HC9 presents an interview series with portfolio company leaders.  We’re interested in how they are solving health care’s biggest problems, what drove them to start a company, and why they chose to work with HC9. 

Richard Lungen (Founder and General Partner, HC9 Ventures)

Today we’re chatting with Yoni Shtein, CEO of Laguna Health.  Yoni, thank you for being here today. When and why did you found Laguna? What has the journey been like since then?

Yoni Shtein (CEO – Laguna Health)

Several years prior to founding Laguna, my mother-in-law passed away after she was discharged from the hospital following a routine admission. It was very unexpected and traumatic for my family, leading me to recalibrate many things. It was so impactful that I left a successful career in finance to focus on the healthcare space.

Then, along came COVID and I saw how so many people were going through similar, painful experiences. In fact, 36 million people return to their homes directly after a surgery. I started to understand the need for support during that time and the opportunity to improve that experience.

I joined up with a long-time friend and collaborator, Yael, who’s had her own experiences with the healthcare system as an Olympic athlete. Yael and I started out together as geeky, software engineers at Microsoft. Our complimentary skills and alignment around improving the healthcare experience brought us back together to launch Laguna.

We’ve evolved quite a bit from our original “transitions of care” model, but it was a really amazing launch pad for us. We spent a lot of time understanding which care models were most effective and then built on those. We piloted these models along with the Mayo Clinic and Northshore, reducing readmissions by 35% and related expenses by 50%.

With a strong foundation based on proven care management models, we’ve been able to leverage the power of Conversational AI to drive efficiencies within care teams. While most of the companies in our space started out by driving efficiency through automating note taking, we started out by driving better care. This gives our platform a depth and specialization that is unique and powerful.

Richard Lungen

I’d love to hear how the Laguna approach is differentiated in the market.

Yoni Shtein

In this business, you want to be very on trend, differentiated, and seamless from an integration standpoint. We have a huge tailwind in the popularity of Conversational AI at the moment, which is conducive to a really interesting opportunity for us to benefit from that, as well as the differentiation in our product offering and who we target as customers.

Generally speaking, most other AI-driven efficiency solutions are primarily focused on the provider side of the world. Solutions like Abridge, Nabla, and Suki target providers, health systems, and clinics to automate note-taking via ambient listening, while a solution like Hippocratic AI does more of the robotic care and case management.

Laguna focuses on health plans. While one of our efficiency drivers is automated note-taking, we go beyond to deliver effectiveness by helping care managers drive better outcomes for patients. We also provide our clients with actuarial proof of our results. We worked with Havarti Risk (formerly Pasco), founded by the former chief actuary of Elevance, to validate our efficiency and effectiveness.

Finally, integration is one of our most important differentiators. You could be driving incredible value with extensive validation, referenceable customers, but if your buyer needs to speak with IT, it’s probably dead. healthcare IT is really, really hard, and can move very slowly. We did the work to build a seamless co-pilot that doesn’t require the customer to change anything from the care team composition standpoint, workflow, or tech stack. It runs on any cloud-based care management platform or EHR, which makes it incredibly easy to insert into your existing technology ecosystem.

Richard Lungen

You have touched on actuarial numbers for both efficiency and clinical outcomes. Do you have actual numbers you can share?

Yoni Shtein

Of our core KPIs, number one is that we provide a 29% efficiency increase, and that number is probably on the conservative side. Number two is the ability to consistently improve engagement, satisfaction, and cost, including a 35% reduction in readmissions, in both 30 days and 90 days, and across conditions. Last but not least, we drive costs down significantly, by reducing readmissions and ED visits.

Richard Lungen

What’s next for Laguna?

Yoni Shtein

We’re very focused on product expansion and then market expansion.We’re starting to see real pull from the market because what we’ve built becomes so easy to adopt and integrate in a non-painful way. Our customers are asking if they can expand to various departments within their organization that would benefit both upstream and downstream from the insights we can provide. We’re also seeing lots of opportunities outside of our core health plan targets in BPOs, post-acute care, and navigation companies.

From a product perspective, we’ve made our core offering so easy to adopt that customers are now looking for deeper integrations and seeing greater opportunities to collaborate. The market is asking us to expand our footprint into additional departments and additional product connectivity.

Richard Lungen

Why did you choose HC9?

Yoni Shtein

I was an investor for quite a good chunk of my career and knowing the investment space actually equips me with some perspective on what differentiates investors and what benefits entrepreneurs.

First and foremost, we are fortunate to have HC9 as an investor. Second, we’re excited to partner with a team who is steeped in the domain that we operate in and can lend incredible expertise with tangible value-add.

HC9 not only talks the talk but walks the walk. Richard, Charlie, and team have been incredibly intentional in the structural design and composition of the LP base in a way that helps them, and us, to diligence the right opportunities and then lean-in and jointly unlock and create value.

I would say that the reality of the HC9 partnership far exceeded my expectations.

About Laguna Health

Laguna Health is an AI-powered contextual care management solution scaling personalized care, starting with hospital transitions. The company has built an innovative suite of NLP and AI solutions proven in published randomized clinical trials to drive 50% cost savings and 10X productivity gains for care managers. Laguna is led by a seasoned team of clinical leaders and technology innovators. Customers include health plans, employers and integrated delivery networks that aim to improve member outcomes while increasing care management productivity. To learn more about Laguna, visit www.lagunahealth.com