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24-WD-Q&C-548-Build a Robust HEB Program Blog 02. Blog Image-CN-FINAL (1)

Understanding the Financial Impact of Health Disparity

September 19, 2024
September 19, 2024

A robust health equity program not only supports at risk patients, it makes good financial sense

Health disparities cost the U.S. economy approximately $451 billion in 2018, according to a groundbreaking study funded by the National Institute on Minority Health and Health Disparities,1 making equitable healthcare an urgent economic issue. Added to this is the specific economic burden the healthcare industry faces due to health disparity: According to the American Hospital Association, hospitals have provided roughly $620 billion in uncompensated care from 2000-20192 for which hospitals were never reimbursed.

Addressing Social Determinants of Health (SDOH), health equity and inclusion, and implicit bias can be a key strategy to combating this economic burden. Costs associated to a lack of access to care, hospital readmissions, and chronic disease, and other potential health inequities make up 6.2% of healthcare spend3. These costs are not just felt by healthcare institutions, insurers, and patients; the broader consequences to the national economy equates to around $42 billion annually to lost productivity3. Programs addressing these costs are a win-win because they not only reduce financial burden but play a role in improving patient outcomes and overall quality of life.

A strong diversity, equity, and inclusion (DEI) education program is the first step towards reducing some of the costs of health disparity and will play a role in the ability of clinical staff to provide meaningful interventions for at risk patients. When choosing a DEI program for your facility, there are a few topics that must be addressed:

  • Social determinants of health. One of the goals of the Healthy People 2030 initiative is to increase the number of adults who get recommended preventative healthcare. Today, they estimate this is at a baseline status, and getting worse – a scant 8.5% of adults get all of the high priority preventative care that’s recommended. It is imperative that all healthcare staff understand these barriers and learn strategies for addressing them.4
  • Cultural competency and sensitivity. The U.S. is an increasingly diverse nation. Cultural barriers can negatively impact communication as well as patient adherence to treatment. A study conducted by the Kaiser Foundation and Georgia State University found cultural competence training programs yielded a nearly 2.5 times return on investment5. It is up to healthcare providers to train staff in addressing racial and ethnic disparities, as well as accommodating a more diverse set of cultural needs.
  • Implicit bias and its impact on care. Studies have shown that patients who detect bias among physicians and staff are far less likely to adhere to treatment plans,6 resulting in higher readmission rates, a problem that costs the healthcare industry $35.7 billion annually.7
  • Patient-centered care. Healthcare providers always strive to provide quality, patient-centered care, but it’s important to understand the aspects of shared decision-making and tailoring care. The Healthy People 2030 initiative reports a mere 26.6% of adult patients in a 2017 survey indicated their provider checked to see if they had a plan for how they would follow treatment plans.3
  • Access to care. Groups with limited access to preventative care make up the highest proportion of avoidable emergency room usage, and it’s estimated that $4.4 billion could be saved by diverting these visits to primary or urgent care.8 It is important for healthcare providers to understand their patients’ barriers to access the appropriate care and develop strategies for overcoming them.
  • Community engagement and advocacy. Healthcare providers must be partners within their communities and advocate for equitable and patient-centered healthcare. This involves advocacy, promotion of health education programs, and engagement with existing community organizations.

While some instances of health disparity show a much more direct correlation to the bottom line than others, it is important to attack all aspects of the issue with a comprehensive training program that serves to provide a baseline understanding to healthcare providers. HealthStream’s Health Equity and Belonging Library, Policy Manager Software, learning resources, and other content and software tools prepare healthcare institutions to build a tailored DEI program based on its unique community needs. No single intervention will solve all the issues healthcare institutions face around health inequities. However, providing staff with best in class content and the ability to curate information as needed builds the foundation of cultural competence and communication for interventions to succeed.

 

 

1 LaVeist TA, Pérez-Stable EJ, Richard P, et al. The economic burden of racial, ethnic, and educational health inequities in the U.S. JAMA. (2023). DOI: 10.1001/jama.2023.
2 Uncompensated hospital care cost fact sheet. (2019). American Hospital Association. https://www.aha.org/system/files/2019-01/uncompensated-care-fact-sheet-jan-2019.pdf
3 Bhatt J, Gerhardt W, Davis A, Batra N, Dhar A, Rush, B. U.S. can’t afford health inequities. Deloitte Insights, 2022. https://www2.deloitte.com/us/en/insights/industry/health-care/economic-cost-of-health-disparities.html
4 Increase the proportion of adults who get recommended evidence-based preventive health care – AHS-08, Healthy People 2030 Objective. (2020). Office of Disease Prevention and Health Promotion. https://health.gov/healthypeople/objectives-and-data/browse-objectives/health-care-access-and-quality/increase-proportion-adults-who-get-recommended-evidence-based-preventive-health-care-ahs-08
5 Parker M, Fang X, Bradlyn A. Costs and effectiveness of a culturally tailored communication training program to increase cultural competence among multi-disciplinary care management teams. BMC Health Serv Res. (2020). DOI: 10.1186/s12913-020-05662-z
6 Bendix J. How implicit bias harms patient care. Medical Economics Journal. 2019; 96(23). https://www.medicaleconomics.com/view/how-implicit-bias-harms-patient-care
7 Guide for reducing disparities in readmissions.(2024, April, revised). CMS Office of Minority Health. https://www.cms.gov/about-cms/agency-information/omh/downloads/omh_readmissions_guide.pdf
8 Weinick RM, Burns RM, Mehrotra A. Many emergency department visits could be managed at urgent care centers and retail clinics. Health Affairs. 2010; 29(9). https://doi.org/10.1377/hlthaff.2009.0748
 
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