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Clinical Laboratories and Pathology Groups

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Great Resignation Hits Retail Pharmacies, Causing Shorter Hours, Closures

As with clinical laboratories, worker shortage is affecting large retail pharmacy chains and independent pharmacies alike

Staffing shortages in clinical laboratories and anatomic pathology groups caused by the Great Resignation is having a similar impact on retail pharmacy chains. Consequently, pharmacy chains are reducing store hours and even closing sites, according to USA Today.

As Dark Daily covered in “Clinical Laboratories Suffer During the ‘Great Resignation,” the US Bureau of Labor Statistics reported that from August 2021 through December 2021, the healthcare and social assistance workforce saw nearly 2.8 million workers quit—an average of 551,000 people during each of those months. By comparison, in December 2020, 419,000 healthcare workers left their jobs.

Pharmacies now report similar shortages in qualified workers, partly due to the sharp decrease in revenue from COVID-19 vaccinations, but also due to worker burnout. Both developments have counterparts in clinical laboratories as well.

B. Douglas Hoey, PharmD

“I’m concerned that without the help from the COVID-19 vaccinations that everyone needed, these pharmacies that were able to tough it out for another year or two might not be able to continue,” B. Douglas Hoey, PharmD, CEO of the National Community Pharmacists Association (NCPA), told USA Today. Clinical laboratories that processed large numbers of SARS-CoV-2 diagnostics have experienced the same sudden drop in revenue causing similar difficulties maintaining staffing levels. (Photo copyright: Cardinal Health.)

Staffing Shortages Leading to Safety Concerns

According to the Washington Post’s coverage of a study conducted in 2021 of 6,400 pharmacists in various retail and hospital environments, a majority did not feel they could conduct their jobs efficiently or safely.

  • “75% of the pharmacists in [the] survey disagreed with the statement ‘Sufficient time is allocated for me to safely perform patient care/clinical duties.’”
  • “71% said there were not enough pharmacists working to ‘meet patient care/clinical duties.’”
  • “65% said ‘payment for pharmacy services’ did not support their ‘ability to meet clinical and non-clinical duties.’”

“Workplace conditions have pushed many pharmacists and pharmacy teams to the brink of despair,” said the board of trustees of the American Pharmacists Association (APhA) in a press release, the Washington Post reported. “Pharmacy burnout is a significant patient safety issue. It is impacting patients today with delayed prescription fulfillment, unacceptable waits for vaccines and testing, and potential errors due to high volume, long hours, and pressure to meet performance metrics.”

This is a sentiment that has been repeated across every facet of healthcare—including in clinical laboratories—where staff shortages are being felt.

Shortage of Pharmacists or Lack of Morale?

In “Drugstores Make Slow Headway on Staffing Problems,” the Associated Press outlined from where it believes the staffing problems originate. “There isn’t a shortage of pharmacists. There’s just a shortage of pharmacists who want to work in those high-stress environments that aren’t adequately resourced,” Richard Dang, PharmD, Assistant Professor of Clinical Pharmacy at the University of Southern California (USC), told the Associated Press.

This statement is reminiscent of the views expressed by Susanna Bator, a former clinical laboratory technician, in her personal essay published in The Daily Nurse titled, “The Hidden Healthcare Heroes: A Lab Techs Journey Through the Pandemic.” She previously worked at the Cleveland Clinic and with MetroHealth System in Cleveland, Ohio.

Dark Daily covered Bator’s journey as a clinical laboratory technician working in the trenches during the COVID-19 pandemic in “Clinical Laboratory Technician Shares Personal Journey and Experience with Burnout During the COVID-19 Pandemic.”

“The pressure never let up. No matter how mind-numbing and repetitive the work could get, we had to work with constant vigilance, as there was absolutely no room for error,” Bator wrote.

“We techs were left unsupported and unmentored throughout the pandemic,” she continued. “No one cared if we were learning or growing in our job, and there was little encouragement for us to enter training or residency programs. We were just expendable foot soldiers: this is not a policy that leads to long-term job retention.”

