The missing business case for health equity

When I was 14 years old, my parents moved our family home within Miami Dade County. We shifted from zip code 33157 to 33183, and as I’ve recently learned, this increased our life expectancy from ~79 years to ~86 years. My parents didn’t have a college education or any access to this type of data, but instinctively they moved toward what we all want and should have — safer neighborhoods, good schools, grocery stores with fresh foods, and job opportunities.

Zip code determines up to 60% of health, and life expectancy can vary up to 30 years within a 10-mile span. Yet over 50 million Americans live in economically distressed zip codes, and we’re a far cry from all Americans having “the fair and just opportunity for every person to attain their highest level of health,” per the CDC.

We’ve made little progress on health equity because we haven’t been able to frame the issue around business cases that employers and payers can fully embrace. Capitation and advanced payment frameworks, particularly in Medicare, have enabled care models where community healthcare providers take care of transportation, food, air conditioners, pest control, and other socioeconomic needs that stand in the way of health. However, 80% of the aggregated US healthcare spend is still essentially fee-for-service, and health equity can’t wait for value-based payments to become the norm. This means that employers and payers, who still directly own the substantial financial risk, need to pave the way through population health initiatives in the fee-for-service population.

We’re at a breaking point as alarming research suggests that health inequity is both a humanitarian and an economic crisis that we need to fix unless we want to accept declining life expectancy and 7-10 year lifespan gaps relative to comparable countries. At a macro level, health inequity costs us $320 billion today and if we do nothing, it will cost us $1 trillion by 2040, and we’ll all feel the financial impact of increased premiums.

If we want a demonstrably more equitable healthcare system in the next 5-10 years, we need to 1) dismantle the attitudes and unspoken objections that linger in today’s healthcare business environment and 2) reshape healthcare business cases to embrace disparities head-on.

2023: Moving from buzz to actionable science

It’s hard to go to a major healthcare conference or read your LinkedIn feed without hearing about health equity themes. The attention to the issue is great, but it can lead cynical healthcare professionals to wonder if we’re all just chasing the latest buzz. We need to focus on the scientific evidence, and the good news is it’s real, voluminous, and very hard to ignore.

A quick search on PubMed yields 22,000 results on health equity research published between 1970 and 2019. The same search between 2020 and 2023 yields 25,000 results. In less than 3 years, we’ve surpassed the volume of 5 decades of scientific research.

That research set the stage for meaningful public health policy changes. The US now allows the use of Medicaid funds for food. In 2022, CMS released an updated framework for health equity, expanding its earlier priorities to include building provider capacity, tailoring culturally sensitive interventions, and increasing accessibility for individuals with disabilities. We’ve even started to see benefit design changes from Medicare Advantage plans that are deploying “extra benefits” strategies including meals, transportation, and in-home care to differentiate themselves from their competition.

Dismantling the legacy attitudes toward health disparities

While the recent advances in scientific research and public policy are encouraging, the business environment can still be pretty dismissive of health disparities, whether consciously or not. We need to address the doubts of business leaders and evolve their mindset:

Is it relevant to my organization? When making decisions about population health initiatives, business leaders look for solutions that will have a meaningful, positive impact on as many people as possible. It may be easy to assume that those with a regular paycheck don’t struggle with social barriers to care like housing, food, transportation, health literacy, access to healthcare, and social support, but that’s not always true. Health equity should not just be the government’s focus in Medicare and Medicaid.

More than 45% of consumers across all coverage types have some unmet basic need. These unmet basic needs typically mean lower productivity with an average of 39 days of lost productivity per year, not to mention higher health care costs and poorer outcomes. These unmet needs are more likely in Black, Hispanic, and LGBTQ workers. Working populations in marginalized communities face many chronic conditions that have a higher prevalence and poorer outcomes — obesity, hypertension, diabetes, depression/anxiety, cancer, and maternal health, to name a few.

The current economic environment has made the situation worse as inflation has hit low-income workers hard, with so many struggling to make ends meet. Even with health insurance coverage in place for their employees, employers face a myriad of socioeconomic circumstances from housing, transportation, safety, food insecurity, and lack of childcare that ultimately show up in medical cost trends. No doubt, having an income through a stable job is correlated with wellbeing but it doesn’t get us completely out of the woods on disparities. We’re way past the point where health equity is the government’s problem — it’s critical to the commercial population.

It sounds complex, expensive, and hard to impact. Well-intentioned healthcare business professionals often feel helpless when facing the complex factors that drive health inequity. I hear sentiments like “I can’t fix poverty” or “I can’t just raise salaries across the board.” Yet in some ways, the answers lie in front of us, and it’s possible to have an impact, especially through the expansion of population health initiatives already underway.

Community healthcare models, like those we’ve seen with Camden Coalition, have shown us what breakthrough change can look like. Employers and payers can adopt the learnings from these models and apply them at a much broader scale. Deeply personalized, in-person, team-based care in local communities worked because they were intentional and because they unlocked the power of human connection and trust in healthcare.

Human connection, trust, and empathy can exist across modalities — in person, asynchronous, and virtual. If we tap data, analytics, and virtual care more effectively, we can provide access to empathetic, team-based, culturally sensitive human providers at a much broader scale. Culturally sensitive texting has already proven to successfully engage low-income, hard-to-reach members. Culturally adapted nutrition advice helps people achieve weight loss and diabetes outcomes. AI-driven shared decision-making can help eliminate racial bias. What’s more, if we put our minds to it, AI and virtual data capture can provide visibility into socioeconomic data drivers at a much earlier stage than what we are able to capture in a purely brick-and-mortar world.

