban said.
The potential impact, he argued, could be enormous because the same dynamics exist across a massive portion of the U.S. healthcare system.
‘The Entire System’ Could Change, Says Cuban
Cuban suggested that widespread use of AI in contract negotiations could put pressure on some of the industry’s largest players by weakening the advantage they gain from complicated agreements and information asymmetry.
“If 67% of employers representing 160M+ Americans ran their contracts through AI before signing and negotiated from that, the entire system for big BUAs and PBMs and subsidiaries would collapse,” he said.
Cuban believes that could ultimately translate into dramatically lower healthcare costs.
“The cost of healthcare in this country would drop like a rock,” he said.
His argument comes as healthcare companies increasingly combine insurance, pharmacy benefits, providers and other businesses under sprawling corporate structures.
Cuban pointed specifically to UnitedHealth Group Inc. (NYSE:UNH), saying it has more than 3,000 subsidiaries and moves roughly $150 billion through intercompany transfers annually.
For Cuban, the broader goal is not simply to add AI to healthcare, but to use technology to challenge the economics underlying the system.
“The ultimate mission is to disrupt health care so that it’s affordable again,” he said.
Cuban Believes AI Could Make Personalized Medicine Cheaper
Cuban’s AI thesis extends beyond contracts and healthcare economics. He also sees the technology potentially transforming how drugs themselves are developed and delivered.
He argued that increasingly powerful AI models could make it far cheaper to design treatments tailored to an individual’s genetic makeup, potentially opening the door to a much more personalized form of medicine.
“The cost of designing a drug personalized to your DNA could start approaching zero,” Cuban said, describing a future in which AI dramatically reduces the cost and complexity of developing individualized therapies.
That vision fits with Cuban’s broader push to use AI and automation throughout the drug supply chain. His Cost Plus Drugs service is already using AI and robotics in manufacturing, with modular production “pods” designed to produce medicines in much smaller facilities.
Cuban said the broader opportunity is much bigger than simply automating existing healthcare processes.
“This is the greatest transitional technology we have ever seen,” he said of AI.
For Cuban, the companies that benefit most may ultimately be those willing to use AI to rethink how healthcare works, rather than simply using it to make the existing system more efficient.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
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