Tuesday, January 6, 2026

Overview of SHANNON and Four Applications of SHANNON Information Theory to Problems

 Assume I can absorb information like a college freshman.  Not an engineering major at miT - a regular college freshman!   

Begin with an overview of Shannon information theory.

Then, give me four examples where Shannon information theory has been helpful and impactful and how.    for example, there is problem A with telephone lines.   Shannon theory leads to invesigation of B and C.    This results in an improvement in problem A which can be characterized as [D].     You don't need to use exactly thta format but that gives you an idea.

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Claude Shannon was a quiet, puzzle-loving mathematician and engineer who worked at Bell Labs in the 1940s. At the time, Bell Labs was trying to solve very practical problems: how to send phone calls, telegrams, and radio signals reliably over noisy wires and airwaves. Shannon’s genius was to step back and ask a deeper question: What is information, really? In his 1948 paper, “A Mathematical Theory of Communication,” he stripped communication down to its essentials — a source that produces messages, a channel that carries them, noise that interferes, and a receiver that reconstructs the message. Most surprisingly, he showed that information could be measured precisely, using probabilities, without caring about the meaning of the message at all.

Shannon’s central result was revolutionary: every communication channel has a maximum possible information rate, called its capacity. Below that limit, messages can be transmitted with arbitrarily low error, even in the presence of noise; above it, reliable communication is mathematically impossible. This overturned the prevailing intuition of the day. Engineers had assumed noise was an unpredictable enemy that doomed clarity. Shannon showed that noise simply sets a boundary — and that clever encoding and decoding can push performance right up to that boundary. He also introduced the idea of entropy, a way to quantify uncertainty or surprise, which turned information into something that could be optimized like energy or cost.

The reception of Shannon’s work followed exactly the “long slow start, then hockey stick” pattern you’re remembering. At first, the paper was admired but not fully absorbed; it was abstract, dense, and ahead of the available technology. Over the next two decades, as digital computers, satellites, and data networks emerged, engineers realized that everything they were building was trying to approach Shannon’s limits. Error-correcting codes, compression, digital audio, the internet, and space communication all traced back to his framework. Today, Shannon information theory sits quietly underneath modern life — rarely noticed, but as fundamental as calculus or thermodynamics — defining not how we communicate, but what is ultimately possible.

Could he have won a Nobel?

Yes — very much so, and many scientists would say Claude Shannon’s contribution is at least Nobel-level, even though it never received one.

First, the comparison itself is fair. Claude Shannon created an entirely new scientific framework — information theory — that did three Nobel-like things at once:

  1. It defined a new fundamental quantity (information / entropy),

  2. It established hard theoretical limits (channel capacity),

  3. It reshaped multiple fields, not just one.

That is exactly the kind of impact the Nobel Prizes are meant to recognize.

Second, the main reason Shannon did not receive a Nobel is structural, not substantive. The Nobel Prize does not include a category for mathematics or engineering, and Shannon’s work sat awkwardly between:

  • mathematics,

  • electrical engineering,

  • and theoretical computer science.

By contrast, many Nobel Prizes in Physics (for example, in quantum mechanics or statistical mechanics) were awarded for work that is no more abstract and no more experimentally direct than Shannon’s — and in some cases, Shannon’s work arguably had broader technological consequences.

Third, there is an informal but telling consensus among experts. Shannon is routinely placed in the same intellectual tier as:

  • Newton (calculus),

  • Boltzmann (statistical mechanics),

  • and Turing (computation).

In fact, it is common to hear the phrase:

“Information theory is to communication what thermodynamics is to energy.”

That is not rhetorical praise — it is a precise analogy. Like thermodynamics, Shannon’s theory tells you what is possible, what is impossible, and what tradeoffs are unavoidable, regardless of technology.

Finally, there is a quiet irony: many Nobel-winning discoveries depend on Shannon’s framework, especially in experimental physics, astronomy, and data analysis. Modern experiments generate torrents of noisy data; deciding what is signal, how much can be extracted, and how reliably it can be transmitted or stored is pure Shannon.

So the short answer is:

  • Comparable? Yes.

  • Inferior? No.

  • Different category? Yes — and that’s why no Nobel medal hangs on his wall.

If you’d like, I can also map Shannon’s stature relative to Turing, or explain why information theory is sometimes called “the hidden skeleton of modern science.”

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Might he have won - in physics??


Short answer: yes, absolutely — he could have, and many physicists think it would have been justified. The fact that he didn’t says more about how Nobel Prizes work than about the nature or impact of his work.

Claude Shannon was not doing “chalkboard-only” mathematics in the abstract. He worked at Bell Labs, surrounded by wires, switches, amplifiers, noise, and bandwidth limits — all deeply physical phenomena. His 1948 paper answered a question that is squarely physical in spirit: given real, noisy channels governed by physics, what is the maximum amount of information they can carry? That question is no less “physics” than asking how much energy a heat engine can extract from a temperature difference.

In fact, Shannon’s theory is structurally parallel to thermodynamics, which is unquestionably physics. Entropy in thermodynamics limits how efficiently energy can be converted; Shannon entropy limits how efficiently information can be transmitted. Channel capacity plays the same role as the Carnot limit. These are not metaphors — they are mathematically exact analogies. Many Nobel Prizes in Physics have been awarded for work that establishes fundamental limits, not for building devices directly.