Today’s healthcare innovation environment has no shortage of solutions, and innovators will bend to employer and payer requirements. If employers and payers intentionally seek health equity impact from all healthcare investments, we’ll achieve a new normal.

Is there a real return on investment? I often hear doubts and fears among healthcare leaders about the business case behind socioeconomic-focused initiatives that sounds something like this: “Health equity is important but we have to prioritize ROI, cost trends, and profits.” The cynicism on ROI comes from a fear (and many failed initiatives) of spending more dollars on seemingly healthy populations without a return within the member’s lifecycle with a payer or employer.

A general example like obesity also illustrates this point. Medical spending for a person with obesity is $1429 higher than a person of normal weight, and obesity prevalence varies drastically, with the most significant disparities showing up in the Black American population (e.g., Non Hispanic Black American adult women are one of the highest risk groups with obesity prevalence of over 55%).

Worse yet, behavior change interventions have insufficiently focused on this population, with many interventions demonstrating worse-than-average outcomes among Black Americans. Yet when it works, it saves money, reduces disparity, and saves lives, as in this Colorado example that saved $16.7 for every dollar invested in a weight loss intervention that disproportionately targeted and enrolled Black Americans and Hispanics.

Chronic disease is essentially a health equity problem, and population health interventions need to pinpoint and overcome drivers of inequitable outcomes in order to hit target returns on investment.

Building the business model in three steps

Whether contemplating a new chronic disease initiative or designing equitable benefits for employees, we can build business models that incorporate health equity using three steps:

While there are many publicly available resources that codify factors associated with disparities in health access and outcomes such as food retail environments and poverty rates, these datasets tend to be vast and multi-dimensional. With significant advances in artificial intelligence and the development of computational tools, we now have the ability to work with these data rich resources to better drive insights and reveal previously underappreciated and unrecognized needs within diverse cohorts.

Understand, stratify, and engage populations – The first step is to understand our populations deeply, using all the data available to us. Publicly available data such as the area deprivation index points to important factors including income, education, and housing quality, based solely on addresses and zip codes. Claims data helps us understand the diagnoses and the associated medical costs of these populations and how this cost compares to the average.

What percent of our population lives in areas with high social deprivation? Across our most common chronic conditions, what are the likely socioeconomic barriers? Food insecurity? Social isolation? Health literacy? What are the language and cultural needs of the population? This information serves as a foundation for the start of any intervention and may help target outreach to ensure equitable access in the engaged populations.

Once engaged, standardized assessments and screeners help to capture individual data on socioeconomic barriers. While subpopulations with cultural and socioeconomic barriers often represent 20-30% of the problem we’re trying to solve, they often represent 70-80% of the cost.

Tailor interventions for barriers to care – Equipped with a deep understanding of the populations we serve, we can tailor interventions to the needs of individuals. Too often, population health initiatives contend with “hard-to-reach” populations and mysteries as to why they won’t engage. The answers lie in unpacking the cultural and socioeconomic barriers and intentionally recruiting marginalized populations.

Culturally diverse populations, including Asian, Hispanic, Black American, and other ethnicities, often seek doctors who speak their language, look like them, and understand their culture and experiences. Providers and healthcare workers, trained for awareness, cultural sensitivities, and ways to overcome barriers can have meaningful impact.

We can deliver cultural adaptations to our interventions that deliver measurable outcomes in subpopulations. For example, design depression education into a fotonovela for a Hispanic population to reduce stigma and improve PHQ scores. Adapt lo-carb recommendations in traditional South Asian recipes to address diabetes. Offer food as medicine programs with food delivery to food-insecure patients with diabetes. Tailored interventions are critical to the business case for any population health intervention — without them, we’re left with a black box on many members who don’t engage in healthcare solutions until the time comes for the emergency room visit.

Measure the impact on subpopulations – Too often in healthcare business contexts, we make perfection the enemy of the good. We miss important insights from subpopulations because the numbers are too small and the chance of error or statistical insignificance is too high. As predictive models become more sophisticated, we’ve come to expect explainability from them. That is, the end point of the model is not risk stratification, but an explanation of why and the scope and size of opportunity. We now have the ability to iterate and measure rapidly to understand what avenues of outreach and intervention are effective in reaching historically underserved populations and how we might be more effective in our approach.

However small the Ns, this basic information sliced across multiple factors including race, gender, cultural preferences, and socioeconomic status, are critical to measuring impact and making our interventions better. Of those who are food insecure, how much did blood sugar control improve as a result of the diabetes intervention we just launched? Did people of various incomes, ethnicities, and geographies utilize the new benefits at the same rates or did we predominantly serve the less disadvantaged? How is this trend improving over time?

We’re at an inflection point, and my hope is that 5 to 10 years from now, zip code will drive much less than 60% of health. Value-based care and community health models will continue to advance, but employers and payers can accelerate health equity impact by dismantling legacy attitudes, reshaping the business cases for population health initiatives, and making health equity a success factor for every dollar spent on population health.

Veeneta Lakhani is an innovative healthcare executive with a decade of experience in senior-level health plan positions across value-based reimbursement, provider operations, and strategic planning. She is currently the chief growth officer for Vida Health and was formerly Vice President at Anthem where she led the enterprise-wide rollout of Anthem’s ACO program and population health services.