Incentive misalignment

A common thread amongst bad outcomes is that what is good for a decision making party making the decision based on the rules and the rewards awarded by the system is bad for society and the greater good.

• Corporations maximizing short-term profit while harming the environment or exploiting workers.

• Doctors incentivized to prescribe unnecessary treatments due to how they’re reimbursed.

• Politicians making decisions that win votes short-term but damage long-term well-being.

• Pharma instead of making people healthy they make people sick, health insurances incentives however are aligned with greater good

Rather than blaming individuals who are behaving logically given their incentives, the real lever for change is redesigning the rules of the system so that:

What is profitable or rewarding for the individual also benefits the collective.

on the other hand for health insurance companies, their goal is to keep their customers healthy