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The Health Equity Imperative

What expanded mandates mean for all healthcare finance leaders and how to take action to improve outcomes and automate compliance

The Health Equity Imperative

What expanded mandates mean for all healthcare finance leaders and how to take action to improve outcomes and automate compliance

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Introduction

Why Health Equity & Why Now?

All healthcare organizations are facing a perfect storm of challenges. On the supply side, leaders are struggling with growing workforce gaps across all major roles, exploding supply chain costs, and increasing constraints related to payor reimbursements, aging population, under and uninsured patient populations. On the demand side, the system is inundated by a population with a myriad of acute health needs that are growing at alarming rates due to increases in homelessness, a mental health crisis, exponential rise in drug abuse, and an obesity epidemic.

At the same time, healthcare leaders are challenged by a proliferation of regulatory mandates and increased scrutiny across the entire care continuum. One area of intense focus is health equity, where hospitals and health systems are now required by the IRS, AHA.org, and CMS.gov to provide detailed reporting across patients as well as the broader community that it serves. This data must include detailed socioeconomic information on patients and how outcomes might compare across demographic groups. Health equity mandates also require healthcare providers to report on the socioeconomic landscape of the surrounding community–i.e., population diversity, education attainment, employment metrics, poverty levels, home ownership and homelessness, crime and safety, and context around all major diseases and public health challenges. 

All healthcare leaders are faced with these mandates, but CFOs and their teams are most burdened with determining how to measure and manage what’s needed to achieve these complex health equity mandates. Finance teams must define the relevant data and analytic models, determine appropriate systems needed to manage and automate the process, and find the right mix of technical and business skills to create a dynamic, repeatable platform. 

These complex dynamics present a daunting challenge on top of so many others facing healthcare professionals, yet there is a path forward. This paper is focused on providing a guide to help CFOs and their teams take control of the complexity related to health equity mandates and achieve the tools needed to automate compliance reporting, proactively manage risk, and discover a path to growth and impact.

Challenge

Compromised Infrastructure Plus Expanded Demands on the System

In recent years, health equity has become a mission critical topic for hospitals, healthcare providers, and their surrounding communities. As health outcomes have declined dramatically despite crippling increases in healthcare related costs, all stakeholders are finding themselves struggling to understand the disconnect. 

In 2021, the U.S. spent 17.8 percent of gross domestic product (GDP) on health care, nearly twice as much as the average country in the Organization for Economic Cooperation and Development (OECD), a partnership of the 38 most developed countries globally. Despite being at the top of the list on every spending or investment metric (GDP, by patient, etc.), the U.S. is at the bottom in terms of outcomes, with the lowest life expectancy at birth, the highest death rates for avoidable or treatable conditions, the highest maternal and infant mortality, and among the highest suicide rates. (Commonwealth Fund, 2023)

At the heart of this disconnect is socioeconomic disparities in health that are imposing overwhelming costs on the healthcare system and socioeconomic landscape more broadly. A 2023 study funded by NIH’s National Institute on Minority Health and Health Disparities (NIMHD) revealed that in 2018, racial and ethnic health disparities cost the U.S. economy $451 billion, a 41% increase from the previous estimate of $320 billion in 2014. The study also finds that the total burden of education-related health disparities for persons with less than a college degree in 2018 reached $978 billion, about two times greater than the annual growth rate of the U.S. economy in 2018. (Department of Health & Human Services, 2023)

This health equity challenge is inevitably intertwined, from both a cause and effect perspective, with other intractable problems healthcare leaders are facing, including:

  • Workforce Gaps
    An estimated 27,000 are physicians currently needed, increasing to greater than 100,000 by 2030+    (CNN, 2023). Meanwhile, the supply of nurses decreased by 100,000 between 2021-2022 despite an increasing need (American Association of Colleges & Nursing, 2023), and hospitals are also struggling with a shortage of other essential workers. (US News, 2022)

  • Rising Labor Costs
    Due to growing demand combined with shrinking supply, labor costs are up 37% from pre-Pandemic levels. (Kaufman, 2022)

