ReThinking the Quest for Sustainable Financing: The Rules Rule

Stacy Becker, Vice President, Programs | 08/24/2015

Part 2: ReThinking the Quest for Sustainable Financing Blog Series

The initial post in this series listed a number of assumptions about financing. One of them is that we often think of financing as a value-neutral technical matter. This sparked some conversation by Pedja and Brian, so I thought it would be a good place to dive in.

We order our lives with rules. Rules automate the myriad of routine decisions that would paralyze us if they didn’t exist. Financing is no exception. But behind every rule is a choice—on what basis do we decide what the rule should be? I contend that no matter how much data, or logic or technical calculation underpins a rule, a value decision (i.e., what I care most about) always lurks as well.

Here’s an example from my hometown. A story in the Star Tribune noted that a bus shelter costs $6,000 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.” You can guess where this is heading….

It may indeed be a tricky calculus, but this photo from Neighborhoods Organizing for Change shows one of the outcomes.

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 this question about the rule: why is the threshold higher in the city, especially since fewer residents have (or can afford to have) cars and places to wait are less safe?

The rules about what we pay for and invest in deeply impact the outcomes and, if we care to look, expose underlying values. Here’s a rule from the Medicaid playbook: investments made under waivers must have no more than a four-year payback. Does this rule promote health? Impact the well-beings of our families and communities? Have unintended, perhaps long-term consequences? Who or what does this rule protect?

Yes, we need rules, but if we want to transform the health of our communities, we need to become vigilant about the values underpinning them, and if we don’t like what we see, change them. In this regard, are there any financing rules would you like to see changed, and why?  Do you know of any exemplary rules that changed for the better?

Stacy Becker is the director of regional financing and investment for ReThink Health.