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Former Theranos CEO Elizabeth Holmes Fights Prison Sentence While Claiming She Was ‘Not Being Authentic’ with Public Image

Founder of now defunct clinical laboratory testing company was supposed to report to prison April 27, but a last-minute legal challenge has delayed that judge’s order

Anatomic pathologists and clinical laboratory leaders who are following the continuing saga of Theranos and Elizabeth Holmes may be interested to learn that the former CEO’s attorneys are making last-minute legal moves to delay her prison sentence while she appeals her guilty verdict. At the same time, Holmes appears to be on a mission to revamp her public image.

Apparently, the twists and turns in Holmes’ never-ending story are not yet over when it comes to Theranos, its maligned clinical laboratory technology, and the company’s convicted founder.

On May 7, The New York Times (NYT) profiled Holmes in a massive, 5,000-word story that attempted to portray her as a flawed businessperson who now prefers a simpler life with her partner and two young children.

Elizabeth Holmes

“I made so many mistakes and there was so much I didn’t know and understand, and I feel like when you do it wrong, it’s like you really internalize it in a deep way,” disgraced Theranos founder Elizabeth Holmes recently told The New York Times. Anatomic pathologists and clinical laboratory directors impacted by the revelation that Theranos hide the fact that its blood testing technology was faulty may not sympathize with Holmes’ position. (Photo copyright: Stuart Isett/Fortune Global Forum.)

Legal Team Secures Last-Minute Delay in Holmes’ Surrender

Holmes admitted to the news outlet that the deep voice she used in public, along with her black turtleneck sweaters, were part of a character she created.

“I believed it would be how I would be good at business and taken seriously and not taken as a little girl or a girl who didn’t have good technical ideas,” Holmes told the NYT. “Maybe people picked up on that not being authentic, since it wasn’t.”

Holmes was scheduled to report to a federal prison in Texas on April 27 after several unsuccessful motions were filed to delay the start of her sentence for the fraud convictions. Dark Daily covered Holmes’ conviction in “Disgraced Theranos Founder Elizabeth Holmes to Serve 11 Years, Three Months in Prison, Ending the Latest Chapter in the Story of the Failed Clinical Laboratory Company.”

However, on April 26, the 9th Circuit Court of Appeals stayed her surrender date until that court rules on Holmes’ latest bid to stay free while she appeals her conviction, The Washington Post reported.

Just days earlier on April 10, a district court judge ruled that Holmes would not stay free while her appeal progresses. The 9th Circuit announcement curtailed the district court ruling. It is not known when the 9th Circuit will issue a decision in the matter.

In “Theranos Ex-CEO Elizabeth Holmes Convicted on Three Counts of Wire Fraud and One Count of Conspiracy to Commit Fraud after Seven Days of Jury Deliberations,” Dark Daily reported that Holmes was convicted in January 2022 of defrauding Theranos investors out of $121 million. Theranos marketed a blood-testing machine called Edison, although it was later uncovered that results attributable to the technology were actually produced on traditional clinical laboratory analyzers.

New York Times Reports on Holmes’ Change in Personality

The somewhat odd New York Times profile of Holmes varied between reflections on her past crimes and on her current personal life, where she is known as “Liz.”

“In case you’re wondering, Holmes speaks in a soft, slightly low, but totally unremarkable voice—no hint of the throaty contralto she used while running her blood-testing startup Theranos, now defunct,” the NYT reported.

Holmes still lives in California with her partner, Billy Evans (whose parents own a luxury hotel chain), and their two children: a son who is almost two years old and a daughter born in February. She works at home for a rape-crisis hotline.

Balwani’s Role in Theranos Again Publicly Debated

In the NYT interview, Holmes talked about being raped while a student at Stanford University and about alleged abuse from her Theranos business partner and former lover, Ramesh “Sunny” Balwani.

Balwani, Theranos’ former President and Chief Operating Officer, began his 12-year, 11-month prison sentence on April 20 in a Southern California facility for his role in defrauding Theranos investors, KTVU TV reported. Balwani has also appealed his conviction on the 12 fraud charges.

Holmes reiterated to the NYT past statements she made in court that Balwani allegedly exerted social and sexual control over her when they both worked at Theranos and were in a romantic relationship.

“She lived by entrepreneurial tenets that she said Balwani told her she needed to follow in order to succeed,” the NYT reported. “These included not sleeping for more than five hours, going vegan, getting to the office daily by 5 a.m., no alcohol.”

