Be transparent. Transparent billing is our business model, and transparency with each other is how we operate as a company. One of my favorite traditions at Cedar is the team meeting that we hold every quarter after the board meeting where I share with the team exactly what I shared with the Board of Directors. I also kept everyone in the loop as we went through the latest round of financing. It is imperative at Cedar that everyone knows what’s going on, the staff is an extension of the family.
As a part of our series about business leaders who are shaking things up in their industry, I had the pleasure of interviewing Florian Otto.
Florian is CEO and Co-Founder of Cedar, a healthcare financial engagement platform for hospitals, health systems and medical groups that clarifies and simplifies the financial experience for patients, and also improves bill resolution and payment outcomes for providers. Prior to Cedar, Florian founded a daily deal company in Brazil (ClubeUrbano) that was eventually acquired by Groupon where he became Chief Executive Officer of Groupon Brazil, and was also an executive at Zocdoc where he drove the commercial adoption of the platform. Florian holds a MD, DDS and PhD from the University of Freiburg, Germany.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
I am German, and I earned an MD, a DDS and a PhD in both medicine and dentistry in Germany. My original plan was to go into maxillofacial surgery. Growing up, I always wanted to be in medicine, but as I was going through school I started to have the feeling that I really wanted to do something that helped a lot of people. I saw that to become a great surgeon was going to take years, and then, as a surgeon I could only help one person at a time. The need to make a difference on a grander scale was great, so after I graduated, I went to work in the healthcare practice at McKinsey, first in Germany then in Brazil.
In Brazil, in 2010, I took what I’d learned at McKinsey and I started a company called ClubeUrbano, it was a daily deals company like Groupon, and Groupon ended up buying it and I became the CEO of Groupon Brazil.
Because of my medical training, I’d always had a passion for healthcare. I knew I didn’t want to practice medicine, but again, that need to make a difference in people’s health was strong. I moved to New York to support my wife’s career and met one of Zocdoc’s co-founders and went to work for them. While there, a personal experience with our antiquated medical billing system led me to start Cedar.
Can you tell our readers what it is about the work you’re doing that’s disruptive?
I think it’s important to start with the ‘why’ of the story to understand why what we are doing is truly disruptive — particularly in a post-COVID world. Like so many ideas, Cedar was born from a bad experience. My wife had a bad billing experience at a hospital, which was just like what thousands of Americans go through every day. She went to the hospital and later received a stack of bills with strange codes — an invoice from the hospital. She then got another invoice from a lab, and another from an imaging center, which went to the wrong address and ended up in collections. I knew there had to be a better way to give patients the information they need to pay their bills, and to actually get providers the revenue they depend on to continue to provide much needed care.
The reality is that how we currently bill patients for their healthcare services usually includes some combination of confusing paper statements, unclear or surprise costs, aggressive collections agencies, and sometimes even wage garnishment or lawsuits that not only do not serve patients, but are only marginally effective in recouping costs for providers. In response, I co-founded Cedar with the specific goal of redesigning how we engage patients in the financial component of their healthcare by offering them a tool to help them better understand and take control of their healthcare bills. Our approach is unique in the healthcare space, but is exactly how patients are used to interacting with other parts of their lives be it travel, financial services or retail.
Cedar’s flagship product, Cedar Pay, provides medical bills that are intuitive and navigable, offers payment options that make sense for the individual and engages patients to resolve balances in the ways that are most convenient to them. Cedar provides outreach in whatever way is best for the patient (paper, text, email, call) alongside a bill that is easy-to-understand; we translate CPT codes into plain-english descriptions so that patients see exactly what they are being billed for.
Cedar is providing the modern, convenient and transparent financial experience that patients deserve — one that begins the moment a patient seeks out medical assistance with pre-visit scheduling, and that continues throughout the entire care journey, including billing, payment and administrative resolution.
And it works. Clients that have adopted the platform have typically seen a 30% lift in patient collections, and a 95% patient satisfaction rate.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
I once took a meeting with someone in Seattle where I had planned to fly there and back — from New York City — in one day. After I landed in Seattle, I received a call from the person I was supposed to meet with letting me know that he wasn’t coming into the office today, and that he needed to change our in-person meeting to a phone meeting. On the bright side, at least we wouldn’t mess up the time zones….
