Healthcare is becoming increasingly unaffordable for many consumers, and rising medical costs often limit patients' access to much-needed care.
About 100 million patients across the U.S. are struggling with medical debt, and it's hitting the middle class hardest. Nearly 17 million (23.5%) middle-class people had medical debt in 2020, higher than the 22% of lower-income people, according to a report from Third Way.
More than 10 million people have been cut from Medicaid since the end of the federal COVID-19 emergency, the majority of whom were cut due to administrative reasons.
What's more, medical debt is now the leading cause of personal bankruptcy. The share of Americans who say they or a family member delayed medical treatment due to cost rose to 38% in 2022 from 26% in 2021, according to a Gallup poll.
Medical billing startup Cedar surveyed consumers and found that 72% said affordability is the biggest challenge to paying large medical bills.
"Now more than ever, patients simply can’t afford to pay their healthcare bills on their own," said Florian Otto, CEO and co-founder of Cedar.
Cedar saw an opportunity to leverage its healthcare financial engagement platform to make it easier for patients to get access to their financial assistance options to pay their medical bills.
The company launched a new software suite, called Affordability Navigator, to connect consumers with outside funding sources and self-service tools. The offering also enables patients to directly enroll in Medicaid within Cedar's platform.
"Cedar’s Affordability Navigator is a new set of features within the Cedar Suite platform that make it easier for patients to afford their bills, with solutions like personalized payment plans, full-service Medicaid enrollment and machine-learning-powered discounts," Otto told Fierce Healthcare in an exclusive interview about the new service.
Cedar is partnering with Advocatia, a startup that provides benefits and financial assistance enrollment solution for hospitals, to integrate self-service screening and enrollment for state-based Medicaid into the Cedar patient experience.
"Providers work with Cedar, and we connect their patients to an ecosystem of payment and aid options so each patient finds the most affordable path to resolve their bills. Our integrations enable a seamless experience for patients to navigate the right aid options. Empathetic patient servicing adds to this experience, empowering patients to confidently apply for coverage at a time when they are most vulnerable," Otto said.
According to the 2024 Healthcare Financial Experience Study, the majority of consumers (63%) do not know what financial assistance options, such as Medicaid, are available.
Financial assistance resources in healthcare are not novel—Medicaid has been around since 1965, and health systems have been offering charity care programs for decades, Otto noted.
"The problem is that accessing these resources remains out of reach for many patients; they don’t know they exist, have trouble understanding the application process or don’t know they are eligible. It’s a long, complicated and sometimes embarrassing process for patients," he said.
Cedar decided to partner with Advocatia given the company's "empathetic" offerings and extensive reach to more than 200 health systems across 31 states.
"Their self-service enrollment workflow is dynamic, personalized and easy to use. With robust multi-language support, easy digital signature and document capture, patients can understand their eligibility and apply after a quick 60-second screening. It was clear that together, Cedar and Advocatia could empower millions of eligible patients to help themselves get or keep their coverage," Otto said.
AnMed, a South Carolina-based health system, is the first to launch this combined solution offered by Cedar and Advocatia.
“More than 100,000 people in South Carolina have lost their Medicaid coverage since the federal protections ended, yet many of these patients are still eligible—they just need help understanding and accessing the enrollment process,” said Christine Pearson, chief financial officer of AnMed, in a statement. “We’re thrilled to be expanding on our long-term partnership with Cedar, and, with the addition of Advocatia, to provide much-needed support to our patients with full-service Medicaid enrollment as an integrated part of the billing experience.”
With the Cedar Suite, AnMed patients are now empowered to understand and trust their medical bills, Otto noted.
Otto said Cedar’s Affordability Navigator is the "next step" in the company's vision to create a "connected financial experience in healthcare—one that brings together payers, providers, government entities and financial institutions."
Otto launched Cedar in 2016 to modernize the medical billing process and remove pain points for patients around confusing, difficult billing and administrative processes. The company built out patient-personalized medical billing and pre-visit technology that includes appointment reminders, digital registration forms and the ability to collect insurance information. It also offers Cedar Pay, a billing and payment solution.
In May 2021, Cedar bought startup OODA Health in a $425 million deal to tackle the insurance side of the market.
A year ago, the company rolled out its integrated payer-provider billing platform, called the Payer Intelligence Layer, that integrates data from both payers and providers to create a unified place for patients to manage their medical bills. Cedar's platform integrates both with payers, to gather benefits information, but also with banks that administer health savings accounts, flexible spending accounts and health reimbursement accounts to ensure members have access to all of the information in one place.
The company has raised $345 million to date, and its backers include Andreessen Horowitz, Thrive and Tiger Global Management.
As of December 2022, Cedar is engaging with 22 million patients on an annualized basis, representing a 120% increase since the beginning of 2021, according to the company. It works with more than 55 healthcare organizations, including Novant Health.
With Cedar Pay, Cedar's flagship post-visit billing and payment solution, provider clients continued to see up to a 30% lift in patient payments and 95% digital self-service payments, with 89% of patients reporting an exceptional financial experience, the company claims.
Using AnMed patients as an example, Otto explained that Cedar Pay elevates the billing experience and expands access to digital methods of payment to meet patients where they are.
"AnMed’s embrace of the Affordability Navigator aligns with the system’s mission to provide exceptional and compassionate care to all that they serve. As the first provider to adopt our full-service Medicaid enrollment offering, they’ll be able to increase insurance coverage for their patients, improve access to care and decrease costs for the health system," he said.
Cedar’s Affordability Navigator also includes a financial assistance screener to enable patients to self-screen for financial assistance eligibility without having to contact customer service and simplifies access to health benefit accounts. The solution also offers a payment plan adviser and leverages Cedar’s machine-learning-powered model to determine the optimal discount for patients.
The company also is eyeing opportunities to tap into cutting-edge technology to improve its capabilities. It's partnering with Google Cloud to leverage generative AI tools, including Vertex AI, Generative AI App Builder and others to build solutions that will assist patients in understanding and resolving their healthcare bills.
"With Google Cloud, our goal is to build AI-powered solutions that will be able to coach patients and bring further clarity to financial workflows, from pre-visit check-ins and estimates to post-visit bill resolution," Otto said.