“[I] deferred to [Balwani] in the areas he oversaw because I believed he knew better than I did,” including on clinical lab activities at Theranos, Holmes said.

Balwani’s attorneys dismissed Holmes’ allegations, as they have in the past.

Clinical laboratory professionals can reasonably make two broad observations from the continuing saga of Theranos and Elizabeth Holmes:

  • Justice for healthcare crimes is often deferred for those who have influence and money.
  • Holmes’ image overhaul may be a last-ditch effort to sway public opinion about her, in the event that she receives a new jury trial as a result of her appeal.

Dark Daily will continue to keep you updated on further developments in this case.

Scott Wallask

Related Information:

Liz Holmes Wants You to Forget about Elizabeth

Hot Startup Theranos Has Struggled with Its Blood-Test Technology

Theranos Ex-CEO Elizabeth Holmes Convicted on Three Counts of Wire Fraud and One Count of Conspiracy to Commit Fraud after Seven Days of Jury Deliberations

Holmes, Balwani Get Lengthy Prison Terms for Theranos Fraud

Disgraced Theranos Founder Elizabeth Holmes to Serve 11 Years, Three Months in Prison, Ending the Latest Chapter in the Story of the Failed Clinical Laboratory Company

Federal Prosecutors Seek $878 Million Restitution from Former Theranos Founder/CEO Elizabeth Holmes

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

Disgraced Theranos Founder Elizabeth Holmes to Serve 11 Years, Three Months in Prison, Ending the Latest Chapter in the Story of the Failed Clinical Laboratory Company

Judge will decide the restitution Holmes must pay to defrauded Theranos investors at future court date; Ex-COO Ramesh “Sunny” Balwani to be sentenced next month

Clinical laboratory leaders and anatomic pathologists who closely followed the fraud trial of Elizabeth Holmes may have wondered how the Theranos founder and ex-CEO would be punished for her crimes. Now we know.

On Friday, a federal court judge sentenced Holmes to 135 months—11.25 years—in prison in the culmination of her conviction on three felony counts of wire fraud and one count of conspiracy, according to NBC Bay Area News.

Late into the four-hour sentencing hearing, Holmes tearfully spoke, according to a twitter post by NBC reporter Scott Budman, who was in the courtroom. “I am devastated by my failings,” Holmes said. “I have felt deep pain for what people went through because I have failed them … To investors, patients, I am sorry.”

Davila ordered Holmes to surrender to authorities on April 27 to begin her time behind bars. She is free until that time. Her upcoming prison term caps off one of the biggest downfalls ever of an American entrepreneur.

[We first published this article in our Dark Daily E-Briefings newsletter. Sign up for free here to stay informed on the lab industry’s most important news and events.]

Elizabeth Holmes

Elizabeth Holmes (above), founder and former CEO of Theranos, the now defunct clinical laboratory company, as she enters the federal courthouse in San Jose, Calif., prior to her sentencing on Friday. In January, Holmes was convicted on three counts of wire fraud and one count of conspiracy. Last summer, Theranos’ former CLIA laboratory director, pathologist Adam Rosendorff, MD, expressed remorse over his testimony which led to Holmes’ defense team requesting a new trial. The judge denied that request and allowed the sentencing of Holmes to proceed as scheduled. (Photo copyright: Jim Wilson/The New York Times.)

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Defense Lawyers Plan to Appeal

Dean Johnson, JD, a California criminal defense lawyer, told NBC Bay Area News during live coverage of the hearing on Friday that Holmes’ defense team will appeal her conviction.

“I have no doubt there will be an appeal in this case,” Johnson said.

Judge Edward Davila, who oversaw Holmes’ trial and sentencing hearing in US District Court in San Jose, Calif., estimated that the total loss for Theranos investors was $121 million. Investors had committed funds to support the company’s flawed Edison blood testing technology. A separate restitution hearing for Holmes will be scheduled for a later date.

Beyond the sentencing, Holmes, 38, will be saddled by infamy for the rest of her life, with her past reputation as a charismatic innovator ruined.

In “Theranos Ex-CEO Elizabeth Holmes Convicted on Three Counts of Wire Fraud and One Count of Conspiracy to Commit Fraud after Seven Days of Jury Deliberations,” we covered how a jury convicted Holmes in January on four charges of investor and wire fraud after a four-month trial. She faced up to 20 years in prison on each of those counts.

Another Theranos executive, former Chief Operating Officer and President Ramesh “Sunny” Balwani, faces sentencing on Dec. 7. A jury found Balwani guilty of two counts of conspiracy and 10 counts of wire fraud in July.