While I can look back today on this ill-fated coast-to-coast trip today and laugh, I think the most important lesson to be learned here is that being an entrepreneur isn’t always as glamorous as it seems. You need to have a lot of persistence, not take things too personally — and be willing to fly across the country twice in one day in a middle seat (luckily, unnecessary business trips are not a concern at the moment for anyone).
We all need a little help along the journey. Who have been some of your mentors? Can you share a story about how they made an impact?
I have relied on many mentors throughout my career, and honestly, my mentors have changed as my career has evolved.
Right now, I am doing a lot more public-facing communication than I have done in the past and I look to Cedar’s Head of Marketing, Bethany Hale, and her team for guidance on that. I know that it is hard work, but she makes it look easy, so I am learning a lot from her.
When it comes to more general business guidance, I really count on Nat Turner from Flatiron Health, who is also one of our investors. Nat has been in the healthcare technology business for a long time, and his advice is invaluable.
A strong network and a group of people that I know will be there when I reach out have been the key to my success so far — I can’t stress this enough. Nobody can do this alone.
In today’s parlance, being disruptive is usually a positive adjective. But is disrupting always good? When do we say the converse, that a system or structure has ‘withstood the test of time’? Can you articulate to our readers when disrupting an industry is positive, and when disrupting an industry is ‘not so positive’? Can you share some examples of what you mean?
In order to evaluate whether disruption is “good” or “bad,” you have to ask yourself: “is the underlying industry broken?” If the answer is yes, then disruption is necessary — as long as it leads to dramatic improvement. However, if the fundamentals of an industry are solid, then usually only incremental change is needed. It’s not worth the disruption if you can only provide a slightly better solution; I like to say that disruptive technology should make something 10 times better, not 10% better.
We founded Cedar because we knew that the traditional practices of healthcare billing — confusing paper statements, aggressive collections agencies, and even wage garnishment or lawsuits — do not serve patients or providers. And in order to succeed in our mission to improve the patient financial experience, we have to develop a solution that is dramatically better. This is what drives us to come to work and solve complex problems each and every day.
Can you share 3 of the best words of advice you’ve gotten along your journey? Please give a story or example for each.
Transparent billing is our business model, and transparency with each other is how we operate as a company. One of my favorite traditions at Cedar is the team meeting that we hold every quarter after the board meeting where I share with the team exactly what I shared with the Board of Directors. I also kept everyone in the loop as we went through the latest round of financing. It is imperative at Cedar that everyone knows what’s going on, the staff is an extension of the family.
Focus on your vision.
There are so many interesting things out there to work on and do, but I have to stop and ask myself — “does this solve the problem? Is this grounded in Cedar’s mission?” If the answer is no, I go back to focus on tasks that are calibrated to move Cedar’s work forward.
Be positive, stay open.
As an entrepreneur I know that I will make mistakes and suffer from setbacks. They are fine as long as I learn from them. I have a favorite Samuel Beckett quote “Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.” If I am improving, I am winning. The same goes for being open to feedback. If I look at feedback as negative or an attack on my character, I am not growing, and when I don’t grow neither does my company — I look at all feedback as something that can help me grow.
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
We are a “B2B2C” company, but our direct customers are large health systems and physician groups. Generating quality leads is a challenge for any business. But for Cedar, what has worked is the following:
- Client referrals — it sounds cliche, but truly our best leads come from the relationships we have with clients who have seen tangible benefit from our platform.
- Events — While networking certainly looks different now due to COVID-19, our partnership team would likely tell you that many of our leads and contacts were generated based on our participation in various industry events where we knew important conversations around patient engagement, the financial infrastructure of our healthcare systems, etc., would be happening. It is really about making sure we are showing up and engaging in those conversations in a way that is focused on the solution. These days, like the rest of the world, we’ve transitioned to virtual events and experiences, hosting well-attended webinars in which industry leaders share best practices for getting through this unprecedented time.
