Health equity is becoming a new regulatory reality

By Jay Bhatt, D.O., managing director of the Deloitte Health Equity Institute and the Deloitte Center for Health Solutions, Deloitte Services, LP, and Josh Lee, National Health Equity Practice leader, Deloitte Consulting, LLP

Accrediting bodies, federal regulatory agencies, states, trade associations, and the White House are pushing health equity to the forefront. A raft of regulations, rules, and standards makes it clear that health equity should be considered as a key part of every health organization’s business strategy.

For example, the US Food and Drug Administration (FDA) recently said it will soon require researchers and companies seeking approval for late-stage clinical trials to submit a plan that ensures diversity among trial participants.¹ (See our report, Enhancing diversity in clinical trials.) Here is a look at a few health equity initiatives being driven by other federal agencies, accrediting bodies, and trade groups:

The Joint Commission: The Joint Commission recently introduced a new leadership standard (LD.04.03.08) that focuses on health equity. The new rule, which went into effect on January 1, requires accredited hospitals, health systems, and other organizations to collect race and ethnicity information from patients. It also adds new requirements to help prevent discrimination among individuals who work in ambulatory and behavioral health care settings. Beginning July 1, that new standard will be elevated to a National Patient Safety Goal. This places health equity on par with other hospital safety issues such as surgical errors and hospital-acquired infections.² This is the latest indication reinforcing that patient safety and health equity are two sides of the same coin. A spokesperson told us that surveyors have already received two training sessions to help them evaluate compliance with the new standards. Resource documents have also been developed for surveyors to establish a meaningful, consistent survey process, she said.

The Department of Health and Human Services (HHS): Last summer, HHS issued a Notice of Proposed Rulemaking to reinterpret and strengthen Section 1557 of the Affordable Care Act (ACA). The provision prohibits discrimination on the basis of race, ethnicity, sex, age or disability in health programs or activities that receive federal financial assistance.³

Centers for Medicare and Medicaid Services (CMS): Realizing Equity, Access, and Community Health (REACH) was one of the first new payment models to be introduced by the Biden administration, which has made health equity a specific goal. According to CMS, Medicare FFS beneficiaries who receive care through a REACH ACO (Accountable Care Organization) will have access to enhanced care-coordination services, telehealth visits, post-discharge home health care services, and may receive assistance with copayments. This new ACO model went into effect on January 1.⁴ (See our blog, New Medicare ACO payment model targets health equity.) Last August, the agency finalized a rule to establish “Birthing-Friendly” hospital designations to denote a hospital's a commitment to maternity care quality, safety, and equity. The new designations, along with three health equity-focused measures for hospital quality programs, are slated to go into effect this fall.⁵

The White House: Shortly after his administration began two years ago, President Biden launched a whole-of-government initiative to advance racial equity across federal policy making, programs, and institutions. The Executive Order (EO) on Advancing Racial Equity and Support for Underserved Communities, helped to establish health equity as a priority for the administration.⁶ On February 16, the president signed a new EO to build on earlier efforts to strengthen racial equity and support for underserved communities.⁷ The White House has also issued a Blueprint for an AI Bill of Rights, which contains several elements relevant to health care, including a call for continuous disparity testing to prevent algorithmic discrimination (see Can digital tech and regulators help improve health equity?)

Trade associations: Some trade groups have established internal groups focused on health equity. The American Medical Association (AMA), for example, launched its Center for Health Equity in 2019 and hired its first Chief Health Equity Officer. The AMA has also developed a three-year roadmap to improve action and accountability to advance health equity.⁸ The American Hospital Association has an Institute for Diversity and Health Equity.⁹ Last fall, America’s Health Insurance Plans (AHIP) finalized new demographic data-collection standards for its member health plans. The trade group intends to use better data to reduce health disparities.¹⁰

Consider the Four Domains of Health Equity

We encourage health care leadership to identify the root causes of health disparities among their patients and within the communities they serve, quantify them, look for ways to address them, and measure their progress. These leaders should also consider ways to incorporate a regulatory/compliance strategy into all health equity initiatives.

