The Rise and Fall of a Healthcare Unicorn

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Leo Laporte hosted an insightful discussion on This Week in Google about the questionable business practices of Athelas, a healthcare startup that reached unicorn status before leaving behind a trail of complaints.

Paris Martineau, a journalist at The Information, had recently published an explosive exposé on Athelas after speaking to current and former employees. Initially founded to develop a diagnostic blood testing device, the company pivoted to remote patient monitoring and telehealth when its original concept failed to take off. However, as it rapidly expanded in this lucrative new market, insiders began raising concerns about its billing processes.

Specifically, Athelas was accused of taking advantage of reimbursement rules requiring patients to use monitoring devices 16 times per month. While the devices technically sent data every day simply by being connected, employees felt this circumvented the spirit of the rules - a view that attorneys agreed with. Despite repeated internal warnings, Athelas failed to address these issues.

Leo pointed out the pressure unicorns face to deliver outsized returns once they've raised large amounts of venture capital. Meanwhile, Cathy Gellis noted the perverse incentives created by U.S. laws that often prioritize short-term shareholder interests over long-term sustainability.

Ultimately, the rise and fall of Athelas serves as a cautionary tale of Silicon Valley hubris. In the breakneck pursuit of growth, healthcare startups can lose sight of their ethics when patient well-being is on the line. Stronger regulations may be needed to protect public health in an industry where lives are at stake.

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