My friend Maureen Klewicki is with me today. Maureen leads venture investing for Cedars-Sinai. Prior to Cedars, Maureen was five years at CrossCut and before that she was program director at Techstars Healthcare, which was a partnership with Cedars. Maureen is a super smart health tech investor so I'm really excited to get to pick her brain today.
Thanks for having me, Minnie. I'm excited to be here and chat and I don't know how super smart I am, but it's going to be a good convo. Oh, you're a well-informed thoughtful health tech investor sitting at a large hospital system. So, uh, it will be great. Start me with your check size and areas of interest.
Yeah. So our check size could range probably from $1 to $10 million, but on average it'll be $4 million. And the fund is a $100 million dollar fund.
And the way that we think about it is there's 1,000,001 problems that right now, Cedar Sinai is facing And so that's kind of like, Enterprise tech companies like enterprise healthcare. And that's probably 50% of what we think about. So just going in and talking to leaders of the hospital, saying like, oh, in nursing or in surgery, what are you thinking about?
Where do you need help? And where can we find a company that we can plug in right now? And then 50% of it is longer-term. Taking more risk, where is healthcare going? And how can Cedar Sinai kind of continue to be on the cutting edge of that? and that is more listening to entrepreneurs and saying like, what are you seeing?
What are you building for? And I think that that, speaks to a shift in core competency. Uh, way from delivering really high quality health care, which Cedars is great at that. They have done that. And like, if you need the most complicated surgery come to Cedars and they can do that too.
Like, wow, there is now this whole like digital virtual care delivery world and, way that folks are connecting with patients. And so we probably need to be talking to talented technologists and product folks and saying like, how are you doing.
And so I came over at the beginning of this year to basically, answer those questions and where we landed was a series a and B fund. these are typically companies that have legs, they have product market fit, And they're coming to us to say like, Hey, let's, put the pedal to the metal with commercialization. And by the way, like who within your healthcare network, can you also introduce us to, and that's not necessarily only on the provider side.
Like obviously we know a lot of providers that look like us, but it could also be. You know, we have a subject matter expert and you want to run a clinical trial with that person, but ultimately you're going to sell to the payers or you're going to sell to pharma. or like we have a robust patient data set that, you could do really cool things with, or we even have lab space that's useful to you.
So then it's interesting because when I think about venture capital, There's a lot of funds that you have the investors and then you have like, platform, right? And that's all of the services that you are offering to your entrepreneurs, which might be around hiring.
It might be around business development, corporate development, like all of these things that we know, I feel like the hospital is the platform. And more and more like as I take a step back and say like, Once we start working with a company, like what is our value add? And it really is like, let's make sure that the right stakeholders within the organization are going to be having continuous dialogue with the company and that we can sort of continuously bring feedback to them.
And then even just things like. Marketing PR like, the organization kind of has that machine going itself.
It's such a great role Marine I'm really into it. So let's, talk about some of the, you.
sort of said 50% is where the hospital might need help.
Maybe can you hit on some of the big areas that you guys are prioritizing internal?
Yeah. so this is like not a surprise to anybody who's in the healthcare industry, but, the labor shortage and provider burnout, is a crisis. It's like a crisis for the us healthcare system right now. COVID was brutal. people worked Very very hard. And they worked on very sick patients and they saw people die and they had to go out of their, typical areas of specialty and just like double down.
And I think that that puts so much strain on the system and there was already strain we were already moving towards this huge nursing shortage where we just don't have enough nurses to kind of serve the system. And so. It's been interesting in the first few months in this role, there's a part of me where I'm like, man, that could be a thesis for a fund right now.
