Sick Care Economics is profit pools concentrate around treating chronic illness, not preventing it. It sits in the Incentives dimension (INC) of the Human Behavior Taxonomy™ as element HBT-INC-0253, within the Healthcare Perverse Pattern family. The core principle: profit pools concentrate around treating chronic illness, not preventing it. In incentive terms, it matters because it changes the payoff people perceive before they choose — which means it can be designed for, or exploited.
Scientific Definition
Profit pools concentrate around treating chronic illness, not preventing it.
Plain-English Definition
Profit pools concentrate around treating chronic illness, not preventing it.
Feynman Explanation
Prevention is a rounding error on the income statement.
Core Principle
Profit pools concentrate around treating chronic illness, not preventing it.
Mechanisms
Pending editorial review.
Profit pools concentrate around treating chronic illness, not preventing it.
Pending editorial review.
Pending editorial review.
Where the margin lives, the strategy follows.
Pending editorial review.
Pending editorial review.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
Prevention is a rounding error on the income statement.
Examples
- Diabetes management dwarfs diabetes prevention spend by orders of magnitude.
- Where the margin lives, the strategy follows.
Pending editorial review.
Original analysis from The Incentives Lab — how this element behaves inside real payoff structures.
Why this element matters to incentive design
This is one of the elements leaders describe as a values gap. It is a payoff gap. The mechanism underneath it is straightforward: profit pools concentrate around treating chronic illness, not preventing it. You can recognize it in the field by its signature: prevention is a rounding error on the income statement. Every element in the Incentives dimension changes the perceived payoff of an action before the action happens, which is exactly where incentive design has leverage.
How it gets exploited
Left undesigned, where the margin lives, the strategy follows. It is amplified whenever where the margin lives, the strategy follows. Inside organizations that shows up as where the margin lives, the strategy follows. The pattern is the same one Goodhart's Law describes: the measurable proxy attracts the effort, and the purpose behind it quietly loses funding.
How the Lab designs around it
The redesign move is to value-based and outcome-based reimbursement at population scale. The test of any redesign here is simple: after the change, can you name what the organization is now doing less of? If not, the payoff structure did not actually move.
Famous Experiments
Pending editorial review.
Design Principles
- Value-based and outcome-based reimbursement at population scale.
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.
- Value-based and outcome-based reimbursement at population scale.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
Federal reimbursement rules incentivize cycling seniors through hospitalizations to upgrade billing categories.
Productivity targets compress visits, raising misdiagnosis and burnout.
A federal mandate intended to lower drug costs for the poor became a profit engine for hospitals and contract pharmacies.
Liability exposure pushes clinicians to order tests for legal protection rather than clinical need.
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.
Where Sick Care Economics is cited in the corpus
Essays, field guides, and diagnostics from The Incentives Lab that apply this element.
- Field guideIncentives: definition, types, examples
The parent field guide for this element.
- ReferenceThe laws of incentives
Goodhart, Campbell, and the Cobra Effect.
- ReferenceThe incentive glossary
Definitions for every mental model, bias, and fallacy in the corpus.
- CourseIncentives 101
The free ten-part primer on reading a payoff structure.
- ReferenceThe Periodic Table of Human Behavior
The full 1,267-element map this page belongs to.
Questions about Sick Care Economics
- What is Sick Care Economics?
- Sick Care Economics is profit pools concentrate around treating chronic illness, not preventing it. It sits in the Incentives dimension (INC) of the Human Behavior Taxonomy™ as element HBT-INC-0253, within the Healthcare Perverse Pattern family. The core principle: profit pools concentrate around treating chronic illness, not preventing it. In incentive terms, it matters because it changes the payoff people perceive before they choose — which means it can be designed for, or exploited.
- What is an example of Sick Care Economics?
- Where the margin lives, the strategy follows. The Incentives Lab catalogs everyday, organizational, and historical instances of this element on its Human Behavior Taxonomy™ page (HBT-INC-0253).
- How is Sick Care Economics exploited?
- Where the margin lives, the strategy follows.
- How do you design around Sick Care Economics?
- Value-based and outcome-based reimbursement at population scale.
- Which behavioral dimension does Sick Care Economics belong to?
- Sick Care Economics is classified in the Incentives dimension (INC) of the Human Behavior Taxonomy™, family "Healthcare Perverse Pattern", class "Perverse Incentive". Its permanent identifier is HBT-INC-0253 and its evidence grade is C.