Healthcare workers feeling burnt out and under-appreciated during the pandemic led to mass resignations that produced staffing shortages throughout the industry. It appears this trend has caught up to pharmacies as well.

Workforce Wasn’t Ready

Local and chain pharmacies played an important role in the COVID-19 pandemic. Pharmacists distributed COVID-19 tests and treatment to their communities. But for many it was a struggle to keep up.

Stefanie Ferreri, PharmD, Distinguished Professor in Pharmacy Practice and Chair of the Division of Practice Advancement and Clinical Education at University of North Carolina’s Eshelman School of Pharmacy, told the Associated Press that she felt the expanding role of pharmacies in public health was “awesome” but stated that “the workforce wasn’t quite ready” for what took place during the pandemic.

Much like Bator recounted in her essay, pharmacy workers suddenly had new responsibilities, longer working hours, and little room for error.

“There are multiple stories about pharmacists just getting overwhelmed. The stress level and burnout is high,” Dima M. Qato, PharmD, PhD, told USA Today. Qato is Hygeia Centennial Chair and Associate Professor (with tenure) in the Titus Family Department of Clinical Pharmacy at the University of Southern California. “So, pharmacists leave, and stores have to shorten” their hours, she added.

Scheduling and Patience Can Help

What can be done to soften some of the issues staff shortages are causing? Ferreri suggests that pharmacies set appointment times for regular customers so that a pharmacist’s workload can be more predictable. An appointment system can ease stress for both the pharmacist and patient. Ferreri advises customers to be patient when it comes to their prescriptions. She suggests patients give pharmacies more than a day’s notice for refills.

“I think on both sides of the counter, we need to all have grace and realize this is a very challenging and stressful time for everyone,” said Brigid Groves, PharmD, Vice President, Pharmacy Practice at the American Pharmacists Association.

With burnout, staff shortages, and stress affecting nearly every aspect of the healthcare industry, having patience with each other will go a long way to helping clinical laboratories, pharmacies, and patients navigate the road ahead.

Ashley Croce

Related Information:

Pharmacies Are Cutting Hours and Closing Stores. What It Means for Customers.

Pharmacists Are Burning Out. Patients Are Feeling the Effects.

Drugstores Make Slow Headway on Staffing Problems

The Hidden Healthcare Heroes: A Lab Techs Journey Through the Pandemic

US Hospitals Continue to Be Squeezed by Shortage of Nurses, Rising Salaries

Clinical Laboratories Suffer During the ‘Great Resignation’

Clinical Laboratory Technician Shares Personal Journey and Experience with Burnout During the COVID-19 Pandemic

Class-Action Lawsuit Filed on Behalf of Patients who Purchased Theranos Testing Services Seeks Damages from Elizabeth Holmes, Ramesh Balwani, and Walgreens

Damages sought include reimbursement of costs for voided clinical laboratory tests as well as an injunction ‘to prevent Theranos and Walgreens from engaging in further misrepresentations and unfair conduct’

Theranos founder and ex-CEO Elizabeth Holmes and ex-COO/President Ramesh “Sunny” Balwani have been found guilty on multiple counts of fraud and now await sentencing in federal criminal court. But the pair’s legal entanglements are not yet over. A class-action lawsuit filed on behalf of patients who purchased Theranos clinical laboratory testing services between November 2013 and June 2016 is weaving its way through the legal system.

Defendants in the civil case include Holmes and Balwani as well as Theranos, Inc., Walgreens Boots Alliance (NASDAQ:WBA) and Walgreens Arizona Drug Company.

According to JND Legal Administration, a class action administration services provider with offices in Los Angeles, Minneapolis, New York, and Seattle, the class-action lawsuit has been filed in the US District Court for the District of Arizona in Phoenix. While no court date has been set, the trial is expected to occur in 2023, a news release states.

“The lawsuit claims, among other things, that these blood testing services were not capable of producing reliable results, that the defendants concealed the blood testing services’ unreliability, that Walgreens knew that the blood testing services were unreliable and not market-ready, that the defendants conspired to commit fraud on consumers, that Theranos’ ‘tiny’ blood testing technology (blood drawn with finger pricks) was still in development, and that the customers who were subject to ‘tiny’ Theranos blood draws by Walgreens employees gave their consent to those blood draws under false pretenses,” the news release notes.