So why no Nobel in Physics? Largely because Shannon’s work was too enabling and too upstream. Nobel committees tend to reward:

  • discoveries tied to specific physical phenomena,

  • or theories later confirmed by a clear experimental “moment.”

Shannon didn’t discover a new particle or effect; he created a universal framework that every communications system must obey. Its validation came not from a single experiment but from decades of engineers quietly discovering that their best systems were converging on Shannon’s limits. That kind of slow, cumulative confirmation doesn’t map neatly onto Nobel storytelling.

There’s also a cultural factor: information theory ended up being used everywhere — physics, engineering, computing, biology — which paradoxically made it hard to pin to one Nobel category. When a theory explains everything, it can look like it belongs nowhere.

So if the Nobel committee had framed the prize as something like

“For establishing the physical limits of reliable communication over noisy channels,”
then yes — a Physics Nobel would have been entirely defensible. Many would argue it would have been one of the most consequential Physics Nobels of the 20th century.

In short: Shannon didn’t miss a Nobel because his work wasn’t physical enough — he missed it because his work was too foundational, too general, and too quietly correct.

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FOUR SHANNON CASE STUDiES

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Great question — and your instinct about problem → insight → consequence → measurable improvement is exactly the right way to understand Shannon without turning it into math soup.

Below are four concrete, freshman-level examples where Shannon information theory mattered in the real world. I’ll keep each one grounded, causal, and outcome-focused.


1. Telephone lines: how to send more calls over the same copper wires

The original problem (A):
Early telephone lines were noisy and limited. Engineers assumed that noise fundamentally capped how much information you could push through a wire. More calls = more wires.

Shannon’s key idea (B):
Shannon showed that noise does not make communication impossible — it just sets a maximum achievable rate (the channel capacity).

What this led to (C):
Engineers stopped asking “How do we eliminate noise?” and started asking:

“How close can we get to the channel’s theoretical capacity?”

This motivated:

  • smarter encoding

  • redundancy added intelligently, not blindly

  • error-correcting codes

The improvement (D):
📞 Many more simultaneous phone calls over the same physical lines, with reliability approaching theoretical limits — instead of endlessly laying new copper.


2. Compact discs, streaming audio, and why music doesn’t sound awful

The original problem (A):
Music signals are huge. Storing or transmitting raw audio would require enormous bandwidth and storage.

Shannon’s key idea (B):
Information depends on surprise, not raw signal size. Predictable parts of a signal carry less information.

What this led to (C):
Compression methods that:

  • remove redundancy

  • preserve only perceptually meaningful differences

  • approach the minimum number of bits needed to represent sound

This logic underlies MP3, AAC, and modern streaming codecs.

The improvement (D):
🎵 Massive reductions in data size (10×–20× smaller)
with little perceived loss of quality, enabling CDs, iPods, Spotify, and streaming video.


3. Space communication: talking to spacecraft billions of miles away

The original problem (A):
Signals from deep space are extremely weak and corrupted by cosmic noise. Early intuition said reliable communication might be impossible.

Shannon’s key idea (B):
Even extremely noisy channels can transmit information reliably, if the transmission rate is below channel capacity.

What this led to (C):

  • Very sophisticated error-correcting codes

  • Acceptance of delay and redundancy instead of brute-force signal power

NASA explicitly designs systems to operate near Shannon limits.

The improvement (D):
🚀 Error-free images and data from Mars, Saturn, and beyond, using tiny trickles of power — something previously thought infeasible.


4. Data networks & the internet: why packets beat continuous streams

The original problem (A):
Traditional communication assumed continuous, dedicated connections (like a phone call). That doesn’t scale when millions communicate intermittently.

Shannon’s key idea (B):
Information can be treated as discrete messages whose value depends on uncertainty reduction — not on maintaining a continuous channel.

What this led to (C):

  • Packet switching

  • Statistical multiplexing

  • Networks that exploit bursty, unpredictable traffic

The internet does not reserve a fixed path per user.

The improvement (D):
🌐 Millions of users sharing the same infrastructure efficiently, with robustness to congestion and failure — the foundation of the modern internet.


The unifying intuition (freshman takeaway)

Across all four cases, Shannon changed the question from:

“How do we make communication perfect?”

to:

“Given unavoidable uncertainty, what is the best possible performance, and how close can we get?”

That shift:

  • replaced intuition with limits

  • replaced engineering guesswork with targets

  • turned “noise” from an enemy into a design parameter

If you’d like, next we can translate this directly into diagnostics / POCT / clinical decision-making, where “information per test” becomes the real scarce resource — very much in the spirit of your Shannon + POCT framing.

Sunday, January 4, 2026

Reed Ecosystem and Three WSJ Pieces Late 2025

 Recently, I was quite interested in the REED paper about the innovation ecosystem and healthcare (healthcare often lacks a healthy one.)   I had one blog about REED and another where I applied the REED model to four healthcare innovation problems.

