- 18 hours ago
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00:00Elizabeth and I are color coordinated today how many of you have heard of
00:11Theranos raise your hand okay quite a bit well until we put Elizabeth on our
00:17cover just a few months back I hadn't heard of you I hadn't heard of the
00:20company and yet you're in my backyard in Palo Alto company is valued at over
00:25nine billion dollars you've got over 500 employees I think 700 700 now okay
00:32growing fast and you have huge broad ambitions can you tell us who you are
00:41and what you do what your company does sure yeah over the last 11 years we've
00:49reinvented the traditional laboratory infrastructure with a mission to make
00:55early diagnosis and early detection a reality in the context of our health
01:02care system and healthcare systems throughout the world and as we thought
01:07about this we focused very much on the question of access to actionable health
01:13information because laboratory data drives 80% of clinical decisions yet it's not
01:22accessible to every person and it's not accessible at the time it matters so we
01:30delve into why in our country 40 to 60% of people are not compliant with the
01:38requisition to go get a lab test done when given to them by a physician and part of
01:45that is because of fear of needles people don't like big needles being stuck into
01:50their arm yeah part of it you're one of those people right deeply so I won't do it part of it is
02:00because of cost yeah even if people are insured they can't afford the ability to
02:06get a test yeah I'm part of it is because of convenience the need to have to leave work yeah in order to be
02:15able to go get a test done and part of it is the speed or turnaround time of the
02:20data in the context of actually having access to that information at the time
02:25you're interacting with the physician and every time as opposed to having to go
02:30get a test done come back see your doctor go get another test done if
02:34something's out of range so so the first thing we did was to make it possible for
02:42every laboratory test to be run on a tiny droplet of blood mm-hmm so go through the
02:49whole list of all the tests that are run in a traditional lab and instead of
02:54requiring tubes coming from your arm make it possible to do the tests on tiny
02:59droplet of blood that could be taken from a finger and how much blood are we
03:04talking about a few drops it's a little tube it looks about that big
03:09yeah and very into miniature things but it it eliminates the need for people to
03:24have needles stuck in their arm and for cancer patients and elderly persons and
03:29little children this means a lot we then said let's take these tests and make them
03:38accessible at prices that every person could afford so we started when we
03:45announced this commercial laboratory service last winter at 50% off of
03:51Medicare reimbursement rates in terms of the way in which we're billing for these
03:57tests and we've since begun dropping that pricing to more than 90% off of
04:04Medicare reimbursement rates in key cases to make these tests accessible
04:11irrespective of what someone's deductibles are and so what that means is for
04:16example something like a complete cell blood count is accessible for four dollars
04:20and that means people can begin to engage in the testing process and we've now
04:26begun rolling this out we're in over 40 locations in Arizona we build out what
04:34we call wellness centers which are physical spaces people can come to that
04:39have a totally different type of experience that that really engages people in
04:45the testing process and we've publicly announced that we are going to deploy
04:53nationally with Walgreens I'm building these wellness centers inside all the
04:58Walgreens so in how many locations is that Walgreens has 8100 yeah across the
05:04country across the country which which is really important because it means you're
05:08in five miles of every person's home and going back every person every person every
05:14American so on average but but on average and in metropolitan service areas one mile of
05:24every person's home on average and so so that that really begins to change the
05:30access question in a fundamental how quickly can you get to that scale what's your plan
05:36well right now we're focused on our work in Arizona and beginning our work in California the most
05:46important thing for us is ensuring store by store and person by person that the service we provide is
05:54excellent and so we're pacing our growth around it however I'm going into 2015 we have plans to
06:04follow Greg Lawson the Walgreens CEO calls it crawl walk run and we're leaving the
06:13crawling phase now and so so the expansion is going to pick up so I actually last week
06:19went into the Walgreens in Palo Alto and had my my little finger prick blood test done
06:25and I'm not going to share all the results with you but I got it with my cholesterol levels are good
06:31apparently but got the results in less than 24 hours there is an app a Theranos app that you can
06:39get on your phone which pulls up all the results I got an email from the doctor also the experience
06:45kind of end-to-end and the technology end-to-end is really different from walking into the center
06:52there's like calming music and you know like a water fountain or something to the the mobile app and