If the defendants are found liable, plaintiffs, who could number in the hundreds of thousands, could receive money or benefits. The Mercury News reported that Arizona’s attorney general had identified 175,000 consumers who purchased tests from Theranos/Walgreens at an average cost of $60 per test.

Elizabeth Holmes and Ramesh Balwani

A class-action lawsuit filed on behalf of patients who purchased Theranos blood testing services at a Walgreens or Theranos location includes as defendants company founder/CEO Elizabeth Holmes (left), ex-Theranos President/COO Ramesh “Sunny” Balwani (right), as well as Theranos, Inc., Walgreens Boots Alliance, and Walgreens Arizona Drug Company. The trial is expected to begin in 2023. It will no doubt draw the attention of clinical laboratory directors and pathologists who followed the Holmes/Balwani fraud cases very closely. (Photo copyright: The Wall Street Journal.)

Federal Court Upholds Class Certification

The Top Class Actions news site notes that in 2021 Walgreens and Balwani unsuccessfully appealed to get the class-action lawsuit against them decertified.

According to the Arizona Theranos, Inc. Litigation website, the court has certified one Class and three Subclasses:

  • Class: All purchasers of Theranos testing services, including consumers who paid out-of-pocket, through health insurance, or through any other collateral source between November 2013 and June 2016.
  • Arizona Subclass: All purchasers of Theranos testing services in Arizona between November 2013 and June 2016.
  • California Subclass: All purchasers of Theranos testing services in California, between September 2013 and June 2016.
  • Walgreens Edison Subclass: All purchasers of Theranos testing services who were subjected to “tiny” blood draws (finger pricks) by a Walgreens employee between November 2013 and March 2015.

Lieff Cabraser Heimann and Bernstein LLP—one of two law firms serving as “Class Counsel” in the litigation—states on its website that, in October 2016, US District Judge H. Russel Holland consolidated four proposed consumer class action fraud lawsuits against Theranos and appointed the San Francisco-based firm as co-lead counsel. Seattle-based Keller Rohrback LLP is co-lead counsel.

‘There Is No Money’

“The lawsuit seeks damages, including reimbursement of the amounts paid by consumers for the voided tests, as well as an injunction to prevent Theranos and Walgreens from engaging in further misrepresentations and unfair conduct,” the Lieff Cabraser website states.

In its notice to potential members of the class action, JND Legal Administration states the “defendants contend that they did not do anything wrong, and they are not liable for any harm alleged by the plaintiffs.” In addition, the notice points out, “There is no money available now, and there is no guarantee that there will be.”

Where could money come from to pay plaintiffs? Likely not from Theranos or Holmes. Though Theranos reached a peak valuation of $9 billion in 2014, it owed at least $60 million to unsecured creditors when the company was dissolved in 2018, USA Today reported. After turning over its assets and intellectual property, Theranos anticipated having only $5 million to distribute to creditors.

And Forbes reported that Holmes’ net worth dropped from $3.6 billion to $0 in 2016.

However, Balwani, who netted nearly $40 million in 2000 when he sold shares of software company Commerce One, has an estimated net worth of $90 million, according to Wealthypipo. As of 2022, Walgreens Boots Alliance is ranked number 18 on the Fortune 500 rankings of the largest United States corporations by total revenue.

The Arizona Theranos Litigation website points out that the suit does not seek damages or other relief for personal injury, emotional distress, retesting costs, or medical care costs. Any Theranos/Walgreens customer intent on pursuing such legal action would need to exclude themselves from the class action case and proceed with separate litigation. The deadline to opt out of the class-action lawsuit is September 12, 2022.

And so, though clinical laboratory directors and pathologists may have thought the saga of Theranos ended following Balwani’s conviction, it apparently continues. It is anyone’s guess what is to come.

