Summary: Yesterday Elizabeth Holmes was convicted of four counts of fraudulently representing the capabilities of Theranos, her incredibly hyped lab tech company. Good; that was long overdue. What’s even more overdue is holding to account those who keep telling us to trust that private for-profit health insurance will efficiently bring us healthcare.
The Epic Rise and Fall of Elizabeth Holmes
New York Times
Jan. 3, 2022
By David Streitfeld
In Silicon Valley’s world of make-believe, the philosophy of “fake it until you make it” finally gets its comeuppance.
For a decade, Ms. Holmes fooled savvy investors, hundreds of smart employees, an all-star board and a media eager to anoint a new star.
Ms. Holmes had many rules at Theranos: “I am never a minute late. I show no excitement. ALL ABOUT BUSINESS. I am not impulsive. I know the outcome of every encounter. I do not hesitate. I constantly make decisions and change them as needed. I speak rarely. I call bullshit immediately.”
Whenever anyone — a regulator, an investor, a reporter — wanted to know a little more about exactly how the Theranos machines functioned, the company cried “trade secrets.” The real secret, of course, was that Theranos didn’t have any trade secrets because its machines didn’t work. But her answer worked for a long time.
“We focused on creating a customized medicine tool that could be used in the home by every patient, so that every day, a patient can get real-time analysis of their blood samples.”
Who could not applaud such an invention? Theranos was making a messy, uncertain and time-consuming medical process into something effortless and painless. “
This is a credulous age.
Comment by: Jim Kahn
Why is HJM noting a fraud conviction of the lab test huckster Elizabeth Holmes? Isn’t that just a Silicon Valley phenomenon? I wish …
The Holmes story, as nicely summarized in the NY Times, evokes the far larger deception being foisted on us with the increasing privatization of health insurance. The profiteers forge ahead relentlessly, perfecting business models that reap tens to hundreds of billions of dollars (far more than Theranos).
We are told repeatedly that private insurance is the path to health care efficiency and clinical effectiveness. Yet our health system performance is by far the worst in the wealthy world – the most expensive, with tenuous access to care, low life expectancy, and a unique American treat: massive medical debt.
Insurers and their political enablers say ignore those numbers, trust the secret sauce that we have (but can’t reveal the details of due to trade secrets).
We’re told that the next iteration of financial incentives to providers will improve quality and reduce costs. Data are delayed, deficient, and discouraging. But it’s ok, it’s working. Really.
Just like Elizabeth Holmes, the leaders of the dysfunctional private insurance edifice guide us down the primrose path.
Ms. Holmes was ultimately held to account. When will private insurers get their comeuppance?