And the thing that comes to people's mind is like contingent staffing. Would you like, yeah, that is a way that you can solve it, but also could you solve it through the use of smart robotics? Could you solve it through computer vision? Could you solve it through ambient scribing? can you things that make it so that.
aren't spending 30% of the time logging things into the EHR, which is what they're doing right now. And so that is, probably the number one issue that, we're thinking about right now. but then. other things that aren't quite as acute, but are really, really important. So things like moving healthcare into the home and beyond the four walls of the hospital, making sure that patients are being met kind of in the right setting for the right acuity of whatever it is that they're, dealing with. So when I think of healthcare moving outside the hospital, I tend to think of then I don't know other providers stepping in, but he is not. Cedar's still extending itself into the home. Just paint the picture of what's going on with moving health care
outside the hospital.
yeah. So moving health care outside the hospital, it can happen in a lot of different ways. So, there is literally like the main hospital itself where, sort of the most complex things are going on. So you could just extend the footprint of the hospital and say like moving the hospital. more into like your neighborhoods through urgent care or through primary care.
That's super convenient to you. or it could be sending providers to the home. And then it's an open question of like, should that be our providers or should we partner with somebody who provides their own folks that they're hiring or should it be a mix of the two? And we've seen that. And then there's also like, what is the right setting for telemedicine?
And again, like, do we just want a platform where we can have our own doc seen patients, which we have, do we want to leverage other platforms and use their dogs? We're also doing. And so, I think that there's a few different facets of how you can reach the patient and it's all about. The way that I think about it is, it's almost like a consumer question.
Like where does this patient who is also a consumer? Where do they want to be? And how do we align that and make sure that it's also the right setting, so that they can get the highest quality of care because you don't want somebody not coming in. And then you miss something because you didn't like do that lab draw or whatever it is.
And do you think this innovation is going to come from people within the healthcare system or just techie folks who have a passion for making healthcare better? this is kind of one of those areas that similar to what I mentioned earlier, there are folks who are really, really good at building out these technology platforms.
They're really good. consumer patient experiences. If you're sending somebody to the home, they're really good at utilization. And so like you might see a team that is half Uber and half like healthcare execs. And so that's where I think you start to see these really cool combinations of like, technologists and, people that know healthcare real.
And it is that whole trend of moving outside of hospitals, is that tied in with the move to value based care because window hospital in the old days, just want to keep you in the
beds.
Yeah. Yeah. And so sort of the two main payment regimes, and frankly, fee for service is still dominant in the United States, but it's shifting away from. and fee for service, if you kind of boil it down, it's that you get paid sort of like per procedure or per interaction. And that's just how the system works.
I think value based care, which can be structured in a lot of different ways, but sort of the overarching, way that it works. You get a set payment for taking care of a patient or a group of patients or a patient as they're going through some episode of care. And if you spend less than that, you keep the savings.
If you spend more than that, you get deemed. And I think what value based care is meant to, incentivize is really strong care team approaches. So rather than. in fee for service, you go and see a surgeon for example, and may kind of have that transactional payment for the service that they provide.
What you want to do. Evaluate is carriers. Okay. First of all, let's keep this patient out of the hospital. If they don't need to be here, let's do preventative care. And then let's make sure that post-surgery, they have the right ride home. They have the right information that they need. They can do a followup telemedicine visit because that overall care team approach is what keeps the cost of care down.
And so you see a lot of. movement from VC backed and private equity backed companies in the value-based care space, because a that's where the payment models are moving. And if you do it right, you can, you can have a very valuable company that is improving outcomes for patients.
But what you said at the beginning is that most of the U S is still fee for service. So is it fair to say that value-based care is better and that our whole system is going to switch over at some point? A lot of people would say yes. And that would be true. there was a really interesting article from the president of CareMore, which is a value-based care organization. They take care of, Medicaid and Medicare patients and like he's living and breathing value-based care day in and day out and just made a point like these are the things that you need to watch out for and value based care.
Because if you think about it, you want to reduce the touch points with providers, if that is the right thing to do from a care perspective. So I would say, yes, it's a positive move and it's one that we are embarking on, but you want to make sure that you're not restricting patients access to care in favor of sharing in that profit, right?
Like you could see how it would get skewed or how a patient might be frustrated if. They can't see the provider that they really want to see, or they feel like that person isn't getting back to them as much as they want to, because they are incentivized to, care for a large number of patients at a relatively low cost.
And so yes, it's the direction that things are going and it's the direction that things should go.
