Scientific Definition
A federal mandate intended to lower drug costs for the poor became a profit engine for hospitals and contract pharmacies.
Plain-English Definition
A federal mandate intended to lower drug costs for the poor became a profit engine for hospitals and contract pharmacies.
Feynman Explanation
Subsidy in. Margin out. Nobody named in the title sees the savings.
Core Principle
A federal mandate intended to lower drug costs for the poor became a profit engine for hospitals and contract pharmacies.
Mechanisms
Pending editorial review.
A federal mandate intended to lower drug costs for the poor became a profit engine for hospitals and contract pharmacies.
Pending editorial review.
Pending editorial review.
Programs without outcome auditing get arbitraged.
Pending editorial review.
Pending editorial review.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
Subsidy in. Margin out. Nobody named in the title sees the savings.
Examples
- 340B-eligible discounts billed against commercial insurance at full price.
- Programs without outcome auditing get arbitraged.
Pending editorial review.
Famous Experiments
Pending editorial review.
Design Principles
- Pass-through requirements. Outcome-tied use auditing.
Measurement Approaches
Pending editorial review.
Evidence
Pending editorial review.
Pending editorial review.
The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Pass-through requirements. Outcome-tied use auditing.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
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Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
Productivity targets compress visits, raising misdiagnosis and burnout.
Liability exposure pushes clinicians to order tests for legal protection rather than clinical need.
Federal reimbursement rules incentivize cycling seniors through hospitalizations to upgrade billing categories.
Paying providers per procedure rewards more procedures, not better outcomes.
Systems paid per filled bed have weak incentives to invest in prevention or community health.
Opaque billing rules create lucrative work for administrators and revenue-cycle firms instead of care.
Insurers profit when claims are denied, delayed, or abandoned.
Hospital group-purchasing and opaque contracting inflate device costs far above marginal cost.
Sales bonuses and prescriber relationships fueled mass over-prescription and an addiction crisis.
Federal incentives meant for neglected diseases get used to privatize widely available medicines.
Drug companies optimize for high-margin chronic conditions, not cures.
Specialists earn more for procedures than primary care for prevention.