We got an exclusive look at the presentation that Cedar used in 2020 to convince investors like Andreessen Horowitz and JPMorgan to bet on the digital health startup’s vision of a better way of paying for healthcare as it rose to a $3.2 billion valuation

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Understanding how much you owe after a doctor’s office visit or surgery can be a long, frustrating process.

There are forms that come from your health insurer summing up how much you might owe, while your doctor’s office might tell you a completely different amount. And it might be months until any of that information shows up in your mailbox, at which point you might’ve already forgotten that particular visit.

Tackling that bad billing experience is the focus of Cedar, a five-year-old New York startup. On Tuesday, the company said it raised $200 million in a Series D round led by Tiger Global Management. The round values Cedar at $3.2 billion.

The round closed nine months after Cedar raised $102 million in funding in a Series C round led by Andreessen Horowitz. $77 million of the investment was equity and the rest was venture debt from JPMorgan. 

In all, the startup has now raised more than $350 million.

Insider in June got an exclusive look at the presentation Cedar used to win over investors in the Series C round. The presentation, shared by Cedar, omits some slides that contained financial information.

The presentation shows how Cedar plans to expand beyond its initial offering, which helped make it easier to pay for a doctor visit.

In partnership with two health systems, Cedar is building a set of tools that aim to improve the experience for patients when they go to the doctor. That includes appointment reminders, software to take down insurance information and provide price estimates, and tools that let patients check in for appointments digitally.

Read on to see the full presentation.

This article was initially published in June 2020 and has been updated in March following Cedar’s $200 million Series D. 

New York-based Cedar got its start in 2016, based on the premise that medical billing is a messy process.

To fix that, Cedar works on making the experience for patients better.

After laying out the company’s mission, Cedar’s presentation to investors lays out why healthcare billing is such an issue in the US.

To start, patients are increasingly on the hook for more of their medical expenses. Americans are now on the hook for $366 billion of out-of-pocket spending, according to data from the Centers for Medicare and Medicaid Services compiled by Cedar.

It can be difficult for patients to figure out how much a visit will cost before they go to the doctor, and the experience afterward is confusing, too. Bills often come much later, and they can be hard to understand.

The billing process, Cedar contends, was not built to interact with patients. Patients are contacted both by their doctor’s office and by the insurer, and it can be confusing to figure out how much you’re expected to pay, which can result in a bill going to collections.

It’s not just patients who struggle with the billing process, the presentation argues.

As a result, health systems have gotten “aggressive” with their collection practices, in turn becoming the subject of investigations. For instance, ProPublica found that a nonprofit hospital in Memphis was suing thousands of patients for unpaid medical bills. Later, the hospital erased the debt for thousands of patients.

You can read the full story from ProPublica here.

For the past few years, fixing that billing experience has been Cedar’s focus, CEO Florian Otto told Insider in June.

Existing systems used for billing with electronic medical records, Cedar argues, aren’t built to be useful for patients.

Instead, Cedar works with those electronic medical record companies including Epic, Athenahealth, and Cerner, to replace the relationship between patients and their doctors when it comes to billing.

Within the next five years, Cedar has ambitions to interact with half of all US patients.

To do that, Cedar will need to expand into more health systems, but also grow beyond its initial focus on the billing experience. Here’s a look at its Cedar Pay system, where it got its start.

Cedar’s working on building out its “Cedar Suite” of tools for health systems, working with Novant Health in North Carolina and ChristianaCare in Delaware to start. That includes check-in tools, as well as price estimates for visits. Otto said that interest in finding touchless ways to check in patients accelerated amid the coronavirus pandemic.

It’ll also include reaching out to patients, with the hopes of making it a smoother process for patients while also leading to more payments being completed for the health system.

Along the way, Cedar also collects data that health systems can use.

In its presentation, Cedar lays out how well it’s working so far. For the most part, organizations using Cedar seem to have satisfied patients and more success in getting bills collected.

The presentation then lays out where Cedar fits into the out-of-pocket payments industry.

So far, Cedar’s collections are only a fraction of the growing out-of-pocket payments market.

As it exists today, the company’s Cedar Suite is a $10-12 billion opportunity, the presentation argues.

Cedar stands to benefit from changes that health systems are making to cope with the pandemic, such as emphasizing digital ways of interacting with patients.

The main presentation ends with a chart of the components of Cedar’s business that it anticipates helping it grow, including its work with health systems and satisfied patients.

The presentation also includes a brief appendix.

In it Cedar mentions its founders Florian Otto, who serves as CEO and Arel Lidow, who’s Cedar’s president.

It also includes the leaders within Cedar’s organization.

As of June, Cedar worked with health systems and physician groups including Maimonides Medical Center, Montefiore, WestMed Medical Group, and US Dermatology Partners.

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