Olive AI plans to divest one of two remaining product lines

Olive AI plans to divest one of its two remaining product lines, prior authorization software for insurers, leaving the unicorn's original focus on administrative automation for hospitals, reported COLUMBUSINNO.

Less than two years after raising $400 million, the health IT company is facing "an unforeseen and significant shortfall in our capital plan," according to a February 9 all-staff memo from CEO Sean Lane.

The memo was to announce 215 job cuts, which Inno previously reported, but it also announced the planned divestiture of the product line, called Utilization Management, and its associated employees. The company did not publicly share that move at the time.

"In our current position, we cannot make the necessary investments to be successful in transforming both Autonomous Revenue Cycle and Utilization Management journeys for our customers," Lane said in the memo. "We must prioritize and direct our critical resources toward Olive's established strengths."

"This means a return to our core area of focus: building automation and intelligence technology for health systems that makes their revenue cycle operate more effectively and efficiently," Lane added.

This month's cuts followed the termination of 450 employees in July. At the time the company had 850 workers remaining. In the fall, Olive sold off some software products, representing 3% of sales, to a sister company that it had spun out of its Olive Ventures division.