  • Talent Retention & Turnover
    Healthcare workers are disenfranchised and more transient as turnover increased by 6.4% to 25.9% annually. (Healthcare Finance, 2023)

  • Increased Supply Chain Costs
    Like all industries, healthcare has struggled with exploding supply chain related costs but even more acutely, which have increased 18% per patient between 2019-2022, outpacing inflation by 30%. (American Hospital Association, 2023)

  • Growing Homelessness
    The rate of homelessness has been increasing across the country at approximately 6% annually, increasing health, social, and economic challenges for communities. (CBS News, 2023)

  • Mental Health Crisis
    In 2019-2020, 20.78% of adults were experiencing a mental illness, equivalent to over 50 million Americans. The percentage of adults reporting serious thoughts of suicide is 4.84%, totaling over 12.1 million individuals. Meanwhile, 11% of adults who identified with two or more races reported serious thoughts of suicide in 2020, 6% higher or more than double than the average among all adults. (Mental Health America, 2023)

  • Opioid Epidemic
    Tied to the mental health crisis and homelessness, drug-related deaths more than doubled between 2000 and 2020, while 2020 further increased to 68,630 and 2021 climbed to 80,411 reported overdose deaths. (NIDA, 2023)

  • Expanding Obesity Rates
    The portion of the U.S. population diagnosed with obesity increased from approximately 30% to over 40% in the decade between 2000 and 2020, with extreme obesity rates nearly doubling from 4.7%-9.1% during that same timeframe. (CDC, 2023) Increased care costs stemming from this growing problem are estimated to be $150B annually (Medical Economics, 2022)

Aggressively addressing America’s health equity challenge is in everyone’s best interest. Health disparities are one of the most foundational factors facing our healthcare system, from both an outcomes and economic perspective.

Value Proposition

The Compelling ROI of Health Equity Mandates

Due to its increasing importance, the compliance mandates and reporting requirements facing hospitals and the broader network of healthcare providers has expanded significantly to include:

Beyond these regulatory mandates, some payors are beginning to require health equity reporting as part of their reimbursement qualification process (Blue Cross Blue Shield of MA, 2021). All communities and their human service focused organizations are talking about Social Determinants of Health, or how the full picture of their community is driving positive or negative outcomes for citizens from a socioeconomic standpoint. Moreover, all healthcare leaders, particularly healthcare CFOs and their expanded Finance and GRC teams, must proactively gain a deeper understanding of the socioeconomic landscape of patients and how their outcomes compare to the surrounding community based on all major demographic factors (i.e., race/ethnicity, gender, age, employment/income, healthcare coverage, education level, etc.)

From an outcomes perspective, multiple studies have shown that significant improvements are achieved in mortality rates with stronger demographic alignment between physicians and care teams and patients-–50% for infants, maternal, and 20% overall. This is exciting and actionable news, suggesting that more intentional recruitment and placement of physicians is one of the most tangible and impactful ways of overcoming the health equity gap. Currently, only 5.7% of physicians are Black while Black patients comprise 13.7% of the population (CNN, 2023). Investing in developing Black physicians, nurses, and expanded staff can have a significant ROI–both return on investment and impact on outcomes that would positively improve the economics of healthcare providers, patients, companies, and communities more broadly. 

Meanwhile, from a workforce standpoint, the investment in recruiting and training diverse healthcare workers would also overcome significant unemployment gaps and disparity in pay equity and household income that challenge diverse communities. Ultimately, this investment creates the opportunity to dramatically reduce the cost of healthcare, which will in turn relieve crippling medical-related consumer debt for patients, control the cost of care for institutions, payors, and help reduce healthcare insurance premiums companies paying for employees.

Solution

Taking Control of Health Equity Costs & Investing in Sustainable Growth

The net of these requirements is that healthcare organizations face a daunting challenge—leaders must determine what to report, what data is needed from internal systems, how to access relevant data on their community, and, most importantly, how to achieve all of it in a way that is feasible and achievable on an ongoing basis. The good news is that much of the data required across these various reporting mandates is the same, so the key is achieving a unified model that intersects all of the inputs and outputs into an automated system to support the full continuum of use cases across the organization. 

