The Theranos Story, ch. 52: How Elizabeth Holmes became ‘healthcare’s most reviled’–HISTalk’s review of ‘Bad Blood’

click to enlargeA Must Read, even if you don’t have time for the book. During the brief Independence Day holiday, this Editor caught up with HISTalk’s review of John Carreyrou’s ‘Bad Blood’, his evisceration of the Fraud That Was Theranos and The Utter Fraud That Is Elizabeth Holmes. Even if you’ve read the book, it’s both a lively recounting of how the scam developed and the willingness–nay, eagerness!–of supposedly savvy people and companies to be duped. The reviewer also reveals that Mr. Carreyrou wasn’t the first to raise questions about Theranos after raves in the press and kudos from the prestigious likes of Eric Topol. Mr. Carreyrou’s first article was in October 2015 [TTA 16 Oct 15] whereas Kevin Loria wrote the first exposé in Business Insider on 25 April 15 which raised all the fundamental questions which Theranos spun, hyped, or otherwise ignored–and Mr. Carreyrou eventually answered. (Our blow by blow, from him and other sources, is here.)

The review also picks out from the book the scabrous bits of Ms. Holmes’ delusions; her makeover to become the blond Aryan female Steve Jobs mit Margaret Keane-ish waif eyes–something she took far too literally; the affair between her and Sunny Balwani, certainly in violation of the usual ethics–and her Hitler in the Bunker, April ’45 behavior as Theranos collapsed around her. 

The review concludes by telling the healthcare community something we need said plainly, often, and written in 50-foot letters:

Theranos is a good reminder to healthcare dabblers. Your customer is the patient, not your investors or partners. You can’t just throw product at the wall and see what sticks when your technology is used to diagnose, treat, or manage disease. Your inevitable mistakes could kill someone. Your startup hubris isn’t welcome here and it will be recalled with great glee when you slink away with tail between legs. Have your self-proclaimed innovation and disruption reviewed by someone who knows what they’re talking about before trotting out your hockey-stick growth chart. And investors, company board members, and government officials, you might be the only thing standing between a patient in need and glitzy, profitable technology that might kill them even as a high-powered founder and an army of lawyers try to make you look the other way.

In other words, what you (the innovator, the investor) is holding is not a patient’s watch, it could be his heart, lungs, or pancreas. (Musical interlude: ‘Be Careful, It’s My Heart’)

The Theranos Effect is real in terms of investment in small companies out there on the ‘bleeding edge’. The cooling is mostly salutory, and we’ve been seeing it since late last year (see here). But…will we remember after it wears off, after the fines are collected, the prison time is served?

Rock Health’s ‘Another record-breaking first half’ in digital health funding is actually–flat. (With a Soapbox Extra!)

The Breathless Tone was the clue. “It’s déjà vu for digital health, with yet another record breaking half for venture funding.” It was déjà vu, but not of the good sort. This Editor hates to assume, so she checked the year-to-year numbers–and first half 2018 versus 2017 broke no records:

  • 2018:  $3.4 bn invested in 193 digital health deals 
  • 2017: $3.5 bn invested in 188 digital health companies [TTA 11 July 17]

But ‘flat’ doesn’t make for good headlines. Digging into it, there are trends we should be aware of — and Rock Health does a great job of parsing–but a certain wobbliness carried over from 2017 even though the $5.8 bn year finished 32 percent up over 2016, analyzed here [TTA 5 Apr 18]. Their projection for 2018 full year is $6.9 bn and 386 deals.

Let’s take a look at their trends:

  • “The future of healthcare startups is inextricably linked to the strategies of large, enterprise-scale healthcare players—as customers, partners, investors, and even potential acquirers.” It’s no mistake that the big news this week was Amazon acquiring tiny, chronic-conditions specializing prescription supplier PillPack after a bidding war with Walmart for an astounding $1bn, making its 32 year-0ld founder very rich indeed and gaining Amazon pharmacy licenses in 49 states. (Prediction: Walmart will be pleased it lost the war as it will find its own solutions and alliances.) 
    • Enterprise healthcare players are cautious, even by Rock Health’s admission, but the big money is going into deals that vertically integrate and complement, at least for a time–for example, Roche’s purchase of Flatiron Health. And when it doesn’t work, it tends to end in a whimper–this May’s quiet sale by Aetna of Medicity to Health Catalyst for an undisclosed sum. Back in 2011, Aetna bought it for $500 million. (Notably not included in the Rock Health analysis, even though they track Health Catalyst and the HIE/analytics sector.)
  • The market is dependent on big deals getting bigger. If you are well-developed, in the right sector, and mature (as early-stage companies go), you have a better shot at that $100 million B, D, E or Growth funding round. B rounds actually grew a bit, with seed and A rounds dipping below 50 percent for the first time since 2012. 
  • The Theranos Effect is real. Unvalidated, hyped up claims don’t get $900 million anymore. In fact, there’s real concern that there’s a reluctance to fund innovation versus integration. The wise part of this is that large fundings went to companies validating through clinical trial results, FDA clearance (or closing in on it), and CDC blessing.
  • The dabbling investor is rapidly disappearing. 62 percent of investors in first half had made prior investments in digital health including staying with companies in following rounds.
  • Digital health companies, like others, are staying private longer and avoiding public markets. Exits remain on par with 2017 at 60. Speculation is that Health Catalyst and Grand Rounds are the next IPOs, but there hasn’t been one since iRhythm in October 2016. The Digital Health public company index is showing a lot less pink these days as well, which may be an encouraging sign.
  • Behavioral health is finally getting its due. “Behavioral health startups received more funding this half than in any prior six-month period, with a cumulative $273M for 15 unique companies (nearly double the $137M closed in H1 2016, the previous record half for funding of behavioral health companies). Of these 15 companies, more than half have a virtual or on-demand component.”

