From Diversity to Equity

Frederick Douglas Hobby, 
CDM, Chief Strategist,
CulturaLink, LLC

I hope this article will generate an honest discussion about the lack of racial and ethnic diversity in healthcare leadership and governance, while identifying what it will take to transform healthcare organizations into the inclusive industry it needs to be. This article is intended to build bridges, not burn them. That is a fine line. It is my hope the article will be received in the spirit in which it is intended.

For more than twenty- five years, achieving diversity in the workforce, especially in the C-Suite and governance structures, has been cited as one of the healthcare industry’s most important commitments and has frequently been referred to as a national strategic priority. I have watched as the commitment to address the lack of diversity in the healthcare workforce began with strong momentum, receiving unparalleled focus, monetary support, and human resources. But I have also seen the more recent, subtle demise of the industry’s focus and an overt retreat from the commitment to racial and ethnic diversity. Instead, emphasis has been placed on achieving goals of health equity for disparate populations. Although no one can object to this need in the healthcare system, the issue is that neither is mutually exclusive; in reality, health equity cannot be achieved without diverse representation in senior leadership roles.

During the 1990’s, the ability of private companies to display cultural sensitivity in advertising and ethnic marketing often resulted in increased market share and profitability. The private sector produced several publications, which collected diversity-related data through voluntary surveys and published the results, creating a competitive platform for corporate recognition. Companies held that 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 (Kochan et al., 2003). However, 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 Caucasian women, had been groomed for years and quietly worked their way up the corporate ladder over the course of their long careers.

As the ethnic demographic shift continued to increase (Sundstrom, 2008), 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, athletic shoes, and so on. Investing in this “Illusion of Inclusion” proved to be a 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 – the Chief Diversity Officer (CDO).

My point is, 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.

Regardless, the success of the private sector created the demand for making the “business case” for diversity in healthcare (Chin, 2000). Beginning in the mid-90s, healthcare attempted to mimic both the business practices and marketing tactics of private companies. Unfortunately, diversity management and the minority representation tactic created by Corporate America could never be effectively transferred to a healthcare model, no matter how hard the healthcare industry tried to make it fit. Even though we have seen examples of progress, by no means has the healthcare industry been successful (Chin, 2000). Yet, in my opinion, the diversity representation commitment in healthcare was destined for eventual failure. Rather than maintaining its original mission based platform for diversity in healthcare and improving medical outcomes among minority patients, the industry chose to mimic the private sector’s diversity model by expanding market share to increase profitability. However, the private sector is in the business of selling products or services for a profit; the healthcare industry 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, and for this reason, the much sought after return on investment did not occur.

It is important to draw attention to the fact that diversity goals are workforce-related and equity goals are patient safety and quality-related. Neither is mutually exclusive; they are equally important and should co-exist. However, it seems that the healthcare industry has quietly and systematically retreated from promoting its commitment to racial diversity in leadership, substituting patient-centered, safety and quality initiatives, for a couple of reasons.

First, the hospital industry has consistently expressed different issues with increasing minority leadership (diversity) in the C-Suite. Over the past 2 ½ decades, hospitals have offered various excuses for not being able to increase minorities in senior leadership. In 2006, the industry was still alleging a “shortage of ‘qualified’ minorities” in the pipeline (American College of Healthcare Executives – ACHE, 2002). Yet, during the same period, the Association of University Programs in Health Administration concluded minorities represented 30% of the students pursuing undergraduate and graduate degrees in health and hospital administration, and was up to 42% by 2009 (ACHE, 1990).

The hospital industry has also 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. But nineteen years after it was revealed that minorities were less than 2% of top management positions (ACHE, 1992), the Institute for Diversity in Health Management’s bi-annual Benchmarking Survey of 2015 revealed that only 23% of hospitals even had a “documented plan to increase the number of ethnically, culturally and racially diverse executives on the senior leadership team” (IFDHM 2015). 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 that owned or managed facilities in urban or minority-dominated communities placed greater value on having minorities in leadership. There were leaders like George Halvorson, President and CEO of Kaiser Permanente, and Jack O. Bovender, President and CEO of HCA Healthcare, who understood the importance of being inclusive in business. The practice of excluding minorities from leadership opportunities eventually created a dynamic tension between hospitals and the membership associations that represented them.