It's just a slow move in that direction. and this is an interesting, point from a technology perspective, because it's almost like you don't want to break the system as you're trying to get there. I guess one thing that I'll say is I think that figuring out value-based care it's a data problem, essentially.
How are you matching the care that a patient is getting with the payments and how are you documenting and aligning all of that. And that infrastructure layer I think, is really being built right now.
So that's like, a surgeon in some ways you want me to be doing less work, but you don't want to ding me for doing less work in some
Yeah. Yeah, exactly. it's almost like keeping the highest quality patient care in mind and making sure that your north star is always, let's make sure that this patient is getting the right care at the right time. You know, I work at the hospital, I'm around doctors all the time and I have, a lot of admiration. I think that, um, man, people work really hard. They're in school for a very long time.
And I, think that they are motivated by caring for patients and furthering that research. But no matter what incentive structure you put in place, it's going to affect the way that, organizations run. And so being really thoughtful about what those incentives look like. is important.
And what is the state of our digital healthcare infrastructure? Like I'm always hearing complaints about EHR is et cetera.
influx is what I would say. So, with large, um, hospitals kind of large academic medical centers, epic on the EHR side has kind of won that game. and then. Legislation that was put in place that basically said, okay, we got to get off of, paper EHR records and we need to move into electronic medical records.
And, so it was mandated to adopt technology and for the bigger providers, epic definitely won that game. And, You know, people complain about epic. It's very monolithic, but at the same time, it's a very complex piece of software because you're using the same piece of software to basically bill and document for a primary care visit as an OB GYN visit as a surgery.
And so you just think about sort of the myriad of use cases and like it's one of those things that people bemoan it, but man, it would be so hard to like rip and replace that right now. So that's sort of main piece of software that exists in. Big, hospitals and medical centers right now.
And I think it'll be that way for awhile. What's interesting, I think is the infrastructure that's being built, for smaller providers, independent providers and, kind of these new digital clinics. And there's a lot of discussion and investment in this space. And so this is basically saying if you are a smaller, more agile, and especially if you are like a tech first platform, What rails do you want to be running on?
You probably don't want to be running on like the older, more monolithic legacy, payment and patient care systems. And so that's where you're seeing a lot of new companies that are working on patient billing, electronic medical records. going back to that data issue of like, how do we match the care that's being provided with the payment?
And, so there's sort of like a whole cohort of companies right now that are, building sort of the next generation infrastructure for digital health companies. And a lot of the thought is it's probably going to be really good tech and at a certain point it's probably going to move its way up the stack and start, to serve traditional health.
wow. So if I'm a new upstart provider, I'm not on epic, I have some new modern options.
Yes. For sure. For You were never using epic, but you might like they're smaller. EHR is like Athena health, but then there's newer ones that are coming out. Like one of them is called Zeus it's a more modern piece of technology. You can plug in a lot of API APIs, and then, like new revenue cycle management and billing tools are being built. new value-based care enablement tools are being built. it's kind of cool because compared to. Eight to 10 years ago, there's now like a whole stack that you can start with. That's kind of like Shopify, you used to have to really cobble this stuff together. And now it's like, oh, you want patient messaging, use this. You want patient videos use this. You want a new EHR use this.
and so you can kind of create these. pointed solutions that are purpose built for a specific patient population, get that care team approach, and have everything hopefully, be kind of better for the patient
Cool. So let's stay on advice for startups. What do you advise for a startup go to market strategy? If they're trying to sell into someone like a Cedar's,
Yeah. So, It kind of depends on the stage if they're coming to us and they are, series a and series B to kind of have their business model figured out and they know that they are selling into providers, then I think it's around the way that we typically make decisions. And this is like, probably a gross overgeneralization, but usually, and you have to think about it from like a big hospital and hospital system perspective. We have a different tolerance for failure than like early stage tech companies, because like, we really don't want to screw something up for a patient. Like you would hate to have a new patient messaging, piece of technology implemented. And it is saying the wrong thing to somebody when they got diagnosed with cancer.