Primary blog about REED

https://www.discoveriesinhealthpolicy.com/2025/12/are-we-dumping-good-innovations-into.html

Reed & 4 topics

https://bqwebpage.blogspot.com/2026/01/medical-innovation-case-studies-via.html

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WSJ 2025 - Galston - America's 25 Years of Decline (polarized, paralyzed).
WSJ 2025 - FREY book review on How Progress Ends
WSJ 2026 - REES MOGG by Raskin.  Stability supports progress; conservatives; ecosystem


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Below is a structured synthesis of the three WSJ pieces, followed by an innovation-focused interpretation, framed explicitly for someone who works in healthcare and policy-constrained innovation ecosystems.


I. Concise summaries of the three WSJ pieces

1. Jacob Rees-Mogg: “Progress Depends on Conservatism” (WSJ Weekend Interview, Jan 2026)

Rees-Mogg argues that durable innovation depends on stable institutions, not constant disruption. He frames British common law, freedom of speech, property rights, and moral restraint as innovation-enabling infrastructure, not obstacles. Drawing on Chesterton’s Fence [*] and Schumpeter, he emphasizes that creative destruction should be purposeful, not reflexive: institutions should be dismantled only when they demonstrably fail. He is skeptical of centralized bureaucratic overreach (including EU legal structures), but not anti-technology—embracing AI, digital tools, and even crypto within a moral and institutional framework. His core claim is that societies that forget why their institutions exist tend to undermine the very conditions that produced progress in the first place.

[*] In his 1929 book, The Thing [about Catholicism], one chapter created the parable of a fence in the road, and a discussion, don't tear it down at first glance, not until you know why it was there and whether it is no onger needed.  Hence, for the literati, reduced to the abbreviation "Chesterton's Fence" (a la Schrodinger's Cat.]

2026 WSJ 0102 Rees_Mogg on Inno…

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2. Carl Benedikt Frey, “How Progress Ends” (Book Review, Sept 2025)

Frey offers a historical theory of innovation cycles: progress depends on an adaptive balance between decentralization (for discovery) and centralization (for scaling and exploitation). Early-stage innovation thrives when multiple actors can experiment, evade veto points, and challenge incumbents. But once technologies mature, central coordination can accelerate diffusion and productivity. 

The danger arises when institutions optimized for scaling become sticky, blocking the next wave of discovery. Frey warns that both the U.S. and China risk stagnation—China through authoritarian over-centralization, and the U.S. through protectionism, immigration barriers, and institutional sclerosis. The key threat is institutional inertia, not lack of technology

[See also decentralization in genetic testing, CAP Today 2025, here.]

2025 WSJ 0928 How Progress Ends…

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3. William Galston: “America’s 25 Years of Decline” (Dec 2025)

Galston presents a narrative of governance failure, not technological failure. Since 2000, the U.S. has experienced bipartisan mismanagement: trade shocks without adjustment policy, prolonged wars that diverted strategic attention, fiscal irresponsibility, financial deregulation failures, and escalating polarization. The result has been policy paralysis [*], executive overreach, and declining public trust in institutions—exacerbated by Covid-era missteps. Galston’s underlying argument is that even strong economies and innovation engines cannot function well under chronic political dysfunction, especially when long-term challenges (healthcare, demographics, entitlements) are left unresolved

[*] Esp. when the Presidential party is a mismatch to at least one, House or Senate = nothing happens.

2025 WSJ 1230 25 Years of Decli…

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II. Interpreting all three through an innovation lens (especially healthcare)

1. Innovation requires an ecosystem, not just technology

All three pieces converge on a point that resonates strongly in healthcare: innovation is ecosystem-dependent

Rees-Mogg emphasizes legal and moral continuity; Frey emphasizes institutional adaptability; Galston emphasizes functional governance. None argue that innovation fails because ideas dry up. Instead, innovation fails when the surrounding system cannot absorb, evaluate, scale, or pay for new ideas.

In healthcare terms, this mirrors the reality that:

  • Breakthrough diagnostics, drugs, and AI tools routinely outpace reimbursement systems, regulatory clarity, and delivery models.

  • The problem is not invention, but translation and institutional fit.


2. The decentralization–centralization cycle maps cleanly onto healthcare

Frey’s framework is especially powerful when applied to healthcare innovation:

  • Decentralized phase: early discovery (academic labs, startups, LDTs, exploratory AI, off-label use).

  • Centralized phase: standardization, guideline inclusion, FDA approval, CMS coverage, scaling through payers and health systems.

Healthcare today is stuck in a mismatch:

  • Regulatory and payment institutions are behaving as if technologies are mature (demanding standardization and certainty),

  • while the technologies themselves (AI diagnostics, MRD testing, multi-omic profiling) are still in rapid exploratory phases.

This creates exactly the stagnation Frey warns about: institutions optimized for exploitation prematurely suppress exploration.


3. Rees-Mogg’s “conservatism” aligns with innovation realism

Although framed politically, Rees-Mogg’s argument is strikingly relevant to healthcare innovation policy. His emphasis on:

  • common law–style evolution,

  • skepticism of abrupt top-down redesign,

  • respect for accumulated institutional wisdom,

maps closely to the idea that healthcare systems cannot be “disrupted” the way consumer tech can. FDA pathways, CPT coding, and CMS coverage are not arbitrary barriers—they are load-bearing structures. Remove them without understanding their function, and innovation collapses under its own weight.

