In October 2018, during his fourth month as CEO of Outcome Health, Matt McNally walked into a conference room filled with investors who had pumped some $500 million into the company. He was accompanied by COO Nandini Ramani, the sole executive remaining from the period when Outcome—which coordinates and manages the display of content on screens in doctors’ offices and other point-of-care settings—allegedly misled clients about campaign performance and lied about how many physicians’ offices it was actually in around the country. He was quite conscious, he says some eight months later, of the table stakes.
“It was the most tense and scary meeting of my career,” recalls McNally, an industry veteran with more than 20 years of media experience. “The future of our company and of 150-plus employees was hanging on it.”
McNally read the room and mentally divided the attendees into two rough categories. There were the people who arrived with a fool-me-once attitude and there were the ones who remained believers in the point-of-care channel—and Outcome’s ability to serve it. He remembers thinking that there were more of the former than the latter.
McNally and Ramani brought with them a detailed five-year business plan, but the primary purpose of the meeting was to start rebuilding the trust that had been obliterated a year or so prior. On that count, McNally had more in common with the investors than they might have realized: As an Outcome client during his previous gig at Publicis Health, he, too, had been victimized by the company’s malfeasance.
The meeting started with the usual banter about the weather and moved quickly into the expected terrain. “Somebody raised his hand and was like, ‘What the hell happened?’” McNally says.
After that initial volley, though, McNally felt the temperature in the room cool down. “Peoples’ shoulders relaxed. The questions became more future-focused – ‘What happens in this space in 2020 and beyond?’” he continues. “We walked out of there feeling much more confident.”
That day may well have marked the turning point in Outcome’s evolution from point-of-care pariah to community member in good standing. Nobody has forgotten and not everybody has forgiven, but client and agency partners largely believe that Outcome has put its recent past behind it.
“They’ve been taking the right steps,” says Healix president Jeffrey Erb. “Matt in particular is doing all the right things to move them forward in a positive way.”
CMI/Compas chief organizational effectiveness officer Nicole Woodland-De Van agrees: “They have been very honest, upfront and transparent about their previous shortcomings as an organization.”
Adds Vishwavijay Singh, director and head of commercial analytics and insights at Promius Pharma, “We were associated with them before that negative event came to light. The transparency they provided was very helpful in addressing the concerns we had.”
The transparency to which Singh alludes comes in different forms for different organizations, more or less based on what those organizations requested. Erb, for example, says that he had “a pretty straightforward requirement: I wanted to do an audit and I wanted the audit to be on my terms, not with an auditing company that was someone [Outcome] recommended. I told them, ‘Honestly, that’s the only way I’m going to be able to recommend working with you.’”
Outcome passed the test. “I didn’t need to know everything was perfect, but I needed to know what the truth was,” Erb continues. “If you tell me that there are ten screens and eight are working, but I find out only five are working, you’re lying to me. But if you tell me that five of ten are working and I confirm that, I know you’re honest. We wanted the reality of the situation so that we could make good decisions.”
McNally believes that accommodating all such requests was a necessary part of the trust-rebuilding process. “Every client needed very specific things to ease their concerns,” he says. “Some wanted financial or sales incentives, some wanted additional reporting and rigor. We had to over-index on expectations.”
Singh says that flexibility was important to Promius, noting that Outcome was willing to “devise an innovative mechanism for working with us. It was risk-sharing, basically. They make money when we make money.”
Beyond that flexibility, there were three bars that past, present and prospective clients asked Outcome to clear. The first was financial: Was Outcome solvent? “The biggest question some companies had was whether they would run out of money,” Erb says.
That was answered definitively in May, when Outcome announced that investment firm Littlejohn & Co. was acquiring a majority interest in the company. “‘Are you running out of money?’ was something we heard on the street,” McNally acknowledges. “The recapitalization allowed us to check that box, which unlocked some of our blocked clients.”
The second bar concerned Outcome’s original management team – namely, that they’d have no role in the company’s future. “That was a big issue, not just for us but for pretty much everyone,” Erb says. Indeed, McNally notes three times over the course of a one-hour interview that “the founders have zero financial interest in the company.” Former CEO Rishi Shah and former president Shradha Agarwal stepped away from day-to-day operations in January 2018 and resigned their positions on the company’s board of directors last June.
But it was the third bar, the one relating to auditing, verification and reporting practices, that loomed as the most crucial. Outcome could make all the promises in the world about its upgraded procedures and technologies, but they’d all fall flat if the company couldn’t guarantee that client campaigns were running on functioning screens in the right physician offices.