Keep in mind that Rock Health tracks deals over $2 million in value from venture capital, excluding government and grant funding. They omit non-US deals, even if heavily US funded. 

Their projection for 2018 full year is $6.9 bn and 386 deals. Will their projection pan out? Only the full year will tell!

A Soapbox Extra!

Rock Health, like most Left Coast companies, believes that Vinod Khosla is a semi-deity. This Editor happens to not be convinced, based on predictions that won’t pan out, like machines replacing 80 percent of doctors; making statements such as VCs have less sexual harassment than other areas, and even banning surfers off his beach. He was at a Rock Health forum recently and made this eye-rolling (at least to this Editor) statement:

Is there one area in the last 30 years where the initial innovation was driven by an institution of any sort? I couldn’t think of a single area where innovation—large innovation—came from a big institution. Retailing wasn’t disrupted by Walmart, it was by Amazon. Media wasn’t changed by CBS or NBC, it was by YouTube and Twitter. Cars weren’t transformed by Volkswagen and GM—and people said you can’t do cars in startups—but then came Tesla.

Other than making a point that Clayton Christensen made a decade or more ago, the real nugget to be gained here is that formerly innovative companies that get big don’t grow innovation (though 3M tends to be an exception, and Motorola didn’t do too badly with the cell phone). They can buy it–and always have. 

Go back a few more decades and all of these companies were disrupters–and bought out (or bankrupted) other disrupters. CBS and NBC transformed entertainment through popularizing radio and then TV. VW created the small car market in the US and saved the German auto industry. GM innovated both horizontally (acquiring car companies, starting other brands) and integrated vertically (buying DELCO which created the first truly workable self-starting ignition system in 1912).

YouTube? Bought by innovator Google. Twitter? Waiting, wanting to be bought. Innovation? Khosla is off the beam again. Without Walmart, there would be no Amazon–and Amazon’s total lifetime profit fits nicely into one year of Walmart’s. Tesla is not innovative–it is a hyped up version of electric car technology in a styled package that occasionally blows up and remains on the borderline of financial disaster. (Model 3, where art thou?)

I’d argue that Geisinger, Mayo Clinic, and Intermountain Healthcare have been pretty innovative over the last 30 years. Mr. Khosla, read Mr. Christensen again!

The 50,000 foot pick as CEO of the JP Morgan Chase-Berkshire Hathaway-Amazon health joint venture

US healthcare is abuzz at the choice that JP Morgan Chase-Berkshire Hathaway-Amazon made to head their healthcare JV: Dr. Atul Gawande, currently practicing general and endocrine surgery at Brigham and Women’s Hospital and teaching as a professor at the Harvard T.H. Chan School of Public Health and Harvard Medical School. Dr. Gawande is presently an executive director of Ariadne Labs, a healthcare innovation center, a writer of four best sellers on healthcare and noted as an outspoken theorist on how the ‘broken’ healthcare system in the US can be fixed. (This Editor’s definition of ‘broken’ is slightly different, encompassing countries like Venezuela, Cuba, Zimbabwe, post-WWII Germany, and the Ceausescu-era Romania where the basics are simply not there for the average person.)

Dr. Gawande will transition to chairman of Ariadne and retain his surgical and teaching positions.

Praise for Dr. Gawande comes from many quarters. Andy Slavitt, the former head of CMS during the previous administration, said “There are few better people in health care” and praised his ‘moral leadership’ when approached by Messrs. Dimon, Bezos, and Buffett. Jeff Bezos: “We said at the outset that the degree of difficulty is high and success is going to require an expert’s knowledge, a beginner’s mind, and a long-term orientation. Atul embodies all three, and we’re starting strong as we move forward in this challenging and worthwhile endeavor.”

What is missing from this sterling public health advocate and practitioner’s resumé is obvious: real business management experience. Among his three soon-to-be-bosses, there is plenty of pontificating from 50,000 feet–for but one example, see this Editor’s POV on Jamie Dimon’s annual shareholder letter [TTA 10 Apr]. Here is what they stated as the purpose of the JV back in January: “partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs” and setting up an independent company “free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.” And more in that vein. (Whew!) It was eye-rolling, even shortly after the announcement back in February.

But actually getting this done is not a TEDTalk. First, there is the hard in-the-trenches work to bring both the management and the 1 million employees of three very different companies onto the same page. Second, it is running the gauntlet of regulations on the national level (that CMS and HHS) plus in 50 states, if this combine chooses to operate as an insurer or PBM. Third, if they don’t, there is getting the cooperation of insurers (payers) who aren’t in business to lose money. There is not only regulation, but also what they are willing and can afford to do. This Editor noted back in January that large companies, including these three, “generally self-insure for healthcare. They use insurers as ASO–administrative services only–in order to lower costs. Which leads to…why didn’t these companies work directly with their insurers to redo health benefits? Why the cudgel and not the scalpel?”

This Editor would expect that a group of skilled senior, operationally focused executives will be hired to work under Dr. Gawande in Boston, where this unnamed-yet venture will be headquartered. There may be some more high-profile senior executives with unconventional backgrounds. From this (lower than 50,000 feet) perspective, Dr. Gawande will be the attention-getting CEO, spokesman, and pace-setter; others will be doing the heavy lifting behind the scrim. 

