A group of venture capitalists recently teamed up to contribute $36 million to Cedar, the creator of a patient financial platform that personalizes the medical billing experience.
With the rise of high-deductible health plans, patients are shouldering more financial responsibility for the medical care they receive. This makes it vital for provider organizations to make it simple for patients to understand and pay their medical bills, because historically, hospitals have received only a fraction of what they are owed from patients.
New York City-based Cedar is one company helping hospitals, health systems and physician groups improve the patient financial experience. The Cedar platform leverages machine learning and data science to personalize each patient's billing process by generating the optimal outreach strategy, preferred method of payment and a unique payment plan for every patient.
Cedar CEO and Co-Founder Florian Otto, MD, PhD, told Becker's Hospital Review the company was developed with three goals in mind: personalizing the entire patient billing experience, providing patients with a user-friendly interface and offering a customer relationship management system for healthcare organizations. He said the company has hit each of these targets.
Personalizing the patient billing experience and providing patients with an easy-to-read statement makes patients more likely to pay their medical bills, according to Dr. Otto.
"In general, patients want to pay their medical bills," he said. "Our hypothesis on why people don't pay the bill is because health systems make it very, very difficult for them to pay. When we reduce this friction and make it easy and transparent for patients, they are going to pay the bill and they are happy."
He noted that provider organizations using the Cedar platform have seen collection rates increase at a minimum of 35 percent, days in accounts receivable decrease, and reductions in cost to collect.
However, the benefits of the platform aren't limited to improving financial metrics. Dr. Otto noted that personalizing and simplifying the billing process can also boost patient satisfaction.
Top investors with ties to Instagram and Flatiron Health were among a group of venture capitalists who recently teamed up to put $36 million behind Cedar. The Series B round, which was led by global investment company Kinnevik, brings the total funding amount over two rounds to $49 million, according to the funding tracker Crunchbase.
Cedar said the funding is owed to the nature of its platform and a lack of such technology in the marketplace. "Based on our rapid growth, it's clear that a digital health platform that simplifies patient billing transactions, drives increased engagement and optimizes provider processes is sorely needed," the company said in a press release.
Cedar will use the funding to continue development of its platform and to build out its existing team. The company plans to unveil new platform features later this year that will help provider organizations better engage with patients both before and after medical visits.
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