The Securities and Exchange Commission today charged Silicon Valley-based private company Theranos Inc., its founder and CEO Elizabeth Holmes, and its former president Ramesh “Sunny” Balwani with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business and financial performance. Theranos and Holmes have agreed to resolve the charges against them. Importantly, in addition to a penalty, Holmes has agreed to give up majority voting control over the company, as well as to a reduction of her equity which, combined with shares she previously returned, materially reduces her equity stake.
The complaints allege that Theranos, Holmes, and Balwani made numerous false and misleading statements in investor presentations, product demonstrations, and media articles by which they deceived investors into believing that its key product – a portable blood analyzer – could conduct comprehensive blood tests from finger drops of blood, revolutionizing the blood testing industry. In truth, according to the SEC’s complaint, Theranos’ proprietary analyzer could complete only a small number of tests, and the company conducted the vast majority of patient tests on modified and industry-standard commercial analyzers manufactured by others.
The complaints further charge that Theranos, Holmes and Balwani claimed that Theranos’ products were deployed by the U.S. Department of Defense on the battlefield in Afghanistan and on medevac helicopters and that the company would generate more than $100 million in revenue in 2014. In truth, Theranos’ technology was never deployed by the U.S. Department of Defense and generated a little more than $100,000 in revenue from operations in 2014.
“Investors are entitled to nothing less than complete truth and candor from companies and their executives,” said Steven Peikin, co-director of the SEC’s Enforcement Division. “The charges against Theranos, Holmes and Balwani make clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage or the subject of exuberant media attention.”
“As a result of Holmes’ alleged fraudulent conduct, she is being stripped of control of the company she founded, is returning millions of shares to Theranos, and is barred from serving as an officer or director of a public company for 10 years,” said Stephanie Avakian, co-director of the SEC’s Enforcement Division. “This package of remedies exemplifies our efforts to impose tailored and meaningful sanctions that directly address the unlawful behavior charged and best remedies the harm done to shareholders.”
“The Theranos story is an important lesson for Silicon Valley,” said Jina Choi, director of the SEC’s San Francisco Regional Office. “Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday.”
Theranos and Holmes have agreed to settle the fraud charges levied against them. Holmes agreed to pay a $500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, return the remaining 18.9 million shares that she obtained during the fraud, and relinquish her voting control of Theranos by converting her super-majority Theranos Class B Common shares to Class A Common shares. Due to the company’s liquidation preference, if Theranos is acquired or is otherwise liquidated, Holmes would not profit from her ownership until – assuming redemption of certain warrants – over $750 million is returned to defrauded investors and other preferred shareholders. The settlements with Theranos and Holmes are subject to court approval. Theranos and Holmes neither admitted nor denied the allegations in the SEC’s complaint. The SEC will litigate its claims against Balwani in federal district court in the Northern District of California.
The SEC’s investigation was conducted by Jessica Chan, Rahul Kolhatkar and Michael Foley and supervised by Monique Winkler and Erin Schneider in the San Francisco Regional Office. The SEC’s litigation will be led by Jason Habermeyer and Marc Katz of the San Francisco office.
The highest rated vendors according to the 2018 Spring Medical Practice Management Software Customer Success Report are:
Market Leaders – NextGen Healthcare, Chirotouch, WebPT, AdvancedMD, Kareo, CureMD and CareCloud were given our highest “Market Leader” award. Market Leaders are vendors with a substantial customer base & market share. Market Leaders have the highest ratio of customer reference content, content quality score, and social media presence relative to company size.
Top Performers – Ambra, Advanced Data Systems, NueMD, DocuTap, Practice Fusion, eClinicalWorks, WRS Health, Compulink and Aprima were awarded “Top Performer” honors. Top Performers are vendors with significant market presence and enough customer reference content to validate their vision. Top Performers products are highly rated by its customers but have not achieved the customer base and scale of a market leader relative to company size.
Rising Stars – chARM Health, edgeMED Healthcare, Pulse Systems and Sequelmed were awarded “Rising Star” honors. Rising Stars are vendors that do not have the market presence of Market Leaders or Top Performers, but understands where the market is going and has disruptive technology. Rising Stars have been around long enough to establish momentum and a minimum amount of customer reference content along with a growing social presence.
