Frederick Douglass Hobby
Abstract
This article explores the healthcare industry’s quiet retreat from its commitment to racial diversity in leadership. For decades, diversity in governance and the C-suite was considered a priority, mirroring private sector strategies. However, unlike corporations that profited from minority inclusion, healthcare failed to achieve a measurable return on investment. By 2015, diversity metrics stagnated, prompting a shift toward patient-centered equity initiatives instead.
Despite efforts from organizations like the American Hospital Association and the Institute for Diversity in Health Management, minority representation in leadership remained low. The industry’s focus on equity—while critical for patient outcomes—has served as a convenient substitute for addressing leadership disparities. This article questions whether true equity can be achieved without diverse representation in decision-making roles and warns of the risks if the industry continues to deprioritize workforce diversity under the guise of equity.
This brief article focuses on the retreat and subtle demise of the healthcare industry’s focus on and commitment to promote racial Diversity. For more than twenty- five years, achieving diversity in the workforce, especially in the C-Suite and in governance structures has been cited as one of the industry’s most important commitments and has frequently been referred to as a national strategic priority.
Diversity, or the lack of it, in the healthcare workforce received unparalleled focus, monetary support, and human resources during the early 1990’s as healthcare continued to mimic the business practices, and marketing tactics of the private sector. For private companies selling services and tangible products, the ability to display cultural sensitivity in advertising and ethnic marketing often resulted in increased market share and profitability. Promoting minorities to executive levels and increasing minority representation on corporate boards increased the awareness and involvement of racially identifiable consumers and stakeholders creating/enhancing a new stream of revenue referred to as Emerging Markets. This strategy for creating brand preference within emerging markets just made good business sense. The private sector gave rise to severable publications which collected diversity related data through voluntary surveys and published the results creating a competitive platform for corporate recognition.
By no means am I suggesting that people of color, who were promoted or recruited to provide leadership in large corporations, weren’t qualified. These were not token promotions driven by Affirmative Action goals. Quite the contrary! Many of these “promotable” individuals including White women had been groomed for years and quietly worked their way up the corporate ladder over the course of their long careers. With the shifting political atmosphere of the election of the nation’s first black president and the absolute growth in minority populations, coupled with their multi- trillion dollar purchasing power, it was time for a change in the self- protectionism practices of the “good ole boy regime”. As one white executive of a large private sector corporation shared, “the only emotion strong enough to overcome racism in American business is greed”.
As the ethnic demographic shift continued to increase (the Browning of America), private sector companies found a healthy return on investment from products such as lime and hot sauce flavored chips, darker skinned cosmetic products, ethnic enhanced baked goods and food, and the use of minority celebrities to promote beer, liquor, automobiles, Michael Jordan endorsed athletic shoes, and so on. Investing in the Illusion of Inclusion proved to be very good business strategy for Fortune 500 and private sector businesses. This business strategy even gave rise to a new corporate executive title and function…Chief Diversity Officer. Among the boldest was Rachelle Hood-Phillips from Denny’s Corp.
My point being, the focus on expanding diversity and minority representation by private sector companies was simply a customer expansion and cultural recognition tactic in Emerging Markets. It was a symbolic expression of an appreciation of cultural differences, and an enabler of new sources of market share and revenue during a period of rapid demographic change.
Unfortunately, diversity management and the minority representation tactic created by Corporate America could never be successfully transferred to a healthcare model… no matter how hard the healthcare industry tried to make it fit. While we have seen examples of progress… by no means has the healthcare industry been successful.
From the outset, the diversity representation initiative in healthcare was destined for eventual failure. When the healthcare industry chose to follow (mimic) the private sector diversity model by expanding market share to increase profitability, rather than placing diversity in health care on a mission platform driven by promoting equal opportunities in the workplace and improving medical outcomes among minority patients, the much sought after return on investment did not occur.
The private sector is in the business of selling products for a profit. Healthcare is in the business of improving health by providing life extending services as part of their not for profit mission…while generating a margin in order to be sustainable. There is a distinct difference.
So, this article will attempt to explain how adopting an inappropriate business model for diversity in healthcare gave rise to the apparent retreat on the promise to achieve equitable minority representation in governance and in the C-suite by substituting it with the equally important, patient centered, safety and quality goals, referred to as Equity.
Diversity Goals are workforce related and Equity Goals are patient safety and quality related. They are not mutually exclusive. They should co-exist. However, it seems that the healthcare industry has quietly and systematically retreated from promoting its commitment to racial diversity in leadership for several reasons.
First, the hospital industry has always had a problem with increasing minority leadership (diversity) in the C-Suite. Over the past 2 ½ decades, hospitals have offered various types of excuses for not being able to increase minorities in senior leadership. In 2009 the industry alleged a shortage of “qualified” minorities in the pipeline. During the same period, AUPHA concluded that minorities represented 32% of the students pursuing undergraduate and graduate degrees in health and hospital administration. Additionally, the hospital industry asserted that senior minority recruitment was just too costly. In other words, because so few minorities had been accepted into the senior ranks of management, competing for them was just too expensive. Based on data collected in ACHE’s 1992 Survey of Career Attainment by Race, minorities in leadership positions were less than 2%. Seventeen years later, the IFD Benchmarking Survey of 2011 revealed that only 23% of hospitals even “had a plan to specifically increase the number of ethnically, culturally, and racially diverse executives serving on the senior leadership team”. It appears the only explanation that hospitals didn’t offer was they just didn’t want minorities in leadership.
