Theranos whistleblower talks ethics in health tech startups

In the tech world, the name Theranos creates a direct synapse with scandal and fraud. Once a Silicon Valley darling, the biotech company, which focused on blood tests, was exposed for its fraudulent claims and brought down in disgrace. 

As the health and tech sectors continue to fuse, it is important to remember the ethics behind the tech, Erika Cheung, a key whistleblower in the Theranos scandal, said during The Atlantic’s Pulse event on Tuesday. Recently Cheung launched an organization called Ethics in Entrepreneurship that is focused on developing ethics resources for startups in the US and Hong Kong. 

“I think [for] anyone who goes into the healthcare industry, you take the certain oath and you set certain standards for yourself,” Cheung said during the Boston-based event. “Largely that is to protect patients. … In my case I was testing patients with technology I didn’t trust myself. I wouldn’t test it on my family members, [and] then being expected to give those to the public that was a line I wasn’t willing to cross.”

With the move towards consumerization in healthcare, industry players must balance speed with the caution of navigating a regulated industry. For Theranos, market demands for access and affordability were among the forces that helped the company pick up steam. 

“It was a compelling mission. Point-of-care diagnostics [are] attractive for so many reasons: the fact you wouldn’t have to go to a doctor anymore, the fact that you can test in your own house, … the fact that there was price transparency. I think a lot of patients, especially, are upset that they will go to the doctor and receive healthcare services and come out of it with bills they aren’t able to afford. So even that statement alone of having price transparency was compelling.”

In Theranos’ case the technology didn’t work. But with scores of startups continuing to work on making healthcare easier to access and more affordable, it’s clear that the fall of Theranos did not halt the health innovation industry. 

Now Cheung is using her experiences at Theranos to help legitimate players in the tech world navigate ethical questions inherent to care. 

“We’ve realized a lot of scandals have been popping up in Silicon Valley, especially where software meets regulated industries,” Cheung said. “So for us it was kind of a call, where we were trying to figure out for entrepreneurs who were starting these new companies how can you embed ethical framework to support their businesses.” 

The organization is also focusing on giving resources to investors working with health startups and technologists in the space, she said. However, while tech is continuing its march into health, she warned that public and regulatory bodies have found plenty of reasons to be more skeptical of startups. 

Ubiome just got in trouble for the way that they were billing patients and billing insurers,” Cheung said. “You are having actual regulators, whether that is the FBI, or whether it is Centers for Medicare and Medicaid Services, or the FDA, coming in and starting to be much more wary of the claims that these tech companies are saying.”

Still, Cheung sees the health industry moving towards a more tech-enabled future. Although it won’t quite move at the same pace as the consumer tech world, she urged for a thoughtful, perhaps slower, rollout. 

“I think we need to be more cautious in healthcare. There is a reason that healthcare moves slowly. It moves slowly because patients’ lives can be at risk. … I think we need to align the risk with the development of the technology and be very cognizant of those timelines and the way that the product is built in combination with the amount of risk,” she said. “I think all of us are hungry for innovation in healthcare and want to see biotechnology products being developed. We just have to do that with a sense of caution and awareness of patient safety.”

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