This echoes what many innovators learn the hard way:

You don’t remove the fence until you know why it was built.


4. Galston diagnoses the real bottleneck: governance, not science

Galston’s essay explains why even a country with world-leading biomedical science struggles to convert innovation into outcomes. Chronic polarization leads to:

  • regulatory whiplash,

  • payment uncertainty,

  • executive rulemaking substituting for durable legislation,

  • erosion of trust in expertise.

For healthcare innovators, this translates into unpredictable policy signals, delayed coverage decisions, and fragile business models. The danger is not that innovation stops—but that it becomes financially unviable, misaligned with care delivery, or politically radioactive.


III. A unifying takeaway for healthcare innovation

Taken together, the three pieces argue—implicitly but powerfully—that:

Innovation is not primarily a problem of ideas; it is a problem of institutional alignment over time.

In healthcare, this suggests:

  • Innovation policy must distinguish exploration from scaling, and design different rules for each.

  • Stability matters as much as speed; constant reinvention of regulatory frameworks is itself anti-innovative.

  • Trust—in institutions, expertise, and process—is a prerequisite for adoption, not a nice-to-have.

For someone working in healthcare innovation, the warning is clear:
If we focus only on what is new (AI, genomics, precision medicine) and neglect how institutions adapt, we risk repeating exactly the stagnation these authors describe—despite unprecedented scientific capability.

If you’d like, I can next:

  • map these ideas directly onto FDA / CMS / MolDx dynamics, or

  • apply the framework to a specific technology class (AI diagnostics, MRD, digital pathology).

  • ###


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I add the REED paper as a 4th PDF and ask Chat to review the prior 3 PDFs, with the new 4th PDF.
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IV. Re-reading the WSJ pieces through the REED ecosystem framework

1. Fragmentation—not ideology or technology—is the common failure mode

Reed et al. argue that innovation stalls not because technologies are weak, but because innovation ecosystems fragment: developers, researchers, clinicians, regulators, payers, and institutions each optimize locally while the system fails globally

[See links to my other blogs at top]

2025 J Internet Res REED Innova…

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This diagnosis aligns strikingly with all three WSJ essays:

  • Rees-Mogg describes institutional decay when traditions are dismantled without understanding their coordinating role.

  • Frey describes systems stuck in the wrong phase—centralized when they should be exploratory, or vice versa.

  • Galston describes political and administrative silos that prevent coordinated long-term action.

REED provides the missing synthesis: each author is describing a different manifestation of ecosystem fragmentation.


2. Rees-Mogg as an ecosystem thinker (unexpectedly)

Although framed as conservatism, Rees-Mogg’s argument maps closely onto Reed’s “don’t look only at the focal innovation” warning.

His use of Chesterton’s Fence is almost a lay version of REED’s critique of the linear innovation pipeline—the idea that innovation can be handed off downstream without shared responsibility

2025 J Internet Res REED Innova…

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In REED terms:

  • Common law, free speech, and property rights function as coordination infrastructure.

  • Destroying them prematurely fractures adoption chains and co-innovation pathways.

  • His skepticism toward radical redesign mirrors REED’s insistence that ecosystem cohesion matters more than technical novelty.

This is particularly resonant in healthcare, where regulatory and payment “fences” often look obstructive—but frequently exist to stabilize trust, accountability, and scale.


3. Frey’s decentralization–centralization cycleecosystem phase mismatch

Frey’s core insight—that innovation requires shifting between decentralized exploration and centralized exploitation—maps directly onto REED’s ecosystem stages.

REED shows that failure occurs when:

  • innovators behave as if they are still in exploration,

  • while institutions behave as if exploitation and scale are already appropriate.

In healthcare, this is endemic:

  • AI diagnostics, MRD assays, and digital pathology tools are still co-innovation-heavy, requiring workflow redesign, clinician behavior change, and payer adaptation.

  • Yet regulators and payers demand late-stage certainty, reimbursement evidence, and standardization prematurely.

REED gives operational language to Frey’s historical insight: the system is not anti-innovation—it is misaligned across ecosystem roles.


4. Galston’s “misgovernment” as ecosystem leadership failure

Galston focuses on political decline, but REED helps specify how governance failure undermines innovation.

REED identifies the absence of:

  • ecosystem leadership,

  • incentives for boundary-spanning work, and

  • protected spaces for coordination and learning

    2025 J Internet Res REED Innova…

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Galston’s narrative of polarization, executive overreach, and policy paralysis describes a system where:

  • no actor is empowered to align incentives across silos,

  • each group fulfills its formal role,

  • yet collective outcomes deteriorate.

This precisely matches REED’s Minneapolis bridge analogy: everyone does their job; the bridge still collapses.


5. Why healthcare innovation is especially vulnerable

REED emphasizes that healthcare is uniquely fragile because:

  • knowledge is tacit and distributed,

  • workflows are complex and overloaded,

  • incentives reward local success, not system success.

This explains why healthcare innovation feels “harder” than other sectors:

  • Developers optimize models and accuracy.