While tackling the health equity challenge is in everyone’s best interest, taking on the imperative is no easy task. Here’s why:

  • Data
    The data needed to understand the socioeconomic landscape at the relevant level of detail is elusive and complex.
     
  • Technology
    To handle the significant amount of rich data, advanced AI-powered technologies are required to harness the power of the data to make it consumable, relevant, and actionable.

  • Skills
    Effectively addressing health equity mandates requires a cross-functional skill set that’s difficult to achieve in-house. Advanced expertise in data and analytics, AI-powered technologies, compliance mandates, and public health are challenging to find and also very expensive. 

There is a significant advantage to tapping third party expertise that has the benefit of looking across the health equity and broader socioeconomic landscape continuously, learning from what is working (or not) across the country. That external expertise can also bring objective guidance to healthcare CFOs and their teams regarding the most impactful investments and initiatives that can drive health outcomes and financial performance.

Beyond these challenges, CFOs and their teams face a myriad of challenges beyond the health equity imperative. The opportunity to outsource this significant component of the compliance and reporting requirements is important. First, it enables internal teams to focus on other initiatives that will yield stronger financial results. Second, the approach can enable a better outcome at a significantly lower cost.

Get Started

Achieving Insights & Taking Action

Health equity reporting requires a systematic approach that is dynamic. A centralized data and analytics platform powered by socioeconomic data and intersected with stakeholder data from enterprise systems required must be accessible across the entire organization for a wide variety of use cases—from HR to Finance to Legal/GRC to Medical and Quality teams. Finance teams also now need the ability to continuously access data for various reporting purposes and ad hoc decision making while also having a strong pulse on where they stand in their journey

Achieving a single view of the world inside the health system and its surrounding community is the only way forward given the challenges facing healthcare executives and their teams. That requires rich socioeconomic data intersected with hospital stakeholder data to understand demographic alignment and other equity related metrics.

Equity Quotient can help. Our team has been doing a great deal of research and thinking about how to provide healthcare leaders a way to harness the complexity to reduce costs and achieve compliance and improve care outcomes.

To get started, we hope you’ll explore our Public Health dashboard and begin the journey of achieving automated health equity data and analytics to support the myriad of complex mandates facing your organization.Equity Quotient is eager to provide much needed support for healthcare leaders with a powerful but cost effective technology solution to inform health equity objectives and outcomes while also automating reporting requirements. 

The Public Health dashboard provides an organized view of all major health equity, environmental, and other relevant socioeconomic factors. This dashboard is powered by seven vetted data.gov sources that the Equity Quotient team has created by doing the hard work of intersecting dozens of feeds into a single platform and providing an easy-to-use dashboard for exploring and utilizing the information for your full continuum of decision making and reporting. Think of the dashboard as an automated way to gain access to a comprehensive view of Social Determinants of Health (SDOH) for the community(ies) you serve. 

Our goal with this new dashboard is to help Healthcare leaders save time and money while cutting through the complexity to chart a path to compliance and growth. We hope the data and analytics provided here help teams elevate focus to the more impactful part of this journey, which is understanding the data and determining what investments and initiatives are needed to improve outcomes and financial performance.

Beyond the Equity Quotient Public Health dashboard, you will see the expanded Equity Quotient SaaS technology solution offers much more. The stakeholder intelligence platform includes expanded data and analytics covering factors such as workforce diversity, supplier diversity, housing market, credit access, education, and the business landscape in the region(s) you serve. Furthermore, Equity Quotient provides the ability for your team to input data from enterprise systems and intersect it with socioeconomic data on the surrounding community. This integrated solution enables teams to automatically generate health equity reporting for IRS Community Health Needs Assessments (CHNAs), American Hospital Association health equity disclosures required for accreditation, and CMS.gov calculations required for medicaid reimbursement.

As you engage with the Public Health dashboard, Equity Quotient is eager to learn your feedback and thoughts for how we can improve its value to your team. We are here as your partners in addressing health equity mandates, improving outcomes,  and achieving financial goals.