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The Future of Healthcare: “We have to automate the payment structure of healthcare in the United States; Right now, we still have 12–15 intermediaries sitting in the middle of every payment”

We have to automate the payment structure of healthcare in the United States. Right now, we still have 12–15 intermediaries sitting in the middle of every payment, and they drive up costs on both the consumer and the provider. In 2019, with the technology infrastructure we have today, there’s no reason there should be multiple […]

We have to automate the payment structure of healthcare in the United States. Right now, we still have 12–15 intermediaries sitting in the middle of every payment, and they drive up costs on both the consumer and the provider. In 2019, with the technology infrastructure we have today, there’s no reason there should be multiple intermediaries in any financial transaction.


As a part of my interview series with leaders in healthcare, I had the pleasure to interview Paul Ketchel. Paul is the founder and CEO of MDsave, a healthcare e-commerce company that allows patients to shop and compare medical procedures in an online healthcare marketplace and provides medical providers with a software infrastructure that automatically adjudicates fully price-transparent, bundled episodes of care. Mr. Ketchel hails from Brentwood, Tennessee, and has more than a decade of healthcare industry experience in both the public and private sectors. Pursuing a lifelong passion for innovation, creating efficiencies, and generally making things work better, Mr. Ketchel put his knack for streamlining processes to work when he began his career in Washington, D.C. as an aide to Senator Bill Frist, M.D.


Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?

I’ve always been an innovator. When I worked on Capitol Hill, what drew me to this career was actually working on tech policy. I got pulled into healthcare policy through Senator Bill Frist, who at that time was the first physician to serve in the Senate in over 100 years. Working with a senator, who was also a doctor, in the middle of the dot-com boom led to this sort of convergence of innovation. I saw at a really young age all of the emerging technologies that the internet revolution was opening up, and that there was a real chance to make changes in healthcare and changes in the lives of people.

I initially started working in tech and health policy, but when I got into the private sector, I joined one of the first biopharmaceutical companies in the country. The company that I worked for patented some of the first human gene expressions. Working in biotech innovation is what eventually led me to where I am today, working to implement policy changes and using technology to streamline what had been inefficient and archaic processes that have added cost to healthcare consumers and the American healthcare system in general.

Can you share the most interesting story that happened to you since you began leading your company?

When we invented technology that allowed the full bundling and automated payment of healthcare, I think the most interesting thing we discovered is that basically half of all the healthcare costs in the country that are being shouldered by consumers are really tied up in processing payments and moving money around. It was shocking that so much of the cost is not really about care delivery at all, but completely payment-related.

Beyond discovering how massive the inefficiency problem in healthcare really is, I’ve found that the most interesting stories come from our patients. They remind us just how urgent the need is to fix healthcare payment in this country. We had one woman out of Nevada whose insurance denied her MRI when she was trying to find the cause of her knee pain. Her hospital helped her buy her MRI out of pocket through MDsave, and they found a bone tumor on her femur. They caught it before it turned cancerous because she trusted her instincts and insisted on the MRI. It goes to show that we as an industry need to do more to empower these patients.

Can you tell our readers a bit about why you are an authority in the healthcare field?

When it comes to consumerism in healthcare, we’re pioneers in the field. MDsave has conducted more transparent, direct-to-consumer healthcare transactions than any company in the United States, and we have more direct-to-consumer bundled healthcare procedures than any other U.S. healthcare organization. We’re the first technology to make healthcare transparent, affordable, and shoppable for patients, in a way that also benefits the providers who offer that care. Last year, we were named #152 on the Inc 5000 list of America’s fastest growing companies. The demand for consumerism in healthcare is rising, and we’re proud to be making it happen even when others in the industry say it can’t be done.

What makes your company stand out? Can you share a story?

What I think is really unique about our company is that we’re the first company in the country that has successfully bridged the cultures of traditional healthcare infrastructure and Silicon Valley tech culture. We’re taking an old, stodgy, mechanics-driven industry and we’re connecting it to this fast-moving tech industry. What’s really made our company unique is that we have successfully bridged two seemingly opposite cultures to bring healthcare into the 21st century.

Can you share with our readers about the innovations that you are bringing to and/or see in the healthcare industry? How do you envision that this might disrupt the status quo? Which “pain point” is this trying to address?