“The judge [said] evidence shows Elizabeth Holmes was leader of the company, but not necessarily the leader of the criminal acts,” Budman tweeted. Those words clearly pointed to Balwani, who Holmes’ defense team had painted as exerting control over her and the company.

Prosecutors Sought a Stiffer Sentence for Holmes

Prosecutors had asked Davila to sentence Holmes to 15 years in prison, arguing that her conviction represented “one of the most substantial white collar offenses Silicon Valley or any other district has seen,” according to NBC Bay Area News, which cited court documents. The government also wanted her to pay $803 million in restitution.

Holmes’ defense team, however, wished for no prison time at all, instead asking that Holmes serve time under house arrest. “If a period of confinement is necessary, the defense suggests that a term of 18 months or less, with a subsequent supervised release period that requires community service, will amply meet that charge,” her lawyers wrote in a court filing.

Prior to the sentencing, Davila received 130 letters supporting Holmes and asking for leniency, NPR reported. Among them was a note from William “Billy” Evans, Holmes’ partner.

“If you are to know Liz, it is to know that she is honest, humble, selfless, and kind beyond what most people have ever experienced,” Evans wrote, NPR reported. “Please let her be free.”

Holmes and Evans have a 16-month-old son together, and she is pregnant with the couple’s second child. Her first pregnancy caused her trial to be rescheduled. Prior to last week’s sentencing, some reporters covering the trial speculated that because Holmes was the mother of an infant—and now pregnant again—the judge might be more lenient in sentencing. The 11-year, four-month sentence indicates that the judge was not much influenced by that factor.

Last Minute Pitch for New Trial Failed

Holmes’ legal wranglings continued until the very end.

On Nov. 7, Davila denied her motion for a new trial. Holmes’ lawyers had argued that key prosecution witness Adam Rosendorff, MD—a pathologist who was former laboratory director at the company—expressed remorse about his own 2021 testimony during an attempt to visit Holmes’ residence on August 2022. Dark Daily covered this event in “Clinical Pathologist Once Again at the Center of a National News Story as Theranos Founder Elizabeth Holmes Seeks New Trial.”

However, Rosendorff later told the court that he stood by his testimony about problems with Theranos’ blood testing technology.

In denying the request for a new trial, Davila wrote, “The court finds Dr. Rosendorff’s statements under oath to be credible,” according to The Washington Post.

From Teen Founder to Disgraced Entrepreneur

Holmes founded Theranos in 2003 at age 19 while she was attending Stanford University as a chemical engineering major. She dropped out of Stanford as a sophomore to focus on her new company.

Theranos claimed its technology—known as Edison—could perform diagnostics tests using a finger prick and a micro-specimen vial instead of a needle and several Vacutainers of blood. The company said it could return results to patients and clinicians in four hours for about half of the cost of typical lab test fees.

However, the promise of this technology began to unravel in 2015 following an investigative article by The Wall Street Journal that revealed the company ran only a handful of tests using its technology, instead relying on traditional testing for most of its specimen work.

Following The Journal’s exposé, the Centers for Medicare and Medicaid Services (CMS) sanctioned Theranos and Holmes in 2016. Meanwhile, the US Securities and Exchange Commission (SEC) investigated Holmes for raising hundreds of millions from investors by exaggerating or making false statements about the company’s technology and financial performance.

In 2018, the US Department of Justice (DOJ) indicted Holmes and Balwani, and Theranos closed shortly after.

Convictions Validated Pathologists’, Hospital Lab Leaders’ Concerns

Fortunately, the Theranos saga has not stunted investment in healthcare technology startups. Spending was in the tens of billions in 2021, although that number has dropped this year as the COVID-19 pandemic has waned, according to TechCrunch. Nevertheless, it is safe to assume that healthcare tech investors are scrutinizing scientific data from startups more thoroughly because of the Theranos fraud case.

Meanwhile, the saga of Theranos continues to leave a bad taste in the mouths of many clinical laboratory managers and pathologists. That’s because, during the peak period of adulation and spectacular news coverage about Elizabeth Holmes and her plans to totally disrupt the clinical laboratory industry, hospital and health system CEOs believed that they would be able to downsize their in-house medical laboratories and obtain lab tests from Theranos at savings of 50% or more. Consequently, during the years 2013 through the end of 2015, some hospital lab leaders saw requests for capital investment in their labs denied or delayed.

