Cedar to acquire OODA Health for $425 million
Using a technology platform for both providers and payers, Cedar says it is tackling a fragmented billing system.
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Cedar, the maker of an intelligent patient billing platform, is set to acquire healthcare technology company OODA Health for $425 million.
The news comes shortly after OODA wrapped up a $200 million series D funding round in March.
Expected to close this month, Cedar said the acquisition is an essential step as it aims to create a one-stop transparent billing platform for consumers. Cedar is already engaging with more than 300,000 consumers a day.
Under the acquisition agreement, leaders from both companies will stay on, including Florian Otto, who will serve as CEO for the combined company. OODA Health's Seth Cohen will become president of Cedar. Cedar cofounder Arel Lidow and OODA Health cofounder Anshul Amar will serve as chief co-maker officers.
Headquartered in New York City, the company expects to add offices in San Francisco and Salt Lake City.
WHY THIS MATTERS
OODA Health's platform links payer systems for around 20 organizations including Anthem, Blue Cross Blue Shield of Massachusetts and CommonSpirit Health. On its end, Cedar partners with over 35 healthcare providers including Summit Health, Yale New Haven Health and Novant Health.
According to Cedar CEO and cofounder Florian Otto, a fragmented provider and payer billing process is one of multiple obstacles that hampers consumers' experience when paying for healthcare.
Consumers, Otto said, need "greater financial clarity and more affordable healthcare -- and the experience with one's provider or one's payer is just part of the issue."
Citing a 2020 healthcare consumer experience study conducted by Forrester Consulting, Cedar claims that 84% of adults in the U.S. worry about paying their medical bills in the next year. One in 10 consumers won't pay their bill if they don't understand the administrative process.
To conduct the study, Forrester surveyed over 1,500 American healthcare consumers.
THE LARGER TREND
Billing has long been a hurdle for patients and providers. In recent years, several startups have launched with the aim of tackling that hurdle.
In 2020, startups MedPilot and PatientPay brought in $1.5 million and $6.15 million respectively to develop their product lines.
Cedar has also had several successful funding rounds, including its initial $13 million Series A in 2017 and a $42 million Series B round in 2018.
ON THE RECORD
"We're tackling healthcare administration and billing head-on by building the most comprehensive technology and services platform for providers and payers. We're thrilled to unite our two teams with that goal in mind and are excited to make a more positive and meaningful impact on the lives of consumers," said Seth Cohen, co-CEO and co-founder of OODA Health.
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