Telemedicine has already proven its effectiveness in traditional acute care hospitals, providing consistent coverage in areas where physicians are hard to come by, guiding clinical teams and leading specialty programs. Now telemedicine is making inroads into a new model of care—micro-hospitals. The growth of micro-hospitals, where small neighborhood hospitals offer care tailored to the specific needs of a community, is dramatic—and telemedicine is helping drive it.
Communities in 19 states have micro-hospitals today, and the numbers are climbing. Cited as a new trend in healthcare by U.S. News & World Report, micro-hospitals typically have eight to 10 short-stay beds and a small ED. They can provide the imaging and lab services performed in larger hospitals, but they are geared toward moderately ill patients who don’t require the intensive care and longer stays required by patients in traditional hospitals.
Because of this patient profile, micro-hospitals can hire fewer physicians—a plus given today’s physician shortage—and can rely more heavily on nurse practitioners (NPs) and physician assistants (PAs)—whose numbers are growing—to assume key leadership roles, make daily rounds and provide hands-on coverage.
A Perfect Environment for Telemedicine
Telemedicine teams offer a cost-effective way to provide on-the-spot, expert guidance to NPs and PAs via web videoconferencing, telephone and secure texting. One could argue that the emergence and growing public acceptance of telemedicine has made the physician-lean, micro-hospital model possible, helping bring cheaper, faster care to moderately ill patients. To illustrate, one company we are working with plans to place 70 micro-hospitals across the country over the next four to five years, and telemedicine will play a key role in all of them.
A Range of Specialized Care
In micro-hospitals, telemedicine serves a function that is similar to the model for many critical access hospitals, where NPs manage hands-on coverage of patients with guidance from telemedicine teams. A videoconferencing cart or “robot” delivers expert physicians to patient bedsides, where the physicians can converse with staff and patients. With the help of the onsite nursing team, they can access diagnostic equipment on the cart to examine patients and make a diagnosis. The telemedicine physicians also work with ED physicians to admit patients, examine them once they have a bed, and develop a plan of care to be carried out by NPs and nursing staff.
The telemedicine physicians might be in the same state and time zone; they might be across the country or, in some instances, halfway around the world, but they must be licensed in the state and credentialed by the hospital in which they are practicing. If they see that a specialist’s care is called for, they can contact a team of specialists—cardiologists or neurologists, for example—who are under contract to examine the patient via telemedicine and provide a diagnosis and treatment.
Given the growing shortage of specialists in the United States—the Association of American Medical Colleges (AAMC) projects a deficit of up to 61,800 specialist physicians by 2030—being able to contact a remote team immediately via telemedicine is another plus for micro-hospitals. For example, teleneurology specialists typically achieve an average response time of 3.5 minutes (a fraction of the time it typically takes for a local neurologist to get in the car and drive to the hospital), and an average diagnosis and treatment time of 21.8 minutes.
DirectTrust today announced that a call for nominations for new directors has been sent to the membership by its board of directors. DirectTrust is a nonprofit healthcare industry alliance created to support secure, identity-verified electronic exchanges of personal health information (PHI) between provider organizations, and between provider and patients, for the purpose of improved coordination of care.
“The organization is also seeking a new CEO to lead through the next era following the departure of current president and CEO David C. Kibbe, MD, MBA, at year-end so this is a pivotal time for the organization. We are seeking thought leaders who can translate the breadth of DirectTrust’s value proposition among the organization’s many constituencies,” stated DirectTrust board chair Paul Uhrig, chief administrative, legal and privacy officer for Surescripts.
DirectTrust’s non-paid Directors support the work of DirectTrust with mission-based leadership and strategic governance. DirectTrust’s Board of Directors is relatively small and unusually active, working with the CEO on policy, strategy, industry relationships, technological advances, and the end-user experience, especially for consumers, their families, and their health care providers. Nominees for a three-year term commencing June 2018 must be and remain associated with members in good standing of DirectTrust. They are sought from various industry groups representative of DirectTrust’s diverse membership, including:
providers of direct exchange services
users of direct exchange services
healthcare providers or provider organizations
providers of services to healthcare providers
governmental entities
educational or scientific research organizations interested in the nationwide health
information network
patient or consumer advocates
Letters of interest with bios may be sent to Kelly Gwynn at Kelly.Gwynn@DirectTrust.org. The deadline for submissions is COB Mar. 18, 2018.
