Most patients wouldn’t use the words convenient, transparent or personalized to describe their billing experience with hospitals and health systems.
Cedar has set out to change that. The New York City-based company created a patient payment and engagement platform that helps modernize the medical billing process. By personalizing the patient financial experience and providing patients with an easy-to-read statement, Cedar helps healthcare providers across the country simultaneously improve patient satisfaction, collection rates and time to collect.
Cedar CEO and Co-founder Florian Otto, MD, PhD, discusses why he launched Cedar, why the consumer experience in healthcare needs to improve, and the role technology plays in transforming the patient billing process.
Editor’s note: Responses have been edited for length and clarity.
Question: You started out in medicine and dentistry. Why did you decide to make the switch from MD to CEO?
Florian Otto: I’m really passionate about healthcare and helping patients. However, while practicing on the clinical side two things stood out to me. First, if you want to be an excellent physician, you need to do the same procedure hundreds of times and for me, it was bit too monotonous.
Second, it’s much tougher to scale your work when you are a doctor. You can do 30 percent faster work, maybe 30 percent better work and maybe work a few more hours, but there are limits. What excited me about business — especially technology — is, it’s infinitely scalable. I was very drawn to this idea of making a bigger impact.
Q: How does the consumer experience in healthcare stack up when compared to other industries?
FO: Most of the innovation in healthcare has been on the medical or business side — we haven’t yet really focused on consumers. When you go into the operating room, it looks fantastic and the technology is very advanced. However, on the consumer engagement side, we are still working with pen, paper and phone. Healthcare’s consumer technology lags far behind.
Other industries, in contrast, have adopted technologies to vastly improve the consumer experience. Compare the consumer experience in healthcare with the airline industry, for example. Over the last 10 to 15 years, the airline industry made the transition away from an offline model. You used to have to buy your ticket through a travel agency, print out your boarding pass, check in again at the gate, get another pass, and then finally board the plane. As they transformed, airlines did a very good job of meeting consumer needs and bringing all of this to a digital experience. And, they didn’t just digitize outdated processes; they completely rethought the customer journey. Right now, nobody goes to a travel agency to shop for flights. Nobody goes to the check-in counter. You handle basically all interactions from your mobile device.
If you compare that to the experience of the patient in the healthcare system, it’s very different. There’s a large gap between consumer expectations and reality in healthcare.
Q: Why has healthcare fallen behind other industries in terms of the consumer experience?
FO: I don’t think we have a great excuse for why there is still such a gap today, other than we are a bit more complex. When you shop on Amazon, you have a very direct interaction — you are the only “payer.” In healthcare, it’s not a direct experience where everybody pays out of pocket for a certain amount of goods.
I think there have been some advancements. Over the last decade, healthcare providers have transitioned from the pen-and-paper model to implementing EMRs. The issue is that the companies providing these EMRs aren’t very consumer-friendly. They’re very good enterprise software companies, but for a healthcare-focused software company to understand the consumer, to develop a consumer product — it is extremely difficult.
Q: What are some ways hospitals and health systems measure the patient experience? How can they improve the process?
FO: Most health systems measure patient experience. However, many times those surveys are administered while the patient is in the hospital, which is just one part of the patient journey. It’s important to measure the experience from beginning to end — before care, at discharge and 60 days after discharge. The survey should be simple, allowing patients to use a one-to-five rating to indicate how easy it was to find the hospital and book an appointment, how happy they were with the quality of their treatment, and how happy they were with follow-up, which is the administrative and cost piece.
Q: What are some of the challenges hospital leaders can expect when it comes to enhancing the patient payment experience? How can they tackle those challenges?
FO: Personalized medicine has been around for years, but patients need a personalized experience on the billing side. For some patients, there’s a lot of friction because they never check their paper mail. For other patients, it’s difficult because they don’t understand CPT or DRG codes. Other patients have a problem paying the bill because they don’t have the money. There are a lot of issues that increase dissatisfaction and decrease the payment rate.
The patient payment process needs to be easy, simple and transparent. It should be easy to review the bill. Cedar tracks your bill, which actually reduces stress for patients. If a patient has questions or a problem with a bill, the only way to communicate with most providers is a phone call or an email. Cedar uses live and automatic chat functions to make that simpler. When a patient chats and asks a question, it’s typically resolved quickly and they pay the bill.
Q: There is a lot of talk about machine learning, AI and cloud technologies. Is healthcare ready for more technology innovation?
FO: It’s imperative to reduce the friction and personalize the experience if we want to meet today’s consumer expectations. Machine learning and AI, when applied in the background with a good interface, is actually reducing the friction.
It’s shocking to technologists that many healthcare systems host their EMRs locally and not in the cloud. Cloud technology allows Cedar to do daily updates, rather than every 18 months as is typical with locally-hosted EMRs. When our engineers build a new feature, the consumer can see that within minutes.
A lot of providers assume ‘It’s not hosted by us, so it’s not secure.’ But, in reality, the physical location in the digital world doesn’t matter. You can’t rely on your EMR vendor to solve all of your problems. If you get an update every 18 months, that’s probably not the velocity at which you want to innovate.
Q: What are your predictions and hopes in healthcare technology for the years ahead? How do we get there?
FO: Right now, most of the business and technologies are provider-centric. I think that will switch to a patient-centric model. Instead of only developing technology for hospitals or the providers, it will also be for the patients.
I also think we will see a lot of nontraditional healthcare vendors entering the market, more innovative companies from other industries. Even from e-commerce or online entertainment. I think a lot of those players will be coming into healthcare because the same consumer that goes to a healthcare system is also watching Netflix or purchasing goods from Amazon.
Q: What were your proudest accomplishments in 2018 and what can we look forward to from Cedar in the upcoming year?
FO: In 2018, we proved that Cedar has product market fit. Healthcare providers are adopting our solution, patients like to use it and payments are higher. In fact, we supported more than 359,000 patients with their billing last year and received a 95% overall patient satisfaction rate. And, nearly 20% of our users are age 65 and over. I think all of these things are a testament to how consumer-friendly our solution is. We recently heard from a 91-year-old patient who said: ‘It was a great experience, nice and easy. I didn’t have to go searching for my password or username. The entire process took less than a minute. And, no searching for a stamp!’ That really sums up the experience we think every recipient of healthcare should have.
This year, we will continue to scale our solution to more healthcare providers and expand our offering so we can impact even more aspects of the patient journey.