Beyond the usual glowing coverage on CNBC and TechCrunch, those in the business of healthcare are already expressing more sanguine opinions on the enterprise and how Dr. Gawande will be leading it with multiple medical, teaching, and writing commitments. Modern Healthcare has a fairly balanced article.

The Theranos Story, ch. 49: CEO Holmes reportedly raising funds for a new company–and feeling like Joan of Arc

click to enlargeHere’s the place where your money will go if you’re an investor. John Carreyrou has now compiled his reporting for the Wall Street Journal on Theranos into a new book, Bad Blood: Secrets and Lies in a Silicon Valley Startup, and it is a Must Read for this Editor and anyone interested in the nexus of Tech, Healthcare, and Hype. (The link goes to AbeBooks, a worthy marketplace for independent booksellers.)

According to Mr. Carreyrou, the founder/CEO Miss Elizabeth Holmes–still leading the company despite settling with the SEC on fraud charges, surrendering her voting control, barred from serving as a public company director or officer for 10 years, and still fighting civil lawsuits–is raising fresh funds for a new venture.

Your eyes did not fool you.

Theranos was a Dogpile of Deceit. From hacking standard Siemens blood testing machines to work with tiny samples, falsifying test results, faking up the Edison test machine, to company financials, it was one lie on the other, chronicled for our Readers in nearly 50 chapters and multiple references. 

Mr. Carreyrou was asked by former Timesman and Vanity Fair reporter Nick Bilton whether, in this unmistakable pattern, Ms. Holmes was a sociopath. Mr. Carreyrou wisely refrained from diagnosis based on a used DSM-V, being a reporter and not her psychiatrist. From Mr. Bilton’s interview podcasted on ‘Inside the Hive’:

“At the end of my book, I say that a sociopath is described as someone with no conscience. I think she absolutely has sociopathic tendencies. One of those tendencies is pathological lying. I believe this is a woman who started telling small lies soon after she dropped out of Stanford, when she founded her company, and the lies became bigger and bigger,” Carreyrou said. “I think she’s someone that got used to telling lies so often, and the lies got so much bigger, that eventually the line between the lies and reality blurred for her.”

Mr. Carreyrou, and by inference anyone who doubted her, like her CFO, and especially those who went public with criticism–well, we are the Bad Guys:

“She has shown zero sign of feeling bad, or expressing sorrow, or admitting wrongdoing, or saying sorry to the patients whose lives she endangered,” he said. He explained that in her mind, according to numerous former Theranos employees he has spoken to, Holmes believes that her entourage of employees led her astray and that the bad guy is actually John Carreyrou. “One person in particular, who left the company recently, says that she has a deeply engrained sense of martyrdom. She sees herself as sort of a Joan of Arc who is being persecuted,” he said.

Mr. Carreyrou was set upon by this ‘martyr’s’ legal pitbulls, one David Boies, until he wisely exited stage left with a bushelful of worthless stock [TTA 21 Nov 16].

(And what is it about Stanford University that fosters people like Ron Gutman, recently ousted from HealthTap over employee abuse and intimidation charges in what may be a Silicon Valley First? [TTA 3 May] Here we have someone who plays with people’s lives and health in vital blood testing. Aren’t some ethics courses long overdue?) 

Mr. Bilton makes the extremely fine point that Silicon Valley will continue to be magnetically attracted to founders equipped with a ‘reality-distortion field’ (as he termed Steve Jobs). SV will relegate Theranos to a biotech outlier. Yet as long as Silicon Valley MoneyMen like Tim Draper will back the likes of Elizabeth Holmes as long as they have a good line of (stuff), despite being embarrassingly proven not just (and only) wrong, but now perpetrating fraud, the Jobsian Myth and black turtlenecks will rise again like Dracula. (Another analogy comes to mind, but precocious children might be reading this.)

We haven’t heard the last of her.

An excellent interview by Tom Dotan of Mr. Carreyrou is podcasted on The Information’s 411 in “You’re So Vein”, which gets the award for Title of the Week (trial signup required, or listen on SoundCloud). Starting at 15:00, interesting comments on the why of Sunny Balwani and Ms. Holmes’ series of ‘marks’ including George Shultz. Also Gizmodo and Politico’s Morning eHealth newsletter.

Health tech founder ousted over alleged ‘acts of intimidation, abuse, and mistrust’: some reflections (Soapbox)

And we thought they were par for the course. Those of us who have worked for company founders, CEOs, and senior execs have learned that some interesting personalities come with the territory, especially in entrepreneurial companies. This Editor has worked for at least one diagnosed ADHD, a bipolar ADHD, another with anger management/impulse control issues, and a gentleman who is now spending a few years in a Federal penitentiary for securities fraud. One of her most memorable CEOs made the cover of Fortune with the caption, “Is this America’s Toughest Boss?” and no, his name was not Donald Trump. (Clue: he was chairman of what was for a time the world’s largest airline conglomerate.)

Of late, there’s been the behavioral quirks of their founders leading to disastrous problems at Uber, Theranos, and Zenefits. It often seems that the more hype, the more sunshine, daisies, puppy dogs, mission, and ‘fab culture’ are on the website, the worse the dysfunctional reality and mistreatment of the troops.

Perhaps no longer. Monday’s very public firing by his board of Ron Gutman, CEO of HealthTap, a digital health all-over-the-map company that now has settled into a members-only patient-doctor mobile health platform, over non-financial behavior may be a first. Mr. Gutman was given the heave-ho by his board after, notably, months of effort. Recode cited a termination letter to him that he “committed acts of intimidation, abuse, and mistrust, and that [he] repeatedly mistreated, threatened, harassed and verbally abused employees.” The coup de grâce: “The toxicity you introduced into the workplace ends now.”