One example of how hospital CEOs embraced news of Theranos’ blood testing technology took place at the Cleveland Clinic. Elizabeth Holmes did such a good job selling the benefits of the Edison technology, then-CEO, Toby Cosgrove, MD, placed Theranos at number three on its list of top ten medical innovations for 2015.

In later years, Cosgrove admitted that no one at Cleveland Clinic or its pathologists were allowed to examine the analyzers and evaluate the technology.

It was for these reasons that the demise of Theranos was welcomed by many hospital lab administrators and pathologists. The fact that two of Theranos’ senior executives have been convicted of fraud validates many of the serious concerns that medical laboratory professionals had at that time, but which most major news reporters and media ignored and failed to report to the public.

Scott Wallask

Related Information:

Theranos Founder Elizabeth Holmes Sentenced to More than 11 Years in Prison

Elizabeth Holmes Is Sentenced to More than 11 Years for Fraud

Theranos Ex-CEO Elizabeth Holmes Convicted on Three Counts of Wire Fraud and One Count of Conspiracy to Commit Fraud after Seven Days of Jury Deliberations

Prosecutors Push 15-year Sentence for Theranos’ CEO Holmes

Elizabeth Holmes Sentenced to 11 Years in Prison for Theranos Fraud

Clinical Pathologist Once Again at the Center of a National News Story as Theranos Founder Elizabeth Holmes Seeks New Trial

Bid for New Trial Fails, Elizabeth Holmes Awaits Sentencing

Ramesh “Sunny” Balwani Convicted by a Jury on 12 Counts of Fraud in Theranos Trial

Hot Startup Theranos Has Struggled with Its Blood-Test Technology

Three Federal Agencies Warn Healthcare Providers of Pending Ransomware Attacks; Clinical Laboratories Advised to Assess Their Cyberdefenses

Sophisticated cyberattacks have already hit hospitals and healthcare networks in Oregon, California, New York, Vermont, and other states

Attention medical laboratory managers and pathology group administrators: It’s time to ramp up your cyberdefenses. The FBI, the federal Department of Health and Human Services (HHS), and the federal Cybersecurity and Infrastructure Security Agency (CISA) issued a joint advisory (AA20-302A) warning US hospitals, clinical laboratories, and other healthcare providers to prepare for impending ransomware attacks, in which cybercriminals use malware, known as ransomware, to encrypt files on victims’ computers and demand payment to restore access.

The joint advisory, titled, “Ransomware Activity Targeting the Healthcare and Public Health Sector,” states, “CISA, FBI, and HHS have credible information of an increased and imminent cybercrime threat to US hospitals and healthcare providers.” It includes technical details about the threat—which uses a type of ransomware known as Ryuk—and suggests best practices for preventing and handling attacks.

In his KrebsOnSecurity blog post, titled, “FBI, DHS, HHS Warn of Imminent, Credible Ransomware Threat Against U.S. Hospitals,” former Washington Post reporter, Brian Krebs, wrote, “On Monday, Oct. 26, KrebsOnSecurity began following up on a tip from a reliable source that an aggressive Russian cybercriminal gang known for deploying ransomware was preparing to disrupt information technology systems at hundreds of hospitals, clinics, and medical care facilities across the United States. Today, officials from the FBI and the US Department of Homeland Security hastily assembled a conference call with healthcare industry executives warning about an ‘imminent cybercrime threat to US hospitals and healthcare providers.’”

Krebs went on to reported that the threat is linked to a notorious cybercriminal gang known as UNC1878, which planned to launch the attacks against 400 healthcare facilities.

Clinical Labs, Pathology Groups at Risk Because of the Patient Data They Keep

Hackers initially gain access to organizations’ computer systems through phishing campaigns, in which users receive emails “that contain either links to malicious websites that host the malware or attachments with the malware,” the advisory states. Krebs noted that the attacks are “often unique to each victim, including everything from the Microsoft Windows executable files that get dropped on the infected hosts to the so-called ‘command and control’ servers used to transmit data between and among compromised systems.”

Charles Carmakal, SVP and Chief Technology Officer of cybersecurity firm Mandiant told Reuters, “UNC1878 is one of the most brazen, heartless, and disruptive threat actors I’ve observed over my career,” adding, “Multiple hospitals have already been significantly impacted by Ryuk ransomware and their networks have been taken offline.”

