Cedar Files IPO Prospectus: Revolutionizing Healthcare Billing with AI-Driven Financial Engagement Platform

Reflecting on your past healthcare experiences, receiving a complex medical bill weeks or months after leaving the hospital—filled with various numerical codes and itemized charges—requires significant effort and time to verify the accuracy of each charge. Medical billing has become an area in urgent need of breakthrough within the industry.

VCBeat (WeChat: vcbeat) has found that, as a financial management platform for patients and healthcare providers, Cedar combines machine learning with data science to offer effective solutions for physicians to improve billing operations and ensure a personalized billing experience for patients.

The U.S. healthcare revenue cycle management market is currently valued at an estimated $50 billion and is projected to grow to $90 billion over the next four years. The revenue cycle for medical billing is critical yet often overlooked. Patient payments account for 35% of healthcare providers’ revenue, second only to Medicare and Medicaid.

To create a better system for managing medical bills, Florian Otto and Arel Lidow founded the digital health platform Cedar in New York in April 2016, aiming to simplify the patient billing payment process, enhance patient engagement, and optimize healthcare providers’ services.

Florian Otto was formerly an oral and maxillofacial surgeon, later served as a consultant at McKinsey & Company, and held the position of Vice President of Sales at Zocdoc prior to founding Cedar. Arel Lidow previously served as Vice President of Product Management at AppNexus. For Cedar, they have three objectives: to personalize the patient payment experience, to provide patients with a more convenient and efficient payment platform, and to offer healthcare institutions a customer relationship management (CRM) system.

When it comes to the idea of starting a business, Florian Otto, CEO and co-founder of Cedar, mentioned his fiancée's medical experience at a hospital in Manhattan. After two hours in the emergency room, she received three different medical bills. One of them remained unpaid in the end. He believes that if a top-tier hospital in Manhattan still uses such outdated billing technology, then there must be something wrong with the entire healthcare industry.

Florian Otto’s prior experience as a physician and his tenure at Zocdoc have also shaped the company’s development trajectory. He noted that patient satisfaction has become more critical than ever, particularly in light of the emergence of online appointment platforms like Zocdoc. The changes he observed at Zocdoc helped him recognize the evolving trends in consumer preferences within the healthcare industry, as well as the fact that enhancing patient experience yields win-win outcomes for both patients and physicians.

Florian Otto believes that what sets Cedar apart is its analysis of millions of internal and external data points, rather than relying on a single metric such as credit scores, to gain insights into how to effectively communicate and engage with patients, thereby ensuring optimal outcomes. For example, we can help physicians analyze whether a patient is more likely to respond to billing-related messages via phone call, text message, email, or postal mail, and then establish contact through the preferred channel to facilitate the fastest payment process.

Cedar’s financial management platform partners with healthcare institutions to help them organize patients’ unpaid bills. When patients pay their medical expenses, they can opt in to receive notifications from Cedar, which then sends the bills to patients on behalf of the healthcare providers.

Clear and Concise Billing— Consolidate complex billing details into online invoices, with no downloads or apps required.

Personalized Communication—Leverage data to analyze patients and communicate through the channels they are most likely to respond to, such as mobile phones, email, or letters.

Diverse Payment Options—Not just checks or credit cards, but customized payment options.

Timely Assistance—Rapidly respond to patient inquiries and streamline the payment process through real-time communication features.

(Image source: Cedar official website)

Furthermore, the platform features a customer relationship management (CRM) system tailored for healthcare organizations. Through this system, healthcare organizations can manage patient engagement, review patients’ historical billing information, monitor patients’ financial behaviors, and track key metrics in a timely manner, such as collection rates, collection costs, and time-to-collect. By providing data-driven recommendations, the platform optimizes all interactions with patients. The Cedar platform can also integrate with any electronic health record (EHR) or practice management system (PMS).

Customized Financial Operations Interface—Closely monitor patient engagement, satisfaction, and real-time revenue collection outcomes.

"White Label" Solutions—Build your brand through the Cedar platform to prevent any potential patient confusion.

Patient Relationship Management—Tracking and communicating about all patient issues can further optimize services.

(Image source: Cedar official website)

In the field of medical bill payments in the United States, Simplee, known as the “PayPal of healthcare,” has long been established. Founded in 2010, Simplee is a U.S.-based software company specializing in payment services for the healthcare sector. Unlike Cedar, Simplee has launched multiple products, including a financial management app that enables consumers to track their medical expenses, an enterprise-grade software platform for healthcare institutions called SimpleePAY, and B2B payment and patient loyalty service platforms. The Simplee financial software payment platform primarily consists of three core products: Simplee Estimate, Simplee Wallet, and Simplee Financial Care. Simplee Estimate helps healthcare providers build trust with patients from the outset. Through intelligent and coordinated communication via Simplee Wallet, users can clearly understand their outstanding balances and the reasons behind them, while its self-service bill payment platform facilitates more convenient medical bill payments. Simplee Financial Care offers user-friendly financial options, providing cash flow assistance to patients while reducing the financial burden on both patients and healthcare providers.

