We Shouldn’t Be Surprised at the Theranos Fraud

Theranos in particular as if they had what they claimed, the media could poop on them forever and once they put out the product it would have changed the medical industry regardless of the media... but nope.

BINGO! What a great term. I've never heard it called that before (which now seems hard to believe), but have definitely seen it SO many times before (specifically in massive corporate IT programs - the domain I work in as an enterprise architect). Did you coin this phrase? I'm so using this! Thank you.

I seriously doubt he allowed Carreyrou to continue for the sake of good journalism.

This is why you mostly hear stories like "Oh, I tried [service] out once and it was actually pretty good"; it's a novelty for most and not worth paying for.

Yes it's a bastardization of their profession, but everyone needs to eat.

Who knows if we'll ever get back to the quality of journalism in the Woodward/Bernstein era, when the large majority of middle-class Americans paid a monthly subscription to have professionally composed news delivered to their doorstep every morning.

I don't see it as an excuse, just as an observation of reality. Journalists can be misled by their sources. They may misinterpret data or make mistakes. They can have ulterior motives, or they may see the world through different glasses than you/me (e.g. conservative/liberal oriented news outlets). They may be pressured by deadlines to put out subpar quality material. There's noise amplification and echo chambers due to the role of social media. There are many reasons average journalism today might not be up to some standards.

The way I tend to think of it is: trust but verify. Some things matter directly to my personal life and it's in my personal interest to verify that I have the correct information about them. Why then, should I trust the (possibly exaggerated) interpretation from some WSJ journalist on some recent research paper rather than doing my own homework?

News about Theranos at this point, for example, is not one of those things that directly affect me or my family, and the accuracy and outrage of this story is of only mild entertainment value to me. Recognizing that, I can choose to consume news about it with the implicit understanding that I'm probably getting sensationalized editorials with no more value to me than a random hollywood movie, and not some data source that I should be investigating.

Yes Journalists need high standards of professional integrity and the legal air cover to maintain that.

But really the ultimate defence is us - to reject the mountains of crap out there and seek out and subscribe to the worthwhile news sources.

As ever, it's down to us.

Rolling Stone after the lacrosse rape case is one example. But more importantly, I think the point above is that journalism is in a vulnerable position where the carrot is more appropriate than the stick. Laws are crude tools for the most part, with lots of potential for collateral damage. It's like chemotherapy: you just hope the treatment kills the good cells slower than the bad.

Punishing bad journalism will have a chilling effect on all journalism, bad or good. It'll increase the costs of doing business by increasing liability insurance premiums. If the industry were thriving, maybe that would be acceptable overhead. But it's not thriving. It's teetering on the edge of collapse. So maybe we should find ways to identify and reward good journalism. Cultivate the flowers in the garden so they overshadow the weeds, rather than dousing the whole shebang in herbicide and hoping you kill what you intend to.

Social sciences are empirical sciences where knowledge of statistical controls and other tools needed to deal with the difficulty of laboratory research in the area of study are necessary as well as all those things necessary in any empirical science, so they don't have that effect.

OTOH, most journalists probably study journalism or other arts, not any kind of science, at the undergraduate level.

This is a long way of saying that we may have created too many disincentives for large companies to IPO.

Because there's no second chance, admins have to adjudicate for voter intent. So they modify the votes in the database.

To protect the database, as part of the backup, the votes are tallied both at end and beginning of shift. That means a running vote count. Law is that votes can only be tabulated when the polls close. So admin's have the fiction of "summary reports" vs "tabulation".

Yes, admins peek at early results.

Another new threat to integrity is signature verification. But that's a whole topic onto itself.

Happily...

The biggest mitigation would be to switch from brittle FPTP to robust approval voting and proportional representation (as appropriate).

This is FUD, to dust off an old chestnut, at least as far as Oregon is concerned.

Check it: https://www.google.com/search?newwindow=1&q=oregon+vote+by+m...

In the 2016 election, a potential 54 cases of voter fraud. Here's the breakdown of the kind of fraud (which amounts to .002% of ballots -- one in 38,000):

"Richardson said the suspicious ballots broke down into several categories: 46 voters appeared to vote in Oregon and another state; six individuals listed as deceased voted; and two voters registered in Oregon voted twice."

Honestly, this is what I understand least.

I can understand and even respect banking a company on "this isn't possible yet, but maybe we can develop new technology". That's a standard feature of legitimate biotech startups and drug research.

I can comprehend the snowballing risks, overstating a case because you think you're almost at something really impressive. I can't really understand the blatant, verifiable lies like "the DoD uses it", but it's not the first time we've seen those.