Outcome’s immediate response was to put together a presentation, “Under the Hood,” designed for clients, investors, industry wonks and basically anyone else who’d give the company an audience. “The idea was to bring people completely behind the scenes,” McNally says. “We wanted to show them how we match their lists, how we reserve inventory, how we ensure we deliver, how we are the only company that is third-party BPA-audited regularly, everything.”
BPA Worldwide EVP Rich Murphy was observing with great interest. His organization had started working with Outcome in April 2017; he wasn’t exactly surprised when the fraud allegations came to light that October.
“When I was meeting people at Outcome, I’d ask, ‘How long have you been here? How long have you been doing this?’” he recalls. “I’d hear ‘three months’ or ‘six months.’ It was like, ‘What gives?’ My radar was up.”
In its initial engagement, BPA sought to verify that Outcome’s screens were physically present and functional in the right physicians’ offices and that ads were being delivered as promised, among other things. It didn’t find much in the way of issues, Murphy says. “We noticed some gaps and advised [Outcome] how to fix them. In the end, we felt the network was legitimate and that they were serving ads correctly and reporting correctly.”
That conclusion held even after Murphy received a call from a Wall Street Journal reporter. “That was a mild panic attack, to say the least,” he recalls. “But we went back and re-reviewed everything we did, and I still felt good about what we saw and what was reviewed… The stuff that came out later happened before us. By the time we were called in, Outcome recognized the challenges they had and were putting in the right controls and fixes.”
That belated recognition, of course, didn’t exactly comfort the company’s investors or clients. And it wasn’t as if the pre-scandal Outcome was blowing the industry away with its practices.
“They didn’t have good visibility into data and performance. They didn’t know how a campaign performed until it was over – and in the digital space, that’s too late,” Murphy says.
He believes that has changed. For most of its clients, BPA conducts full system audits annually; it now does so for Outcome every six months. Murphy says BPA has audited approximately 300 individual campaigns during the last 18 months, a process facilitated by Outcome’s willingness to give it a direct link into its real-time data feed. Similarly, during the last year BPA’s independent telemarketing team verified 2,936 locations and 13,075 devices, Murphy reports.
He came away from the continuing engagement impressed. “Outcome has really made investments in their controls and reporting… All the right pieces are in place,” he adds.
As for what comes next, McNally says the recapitalization will allow Outcome to focus on improving its product and technological infrastructure. There are also likely to be changes in the type of content that runs on Outcome screens.
“What we heard from our market research is that we need to give people a reason to look up from their phones. It’s like, ‘Why are you giving me the weather?’” McNally says. “We need to deliver powerful content that people can’t get anywhere else.” To that end, Outcome has partnered with Headspace on content around mindfulness and mental health.
The company’s revamped approach to content is designed to “create an experience at the moment of care between patients and physicians,” McNally adds. Prior to effecting the changes, Outcome conducted a thorough audit of its content library and surveyed a range of stakeholders. The content comes from various sources: some is licensed, some is co-created with organizations like Headspace and some is developed by O/Studio, Outcome’s in-house creative unit.
“Life-changing moments happen at the point of care. And because Outcome Health exists in this space, we want our company to stand for empathy – like we’re wrapping our arms around patients during their most vulnerable moments,” McNally says. “We are now creating content that is so powerful, educational and relevant during a time when it’s needed the most.”
He’s well aware that the company still has skeptics to win over, and says that he initially underestimated the full impact of the old Outcome’s actions. “Yes, they want to reconcile the media they paid for that allegedly didn’t run correctly, but there’s also all the time and energy that went into this,” he explains. “Agencies had to explain to their clients what had happened. They had to sit down with their legal teams. How could we make that right again? There was a business wrong, but there was also a relationship wrong.”
Ironically, Outcome’s efforts to clean up its own mess may well have helped elevate the point-of-care channel as a whole. Erb, who worked on the Point of Care Communication Council’s recently revised auditing and verification guidelines, says the episode prompted all channel players to be more precise – not just in their auditing/verification standards, but in their verbiage and definitions.
“Not everybody was talking the same language. What one person might call an allergist, another person would call a primary care physician prescribing allergy medicine,” he explains. “As an industry, we’re a lot better about that now.”
McNally has endless enthusiasm for the point-of-care channel – “it’s the child of out-of-home and digital!” – but mostly confines his predictions to Outcome itself. He notes that “17 of our top 20 historical revenue-generating clients are back with us in some fashion” and hopes to win over the remaining three. He also pledges to double-down on network support, whether for hospital systems or for solo practitioners.
“2018 was about helping get this company off life-support and stabilizing it,” McNally says. “Now, the patient’s off the table. I couldn’t be more proud of what our team has accomplished or humbled by the response.”