Andrea Downing Peck

Related Information:

If You Purchased Theranos Blood Testing Services, including At a Walgreens Store, a Class Action Lawsuit May Affect Your Rights

United States District Court, District of Arizona: Second Amended Complaint, Case 2:16-cv-02138-HRH

Theranos and Elizabeth Holmes: Judge Grants Class Action in Civil Suit Led by San Jose Resident

Theranos Allegedly Voided 31,000 Test Reports Provided to Walgreens Customers

Walgreens Breaks Ties with Theranos, Will Shutter all 40 Wellness Centers

Balwani and Walgreens Lose Most Appeals in Theranos Blood Test Class Action Lawsuit

Blood-Testing Company Theranos Will Dissolve, Pay Creditors

Billionaire Profile: Elizabeth Holmes

Scientists Estimate 73% of US Population May Be Immune to SARS-CoV-2 Omicron Variant

Clinical laboratory scientists should also know experts warn that ‘herd resistance’ is more likely than ‘herd immunity’ due to low vaccination rates in many parts of the world

Scientists estimate 73% of the US population may be immune to the SARS-CoV-2 omicron variant. Whether the nation is approaching “herd immunity” against the disease, however, remains open to debate, the Associated Press (AP) reported. These estimates are relevant to medical laboratories doing serology tests for COVID-19, as different individuals will have different immune system responses to COVID-19 infections and vaccines.

More than two years into the COVID-19 pandemic in the United States, the CDC’s COVID Data Tracker shows the number of daily cases dropped to fewer than 50,000 as of March 4, 2022, after reaching a high of 928,125 on January 3, 2022.

Meanwhile, the seven-day death rate per 100,000 people stands at 2.78. That’s significantly above the seven-day death rate reached last July of .45, but well below the 7.21 mark recorded on January 13, 2021.

“We’re clearly entering a new phase of the pandemic,” William Morice, II, MD, PhD, Department of Laboratory Medicine and Pathology at Mayo Clinic in Rochester, Minn., told KARE11, an NBC affiliate.

Is Herd Immunity Achievable?

According to the AP, an estimated 73% of the US population is likely to be immune to the Omicron variant due to vaccination or natural immunity from contracting the disease. That calculation was done for the media outlet by the Institute for Health Metrics and Evaluation (IHME) at the University of Washington in Seattle. The IHME anticipates immunity to Omicron could rise to 80% this month, as more people receive vaccination booster shots or become vaccinated.

Despite those optimistic totals, however, Don Milton, MD, DrPH, Professor of Environmental Health at the University of Maryland School of Public Health, suggests achieving herd immunity to COVID-19 and its variants may no longer be possible.

“Herd immunity is an elusive concept and doesn’t apply to coronavirus,” he told the Associated Press (AP).

Milton maintains populations are moving toward “herd resistance,” rather than “herd immunity.” This will transform COVID-19 into a permanent fixture with seasonal outbreaks similar to influenza.

Ali Mokdad, PhD
Epidemiologist, Ali Mokdad, PhD (above), Chief Strategy Officer for Population Health and Professor of Health Metrics Science at the University of Washington in Seattle, believes the US is now much better positioned to withstand the next wave of COVID-19 cases. “I am optimistic even if we have a surge in summer, cases will go up, but hospitalizations and deaths will not,” he told the Associated Press (AP). Mokdad worked on the IHME model that calculated the 73% Omicron-immunity figure for the AP. However, he recommends continued vigilance toward COVID-19. “We’ve reached a much better position for the coming months, but with waning immunity we shouldn’t take it for granted,” he added. And so, clinical laboratories can expect to continue to play a vital role in the fight against the spread of the SARS-CoV-2 coronavirus. (Photo copyright: University of Washington.)

Herd Immunity Varies, according to the WHO

Because antibodies that developed from vaccines—or natural immunity from a previous infection—diminish over time, waning protection means even those boosted or recently recovered from COVID-19 could be reinfected. In addition, vaccination rates vary widely around the world. Our World in Data estimates only 13.6% of people in low-income countries had received one dose of the COVID-19 vaccine as of March 7, 2022.

