There's two different things you're talking about here. There's the cost estimate- the amount you tell people up front a surgery is likely to cost, vs the actual cost to the hospital. You don't need to guess how many syringes of X you're going to need when you've already done the surgery. At that point you just addd up all the stuff you used, price it up and that's the BOM. Cuban is saying they don't even do that - they don't track their costs on a surgery by surgey basis at all. And because they don't track any of that it's impossible to reason about it.

It's impossible to answer "How much will it actually cost to insure person X" because you don't have any of the data on what the costs will be when person X needs a given surgery, all you have is the aggregate costs of the entire system - a lot of which is misleading because things are cross-subsidized because no one is really tracking costs. It may well be that whilst every surgery is billed equally in reality obese patience are responsible for 80% of the cost. Or it may even be that the hospital is making an average loss on hip surgeries because their negotiations with the insurer drove those prices down whilst brain surgeries give a nice profit margin.

And so you can't ask "How much would it cost for the government to fund service X" because you don't know how much it costs, all you know is the aggregate money spent across all medecine.

Let's say every now and then, you need to do X.

That means you need to be prepared to do X.

And what if some of the components of X expire? That means you have to pay to keep them on hand.

And the distribution of how often you do X is absolutely not predictable. Sometimes it's months between them. Sometimes it's 10 in a day.

If you had to be prepared to serve 20 hamburgers, any given afternoon, with no warning, how much ground beef would you waste, over a year?

Counting how much ground beef you did use does actually provide some information. I'm not discounting that. But it absolutely does not tell the whole story.

>Cuban is saying they don't even do that - they don't track their costs on a surgery by surgey basis at all. And because they don't track any of that it's impossible to reason about it.

Then Cuban is wrong. I had a heart valve replacement surgery last year and I got a detailed to the penny to the mg of tylenol what they consumed and what they charged. It was not a big massive one line "heart surgery" on the invoice, there were dozens and dozens of line items. I think quite the contrary they know exactly what their inputs are to a surgery, it's just that is not the only cost you get billed.

>because you don't have any of the data on what the costs will be when person X needs a given surgery

This was exactly my point, and yes part of it is because of cross-subsidization, but it is also because my valve replacement almost certainly cost someone differently than the next guy having the same surgery the next day because of any number of factors

Also part of determining insurance costs is that you probably don't know which surgeries someone is going to need at the time the premiums are being set. Even if you knew perfectly how much every surgery in the system costs, you don't know how many of those surgeries you are going to have to pay for