07:00the cost and access can you talk about what what what the innovations are with Theranos because there's the
07:10technology itself how how can you do you know run all of these tests with such a small amount of blood and why hasn't
07:17anybody done this before to the fact that you publish your costs the fees for all of these tests
07:24online which is not the way healthcare is done by the way just talk about all the innovations along the way
07:33sure so our our belief fundamentally is that the answer to our challenges in healthcare lies in engaging and empowering the individual and if we can connect with people so that they begin to understand that they have this basic human right to get access to information about their body that can change their life
08:00we can begin to engage people in the process of finding some of this information out in time to do something about it so we have exactly designed an end-to-end solution which is geared toward being able to get people engaged because engagement is the first step to knowledge which then often can facilitate behavior change
08:26and we you know I talk a lot about type 2 diabetes which in our country we have 80 million pre-diabetics 90% of whom don't know that they're pre-diabetic and all you need is a glucose test to begin to get them engaged and and type 2 diabetes can be reversible with behavior modification and changes in lifestyle and diet and exercise
08:52So what does a glucose test cost in fairness it's probably less than a dollar I guess so so the system was build these locations that people want to go to and are really nice and engage them in the testing process we've exactly got spa music and waterfalls and you know virtual fish tanks and a lot of bamboo and
09:18and and and people describe the experience is fun right are not words that you traditionally hear associated with lab testing and people are not normally walking out being like that was awesome you know so but but that has to happen because if we can turn it into something that that's cool and that people like doing then they'll begin to connect with it so so we started with those physical spaces
09:45We then tried to design the process in such a way in which it's as painless as possible and it's fast so you get in and out quickly it's accessible late at night it's accessible on the weekends
10:00And it's accessible to my eyes and it's accessible to the reasons and it's available on the weekends as well to continue to help out the next one where it's your process
10:07I've been using To ensure the integrity of the process and the integrity of the data so that that data can be used in ways that are most meaningful in the context of the early detection mission
10:18but also because it makes the experience in and of itself more accessible through our app which we've just launched
10:25launched, the intent was help people begin to connect with this information.
10:30We know more about our credit cards than we do about our body, and normally people see
10:35these lab reports and they look a little scary and they don't completely understand them,
10:39so they don't connect with it, but it's highly useful information.
10:45People should begin to understand because it'll change their life.
10:50And you talked a lot about the experience.
10:53Help us understand, give us your trade secrets.
10:56Help us understand how you are able to actually make this happen.
11:01Sure.
11:02Well, part of the reason it took us so long is that we went through the process of...
11:07And by the way, I should mention that Elizabeth started this company when she was 19, so...
11:11Yeah.
11:12I noticed you didn't actually answer the question about who you are, but we'll get to that.
11:21We went through redeveloping every test that is run in a traditional laboratory to be able
11:29to operate on these tiny volumes of blood or other fluids.
11:34We do urine testing, feces testing, swabs, and all sorts of other fluids.
11:42And went test by test to be able to do that.
11:46And then we had to redevelop the analytical systems to run those tests, because traditionally,
11:53very large tubes of blood are required in order to run these tests in traditional labs and
11:58different tubes of blood are required.
12:00You need the green top and the purple top and the rainbow top and all these other tops.
12:07And then we invested very heavily in software in the context of automating the traditional
12:12analytical process, and importantly, what's called the pre-analytical and post-analytical
12:18processes, wherein humans are traditionally involved in doing things like manually handling
12:24samples, centrifuging them, leaving them on counters.
12:29And that's where 93% of the error and variability is introduced.
12:33So we work to design a process that is highly automated to help to minimize that variability
12:41and error.
12:43And it's in then integrating that with the end-to-end solution.
12:48And you referenced sort of the elements of the wellness center.
12:51So we've built, for example, software on the front end that allows us to do the first real-time
12:57electronic eligibility for lab testing.
12:59So when someone walks in, we can tell them right there, before they choose to buy this
13:04service, how much is it going to cost them?
13:07This historically has been a service that you go do a test, but you don't know whether you're
13:12going to get a bill in the mail for $300 three months later.
