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Improving Quality and Achieving Equity:
A Guide for Hospital Leaders
Chapter 2: Why Should You Care? (pdf)
The Business Case: Disparities, Efficiency, and the Bottom Line
“Baylor’s focus on Health Equity emerged from its interest in improving quality. We have begun to understand that improving health care quality not only makes the hospital experience safer and more patient-centered, but by also focusing on the improvement of health equity we can simultaneously address avoidable causes of hospitalizations and improve health status for people experiencing disparities in health. As we have begun to address health inequity at Baylor, we have identified opportunities to reduce inefficiencies and waste in the systems of care for a number of minority sub-populations within our health care system. Initially, we have focused upon processes of care changes for low income populations who experience the most health disparities within our community, understanding that these actions were both good medicine and good business.” - James Walton, DO, VP and Chief Health Equity Officer, Baylor Health Care System
Efficiency is certainly one of the pillars of quality that garners special attention given its link to the financial wellbeing of hospitals, particularly in this time of tight budgets and a contracted health care dollar. New efforts and initiatives often have to either be budget-neutral or show a return-on-investment to justify the expenditure. The ‘efficiency pillar’ states that systems should use resources to get the best value for the money spent. This can be achieved by reducing quality waste and administrative and/or production costs. Some argue that efforts to address racial and ethnic disparities in health care are simply too costly in these challenging financial times—that there is no strong “business case”. A large part of this viewpoint centers on the perception that addressing disparities requires significant cost outlays without clear cost savings. However, a more careful review of the evidence highlights how being inattentive to the root causes of disparities adversely impacts efficiency and the hospital bottom line.
Disparities and their Impact on Efficiency and Cost
- Medical Errors: Patients with limited-English proficiency have more medical errors, with greater clinical consequences, than their white counterparts (3, 85, 86). Line infections, falls, bed sores all may be more common with minority patients who may not be able to communicate effectively with their health care providers—whether it be due to limited-English proficiency, mistrust, or a cultural perception that clinicians are authority figures who shouldn’t be questioned. These situations undoubtedly have an impact on efficiency and cost, likely leading to complications that require a prolonged length of stay, and tying up beds that could be used for other services. Even greater financial risk now exists with the Centers for Medicare and Medicaid Services non-reimbursable “never-events,” many of which can be prevented by an empowered patient who can communicate clearly with their health care providers (12, 87, 88). Devising systems to address the root causes of disparities, particularly those related to communication (through the implementation of interpreter services, training in cross-cultural communication for health care providers and staff, etc.), should certainly improve safety and provide both immediate and long-term cost savings.
- Inappropriate Test Ordering: Communication difficulties (due to language barriers or cultural barriers) can lead health care providers to order expensive tests (such at CT Scans) for conditions that could have been diagnosed through basic history-taking (6). This is particularly the case in the emergency setting. Interpreter services can assist health care providers in obtaining an accurate history that in turn prevents the knee-jerk ordering of high-priced tests. This can lead to significant cost-savings and reduction of risk of medical errors (i.e. contrast allergy, IV infection). Finally, limited resources, like CT Scans, will not be inappropriately tied-up and instead used more effectively for those patients who really require them. Investing in systems to assure that a history can be taken effectively in patients of diverse cultural and linguistic populations should decrease inappropriate utilization of potentially high-priced diagnostic procedures, and in turn improve safety and efficiency.
- Length of Stay: Patients with limited-English proficiency have longer hospital stays than English-speakers for some common medical and surgical conditions (unstable coronary syndromes and chest pain, coronary artery bypass grafting, stroke, craniotomy procedures, diabetes mellitus, major intestinal and rectal procedures, and elective hip replacement) than their white counterparts (89). There may be many reasons for these findings, but there is no doubt that addressing language and communication barriers can expedite the discharge process and thus decrease length-of-stay and increase efficiency. This issue takes on particular importance for hospitals that run at capacity, as they are often prevented from reliably scheduling high-revenue generating elective surgical procedures, and frequently need to go on emergency room diversion because of bed shortages. Developing strategies for case management (i.e. cross-cultural training, access to interpreter services) that are able to address the cultural and linguistic needs of patients may in turn improve the efficiency of the discharge process and decrease length of stay for these patients.
- Readmissions: Minorities are more likely to be readmitted for certain chronic conditions (7-9) – such as congestive heart failure (CHF) – than their white counterparts (10). This may be due to the fact that when a patient has limited-English proficiency, low literacy, or other communication barriers, they may be more likely to misunderstand discharge instructions. As a result, the risk for readmission may be higher, particularly for chronic conditions (e.g. CHF) in which diet, weight management and adherence to a complex medication regimen is essential. This issue will take on greater financial importance if the Centers for Medicare and Medicaid Services decide to limit or refuse reimbursement for patients with CHF who are readmitted within 30 days of discharge (11, 12). Given that minorities suffer at greater rates from cardiovascular disease and congestive heart failure, collecting race and ethnicity data to identify patients-at-risk for readmission, and developing targeted discharge planning that addresses cultural and linguistic needs, should be a worthy investment that will improve efficiency and provide cost-savings.
- Ambulatory Care Sensitive/Avoidable Admissions: Minorities may be at greater risk for ambulatory care sensitive/avoidable hospitalizations for chronic conditions (hypertension and asthma) than whites (91). Contributing to this risk is the fact that minorities, even with health insurance, are less likely to have a medical home where these issues can be better managed in the outpatient setting. The issue of medical homes has garnered significant attention recently as a method of improving quality and it may also play a major role in addressing racial and ethnic disparities in health care. Targeted efforts to support systems that facilitate a medical home for all patients within hospital outpatient settings—including the development of strategies to address cultural and linguistic barriers to care—has the potential to improve quality, efficiency, and equity, as well as save costs.
- Pay-for-Performance: Pay-for-performance is gaining traction as a method for addressing quality of care. For example, health plans are increasingly including pay-for-performance measures for conditions such as diabetes in their contracting with provider organizations, and public payors are also beginning to move in this direction. Some of these contracts have also started including provisions that look to address racial and ethnic disparities in health care—and it is expected this trend will become more widespread over time (92). For example, in Massachusetts health care reform linked Medicaid hospital rate increases to various quality measures including the measurement and reduction of racial and ethnic disparities in health care (93). As these initiatives become more evolved, hospitals will undoubtedly have to develop systems to track patients by race and ethnicity, monitor quality, and develop strategies to address disparities. From a financial standpoint this will be particularly important for conditions where pay-for-performance is taking root, such as diabetes.
“With investing in reducing disparities comes fewer errors and this in turn reduces costs.” Pat Hagan, MHSA Chief Operating Officer and President, Seattle Children’s Hospital
In summary, there are several clear examples of how disparities, when left unattended can impact efficiency and cost. The development of initiatives in a variety of areas—as described above—can not only improve efficiency, but provide both financial gain and cost savings in the short and long-term, all the while improving quality.
The Quality Case
The Risk Management Case
The Accreditation Case
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