By FRED GOLDSTEIN

A Correction to Unicornius Gorus – Theranos and Zenefits

I have a confession to make, my previous piece entitled Unicornius Gorus –Theranos and Zenefits, which identified these two companies as a new species in the Unicornius genus was not correct.

The problems at Theranos, as reported by John Carreyrou at the Wall Street Journal, just keep getting worse. While its now very clear Theranos has a serious problem with their Edison technology and its ability to produce accurate results, what is perhaps even more glaring is their complete disregard for operating a lab within standards.

Along with the measurement errors, the report by the Center for Medicare and Medicaid Services found Theranos:

• used unqualified staff,

• allowed unlicensed workers to review patient test results

• did not properly operate equipment as per manufacturer recommendations,

• lacked proper documentation and signatures and

• failed to meet quality control standards.

To be fair, reviewers could find a limited number of issues like documentation or signature problems in any inspection if they look hard enough. In this case the shear volume of problems discovered along with the severe quality issues of the lab results themselves raises this to an entirely different level.

But to me, the piece de resistance is the response from Theranos spokesperson Brooke Buchanan:

“We’ve made mistakes in the past in the Newark, CA lab, but when the company was made aware of the deficiencies we have dedicated every resource to remedy those failures,”

What? These failures were only discovered after CMS did its review?  The issues listed above should have been clear to Theranos and its management through any well run quality reporting and committee structure.

In an effort to be open minded, I will take Ms. Buchanan at her word and not believe that the management of Theranos knew of these issues, behaved negligently and let these problems fester (well maybe). Therefore, Ms. Buchanan, who is speaking on behalf of Theranos, admits to profound incompetence in the management of their lab.

In the case of Zenefits when some of the operational issues came to light, including using unlicensed brokers to sell insurance, their CEO and Founder Parker Conrad immediately resigned as CEO and a director of the company and changes were quickly made.

The laboratory business, like insurance is highly regulated for a reason, to ensure the safety of the consumer. Given all that we now know about Theranos, their Board has a clear responsibility. With this level of poor operational and quality issues identified, the senior management at Theranos has to be held accountable and should be removed.

It certainly looks like legal action will be coming at Theranos from many sides, patients, investors, partners.  More importantly, I hope no patients were harmed by their shoddy practices and the clearly questionable results from their technology. But how are we to truly know? Theranos apparently did millions of tests.

So, upon further examination of the materials now available, I have identified that I was wrong when I assigned Theranos and Zenefits to the genus Unicornius.  This originally classification was based on limited evidence and should never have been made. I therefore retract my previous naming, revise my taxonomical classification and rename them Equus asinus gonus, for they are in fact a subspecies in the donkey family and on the verge of extinction without immediate severe interventions.