Capital misadventures

A few years ago I wrote a column about what promised to be an exciting development in blood testing technology. Using the money her parents had set aside for her education, a young woman dropped out of Stanford University at age 19 and started a company that she claimed would be able to offer hundreds of lab tests on just a few drops of blood. Results would be available in just minutes instead of hours or days. At the time I wrote the column, the company had just landed a contract with a large drug store chain with an arrangement that would eventually allow nearly every resident of the United States to be within a few miles of a site that would offer rapid response blood tests with nothing more than a finger prick.

It seemed a little hard to believe, but the prospect of pediatricians being able to make a diagnosis without running the risk of exsanguinating our smallest patients sounded appealing. On the other hand, I worried that a quick and easy technology might encourage some physicians to use a shotgun approach to diagnosing illness rather than a more rational and cost-effective process based on the traditional skills of history taking and physical examination. Some patients who foolishly wanted to know “everything” about themselves might be tempted to ask their physicians to order the whole smorgasbord of tests. “Hey, it’s only a few drops of blood.”

Turns out there were enough people with more money than reservations and the company quickly attracted hundreds of millions of dollars in venture capital. The company, now calling itself Theranos, has been valued at nine billion dollars. But, recently this startup star has encountered some serious bumps in the road to a full-scale launch (“Hot Startup Theranos Has Struggled With Its Blood-Test Technology” by John Carreyrou, The Wall Street Journal, updated Oct. 16, 2015). The Wall Street Journal reported that despite promises, only a few of the 240 tests offered by the company are currently performed using their proprietary microtechnique. In the days following the Journal article, the Food and Drug Administration warned Theranos that their “nanotainer” is considered a new medical device that must first clear the agency’s time consuming and costly vetting process (“Hot Startup Theranos Dials Back Lab Tests at FDA’s Behest” by John Carreyrou, The Wall Street Journal, updated Oct. 16, 2015).

The venture capitalists who had climbed on the Theranos bandwagon tempted by the just-a-few-drops promise may end up seeing their bank accounts hemorrhage. But I don’t think we should be too critical of their investment decision. It was and may still be good idea that has simply run afoul of the details. However, I recently learned about another new business that I don’t consider to have even started with a good idea, but still has managed to attract enough capital to get itself off the ground (“Should Breast Milk Be Nutritionally Analyzed?” by Laura Johannes, The Wall Street Journal, Dec. 28, 2015).

I’m sure you have seen some new mothers who were concerned that their breast milk was not enough for their babies. But how many of them would pay $150 for a start-up kit and then more than $300 to find out the nutritional content of their breast milk? What if it meant pumping and freezing three samples 2 or 3 days apart and then shipping them in a cooler to a lab? What if you told them that neither you nor anyone else could reliably interpret the results because there aren’t any published guidelines for the optimal composition of human breast milk? Even if your practice is packed to the rafters with anxiety-driven, irrational parents, I don’t think you would find many takers. But that doesn’t seem to have bothered the folks who have invested in Happy Vitals, a company in Washington that is offering a service similar to the one I have just described.

You and I might not have invested in a company whose business plan was to offer such a service. But I fear there may be enough health care “providers” practicing without the benefit of an evidence-based education that what I consider a capital misadventure may actually be able to pay back its investors.

Dr. Wilkoff practiced primary care pediatrics in Brunswick, Maine, for nearly 40 years. He has authored several books on behavioral pediatrics including “How to Say No to Your Toddler.”

A few years ago I wrote a column about what promised to be an exciting development in blood testing technology. Using the money her parents had set aside for her education, a young woman dropped out of Stanford University at age 19 and started a company that she claimed would be able to offer hundreds of lab tests on just a few drops of blood. Results would be available in just minutes instead of hours or days. At the time I wrote the column, the company had just landed a contract with a large drug store chain with an arrangement that would eventually allow nearly every resident of the United States to be within a few miles of a site that would offer rapid response blood tests with nothing more than a finger prick.

It seemed a little hard to believe, but the prospect of pediatricians being able to make a diagnosis without running the risk of exsanguinating our smallest patients sounded appealing. On the other hand, I worried that a quick and easy technology might encourage some physicians to use a shotgun approach to diagnosing illness rather than a more rational and cost-effective process based on the traditional skills of history taking and physical examination. Some patients who foolishly wanted to know “everything” about themselves might be tempted to ask their physicians to order the whole smorgasbord of tests. “Hey, it’s only a few drops of blood.”

Turns out there were enough people with more money than reservations and the company quickly attracted hundreds of millions of dollars in venture capital. The company, now calling itself Theranos, has been valued at nine billion dollars. But, recently this startup star has encountered some serious bumps in the road to a full-scale launch (“Hot Startup Theranos Has Struggled With Its Blood-Test Technology” by John Carreyrou, The Wall Street Journal, updated Oct. 16, 2015). The Wall Street Journal reported that despite promises, only a few of the 240 tests offered by the company are currently performed using their proprietary microtechnique. In the days following the Journal article, the Food and Drug Administration warned Theranos that their “nanotainer” is considered a new medical device that must first clear the agency’s time consuming and costly vetting process (“Hot Startup Theranos Dials Back Lab Tests at FDA’s Behest” by John Carreyrou, The Wall Street Journal, updated Oct. 16, 2015).

