Circulo Health, the Columbus, Ohio-based health tech startup once poised to disrupt Medicaid managed care, has announced a major strategic overhaul. The company is laying off about one-third of its workforce, effective immediately, as it discontinues its health plan and primary care clinic initiatives. Going forward, Circulo will concentrate exclusively on delivering IDD Home and Community Based Services through its growing division, Circulo Home.
This pivot marks a dramatic departure from Circulo’s original vision—but one that could create meaningful impact for individuals with intellectual and developmental disabilities (IDDs), their families, and the Medicaid system at large.
A Startup With Bold Ambitions
Circulo launched in 2021 as a spinout of Olive AI Inc., backed by $50 million in Series A funding from firms including Drive Capital, General Catalyst, Oak HC/FT, and SVB Capital. The startup aimed to become a next-generation Medicaid managed care organization (MCO) by applying Olive’s artificial intelligence and automation technologies to deliver smarter, more efficient health coverage.
The company also sought to build a network of tech-powered primary care clinics, reinforced by its January acquisition of Huddle Health, a New York-based clinic startup.
However, neither venture reached maturity. Circulo’s health plan never made it to market, and the clinics—intended to support the expansion of that health plan—will now be shelved indefinitely. Instead, Circulo will double down on the success of its IDD Home and Community Based Services division, Circulo Home.
Layoffs and Restructuring
Before the layoffs, Circulo employed about 380 people. Of those, 250 worked in the IDD Home and Community Based Services segment, none of whom were affected by the cuts. Most of the terminated roles were in product development and operations tied to the health insurance and clinic business lines, according to Chief Marketing Officer Dana Guilfoyle.
While Axios Pro reported that as many as 50% of Circulo’s total workforce could be affected, leadership emphasized that Circulo Home remains fully intact—and in growth mode.
Centering the Mission: Supporting People With IDD
Circulo Home provides IDD Home and Community Based Services across 12 Ohio counties. These services are delivered by Direct Support Professionals (DSPs), who help people with IDDs navigate daily life, build life skills, and participate in their communities. Unlike traditional healthcare providers, DSPs are not clinical staff—they act more like coaches or guides, helping clients develop independence and confidence.
Vice President of IDD Programs Tom McMahon said the shift in strategy reflects both operational clarity and a moral imperative.
“It’s a really bad health equity problem that people with disabilities are treated so poorly in our healthcare system,” McMahon said. “It’s unconscionable. The outcomes are not only tragic—they’re extremely expensive.”
Medicaid pays for the vast majority of IDD Home and Community Based Services, making this space both mission-driven and closely tied to public policy.
According to the Kaiser Family Foundation, Ohio spent approximately $3.21 billion—about 12.6% of its $25.4 billion Medicaid budget—on HCBS in fiscal year 2020. Yet only 7.4% of Medicaid enrollees received these services, reflecting the resource intensity and complexity of this care model.
Rebuilding With Purpose and Tech
While Circulo is stepping away from its insurance and clinical ventures, the tech developed for those initiatives will be repurposed. The company plans to use it to enhance workforce management, session tracking, client progress metrics, and other tools to improve the delivery of IDD Home and Community Based Services.
“We’re excited to take the tools we built for other parts of the business and apply them where they can really make a difference,” McMahon said. “This isn’t just about saving money or streamlining operations—it’s about delivering better lives for people who are often forgotten.”
This move echoes a broader trend in the Medicaid innovation space, where startups are moving away from large-scale disruption and toward solving tangible problems in high-cost, high-need populations.
Workforce Expansion Amid Industry Pressure
Circulo Home is scaling up its DSP workforce as fast as possible. Since March, the company has hired 206 new DSPs, and it recently announced plans to hire 1,000 more. But McMahon acknowledged the high turnover in this field, predicting the company may end the year with about 500 active DSPs.
Even that would represent a significant milestone.
“That would more than double our current team and create a meaningful increase in revenue,” McMahon said. “And it turns out revenue is as important to investors as almost anything else. That’s why they want us to focus on this.”
The timing may be fortuitous. IDD service agencies across the country are struggling with wage inflation, rising costs, and labor shortages. As some competitors scale back or shut down, Circulo sees opportunity to become a leader in IDD Home and Community Based Services.
A Competitive Landscape
Circulo’s strategic pivot comes amid a wave of innovation in the HCBS market. Notably, CareBridge, another Ohio Valley startup focused on HCBS, recently raised $140 million to build tech solutions that help Medicaid MCOs reduce costs and improve care outcomes. One of CareBridge’s lead investors is also a backer of Circulo.
With its own investment in tech and operational infrastructure, Circulo is betting it can stand out by focusing narrowly on IDD Home and Community Based Services, rather than diluting efforts across multiple care models.
Looking Ahead: A Focused Future
While the decision to abandon Circulo’s original plans for insurance and primary care may seem like a retreat, it’s more of a reorientation—away from unproven models and toward high-impact, mission-aligned work.
The company’s leadership hasn’t ruled out returning to broader Medicaid innovation in the future. But for now, Circulo is concentrating on becoming the premier provider of IDD Home and Community Based Services in Ohio, with plans to expand its reach and deepen its impact.
“This is a pivot toward purpose,” McMahon said. “People with IDDs deserve better, and we have the tools and the passion to give it to them. That’s what Circulo Home is about.”
