American investors love drama. So it is no surprise that Theranos is causing a stir. Just two months ago this blood diagnostics company — created a decade ago by Stanford dropout Elizabeth Holmes — was an investor darling valued at $9bn. Now, however, it faces allegations that its testing techniques were not as novel as claimed, and the company has become a lightning rod for wider investor concerns about the sky-high valuations now seen in Silicon Valley.
But investors should not let the Theranos furore distract them from the bigger issue: something new is developing in medical diagnostics. Dozens of other start-ups are emerging in different medical niches (Sage Bionetworks, We Are Curious and Patients Like Me are just a few). They could change how US healthcare is done, just as Uber has transformed our idea of what a “taxi” is.
At issue is the question of who controls medical data. In decades past, it was considered a hallmark of American culture that rugged individuals — that is, consumers — liked to exercise their rights. But in one area, health, they have appeared willing to let doctors control their records and keep them private.