We’re leading the charge on the full consumerization of healthcare. Allowing patients to shop, compare and purchase healthcare the same way that you would purchase any ecommerce product on the internet is absolutely possible with the technology infrastructure we have in 2019. Before, healthcare has always been delivered by multiple, siloed provider groups, with different payment structures and different contracted rates. The consumerization aspect of what MDsave’s software can do is to take all of this complex medical coding, condense it into consumer-friendly, easy-to-understand transactions, collect one payment, and connect patients directly to the provider versus going through multiple intermediaries for their healthcare. As a result of that, you’ve got providers who are able to spend more time practicing medicine versus billing, and they’re increasing their margins because you’re taking out inefficiencies. At the same time, you’re giving consumers greater access, greater choice, and greater savings than they could access before.

Healthcare consumerism addresses a number of pain points, especially balance billing, opaque pricing, and the heavy administrative burden of collecting payments. In our consumer-friendly model, the patient sees one upfront price that includes the services most often associated with that episode of care, so they only have to pay once for that episode. In the case of colonoscopy, for example, the patient price will include the facility fee that includes operating room, recovery room, and outpatient stay; the professional fee for the physician performing the procedure and postoperative follow-up; the anesthesiology fee for general or local anesthesia; and the pathology fee for specimen examination and diagnosis. This patient will receive a voucher to take to their appointment and will not have to pay a bill from an anesthesiologist or pathologist who they never saw. The providers performing the colonoscopy will have their portion of the total payment distributed to them automatically after the service is rendered.

What are your “5 Things I Wish Someone Told Me Before I Started” and why.

  1. The first thing I wish someone had told me before I started is that you’re going to hear the word “no” a lot when you’re innovating a big industry. They’ll tell you it can’t be done. You need to trust yourself, believe in yourself and believe in your team. Know that when you’re doing something really transformative and innovating, most of the time, the industry you’re innovating doesn’t believe it’s possible. That’s why the innovation opportunity is there in the first place.
  2. We heard “no” a lot in our early days. Our first challenge was teaching the current market what costs really are and what costs should be. Providers didn’t know what to charge or how much they’d been getting paid for procedures they performed every day. The second challenge, and the most difficult, was bundling together the multiple physicians, diagnostic groups, and ancillary services involved in a care episode, putting them all into one price and then distributing payment to all participating parties. Before MDsave came along, there was no way of pulling all those parties together into a unified payment structure or pay participants in an efficient, cost-effective way. The “experts” said it was impossible, that we’d never be able to bundle prices together, that there was too much variation in prices. We crossed these barriers with technical innovation.
  3. Second, focus on what your mission is as an organization. Keep focused on that mission and that growth, let that drive how you operate your financing, your company, and everything else coming down from there. Don’t drive to your financing first and your mission second. Drive to your mission first and your financing second, and the two will take care of each other.
  4. The third thing I wish I’d known when I started is that as an operator, you need to trust your own instincts. You have a lot of experts when you’re building a company that give you advice on how you should manage everything, from running the company to managing personnel to raising funds and financing. At the end of the day, as a founder and entrepreneur, you typically have an innate sixth sense that no one else really has about the business, operations, and the direction of the company. You have to trust yourself on those things and not allow yourself to get too distracted by the industry experts.
  5. We have many examples from those early days when we were told “this will never work” (it does), “it’s illegal” (it’s not), “you can’t do this” (we’re doing it in 250 hospitals across the country), “there’s just some things you can’t bundle,” “healthcare doesn’t work that way,” or “it’s not like you’re buying a set of headphones on the internet.” I’ve heard every reason why you can’t solve the problem, but no other solutions to the problem besides ours.
  6. Just because something is logical, just because something makes sense, just because something is better, doesn’t mean that industry is going to embrace it or want to do something that’s better, more efficient, cheaper, more profitable.
  7. We still run into problems of inertia, of a lack of willingness to change. We’re still dealing with some provider groups where we’re getting them paid much quicker than they were ever paid before, with a lot fewer rejections, we’re getting them upfront payment, we have a much higher net promoter score, much higher patient satisfaction among their own patients, but we still have folks who think, “Well, I should do it the old way because I might be able to get more money if some insurance company decides to pay me that.”
  8. Understand that when you’re disrupting an industry, you’re going to run into legacy forces in an industry who want to keep things exactly as they are, even if it impedes change for the better.

Let’s jump to the main focus of our interview. According to this study cited by Newsweek, the US healthcare system is ranked as the worst among high income nations. This seems shocking. Can you share with us 3–5 reasons why you think the US is ranked so poorly?