Right. And so, because of that, I think that's also just like a, cultural thing that needs to shift. But because that definitely exists right now. It's like, let's start small in this one discrete area and do a pilot. And if that goes well, then we will convert that into a commercial agreement and we will move it out into. other departments So I think that the advice there is to be very clear around, like, what are the milestones that need to be hit and what happens when they are hit. And does that automatically trigger that commercial deal?
Because I think that, sometimes it's like, oh great. You are. sort of like this wet lab partner for us. And so we're going to try this thing out, but then if that works, you should be rewarded for it. Right. And sometimes those details get lost and it's like, oh, well now we'll try it over here.
And like the death by pilot thing happens. And so I think the very crisp around. This is step one, this is step two. This is step three. This is what the payments look like. even for that pilot phase, then it converts, and this is what our commercialization plan looks like. so that's what I would say for the later stage companies for earlier stage companies.
Honestly, it's a lot of times, especially on the enterprise healthcare side, Figuring out who is paying for and who is using your product because, sometimes it's just really unclear, like where the value add is. Um, like I was talking to a GI company this morning and they are, basically like collecting data on GI health, through video, in like a new modality and. They were like, we know we're going to have this data that's really important, but is that really important to the payers to reduce the cost of care? Is that important to providers to, kind of improve the patient care itself? Or is that important to pharma to, Kind of understand patient conditions so that they can create new drugs around it essentially.
And where they ended up is we're going to give this to providers for free. And then the pharma companies will pay us because they want to identify patients that have the specific GI condition so that they can enroll them in clinical trials. And that's just an example of like, it can be very convoluted around who is using. Your, um, who is actually using it and who is paying for it.
anything else? Interesting. You're seeing on go to market for startups in the space
Yeah, there are a lot of companies that are starting out direct to consumer and they are testing, whether or not patients really want their product through a direct to consumer channel.
And then they basically then use that data and they go to the payers or they go to self-insured employers and they say like, look, people really want this so much so that they're willing to to pay out of pocket and, oh, by the way, we also have data that it's reducing the overall cost of care. And so you, big insurance company should cover that or you self-insured employers should offer that as a benefit, to your patients. and so. it's worked but it's tough, right? Because you're almost starting a business with one go to market and then you have to like entirely switch it to a different go to market. Like you are starting direct to consumer, but you are ultimately a B2B business. And so, in that case, I think it's making sure that you understand the metrics that, the entity that you're ultimately selling into. It's going to want to see. So like with the payers, they're probably interested in the overall cost of care for a patient and how much that is lowered once your solution is implemented.
there's just a lot of thinking ahead that needs to be done. So.
question about that. Like see a lot of the selling ended. Self-insured employers. I haven't actually invested in anyone who's doing it. How do you think of that as a strategy?
Yeah, I think, um, definitely works. There are definitely big companies that are, out there doing it, but it's very saturated at this point. And I think that employers more and more are. fatigued by the number of solutions out there. And so, yeah, I mean, I have heard from investors growth investors that would do kind of the subsequent rounds from us, that in certain areas like mental health, they will not take pitches from companies that are mental health and focused on self-insured employers, because they feel like the channel is too saturated. but then the other side of it is like, you know, it was only a few years ago that there really weren't. these dedicated groups like Maven and Tia that were focused on women's health.
And that was just like, not a thing, I think that there are still areas where employers are going to be like, oh, wow, that's actually a great idea.
And which we really helpful in like, as some of these groups that unfortunately have been worn, visible, in our, health care system in, just like the working world are not as invisible anymore. There is a big opportunity about changes and how that's going to affect how everyone's making decisions?
So, we already talked about the shift to value based care. That's a big one. It's kind of like the carrot and stick with, the center for Medicaid and Medicare services, because they're the ones that are driving that. test out these payment models and the commercial payers tend to adopt them.
And so, I think it's been a slower transition than everyone thought that it would be. And, you know, it's just kind of, the speed that policy moves out, frankly. some other ones that, we've been watching and thinking about.