The World Health Organization (WHO) points out that herd immunity levels vary with different diseases. Herd immunity against measles requires about 95% of a population to be vaccinated, while the threshold for polio is about 80%.

“The proportion of the population that must be vaccinated against COVID-19 to begin inducing herd immunity is not known. This is an important area of research and will likely vary according to the community, the vaccine, the populations prioritized for vaccination, and other factors,” the WHO website states.

Living with COVID-19

Nonetheless, the US appears to be moving into a new “normal” phase of living with the disease.

In an interview with Reuters, US infectious disease expert Anthony Fauci, MD, Director of the National Institute of Allergy and Infectious Diseases (NIAID) acknowledged a need for returning to normal living even though portions of the population—immunocompromised individuals and the unvaccinated, including children under age five who are not eligible for vaccination—remain vulnerable to more severe COVID-19.

“The fact that the world and the United States—and particularly certain parts of the United States—are just up to here with COVID, they just really need to somehow get their life back,” Fauci said. “You don’t want to be reckless and throw everything aside, but you’ve got to start inching towards that. There’s no perfect solution to this.”

Most states have lifted coronavirus-related restrictions, including masking requirements. As COVID-19 cases drop in California, Gov. Gavin Newsom put in motion a plan called SMARTER (Shots, Masks, Awareness, Readiness, Testing, Education, and Rx) that no longer responds to COVID-19 as a crisis, but instead emphasizes prevention, surveillance, and rapid response to future variant-based surges in cases.

“We have all come to understand what was not understood at the beginning of this crisis, that there’s no ending, that there’s not a moment where we declare victory,” Newsom told USA Today.

Mayo Clinic’s Morice agrees. “It can’t be out of sight, out of mind, per se, but it at least gives us hope that we can get back to some level of normalcy here over the course of the year,” he said.

Since clinical laboratories played a critical role in assay development and COVID-19 testing, medical laboratory leaders should continue monitoring COVID-19 as it moves from pandemic to endemic status due to high vaccination rates and advances in treatment options.

The COVID-19 pandemic has raised awareness among healthcare consumers as well, about the critical role laboratory medicine plays in modern medicine and healthcare. Medical laboratory leaders and pathologists would be wise to amplify this message and stress the importance of clinical laboratory testing for many diseases and healthcare conditions.

Andrea Downing Peck

Related Information:

Estimated 73% of US Now Immune to Omicron: Is That Enough?

Model Estimates 73% of Americans Immune to Omicron Variant

California is First to Unveil Plan to Live with Virus; ‘Stealth Omicron’ Could Be More Dangerous than Initial Version: COVID-19 Updates

Fauci Says Time to Start ‘Inching’ Back Toward Normality

CDC Data Tracker

Is Omicron Leading US Closer to Herd Immunity against COVID?

Canada’s Early Response to COVID-19 Garnered Praise, But Critical Shortages of Clinical Lab Tests and Delays in Test Results Brought Criticism of the Government’s Actions. Sound Familiar?

Though coronavirus infections were detected nearly simultaneously in both Canada and the US, total cases and total deaths vary dramatically leading experts to question how differences in healthcare systems might have contributed

Can clinical laboratories in the United States learn from Canada’s response to the COVID-19 pandemic? While our northern neighbor won praise for its early response to the coronavirus, since then Canada has faced criticism over a lack of access to SARS-CoV-2 testing and long wait times for test results—criticism levied at the United States’ response to the outbreak as well.

In “Canada Shows How Easy Virus Testing Can Be,” Foreign Policy reported that Canada was more prepared to mount a successful response to COVID-19 because it systematically improved its pandemic-response preparedness and testing capacity after the 2003 SARS coronavirus (SARS-CoV-1) outbreak.

“Provincial laboratories put the infrastructure in place that would allow them to run their own testing and validation without help from the federal government,” Foreign Policy wrote. “At the same time, the federally run National Microbiology Laboratory in Winnipeg expanded its own capacity to support those efforts.”