An all-hands memo to employees was more restrained:

After receiving concerning reports by employees about Ron’s conduct as CEO, the Board of Directors hired an outside law firm to conduct an investigation into these allegations. What we learned left us with no choice but to make this change, and we did so after taking the necessary steps from a corporate governance perspective.

The replacing CEO is Bill Gossman, a serial founder and a partner in one of the investors, Mohr Davidow Ventures.

Mr. Gutman has denied it all, stating that he did not abuse employees and that the VCs are in violation of their duties. (FYI, not a whiff here of #MeToo antics.)

Funded to the tune of $38 million by Khosla Ventures, Mayfield Fund, and Eric Schmidt’s Innovation Endeavors, but without fresh funding in five years, the public face of both Mr. Gutman and HealthTap (of which he is the very public face, appearing all over their website still) is one with a very large smile. Mr. Gutman gained some fame from his TED talk and book on the power of smiling. One wonders how the smile is doing today. A frown turned upside down. TechCrunch, Mobihealthnews

Soapbox: JPM’s Dimon takes the 50,000 foot view on the JP Morgan Chase-Berkshire Hathaway-Amazon health joint venture

Mr. Jamie Dimon, the chairman and CEO of JP Morgan Chase, had a few thoughts about the JPM-Berkshire Hathaway-Amazon healthcare JV for all three companies. You’ll have to fill up the tea or coffee mug (make it a small pot) for it’s an exceedingly prolix Annual Shareholder Letter you’ll have to sled through to find those comments. Your Editor has taken her punishment to find them, towards the end of the letter in ‘Public Policy’. 

They demonstrate what this Editor suspected–an headache-inducing mix of generalities and overreach, versus starting modestly and over-delivering.

  • Point #1 sets up what has gone wrong. Among several, “Our nation’s healthcare costs are twice the amount per person compared with most developed nations.” Under point 2 on how poor public policy happened, an admission that Obamacare fixed little:

Here’s another example: We all know that the U.S. healthcare system needs to be reformed. Many have advocated getting on the path to universal healthcare for all Americans. The creation of Obamacare, while a step in the right moral direction, was not well done. America has 290 million people who have insurance — 180 million through private enterprise and 110 million through Medicare and Medicaid. Obamacare slightly expanded both and created exchanges that insure 10 million people. But it did very little to fix our broken healthcare system and has, in fact, torn up the body politic over 10 years — and this tumult may go on for another 10 years.

  • Point #7 is about fixing the deficit and the ill effects if we don’t. In Mr. Dimon’s view, healthcare is a major part of this through the uncontrolled growth of entitlements, with Medicare, Medicaid and Social Security leading the pack–skipping over the fact that nearly all Americans pay into Medicare and SSI well in advance of any entitlement collection. Healthcare is also an offender through unnecessary costs such as administrative and fraud (25-40 percent),  and six mainly chronic conditions accounting for 75 percent of spending.
  • The experts–specifically, their experts–will fix it! “While we don’t know the exact fix to this problem, we do know the process that will help us fix it. We need to form a bipartisan group of experts whose direct charge is to fix our healthcare system. I am convinced that this can be done, and if done properly, it will actually improve the outcomes and satisfaction of all American citizens.”
  • The generalities continue with
    • The JV “will help improve the satisfaction of our healthcare services for our employees (that could be in terms of costs and outcomes) and possibly help inform public policy for the country.” 
    • Aligning incentives systemwide ‘because we’re getting what we incentivize’
    • “Studying the extraordinary amount of money spent on waste, administration and fraud costs.”
    • “Empowering employees to make better choices and have the best options available by owning their own healthcare data with access to excellent telemedicine options, where more consumer-driven health initiatives can help.”
    • “Developing better wellness programs, particularly around obesity and smoking — they account for approximately 25% of chronic diseases (e.g., cancer, stroke, heart disease and depression).”
    • “Determining why costly and specialized medicine and pharmaceuticals are frequently over- and under-utilized.”
    • “Examining the extraordinary amount of money spent on end-of-life care, often unwanted.”
    • “To attack these issues, we will be using top management, big data, virtual technology, better customer engagement and the improved creation of customer choice (high deductibles have barely worked”).

This Editor has observed from the vantage of the health tech, analytics, payer, and care model businesses that nearly every company has addressed or is addressing all these concerns. So what’s new here? Perhaps the scale, but will they tap into the knowledge base those businesses represent or reinvent the wheel? 

A bad sign is Mr. Dimon’s inclusion of ‘end of life care’. This last point is a prime example of overreach–how many of the JV’s employees are in this situation? The ‘attack’ tactics? We’ve seen, heard, and many of us have been part of similar efforts.

Prediction: This JV may be stuck at the 50,000 foot view. It will take a long time, if ever, to descend and produce the concrete, broadly applicable results that it eagerly promises to its million-plus employees, much less the polity. 

PARO: The robotic therapy seal that benefits so few

click to enlargeI have a problem with that cute, robotic seal cub PARO.

More accurately, I have a problem with the ethics of the business model of the Japanese company that makes it, Intelligent System Co. Ltd.

PARO started development in 1993 and the first English press release was in 2004 – a year before Telehealth and Telecare Aware started! Since then the indications that PARO is good for people with dementia have been building and building, as Editor Donna most recently highlighted in this item: PARO therapy robot tested, cleared by NHS for — hygiene.

I have no problem believing, as Donna summarised, “the research has shown that it lowers stress and anxiety, promotes social interaction, facilitates emotional expression, and improves mood and speech fluency.”