13:16And that matters a lot to a lot of people.
13:17So we've built additional services around this to begin to engage people and create that
13:25transparency as a vehicle for access to testing.
13:30Okay.
13:31I want to open up to questions in just a minute or two.
13:35But before I do that, you have had just a really interesting trajectory with this company.
13:42You were very secretive for a long time.
13:45But one of the things that you've done is put together this amazing board.
13:50And I just want to highlight some of the folks that you have on the board.
13:52I can't even call them folks.
13:55So it includes three former U.S. Cabinet Secretaries, two former U.S. Senators, a retired Navy Admiral,
14:01and a retired Marine Corps General, including George Shultz, Henry Kissinger.
14:09How did you make that happen?
14:14You know, I started this company because I believe that nothing matters more than what
14:26people go through today when you lose someone you love because you found out too late in the
14:33process to do something about it.
14:35And this board is involved in this company because we have an opportunity to do good in the world.
14:44And we have an opportunity by building a business as a vehicle for making a change in the world to help to shape
14:52our health care system and to shape it in such a way in which we empower individuals to get access to information that
15:00fundamentally means you don't have to say goodbye too soon.
15:04So that's why they're part of this.
15:15And it's been an incredible privilege for me to be able to learn and be surrounded by that kind of wisdom because
15:25we know one of the things that's so amazing about this country is that you can build companies and leverage creativity and innovation to make a change.
15:38And that can be done in our health care system.
15:41And it can be done by outside the system in terms of engaging the individual and the consumer to facilitate that change.
15:49And that's what that group and what we're working to do is about.
15:54So I've got to ask you though, because looking over the list, and these are just very fine men, you know, but you don't have any women.
16:04Yeah.
16:05When are you going to have a woman on your board?
16:07And you have a lot of women in the company, I should say, but none on the board.
16:10Well, I hope I qualify as the first one.
16:12It's you and a bunch of old guys, basically.
16:15You know, this is an area that's so important and we've started, we have, we're told, one of the largest percentages in terms of workforce of female engineers and scientists in the Bay Area.
16:32And they're all there because they're the best at what they do.
16:38And I have the privilege of spending a lot of time with them talking about the fact that we have an opportunity to show to their little girls that absolutely you can go into engineering, you can go into science, and you can be successful, and you can build a family.
16:58And we should be doing this, and so having women involved with this company, and building this company, and leading this company because of who they are, especially in the engineering and science space.
17:11I mean, I was the only woman in chemical engineering at Stanford, and in the electrical engineering program that I was at at Stanford, and that must change.
17:20Well, if you are looking for a female board member, I hear Melinda Gates is in the audience.
17:27Do we have a question?
17:29I appreciate that.
17:32One over here.
17:34Hi there.
17:35My name is Andreas Sturmer from Zurich Insurance.
17:38I really admire what you do.
17:40It is a phenomenal achievement where you are today and with the innovation you've brought.
17:46You're talking about bringing that to consumers and people here in this country, but obviously we heard from Melinda Gates just before you came in, and the connection is so obvious.
17:59So there is such potential in what you do, and how do you think about that outside of this country?
18:04It is at the heart of why we're doing everything that we do every single day.
18:09What's amazing about the opportunity to apply this internationally is that in many countries we use the analogy to the lack of landline infrastructure in China and the existence of cell phones sort of leapfrogging over it.
18:28The creation of a decentralized testing infrastructure because laboratory data drives 80% of clinical decisions can be a tool for facilitating a decentralized care delivery infrastructure.
18:43And we, as a company, do all of our manufacturing here in the United States.
18:50We know we can compete on cost internationally, and we can apply that toward being able to make this type of testing accessible for the types of prices that matter in those environments.
19:06I mean, you know, often you think about something like tuberculosis, a $10 test is too expensive.
19:13So being able to operate in that realm in those countries is at the core of what we're doing, and we're starting to get involved in that.
19:25Unfortunately, we are out of time.
19:27I'm sure there are more questions for Elizabeth.
19:29I encourage you to talk to her afterwards.
19:31But thank you so much.
19:33I really appreciate your being here.
19:38Are you stepping down this way?
19:39I'm going over here.
19:42All right.
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