What is the Wrong Pocket Problem?
A self-insured employer covers early detection, diagnosis, and treatment for an employee with early Alzheimer's disease. The savings arrive ten or fifteen years later — by which point the person is on Medicare, or has changed jobs, or both. The employer bore the cost. Someone else banked the return.
Nothing here is irrational. Every party is behaving sensibly within its own budget and time horizon. That is exactly what makes the problem durable: there is no villain to remove and no obvious decision to reverse. The savings simply lands in the wrong pocket.
All of us have almost certainly run into this, whether or not you had a name for it. The plan funding early detection isn't the plan covering the member a decade on. The primary care budget absorbs a cost the specialty budget avoids. The health system invests; the payer benefits. The term comes from public finance and is used frequently outside of healthcare — and, we are finding, is largely unfamiliar inside it. The most common reaction when we introduce it is relief. Not because the problem is new to anyone, but because a name turns something you keep losing to into something you can work on.
Why this is a pattern, not an anecdote
Consider two cases with nothing clinical in common.
A durable cell or gene therapy delivers a one-time cost against decades of avoided care, often accruing to a payer the patient has not yet joined. Early detection in Alzheimer's disease carries costs today against benefits that materialize long after coverage has changed hands.
Different diseases, different products, different stakeholders — and structurally the same problem. That structural repetition is what makes the wrong pocket problem an archetype: one of six recurring patterns of system unreadiness we have identified across seventeen years of case work.
The distinction matters practically. Solve it once in one disease and you have solved one problem. Work it as an archetype and the solution is portable to the next case, and the one after that.
→ The six readiness gap archetypes
Why we're starting here
Two independent lines of evidence pointed to the same place.
Across two years of interviews and executive roundtables, senior leaders told us the field is moving toward early intervention and prevention — and that prevention is nearly always entangled with a wrong pocket problem. Separately, looking back across our own case portfolio, we have encountered this archetype in nearly every case we have evaluated since 2009.
What the field said it needed and what our case history showed turned out to be the same thing.
What we're doing about it
No single organization sees the whole shape of this problem. So we're listening first — through one-on-one conversations, small group calls, and executive roundtables beginning in Q1 2027 — and what we hear shapes which cases we take on next.
If you've run into it, we'd like to hear how.