However, in response to an enquiry last week, it was confirmed to me that neither price or delivery time information is available but that PARO seals continue to be made individually, by hand. This is a huge production bottleneck and cost.

It is entirely proper for a company that produces handmade cars to have high prices and long waiting lists for their rich man’s toys but I am completely at a loss to conjure up any justification to apply that thinking to PARO. (PARO cost $6,400 in 2017.)

I believe that the insistence that PARO continues to be made in this way is an unethical denial of a benefit to millions of people.

Does Intelligent System not have the will or the skill to scale up production and bring down the cost so that every care home or dementia ward could acquire a PARO (or even a ‘PARO lite’) within a few years? If not, they should license it to a company that can.

At least they should stop pretending that PARO is benefiting people with dementia when it reaches so few.

This Telehealth and Telecare Aware Soapbox item is the personal opinion of TTA founder and Editor Emeritus Steve Hards.

Blockchains, EHRs, roadblocks and baby steps

TTA founder and former editor Steve Hards crawls out of his retirement tent to squint at the misty landscape of blockchain technology.

In a recent dream I was observing an auditorium full of people chanting “Blockchain! Blockchain! Blockchain!” and yes, mantra-like, blockchain is now popping up all the time in health technology articles and presentations.

It has taken a while to get to this stage. It was January 2016 when Editor-in-Chief Donna first mentioned blockchain. Since then there appears to have been more talk than action.

A year ago, in February 2017, health IT guru Brian Ahier was able to say in a comment here “Blockchain of course, is going to sneak up on a lot of people…”

Where we have seen developments occurring is in the trickle of ‘coins’ or ‘tokens’ in health-related Initial Coin Offerings (ICOs) of dubious investment worthiness. I may rant about those in a follow-up article if anyone is interested. (Let me know in a comment.)

The terminology is still in its ‘shakedown phase’ (see this great terminology rant) and, because of the publicity around Bitcoin, which is on a blockchain, the distinction between blockchains and distributed ledger databases is blurred. There are technical differences: blockchains are a sub-set of distributed ledgers (Wikipedia), which is the term I’ll generally use in this article.

Distributed ledgers and EHRs

What are the implications of distributed ledgers for the biggest databases in healthcare, electronic health records (EHRs)?

The two principal characteristics that differentiate distributed ledgers from the databases with which we are familiar are that they are more robust and, potentially, more private. Some even claim to be quantum computing hack proof although we will have to wait for hackers with quantum computers to test that.

Traditional databases are formed from one large or several linked entities that have a centralised control from where performance, data integrity and security are monitored and managed. There are human and technological factors that introduce weaknesses to all such systems, as the number of data breaches reported here over the years testify.

(more…)

HeyDoctor! Come and get your diagnosis via text here!

An app that makes this semi-grizzled pioneer feel…not quite on board the wagon. HeyDoctor is not for horses, but for those who Text to Live. Yes, all you need to do if you feel under the weather is to download the app, text the doc, get your diagnosis, and prescription. Like that. No need to comb your hair and wash your face for that video visit. According to the website, you can get anything from a UTI to acne to erectile dysfunction diagnosed and treated. Out of birth control? Handled. You can get tests ordered up for blood typing, HIV, and metabolic analysis. Not happy with your lash thickness and growth? Here’s the topical med for you! Trying to quit smoking? Done. All you need do is text one of their in-house board-certified physicians and live in one of 19 states where it’s offered.

For our UK Readers, this is a service with similarities to Babylon Health‘s chatbot service but without the decision support ladder–it goes straight to the doctor.

They claim on the website that most visits are five minutes and under $20 in cost, plus affiliations with leading medical centers like UCSF and Georgetown, although this Editor doubts that Amazon Web Services (AWS) is a ‘healthcare organization’ in the same category.

MedCityNews confirms their playbook, for now, is B2C, but the San Francisco-based founders are considering partnering with health systems. According to Crunchbase, funding so far is seed from the two founders, Brendan Levy, MD, a SF-based family medicine practitioner, and Rohit Malhotra, an attorney. LinkedIn counts three employees.

So why not on board the Conestoga? While the convenience is very attractive, there’s also the opportunity for misdiagnosis–the kind of thing we used to worry about with telemedicine. Does the app secure the texts for privacy? Many of these conditions aren’t hangnails–HIV and UTIs come to mind. Oddly, photo upload isn’t mentioned–important with acne. Testimonials point to convenient prescription renewals, but that information can be falsified–easy to do with text. Identity too with smartphones can be faked. A video consult also permits the doctor to see the patient and pick up at least some physical signs of illness. Also not inspiring confidence: a website that crashed when I looked for FAQs and had a chatbot named Brendan (same face as Dr. Levy’s) constantly popping up after X’ing him out. To this Editor, it feels like some verification and diagnostic layers are…missing.

Anthem to Cigna: That’s Sabotage! You’re staying, like it or not! (updated 21 Feb)

Breaking News in The War of the Payers. Late on Wednesday (15 Feb), Anthem received a temporary restraining order to block Cigna from terminating the merger. Judge Travis Laster’s decision in the Delaware Court of Chancery maintains the “legal status quo’ until an April 10 hearing, where he will hear arguments from both sides. Anthem is now able to proceed with a fast-tracked appeal in the DC Federal Court of Appeals to overturn the February 8 DC District Federal Court decision that denied the merger. The sole extension in the merger agreement is to April 30, which will be preceded by the Chancery Court hearing 20 days prior. Bloomberg, WSJ (via 4-traders.com)

Wednesday morning, Anthem had filed a temporary restraining order in Chancery Court to keep Cigna from ankling the merger, which would make an appeal moot. It was positioned in their February 15 release as “a temporary restraining order to enjoin Cigna from terminating, and taking any action contrary to the terms of, the Merger Agreement, specific performance compelling Cigna to comply with the Merger Agreement and damages.” Cigna wanted out immediately, as we noted on Feb 14, seeing no hope in challenging the District of Columbia Federal District Court ruling as Anthem does, and took the position that the extension was invalid. They also sought an additional $13 billion in damages for shareholders beyond the $1.85 billion breakup fee.

