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AMA cuts ties with Outcome Health after allegations of deception

Lisa Schencker, Chicago Tribune on

Published in Health & Fitness

CHICAGO -- The American Medical Association is ending its relationship with Outcome Health after allegations that the once-hot Chicago startup deceived advertisers and investors.

Outcome, which puts screens and interactive tablets in doctors' offices that run educational content and paid ads from pharmaceutical companies, had been donating screen time to the association for public service announcements about prediabetes.

The American Medical Association had no financial relationship with Outcome.

"In light of recent unfavorable reports in the media regarding Outcome Health, we requested that all AMA content displayed on any ContextMedia platforms be removed immediately," the American Medical Association said in a statement Monday. Outcome's previous name was ContextMedia.

The public service announcements had been part of a pilot program Outcome that ended in October. Outcome, however, had agreed to continue donating screen time.

In recent weeks, a number of hospital systems and advertisers have backed away from Outcome Health, and a group of investors has sued the startup and founders Rishi Shah and Shradha Agarwal, alleging fraud as the company secured $487.5 million in funding this year and rose to a valuation of $5.5 billion. Last month, the Wall Street Journal reported that some Outcome Health employees charged pharmaceutical companies for ads on more video screens than the company had installed.

 

Outcome and its lawyers have said the investors' lawsuit has no merit, and they have denied routinely misreporting information to customers. The company has hired former U.S. Attorney Dan Webb to conduct an internal review.

On Friday, Outcome offered voluntary buyouts to employees amid the "ongoing scrutiny."

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