However, Canada’s pandemic response has not been criticism free. In “Health Minister Says Test Result Wait Times ‘Not Acceptable’ As Ontario Confirms 25 New COVID-19 Cases,” CBC News reported in late March about COVID-19 testing shortages and four-day wait times for test results that were “not acceptable,” particularly in Ontario, where people with mild symptoms were being refused testing and sent home unless they worked in high-risk settings.

In “Why It’s So Difficult to Get Tested for COVID-19 in Canada,” CBC News suggested that Canada’s test rationing was due to a laboratory-supply shortage, a problem which The New York Timesreports still has not been overcome in the US more than six months into the pandemic.

Government Bureaucracy’s Effect on Response to COVID-19

In “Canada’s Coronavirus Response Has Not Been Perfect. But It’s Done Far Better than the US,” The Washington Post reported that the initial exposure to the virus by the US and Canada was similar. Both the US and Canada have extensive ties to Europe and China, resulting in the two countries identifying their first cases of COVID-19 within a week of one another in January. Since then, however, the progression of the disease diverged dramatically in the two nations.

To date, the US has experienced 7,361,611 total cases with 209,808 total deaths, placing it in the number one spot globally on Worldometers’ COVID-19 tracking site. By contrast, Canada is in 26th place, with 155,301 total cases and 9,278 total deaths. However, to date the US has conducted 105,401,706 total clinical laboratory tests, as opposed to Canada’s 7,220,108 total tests. This might account for the disparity in total cases, but what accounts for the huge difference in total US deaths due to COVID-19 compared to Canada?

A Fraser Institute blog post authored by Steven Globerman, PhD, Resident Scholar and Addington Chair in Measurement at the Institute and Professor Emeritus at Western Washington University, titled, “US COVID Experience Highlights Risks of Centralized Management of Healthcare,” blamed the US’ “top-down, centralized approach to testing” for the “testing fiasco” that marked the US’ initial slow response to the pandemic. Globerman maintained the Centers for Disease Control and Prevention’s insistence on producing its own COVID-19 diagnostic test, rather than using a proven German-produced test, was the first of several missteps by the US.

Steven Globerman, PhD
“While there has been much criticism of the decentralized private insurance industry in the US, the major shortcomings in testing that characterize the US experience during the current pandemic seem to be the result of the government healthcare bureaucracy,” wrote Steven Globerman, PhD, (above), Resident Scholar and Addington Chair in Measurement at the Fraser Institute and Professor Emeritus at Western Washington University. (Photo copyright: Fraser Institute.)

Globerman also noted the problems were compounded by the US government’s low initial Medicare payments to private laboratories for COVID-19 tests. “Medicare is reputed to have paid about half the price it pays for a flu test, even though the coronavirus test is substantially more expensive to produce. The price forced labs to take losses on the test, blocking many labs from scaling up production to expand the nation’s testing capacity.

“Only after major lab organizations made public pleas for increased Medicare reimbursement, and long backlogs emerged for testing and reporting test results, did Medicare agree to double its payments for coronavirus tests,” Globerman wrote.

Could National Differences in Healthcare Systems Be to Blame for Disparate COVID-19 Outcomes?

In “Canada Succeeded on Coronavirus Where America Failed. Why?” Canadian public health experts told Vox differences in the two countries’ political leadership, public health funding, and healthcare systems are to blame for the US experiencing a worse coronavirus outbreak than Canada.

Is that true? Sally C. Pipes, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute, a former resident of Canada and an ardent critic of single-payer healthcare, argued that Canada’s healthcare system is plagued by long waits for elective procedures, equipment shortages, and limited access to cutting-edge drugs and therapies.

In “The Canadian Health-Care Scare,” Pipes wrote, “Our northern neighbors wait months for routine care and lack access to the latest life-saving medications and technology. Importing this system would lead to widespread misery,” adding, “Is a six-month wait for a knee replacement—the median in Canada last year—reasonable, when it keeps someone in pain and unable to work? One study puts the total cost of waiting for joint-replacement surgery after taking into account lost wages and additional tests and scans at almost $20,000. It’s no wonder that more than 323,000 Canadians left the country to seek care abroad in 2017.”