The language Anthem used in Wednesday’s release to justify the filing was harsh: “…Cigna does not have a right to terminate the Merger Agreement at all because it has failed to perform fully its obligations in a manner that has proximately caused or resulted in the failure of the merger to have been consummated.” Anthem then accused Cigna of actively working to sabotage the merger: “Cigna’s lawsuit and purported termination is the next step in Cigna’s campaign to sabotage the merger and to try to deflect attention from its repeated willful breaches of the Merger Agreement in support of such effort.”Also Forbes

Bottom line: ‘Cigna, you’re a bad and faithless partner, but we are going to force a merger by any means possible anyway.’ Cigna blames Anthem for botching the merger approvals. Does prolonging any of this make sense?

Updated 21 Feb The differences started at the very beginning, with C-level disputes on who would lead a merged company and other areas of governance, so obvious (and public) they were cited by DC Federal District Judge Amy Berman Jackson’s Feb. 8 decision. David Balto, an antitrust lawyer in Washington, dubbed it ‘a shotgun marriage that went sour’ and not to discount Cigna’s case for damages due to business harm. After reading this article, you’ll wonder why they even started. Hartford Courant

Analysis Any merger between Anthem and Cigna has become, despite the language, a hostile takeover, worthy of Frank Lorenzo in this Editor’s airline days, or more recently, Carl Icahn. Having worked for Mr Lorenzo years ago, observing from my tiny chair way over on the sidelines, I learned that hostile takeovers and poorly thought-out mergers don’t work out well, in service delivery or economics, short or long term. They usually end badly, in bankruptcy court, with many tears shed and lives wrecked.

Memo to Anthem and Cigna–is this really necessary? Here we are dealing with insurance, and service to policyholders/members, affecting both their health and wealth. You both talk a good game about saving on medical costs, accelerating the progress of value-based care, delivering value to shareholders, and improving quality. But you hate each other and have from the start. Playing the game of Who Blinks First, and the distraction of a long and bitter legal battle, cannot be anything other than harmful to your members, employees, doctor and health system providers, your bottom lines, and your future.

This is not the airline business, beverages or detergent. It’s people’s lives here–have you both forgotten? Enough! Stop now! Get back to the business of healthcare!

Previously and related in TTA: Cigna to Anthem: we’re calling it off too, Aetna’s Bertolini to Humana: let’s call the whole thing off, Anthem-Cigna merger nixed

The Theranos Story, ch. 29: Blame the scientists! Bring on the lawyers!

click to enlargeIt was the fault of the scientists and the investors! That is the speculation of Quora poster Drew Smith, a former R&D director at biotech firms MicroPhage and SomaLogic. It was a round robin of founder/CEO Elizabeth Holmes’ all-too-rosy forecasts and scientists not wanting to toss a wet wool blanket on the fun by telling her what she didn’t want to hear. Mr Smith, from where his experience lies, believes that the scientists discarded the testing with bad results, passing on only the good even if flawed, in a delusional circle that ultimately went pear-shaped. Then there were the investors, who didn’t apply the usual Deep Discount to the Big Hype that all entrepreneurs weave around the Revolutionary Whatevers, for whatever reason. On this, Mr Smith doesn’t speculate. It must have been those wide-screen blue eyes, black turtlenecks, and nanotainers that kept them mesmerized. Theranos wouldn’t be the first company that failed because they believed their own press releases and pictures! Forbes  Hat tip to reader Bill Oravecz of Stone Health Innovations and WTO Associates.

And the law firms multiply. Continuing to fight Theranos’ many lawsuits in multiple courts are a bevy of Big Law firms. In Chapter 26, Boies Schiller exited, stage left, and Wilmer Hale (formally Wilmer Cutler Pickering Hale and Dorr) entered. Wilmer Hale is representing Theranos in the California class action lawsuit described in Chapter 27 and what we’ve deduced is the Partner Fund Management lawsuit filed in Delaware (Chapter 21). Here’s where Santa unloads his jolly pack of toys for the Law Boys. Cooley LLP (32nd on The American Lawyer’s 2016 Am Law 200 ranking) is busy representing Ms Holmes, who has been separately sued by Partner Fund Management, and defending an Arizona lawsuit (Chapter 22). And on deck for Theranos in the Walgreens action, also in Delaware? (Chapter 23) Newcomer Wilkinson Walsh + Eskovitz, founded earlier this year by top trial lawyers from larger firms. All those billable hours add up to gold in their stockings, coal in Theranos’. Law.com

See here for the 28 previous TTA chapters in this Continuing, Consistently Amazing Saga.

Categories: Latest News, Opinion, and Soapbox.

WLSA merger with PCHAlliance: the digital health conference scene contracts a bit more

Over the weekend, the Personal Connected Health Alliance (PCHAlliance) and the Wireless-Life Sciences Alliance (WLSA) announced that the San Diego-based WLSA would be combining its operations with the PCHAlliance. This follows on the earlier announcement [TTA 21 Oct] that the Boston-based and Partners HealthCare- owned Connected Health Symposium would be folding its operation into the PCHAlliance. Both Robert B. McCray, co-founder and CEO of WLSA, and Dr Joseph Kvedar of Partners HealthCare are now Senior Advisers to the PCHAlliance, with Mr McCraw heading Thought Leadership and Dr Kvedar now Program Chair of next year’s event.

