The Positive Role of Patents in Protecting Cost Transparency

Jun 24, 2022 at 03:46 pm by Staff


By Paul Ketchel


Consumers are demanding more transparency in their healthcare transactions, just as they have in other areas of their lives. The days of receiving a service, paying a small co-pay, and expecting insurance to cover the rest are long gone. Now that consumers owe a greater portion of their own healthcare expenditures, they need greater insight into what services cost so they can make more informed decisions about where and when and how much to pay for care.

The good news is that we are making progress on transparency. Providers can now use patient responsibility estimation technology to inform insured patients about what their out-of-pocket costs will be and how much they have left on their annual deductibles. The challenge is that not all providers use the technology, the technology isn’t 100% accurate, and it doesn’t help consumers who are uninsured or underinsured. Those consumers, especially, need pricing information that will help them shop for the highest quality services at a price they can afford.


Price transparency and bundled services

A new marketplace is now available that addresses these challenges and benefits both consumers and providers alike. The technology includes a cost-adjustment database with predetermined prices set by participating providers in the same geographic area. Analytics are then applied to the data and used to create a single price for a set of services.

For example, patients who need a colonoscopy can go into the app to see a “bundled service” price that is inclusive of all fees: operating room, recovery room, outpatient stay, physician’s fee, anesthesia, and pathology for the specimen examination and diagnosis. Consumers can then compare pricing between multiple providers through the app. Once they find a price that fits into their budget, they are able to pre-purchase the service right from the app. Once purchased, consumers receive a redeemable proof of purchase that they give to the hospital when they register for their service.

Consumers benefit by being able to access more timely care at a price that fits their budget. Providers benefit by receiving reimbursement in as little as four days instead of a month or more. This is because the bundled pricing partner manages distribution of payments to each entity. The result is improved cashflow, reduced days in A/R, and improved self-pay collections. Providers can also gain a competitive advantage by reaching more patients and growing revenue.


The role of patents

As with many new innovations, new entrants often take advantage of the advances created by others to develop a viable business model. For example, not long after MDsave, the nation’s leading online healthcare purchasing platform, released its new bundled services solution, several organizations started buying procedures, which they resold to consumers at significantly higher prices. By doing so, they negated the benefit to both providers and consumers by eliminating all aspects of transparency and affordability.  

MDsave was able to protect its marketplace by securing patents that protect the original intent of the technology. Patents were awarded for the company’s proprietary bundled services technology as well as for its proprietary pricing tool and “talk live” button. Since securing these patents, purchasing of vouchers for resale has been completely eliminated.

The goal in the use of patents for MDsave was to protect consumers, not to inflate profits. This is a refreshing approach to the use of patents in healthcare. We’ve all heard about how “big pharma” uses patent laws as a way to block competition from creating cheaper, generic versions of their drugs once patents expire. This has allowed pharmaceutical companies to set outrageous prices in order to keep profits high, regardless of the impact on patients.


The bottom line

Patients can save between 40% to 60% when they have the ability to shop for bundled services, often without having to switch providers.[1] In some cases, uninsured consumers are able to get even lower out-of-pocket costs than the negotiated rates insured consumers have to pay. Providers benefit too. Research has shown that those who embrace pricing transparency can see a 63% increase in patient volume within just a year of adoption.[2]

Bundled services technology like MDsave supports healthcare consumerism by reducing healthcare costs in a meaningful way. But it will only work if the solutions are protected from dishonest actors who seek to benefit financially, regardless of the impact on consumers. Patents can—finally—play a positive role in helping improve access to high-quality, cost-effective care.

Paul Ketchel is CEO of MDsave. Visit


[1] MDsave data


Sections: Business/Tech