Um, price transparency is a big one. lots of conversation around, like, how do you reduce the overall cost of care? How do you improve, patient experience?
right now when I go to get care, right? Like, I don't know how much it's going to cost.
yeah, you don't know how much it's gonna cost. Exactly. Which is like a crazy state of affairs. And it's kind of, because. A, like, what care are you going to get is sort of a question when you walk in the door to a provider, right? Like what are we gonna find? and then what are the different contracted rates with, the insurance company?
What is your insurance coverage? What is the out-of-pocket costs? Becomes this dizzying thing. And a lot of those contracts between payers and providers are very, very one-off and dependent on what they have negotiated. And so last year, and this legislation is still coming into play because it doesn't have a lot of teeth around it yet. but last year legislation came into place that basically said providers need to post their prices. And then, there was mirroring legislation on the payer side, which is basically saying you need to publish your contract and rates with different providers.
Without those two pieces, it's really hard to ever come up with what is the overall cost of care. and it's also, you know, I think fee for service in a lot of ways has just led to huge variances in like what something costs, at the small clinic, down the street versus big hospital versus like, et cetera, et cetera.
And so, about early stage companies, it seems like there's a big opportunity to say like, oh, all of a sudden we have a massive amount of data that has now become public. What can we do to create tools for patients such that they can start to understand the overall cost of care? What can we do to make contracting easier?
And probably just have a bird's eye view as to like, this is what. This surgery costs in San Francisco. This is what the surgery costs in salt lake city, Utah. And so, it's early innings, but that is a piece of legislation that I think is going to have, a big change. And then. Moving on to other things like, virtual visits, those really weren't reimbursable until like fairly recently.
And then you see like, wow, this whole crop of telemedicine companies has popped up. even like with physicians who work at hospitals, if they were calling a patient after hours to say like, oh, you got a lab result that was abnormal. And I just want to walk you through it. They previously weren't paid for that.
And so, you know, it kind of unlocked. payment for work that was being done, but kind of invisible.
Okay. I could keep asking questions indefinitely, but I think we should shift gears and talk about the job. Uh, how is the job, how was it different than cross-cut and what have you been spending your time on?
You know, I feel like previously, I spent a lot more of my life, like, talk to founders, look for deals, do deals. I'm just, still thinking a lot about that, but then there's other things like, oh man, what should our check size be? how quickly do we want to be deploying capital? And so it's sort of a different part of the venture brain but then also I think that the more integrated I am with Cedar Sinai, the better, right? Because when we are looking at a potential opportunity, It's really nice if I've already had a few conversations with stakeholders and I'm like, oh, I know that this is a problem for you. Like, I know for example, how to conversation with the head of nursing. And, she mentioned that. One of the big things that they're thinking about is there's a lot of invisible work that's done by nurses that, they're not ever charting it. They're not ever billing for it. And it's sort of like, it didn't happen, but it did happen.
And so what are ways without increasing the, charting and documentation burden that we can capture that. So that's what you think about things like computer vision and, ambient scribing to say like, oh, well this nurse. At 1:00 AM 3:00 AM and 6:00 AM went in. sat with a patient, turned them and, spend time having a conversation, but we never captured that anywhere.
And so going back to sort of, what am I thinking about with the fund? Like just having more conversations like that and getting more granular on. What are the things that you are thinking about? Such that if I see a company I'm like, Ooh, this is perfect. Like, let's have you have a conversation with this person and see if there's interest and we can move that forward. And then yeah. Building out the team and, just talking to as many companies as I have time for basically.
Hmm, how big is Cedar? It's like when you talk about the head of nursing, how many nurses are there?
I know that there's 14,000 employees, um, in audible. Yeah. It's a big organization. Um, the number of nurses, I don't know. I'm sure that it is a large percentage of those employees. And then yeah, we have, the main. medical center campus over in Beverly Hills. then, in marina Del Ray, which is right near you, um, there's a new hospital.
