One of the most common questions we field from health care leaders across the industry is how they can prove a financial ROI for health equity efforts. These leaders deeply believe in the moral case for advancing health equity, but they can't secure sufficient funding from senior executives without linking potential investments to reduced costs or improved revenue. For these organizations, securing an airtight, financial ROI-driven business case for every health equity investment becomes a prerequisite for action.
But we've also fielded significant pushback from the other end of the spectrum. As one community health equity leader of a health system put it, "The idea that we have to make a case for equity sickens me. It's immoral to ask the question…There's a pretty good business case for white supremacism and keeping the status quo. This work has to be based in the mission of health care, not the margin."
The quote above begs an interesting question—why have we as an industry been holding health equity efforts to a standard that we rarely apply to other strategic areas? For example, it's uncommon for leaders to require a strict financial ROI for their innovation centers, HR departments, or primary care services. They're viewed as intrinsically valuable for the business, important for long-term growth, or central to their identity as a health care organization. Put another way, leaders expect that there will be a return on the investment for these services—but they've adopted a definition of ROI that goes beyond the financial.
This isn't to say that we can't measure a positive financial ROI for health equity efforts. As the evidence base builds, we continue to understand how specific interventions can be a boon to our bottom lines. But we also have to acknowledge that there's more research to be done, and a clear financial ROI may not exist yet for every equity initiative from every vantage point in the industry—and certainly not within a short timeline.
It's important to bring strategic rigor to the design and implementation of a health equity strategy. Remember, as we explored in a previous blog post, defaulting to one-off passion projects can sometimes do more harm than good. But the need for strategic rigor does not equate to a need for a positive financial ROI. We have to be ready to take a more expansive view of the business case and ROI, like we already do for a whole host of other business priorities. And that means taking a look at the holistic value that health equity efforts bring to each organization—including the intrinsic moral value.
Adopting an authentic market-facing brand that inspires trust.
The pandemic hasn't led to a sustained brand halo for the industry, as indicated by policymakers' renewed interested in reducing drug prices and taking aim at major M&A. And public scrutiny is rising for companies that made big proclamations in the wake of George Floyd’s murder. Just recently, The Washington Post published an investigation into whether the collective $50B promised to address racial inequity was actually disbursed—and how. Even if you didn't make a public pledge, bad publicity generated from complacency or inaction can have ripple effects in competitive markets and damage relationships with consumers and potential partners.
Deepening employee value proposition through positive social impact.
After 18 months struggling with employee burnout, most of the executives we speak with cite workforce retention as their top priority—especially those who lead provider organizations. In today's tight labor market, leaders have to take every opportunity to become an employer of choice. And because employees are increasingly mission driven—71% of employees surveyed say a company’s social impact strategy (or lack thereof) is a deal breaker when considering a job—demonstrating an authentic commitment to equity can differentiate an organization.
Improving the consumer experience for all
Health plans and provider organizations can already see their finances take a hit with low quality and CAHPS scores. CMS has stated that it plans to place equity at the center of all future initiatives, indicating more to come. But even beyond regulatory changes, all health care organizations are searching for ways to secure consumer loyalty. And loyalty is about much more than in-the-moment satisfaction. Generating consumer loyalty includes:
Readying yourself for downside risk value-based payment
Health plans and provider organizations under risk already understand that mitigating disparate outcomes will reduce total cost of care. But with CMS hinting at mandatory value-based payment models down the road, all provider organizations should plan to build key capabilities that will allow them to succeed under downside risk models, such as changing workflows to screen for social needs or segmenting patients based on risk level. If and when the shift to risk-based payment becomes less voluntary, organizations that have started to flex these muscles will be more prepared to make the transition to downside risk.
Improving future product offerings (no matter where you sit in the industry)
For example, pharma companies that diversify their clinical trials and which diseases they study can develop better products that work for a broader population. Health technology companies that take accessibility seriously in product development can reach historically disconnected groups, like people with limited English proficiency or disabilities. And remember—as with all equity initiatives, investments targeted to those most in need will inherently improve experiences for all consumers who benefit from things like more rigorously studied drugs, more accurate devices, and easier to navigate digital tools.
Ultimately, advancing equity is inherently valuable. Our goal with this conversation is not to undermine that fact. Our goal is to emphasize that while we shouldn’t nickel and dime equity efforts, we also need the strategic rigor that cements equity as a key component of existing business priorities. Because when advancing equity is seen as a non-negotiable—that's when real progress gets made.
In this Stay Up to Date, Rachel Woods and Darby Sullivan join Christopher Kerns to explore what an equitable organization looks like in practice, what barriers stand in the way of making that a reality, and how different parts of the industry must work together to create a more equitable future.
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