Olive, a $4 billion health tech startup, overpromises and underdelivers
Olive is the bustling startup whose purple “go save health care” buses dominate industry conferences. But its promises to save healthcare systems millions of dollars with its automation software don’t hold up.
- An investigation by Axios reveals that Olive relies on rough estimates for its calculations, inflates its capabilities and, in many cases, generates only a fraction of the savings it promises.
- Erin’s reporting includes interviews with 16 people, including former and current employees and health technology executives.
Why is it important: Valued at $4 billion by companies like Tiger Global and Vista Equity Partners, Olive is the hottest healthcare automation startup; a holy grail that promises to cut costs and spend more time on patient care.
- In just 10 years, Olive’s promise to reduce administrative expenses for its customers by approximately 5 times the cost of installing software has captured the attention of some of the largest healthcare systems in the United States.
- Axios’ report, which includes interviews with 16 people — including former and current employees, health-tech executives and others — finds that Olive isn’t delivering on those promises.
How it (should) work
Olive’s sales process, like its peers, is to evaluate a healthcare system’s processes to assess potential savings. The company bases these estimates on data gathered from interviews with health system personnel and patient access and billing departments, as well as patient net income and discharges.
- Four former employees say Olive reps spend about two weeks assess the potential savings it can generate for a health system.
- This is markedly different from its industry counterparts who spend between six and eight weeks on such assessments, according to several health technology executives.
- Olive claims to automate administrative tasks for pharmacy and supply chain management, and says its efforts in these categories use AI and machine learning.
- But seven sources, including current and former employees, say none of those efforts use AI or ML, and instead rely on the decades-old practice of screen scraping, or allowing a bot to retrieve information from a PDF or web page. The practice “is notoriously risky” because as soon as a button is moved, “the whole system breaks”, explains a former employee.
- They say the only automation work that meaningfully involves AI is Olive’s work on pre-clearances, a capability she gained when she bought Verata Health in 2020.
What is happening: The savings Olive promises to customers are based on rough estimates. The company does not comprehensively track its progress unless a customer specifically requests it, according to sources and several internal and external documents reviewed by Axios.
- “There are hospitals that will not touch [Olive] because they know people who have been burned,” says a former employee at Axios. “And I think people don’t want to admit it; there is a great sense of shame about it.
- “Most customers who expected to see $10 million in value ended up getting less than a fifth of that,” said another former employee.
- In one case, a former employee said he was told to calculate a hospital’s potential savings on a particular expense category by looking at data reported by Definitive Healthcare and combining it with average salary figures reported on Glassdoor.
- Seven people said that when they raised the issues with the company’s top executives, including founder and CEO Sean Lane, they were dismissed or fired.
- Olive also used human login credentials to access health system data held in clearinghouses like Availity to avoid being detected and blocked as a bot, putting those companies’ software at risk. malfunction, according to three current and former employees.
More: Several current and former employees have also raised concerns about the handling of sensitive patient data known as patient health information (PHI).
- In at least one case, data from an internal database that should have been retained for at least seven years under HIPAA rules was deleted.
- In several other instances, Olive employees used real patient data to test their tools, rather than following the standard practice of using fake datasets for testing, two sources said.
To note : Unless a health system specifically requests it, Olive does not keep detailed logs of its progress toward achieving its estimated outcomes or cost savings, which the company calls “Pi” or “perpetual impact.” .
- In an internal document seen by Axios, a vice president writes that the company “isn’t really meant to be the validator of impact.”
- The person goes on to say that Pi – the number he uses instead of the industry standard ROI – “is meant to be a pre-determined estimate of Olive’s impact that is agreed to be pre-built for allow us to move forward”.
- “There were assumptions and calculations made in advance and on the face of it, when the client saw this, it seemed reasonable,” says a former employee. “But there was no verification after a solution went live of the impact it was having. For Olive, I think they knew the estimates might not be up to par.”
- In an internal document seen by Axios, an executive voices concern over these assumptions, noting that Olive has no way to track its progress or change its estimated savings. “My problem is that we put a lot of assumptions into our models. If we say Olive will reduce radiation by 20%, and it only does it by 5%, that should have an impact. reduced by 40%.”
An epic problem
For several months, electronic health records giant Epic asked Olive to remove his name from the documents because Olive had repeatedly misrepresented the companies’ relationship in internal and external documents, according to multiple former employees and documents.
- A screenshot from Slack shows a manager asking Olive employees through Slack “to help identify and provide any and all ‘Epic Material’ in our possession to Epic for review,” including blueprints workbooks, training materials and slides presented to clients.
Go Deeper (
- “Customers feel that Olive is not proactive in resolving issues and, at times, lacks knowledge of their own product’s capabilities,” the KLAS document states.
Internal customer reporting: When it comes to outlining potential projects for hospital customers, Olive salespeople are granted the highest levels of authority, which former and current employees say leads to missed deadlines and a rushed and uncomfortable work environment.
- “There were instances where we tried to implement things multiple times based on a sales idea rather than what the hospital wanted,” says a former employee source. This former employee adds that often, when this idea was put into action, the hospital would ask that it be deactivated because it was not useful.
- Five sources say colleagues in the sales department justify the behavior by saying that once a hospital buys Olive’s solutions and starts reassigning staff, it will be too difficult to remove them.
- These situations put health systems “in this perpetually difficult position,” says a former employee source, because once they implement automation and reassign employees, “it’s incredibly sticky.”
- “It’s a slimy way to go to the market,” said another employee.
What Olivier says
When contacted about the findings of this investigation, Olive spokespersons initially offered a conversation, but ultimately only provided the following statement from Founder and CEO Sean Lane:
“We strongly believe that automation will change the healthcare experience for humanity. Building this type of change is not easy, especially in healthcare with its complex data systems and high stakes. Olive challenges legacy healthcare systems and the assumptions they were built on – and we are seeing tremendous progress.
Today, Olive provides 200 enterprise customers, including more than 1,000 hospitals, health systems and payers, with increased revenue and reduced costs. We know this because their finance teams tell us. That’s why the majority of Olive’s sales come from expanding existing relationships.”
Yes, but: Internal documents show that Olive has about 80 customers, not 200.
The bottom line
Healthcare automation is a tough and complicated business, and Olive – the industry’s leading company – is ramping up its capabilities to drive more investment, rather than focusing on the quality of the product it delivers.