Perverse incentive

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A perverse incentive is an incentive that has an unintended and undesirable result that is contrary to the intentions of its designers. Perverse incentives are a type of negative unintended consequence. A classic example of a perverse incentive occurred when the British government offered a bounty for dead cobras with the intent of decreasing the wild cobra population. However, enterprising people began to breed cobras for the income. When the government became aware of this, the reward program was scrapped, causing the cobra breeders to set the now-worthless snakes free. As a result, the wild cobra population further increased. The term cobra effect was coined to describe a situation where an attempted solution to a problem actually makes the problem worse. [1] [2]

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First Transcontinental Railroad The first railroad in the United States to reach the Pacific coast from the eastern states

The First Transcontinental Railroad was a 1,912-mile (3,077 km) continuous railroad line constructed between 1863 and 1869 that connected the existing eastern U.S. rail network at Council Bluffs, Iowa with the Pacific coast at the Oakland Long Wharf on San Francisco Bay. The rail line was built by three private companies over public lands provided by extensive US land grants. Construction was financed by both state and US government subsidy bonds as well as by company issued mortgage bonds. The Western Pacific Railroad Company built 132 mi (212 km) of track from the road's western terminus at Alameda/Oakland to Sacramento, California. The Central Pacific Railroad Company of California (CPRR) constructed 690 mi (1,110 km) eastward from Sacramento to Promontory Summit, Utah Territory. The Union Pacific Railroad (UPRR) built 1,085 mi (1,746 km) from the road's eastern terminus at the Missouri River settlements of Council Bluffs and Omaha, Nebraska westward to Promontory Summit.

Unintended consequences Outcomes of a purposeful action that are not intended or foreseen

In the social sciences, unintended consequences are outcomes of a purposeful action that are not intended or foreseen. The term was popularised in the twentieth century by American sociologist Robert K. Merton.

A subsidy or government incentive is a form of financial aid or support extended to an economic sector generally with the aim of promoting economic and social policy. Although commonly extended from government, the term subsidy can relate to any type of support – for example from NGOs or as implicit subsidies. Subsidies come in various forms including: direct and indirect.

A patient's bill of rights is a list of guarantees for those receiving medical care. It may take the form of a law or a non-binding declaration. Typically a patient's bill of rights guarantees patients information, fair treatment, and autonomy over medical decisions, among other rights.

Prescription drug prices in the United States continually rank among the highest in the world. The high cost of prescription drugs became a major topic of discussion in the 21st century, leading up to the U.S. health care reform debate of 2009, and received renewed attention in 2015. High prescription drug prices have been attributed to government-granted monopolies to manufacturers and organizations lacking ability to negotiate prices.

An orphan drug is a pharmaceutical agent developed to treat medical conditions which, because they are so rare, would not be profitable to produce without government assistance. The conditions are referred to as orphan diseases.

Two-tier healthcare political slogan

Two-tier healthcare is a situation in which a basic government-provided healthcare system provides basic care, and a secondary tier of care exists for those who can pay for additional, better quality or faster access. Most countries have both publicly and privately funded healthcare, but the degree to which it creates a quality differential depends on the way the two systems are managed, funded, and regulated.

In the healthcare industry, pay for performance (P4P), also known as "value-based purchasing", is a payment model that offers financial incentives to physicians, hospitals, medical groups, and other healthcare providers for meeting certain performance measures. Clinical outcomes, such as longer survival, are difficult to measure, so pay for performance systems usually evaluate process quality and efficiency, such as measuring blood pressure, lowering blood pressure, or counseling patients to stop smoking. This model also penalizes health care providers for poor outcomes, medical errors, or increased costs. Integrated delivery systems where insurers and providers share in the cost are intended to help align incentives for value-based care.

HIV/AIDS in India

HIV/AIDS in India is an epidemic. The National AIDS Control Organisation (NACO) estimated that 2.11 million people lived with HIV/AIDS in India in 2015. Despite being home to the world's third-largest population of persons with HIV/AIDS, the AIDS prevalence rate in India is lower than that of many other countries. In 2016, India's AIDS prevalence rate stood at approximately 0.30%—the 80th highest in the world. Treatment of HIV/AIDS is primarily via a "drug cocktail" of antiretroviral drugs and education programs to help people avoid infection.

Fee-for-service (FFS) is a payment model where services are unbundled and paid for separately.

Eculizumab, sold under the trade name Soliris among others, is a medication used to treat paroxysmal nocturnal hemoglobinuria (PNH), atypical hemolytic uremic syndrome (aHUS), and neuromyelitis optica. In people with PNH, it reduces both the destruction of red blood cells and need for blood transfusion, but does not appear to affect the risk of death. Eculizumab was the first drug approved for each of its uses, and its approval was granted based on small trials. It is given in a clinic by intravenous (IV) infusion.

Homeless dumping Inappropriately releasing homeless or indigent patients

Homeless dumping or patient dumping is the practice of hospitals and emergency services inappropriately releasing homeless or indigent patients to public hospitals or on the streets instead of placing them with a homeless shelter or retaining them, especially when they may require expensive medical care with minimal government reimbursement from Medicaid or Medicare. The term homeless dumping has been used since the late 19th century and resurfaced throughout the 20th century alongside legislation and policy changes aimed at addressing the issue. Studies of the issue have indicated mixed results from the United States' policy interventions and have proposed varying ideas to remedy the problem.