John Riggi (above), senior cybersecurity adviser to the American Hospital Association (AHA), told the AP, “We are most concerned with ransomware attacks which have the potential to disrupt patient care operations and risk patient safety. We believe any cyberattack against any hospital or health system is a threat-to-life crime and should be responded to and pursued as such by the government.” Hospital-based medical laboratories and independent clinical laboratories that interface with hospital networks should be assess their vulnerability to cyberattacks and take appropriate steps to protect their patients’ data. (Photo copyright: American Hospital Association.)

Multiple Healthcare Provider Networks Under Attack

Hospitals in Oregon, California, and New York have already been hit by the attacks, Reuters reported. “We can still watch vitals and getting imaging done, but all results are being communicated via paper only,” a doctor at one facility told Reuters, which reported that “staff could see historic records but not update those files.”

Some of the hospitals that have reportedly experienced cyberattacks include:

In October, the Associated Press (AP) reported that a recent cyberattack disrupted computer systems at six hospitals in the University of Vermont (UVM) Health Network. The FBI would not comment on whether that attack involved ransomware, however, it forced the UVM Medical Center to shut down its computer system and reschedule elective procedures.

Threat intelligence analyst Allan Liska of US cybersecurity firm Recorded Future told Reuters, “This appears to have been a coordinated attack designed to disrupt hospitals specifically all around the country.”

He added, “While multiple ransomware attacks against healthcare providers each week have been commonplace, this is the first time we have seen six hospitals targeted in the same day by the same ransomware actor.”

An earlier ransomware attack in September targeted 250 healthcare facilities operated by Universal Health Services Inc. (UHS). A clinician at one facility reported “a high-anxiety scramble” where “medical staff could not easily see clinical laboratory results, imaging scans, medication lists, and other critical pieces of information doctors rely on to make decisions,” AP reported.

Outside of the US, a similar ransomware attack in October at a hospital in Düsseldorf, Germany, prompted a homicide investigation by German authorities after the death of a patient being transferred to another facility was linked to the attack, the BBC reported.

CISA, FBI, HHS, Advise Against Paying Ransoms

To deal with the ransomware attacks, CISA, FBI, and HHS advise against paying ransoms. “Payment does not guarantee files will be recovered,” the advisory states. “It may also embolden adversaries to target additional organizations, encourage other criminal actors to engage in the distribution of ransomware, and/or fund illicit activities.” The federal agencies advise organizations to take preventive measures and adopt plans for coping with attacks.

The advisory suggests:

  • Training programs for employees, including raising awareness about ransomware and phishing scams. Organizations should “ensure that employees know who to contact when they see suspicious activity or when they believe they have been a victim of a cyberattack.”
  • Regular backups of data and software. These should be “maintained offline or in separated networks as many ransomware variants attempt to find and delete any accessible backups.” Personnel should also test the backups.
  • Continuity plans in case information systems are not accessible. For example, organizations should maintain “hard copies of digital information that would be required for critical patient healthcare.”

Evaluating Continuity and Capability

The federal agencies also advise healthcare facilities to join cybersecurity organizations, such as the Health Information Sharing and Analysis Center (H-ISAC).

“Without planning, provision, and implementation of continuity principles, organizations may be unable to continue operations,” the advisory states. “Evaluating continuity and capability will help identify continuity gaps. Through identifying and addressing these gaps, organizations can establish a viable continuity program that will help keep them functioning during cyberattacks or other emergencies.”

Dark Daily Publisher and Editor-in-Chief, Robert Michel, suggests that clinical laboratories and anatomic pathology groups should have their cyberdefenses assessed by security experts. “This is particularly true because the technologies and methods used by hackers change rapidly,” he said, “and if their laboratory information systems have not been assessed in the past year, then this proactive assessment could be the best insurance against an expensive ransomware attack a lab can purchase.”

—Stephen Beale

Related Information:

Ransomware Activity Targeting the Healthcare and Public Health Sector

FBI, DHS, HHS Warn of Imminent, Credible Ransomware Threat Against U.S. Hospitals

Hackers Hit Hospitals in Disruptive Ransomware Attack

Several Hospitals Targeted in New Wave of Ransomware Attacks

Hospitals Hit with Ransomware Attacks as FBI Warns of Escalating Threat to Healthcare

Ransomware Attacks on Hospitals Could Soon Surge, FBI Warns

Building Wave of Ransomware Attacks Strike U.S. Hospitals

Oregon Hospital Shuts Down Computer System After Ransomware Attack

Three St. Lawrence County Hospitals Hit by Ransomware

‘Unusual Network Activity’ at Ridgeview Medical Center

Brooklyn and Vermont Hospitals Are Latest Ryuk Ransomware Victims

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

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