We have identified Four Domains of health equity that could be a part of that strategy:

• Organization: The first domain is straight forward—do right by your staff. Health care leaders should consider what staff, representatives, allies, and advocates do to ensure equitable access and equitable health outcomes. Organizations might also look for ways to support historically vulnerable and marginalized populations in the communities they serve. Leaders might be able to advance equity by focusing on the people they hire and promote. Diverse talent-development and recruitment programs—along with education related to benefits and financing—can help support the workforce. Consider this: In January, Delta Air Lines announced an Emergency Savings Program to help ensure the financial security of their employees. Financial security is a social driver of health.¹¹ One-third of U.S. households cannot come up with $400 cash to cover an emergency expense, according to the Federal Reserve.¹² Employees who complete an online financial education program and meet with a financial coach will receive $750 from the airline and will match an additional $250 of employee contributions.¹³ 
• Offerings: An organization’s products and services could be evaluated through an equity lens. This can include everything from the look and feel of the organization’s website, to the artwork on the walls, to the cultural sensitivity training that call-center staff receive. Leaders might also build trust by listening to employees and making it easier for them to voice their concerns. A health care organization’s offerings have the potential to advance or diminish health equity and should be centered around population-specific needs, preferences, priorities, and behaviors, and should leverage human-centered design principles and data analytics. Case in point: Boston Medical Center launched its Health Equity Accelerator a little more than a year ago. The goal of the program is to identify and address racial health disparities across its organization and to improve health outcomes among Black and Latinx patients (which make up about 70% of the health system’s patients). The health system identified five clinical areas where health inequities are most apparent: maternal and child health; infectious diseases; behavioral health; chronic conditions; oncology, and end-stage renal disease.¹⁴ 
• Community: This domain looks outward even further and encourages leaders to take a place-based approach to health-equity initiatives. Health care leaders might consider the needs of the communities they serve, determine how their organization could more effectively serve those communities, and identify assets that could be deployed. Leaders should consider how their organizations are connecting networks and resources to advance gender equity and ensure equitable health outcomes for all members of the community. Health care organizations can consider making strategic investments in communities to build on existing assets while helping to fill gaps related to health equity and economic opportunity. Partnering with traditional competitors could help magnify the impact on equity in the same virtual or geographic communities. For example: One of our clients began operating a third shift in the cafeteria to provide emergency meals to members of the community.
• Ecosystem: Leaders should consider examining how the power of their organization is being used to advance health equity. The collective whole of an organization can be vastly more powerful than the individuals who are a part of it. Consider ways to leverage that power to create a health care ecosystem that treats everyone equally. This could include pooling resources (e.g., dollars, fixed-assets) with other, cross-sector organizations to address some of the pervasive issues that have historically impacted vulnerable and marginalized populations. Leaders should also try to understand how the investments they make might impact health equity.

Conclusion:

Over the past couple of years, we have seen health equity be prioritized by the number of new rules, regulations, standards, and measures that could have a real impact. At the same time, some organizations are pushing back on efforts that they consider too onerous. Many of the rules and regulations cited above were developed to help ensure health equity becomes integrated into the core business. Health equity appears to be becoming an important component for all organizations. We expect health equity may eventually be elevated to the same level as finance, quality, and safety within organizational priorities.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

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Endnotes: 

¹ Clinical Trial Diversity, US Food & Drug Administration, November 4, 2022

² Advancing health equity, together, The Joint Commission 

³ Nondiscrimination in health programs and activities, the Federal Register, August 4, 2022

⁴ CMS announces increase in 2023 in organizations and beneficiaries, January 17, 2023

⁵ CMS proposes policies to advance health equity and maternal health, CMS press release, April 18, 2022

⁶ Executive Order On Advancing Racial Equity and Support for Underserved Communities, January 20, 2021

⁷ Executive Order on Further Advancing Racial Equity, The White House, February 16, 2023

⁸ AMA Center for Health Equity

⁹ AHA Institute for Diversity and Health Equity

¹⁰ Here’s how we reduce health disparities with better data, AHIP, October 19, 2022

¹¹ Emergency savings program fuels employees’ financial security and well-being, Delta News Hub, Delta Airlines, January 23, 2023

¹² Economic well-being of US households, The Federal Reserve System, August 22, 2022 

¹³ Emergency savings program fuels employees’ financial security and well-being, Delta News Hub, Delta Airlines, January 23, 2023

¹⁴ Health Equity Accelerator, Boston Medical Center, November 16, 2021

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