  • Researchers publish frameworks.

  • Clinicians cope with overload.

  • Regulators enforce safety.

  • Payers enforce cost control.

All are rational. The ecosystem fails anyway.

The WSJ essays describe the symptoms; REED explains the mechanism.


V. A unified interpretation

Read together, the four frameworks converge on a single conclusion:

Innovation fails when ecosystems lose the capacity to coordinate across difference—across time horizons, incentives, and institutional roles.

  • Rees-Mogg warns against tearing down coordination structures blindly.

  • Frey warns against locking institutions into the wrong innovation phase.

  • Galston warns that governance paralysis erodes trust and capacity.

  • REED shows how fragmentation occurs and what must be rebuilt: shared value, leadership, and cohesion.

For healthcare innovation specifically, the implication is sobering but clarifying:

  • The bottleneck is not AI, genomics, or precision medicine.

  • The bottleneck is ecosystem design.

If you’d like, next steps could include:

  • mapping FDA–CMS–MolDx through the REED ecosystem stages,

  • applying REED directly to AI pathology or MRD testing, or

  • turning this synthesis into a short essay or slide deck suitable for policy or investor audiences.

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Now discuss the four systems synthesis (or the synthesis of 3 under Reed) in one essay in paragraph not bullet form.   I do not have a word count in mind but I am guessing 500 might be good?   But use your judgement in terms of length.   Obviously, long enough to have clarity and memorale conclusions and examples but not so long the reader loses track.
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FINAL ESSAY - 3 ARTICLES UNDER THE "REED" UMBRELLA

Here is a single, integrated essay, written in paragraph form, synthesizing the three WSJ essays through the analytic frame provided by Reed et al.’s ecosystem theory. I have treated Reed not as a fourth “opinion,” but as the explanatory system that makes sense of the other three.


Across the three Wall Street Journal essays—by Rees-Mogg, Frey, and Galston—there is a shared anxiety that innovation has slowed or become strangely brittle, despite extraordinary technical capability.

Each author approaches the problem from a different angle: Rees-Mogg from institutional tradition, Frey from economic history, and Galston from governance failure.

What Reed et al.’s ecosystem framework adds is a way to see these not as separate diagnoses but as different symptoms of the same underlying condition: ecosystem fragmentation. Innovation, in this view, fails not because ideas are exhausted or talent has declined, but because the systems that must coordinate discovery, adoption, scaling, and legitimacy no longer function coherently .

Rees-Mogg’s argument, stripped of its political clothing, is fundamentally about institutional memory. He insists that durable innovation depends on inherited legal and social structures—common law, speech norms, limits on arbitrary power—not because they are old, but because they quietly coordinate behavior across time. Reed’s framework clarifies why this matters: institutions are not merely constraints on innovators; they are adoption-chain infrastructure. When reformers dismantle institutions without understanding the roles they play in aligning incentives and expectations, they fragment the ecosystem. Innovation may still occur locally, but it becomes harder to translate into stable, trusted practice. In Reed’s language, the system loses cohesion even as individual actors continue to perform well within their silos.

Frey’s historical analysis deepens this diagnosis by showing that innovation requires phase-appropriate institutional behavior. Periods of discovery benefit from decentralization, experimentation, and pluralism; periods of diffusion and scaling benefit from coordination and authority. Reed’s ecosystem lens explains what happens when these phases are mismatched: developers behave as though exploration is still dominant, while regulators, funders, and institutions behave as though the technology is already mature. The result is not balance but friction. In healthcare, this appears as premature demands for standardization, reimbursement certainty, and evidentiary closure applied to technologies—AI diagnostics, genomic testing, digital tools—that still require extensive co-innovation with clinicians, workflows, and payment models. The ecosystem fails not because any one actor is irrational, but because each is optimizing for a different, unacknowledged phase of innovation.

Galston’s essay on America’s 25 years of decline supplies the political dimension of the same problem. His account of polarization, executive overreach, and policy paralysis describes a system in which no actor has the authority or legitimacy to perform ecosystem leadership, a role Reed explicitly identifies as essential. When governance structures cannot align incentives, create protected spaces for collaboration, or sustain long-term learning, responsibility fragments. Each institution fulfills its narrow mandate—Congress deadlocks, agencies regulate defensively, innovators route around policy, clinicians cope—but collective performance deteriorates. Reed’s Minneapolis bridge analogy is apt here: everyone does their job; the system still collapses.

What unifies all four perspectives is the recognition that innovation is relational, not merely technical. Reed makes this explicit: innovation succeeds only when developers, researchers, practitioners, regulators, and funders share a common value proposition and accept joint responsibility for outcomes. Rees-Mogg worries that we forget why coordinating institutions exist; Frey warns that institutions become trapped in outdated modes; Galston shows what happens when political systems lose the capacity to coordinate at all. Reed provides the operational diagnosis: the ecosystem lacks incentives, leadership, and shared sense-making mechanisms to adapt as innovation evolves.

