The American Healthcare Crisis: Why the System Fails and How Innovation Could Break It

The Central Question

When Elon Musk recently posed a straightforward question on X — why can’t the US afford quality healthcare — it highlighted a crisis many feel acutely. The core issue: Americans invest enormous resources into healthcare yet receive diminishing returns. Mark Cuban went beyond commentary to expose the structural flaws that created this dysfunction, identifying seven interconnected failures that lock both employers and patients into an exploitative system.

Who’s Really Controlling the System?

The culprit isn’t mysterious. Pharmacy Benefit Managers (PBMs) — often working invisibly in the background — have engineered a system where every participant except patients and employees profits. These intermediaries control the machinery of drug distribution, pricing, and access, creating a web of conflicts of interest that no single actor can easily escape.

Seven System Failures Destroying American Healthcare Economics

1. Data Blackout: When Companies Don’t Know Their Own Spending

Self-insured employers think they’re paying for healthcare, but they can’t actually see where the money goes. PBMs deny them access to their own claims data, eliminating any meaningful ability to negotiate or understand true costs. Without visibility, there’s no leverage.

2. Employees Have No Choice in Medication

It’s not the company paying the bill that decides which drugs employees receive — it’s the PBM. This creates perverse incentives where expensive medications get prioritized over equally effective, cheaper alternatives. Employee health outcomes take a backseat to profit optimization.

3. The “Specialty Drug” Markup Illusion

One of healthcare’s greatest deceptions is the category of “specialty drugs.” These aren’t necessarily special in terms of efficacy. Instead, PBMs artificially inflate prices on standard medications, rebranding them as specialty treatments to justify extreme markups. Employers pay multiples of the actual medication cost.

4. The Sickest Pay the Most

PBM rebate structures are deliberately designed so the most vulnerable employees — the oldest, the sickest — absorb the highest costs through deductibles and co-pays. This creates a system where those with the greatest medical needs are punished most severely.

5. Independent Pharmacies Are Being Systematically Eliminated

PBM reimbursement rates to independent pharmacies deliberately undercut actual costs, forcing them out of business. As local pharmacies disappear, competition evaporates, and prices rise further. The entire ecosystem of healthcare access narrows.

6. CEOs Are Legally Prevented from Negotiating

Contracts with PBMs explicitly prohibit direct negotiations between employers and pharmaceutical manufacturers. These restrictions deliberately block the one avenue through which real cost reductions might occur.

7. Silence Through Non-Disclosure

Perhaps most insidious: contracts include strict NDAs preventing executives from publicly discussing their company’s healthcare arrangements. This enforced silence means the problems remain hidden, the system perpetuates, and no exposure of the dysfunction can occur.

Breaking the Cycle: The Direct-to-Consumer Model

Cuban’s response extends beyond diagnosis to treatment. His company, Cost Plus Drugs, circumvents the entire PBM infrastructure by selling medications directly to consumers with radical transparency. No middlemen. No hidden fees. No artificial markups obscuring the true price of medicine.

This model represents genuine disruption — not incremental reform of the existing system, but an alternative structure that renders PBM intermediation obsolete.

The Broader Implication

Musk’s question was deceptively simple, but Cuban’s seven-part answer reveals something uncomfortable: the US healthcare crisis isn’t accidental. It’s engineered. It’s maintained through contractual architecture that distributes pain while concentrating profits.

If alternative models like direct-to-consumer pharmaceuticals gain traction, they won’t just lower prices — they’ll expose how thoroughly the current system extracts wealth from patients, employers, and society at large. The question isn’t why the US can’t afford healthcare. The question is whether the industry can survive when patients finally have a choice.