Contributors: Wren Keber, Lisa Soroka, and Z. Colette Edwards, WG'84, MD'85
To learn more about Wren, Lisa, and Colette, click here.
As with the prior articles in this series, we will be focusing on the activities healthcare leaders can undertake in service of financial and operational recovery from the COVID-19 pandemic. Health equity is an important topic for a variety of reasons, and this article encompasses current realities of healthcare payment and delivery and simplifies the complicated history of how our healthcare system has evolved in the way it has.
Before we begin discussing health equity, we would be remiss if we didn’t take a moment to acknowledge an important reality: the goal posts marking the “end” of this pandemic keep moving. Emerging variants and associated surges in cases/hospitalizations/deaths have forced healthcare leaders to continue to struggle with operating healthcare organizations amid constantly changing demands. The tactics we outline will be relevant even if the pandemic continues to strain resources and further blur the finish line.
As the pandemic grinds on, healthcare system realities still disproportionately challenge marginalized racial/ethnic communities. Disparities in access to healthcare, as well as health outcomes, have long been known to exist in these populations. Programs and systems in place for healthcare payment and delivery have simply not been reformed sufficiently to sustainably address very long-standing disparities which have only worsened during the era of COVID-19.
Simply glancing at industry headlines reveals startling statistics. For example, when considering clinical outcomes related to childbirth (that the average American would expect to be routine and normal), clear evidence demonstrates disparities not only exist, but also fall along racial lines. Specifically, according to Blue Cross Blue Shield's "The Health of America Report,®" the Severe Maternal Morbidity (SMM) rate in majority Black communities was 63% higher in 2020 than in majority white communities. The underlying factors complicate even routine deliveries, endangering mothers and infants. According to data assembled and published by The Commonwealth Fund,1 the maternal mortality rate for Black women is three to four times higher than their white counterparts, even when education level and socioeconomic status are the same. These statistics are just a sampling of data pertaining to maternal/child outcomes.
More broadly, organizations should be very aware of the negative impact health inequities are already having day in and day out on the bottom line. For example, a 2018 study by the W.K. Kellogg Foundation and Altarum calculated the cost of health disparities to be $42 billion in lowered productivity and $93 billion in excess medical costs each year.2
When considering the pandemic, we now know patients with underlying conditions and socioeconomic determinants of health (SDOH) challenges have measurable differences in disease acuity and recovery compared to healthier populations living in conditions which provide access to resources conducive to a healthy lifestyle and lower risk of illness. The “Economic Impacts of Health Disparities in Texas 2020,”3 a report published through a collaboration between Johns Hopkins, Altarum, Tulane, and Uniformed Services University, determined the cost of racial health disparities related to COVID-19:
- If Black and Hispanic people in Texas had had the same rate of hospitalization as white counterparts, there would have been 24,000 fewer hospitalizations, which would have resulted in $550 million in healthcare cost savings.
- In the U.S., health disparities have resulted in $2.7 billion in excess medical spending and $5 billion in lost productivity → a 60 percent increase in excess medical spend and 72 percent in lost productivity spending since 2016.
Rightfully, this has all helped propel health equity into the foreground. As never before, we can demonstrate disparities in health are real, measurable, and cause a far-reaching impact to human quality of life, longevity, and both the cost and quality of care. These impacts are not just to the individual, but the healthcare system and society as a whole.
Everyone sees health equity slightly differently. Our four-part definition of health equity is based on what we see in communities across the country:
- Health Disparity – a particular type of health difference that is linked with a social, economic, and/or environmental disadvantage. These are preventable differences in the burden of disease, injury, violence, or opportunities to achieve optimal health.4
- Health Literacy – the degree to which individuals have the capacity to obtain, process, and understand basic health information and services needed to make appropriate health decisions.5
- Social Determinants of Health – the range of social, environmental, and economic factors that can influence health status.6
- Cultural Humility → Sensitivity → Competency – a set of integrated attitudes, knowledge, and skills that enables a healthcare professional or organization to care effectively for patients from diverse cultures, groups, and communities.7
What is being done to address these issues? How can investing to correct health inequity help healthcare organizations recover from the pandemic?
Federally, the Center for Medicare and Medicaid Innovation (CMS CMMI) makes it clear health equity will be core to establishing and evaluating its payment and care delivery models. In its 2021 Strategy Refresh, CMMI went as far as to acknowledge that many of its existing models do not reflect the full diversity of beneficiaries. Further, they will be ensuring models are redesigned, removing implicit bias from design and evaluation. While it may take some time for the strategy to be implemented, we believe healthcare organizations will be able to participate in models making investments in delivery systems proportionate to the degree of inequity. Specifically, we expect future programs to financially reward participants that build care models to manage population health by closing health disparity gaps and addressing other root causes of inequity at their own local/regional levels.
Beyond CMMI, CMS has proposed a change to the Stars rating system for Medicare Advantage and Part D plans. The proposal is the first step in a multi-year approach to embed a Health Equity Index into the Stars rating system. CMS proposed beginning with SDOH in 2023, by adding a quality measure to assess how often plans are screening for common social needs such as food insecurity, housing insecurity, and transportation challenges. This signals a heightened commitment to address inequity, and future proposals are expected.
Outside of CMS, other national organizations are focused on promoting and funding programmatic impacts to address health inequities. For starters, the National Committee for Quality Assurance (NCQA) has recognized that high-quality, accessible care is equitable care. They have rolled out a new and enhanced certification for health equity accreditation, following a rigorous set of standards. NCQA envisions this certification to objectively define when organizations have transformed their business practices to provide equity across all populations they service.
At the State level, some are or will make serious programmatic changes and invest intentionally to correct some of the root causes of inequity. A current example is the effort by the New York Department of Health (DOH) to design a Section 1115 Waiver8 to demonstrate a reimagined Medicaid delivery system can make a material impact on improving health equity. In a concept paper from August 2021, DOH outlines a specific goal of its proposed waiver as “Building a more resilient, flexible and integrated delivery system that reduces racial disparities, promotes health equity, and supports the delivery of social care.” New York’s vision is to invest heavily to strengthen the delivery network, by building culturally competent and accessible primary care and by supporting community-based organizations to address SDOH as part of the Medicaid payment system. When successful, New York will set an example for how dramatically reforming Medicaid can spark a ripple effect to Medicare and commercial plans to correct root causes of health inequity, while providing a blueprint for other states.
Lastly, we believe opportunities exist to address inequity outside the delivery system. Specifically, we see a newfound focus on the development of the clinical and research workforce by upgrading medical school and residency/fellowship programs – not only promoting diversity in enrollment, but also refreshing training curricula to incorporate health equity as a foundational component of skill acquisition. Over time, these changes directly impact the workforce entering the delivery system to improve the health and well-being of both patients and providers, while also contributing to the quality outcomes that improve the financial health of the practice, hospital, or health system. Improving Stars and other quality ratings and addressing components defining success in value-based payment arrangements are key examples.
Recovering in a post-pandemic world will take many forms, so organizations will have to employ a number and combination of different tactics to fit each unique situation. Making this reality even more complex is the continued evolution of the pandemic’s trajectory. Amidst all this, healthcare organizations should continue to rightly invest to correct inequities as a component of their post-pandemic recovery plan. These investments are critical to redesigning a delivery system that is accessible to everyone, and more robust in the face of future healthcare crises.
Healthy People 2020 and Centers for Disease Control and Prevention
New York State Department of Health
Center for Medicare & Medicaid Innovation
California Department of Health Care Services
A Section 1115 Waiver offers flexibility on federal guidelines on Medicaid, to allow states to pilot and evaluate innovative approaches to serving beneficiaries