British sport puts "too much" focus on winning medals, says UK Athletics chairman Ed Warner.
Funding body UK Sport allocates money to governing bodies on the basis of medal potential.
But Warner believes it should take into account how a sport can inspire people to get active, too.
"There's too much of a culture of medal winners and non-medal winners, which is unhealthy and doesn't speak well for us as a sporting society," he said.
Rio 2016 was Great Britain's most successful 'away' Games in history, with 214 Olympic and Paralympic medals.
However, the funding approach has been questioned following a series of bullying allegations in elite sport, with some claiming it has created a win at all costs mentality at the expense of athlete welfare.
Most notable have been allegations of a culture of bullying at British Cycling, which has enjoyed huge medal success at recent Games.
"We need a grown-up debate about the value of one extra marginal medal, out of the many Britain wins, versus the ability to fund an aspirant sport like basketball, which is hugely important internationally and could have enormous participation value," said Warner, who is stepping down this year after a decade in charge at UK Athletics.
"Post-London 2012, basketball was one of the big losers. This is a sport which is urban and played by many people who come from deprived backgrounds.
"We should do everything we can to get a British team back in the Olympics for the inspirational effect that simply appearing in the tournament would have for youngsters in that sport."
Badminton, archery, fencing, weightlifting and wheelchair rugby have lost their public funding for Tokyo 2020, which Warner says is "potentially catastrophic".
He added that UK Sport has a chance to review its strategy, with the situation at British Cycling sparking a wider debate about athlete welfare.
However, speaking at the same conference British Olympic Association chief executive Bill Sweeney said any debate should not lose sight of the importance of winning medals.
"The last thing we want is you go through all the various governance issues, and tick all the boxes, and end up with such a squeaky clean system that people are afraid to challenge an athlete and we come away from Tokyo ninth in the medal table," he said.