The Stew BLOG

We’ve Got Choices in Population Health Financing, So Let’s get Really Good at Making Them

Stacy Becker, Vice President, Programs | 01/20/2017

What do you see when you look at financial spreadsheets like those above?

A bunch of numbers? Something to be deciphered? Something to be left to the experts?

I see choices.

When I served as budget director for the City of Saint Paul, a Minnesota council member once asked me why the council budget process took so long. “I could do it overnight myself,” she said. Well of course she could. Making the numbers add up is the easy part. The hard part is getting council members to agree with the hundreds of choices that must be made in order for the budget to balance.

Financing is fundamentally about choices. Numbers and spreadsheets are merely the expression of those choices. The choices are sometimes deliberate, sometimes painstaking, sometimes imposed upon us, and sometimes automatic. But there’s always a choice lurking somewhere.

In last week’s Finance Friday blog post, my colleague Kim Farris-Berg shared many examples where actors didn’t confuse difficult choices for a lack of choices. They recognized options, assessed risks and potential rewards, managed their choices well, and saw positive financial outcomes.

Transforming health in our communities requires making difficult choices, and when we’re dealing with money, choices can be especially challenging. ReThink Health’s Sustainable Financing Team has developed “a new narrative” for financing: essentially a framework for understanding and actively managing the choices before us.

Financing choices reflect our values.

No financing structure is value neutral. At a macro level, how we spend our money says a great deal about what we value as a society. At a micro level, and much harder to see, are the rules, procedures, and norms embedded in every financing structure that determine who gets the money, under what conditions, and who decides.

Here’s an example from my hometown of Minneapolis. A story in the Star Tribune noted that a bus shelter costs $6,000 to build and install and “the placement of shelters is a tricky calculus for transit officials. To qualify for a shelter, the agency requires a bus stop to have at least 40 average daily boardings in Minneapolis and St. Paul, or 25 in the suburbs.” It may indeed be a tricky calculus, but this photo from Neighborhoods Organizing for Change shows one of the possible outcomes of no bus shelter. The story went on to say, “The need for shelters is starkest . . . where residents rely heavily on public transportation and crime rates are higher. And only nine shelters are lighted, far fewer than other parts of the city.” The story exposed a key question about the financing rule: why is the threshold higher in the city, especially since fewer residents have (or can afford to have) cars and waiting is less safe?

Financing choices are rooted in systems.

The impact of our work and choices reverberate through numerous sectors. The choice not to fund chemicals to ensure safe drinking water Flint, Michigan, for example, has negatively impacted the health of residents, the future educational achievement and economic well-being of Flint’s children, and will perhaps increase the need for safety net and criminal justice services down the line according to studies examining the impacts of lead poisoning prevention. And that’s not to mention the enormous monetary costs that are likely to be born by state and federal taxpayers to address the damage.

What might have happened if this choice—to save approximately $150,000 in chemicals—was made in the context of a larger set of consequences? How often do we allow such “siloed” choices to prevail?

Financing is a creative process.

How often have you seen an interesting idea shot down with hardly an exploration into its merits or ways to improve it to overcome any deficits? Right now, there are no dedicated, systemic financing sources for population health, so they must be created—that is, caused to come into being.

This will require choices. Who will benefit and who will pay? How much risk are we willing to take? How much political capital are we willing to expend? What relationships need to be developed? What rules need to be rewritten? There is no financing source that allows us to escape from making choices like these. In the creative process, we become aware of the full extent of our choices, and embrace the opportunity to make them.

Financing is a journey.

In the public sector, the political process of budget balancing often takes a very short term focus, especially if budgets are experiencing revenue shortfalls. Many times I have seen budgets balanced with one-time revenues, or via borrowing from the future, or even “cutting” expenditures (such as pension contributions) that really can’t be cut. The counterpart in the private sector is corporate “short-termism’, a focus on quarterly returns that can have negative long term consequences, as described by this story in Barron’s.

Balancing short-term versus long-term needs, building for the future, having the courage to not kick tough decisions down the road—these are all important financial choices.

Financing is built on agency.

In other words, you can choose to exercise your choices, or you can choose to defer to the status quo. Not choosing is indeed a choice. Sometimes we hire experts because we believe that financing is an esoteric and incomprehensible field, and indeed there are many who are happy to make it so! But the real work of financing is engaging your partners in making choices. And this is something that anyone and everyone can practice and excel at.

Choices often can feel burdensome. There are so many trade-offs and interests to consider. But being in a position to make choices is also being in a position of privilege. Your choices can transform people’s lives and their communities. Approach choosing by examining which values are taking precedence, looking for unintended consequences, embracing creativity, appreciating the persistence required, and exercising your capacity to act—all of which will enhance your impact.

Follow us on Twitter! @stacymbecker   @ReThinkHealth