(Image source: simplee)

December 2017, Cedar secured $13 million in Series A financing, with participation from prominent investment firms including Founders Fund, SV Angel, Martin Ventures, and Thrive Capital.

In the initial trial, healthcare providers using the Cedar platform achieved significant results, including a 22% increase in the average collection rate, a 33% reduction in days sales outstanding (DSO), a 62% increase in the number of patients making self-service payments, and patient satisfaction with the Cedar platform exceeding 90%.

Following the completion of its Series A financing, Cedar’s primary objective is to expand its consumer service offerings, while further broadening its business scope and enlarging its professional team.

January 2018, as a leader in the field of medical privacy and security, BluePrint Healthcare IT announced that Cedar has met the standards of the Health Information Trust Alliance Common Security Framework (HITRUST CSF). This indicates that the Cedar application complies with major healthcare requirements and can effectively protect personal information. The Cedar platform, based on Amazon Web Services (AWS), has already obtained the Health Information Trust Alliance's information security certification.

March 2018Cedar launched Cedar Cares, a brand-new community-focused charitable initiative. The first program under Cedar Cares is to support the Colorado Rehabilitation Services Volunteer Partnership (RSVP) Clinic, an institution that provides outpatient rehabilitation services for children and adults suffering from brain disorders, spinal cord conditions, stroke, and amputations. Cedar donated $100,000 to this clinic. Additionally, it assisted a medical organization in Colorado in enhancing the independence, cost-effectiveness, and community engagement of its rehabilitation services, enabling the organization to better serve uninsured individuals with serious illnesses.

June 2018Cedar has completed a $36 million Series B financing round, led by the global investment firm Kinnevik. Other participants include Founders Fund, Thrive Capital, Lakestar, Sound Ventures, Instagram co-founder Kevin Systrom, and Nat Turner from Flatiron Health. Cedar plans to use this funding to further develop its next-generation innovative platform and expand its current team, with new features and functionalities scheduled for launch in the second half of this year. These enhancements aim to enable healthcare providers to engage more effectively with patients before and after medical visits.

(Image source: AlleyWatch)

Cedar has established partnerships with healthcare institutions such as Montefiore Medical Center, U.S. Anesthesia Partners, and Westmed Medical Group, creating a transparent data platform for hospital financial management. Through modern, intelligent communication methods, it provides patients with convenient payment options. Cedar acts on behalf of its clients to engage with nearly 100,000 patients across the country, helping them settle tens of thousands of medical bills each month. By leveraging this platform, these healthcare institutions have achieved a 35% increase in collection rates, a 50% reduction in days sales outstanding (DSO), a 95% customer satisfaction rate, and a 60% increase in the number of self-service payments.

One of Cedar’s partners, Crystal Run Healthcare (Crystal Run), is one of the fastest-growing multi-specialty group practices in the United States, with over 400 physicians across nearly 50 medical specialties. It is also a physician-led Accountable Care Organization (ACO) and a member of the Montefiore Health System. Through its partnership with Cedar, Crystal Run has improved patient satisfaction and accounts receivable performance within its revenue cycle. Within four months, Cedar helped enhance Crystal Run’s patient medical billing payment services. The actual collection rate increased, the average collection period was reduced to 25 days, patient satisfaction reached 95%, and operational costs were significantly reduced.

Sue Gillies, Vice President of Revenue Cycle Management at Crystal Run, stated that Cedar has helped us improve efficiency in patient billing services, largely due to the platform’s short cycle time and rapid feedback loop. Cedar is now our sole partner for post-visit revenue cycle services, a change that has enabled us to streamline operations. We are confident that through continued collaboration, we can better serve patients while achieving our financial goals.

Kareem Zaki of Thrive Capital believes that, after understanding the current process by which patients pay medical bills, it is evident that the consumer experience in healthcare lags behind nearly every other sector. We have found that Cedar offers more than a stopgap solution; they approach patient billing from an entirely different perspective, setting new standards for revenue cycle management.

Joel Perlman, an advisor to Cedar and former Executive Vice President and Chief Financial Officer of New York’s Montefiore Health System, believes that patient payments are a critical component of the revenue cycle, making it essential for hospitals and health systems to provide patients with the best possible service. Cedar understands what “patient-first” truly means in the healthcare technology sector and helps providers improve the most frustrating and emotionally charged aspects of the patient payment process. Consequently, hospitals and health systems will see improvements not only in collections, billing operations, and days sales outstanding (DSO), but also in overall patient satisfaction.

Reference:

1.https://www.cedar.com/

2.http://www.alleywatch.com/2018/05/cedar-simplifies-your-medical-bill/

3.https://hitconsultant.net/2018/06/25/cedar-patient-financial-management/

4.https://www.mobihealthnews.com/content/cedars-intelligent-patient-billing-platform-draws-13m-series-round