WLSA has been largely inactive on the conference scene since 2015, when it staged its last Convergence Summit in May and the Wireless Health event in October of that year. The Convergence Summit has been merged into PCHAlliance’s Connected Health Conference kicking off today near Washington, DC. The Wireless Health event will continue through a collaboration with IEEE/EMBS cooperating with the National Institutes of Health (NIH) and the National Science Foundation (NSF).

In their release, PCHAlliance emphasized WLSA’s experience in research within engineering, computer science, biomedical and health disciplines. Patricia (Patty) Mechael, PhD, Executive Vice President, PCHAlliance in the release was quoted that “Their focus on medical and health research communities is a perfect compliment to our commitment to accelerate the adoption of clinical grade technology in consumer-friendly health outcomes- based business models.” Life science companies will be welcomed for membership in the PCHAlliance. PCHAlliance also includes Continua, which for well over a decade has been promoting engineering standards for device interoperability.

As this Editor looked back in October, when most of these organizations and events started about 2007-8, there were few Big Health conferences that took what was then dubbed eHealth and mHealth (later Digital Health) seriously. Now, of course, they do. There are also multiple events, large and small, expensive and popularly priced, every month in many cities–we attended and reported on #MedMo16 which will be branching out to multiple cities in 2017.

In looking back at our articles, the WLSA was engaged with the conference almost from the start, when the mHealth Summitwas one of the first ‘big name/big support’ conferences. Its tack then was governmental policy and what international NGOs were doing as a model for developed nations. It was organized by the Foundation for the National Institutes of Health, the National Institutes of Health and the mHealth Alliance up to 2012, when HIMSS took it over.

Grizzled Pioneers, and even the non-grizzled, can testify to the multiple phases in a decade up and down the Hype Curve: device-driven, mobile-driven, sensor-driven, telehealth, wearables, Big Data, population health, patient engagement, analytics, data integration, outcomes-based and a few others. This move confirms that many factors are blending: academic, engineering, software, biotech, genomics, social, behavioral, governmental–and that technology is not standalone or sitting in isolation, but is integrating and manifesting itself in all sorts of interesting places both behind the consumer scene and in policy, and to consumers on mobiles and in the home (IoT, which hasn’t resolved its multiple and obvious security problems).

Also Neil Versel in MedCityNewsTTA is a media partner of the PCHA CHC for the 8th year, starting in 2009 when it was the brand new mHealth Summit. Conference tweets on #connect2health.

Optum’s Utopia of proactive patient care–without telehealth

click to enlargeAnd we wonder why telehealth patient monitoring is floundering and telemedicine is only starting to take off? In this Editor’s reading today, up came this rather glossy, beautifully designed advertorial web page in The Atlantic sponsored by healthcare services provider/holding company Optum. It describes a proactive, highly supportive care process that starts with the diagnosis of a chronic condition (in this case developing CHF) through a ‘health scare’ handled at an urgent care versus a hospital ED, then to care at home (from a highly engaged nurse-practitioner no less) and a patient who, suitably engaged, is “responsibly managing her condition through a wellness approach” and has an improved lifestyle.

Other than an EMR (integrated between provider and urgent care–but EHR is the more current term), no other technology other than telephonic is mentioned in this rosy picture. Where’s the telehealth app that touches our patient, letting her chart her weight, breathing and general wellness, sending it to her EHR and alerting that nurse so she can truly be proactive in seeing changes in her patient’s health? Where’s the telemedicine virtual visit capability, especially if our patient’s out of breath outside of normal office hours, or there’s a blizzard and that nurse can’t visit? Here’s all the infrastructure built up for integrated care, but where’s the technology assistance and savings on home health visits and transportation for the patient?

It can’t be that Optum doesn’t know about what telehealth/telemedicine can do and the role it already plays in care? It can’t be that it doesn’t fit in the integrated care infrastructure? Or does it have to do with reimbursement? (Optum is the parent of giant insurer United HealthcareReaders’ thoughts?

The Theranos Story, ch. 28: when the SecDef nominee is on the Board of Directors

click to enlargeDoes ‘Mad Dog’ ‘Warrior Monk’ James Mattis, General, USMC (ret.) have a blind spot when it comes to Theranos? President-Elect Donald J. Trump has selected him as the next Administration’s nominee for Secretary of Defense. A remarkable leader and, yes, scholar (check his background in various sources), but he has some ‘splaining to do, in this Editor’s opinion.

This Editor leads with this question because those who have been following the Continuing Saga (which, like the Nordics, seems never-ending) know that Theranos stuffed its Board of Directors (BOD), prior to last October, with a selection of Washington Luminaries, often of a great age: Henry Kissinger, George Shultz, Sen. Sam Nunn, Sen. Bill Frist (the only one with an MD), William Perry and Gary Roughead, a retired U.S. Navy admiral. It also reads like a roster of Hoover Institution Fellows except for Sen. Frist, who sticks to the East Coast. Another interesting point: Hoover is based at Stanford University, an institution from which Elizabeth Holmes dropped out to Follow Her Vision. Obviously, there was an accompanying Vision of Washington Pull.

