Bad Rules Outlast Bad People

When systems break down, we look for villains. A CEO to indict, a bureaucrat to blame, a “bad apple” who spoiled the barrel. It feels right to imagine misdeeds coming from misdoers. But the pattern doesn’t hold. The same failures repeat across industries and decades: airlines overbook, banks mis-sell, hospitals miscode, and platforms amplify scams.

Executives and officials turn over, and the same moves come back. If character were the deciding factor, outcomes would be more varied: sometimes disastrous, sometimes exemplary. Instead, we get the same rhymes over and over—the signature of bad terrain.

“Terrain,” as I use it here, is the shape of the rules, incentives, and defaults that channel behavior. On tilted ground, the profitable move is the harmful one.

If cutting corners pays, the pressure to maximize returns ensures corners will be cut. If an apology costs less than repair, apologies will proliferate. If paperwork shields more effectively than prevention, paperwork, not prevention, will grow.

Even people who want to do the right thing find themselves sliding. Virtue acts as friction, not direction: it slows the fall but cannot change its slope.

What looks like moral weakness is often structural gravity. If we want different outcomes, we need a different surface, not better sermons.

Much of today’s terrain is engineered for defensibility rather than integrity. What matters is whether harm can be explained away. A safety failure gets reclassified as a compliance issue, a financial misrepresentation as a disclosure dispute.

Complexity itself is weaponized; if only a handful of experts can decipher the rules, plausible deniability turns into the most valuable asset. Character still matters, but it matters less than paperwork.

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The law is part of this terrain. Rules written for checks now funnel dark money. Labor categories built for factories stumble over app-mediated work. Obsolete statutes turn into tools. Gray zones are where games are played, and a terrain built on dead rules rewards exploitation over clarity.

What emerges is not random chaos but patterned failure. Gig work drifts toward precarity, financial “innovation” toward arbitrage, apologies toward substitution for restitution. As I argued in The Politics of Load Bearing, strain is routed by design, deciding who carries the weight. The consistency of those routes is what makes the limits of character so obvious: good intentions keep colliding with the same grooves, carved deeper by each cycle.

Relying on individual virtue to make up for bad design ends in disappointment. On today’s terrain, doing right can look like negligence, while evasions are rewarded. Individual conscience has to contend with an institution that can penalize it. The person who refuses a harmful target may lose the job without changing the target.

What the terrain looks like in healthcare

Picture an insurance reviewer with ninety seconds to decide whether a cancer patient gets treatment. The reviewer works inside a budget and a queue. The chief executive works inside loan contracts, investor expectations, and margin targets. Replacing either person leaves those conditions waiting for the replacement.

That pressure makes denial financially attractive. It doesn’t make every denial inevitable, or create a legal duty that overrides patient care in every case. Some insurers and hospitals resist, and regulation can constrain them. The claim is about what leadership change leaves in place: the debts, the savings targets, and the rewards for meeting them.

The career can teach its own rationalizations. An analyst learns to call a reduction in paid claims an efficiency. A manager learns to call a shorter encounter resource optimization. A senior leader turns those practices into policy, then defends the policy as necessary to protect the institution. Each promotion can put more distance between the number someone improves and the patient who pays for it.

The choices are concrete. Mayo Clinic’s CEO told employees in a late-2016 speech to prioritize commercially insured patients over Medicaid and Medicare patients seeking similar care at the same time, as STAT reported in 2017. Cigna’s PXDX review let its doctors deny more than 300,000 payment requests in two months in 2022, at an average of 1.2 seconds per case. One rule sorts patients by payer; another makes review fast enough that a doctor cannot read each case. Both sit above the person handling the next request.

The consequences also follow existing inequalities. Low-income and minority communities have less protection when rural hospitals close, Medicaid services shrink, or care is organized around the better-paying patient. Expanding coverage helps, but a fragmented payer system can retain those differences after more people have an insurance card.

The executive who attracts public fury can become another kind of shock absorber. A hearing, a resignation, and a large severance package give the story an ending while the institution keeps the targets. Personal responsibility still matters. A resignation simply doesn’t tell us whether the conditions that produced the conduct changed.

Change what survives the replacement

In healthcare, changing the terrain means putting the constraint where the financial and operating decisions are made:

• Fund claim review as a cost of care, without a savings target that rewards refusing it.
• Count denials, reversals, delays, and differences in outcomes across patient groups. A high reversal rate should change the rule behind the denials.
• Give patients and staff a protected way to stop an unsafe denial practice or an understaffed service. A board seat helps only if its holder can affect those decisions.
• Put the cost of an overturned denial, including the appeal and the delay, on the plan that issued it.
• Expand universal access and remove medical debt, so losing a job or failing a market test doesn’t mean losing treatment.

Public provision changes who receives the money and removes a price barrier. It still needs a way for the people it gets wrong to make it change.1 A hospital can be publicly owned and keep the same inaccessible records, staffing rules, and appeal barriers. The ownership question and the correction question both have to be answered.

And that is the real lesson. We can’t rely on character. Good intentions can’t defy a slope forever. What looks like a personal failing is often a structural one, repeated until it feels inevitable. Sermons won’t get us there; only a different surface will.