Some final words on Olive AI–what can we learn from its failure? (updated)

November 21, 2023 | by

“To the extent Olive might have sold something, they didn’t deliver – otherwise they’d still be in business.”–Emily Evans, managing director, Hedgeye Risk Management (quoted in Columbus Business Review)

Seeing this article on how Olive AI ‘ran out of time and money’ in Becker’s Hospital Review, this Editor hoped that it would be a final word, a summing up of what was likened to the seismic equivalent of Theranos’ failure in the health IT and ‘changing healthcare’ space. It wasn’t, but a terse summary of a very long article in Columbus Business Journal–Columbus, Ohio being their headquarters city. 

It’s a decade-long story (2012 as CrossChx to 2023). Up to March 2020, it seemed to be a reasonable narrative of a company and entrepreneur, Sean Lane, who built on his USAF background and founding an earlier successful software business (BTS Software) to transform healthcare through automating routine tasks through what they termed ‘AI’ but was more like software programming coupled with machine learning. With General Catalyst’s $52 million in hand and the encouragement of industry experts, he evangelized, hard, at multiple conferences. Some savvy investors and advisers (Ms. Evans above) saw that Mr. Lane didn’t know much about healthcare even during the ‘throw money at anything health tech’ days of 2020-21. But Olive AI easily gained two more 2020 raises totaling over $330 million, plus the capper in July 2021 of $400 million, for a total of over $850 million.

With the funds, Mr. Lane acquired or developed multiple businesses for Olive including prior authorizations, revenue cycle management, population health, business intelligence, and analytics for surgery. He even put $50 million into designing a Medicaid managed care insurer, Circulo Health, which was sold off in 17 months. The pivots came thick and fast, but the sales didn’t follow and the negative client reviews (KLAS) plus non-renewals started to pile up. Come 2022 with healthcare paying the Pandemic Piper and interest rates inflating, the VC funding spigots turned suddenly to ‘OFF’. The grow-at-any-cost early-stage companies found that when it came to VC funding, as they say in New Jersey, they couldn’t get arrested. So the end, as with Pear, Olive, and Babylon, came quickly. (Cue the tinny piano playing ‘Melancholy Baby’ in a dive bar.)

So for your startup or early stage company… A Guide to Avoiding A Train Wreck.

  • Don’t believe your own press releases, no matter how well written. And make sure your marketing people are seasoned pros who say what you do accurately and have been there, done that. (And when the most seasoned gives the raised eyebrow…ask why.)
  • Don’t constantly bang the gong that your solution/s will transform healthcare (memo to Larry Ellison). Stick to solving client problems and do that well, though you may have to evangelize a little. In the end, create ‘raving fans’. 
  • Don’t go it alone. Create strong supplier alliances where you need them. Then treat your partners and their corresponding account managers well and give them the resources they need.
  • Take the absolute minimum of Other People’s Money, even when it’s being thrown at you and everyone else, including your competitors which you will keep a cynical eye on. Stow cash away in the old fashioned way, in a reputable and not overextended bank, for the rainy days that will come.
  • There are certain investors and ‘thought leaders’ to smile at and run away from. (Two of them are mentioned in the article.) Their track records are dubious or they have their own agendas.
  • Get to positive cash flow as quickly as you can. 
  • Hire well, but not too many. And beware of execs with non-competes. They tie up your legal counsel who may also be keeping an eye on your IP, compliance, and finances.
  • Overdeliver and create happy clients who renew and expand your business–but don’t give away the store doing it
  • If you have to buy another company, don’t buy when the streets look paved with gold. Buy when there is some Type A on the pavement. And when you buy, ensure it makes sense in your business model, the acquisition actually does what they claim, their IP is free and clear, and the company owners aren’t overeager to sell (a clue to hidden problems).
  • Don’t, whatever you do, step on Superman’s cape. Avoid getting into conflicts with big guys like Epic, Oracle, or UnitedHealthcare. Especially don’t say that you will put them out of business. (You won’t.)
  • Know that healthcare, no matter what the conferences say, is an entrenched, over-regulated, risk-averse, and thus extremely slow-moving business. The risk level is high, the reward may be incremental, at best. And the big guys–the payers, big health systems, and their vendors, will always have it all over you.

Updated–Some more advice from different points of view:

“Hope is not a business model”–advice from two VCs, with a bit more advice on basic banking

ViVE post-script: VC panel opines in midst of digital health’s new reality (depression?), and extra ViVE from an attendee

Your thoughts on the above and your real-world examples invited as comments!

Population health management growing, segmenting; one investor’s helpful view

March 25, 2016 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/03/TPHM-Blog-PHM.jpg” thumb_width=”150″ /]An interesting post-HIMSS 16 view is a helpful attempt to sort out the miasma around ‘population health management’ (PHM). There were about 125 vendors categorized under PHM there, a good sized chunk, and PHM was the subject of much of the presentation content. Many vendors contend that they have or ARE the solution, but down here in the trenches where most of our Readers slog, we realize that each have only a piece of it.

The writer skillfully divides PHM companies into four main categories of main offerings and further into sub-functions (see left above):

  1. Data integration and management
  2. Clinical analytics
  3. Care coordination
  4. Patient engagement where telehealth/RPM generally fits also includes patient communications, treatment plans, educational content and closing gaps in care.

Only lightly touched on (more…)

IBM Watson Health adds 2 companies, three partners, moves to Boston and into the cloud

April 13, 2015 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/04/IBM-Watson-Announcement.jpg” thumb_width=”200″ /]A Day with a Big Exclamation Point for Healthcare Data and Analytics. In a series of press releases late NY time on Monday and a spectacular announcement at HIMSS (photo hat tip to Sandeep Pulim via Twitter), the recently quiet-on-the-healthcare-front IBM Watson has announced multiple major moves that re-position it squarely into the healthcare arena as the 90,000 lb. Elephant.

  • IBM Watson Health is now a separate business unit headquartered in Boston. The Watson New York headquarters will be expanded, but that may be for their other businesses: travel, retail, veterinary care, cognitive computing, and IT security and support. IBM claims that Watson Health will be hiring up to 2,000 healthcare consultants, clinicians and researchers, folding in existing units such as Smarter Care and Social Programs.
  • The IBM Watson Health Cloud is now their secure, open and HIPAA compliant platform for health-related data: physicians, researchers, insurers and health and wellness companies.
  • Three new partnerships were announced, designed to bolster IBM in different aspects of what is to be done with All That Data being generated from health and fitness devices. IBM Watson Health Cloud will be the secure platform, storage and analytics for Apple’s HealthKit and ResearchKit. Johnson & Johnson will be working with Watson on pre/post-operative coaching and education and Medtronic on diabetes management using data from Medtronic devices. (more…)

Philips enters hospital readmissions reduction fray

October 9, 2014 | by

Perhaps this Editor has attended too many new-company pitches of late, but there is another US ‘gold rush’ similar to EHRs (2009-12). This time, the gold glinting in the stream is reducing same-cause (disease) readmissions after the patient departs through the hospital doors. The latest prospector with pan, pick and shovel, quite amazingly, is Philips USA with the Transition to Ambulatory Care (eTrAC) (!) post-discharge program. Their first two applications, eCareCoordinator and eCareCompanion, just received FDA 510(k) clearance. (more…)