About DirectTrust DirectTrust is a five-year old, nonprofit, competitively neutral, self-regulatory entity initially created by and for participants in the Direct exchange community, including Health Internet Service Providers (HISPs), Certificate Authorities (CAs), Registration Authorities (RAs), doctors, patients and vendors. DirectTrust supports both provider-to-provider and patient-to-provider Direct exchange. In the period 2013 to 2015, DirectTrust was the recipient of a Cooperative Agreement Award from the Office of the National Coordinator for Health Information Technology (ONC) as part of the Exemplar HIE Governance Program.
DirectTrust serves as a forum and governance body for persons and entities engaged in the Direct exchange of electronic health information as part of the Nationwide Health Information Network (NwHIN). DirectTrust’s Security and Trust Framework is the basis for the voluntary accreditation of service providers implementing Direct health information exchange.
The goal of DirectTrust is to develop, promote, and, as necessary, help enforce the rules and best practices necessary to maintain security and trust within the Direct community, consistent with the HITECH Act and the governance rules for the NwHIN established by ONC. DirectTrust is committed to fostering widespread public confidence in the interoperable exchange of health information. To learn more, visit www.directtrust.org.
Yet effective January of this year, CMS instituted important changes to their reimbursement policies that encourage the use of digital health tools. Most significant among these changes is the un-bundling of the Medicare/Medicaid CPT code 99091, a decision that specifically affects the adoption and deployment of remote patient monitoring (RPM) devices. In the past, CMS has only offered financial incentives for live, audiovisual virtual visits, excluding RPM—and thus excluding a major demographic from the possibility of affordable and accessible care. With the un-bundling, financial incentives for RPM are not only available, but also are deployed across multiple providers, allowing nurses and care managers as well as physicians to analyze and monitor data, creating efficiencies and lowering costs.
But while the CPT un-bundling represents an important victory for RPM, it also serves to highlight the policy’s inadequacies and the large margin for growth. With the update, care providers no longer have to worry about fully funding RPM from their original operating budgets, but the reimbursement rate ($60 per patient per month) is still far too low to be effective in most cases. Other requirements, such as a prior wellness visit with the patient and a limit of one charge to the code per month, further restrict its effectiveness.
Perhaps most problematic, while the un-bundling will have an immediate positive impact on patients over the age of 65, a large patient demographic could be outside the bounds of its effects. Commercial plans are under no requirement to follow the updated CPT guidelines, and more importantly, neither is Medicaid. And while Medicaid is the smaller of the two government run-healthcare plans (compare Medicaid’s revenue of $565.5 billion to Medicare’s $672.1 billion), it is outpacing Medicare by 10 percent in rates of spending (increasing by 3.9 percent in 2016 compared to Medicare’s 3.3 percent).
Thank you Jared (Kushner) for that kind introduction. It has been an honor to work alongside visionaries like you; somebody who really understands at a very personal level as I do, the need and potential of innovation to better serve Americans. Having the Office of American Innovation involved is critical, and I’m grateful for Jared’s involvement, his hard work, and his leadership. It’s an honor to serve with him, and I am grateful for his service to our country.
It is a privilege to be with you here today and speak about the amazing advancements happening all across the nation in healthcare. One of the most exciting parts about being the CMS Administrator is the opportunity to see the cutting-edge breakthroughs that are happening every day. As we walk the exhibit hall of this conference, it is easy to be struck by how innovation is accelerating in healthcare.
We have procedures that we couldn’t have imagined a generation ago that are saving thousands of lives.
Precision medicine has opened the door to a new world of therapies specifically tailored to a patient’s unique genetic code.
We can now treat retinal disease that causes blindness.
Robotic technology is making surgeries less invasive, and we are on the verge of having the world’s first artificial pancreas.
3D training tools are enabling doctors to learn anatomy without a cadaver.
Telemedicine is also improving access to care and empowering CMS beneficiaries to lead healthier lives.
And it doesn’t stop with traditional healthcare innovators. The automobile industry is partnering with leading technology companies to perfect driver-less cars that may one day give independence to our nation’s elderly and people with disabilities. And through smart phones and wear-able technology, we are compiling health information every second, and Americans are using that information to track activity, calories, and heart rates. Innovators are even developing ways to monitor chronic illness with electronic watches. The list of innovation is endless.
