Health Tech Needs to Rebuild Trust in the Wake of the Theranos Verdict
January 4, 2022
By David Stein
Monday’s news that Elizabeth Holmes, the founder and CEO of Theranos, was found guilty of three counts of wire fraud and one count of conspiracy to defraud investors makes for sensational headlines.
But these headlines make it easy to lose sight of what is most important in this story and who was hurt: people reluctant to undergo diagnostic testing who could have benefited from Theranos’ purported innovations that would have lowered barriers to testing. They are now left with the status quo and have yet another reason to question the medical-innovation establishment that claims to want to help them.
The company’s transgressions cast a shadow over biomedical innovation, especially in the diagnostic and blood testing space. Established players and entrepreneurs alike are facing more public scrutiny over the claimed benefits of their innovations, which is healthy. For investors, the Theranos story is a cautionary tale, a reminder to pay closer attention and ensure that technologists’ claims are backed by real science.
This scandal must serve as a call to action to the health care technology community. It is critically important that it learns from — and moves past — Theranos so patients get the benefit of new technologies, approaches, and care. Change starts with rebuilding trust with patients and providers and by taking a non-negotiable stand on three principles.
Caring for patients first and foremost
One woman testified that a Theranos blood test falsely told her she had miscarried. Other people testified about inaccurate results for blood disorders and cancer.
It is impossible to provide quality care without reliable and accurate test results, and bad tests put people at risk, both physically and psychologically. Seventy percent of medical decisions depend on diagnostic lab testing. If the results of testing aren’t accurate, providers can give bad advice to their patients and patients can make potentially disastrous choices.
Consumers are drawn to new drugs, diagnostic methods, drug delivery systems, and medical devices that offer the hope of better treatment and care that is more convenient and less costly. But Silicon Valley’s “move fast and break things” approach doesn’t work when lives are at stake.
Always lead with science
In health care, the drive to innovate and commercialize new products is intense, and the growing demand for convenience and ease is putting pressure on companies to evolve faster than ever before. That’s good, but there is danger in forgetting that in sustaining people’s lives, real shareholder value results from genuine value to patients.
To create that value, everything must be grounded in science. Even in this turbocharged environment, it is possible to innovate with rigor and integrity, bridging deep scientific knowledge and the know-how of the tech ecosystem. Taking a systematic approach can address some of the biggest health care challenges and ensure that patients and providers get the most from innovation.
The Covid-19 pandemic has underscored the need to expand access to testing so individuals can make informed decisions about their health and well-being. As consumers become increasingly engaged in managing their health, they are looking for brands they can trust.
Ensuring transparency and understanding
The demand is high for new health care offerings to address the growing need for disease detection and chronic disease monitoring. The Centers for Disease Control and Prevention estimates that 6 in 10 Americans live with at least one chronic disease. These diseases, such as asthma, diabetes, heart disease, are the leading cause of death and disability in America, as well as the leading driver of health care costs.
Yet a survey conducted in 2018 found that 40% of Americans reported skipping a recommended medical test or treatment, figures that have remained consistent with the advent of Covid-19. The result is a medical system centered on sick care instead of timely diagnosis and early intervention.
Because blood testing can be a predictor of trending illness, a simple way to help people is by providing them easily accessible and affordable testing options. Yet a flood of new options and consumer promotion without clarity on proper use, performance, and quality can be confusing at best and misleading at worst.
Truthfulness in communication is essential. It’s critical that clear information about diagnostic testing is conveyed to patients and they know that in diagnostic testing — and any other area of innovation — clinical oversight is a must, not a “nice to have.”
In the excitement to invent new things, innovators must stay grounded in these three key values. Lives are at stake. There is no “fake it till you make it” in health care. Scientists and innovators must learn from the Theranos debacle so people truly benefit from new blood-testing technologies and approaches and the quality care they unlock.
David Stein is CEO of Babson Diagnostics, a health care technology company focused on moving laboratory testing to the pharmacy counter.
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The trial and fraud conviction of Elizabeth Holmes, the founder of the now-discredited startup Theranos, was a gut check on the work we’re doing at Babson Diagnostics to empower consumers to make informed decisions about their health and well-being. One of our core values is innovating with integrity, but we must do a better job as a company and a healthtech ecosystem communicating how we’re living up to that. So, I decided to share some ideas about how we as an industry move forward from the Theranos scandal, and I’m honored that STAT, a leading health news website, published my guest essay.