"Laguna's success would be making a real dent in people's healthcare and life after hospitalization.”

Finding meaning in your work is extremely motivating, Yoni Shtein shares. He experienced that feeling of doing something significant in the military, but he struggled to find it in his career afterward. But Shtein has found that deep purpose again as CEO and co-founder of Laguna, a company in the healthcare industry that helps patients with their recovery journey after leaving the hospital. He explains that many patients end up back in the hospital or in another sub-acute venue for care after being discharged, which is very difficult for them as well as expensive for insurance and hard on providers. Preventing readmissions is an issue that the major stakeholders in U.S. healthcare can agree on and will benefit all. Shtein says having a direct impact on people’s lives in his work is the ultimate motivation to continue working hard to solve this problem.

 

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Tell me about yourself.

I am Israeli originally. I could not avoid technology. It was near and dear to my heart from childhood, so I did my undergrad in that. I was an engineer for three years at Microsoft. I moved to the States for my MBA. I moved to San Francisco to join a patent startup called RPX that went public. Then I moved over to Fortress Investment Group, which is a large private equity and credit fund.

Then I ended up returning to Israel after we lost my mother-in-law in 2016, which got my wife and I thinking about the meaning of life and doing something with deep purpose. That was my genesis and wake up moment to be doing something meaningful.

Coming from Israel, how are you so involved with such a complicated system in the U.S.?

I'm fortunate to have an amazing and experienced partner, Yael Peled Adam, the co-founder of Laguna. Also, the system is so fragmented and complex that whatever head start you think you have, the road you need to travel is so long.

We ended up learning not only about the US but also about other markets that serve as an inspiration. When you consider what's broken and how to fix it, you should not only become extremely smart in digital health in the US healthcare ecosystem. You have to be very thoughtful about stakeholder analysis. You also need to draw inspiration from other systems.

Give me a few key perspectives from your earlier research on hospital at home.

As COVID was starting, Yael and I realized that the world of hospitalization before and after will have to be re-imagined. We spent the first two months looking at the hospital at home. But there are meaningful challenges in hospitals’ willingness to adopt it. We understood that a much better strategic wedge is when folks go home, we can accompany them in their recovery journey.

I think to myself, “I'm sick. I go to the hospital. I get treatment. I come home. Great." That's not actually the case though.

On average, for every day you spend in the hospital, you recover at home a week. The average hospitalization is approximately 4.3 days, which means that on average people spend a month at home recovering alone, which is tragic because then folks have to deal with multiple challenges of recovery: medication adherence, therapy appointment adherence, understanding signs and symptoms. All with no help, with nobody to speak to.

How big is this problem?

It's huge. We've really mapped in fine actuarial detail the "patient journey" after the hospital. In Medicare and working age population, over half of people escalate from the home to more acute venues: home health, skilled nursing facilities, etc. In commercial population and working age sub-65, 40% in the year after the surgery.

The attention has gone to readmission. But certainly, your inability to stay home means you're failing to recover. This is a big problem that is costing the payers a lot. And it's certainly tragic to the patients. Half of these escalations, half of these readmissions are avoidable.

Millions of people, dozens of stakeholders, hugely complicated system: what can a startup in Ramat Gan do?

We're a startup in Ramat Gan and in the States. Everything business, clinical, and operational for Laguna from day one is in the States. Everything engineering, data, and product is here.

What we're building at Laguna is an engine, a system, that enables us to support people in a rather sophisticated manner with what we call the ways of recovery, drawing the analogy to the navigation software. Instead of navigating with the map, folks navigate the journey of recovery using a discharge summary. It is often generic. It is not written in plain English. And certainly, people's mind-set is very stressful and anxious.

We're building a system that helps break it down to individual steps and also makes our coaches available to you proactively. We engage with people in the hospitals. And we accompany them in the month thereafter until they're recovered with digital support and human support.

Why is this a win-win for various stakeholders?

Recovery and readmission avoidance is one of the rare instances in healthcare where the three Ps (patient, provider, and payer) align and agree. As patients leave the hospital, patients are certainly motivated to recover and not come back. Payers would rather pay less and would rather their patients and members recover. And providers, meaning the hospitals, since the Affordable Care Act have a variety of carrots and sticks imposed on them by the Centers for Medicare & Medicaid. This is a good instance of a problem where you have stakeholder alignment around the problem you're trying to solve.

Circle back to the idea of meaning. What does this mean for you?

I first discovered the joy and importance of meaning in my military service. I spent many years in special forces. I was fortunate to do something that I perceived to be quite important nationally. It's hugely motivating and inspiring. Moving to civilian life, I almost gave up on the hope of finding something comparable.

In my career, moving from investor to entrepreneur, I could not have imagined this step of important meaning and the extent to which it motivates you. Not only to work hard but really to solve this problem. You are foundationally and directly helping people recover. Helping people avoid tragic circumstances. Not to mention the societal and economic benefits. But you are absolutely dealing with direct impact on human lives, which is a beautiful place to be.

What do you do as the leader to build a culture where employees also feel that?

We're pretty thoughtful on culture. Yael and I very early distilled our values. We've developed this framework that we've placed on our website, and we're talking about it every week: how does our culture and values framework look like in terms of us combining our passion with focus on healthcare to drive a meaningful impact. We explain what passion means for us, what focus means for us, and what is a meaningful impact. This is not something that we just feel. This is something that we communicate to the world and are very much looking for the talent that this sense of meaning resonates with. This is something that we practice in the company and live by.

What is success with Laguna for you?

I think Laguna's success is my success. Laguna's success would be making a real dent in people's healthcare and life after hospitalization. Laguna's success is to help avoid the unnecessary readmissions. About 50% of these bad outcomes are avoidable with our interventions of combining behavioral health, care management, and digital and data tools.

As a child, what really fascinated you?

Technology was my thing as a kid. It absolutely serves me and drives me today. Meaning and inspiration: I know that that is a core need for me. And energy and passion. Laguna helps me be very authentic about who I am because it's certainly very important as a leader and an entrepreneur to live by your passions.

What inspires you today?

I think healthcare and healthcare entrepreneurs provide a lot of inspiration. Healthcare provides inspiration because we're dealing with one of the most important problems and opportunities: helping people thrive. Specifically, people who were successful in this very complicated industry of US and global digital health, that is a huge inspiration for me.

What are three words you would use to describe yourself?

Energetic, optimistic, vocal.

Michael Matias, Forbes 30 Under 30, is the author of Age is Only an Int: Lessons I Learned as a Young Entrepreneur. He studies Artificial Intelligence at Stanford University, while working as a software engineer at Hippo Insurance and as a Senior Associate at J-Ventures. Matias previously served as an officer in the 8200 unit. 20MinuteLeaders is a tech entrepreneurship interview series featuring one-on-one interviews with fascinating founders, innovators and thought leaders sharing their journeys and experiences.

 

Contributing editors: Michael Matias, Megan Ryan