But while all of this technology is changing every area of our lives, we face enormous challenges in healthcare, and the value that we are receiving for the amount of money that is being spent.
Last year CMS released a report showing that the rate of growth in healthcare spending is not slowing down. Despite all of the changes and regulations over the past decade, healthcare continues to grow more quickly than the overall economy. By 2026, we will be spending one in every $5 on healthcare.
This matters to each and every one of us because this increase in spending will continue to crowd out funding for other priorities, such as roads and schools, as well as national defense. Not to mention it means higher healthcare spending for each and every one of us. We’ve already seen our costs go up, with health insurance premiums, co-pays and deductibles.
And yet, this national increase in spending has not addressed many of America’s healthcare challenges. Entire communities have been ravaged by the opioid epidemic, and we rank poorly compared to other countries when it comes to preventing premature births, infant mortality and chronic diseases. It’s clear that when it comes to the most consequential measures of health and wellness, we need to get much more for our money.
The system we have is unsustainable, and it cannot continue. And President Trump agrees.
Last year, the President announced an Executive Order: Promoting Healthcare Choice and Competition Across the United States. Through his executive order the President made clear that he wants his administration working to change the rate of growth of healthcare spending so that competition can be fostered in healthcare markets, so that patients, and the American people, may receive better value for our investment in healthcare.
Secretary Azar and I are working for competition and better value by moving away from a fee-for-service approach, to a system that is value-based – and that rewards value over volume. This means paying providers on the outcomes they achieve, making people healthier rather than how many procedures they perform. Now many of you have heard this all before.
But, I’ve always been struck by how seldom the patient is mentioned in discussions around value-based care. Let me be clear, we will not achieve value-based care until we put the patient at the center of our healthcare system. Until patients can make their own decisions based on quality and value health care costs will continue to grow at an unsustainable rate. This administration is dedicated to putting patients first, to be empowered consumers of health care that have the information they need to be engaged and active decision-makers in their care. Through this empowerment, there will be a competitive advantage for providers that deliver coordinated, quality care, at the best value, to attract patients who are shopping for value.
I have spent a lot of time talking to Americans from all walks of life, and they are demanding more accountability from the health care system. As they are paying more through higher premiums and higher deductibles, they want to know how much services are going to cost, and they want to shop around for the best price. They don’t want to be paying for duplicate tests, or unnecessary care, and they are demanding a higher level of service and efficiency from the healthcare system.
In every other area of our lives, we are receiving better services that leverage innovation in technology. We can take our ATM card to any bank across the globe, and that bank can access our accounts. We can track every credit card purchase, and every phone carrier honors our cell phone number, and we receive ads for products we were only thinking about buying – or so it may seem.
So it should be no surprise that Americans have the same consumer friendly demands for healthcare. Americans are demanding that when they go to the doctor, the doctor spends more time with them, and less time on paperwork or typing into a computer.
To that end, in our drive towards value-based care, CMS adopted an approach that we call “Patients Over Paperwork.” Patients Over Paperwork is a direct result of President Trump’s Cut the Red Tape initiative, which aims to restore patients as the priority of everything we do, and eliminate burdensome regulations that have outlived their purpose.
We have held meetings in cities across America, and received thousands of letters. And one of the most common complaints we have heard from both patients and providers has been the inefficiency of Electronic Health Records – or EHRs, and the inability of providers to effectively coordinate care for their patients.
Now tremendous progress has been made in the adoption of EHRs. The technology for data sharing has advanced, and data is often shared effectively within a given healthcare system, with inpatient and outpatient doctors in the same provider system able to share and edit the same clinical record.
Despite this progress, it is extremely rare for different provider systems to be able to share data. In most cases there is not yet a business case for doing that – it’s in the financial interest of the provider systems to hold on to the data for their patients.
By Ray Parker, internet marketer and creative writer, IQVIS
Ray Parker
For people diagnosed with various diseases and without treatment, the problem could worsen. However, going to doctor and have a medical checkup needs to be reviewed multiple times, especially for low-income patients. The mammoth fee could break you up financially if you are living paycheck to paycheck. Moreover, affording pricey health insurance is nearly impossible for low-income people.
According to Gallup Sharecare Well-Being Index, “11.7 percent of Americans were uninsured in the second quarter of 2017, up from a record low of 10.9 percent at the end of 2016.”
