Outcome Health Settles Messy Legal Spat; Founders Kicked To Board
January 27, 2018 by Dave Haynes
Founders Rishi Shah and Shradha Agarwal are now Chairman and Vice Chair of the Board of Directors, shifting from CEO and President respectively. A search is on for a new CEO.
The press release and company statement are PR-fuzzified and lawyered and need a decoder, but the nut of it is that there is no more major litigation.
The company was a high-flying darling of the Chicago tech sector until last fall, when stories surfaced alleging that some staffers were inflating numbers for the performance of the media sold on the health clinic screen networks. The executive team denied wrongdoing, but Shah and Agarwal denied knowing of any wrongdoing, but Tier 1 investors liked Goldman Sachs filed a lawsuit against the company in November.
Here’s the statement from Shah, which says more than the press release …
We are pleased to announce today a complete resolution of all outstanding investor litigation and that all relevant parties have entered into a settlement agreement that represents alignment and reaffirmation of Outcome Health’s value to all its stakeholders as well as the healthcare community at large. As a result of the settlement, the equity investors, lenders and Shradha and I are reinvesting $159 million in Outcome Health which will further strengthen and scale its technology platform, automated processes and overall customer operations.
This resolution is based on two principles: a shared belief in the performance of the company’s business model and conviction in its mission and impact as it pursues the path forward. As a result of this settlement, the outside equity investors and the company’s founders are reinvesting in Outcome Health and the lenders are extending multi-year credit facilities. These commitments provide increased capital to further strengthen and scale our technology platform, automated processes and overall customer operations. Your success and satisfaction in all aspects of your partnership with Outcome Health continues to command the highest priority of every member of our team.
As part of this agreement, the company will have an expanded Board of Directors, including new independent directors, and Shradha and I will step into the roles of Vice Chair and Chairman respectively. Together with the Board, we will be launching a search for a new CEO to lead the company in its next chapter of growth. We are immensely confident that our executive management team, led by our COO Nandini Ramani, will lead the company admirably during the interim period. Nandini brings a depth of expertise from Twitter and Oracle, where she has led revenue, technology and operations. She will continue to mobilize our resources to actualize our commitment to operational excellence and customer satisfaction.
Under her leadership, we have been shifting to technological solutions that demonstrate the efficacy of our platform with transparent and measurable campaign delivery. All new campaigns that run on the Outcome Health network will be verified by an independent third-party. We received the point-of-care industry’s first independent certification of our platform in accordance with BPA Worldwide rules for audience qualification and the Interactive Advertising Bureau (IAB) guidelines from BPA’s iCompli division.
We regularly hear from our member physicians about the positive patient impact of the Outcome Health platform. For example, a Gastroenterologist in Wilmette, IL used an animation on the wallboard to ease a patient’s fears about an upcoming procedure. A health center manager in Cambria, CA told us that in just one week, two patients suffering a stroke got to the Emergency Room in time because they remembered seeing stroke symptoms on an Outcome Health wallboard. An Oncologist in Laurel, MD talked about how he can help to ease the distress of a newly diagnosed cancer patient by helping his patient visualize the plans for his treatment, taking fear out of the unknown with a clear understanding of what’s ahead. These are examples of the extraordinary impact we have been able to achieve with all of your collective support.
We each hold a deep conviction in our platform and its ability to empower patients and physicians to meaningfully improve health outcomes. We are proud to serve over 40,000 physician practices around the country impacting patients through 140,000 digital devices. We are excited for the future and you have our commitment that Outcome Health will endeavor to deliver at the highest level of execution. We are grateful for your ongoing support and look forward to the opportunity to discuss how we can support your needs in the months and years ahead.