News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Two Important Aspects for Clinical Laboratories to Consider Following Elizabeth Holmes’ Conviction

The Theranos trial brought plenty of media attention, but beneath the hype, laboratory managers have lessons to ponder

Editor’s note: This is a special edition of Dark Daily brought to you by The Dark Report.

The conviction of disgraced Theranos founder and former CEO Elizabeth Holmes brings a close to one of the most infamous healthcare and high-tech trials ever.

But the high-profile case should not camouflage critical, everyday lessons for clinical laboratories.

Holmes was found guilty on Monday of four charges: three for defrauding investors and one for conspiracy to commit wire fraud (i.e., fraud perpetrated using electronic communications). The jury said she was not guilty of four other fraud charges related to patients who received blood testing, and it deadlocked on three charges related to defrauding other investors.

Key to the convictions was testimony from numerous witnesses, including former Theranos laboratory directors who knew the company’s Edison finger-prick blood machine did not work as touted.

Look for more details about the trial’s conclusion on Monday from Dark Daily and a full analysis of what the verdict means for clinical laboratory directors and anatomical pathologists in a future issue of The Dark Report.

Theranos logo

The trial of former Theranos CEO Elizabeth Holmes concluded this week with conviction on four charges. For clinical laboratory directors, the trial’s media hype should not obscure important lessons to be learned.

Two Lessons for Laboratories to Evaluate Following the Trial

The average lab director likely will never face the media buzz and scandalous nature of the Holmes trial. Nonetheless, laboratory leaders should take lessons from aspects of the court proceedings.

The biggest one? The director listed on a lab’s license under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) holds responsibilities that have legal sway.

Such ramifications were clear during the Holmes trail given that four of Theranos’ former lab directors took the witness stand. However, it won’t take a high-profile case to bring up CLIA licenses in court. Laboratory teams should carefully review what their legal responsibilities are under the regulation.

Another important facet for lab managers to consider is adding a policy to their operations manual (if not already present) about properly dealing with whistleblower complaints.

No one will ever know if Theranos’ trajectory would have changed had executives, including Holmes, heeded the warnings of whistleblowers regarding inaccurate test data from the Edison machines. Instead, they shrugged the whistleblowers off, likely because they were young and Theranos was the subject of significant positive media coverage. The whistleblowers ended up being powerful sources of information for regulators and prosecutors.

Subscribers to The Dark Report can check out past coverage of the trial, which analyzed developments during the proceedings to explain how they should influence lab directors moving forward:

  • In Theranos’ Trial, CLIA Laboratory Director Has a Starring Role (Nov. 29, 2021)
  • CLIA Lab Director Testimony Shows Risks to Pathologists (Nov. 8, 2021)
  • Third CLIA Lab Director Testifies in Trial of Elizabeth Holmes (Nov. 8, 2021)
  • Former Theranos Lab Director Makes News at Elizabeth Holmes Trial (Oct. 18, 2021)

—Scott Wallask

Related Information:

Theranos Founder Elizabeth Holmes Has Been Convicted of Fraud

CLIA Laboratory Director Responsibilities

The Powerful Impact of the Theranos Whistleblower

Another Former Theranos Clinical Laboratory Director Testifies in Holmes’ Fraud Trial about Irregularities with Proprietary Edison Blood-Testing Technology