Former executives of Outcome Health convicted in $1B corporate fraud scheme
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Re: Former executives of Outcome Health convicted in $1B corporate fraud scheme
#2Even if they hadn't committed fraud I am happy that they are in problems. The article says they were selling TVs to hospitals to display ads. The last thing we need is more ads and I hope every company that tries to push ads into new spaces will go bankrupt.
Re: Former executives of Outcome Health convicted in $1B corporate fraud scheme
#3They installed displays in medical buildings that sold as space. Then they oversold the ad space, billing customers for ads that were never displayed from 2011 to 2017 and took investment based on the fake numbers.
I wonder how the scheme unraveled. It takes a lot of people to cover up a fraud at this scale, so presumably someone noticed and reported it?
I really dislike this company. I went to a doctor who had advertising tablets installed in every patient room. Getting blasted with drugs ads while your doctor is 20 minutes late put me over the edge. She was a terrible doctor who tried to prescribe a lot of unnecessary products and services that she, conveniently, sold through the front desk of her office. The ads were a great warning sign that she only cared about extracting as much money as possible from patients.
Re: Former executives of Outcome Health convicted in $1B corporate fraud scheme
#4Even if they hadn't committed fraud I am happy that they are in problems. The article says they were selling TVs to hospitals to display ads. The last thing we need is more ads and I hope every company that tries to push ads into new spaces will go bankrupt.
a fast talking Eastern European in Berkeley and his female security expert companion, got pretty far with funding and social position for enacting this business model.. making the rounds at the Berkeley incubator next to the BART station about seven years ago?. IIR the pitch was to hospitals directly as clients. Security for the data streams, plus the money transfers, quickly took over the bandwidth. No one close to the effort questioned the crystal-clear intent to make as much money as possible for the founders and those that chose to do business with them, it seemed. No idea where they are now -- McMansions all around, probably.
Re: Former executives of Outcome Health convicted in $1B corporate fraud scheme
#5From wikipedia:
> Outcome Health is a Chicago-based healthcare technology company founded by Rishi Shah. Its registered name is ContextMedia Health LLC. It is majority owned by Littlejohn & Co., a private equity firm. After its founders were indicted by a federal grand jury on multiple charges of fraud and also sued by the SEC, veteran tech investor Howard A. Tullman called Outcome "our version of Theranos."
> In May 2017, a funding round with Goldman Sachs, CapitalG, Pritzker Group, and others invested $600 million in Outcome Health, giving it a $5.6 billion valuation. This is the largest single funding round in Chicago since Groupon in 2011, when it raised $950 million in its fifth funding round.
Private capital investment + healthcare = bad combo
Re: Former executives of Outcome Health convicted in $1B corporate fraud scheme
#6The sole aim of this company was to extract money from investors...somehow, they managed to raise $500mn, $159mn of which went to the founders for selling secondary shares [1].
I really don't understand people like this. It's far easier to build a serially unprofitable business and cash out your shares...ask Adam Neumann, Travis Kalanick, and the GoPuff founders. Just don't lie to investors, pretend you're building something real at least.
1- https://www.wsj.com/articles/former-outcome-health-executive...
Re: Former executives of Outcome Health convicted in $1B corporate fraud scheme
#7They installed displays in medical buildings that sold as space. Then they oversold the ad space, billing customers for ads that were never displayed from 2011 to 2017 and took investment based on the fake numbers. I wonder how the scheme unraveled. It takes a lot of people to cover up a fraud at this scale, so presumably someone noticed and reported it? I really dislike this company. I went to a doctor who had adver…
The CEO, Rishi Shah, was a major rising star and was profiled by the Wall Street Journal in 2017. The journalist on the story thought something seemed fishy and started pulling threads, leading to an expose published in October of that year.
https://www.wsj.com/articles/outcome-a-hot-tech-startup-misl...
Re: Former executives of Outcome Health convicted in $1B corporate fraud scheme
#8Well there's a blast from the past. Many years ago I worked with the startup company that eventually evolved into Outcome Health. Back then many doctors' offices still lacked broadband Internet access, especially in rural areas. The business model was to provide free satellite Internet service to doctors by installing a rooftop dish antenna connected to a kiosk in the waiting room. Revenue came from selling video ads displayed on the kiosk screen (mostly prescription drugs) along with looped healthcare videos from CNN.
That aspect of the business eventually failed. Some doctors really liked it (the CNN educational content was legitimately pretty good and kept waiting patients from getting bored), but overall it was too expensive to deploy the hardware and geosynchronous satellite Internet service is always slow. As availability of other forms of broadband Internet access improved the satellite service opportunity evaporated. Back at that time I wasn't aware of any fraud, just a failed business model.
Re: Former executives of Outcome Health convicted in $1B corporate fraud scheme
#9Raising almost a billion US$ in 2016? It seems like a lot for what boils down to "advertising in doctor's offices". Would be interesting to know who the VCs were.
Re: Former executives of Outcome Health convicted in $1B corporate fraud scheme
#10They installed displays in medical buildings that sold as space. Then they oversold the ad space, billing customers for ads that were never displayed from 2011 to 2017 and took investment based on the fake numbers. I wonder how the scheme unraveled. It takes a lot of people to cover up a fraud at this scale, so presumably someone noticed and reported it? I really dislike this company. I went to a doctor who had adver…
The CEO, Rishi Shah, was a major rising star and was profiled by the Wall Street Journal in 2017. The journalist on the story thought something seemed fishy and started pulling threads, leading to an expose published in October of that year. https://www.wsj.com/articles/outcome-a-hot-tech-startup-misl...
Such is the conundrum with the WSJ. The op-ed section is beyond parody at this point (see the recent article attempting to pin SVB's collapse on 'wokeness'). But at least the journalists remain committed to digging into stories.
The Theranos fraud was also discovered by a WSJ journalist who wasn't wowed by their ex-Pentagon and Beltway board members and puff pieces written about Holmes.