Badge of shame

A badge of shame, also a symbol of shame, mark of shame or stigma, is typically a distinctive symbol required to be worn by a specific group or an individual for the purpose of public humiliation, ostracism or persecution.

Gaming the system can be defined as using the rules and procedures meant to protect a system to, instead, manipulate the system for a desired outcome.

The welfare trap theory asserts that taxation and welfare systems can jointly contribute to keep people on social insurance because the withdrawal of means-tested benefits that comes with entering low-paid work causes there to be no significant increase in total income. An individual sees that the opportunity cost of returning to work is too great for too little a financial return, and this can create a perverse incentive to not work.

In economics, a negative income tax (NIT) is a system within an income tax where people earning below a certain amount receive supplemental pay from the government instead of paying taxes to the government.

Cobra effect The case of a solution unintendedly making the problem worse

The cobra effect occurs when an attempted solution to a problem makes the problem worse, as a type of unintended consequence. The term is used to illustrate the causes of incorrect stimulation in economy and politics.

Drug coupon

A drug coupon is a coupon intended to help consumers save money on pharmaceutical drugs. They are offered by drug companies or distributed to consumers via doctors and pharmacists, and most can be obtained online. There are drug coupons for drugs from many categories such as cholesterol, acne, migraine, allergies, etc.

Population planning in Singapore

Population planning in Singapore spans two distinct phases: first to slow and reverse the boom in births that started after World War II; and second, from the 1980s onwards, to encourage parents to have more children because birth numbers had fallen below replacement levels.

Onasemnogene abeparvovec, sold under the trade name Zolgensma, is a gene therapy medication used to treat spinal muscular atrophy (SMA). It was approved for children less than two years old in 2019. It is used as a one-time injection into a vein with at least 2 months of corticosteroids.

References

  1. Siebert, Horst (2001). Der Kobra-Effekt. Wie man Irrwege der Wirtschaftspolitik vermeidet (in German). Munich: Deutsche Verlags-Anstalt. ISBN   3-421-05562-9.
  2. Schwarz, Christian A. (1996). NCD Implementation Guide. Carol Stream Church Smart Resources. p. 126. Cited in Brickman, p. 326.
  3. Michael G. Vann, "Of Rats, Rice, and Race: The Great Hanoi Rat Massacre, an Episode in French Colonial History," French Colonial History Society, May, 2003
  4. Protesters in straitjackets demand inquiry of Duplessis Orphans era
  5. Allegations of child abuse
  6. Orphans sue Catholic orders over mistreatment
  7. Department for Communities and Local Government (2002). "Fire" Archived 2004-08-01 at the Wayback Machine . In Consultation on the Local Government Finance Formula Grant Distribution. Retrieved November 10, 2006.
  8. III, Carl C. Swisher; Curtis, Garniss H.; Lewin, Roger (November 2001). Java Man: How Two Geologists Changed Our Understanding of Human Evolution. University of Chicago Press. ISBN   9780226787343.
  9. James C. Robinson, Reinvention of Health Insurance in the Consumer Era (2004). In JAMA, April 21, 2004; 291: 1880–1886. Retrieved 2008-01-12
  10. Myndans, Seth (2007-08-25). "Cute Kitty Is Pink Badge of Shame in Bangkok". The New York Times . Retrieved 2007-11-06. It is the pink armband of shame for wayward police officers, as cute as it can be, with a Hello Kitty face and a pair of linked hearts.
  11. Stephen Dubner and Steven Levitt, Unintended Consequences, New York Times Magazine, 20 January 2008
  12. Bebchuk, L., & Fried, J. M. (2005) "Executive Compensation at Fannie Mae: A Case Study of Perverse Incentives, Nonperformance Pay, and Camouflage" Journal of Corporation Law, 30 (4): 807–822.
  13. Mark Zwonitzer, writer, PBS American Experience documentary "Transcontinental Railroad" (2006) "Program Transcript . Transcontinental Railroad . WGBH American Experience"
  14. "Gassing up the welfare trap machine", 6 January 1997, Atlantic Institute for Market Studies
  15. Daniel Gross (20 Feb 2005). "Why a Real Estate Agent May Skip the Extra Mile". The New York Times. Archived from the original on 29 May 2015.
  16. B. Douglas Bernheim; Jonathan Meer (13 Jan 2012). "Do Real Estate Brokers Add Value When Listing Services Are Unbundled?". The National Bureau of Economic Research. Retrieved 3 Sep 2016.
  17. Rosenthal, Elisabeth; Lehren, Andrew W. (2012-08-08). "Incentive to Slow Climate Change Drives Output of Harmful Gases". The New York Times. ISSN   0362-4331 . Retrieved 2015-07-02.
  18. Gupta, Anika. "Carbon credit scam slur on Indian firms". Hindustan Times. Retrieved 2015-07-02.
  19. Sanger-katz, Margot (2016-03-10). "Medicare Tries an Experiment to Fight Perverse Incentives". The New York Times. ISSN   0362-4331 . Retrieved 2016-07-30.
  20. "RHI scandal: RHI 'cash for ash' scandal to cost NI taxpayers £490m". BBC News . 23 December 2016.

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