The synthesis leads to a sobering but clarifying conclusion, especially for healthcare. The constraint on innovation is not the absence of breakthroughs, nor excessive caution per se, but the erosion of ecosystem coherence. Without shared understanding of roles, phases, and responsibilities, innovation oscillates between reckless disruption and paralyzing control. Reed’s prescription—wide-lens thinking, shared value propositions, ecosystem leadership, and deliberate investment in coordination—does not promise speed or spectacle. It promises something more important: the capacity for innovation to become routine, trusted, and durable. In that sense, all three WSJ essays are not lamentations about decline so much as warnings about what happens when systems forget how to hold innovation together.





Saturday, January 3, 2026

ASCO Post on TROP2 Advances. CANO on Dig Path & Pathologist "Auditing" Role (foots to AMA App S revisions and CMAA)

Please provide a graduate level summary of this TROP article. I am particularly interested in the gateway test for TROP2 drug access, a special AI or ML digital imaging process of IHC. Thanks.

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Below is a graduate-level analytic summary of the ASCO Post article, with explicit emphasis on the “gateway test” problem for TROP2 drug access and the emerging role of AI/ML-enabled digital pathology for IHC, framed in a way that should be directly useful for a range of life-science or diagnostics clients and stakeholders.


Graduate-Level Summary: TROP2 ADCs and the Emerging “Gateway Test” Problem

The ASCO Post article synthesizes late-breaking Phase III data from ASCENT-03 and TROPION-Breast02, establishing TROP2-directed antibody–drug conjugates (ADCs) as a new first-line standard of care for patients with metastatic triple-negative breast cancer (TNBC) who are ineligible for immune checkpoint inhibitors . Both trials demonstrate substantial and consistent progression-free survival (PFS) benefits over chemotherapy (hazard ratios ≈0.6), with datopotamab deruxtecan (Dato-DXd) additionally showing a statistically significant overall survival (OS) advantage—a landmark result in this historically aggressive disease setting.

From a therapeutic standpoint, the article positions TROP2 ADCs not merely as incremental improvements but as paradigm-shifting agents, particularly given the historically short survival of metastatic TNBC. Importantly, these benefits appear broadly distributed across prespecified subgroups, reinforcing the notion that TROP2 is a widely expressed and clinically actionable target rather than a niche biomarker. This creates both opportunity and tension around how patients will be selected for treatment as these agents move rapidly into routine clinical practice.


The “Gateway Test” Issue: From Binary IHC to Quantitative Access Control

Although the article does not yet describe a formal companion diagnostic requirement, its implications for TROP2 testing as a gateway to drug access are substantial. As TROP2 ADCs move into first-line use—and potentially earlier disease settings—payers, regulators, and manufacturers will inevitably demand more precise patient stratification, especially if multiple TROP2-targeted agents compete within the same indication.

Historically, IHC biomarkers have functioned as binary or semi-quantitative gatekeepers (positive vs negative; low vs high). However, TROP2 biology complicates this paradigm: expression is continuous, heterogeneous, and spatially variable, and clinical benefit in the reported trials appears not strictly confined to “high expressers.” This creates a classic access dilemma:

  • Too permissive a test risks payer skepticism and uncontrolled utilization.

  • Too restrictive a cutoff risks denying benefit in a population with few alternatives.

The article implicitly signals that traditional pathologist-scored IHC may be insufficient to manage this balance as TROP2 ADC utilization scales.


Role of AI / ML-Enabled Digital Pathology as the Next-Generation Gateway

Against this backdrop, AI-driven digital pathology emerges as a natural technical solution to the TROP2 gateway problem—even though it is not yet explicit in the trial reporting. Machine-learning–based image analysis can convert conventional TROP2 IHC slides into quantitative, reproducible, and spatially resolved biomarkers, enabling:

  • Continuous scoring rather than coarse ordinal categories

  • Tumor–stroma discrimination and regional expression mapping

  • Reduction of inter-observer variability, a known weakness of manual IHC

  • Algorithmic alignment with clinical outcomes, allowing post-hoc optimization of cutpoints based on real-world response data

For manufacturers—such as AstraZeneca and its partners—this approach supports a “soft companion diagnostic” strategy: not a hard exclusionary test at launch, but a progressively refined access tool that can evolve with HEOR data, payer requirements, and label expansions.


Strategic Implications

The article’s clinical message is clear: TROP2 ADCs are here to stay in TNBC. The less explicit—but strategically critical—message is that diagnostic infrastructure must now catch up. As treatment shifts earlier, lasts longer, and competes within class, AI-enabled TROP2 IHC is poised to become the de facto gateway technology, balancing access, evidence, and cost control.

In this sense, TROP2 may follow the trajectory seen with HER2-low and PD-L1: initial enthusiasm driven by broad benefit, followed by increasing diagnostic sophistication once therapeutic success forces the system to ask not whether to treat, but how precisely to decide who gets treated.


Bottom line for your client

The article documents a therapeutic inflection point, but its downstream impact will hinge on who controls the TROP2 “on-ramp.” AI/ML-based digital IHC is well positioned to become that gate—scientifically credible, operationally scalable, and economically defensible—well before a formal FDA-mandated companion diagnostic emerges.