What feels new and totally baffling is to not even care what's being done and what's possible. There's no sign that Holmes or Balwani ever had any idea whether they were close to success. This wasn't just betting on horse races with borrowed money, it was betting on a dead horse because you hadn't bothered to check if it was still alive.

Replace iPhone with iPod and Apple never reaches this sky it's currently at. It the product that put it back on the map, open the itune cash valve and paved the road for the iphone flag ship product.

The situation is never _exactly_ the same. But you can see a pattern. And history is written by the victors.

> Theranos made VERY negligent statements such as the military using Theranos products(they did not).

Musk, Jobs and the rests lied as well, just on a different scale.

The scale does make it worse, but the mechanism is the same. If Theranos had delivered, nobody would recall this lie.

The options backdating scandal arguably involved criminal behavior, and the anti-poaching collusion between Apple and other companies was arguably illegal as well.

Not saying that Jobs was primarily a criminal, but he was involved in a fair amount of unethical behavior over the years.

Carreyou had two big revelations. One was that Theranos was not running blood tests on their proprietary machines, which were supposed to do finger prick draws. The other was that Theranos had submitted fraudulent validation data to the Center for Medicare and Medicaid Services (CMS) and state regulatory bodies.

They did a couple brazenly unethical and illegal things.

1) CMS subcontracts lab inspections to state regulatory bodies. When California lab inspectors visited Theranos, they physically blocked off the door leading to a floor that had the Siemens equipment, presumably to hide the fact that they were not conducting tests on their own proprietary machines. So, the inspectors never actually inspected the relevant labs.

2) Theranos violated "proficiency testing" guidelines. Proficiency testing is the practice of running tests on a sample with a known concentration/result, and comparing results. The spirit, if not the letter, of the guidelines is that you run the tests on the same equipment as would be commercially used. Thus, Theranos sent in fraudulent tests by testing using Siemens machines. This proficiency testing duping was what caused Tyler Schultz to send in an anonymous tip to the New York laboratory regulatory body, and led to his final decision to leave the company.

3) Theranos tried to claim with the FDA that its tests were "laboratory developed tests", i.e. they were unique tests that could not be compared to existing market tests. Carreyrou has a scoop in the book that Theranos benefited greatly from a bureaucratic power grab between the FDA and CMS. Both agencies claim some sort of regulatory oversight for the blood testing market.

At least initially, there were many in the FDA who were suspicious, and wanted to send inspectors. But, Theranos's seeming passing of CMS inspections allayed fears in the short term. It was after Carreyrou's first two articles (IIRC), that the FDA sent a surprise inspection.

EDIT: I also think that in the book Carreyrou mentions that a number of doctors in the Phoenix area, where Theranos was doing a test pilot of their finger prick tests, had filed complaints with the state or federal regulatory bodies. So, there were definitely people at CMS or FDA who were beginning to pay attention.

“AFTER ALL THE DELAYS, the partnership seemed to finally be getting off the ground in the early months of 2012: as a beta run before a full launch, the companies had agreed that Theranos would take over the blood testing at an employee health clinic Safeway had opened on its corporate campus in Pleasanton. The clinic was part of Burd’s strategy to curb the supermarket operator’s health-care costs by encouraging its workers to take better care of themselves.”

Carreyrou's first article was October 2015. I think the Walgreens stuff had kicked off by then too. The FDA probably took a while to deal with it. But by putting a non-working instrument in a consumer facing context they were clearly going to get involved at some point.

If they hadn’t done that, I don’t think it would have been a news story, or that legal action would have been taken.

This stuff happens relatively often, investors just right-off the investment (or otherwise try and dump it).

I think I may be being a bit unfair to the scientists. Basically, Theranos was a hot enough startup that Elizabeth Holmes and Sunny Balwani would fire, demote, or marginalize anyone who made a fuss. Lifelong academics may have never had to deal with that kind of bullying/pressure before.

On the other hand, they had some pretty incredible scientific talent on staff. You would think that people who are highly cited and have a reputation to protect would have spoke up sooner. Instead, the first two people to make any kind of sustained fuss were two fresh out of college hires.

How Musk will be treated after Telsa implodes will tell us a lot about how sexist our culture is.

I'd personally be going for the pitchforks but I don't see many others doing the same.

This goes to answer both your comment and (at present) the top comment of this post, which asks why people ignore a chorus of naysayers saying that what's being done is impossible. The entire mindset of the Silicon Valley disrupter--we're the plucky underdog fighting an established oligopoly by doing the impossible (at least for the established oligarchs)--is very ripe for an unethical fraudster to milk. Distinguishing between the two cases is not easy, especially given the tendency to believe your own hype and oversell your current capabilities.

What does that mean? The height is adjustable. At full height you still find it too low?