Theranos' business model is built on the idea that it can offer more than 100 simple blood tests directly to patients at a much lower cost than traditional blood labs, ideally using its own technology to test that blood with only a finger-prick.But it has faced accusations about the validity of its technology since last year, and in January the Centers for Medicare and Medicaid Services found problems with its Northern California lab in January, saying some of its practices "pose immediate jeopardy to patient health and safety.
Its founder Elizabeth Holmes said in a TV interview recently that, "we stopped testing and have taken the approach of saying, 'Let s rebuild this entire lab from scratch so that we can ensure it never happens again.
Take a consumer genetics test, for example: Rather than making an appointment at the doctor, sitting for an array of expensive genetic tests, waiting days for the results and then having to trek back to the office to discuss them at your physician's convenience, the company offered a simple, straightforward alternative: Spit in a tube, mail it in, and get results online in a visual, simple-to-understand format.Theranos has been doing something similar, but with blood instead of spit.
"We've taken comprehensive corrective measures to address the issues CMS raised in their observations.
Many "disruptive" Silicon Valley health companies have run into this regulatory problem as well.But because Theranos focuses on blood tests, which provide information that the average person could act on, like diagnosing a sexually transmitted disease or monitoring an existing diagnosis, Theranos faces an additional scrutiny.For example, a patient who had gotten a blood test through Theranos went to the emergency room in 2014 after a blood-test result that showed abnormally high results, The Journal reported.
"Holmes then went on to explain, in veiled terms, a bit about how the company runs its tests in an attempt to dispel some claims about dilution methods.