Cedar

Cedar co-founders Dr. Florian Otto (left) and Arel Lidow stand inside the Cedar office
Healthcare finance platform Cedar has raised $345 million to date. (Cedar)

Cedar is a winner of FierceHealthcare's Fierce 15 awards. See our other honorees here.

Cedar was founded in 2016 to improve the patient billing experience.

Cedar

The big idea: Personalized healthcare financial engagement platform

Headquarters: New York, N.Y.

CEO: Florian Otto

Launched: April 2016

Latest milestone: Acquisition of OODA Health in May 2021

Goal for 2022: Prioritizing integrations for payers and providers, with the goal of improving the patient experience and healthcare affordability.

Funding to date: $345 million. Funders include Andreessen Horowitz, Thrive and Tiger Global Management.

FY2020 revenue: Declined to reveal.

Number of employees: 530

Where most healthcare financial service providers focus on metrics like cash collections, Cedar’s goal is to help patients resolve bills through the application of best-in-class data science and user interface design.

“Unlike our competitors, Cedar’s leadership team has deep experience in building great customer experiences and financial technology,” Cedar CEO Florian Otto told Fierce Healthcare. “Our data science and design teams work together to design thoughtful features and deliver personalized experiences that we continuously improve through experimentation.”

To measure its impact in this area, Cedar created a new metric it calls the “resolution rate.” Instead of measuring dollars collected, the company measures the number of invoices fully resolved and evaluates it alongside patient satisfaction scores. The company’s tools help three in four patients who interact with the platform to avoid collections by providing them clarity into their healthcare costs and offering them pathways to make those costs affordable.

Investors have taken notice. Its $200 million series D funding round completed in 2021 brought the company to unicorn status, with a $3.2 billion valuation. And it’s not resting on its laurels: Cedar’s acquisition of OODA Health in 2021 extended its reach to 55 live payer and provider clients. At the same time, it increased daily engaged users by 55%.

Next, the company aims to rapidly scale its engineering team, positioning itself as a high-growth technology leader bringing much-needed transparency and cost certainty to the healthcare financial experience.


Fierce insights from Florian Otto, CEO of Cedar

What is your best piece of advice for launching a healthcare company that challenges the status quo?

I’ve always felt that our competition comes from status quo and inertia. The disruptive innovation that we’ve seen across more traditional consumer-facing industries—retail, banking, air travel, etc. — can present a challenge in large enterprise markets. There is a lot of hesitancy around change.

Hospitals and health systems, for example, tend to be very risk-averse—and for good reason. As a medical institution, you don't really want to take risks. I was a physician, and you're always trained not to take any chances but instead follow the proven pathway.

However, COVID-19 has been called the “great accelerator” for a reason. A 2020 McKinsey survey revealed that across all sectors and regions, the pandemic has sped up the way companies do business, and many temporary digital solutions are expected to be long-lasting. I would tell healthcare entrepreneurs to take advantage of this momentum and provide value to organizations by making sure they don’t go back to the way things were.

Florian Otto, CEO of Cedar
Florian Otto (Cedar)

What is the failure you’ve learned the best lesson from?

A failure in communication a few years ago taught me a lot about what it really means to be an entrepreneur. I had a meeting with someone in Seattle, and I had planned to fly there and back (from New York City) in just one day. However, when I landed, I had a voicemail from the person I was supposed to meet with asking if we could change to a phone meeting, as he wasn’t coming to the office.

In addition to learning that a day trip to the west coast isn’t always the best idea, I think what I really took away here is that being an entrepreneur is not necessarily always the most glamorous life. You need to be persistent, understand that there will be setbacks and stay focused on what really matters to the success of your company.

What is the book you recommend to other healthcare leaders?

There are several healthcare-focused books that I find myself returning to often. One of my favorites is “Priced Out” by Uwe Reihardt. It’s probably the best book out there on why healthcare in the U.S. is so expensive, in addition to why it doesn’t have to be that way.

Putting healthcare aside for the moment, I just finished “The Man Behind the Microchip” by Leslie Berlin, which is a must-read for any business leader. It’s a great retro on the ascent of Silicon Valley, with useful lessons on leadership and entrepreneurship. Bob Noyce was a hero, and his legacy cannot be overstated.

What is your prediction for how the healthcare industry will change in 2022?

While digital healthcare has evolved quickly this past year, other industries have innovated faster, which has increased consumers’ expectations for how intuitive technology can integrate into their daily lives. In 2022, the focus needs to shift back to the individual and improving personalization to increase consumer engagement.

What advice would you give to healthcare leaders seeking to make a real impact on health equity?

Earlier this year, I had the privilege of speaking with Marji Karlin of NYC Health + Hospitals and Toyin Ajayi of Cityblock on effective strategies for advancing diversity, equity and inclusion, and how—by working to improve DE&I efforts—healthcare organizations can improve outcomes for everyone.

One important topic of conversation we touched on is the need to acknowledge an individual’s entire life when it comes to their health—including the communities in which they live, social experiences, environmental risk factors and, in many cases, systemic racism. Without understanding and addressing all of these factors, it is not possible to make a real impact on health equity.

In this vein, we recently shared Cedar’s Anti-Racism Pledge, which will help us make measurable, sustainable progress in improving the healthcare outcomes of those our products serve.

Cedar
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