In fact, it was the recognition of this culture of exclusion that caused ACHE, the American Hospital Association (AHA), and National Association of Health Services Executives (NAHSE) to collaborate and create the Institute for Diversity in Health Management (IFD). The Catholic Health Association (CHA) joined the collaboration a few years later. Simply put, the IFD, later renamed the Institute for Diversity and Health Equity (IFDHE), was created in 1994 to “work closely with health organizations…to expand leadership opportunities for ethnic minorities in health services management” (IFD, n.d. A). According to the AHA’s website, the Institute’s Mission 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” (AHA, n.d.). There was never a mention of ROI.

With the help of a limited number of committed hospital executives as partners and the American Leadership Council for Diversity in Healthcare (ALC), minority leadership in C-Suites grew from less than 2% in 1992 (ACHE, 1992) to 12% by 2011 (IFDHM, 2015). However, the 12% milestone had dropped to 11% within the following four-year period (IFDHM, 2015). This decline should have been a red flag that something was changing. The percentage of minority trustees on hospital boards reached 14% by 2011 and remained there until 2015 (IFD, 2015). It is not a coincidence that details for the 2017 bi-annual Benchmarking Survey are still forthcoming (IFDHE, n.d. B), yet no one seemed to complain.

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 Initiative 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 (IFD, 2015).

The Collection of REAL (Racial Ethnic and Language preference) Data increased considerably between 2011 and 2015. The use of the collected data only increased marginally, except for declines in Religious awareness, disability status, and sexual orientation (IFD, 2015).

Cultural Competence training increased considerably to 79% “among all clinical staff” (IFD, 2015).

During the same four-year period, diversity on boards remained flat at 14%, while diversity in the C-Suite declined (IFD, 2015).

The 1% decline in minority representation in the C-suite in 2015 chronologically overlapped with the healthcare industry’s efforts to get all hospitals to sign the #1,2,3 for Equity Pledge to Act Campaign. While as many as 1767 hospitals signed the Pledge, some CDOs admitted to me 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.

Despite being guided for decades by the Sullivan Report, the Culturally and Linguistically Appropriate Service (CLAS) Standards of the Office of Minority Health, the Institute of Medicine’s 6 AIMS (which were quietly reduced to 3 AIMS by taking a solely patient-centered approach), and numerous other publications, the healthcare industry’s commitment to achieve racial diversity in the C-Suite by reflecting the demographic makeup of the communities and patient populations being served, seemed to have vanished by 2016. By 2017, it seemed that hospitals, and the associations that represented them, were no longer willing to commit to goals that disrupted the status quo of the Anglo-dominated C-Suite. The healthcare associations’ inability to influence their members, or perhaps the hospitals’ unwillingness to achieve the minority representation goals established by the industry’s leadership and the National Call to Action, gave rise to the benign neglect that has become the default behavior of today.

In order to make the industry’s retreat from its failed commitment to racial diversity more palatable, it was replaced by commitments to achieve equity goals, which are patient focused. The #1,2,3 Equity Pledge to Act provided a convenient segue for the retreat from diversity. Based on the irrefutable quest to eliminate racial and ethnic disparities in care and improve medical outcomes, how could anyone object? This subtle substitution could not be criticized privately or publicly. After all, who could argue that improving the health status and medical outcomes of minority patients was not important given the Institute of Medicine’s (IOM) publication, “Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care?” Some of my peers and colleagues have remained silent as they witnessed this bitter-sweet behavior. Others attempted to question this shift in priorities and commitment only to be made to feel that they were behaving selfishly or “not like a team player.”

The healthcare industry has moved from a cultural conversation to a clinical conversation because achieving minority representation in leadership and on hospital boards has proven to be too difficult; the resistance to fairness, inclusion and change now seems insurmountable. 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”.

Now is the time for discussion free from the shadows of rumor, speculation, and whispers. Now is the time to let it be known that the departure from diversity has not gone unnoticed; progressive leaders are not naïve to the shift in conversation and action. However, regressive leaders against inclusion should realize that eliminating disparities and achieving the goals of equity cannot be successfully accomplished without minority representation and leadership. As the nation’s demographics continue to shift from majority to minority, now is the time to make real efforts and major strides in both diversity and equity. Challenge your leadership team to consider the following:

Action Items

• Conduct an internal audit to determine if your board and leadership team reflect the racial and ethnic diversity of the communities they serve.
• Include diversity recruitment as a strategic priority and present updates at each board meeting for approval.
• Use equity as a metric to ensure improved patient outcomes and opportunities for minorities to serve and lead.
• Begin a meaningful and honest discussion about the racial and ethnic diversity on your board and in your C-suite.

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