Also joining the BOD as of July 2013, well before The Troubles, and shortly after his retirement, was Gen. Jim Mattis (also a Hoover Fellow, photo above). When the Washington Luminaries were shuffled off to a ‘board of counselors’ after the Wall Street Journal exposé hit in October, Gen. Mattis remained on the governing BOD. Unlike his fellow Fellows, he had actually been involved with a potential deployment of the lab testing equipment. As we previously noted, as commandant of US Central Command (CENTCOM is Middle East, North Africa and Central Asia), he advocated tests of the Theranos labs under in-theatre medicine conditions in 2012-13. Leaked emails cited by the Washington Post (in Gizmodo) and also in the Wall Street Journal indicate the opposition from the US Army Medical Research and Materiel Command at health-intensive Fort Detrick MD, which oversees medical research, based on the undeniable fact that the equipment and the tests weren’t FDA-cleared, which remained true two years later…and which Gen. Mattis tried to get around, being a good Marine. Nonetheless, the procurement of Theranos equipment was halted. DOD permitted him to join the BOD after retirement as long as he was not involved in any representations to DOD or the services. (Wikipedia bio)

Yesterday, Theranos also announced that it is dissolving (draining?) the ‘board of counselors’. They led with a BOD shuffle, with Daniel J. Warmenhoven, retired chairman of NetApp, replacing director Riley P. Bechtel, who is withdrawing for health reasons. (Warmenhoven also serves on the Bechtel board, so they are keeping an eye on the estimated $100 million they invested). Gizmodo and Inc. While effective January 1, the Theranos website has already scrubbed the counselors and updated the BOD.

However, Gen. Mattis remains a director, until such time as he actually becomes Secretary of Defense, which is not a lock for Senate approval by a long shot. First, he requires a Congressionally approved waiver demanded by the National Security Act of 1947, as he has been retired only four years (as of 2017) not the required seven. Second, his involvement with Theranos has already been questioned in the media. After all, it is a Federal Poster Child of Silicon Valley Bad Behavior: censured by CMS, under investigation by SEC and DOJ. It is a handy, easily understandable club with which to beat him bloody (sic). WSJ’s wrapup.

In this Editor’s opinion, the good General should have left in October, but certainly by April when CMS laid the sanctions down, banning Ms Holmes and Mr Balwani from running labs for two years in July. What is going on in the ‘Warrior Monk’s’ mind in sticking around? Is there anything to save? 

If the WSJ articles are paywalled, search on ‘Gen. James Mattis Has Ties to Theranos’ and ‘Recent Retirement, Theranos Ties Pose Possible Obstacles for Mattis Confirmation’.  Oh yes…see here for the 27 previous TTA chapters in this Continuing, Consistently Amazing Saga.

The Theranos Story, ch. 19: the dramatic denouement, including human tragedy

click to enlargeThe deconstruction of Theranos continues, con il dramma, rounding back to those who touted it. There isn’t all that much new in Nick Bilton’s Vanity Fair article, but it adds context and color to this (literally) Bloody House of Smoke and Mirrors. (Ah, where’s Christopher Lee when you need him?–Ed.) There’s the usual Inside Baseball of closed-door meetings in ‘war rooms’, G150 jetting to awards, bodyguards, threatening lawyers, crisis managers, COO ‘enforcers’ (Sunny Balwani) and playing the Silicon Valley investor game (with Google Ventures taking a very smart pass). Where this gets unusual is the portrait of Elizabeth Holmes as an obsessive, secretive, blondined Steve Jobs knockoff from the age of 19, with a hot idea that never matched scientific reality from the start, but with a great line of ‘making the world a better place’ magnified by Silicon Valley’s incessant, We’re The Top And You’re Not narcissism.

Even Narcissus ultimately saw a fool in that pool. Played and tarred to a greater or lesser degree were: the only major SV VC lured in, Draper Fisher Jurvetson, and off-SV investors like mutual funds and private equity have lost it all; Fortune, Forbes, CNN plus much of the tech and financial press; and respected people lured to the board like Marine Gen. James Mattis, who had initiated the pilot program in DOD, Henry Kissinger and former Senator Bill Frist MD. Then the alphabet agencies marched in after the author: FDA, CMS, SEC and DOJ.

Oh yes, that Zika test announced in early August? Withdrawn at end of August. Ms Holmes is appealing her two year lab ban. But she still has absolute control of what’s left of the business. Business Insider

Finally, the lede in many articles is the suicide of British chief scientist Ian Gibbons and Ms Holmes reaction. Already ill with cancer, (more…)

Robot greeter on the job at Ostend, Belgium hospital–and those killer robots

click to enlargeThis humanoid (but not Terminator-like, its developers are careful to say!) robot is currently on the job as a receptionist at Ostend, Belgium hospital AZ Damiaan. Equipped with healthcare-oriented software developed by local company Zora Robotics, the Aldebaran/SoftBank Robotics’ demure Pepper robot stands 1.2 meters (just under 4 feet), speaks 19 languages and works for about 20 hours on a single charge. Pepper communicates via its tablet interface but also is responsive to actions and emotions in what SoftBank calls a natural and intuitive way. The Pepper robot was first deployed in the hospital’s maternity area. The video has an awwwww…. illustration of a newborn grasping Pepper’s fingers. Previously, the toddler sized Nao robot worked with patients at AZ Damiaan for physical therapy. (Nao robots have also been featured in modern dance and as greeters at Japanese hotels and banks.) Reuters (video 1:51)

click to enlargeThis is a far more benign take on robots than the Daily Mail‘s recent screamer that “Killer robots are ‘quickly moving toward reality’ and humanity only has a YEAR to ban them” which conflates drone weaponry (human guided) with ground robots (human guided). As of now, They’re Still Puppets (more…)