Living in a digital era, our dependency on technology is getting greater day by day. Making use of this technology, low-income people can also benefit from treatment through the apps available on the app market. Have a look at some of them.
AmWell
If you are sick and can’t afford to pay doctor’s fee, try AmWell available on Android and iOS. The app is specifically designed to ensure 24/7 access to health for low-income people. See your doctor within minutes without commuting for hours or sitting in the waiting room.
Whether you are looking for someone who can perform therapy to deal with anxiety and depression or urgent care for respiratory infections or a sore throat, AmWell is a doctor in your pocket. The prices are nominal and you don’t need to break the bank after consulting your doctor.
MyChart
MyChart is also another app for low income people available for both Android and iOS. The app helps you stay in touch with your physician, view and pay your bill, manage your appointments and review test results. Before you can use this app, you must create an account through MyChart website.
MyMedical
MyMedical is a great app available for both Android and iOS users. With this app, you can keep your personal medical information. In other words, it is a record-keeping app for your health info. You can keep multiple records including your parents, spouse or children.
The app also comes with translation feature to help explain medical jargon from your records, letting you know what it means. The app is very useful in emergency cases, listing aid information such as emergency contacts for first responders.
First Aid by American Red Cross
First Aid is yet another app available for both iOS and Android. Emergencies can erupt out of nowhere and this app gives emergency response tips for situations that require quick action. For example, if a person goes through the sudden heart attack, choking or snake bit, First Aid by American Red Cross will guide through immediate actions to avoid loss of life. The app can be accessed without connecting to the internet and is available for free.
Medications only work if people take them. And yet, it’s estimated that patients take only half of the doses they are prescribed by healthcare professionals. That holds true regardless of whether the medication is for life-threatening conditions, or just a simple infection. With 190 million Americans affected by one or more chronic conditions, most of which are managed through medication, the consequences across society of non-adherence becomes substantial.
Non-adherence to medication causes about 125,000 deaths a year. As much as 25 percent of hospital and nursing home admissions can be traced back to the patient not taking their prescribed medication, and non-adherence causes 30 to 50 percent of treatment failures.
It’s estimated that in the U.S. alone, non-adherence costs the healthcare system about $100 billion to $290 billion a year. If adherence were a disease, it would be one of the largest and most expensive disease categories.
Costs and Benefits
With the consequences so severe, the question then becomes: Why don’t patients take their medication? The issue has been studied for decades and yet the rate of adherence hasn’t changed much during the past 30 years.
Research has shown that patients often don’t truly appreciate the importance of medications to their health. Cost is also a factor. Patients sometimes determine that the cost of medication outweigh the benefits. In some cases, the complexity of the treatment is an issue.
The solution then is complex and must be addressed on multiple levels. A study by the World Health Organization showed that adherence rates are influenced by the structure of healthcare systems, the patient-provider relationship, the recommended treatment, and socioeconomic factors.
Technology Aids
But with modern technology, healthcare providers now have new tools they can use to combat non-adherence. Apps and other intelligent tools can facilitate ease of use, enhance patient-physician communication, improve comfort, and make administration of medications more convenient.
Developers, for example, are creating interactive software products that can track dosages, provide reminders, and communicate information directly to healthcare providers. They are also employing games to incentivize adherence by rewarding patients who stay on top of their treatment plan. Smart pill bottles, boxes, and caps that alert the patient to missed dosages are becoming more commonplace and will take an important role in coming years.
New technologies that can make following the medical regime easier and more tolerable for the patient can also improve adherence. In some cases, this may be as simple as an extended release medication that results in taking one pill a day instead of two. In other cases, new technologies that reduce the number of steps involved in a treatment or simplify the process can reduce non-adherence. This is particularly true for elderly patients who might lack dexterity or the ability to follow complex protocols with procedures such as administering eye drops, or using inhalers.
When creating new technologies and processes there is a massive benefit of using a test automation tool. This will allow you to see how real-world users will interact with the application and make changes before rolling it out for a smoother transition and greater benefits for everyone.
DirectTrust today announced that a call for nominations for new directors has been sent to the membership by its board of directors. DirectTrust is a nonprofit healthcare industry alliance created to support secure, identity-verified electronic exchanges of personal health information (PHI) between provider organizations, and between provider and patients, for the purpose of improved coordination of care.