And so just kind of continuing to expand the footprint
What's this sort of a budget of Cedars
Yeah. So it's, overall like a $4 billion annual revenue system. And then just like the overall scale of healthcare, it's something that always blows me away. United health group, which is one of the biggest, they do 270 billion annually in revenue.
So just like the scale of these organizations. it's wild.
Well, 4 billion a year. You're one of the largest organizations in LA.
yeah. It's kind of wild. it is. And when you go over to the, you know, kind of west Hollywood, Beverly Hills area, you're like. There's a lot of Cedars over here. Like just has a big footprint. and so yeah, there's a lot of stuff that's going on. in the hospital day in and day out.
And my little sliver of it is like the technology piece and how can we make sure that this place is as digitally enabled as possible for the benefit of like everybody that's working there, but then everybody that is being seen there.
It's such a great role Marine. Um, Let's talk a little about you and weren't cross cut for five years.
Yeah, three and a half.
That's what I said. Um, um, You know, what did you learn there? How did you see it evolve? So, it was interesting because I was at Techstars first, which is sort of like venture capital light, right? Like you're working with all of these early stage companies at an accelerator you're working onsite.
So very early. and then from an investment perspective, you were investing on notes and like that's what you were doing. And it was kind of like the standard a hundred K note on a 5 million. Then moving over to Pross cup. For me, it was just like, oh, this is. Proper venture capital, right? Like we can be really agile. and that's, primarily a seed fund. They do some series, a some pre-seed, you know, similar to 10, 1 10, then deal together. but from sort of the venture perspective, it was like, wow, there's a lot of ways that you can work with early stage company. There's a ton of ways that you can structure deals.
You can leave, you can follow, you can do scout deals. You can do like little pre-seed deals. and then it was. Also fantastic. now I've like really specialized, but I think that it was nice from kind of a healthcare investor perspective to see like holy smokes themes can scale really, really, really fast, through like, Bottoms up developer growth, or like if you have an e-commerce company that takes off like the speed of that is just amazing. and also the technical and product talent that exists more just in like tech tech is amazing, and that is like a universal, in and unto itself. And I think that in healthcare, we're now getting to a point where there are like, Digital health entrepreneurs. Like they have been both digital and health from day one, rather than like you're in this bucket and you're in this bucket. but I think that spending time around, just kind of like pure technologists, pure product folks, it gives you this huge appreciation for how much that is needed and healthcare. And I still go back and forth in terms of like the perfect fund. How much would it be specialized versus how much would it be generalist because you learn so much, like one learned so much from the other, it's still an open question. So that's something that was really awesome, to learn at, cross-cut.
So it was a great time. Yeah. I love my colleagues over there.
And before that, like give me a little bit more of you. grew up in.
Nope. I grew up in.
Utah. Yeah. So sort of my background, grew up in Utah. My dad was a professor at the university of Utah, so, that's why we moved there really nice place. Super outdoors-y love it. Still go back all the time. came out to LA actually to go to law school. realized in law school that I probably should have gotten an MBA because like, I just wanted to go work for tech companies, but I have this law degree and it was like, okay, let's use it and pay off some of my student debt.
And so went and joined a big law firm. And so. It was like a really helpful education. Ultimately I wanted to work with early stage companies. So made the jump and yeah, and I really liked the, founders that work in healthcare, like tend to be driven. by a personal experience, like you hear that a lot, probably with like 70% of the founders that we work with or talk to it's like I had this experience with a family member with cancer. I had this experience when I was trying to get ahold of a provider, et cetera, et cetera. And that's like very, very motivating.
Hmm What about you Marine? How do your friends describe you?
Oh my gosh. How did my friends describe me? my friends probably describe me as like outdoorsy and then yeah, probably type a unfortunately, even though I like try to be this type B person, it's like, I know what I am. Um, but yeah, when I'm not working, like, you know, LA is amazing. So surfing, hiking, just like exploring the city, it's such a good place.
Well, I mean, Marine, congratulations on the great role is a really important institution in LA and it sounds amazing. I hope we get to work together more.
Oh, yeah, for sure. We definitely will. And thanks for having me. I appreciate it. This was fun.
It was great.
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