CCSE Lecture Series - Roger D. Jones "U.S. Healthcare as a Complex System: How Close are we to a Major Shift in US Healthcare?"

Thursday, February 6, 2014 ( 3:00 pm to 4:30 pm )

Location: Babbio 541 - CCSE Lab

Center for Complex Systems and Enterprises
Distinguished Lecture Series
U.S. Healthcare as a Complex System
Roger D. Jones - American Physicist and Entrepreneur

Thursday, February 6 - 3:00 PM
Lecture 3: How Close are we to a Major Shift in US Healthcare?

  • The meaning of structural fluctuations
  • Likelihood of a phase transition
  • Possible outcome states
  • M&A activity as a measure of closeness to a phase transition

ABSTRACT: Just as it is unreasonable to predict the state of water—ice or liquid—by computer modeling the trajectories and orientations of each water molecule and its electrons as well as the physical micro-properties of the materials with which the water is in contact, it is equally unreasonable to predict the future state of a complex social system like healthcare by looking at details of the dynamics of the Affordable Care Act, health insurance contracts, and drug patents. The state will have changed before the calculations can be carried out. Checking the accuracy of the predictions will take even more time.  In a quote attributable to several people such as Niels Bohr, Mark Twain, and Yogi Berra, “prediction is difficult, especially about the future.

Figure 1: “prediction is just difficult, especially about the future” Image source.

One can, however, use general principles and a few well-chosen measurements to understand how close a system is to an X-Event or phase transition—an extreme change in the structure of the system.  The fluctuations in the structure of the system signal an impending event, while the nature of the external forces on the system suggests possible end states that relieve the strain on the system.

In the case of US healthcare, fluctuations in the structure are manifested in mergers, acquisitions, bankruptcies, and startups. This activity has been increasing in the last few years. There are intense forces on the system as a whole and on some of its parts, such as the pharmaceutical industry. Expense is high and outcomes are low. For pharmaceuticals, revenue is down due to patent expirations and a weak drug pipeline. Personalized medicine is changing the relationships among providers, patients, and payers. The nature of clinical trials must change. Physicians must acquire new information-management tools. Patients have greater control.

The indications are that US healthcare is in the middle of an X-Event, or phase transition. A positive outcome will be that healthcare expenses are lowered and the general health of the nation improves.

BIO: Roger D. Jones is an American physicist and entrepreneur.   Jones trained in physics at Dartmouth College and worked as a staff physicist at Los Alamos National Laboratory from 1979 to 1995. His primary research interests were in laser fusion and machine learning.  In the early nineties he headed projects that applied his machine learning inventions to technical problems in the private sector. In 1995 in collaboration with Citibank, Jones co-founded the Center for Adaptive Systems Applications (CASA), a company that applied neural network and adaptive technology to consumer banking.  HNC Software acquired CASA in March 2000, at the peak of the dotcom boom.  Fair Isaac Corporation subsequently acquired HNC Software.  Much of the technology developed at CASA became part of the credit scoring offerings of Fair Isaac.  Jones along with other Santa Fe scientists and entrepreneurs such as Doyne Farmer, Norman Packard, Stuart Kauffman, and David Weininger founded several other high-technology startup companies in the emerging Santa Fe technology community, dubbed by Wired Magazine as the "Info Mesa."   Jones introduced the first entirely virtual company.  Much of the effort of these startups focused on finance and the catastrophic reinsurance industry. By 2004 the companies Jones co-founded merged into a single company, Qforma, Inc., that focused on adaptive and predictive technologies for the pharmaceutical industry. In June of 2013 Qforma merged with SkilaMederi.