KEY TAKEAWAY: Theranos, led by CEO and founder Elizabeth Holmes, raised more than $700 million on the promise of a revolutionary blood-testing technology that never materialized. The Securities and Exchange Commission just charged Holmes with “massive fraud.” Yet shouldn’t the investors have done their “due diligence” before investing money into a promise that was too good to be true?
A fundamental falsehood: Theranos’s blood-testing technology simply didn’t do what the company repeatedly told investors, clients, and the media it could, the SEC alleged and Theranos gave fake demonstrations when it was striking deals with one of its major clients, Walgreens. Of course that is troubling, but what is the responsibility of a company that invests in technology that sounds “too good to be true”? If I was a Walgreens shareholder I would have demanded the heads of the people who said “let’s write them a check for $100 million”.
There is no doubt that we are in the middle of a health care tsunami. Patients want more control of their health and don’t see the reason why they can’t just go online an get an Rx without the hassle of making an appointment and losing two hours waiting to see a doctor who asks a couple of questions and then writes an Rx.
But with this new frontier comes danger.
There is going to be apps that don’t meet the basic requirement for patient safety. For example, as patients, as enamored with Mhealth the evidence for efficacy is still limited,” wrote a study’s by David Novillo-Ortiz, MLIS, MSc, PhD. An app can never replace a doctor – at best it can only supplement one.
But with all the hype around Mhealth and digital health is there too much money flowing into unproven and untested technology? It seems that nobody wants to be left out in the cold in case some company hits it big. When it comes to digital health care we may be moving too fast without adequate safeguards.
Theranos pumped its false claims up to the media and of course the media ran with it. From 2013 to 2015, Holmes graced the covers of magazines like Fortune, Forbes, T: The New York Times Style Magazine, and Inc., decked out in her signature black turtleneck sweaters. She got glowing write-ups that contained lies she’d fed to reporters. Forbes, for instance, declared that Holmes was “the youngest self-made woman billionaire” whose company could “quickly test a drop of blood at a fraction of the price of commercial labs which need more than one vial.” An April 2014 Wired article stated that “instead of vials of blood — one for every test needed — Theranos requires only a pinprick and a drop of blood. With that they can perform hundreds of tests, from standard cholesterol checks to sophisticated genetic analyses.”Holmes didn’t correct them. In fact, according to the SEC, she showed off some of the articles to potential investors.
Keep in mind that these people were supposed to be journalists not PR followers.
Patients want simple things in the promise of digital health. As usual, we are trying to complicate things because “there is a lot of potential money to be made”.