Human Health

The past half-century has witnessed unprecedented advancements in human health—from bioengineered drug delivery to the emergence of genomic medicine. MIT has played a central role in many of these innovations. And while new approaches to diagnosis and novel treatments remain essential to improving health, invention at MIT is not limited to the scientific. Faculty members at the MIT Sloan School of Management are concurrently tackling the significant financial, economic, operational, and organizational challenges faced by this industry.

MIT is perfectly positioned to address both healthcare and healthcare management. Not only do we have the very best scientists studying cures for cancer, genomic sequencing, and the management of Alzheimer’s and diabetes, but we also have experts in system dynamics and in work and employment who are looking to fundamentally change the way healthcare is managed, decreasing the cost of care while creating better outcomes for patients, physicians, and administrators.

Initiative for Health Systems Innovation

The MIT Sloan’s faculty are working to provide better access and lower cost solutions to managing global health through the MIT Sloan Initiative for Health Systems Innovation (HSI). HSI seeks to accelerate the creation of high-quality and cost-effective health systems through industry-based research and education. In order to achieve this mission, the group leverages existing faculty research and also launches new efforts through expanded partnerships with health industry leaders throughout New England and beyond.

Healthcare in the United States is facing significant systemic issues as costs increase, the population ages, and chronic illness rates grow. Seizing an opportunity to make the healthcare system more efficient, patient-oriented, and cost-effective—and aiming to fundamentally make people healthier—a group of MIT Sloan faculty members led by Joseph Doyle, Retsef Levi, and Anne Quaadgras have launched the Initiative for Health Systems Innovation (HSI).

The Initiative is a center of intellectual leadership and innovation that provides bridges to and from the health industry, and enables collaborative work between industry stakeholders and academics. HSI educates students and industry leaders through degree programs like the Healthcare Certificate, which offers a hands-on curriculum to all students at MIT, custom Executive Education programs that are structured around close partnerships with industry, and regular seminars and conferences. With new models, management practices, data analysis, and technologies to improve complex health systems, HSI and its affiliated faculty and students are working to transform health management, clinical practices, and systems design around the world.

Healthcare Finance Initiative and CanceRx

The MIT Sloan School of Management has long been known as the birthplace of modern finance–a place where ingenuity and innovation have led to tools and models that have fundamentally changed financial markets. Now, the MIT Laboratory for Financial Engineering (LFE), led by Professor Andrew W. Lo, is drawing on that same intellectual rigor and inventive spirit to ask whether financial engineering can be used to help cure cancer and other diseases.

Over the last decade, financial markets have channeled trillions of dollars into the real estate and lending markets. Structured finance facilitated this process by packaging loans and receivables into securities, offering new profiles of risk and return to investors. Professor Lo and his colleagues at the LFE have launched the Healthcare Finance Initiative to apply this same approach to fund biomedical research.

Biomedical innovation and drug development require tremendous amounts of capital over long periods of time. To address this challenge, Professor Lo and his team have proposed combining structured finance and portfolio theory to create a new family of “megafunds” to invest in biomedical innovation. As a result of this research new funding structures have been released with some early successes as in a recent pharma company that raised more than a $1B to continue drug development. With these new financing structures, the biopharma industry can greatly multiply the resources available for scientific research and speed the discovery of a cure for cancer and other diseases.

But the LFE team isn’t stopping there. By proposing new business models and convening small working-group meetings at MIT with all the relevant stakeholders, they aim to help bridge the gap between early-stage research and patient access, improve organizational structures, and increase the capital efficiency of biomedical funding. This is research with vitally important practical applications.