Outcome Health, launched in 2006 by co-founders Rishi Shah and Shradha Agarwal, is now being sued for fraud.
Earlier this year, the company received its first round of outside venture capital investments, which totaled $487.5 million and included $100 million from a Goldman Sachs-managed fund as well as $50 million each from Pritzker’s Fund, a fund tied to Google parent company, Alphabet, and one affiliated with Emerson Collective, an organization run by Laurene Powell Jobs, according to the investors’ lawsuit. That funding valued the company at about $5.5 billion.
Now, the DOJ is subpoenaing the company’s investors. The parties to the company have been accused of committing fraud to secure the half a billion dollar investment.
The investors sued Outcome Health CEO Rishi Shah and President Shradha Agarwal on Tuesday in New York. Outcome Health has denied the allegations and hired former U.S. Attorney Dan Webb to review issues raised.
“The company is committed to fully cooperating with any government investigation,” Outcome Health attorney Sanford Michelman said in a statement.
Advocate, Illinois’ largest hospital system, has about 500 of the Outcome Health devices now, mainly in outpatient settings, Advocate spokeswoman Lisa Lesniak said. “We are monitoring the situation closely. In the meantime, we’ve paused plans to expand screen installation,” Lesniak said in an email.
Edward-Elmhurst, which just announced its partnership with Outcome Health this month, is backing away from its previous plans to roll out the technology systemwide. Elmhurst’s Nancy W. Knowles Cancer Center has been using the technology since June, and the system also has Outcome Health wallboards in nearly a dozen other physician offices throughout the system, spokesman Keith Hartenberger said.
“We partnered with Outcome Health because of the company’s mission to educate and empower patients, and its alignment with our own vision to transform the health care experience,” Hartenberger said in a statement. “In light of recent developments, however, we are putting further technology and equipment installations on hold.”