The venture capitalists who had climbed on the Theranos bandwagon tempted by the just-a-few-drops promise may end up seeing their bank accounts hemorrhage. But I don’t think we should be too critical of their investment decision. It was and may still be good idea that has simply run afoul of the details. However, I recently learned about another new business that I don’t consider to have even started with a good idea, but still has managed to attract enough capital to get itself off the ground (“Should Breast Milk Be Nutritionally Analyzed?” by Laura Johannes, The Wall Street Journal, Dec. 28, 2015).

I’m sure you have seen some new mothers who were concerned that their breast milk was not enough for their babies. But how many of them would pay $150 for a start-up kit and then more than $300 to find out the nutritional content of their breast milk? What if it meant pumping and freezing three samples 2 or 3 days apart and then shipping them in a cooler to a lab? What if you told them that neither you nor anyone else could reliably interpret the results because there aren’t any published guidelines for the optimal composition of human breast milk? Even if your practice is packed to the rafters with anxiety-driven, irrational parents, I don’t think you would find many takers. But that doesn’t seem to have bothered the folks who have invested in Happy Vitals, a company in Washington that is offering a service similar to the one I have just described.

You and I might not have invested in a company whose business plan was to offer such a service. But I fear there may be enough health care “providers” practicing without the benefit of an evidence-based education that what I consider a capital misadventure may actually be able to pay back its investors.

Dr. Wilkoff practiced primary care pediatrics in Brunswick, Maine, for nearly 40 years. He has authored several books on behavioral pediatrics including “How to Say No to Your Toddler.”

A few years ago I wrote a column about what promised to be an exciting development in blood testing technology. Using the money her parents had set aside for her education, a young woman dropped out of Stanford University at age 19 and started a company that she claimed would be able to offer hundreds of lab tests on just a few drops of blood. Results would be available in just minutes instead of hours or days. At the time I wrote the column, the company had just landed a contract with a large drug store chain with an arrangement that would eventually allow nearly every resident of the United States to be within a few miles of a site that would offer rapid response blood tests with nothing more than a finger prick.

It seemed a little hard to believe, but the prospect of pediatricians being able to make a diagnosis without running the risk of exsanguinating our smallest patients sounded appealing. On the other hand, I worried that a quick and easy technology might encourage some physicians to use a shotgun approach to diagnosing illness rather than a more rational and cost-effective process based on the traditional skills of history taking and physical examination. Some patients who foolishly wanted to know “everything” about themselves might be tempted to ask their physicians to order the whole smorgasbord of tests. “Hey, it’s only a few drops of blood.”

Turns out there were enough people with more money than reservations and the company quickly attracted hundreds of millions of dollars in venture capital. The company, now calling itself Theranos, has been valued at nine billion dollars. But, recently this startup star has encountered some serious bumps in the road to a full-scale launch (“Hot Startup Theranos Has Struggled With Its Blood-Test Technology” by John Carreyrou, The Wall Street Journal, updated Oct. 16, 2015). The Wall Street Journal reported that despite promises, only a few of the 240 tests offered by the company are currently performed using their proprietary microtechnique. In the days following the Journal article, the Food and Drug Administration warned Theranos that their “nanotainer” is considered a new medical device that must first clear the agency’s time consuming and costly vetting process (“Hot Startup Theranos Dials Back Lab Tests at FDA’s Behest” by John Carreyrou, The Wall Street Journal, updated Oct. 16, 2015).

The venture capitalists who had climbed on the Theranos bandwagon tempted by the just-a-few-drops promise may end up seeing their bank accounts hemorrhage. But I don’t think we should be too critical of their investment decision. It was and may still be good idea that has simply run afoul of the details. However, I recently learned about another new business that I don’t consider to have even started with a good idea, but still has managed to attract enough capital to get itself off the ground (“Should Breast Milk Be Nutritionally Analyzed?” by Laura Johannes, The Wall Street Journal, Dec. 28, 2015).

I’m sure you have seen some new mothers who were concerned that their breast milk was not enough for their babies. But how many of them would pay $150 for a start-up kit and then more than $300 to find out the nutritional content of their breast milk? What if it meant pumping and freezing three samples 2 or 3 days apart and then shipping them in a cooler to a lab? What if you told them that neither you nor anyone else could reliably interpret the results because there aren’t any published guidelines for the optimal composition of human breast milk? Even if your practice is packed to the rafters with anxiety-driven, irrational parents, I don’t think you would find many takers. But that doesn’t seem to have bothered the folks who have invested in Happy Vitals, a company in Washington that is offering a service similar to the one I have just described.

You and I might not have invested in a company whose business plan was to offer such a service. But I fear there may be enough health care “providers” practicing without the benefit of an evidence-based education that what I consider a capital misadventure may actually be able to pay back its investors.

Dr. Wilkoff practiced primary care pediatrics in Brunswick, Maine, for nearly 40 years. He has authored several books on behavioral pediatrics including “How to Say No to Your Toddler.”