For one, I think the ranking system is wrong. I think healthcare in America is extremely expensive. I think healthcare in America has been a very black box, non-transparent process, which has made many people frustrated dissatisfied. I don’t think people in America like to have their choices taken away from them. However, I believe that from a standpoint of care delivery, outcomes, and readmission rates, American healthcare is the best in the world. I say to people all the time, if it’s really so great in Canada, why do Canadians fly to the United States? If healthcare is really so great in the Middle East, why do the children of the Saudi Royal Family fly to the Mayo Clinic for care? There’s a reason why the wealthiest people in the world come to America to pursue their healthcare.

In today’s healthcare, there are often 12–15 intermediaries in the middle of every healthcare transaction, and that adds so much unnecessary cost to each procedure. Cost-sharing and high-deductibles are on the rise, and unfortunately many Americans who have to pay out of pocket end up forgoing needed care to save money. This can lead them to end up in the Emergency Room, which is more expensive for both the patient and the provider. Surprise bills are another common fear among American patients that also arises from inefficiencies in the healthcare bureaucracy. A more transparent, consumer-friendly healthcare system can reduce cost by alleviating these inefficiencies, therefore making it easier for patients to access the care they need, when they need it, and stay out of the ER. If all providers treating the patient in an episode of care are included in the price, then there isn’t any need for surprise billing, because there isn’t any need for physician networks. Consumerized healthcare is coming, and it’s coming very quickly. Our country needs it.

You are a “healthcare insider”. If you had the power to make a change, can you share 5 changes that need to be made to improve the overall US healthcare system? Please share a story or example for each.

  1. We need to have greater access to care. What we need to have, and the mission we’re pushing first and foremost, is healthcare consumerization. Patients need to know what they’re purchasing, how much it costs them, where they can get it, and be able to make an informed decision based on their budget.
  2. We have to automate the payment structure of healthcare in the United States. Right now, we still have 12–15 intermediaries sitting in the middle of every payment, and they drive up costs on both the consumer and the provider. In 2019, with the technology infrastructure we have today, there’s no reason there should be multiple intermediaries in any financial transaction.
  3. Patients need to have more choice in America. They shouldn’t be forced to live under the constraints of a health plan design. They shouldn’t be forced to live under the constraints of networks. They shouldn’t be forced to choose which doctor they can see based on the health plan of their employer. Patients should be able to drive these decisions.
  4. We need to have free market forces put into the healthcare system. The answer in healthcare is not a government-funded plan, or more insurance-driven plans. The answer is to allow American economics to work in healthcare the way that they function in every other industry. If you put economic forces at play, you’ll see better procedures, you’ll see higher outcomes, you’ll see more choice, and you’ll see affordability increases for American consumers.
  5. When you live in the United States, you have a health insurance plan, and you pay health insurance premiums, if you have a catastrophic event, then the insurer should be forced to cover those expensive charges.

Thank you! It’s great to suggest changes, but what specific steps would need to be taken to implement your ideas? What can individuals, corporations, communities and leaders do to help?

1. As corporations, we need to continue to create and establish the technology needed to automate the payment structure of American healthcare. This will allow us to prune the multiple intermediaries from healthcare transactions.

2. Leaders can continue to demand transparency in healthcare and force the legacy system into action, so that the hold-outs will be forced to accept change.

3. Communities can rally behind local politicians and let them know that price transparency and greater healthcare access are issues that matter. Support consumerism in healthcare, and most importantly, vote whenever you can.

4. The most important thing we can do as individuals is to keep up with our routine care and screenings, stay out of the ER as much as possible, and try to head off chronic conditions with preventive care. We can educate ourselves by researching local healthcare prices, either through a shoppable marketplace like MDsave, or through transparency websites like Healthcare Bluebook. Never be afraid to ask how much your procedure is going to cost before you go through with it, especially if you are paying out of pocket.

What are your favorite books, podcasts, or resources that inspire you to be a better healthcare leader? Can you explain why you like them?

I feel that human behavior changes very little over time, and I mean even over centuries, so my favorite business book is Sun Tzu’s The Art of War. I believe that any time you’re faced with a complex question, whether it’s an innovation, if it’s in business, if it’s in disruption, you can look back at these ancient texts and understand that people are motivated by the same things, they still think the same way, and to address complex problems, you should address them the way humans have been approaching these problems for centuries.

How can our readers follow you on social media?

In my opinion, nuclear weapons and social media are the worst inventions of the 20th century.

With that said, I also appreciate the importance of conversation, so if you want to connect with me, please feel free to reach out to me via my company’s channels, @MDsave on Twitter and Facebook and MDsave, Inc. on LinkedIn.

Thank you so much for these insights! This was so inspiring!

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