The Guru Is In
Crossing the funding Stream
By David A. Smith
5 min read
Spengler: There’s something very important I forgot to tell you. Don’t cross the streams. It would be bad.
As will be amply demonstrated elsewhere in this month’s Tax Credit Advisor, the conceptual case for using improvements in affordable housing to improve healthcare outcomes is overwhelming. Common sense, personal experience, a nearly unanimous view of affordable housing providers, a host of expert opinions, statistical studies – everything favors it.
Except one thing. You have to cross the streams.
Venkman: What do you mean, ‘bad’?
Spengler: Try to imagine all life as you know it stopping instantaneously and every molecule in your body exploding at the speed of light.
Venkman: Right. That’s bad. Okay. Important safety tip.
Virtually any government anywhere is organized not around outcomes but around processes. It believes that if one follows the process (statute, regulations, and administrative guidance) then a good outcome must follow. To address rising healthcare costs, for example, write the world’s longest law, pour into that law over $1.1 trillion annually, and all will be well.
Except that it isn’t. Healthcare spending is rising faster than inflation and more than half of the ACA exchanges have already failed. The reason is expensively simple – the Federal government is funding Pound-of-Cure agencies and ignoring Ounce-of-Prevention agencies.
In our Cure model of healthcare, when a person (say, an elder on Medicare) suffers a health adversity, the Federal government pays for each quantum of Cure – emergency room visit, hospitalization, re-hospitalization, or, even more expensive, having to move into assisted living, nursing home, or hospice. But HHS generally doesn’t pay for Prevention. Instead it waits for people to hit health adversity, gives them a dose of Cure, and then returns them to fail again.
At this point any normal person would say, “Take money being spent on Cure and invest it in Prevention.”
Spengler. I have a radical idea. [Hesitates] We’ll cross the streams.
Politically, crossing the streams is extremely dangerous in two ways:
- Robbing Peter to pay Paul. Money spent out of the Prevention Agency’s budget generates savings in Cure Agency’s budget.
- Moving upstream in time. Prevention happens before Cure, often many years before Cure, and often requiring continuous Prevention.
Ask any government agency in the Cure business if it would like to see more done by the Prevention Agency and it will say, “Heck, Yes!” Ask if in light of this it would transfer some of its Cure Agency budget to the Prevention Agency and it will say, “Heck, No!”
Venkman: ‘Scuse me? You said crossing the streams was bad.
In political-administrative terms, crossing is worse than bad, it’s the worst possible thing, because no ambitious agency secretary will admit to anyone (least of all herself) that her costs could better be reduced by funding another agency’s efforts, and when agency turf is involved, politics all too often obliterates policy. In four decades of policy wrangling, I have never witnessed stream-crossing happen by itself. Moreover, outsiders can’t bust funding silos with policy weaponry – they’re blast proof. They must be approached politically and from above, going over the agency’s head.
Spengler: Not necessarily. There’s definitely a very slim chance we’ll survive.
Such a move is risky. The only person capable of reprogramming money from the Cure Agency to the Prevention Agency is their mutual boss, the apex policymaker in the jurisdiction. At the federal level, that’s the President (good luck with that); in a state, it’s the governor; and locally it’s the mayor (or, in each case, their respective political and policy guardians, the chief of staff and the chief budget officer).
Then, assuming the undivided attention of the apex politician can be gained, the aspiring stream-crosser must then present a proposition that wins across three overlapping time periods:
- Favorable press coverage when announced. Before the law come the headlines, and before the headlines come the instantaneous reactions. Every battle is won or lost before it is fought, as Sun Tzu tweeted. A proposal whose soundbites and hashtags are botched has lost before it started.
- Survivability when presented for authorization. The reallocation of funding from Cure to Prevention must survive the political process of its authorization, and this is more than just intra-administration discipline. Even if the Cure Agency head is willing to support his or her boss, every dollar of Cure Agency funding flows out to some group of stakeholders who won’t share the same perspective. That inescapable blowback must be neutralized or endured, without transmogrifying the proposal in the process.
- High likelihood of success when implemented. The instant a proposal becomes law or program, it will be hawkishly watched by those keen to see it fail either out of self-interest or sheer love of other people’s train wrecks. There can be no scandals in the new model, no financial shenanigans, no imputations of overpayment for underperformance. The market’s froth of interest in models labeled pay-for-success, and the hunt for Social Impact Bonds, have both purported to offer insurance against non-performance, but as of now far too many of such proposals treat actual risk like the Queen of Spades in Old Maid – something you talk about and then discreetly slide to the stakeholder to your left.
Decision meetings with apex politicians are short (45 minutes tops), heavily pre-screened by that individual’s loyal staff, and admit of no missteps in the encounter. To carry the day and win the argument and get healthcare Cure funding reprogrammed into housing Prevention funding, the aspiring reformer has to be compelling, clear and short. Get those three domains aligned, including aligning your interests alongside the apex politician’s, and you too can cross the funding streams. Be wrong at any stage and it can blow up on you.
Venkman: I love this plan! I’m excited to be a part of it! Let’s do it!