- Account-Based Marketing — Just like our platform offers patients a personalized financial experience, we’ve seen a lot of value in engaging with our ideal customer targets. By focusing on the right leads, we can offer them customized solutions — including offering the most relevant content at the right place and time — when they need it most.
- Marketing — Our solution works, and our platform has been a game-changer for both providers and patients. So it’s important that those who stand to most benefit know that it exists and what the specific value proposition is to them. We have a really strong marketing team that has done a great job of telling our story and increasing the visibility of our offering.
Overall, you can’t do any of this if you don’t have a passion for it. Starting a new company, generating leads, this is all hard work. But I knew going into it that Cedar has a revolutionary product that could really change the healthcare industry, and that fueled my passion. That’s what gets me going every morning.
We are sure you aren’t done. How are you going to shake things up next?
The COVID-19 crisis has really forced the healthcare system into some major changes. Telehealth, which had previously been an interesting experiment, is now a way of life. And along with that, patients need a better healthcare financial experience, and healthcare providers need to get paid so that they can continue to provide care — particularly for those that are the most vulnerable.
But to help solve the real problems of healthcare costs and price transparency, financial conversations need to happen earlier in the billing process, before patients even step foot in a medical facility.
We recently announced that we raised 102 million dollars in Series C funding, led by Andreessen Horowitz, and plan to use the funding to expand our product offerings to better engage patients prior to receiving care. Our pre-service offering helps patients save time in the waiting room by enabling self-serve registration and prepayment, in addition to enabling meaningful price transparency to help people better understand and anticipate out-of-pocket expenses well in advance of receiving the bill weeks after a visit. Our new innovation partnership with Novant Health will allow us to advance and accelerate key innovation initiatives that extend further into pre-visit patient digital engagement.
Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?
I love to read, and there are some business and healthcare-focused books that I return to year after year. There is some magic in these books — I see different things every time I crack the spine, things that I hadn’t remembered seeing. Here are my top five:
1) Made in America by Sam Walton: A great story about an amazing entrepreneur of the last century.
2) Only the Paranoid Survive by Andy Grove: Contains highly actionable advice on competition from one of the best tech CEOs in history.
3) The Advantage by Patrick Lencioni: This book is very rich with advice on how teams should function and how strategy gets made.
4) Catastrophic Care by David Goldhill: An outstanding book about the healthcare system.
5) Priced Out by Uwe Reinhardt: This is probably the best book offering details of the cost implications in the U.S. healthcare system.
I also enjoy listening to a few podcasts. One I never skip is the a16z podcast which I find really offers a lot of insightful discussions around tech and culture trends with relevant industry experts and business leaders. I also like their more news-driven podcast “16 Minutes.”
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
At Cedar, we live by the motto “it pays to care.” To us that means that our business is rooted in really caring about the people we serve — both patients and healthcare providers. When things are clear, easy and relevant for patients, providers see better financial results, so what’s good for patients is good for providers. On the patient side, it’s so gratifying to hear things like, “This was the perfect bill paying system. Medical bills are intimidating and cause stress, this was totally stress free. Was able to enter into a comfortable payment plan where my card is always charged, and I don’t have to worry about calling back on certain days. Love it, thank you!” And, when I read that one health system we work with doubled collections and achieved a 96% patient satisfaction rate with Cedar, I am incredibly proud.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
Obviously, if I could inspire a movement, it would definitely be about health. One of the most critically important aspects of health is preventive care, so perhaps a movement toward creating a “National Checkup Day.” I envision health clinics in parks, malls, farmer’s markets, and other places where people meet (with today’s appropriate safety precautions, of course), to help people get some basic health checkups, and help schedule complete preventive care appointments. People would be able to use their smartphones to find a ‘Checkup Site’ near where they are and could, of course, use the Cedar platform to guide the financial experience of their visit. I think having that access, and making it the same day every year could really underscore not only the role of technology in supporting our health, but also the vital importance of preventive care.
How can our readers follow you online?
This was very inspiring. Thank you so much for joining us!