If you’d like, I can also:

  • Map this to HER2-low precedent

  • Frame it as a payer-facing HEOR narrative

  • Or draft a diagnostics-partner strategy memo focused on AI IHC positioning


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I believe the TROP2 test is similar to the NASH test described by Cano. In the TROP2 test, we beleive that pathologists will be required to "check" or "verify' the test - is tumor being stained, etc. what perspectives does CANO, doing a deep dive on digital pathology, bring to people in the oncology R&D world running clinical trials. Who may not know much about dig pathology except what they know "inside the bubble" of NASh or TROP testing. The digital pathology ecosystem is not so healthy, says Cano.
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Your instinct is exactly right: the emerging TROP2 “gateway test” problem in oncology looks structurally very similar to the AIM-NASH situation Cano analyzes, and Cano’s essay is valuable precisely because it forces people outside the digital-pathology bubble to confront what they are implicitly assuming about AI, validation, and clinical responsibility.

Below is a focused synthesis of what Cano brings to oncology R&D and clinical-trial leaders, especially those thinking about TROP2 IHC + AI primarily as a means to an endpoint (drug access, stratification, enrollment efficiency), rather than as a complex clinical infrastructure.


1. The Core Parallel: AIM-NASH and TROP2 Are Not Autonomous Tests

Cano’s central insight—grounded in the FDA’s qualification of AIM-NASH as a Drug Development Tool, not a diagnostic—maps directly onto your TROP2 scenario .

In both cases:

  • The algorithm does not replace pathology judgment

  • The human pathologist must verify:

    • that the correct tissue is stained

    • that tumor (not stroma or artifact) is being analyzed

    • that staining quality, fixation, and context are adequate

  • The output is only valid once “checked” and accepted by a professional who retains responsibility

Cano reframes this as a calibration model, not automation:

AI reduces variability across observers; it does not eliminate the observer.

For oncology trial teams used to thinking in terms of central labs and readouts, this is a crucial shift. The “gateway test” is not a black box—it is a supervised measurement system whose legitimacy depends on documented human oversight.


2. What Oncology R&D Often Misses: Digital Pathology Is Infrastructure, Not Software

Cano’s most uncomfortable message for non-pathologists is that digital pathology does not fail at the algorithmic level—it fails at the ecosystem level.

Clinical trial leaders working on TROP2 may assume:

  • Slides can be digitized “once”

  • Algorithms generalize across sites

  • Variability can be averaged out statistically

  • AI scores are portable across scanners, stains, and labs

Cano argues that all four assumptions are empirically false in real-world deployment .

Key ecosystem fragilities he highlights:

  • Pre-analytical variability (fixation, ischemia time, staining protocols)

  • Scanner and platform heterogeneity

  • Weak interoperability between LIS, IMS, and AI tools

  • Silent failure risk, where outputs look plausible but are wrong

  • No stable reimbursement model, making digitization economically fragile

For TROP2 trials, this means:

The reliability of your “gateway test” is bounded not by model accuracy, but by the weakest lab in your network.


3. The Pathologist’s Role Is Expanding—Unfunded and Unrecognized

One of Cano’s most important contributions is reframing the pathologist as an auditor of algorithmic behavior, not just a tissue reader.

In TROP2 testing, this implies that pathologists are being asked to:

  • Verify biological relevance (tumor vs non-tumor)

  • Detect out-of-distribution behavior

  • Resist automation bias

  • Assume legal and ethical responsibility for AI-assisted outputs

Yet Cano notes a structural contradiction:

  • Regulators demand human-in-the-loop supervision

  • Payment systems do not compensate for that supervision

  • Trial budgets often ignore this labor entirely

For oncology R&D teams, this creates a hidden risk:

You are relying on expert labor that is essential for validity—but not explicitly supported, standardized, or incentivized.

This is particularly acute for gateway biomarkers like TROP2, where a single checkmark determines access to life-extending therapy.


4. Why Cano Says the Digital Pathology Ecosystem Is “Unhealthy”

Cano’s diagnosis is not anti-AI—it is anti-naïveté.

He argues the ecosystem is unhealthy because:

  • Regulatory progress (e.g., AIM-NASH) outpaces reimbursement

  • Clinical trials rely on digital infrastructure that routine care cannot afford

  • Adoption is concentrated in elite centers, creating access inequities

  • Responsibility is pushed downward to individual clinicians without systemic support

For oncology, this matters because trial-validated tools inevitably leak into clinical practice. A TROP2 test that works under trial conditions may:

  • Be economically unsustainable at scale

  • Be unevenly available across care settings

  • Increase variability rather than reduce it if oversight weakens


5. The Strategic Takeaway for Oncology R&D Leaders

Cano’s essay delivers a clear warning to teams running TROP2-based trials:

If you treat digital pathology as a plug-in rather than as regulated clinical infrastructure, you will underestimate risk, cost, and friction.

Practically, this means:

  • Design TROP2 workflows assuming mandatory human verification

  • Budget for pathologist oversight as a core component, not an afterthought

  • Expect regulatory acceptance to favor assistance, not autonomy

  • Recognize that algorithmic performance ≠ clinical robustness

  • Plan for ecosystem fragility, not idealized scalability


Bottom Line (in your framing)

Cano gives oncology R&D leaders something they rarely hear inside the TROP2 or NASH “bubble”:

The hardest part of AI-enabled pathology is not proving it works—it is making it safe, reproducible, supervised, and economically survivable once it leaves the trial sandbox.