A Fraser Institute study of wait times in Canada for medically-necessary treatments underscores Pipes’ claims. According to the study, the median wait time—from general practitioner referral to treatment—across 12 medical specialties was 20.9 weeks in 2019, the second highest recorded by the Institute. If this is the case, how did Canada earn praise for its early COVID-19 response?

It’s unclear what lessons American clinical laboratories can glean from Canada’s response to COVID-19. Nevertheless, lab managers should closely watch their counterparts in other nations around the world. The coronavirus does not respect borders or care about disparities in healthcare systems.

—Andrea Downing Peck

Related Information:

The Canadian Health-Care Scare

Waiting Your Turn: Waiting Times for Healthcare in Canada, 2019 Report

Worldometers COVID-19 Coronavirus Pandemic Tracking

Canada Succeeded on Coronavirus Where America Failed. Why?

Coronavirus Test Results Are Still Delayed

U.S. Doctor in Canada: Medicare for All would Have Made America’s COVID Response Much Better

Canada’s Coronavirus Response Has Not Been Perfect. But It’s Done Far Better than the U.S.

Why It’s so Difficult to Get Tested for COVID-19 in Canada

Health Minister Says Test Result Wait Times ‘Not Acceptable’ as Ontario Confirms 25 New COVID-19 Cases

Canada Shows How Easy Virus Testing Can Be

Previously High-Flying Theranos Provides Clinical Laboratories and Pathology Groups with Valuable Lesson on How Quickly Consumer Trust Can Be Lost

Affected patients speak about emotional, financial, and medical costs of receiving inaccurate results from the startup’s faulty Edison ‘finger-stick’ blood draw testing device

Healthcare consumers trust America’s clinical laboratories and anatomic pathology groups to provide accurate test results. When those test results are inaccurate, the loss of public trust can trigger a sharp decline in referrals/revenue and draw an avalanche of lawsuits by those harmed by inaccurate results.

The most recent example of this object lesson is disgraced blood testing company Theranos, previously estimated to be worth $9 billion but now struggling to stay afloat. The once high-flying startup has been brought to the edge of bankruptcy in the aftermath of a fraud settlement with the Securities and Exchange Commission (SEC), sanctions from the Centers for Medicare and Medicaid Services (CMS), investor lawsuits, consumer lawsuits, and a settlement with Walgreens over claims about Theranos’ Edison portable blood analyzer.

Theranos first made its unproven finger-stick blood draw device available to consumers in September 2013, when it announced a partnership with drugstore chain Walgreens (NASDAQ:WBA). At its height, Theranos operated 40 “Wellness Centers” in Walgreens stores in Arizona and a single location in California, which were the source of much of its revenue. USA Today reported the metro Phoenix-area centers alone sold more than 1.5 million blood tests, which yielded 7.8 million tests results for nearly 176,000 consumers. Theranos shuttered the wellness centers in 2016 after CMS inspectors found safety issues at Theranos’ laboratories in California and a Wall Street Journal (WSJ) investigation raised questions about the company’s testing procedures and accuracy claims. Ultimately, Theranos voided the results of all blood tests run on its Edison device from 2014 through 2015.

Breast-cancer survivor Sheri Ackert (above) told the WSJ she panicked when blood-test results from Theranos indicated her cancer may have reoccurred or were indicative of a rare type of tumor. After being retested by a different clinical laboratory, her results were found to be normal. Click here to watch a WSJ video about Ackert’s experience. (Photo/video copyright: Mark Peterman/Adya Beasley/Wall Street Journal.)

USA Today outlined the impact Theranos’ supposedly low-cost, cutting-edge technology had on several customers:

  • A woman inaccurately diagnosed with the thyroid condition Hashimoto’s disease changed her lifestyle, made unnecessary medical appointments, and took medication she didn’t need;
  • A woman inaccurately diagnosed with the autoimmune disease Sjögren’s syndrome was checked for food allergies before being retested and found not to have an autoimmune condition; and,
  • An Arizona resident who had heart surgery visited a Theranos clinic five times to monitor the results of blood-thinning drug warfarin and was switched to a different drug. He had to have a second heart surgery to drain blood from the pericardial sac and believes more accurate test results could have averted the follow-up operation.

