Outcome Health
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Outcome Health (originally ContextMedia) was a Chicago point-of-care health marketing company founded in 2006 by Rishi Shah and Shradha Agarwal. It installed free tablets and flat-screen TVs in physicians' waiting rooms and exam rooms, displaying health-education content alongside targeted advertisements from pharmaceutical companies. It had never raised outside money until 2017, when it raised $487.5 million at a valuation of about $5.5 billion from Goldman Sachs, Alphabet and the Pritzker group.
02 / Outcome Health FAILURE REASONS
Failure reasons
The Wall Street Journal reported in October 2017 that Outcome inflated its data to pharmaceutical advertisers to boost ad sales. Investors sued that November alleging the company had misled them and clients with fraudulent data and financial reports. In its 2019 DOJ non-prosecution agreement, the company admitted that from 2012 to 2017 its former executives and employees fraudulently sold ads to clients; federal investigators said it overbilled clients by more than $6 million in 2015 and more than $25 million in 2016.
03 / EVENT HISTORY
Events in the structured record
- Founded
Rishi Shah and Shradha Agarwal founded ContextMedia in Chicago (later Outcome Health), putting ad-supported screens in doctors' offices.
- $487.5M raise and fraud exposed
Outcome raised $487.5 million at a ~$5.5B valuation. In October the WSJ reported inflated ad data; in November investors including Goldman Sachs and Alphabet sued for fraud and breach of contract.
- Investor settlement
The investor lawsuits settled in January 2018: Shah and Agarwal stepped down from day-to-day management, and all parties reinvested $159 million, $77 million of it to pay down debt.
- DOJ resolution
In late 2019 co-founders Shah and Agarwal and other former executives were charged in an alleged $1 billion fraud scheme; the company agreed to a DOJ non-prosecution agreement and a $70 million settlement to compensate pharmaceutical client victims.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Outcome raised $487.5M at a ~$5.5B valuation in 2017, having never taken outside money before.
- 02
Oct-Nov 2017: WSJ exposed inflated ad data; investors sued for fraud.
- 03
Jan 2018: investor lawsuits settled; founders stepped aside; $159M reinvested.
- 04
2019-2020: executives criminally charged; Outcome admitted fraud 2012-2017 and paid $70M to resolve the federal investigation.