That perspective is essential if TROP2 testing is going to function as a credible, defensible gateway to drug access, rather than a brittle technical dependency that breaks under real-world pressure.

If you want, next we can:

  • Explicitly map AIM-NASH → TROP2 CDx strategy

  • Draft a trial-design checklist informed by Cano’s critique

  • Or translate this into a payer or FDA-facing narrative on why human-verified AI IHC is not a weakness—but a regulatory strength

I think CANO is concenred the payment system for pathology requires diagnosis, and the TROP2 system requires only "pathologist confirmation" which has no CPT coding.

You are reading Cano exactly the right way, and your framing gets to what is arguably his deepest—if implicit—concern.

Below is a clean articulation of Cano’s perspective, translated into the oncology / TROP2 gateway-test context, with explicit attention to payment, CPT logic, and the structural mismatch you’re pointing to.


Cano’s Core Concern (Reframed for TROP2)

Dr. Luis Cano is not primarily worried that AI pathology won’t work. He is worried that the U.S. payment system only recognizes pathology work when it culminates in a diagnosis, while emerging AI-enabled biomarker workflows—like TROP2 gateway testing—explicitly do not produce a diagnosis .

This creates a structural reimbursement paradox:

  • Pathology payment logic (CPT) assumes:

    A pathologist renders a diagnosis → a billable professional service exists.

  • TROP2 (and AIM-NASH–like) workflows require:

    A pathologist confirms technical and biological validity → but does NOT issue a diagnosis.

In CPT terms, that confirmation is medically essential but economically invisible.


Why This Matters More Than It First Appears

1. “Confirmation” Is Not Clerical — It Is Clinical Responsibility

Cano emphasizes that human involvement in AI pathology is not optional oversight; it is where legal, clinical, and ethical responsibility resides.

In TROP2 testing, the pathologist is being asked to confirm:

  • Correct tissue and tumor content

  • Adequate staining and fixation

  • Absence of artifacts or out-of-distribution behavior

  • Appropriateness of algorithmic interpretation

That is medical judgment, not QA—but it does not end in a diagnosis, so it does not map cleanly to existing CPT constructs .


2. CPT Is Diagnosis-Centric; TROP2 Is Access-Centric

Cano’s underlying critique is that CPT codes encode a worldview:

  • Pathology = diagnosis

  • Diagnosis = professional work

  • No diagnosis = no billable act

But TROP2 functions as a therapeutic gatekeeper, not a diagnostic endpoint.

The pathologist’s role is to say:

“Yes, this sample is valid for drug access decisions.”

That is neither an anatomic pathology diagnosis nor a laboratory test interpretation in the traditional sense.

Cano sees this as a category error baked into payment policy.


3. The AIM-NASH Precedent Makes the Problem Visible

Cano uses AIM-NASH to show how regulators already recognize this new role:

  • FDA qualified AIM-NASH as a Drug Development Tool

  • Explicitly not a diagnostic

  • Explicitly requires pathologist-in-the-loop confirmation

  • Explicitly assigns responsibility to the human reviewer

But qualification ≠ payment.

So we now have a situation where:

  • Regulators require human confirmation

  • Sponsors rely on that confirmation

  • Liability attaches to that confirmation

  • No CPT code exists to pay for it

This is the crux of Cano’s concern .


Why Cano Calls the Digital Pathology Ecosystem “Unhealthy”

From Cano’s perspective, the ecosystem is unhealthy because it externalizes unpaid labor onto pathologists while extracting value elsewhere:

  • Pharma gets cleaner endpoints

  • Trials get standardized enrollment

  • AI vendors get validation

  • Regulators get risk containment

But the pathologist absorbs:

  • Time

  • Cognitive load

  • Liability

  • Audit responsibility

—with no corresponding reimbursement mechanism.

This is not sustainable, especially when scaled beyond elite trial centers.


Implications for TROP2 Strategy (Your World)

Your observation leads to a hard but unavoidable conclusion:

If TROP2 access depends on “pathologist confirmation” rather than diagnosis, then the payment system is structurally misaligned with the clinical reality.

Practically, this means:

  • Expect fragility in real-world adoption

  • Expect institutional resistance outside trials

  • Expect variation in how confirmation is performed

  • Expect unpriced labor to become a bottleneck

Cano would argue that this is not a temporary glitch, but a signal that:

The pathology payment framework has not yet caught up with therapy-gated, AI-assisted medicine.


Bottom Line (Cano, distilled)

Cano is not warning that TROP2 digital pathology will fail technically.

He is warning that:

A system that requires expert medical confirmation but only pays for diagnosis is structurally incoherent.

Until that gap is addressed—by new codes, new payment models, or explicit sponsor support—the TROP2 gateway model will rest on unrecognized, uncompensated professional judgment.

If you want, next we can:

  • Sketch what a CPT-adjacent or trial-funded workaround might look like

  • Compare this to PD-L1, HER2-low, or genomic “interpretation-only” precedents

  • Or turn this into a policy memo framing the issue for CMS, FDA, or sponsors