Arizona resident Steven Hammons visited a Theranos clinic several times to have his blood tested. He’d been placed on blood thinners following heart surgery. He was taken off the blood thinners presumably based on the results of those tests. However, as USA Today reported, one test result was later found to be inaccurate. Hammons, who underwent a second procedure to remove blood that had built up around his heart, told USA Today he was concerned about the safety of his fellow citizens.

“That makes me very concerned and worried for the safety of other Arizonans,” said Hammons, who once worked in the medical services division of a private health insurance company. “Government had a role in patient safety. The powers that be dropped the ball.”

Arizona Attorney General Mark Brnovich spearheaded a lawsuit against Theranos under the state’s Consumer Fraud Act, which led to a $4.65 million settlement covering full refunds for every Arizona customer who used the company’s testing services.

“Theranos may have not only had some erroneous test results, but they may have misread my rising blood pressure level as well,” Brnovich told The Republic in a 2017 article announcing the state’s fraud settlement with Theranos. “They said that about 10% of the results were inaccurate. The problem is, as an Arizona consumer, you don’t know whether you were part of that class or not.”

Downfall of a Once-Vaunted Clinical Laboratory Company

Dark Daily and sister publication The Dark Report have written extensively about these events. Former CEO Elizabeth Holmes founded Theranos in 2003 when she was just 19-years old. By 2013, Holmes had become a media sensation based on her claims that “Theranos had developed a medical technology that could do what seemed to be impossible: Its secret machines could run thousands of medical tests using the blood from a tiny finger-prick, and do so quickly and cheaply,” Bloomberg reported in a recent article outlining Holmes’ fall from grace.

While Holmes continues in the role of Chairman of Theranos’ Board of Directors, she was stripped of control of the company as part of the SEC settlement in 2016. The SEC found Holmes and then-company President Ramesh “Sunny” Balwani had fabricated claims Theranos technology had been validated by the Food and Drug Administration (FDA) and pharmaceutical companies and battle-tested by the US military in Afghanistan.

As a result, the SEC also barred Holmes from serving as an officer or director of any public company for 10 years. In October 2016, Theranos announced it would be closing its laboratory operations and focusing on its effort to create miniature medical testing machines, which it did. Nevertheless, the fallout continues.

As pressures on medical laboratories and pathology groups to cut costs while delivering quality care and value increases, laboratory leaders must not lose sight of the fact that accuracy of results remains the key to maintaining trust with healthcare consumers and a financially viable business.

—Andrea Downing Peck

Related Information:

Theranos, CEO Holmes, and Former President Balwani Charged with Massive Fraud

Theranos Receives Notice of Sanctions from the Centers for Medicare & Medicaid Services

Two More Investors Sue Theranos and Elizabeth Holmes for Fraud

Theranos Hit with Consumer Lawsuit over Faulty Blood Tests

Theranos, Walgreens Reportedly Reach a Deal to Settle Suit for under $30 Million

Theranos Selects Walgreens as a Long-Term Partner Through Which to Offer Its New Clinical Laboratory Service

An Open Letter from Elizabeth Holmes

How Startup Theranos Has Struggled with its Blood-Test Technology

Theranos Reaches $4.65 Million Fraud Settlement with Arizona

As Theranos Drama Unwinds, Former Patients Claim Inaccurate Tests Changed Their Lives

Theranos Statement on CMS 2567 Report

Agony, Alarm and Anger for People Hurt by Theranos’ Botched Blood Tests

Blood, Fraud and Money Led to Theranos CEO’s Fall from Grace

Holmes, Balwani Indicted by Department of Justice

Theranos News Gets Worse for the Former Silicon Valley Hero

After AACC Presentation, Elizabeth Holmes and Theranos Failed to Convince Clinical Laboratory Scientists and the News Media about Quality of Its Technology

Now Theranos Faces Criminal Investigation on Whether the Clinical Laboratory Company Misled Investors, according to Published Reports