Of course, there were exceptions. Large multi-hospital companies and some faith-based systems which owned or managed hospitals or ambulatory facilities in urban or minority dominated communities placed greater value on having minorities in leadership. There were also leaders like George Halvorson, president and CEO of Kaiser Permanente and Jack O. Bovender, president and CEO of HCA that understood the business imperative of being inclusive. The practice of excluding minorities from leadership opportunities eventually created a dynamic tension between hospitals and the membership associations which represented them.
It was the recognition of this practice of exclusion that caused the American Hospital Association (AHA), the National Association of Health Services Executives (NAHSE), the American College of Healthcare Executives (ACHE), and eventually The Catholic Health Association to collaborate and create the Institute for Diversity in Health Management. Simply put, IFD was created in 1994 to work closely with hospitals and related healthcare services organizations and educators to “expand leadership opportunities for racial and ethnic minorities in the administration of the healthcare industry”. According to its bylaws and website, the Institute’s Mission is (was)” to increase the number of minorities in health services administration to better reflect the increasingly diverse communities they serve, and to improve opportunities for professionals already in the health care field”. There was never any mention of ROI.
With the help of a limited number of committed hospital executives as partners, socially conscious private sector sponsors such as ARAMARK, HCA, etc., and advocacy by a few dozen diversity practitioners (CDOs), minority leadership in C-Suites grew from less than 2% in 1995 to 12% by 2013. Not surprising, the 12% milestone had dropped to 11% within the following 2year period (2015). This decline should have been a red flag that something was changing. The percentage of minority trustees on hospital boards reached 14% in 2011 and remained there until 2015 which was the last year of published data from the Institute’s Benchmarking Survey. Another red flag should have been raised when the results of the 2017 IFD Benchmarking Survey was not published. No one complained!
The second reason for retreating from diversity representation was the healthcare industry’s inability to achieve the metrics it had set for itself!
The healthcare industry’s National Call to Action in 2011 resulted in three specific goals or areas of concentration along with metrics for measuring the progress of each goal. Areas of concentration were (1) Collection and Use of REAL Data, (2) Increased Cultural Competency training, and (3) Increased minority representation in the C-Suite and on hospital Boards.
The Collection of Real Data increased considerably between 2011 and 2015. The use of the Collected Data only increased marginally except for declines in Religious awareness and Sexual Orientation.
Cultural Competence training increased considerably to 79% “among all clinical staff”.
During the same four-year period, diversity on boards remained flat at 14%, while diversity in the C-Suite declined during the same period. The 1% decline in minority representation in the C-suite in 2015 chronologically overlapped with the healthcare industry’s efforts to get all hospital to sign the #1,2,3 for Equity Pledge to Act Campaign. While as many as 1767 hospitals signed the Pledge, some CDO’s reported that guilt rather than intentionality was the real driver. The potential for public embarrassment was too great to ignore if your hospital was not listed on the Pledge. I know from experience that at least one CEO reprimanded a CDO for signing the Pledge without his consent and requested that his hospital’s name be removed from the public list of pledged hospitals.
Although guided for decades by the Sullivan Report, the CLAS Standards of the Office of Minority Health, the Institute of Medicine’s 6 AIMS (which were quietly reduced to 3 AIMS by removing Equity from the list), and numerous other publications, the healthcare industry’s commitment to achieve racial diversity in the workforce, and especially in the C-Suite, by reflecting the demographic makeup of the communities and patient populations being served, seemed to have vanished.
By 2017, hospitals and the associations that represented them were no longer willing to commit to goals that disrupted the status quo of the C-Suite .The inability and perhaps unwillingness to achieve the minority representation goals established by the industry’s own national leadership gave rise to the benign neglect that has become the default behavior. Only NAHSE has occasionally verbally challenged this silent retreat.
In order to make the industry’s retreat from its failed commitment more palatable, it was replaced by commitments to achieving Equity goals which are patient focused. The #1,2,3 Equity Pledge to Act provided a convenient segway for the retreat from Diversity. Based on the unrefutably quest to eliminate racial and ethnic disparities in care and outcomes, how could anyone object? This substitution could not be criticized privately or publicly. After all, who could argue that improving the health outcomes of minority patients was not important given the IOM’s publication, “Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care. Some of my peers and colleagues have remained quite as they witnessed this bitter- sweet behavior. Others attempted the question this shift in priorities and commitment only to be made to feel that they were behaving selfishly. I thought it was time to bring the subject out of the shadows of rumor, speculation and whispers.
As one diversity practitioner framed it, we (people of color) are always so willing to allow the dominant group to change the direction of the conversation when they become uncomfortable. The healthcare industry has transgressed from a cultural conversation to a clinical conversation because achieving representation in leadership and on hospital boards has proven to be too difficult. The resistance to fairness, inclusion and change seems insurmountable.
Where will the conversation go when the dominant group realizes that eliminating disparities and achieving the goals of Equity cannot be accomplished without minority representation and leadership.
Will they simply retreat from Equity?
Disclaimer: These are my thoughts and opinions and not those of my employers, past nor present.
