Friends,

This episode is about a domain of healthcare delivery that will undergo a fundamental transformation over the next 3 – 5 years. It is the most precarious and fragmented stage of care – post-hospital discharge and post-acute care transitions. It is a side of healthcare that is ripe for disruption, with the potential to greatly reduce readmissions, reduce total costs of care, and dramatically reduce preventable pain and suffering for patients and their families.

Our guest today, Yoni Shtein, is a serial entrepreneur who started his journey as a software engineer at Microsoft. Having completed his MBA at Harvard, Yoni joined RPX Corp as a founding member of the insurance business. After RPX went public, Yoni left to co-found and merge a tech fund into Fortress Investment Group, where he spent six years as an investor. Yoni then moved to Israel and launched Laguna Health, a ‘digital recovery assurance company’, with his longtime friend and colleague from Microsoft, Yael Peled Adam. They also have recently brought Dr. Alan Spiro on as their President and Chief Medical Officer.

In this episode, we’ll discover:

During the interview Yoni states his fundamental thesis: “Laguna is reframing healthcare in changing the dialogue from readmissions and provider penalties to member ‘recovery journeys’ and payer cost drivers.”

He points out that the most fundamental problem in transitions of care is the misalignment of incentives. Let’s unpack his statement.

The reality is that healthcare systems and provider groups are not financially incentivized to optimize patients’ health after discharge. While there has been an increased focus over the past few years on reducing readmission rates (driven in large part by CMS readmission penalties); the fact is that hospitals’ financials are not aligned to post-hospital care. And, just to be clear, this is not to blame hospital systems. Instead, it’s a commentary on how care is paid for in our country. Given that reality, Yoni and his colleagues are targeting their efforts at entities whose business models are aligned with improving post-discharge care: (1) self-insured employers; (2) Medicare Advantage Health Plans; and (3) payers or healthcare systems that are taking financial risk for their populations’ total cost of care.

A second reframe that Laguna is introducing is instead of focusing on a metric (i.e. 30-day readmission rate); they are focused on the patient’s “recovery journey”. They’re using decades of published research to identify “recovery barriers”, and are designing their products and services to mitigate and eliminate those barriers.

A third reframe that Laguna has introduced is that they have designed their care model to address the behavioral and contextual aspects of care.  They’re identifying and solving for the daily barriers that people face in engaging with healthcare and optimizing their health.

According to Yoni, over 50% of all readmissions are preventable. That means that the American healthcare system is failing patients and their families one out of every two readmissions. It’s been said that our healthcare system is perfectly designed to deliver the results it delivers. But if we understand how wrong those results are, why aren’t we changing the system more intentionally and more immediately? Why aren’t more healthcare leaders not pushing to create a new healthcare? Far from being discouraged, these questions only strengthen my resolve to seek avenues to create a new and more humanistic healthcare system. And, it also strengthens my belief that we need more leaders like those in Laguna, who are reframing healthcare to be what patients, their families, as well as providers need it to be, and not what ‘the system’ dictates it be.

Until Next Time, Be Well.

Zeev Neuwirth, MD