Column | Leadership

Addressing racial disparities in healthcare: It's time now

Column | Leadership

Addressing racial disparities in healthcare: It's time now

May 25 marks the anniversary of George Floyd’s death at the hands of Minneapolis police. For me personally, that incident sparked a period of reflection and learning about racial inequities. Last summer, I urged the HFMA community to stop, listen and care about these issues. Since then, I have read, listened to podcasts and talked with friends about racism and antiracism. It has been humbling. Some of my lifelong beliefs have been altered, not by emotion, but by facts.

I have also given much thought to the intersection between racial inequity and healthcare finance. In the short term, under fee for service (FFS), medical debt may have a disproportionate impact on Blacks and other people of color. Implicit bias in business processes, including collections practices, can exacerbate financial barriers to healthcare. A recent article by the consumer advocacy group Community Catalyst focuses on how medical debt reduces economic security, an important social determinant of health (SDOH), in Black communities..a That’s another reason it’s important to follow HFMA’s best practices for medical account resolution and identify areas where inequities could occur. For example, are financial conversations with patients reviewed for implicit bias? Are all patients given the same financial assistance opportunities? Is financial counseling made available to all? If a hospital uses extraordinary collection actions, are they being taken without regard to race?

In the long term, as the nation transitions to value-based payment (VBP), healthcare leaders will fine-tune their ecosystem roles in addressing the full range of SDOH. It’s well known that people of color are disproportionately impacted. The pandemic has shined a spotlight on this fact. Within healthcare, VBP models are much more conducive than FFS to addressing SDOH. But the transition to VBP has been slow. And improving SDOH in disadvantaged communities can’t wait. What’s the solution? It comes back to stop, listen and care: Stop the business-as-usual mindset, listen to your community and care about finding solutions. That means being proactive about VBP.

Here’s how to start: Evaluate payment methodologies with the aim of moving toward risk sharing, including population health management. Do a data-based analysis of the financial opportunities of sharing risk and reducing unnecessary care. Arrange for financial analysts to connect with medical staff on initiatives to reduce and better manage chronic conditions. (Managing patients with multiple chronic conditions costs four to six times more on a per-
member-per-month basis.)

From a societal standpoint, moving toward managing health is simply the right thing to do. On an organizational level, it enables health systems to fulfill their missions by better serving disadvantaged communities of color that are most in need. In the long run, it’s also the best move for health systems from a financial standpoint. With greater risk — assuming risk is well managed — comes the potential for greater reward.

FFS payment was “safe” once. That era is ending. And a long-overdue focus on reducing racial disparities in healthcare is beginning. This is an inflection point for healthcare leaders: Embrace change or accept the change that will be imposed on us. 


a Nguyen, Q.C., “Feds, states and health system need to take action to reduce disproportionate medical debt burden on black communities,” Community Catalyst, Feb. 24, 2021.

About the Author

Joseph J. Fifer, FHFMA, CPA,

is president and CEO, HFMA, Westchester, Ill.

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