September 29, 2021

There’s equity and then there’s equity. Not all equities are, well, equal! You might have equity built up in your home or business. That is, your property may have accrued certain monetary value that exceeds the amount owed. The term is also used relative to other financial instruments and arrangements. But there is another type of equity—one in which fairness and impartiality are at issue. The term itself seems to be related to the words, “equality,” “equivalence” and “equate.” This other, non-financial sense of equity, then, encapsulates the concept of justice, including social justice; and it is this type of equity that is becoming a growing issue for America’s hospitals.

A New Standard

Hospital executives, over the years, have grown used to satisfaction surveys submitted by patients, as well as scoring performed by national industry watchdogs and big media outlets. It is nothing new to open up an edition of US News and World Report and see their rankings of “America’s Best Hospitals” and read how these rankings are tied to various clinical metrics. It is something altogether different and relatively new to see national publications judging your hospital on its level of “equity.”

Now, what does that mean exactly? We’ve already indicated that equity, for our purposes herein, has something to do with fairness, impartiality and perhaps even social justice. If hospitals are now being judged on these metrics, and those judgments are being published for all to see, it may be a good idea to delve a little deeper into the criteria being used to generate these equity ratings. To accomplish this, we will take a look at a recent national hospital survey that included equity in the mix.

Metrics and Methodology

The Lown Institute (LI) released on September 21 its list of the most “socially responsible” hospitals in the United States. The list or “index,” which represents the organization’s second effort of its kind in two years, is reportedly based on LI’s evaluation of hospitals’ emphasis on equity, value of care, and patient outcomes. The survey was conducted within the confines of the 50 states and Washington D.C., was limited to acute care hospitals, and excluded federal hospitals, hospitals run by Medicare Advantage programs, and specialty hospitals with more than 45 percent admissions for orthopedic, cardiac, or surgical procedures.

Again, the ranking attempted to score hospitals based on three primary areas: equity, value of care and patient outcomes. What we want to dive into is what LI precisely meant by “equity.” After all, one person’s definition of fairness may differ from another’s. So, what were the equity elements embedded within the LI survey’s metrics?

According to the Advisory Board, the equity category encompassed the following components:

Pay equity. This metric compares how much a hospital’s executives are paid compared with its frontline workers. Weighted at 20 percent.
Community benefit. This metric looks at hospital spending on charity care and other community health initiatives, as well as their service of Medicaid patients. Weighted at 40 percent.
Inclusivity. This metric focuses on the degree to which a hospital’s patient population reflects the demographics of its community area. Weighted at 40 percent.
The American Hospital Association (AHA), in its response to the Lown Institute’s index, pointed out what it believes to be deficiencies in LI’s methodology. For example, the AHA felt that the index draws “sweeping and arbitrary conclusions” and uses “old and incomplete data.” The organization also took issue with the rankings’ inclusivity metric as it looks only at Medicare data, which AHA believes is not sufficiently representative.

Giving It a Grade

LI based its assessments on sources such as CMS’ Healthcare Cost Report Information System, the U.S. Bureau of Labor Statistics, IRS 990 forms, the U.S. Census Bureau’s American Community Survey, as well as others. In its review of over 3,700 U.S. hospitals, LI found only 75 making its Lown Index Honor Roll. In order to achieve that distinction, a facility would have to earn an “A” grade in each of the three major categories: equity, value of care, patient outcomes.

Interestingly, none of the top 20 hospitals from the U.S. News & World Report rankings made the honor roll list, largely due to their low equity grade. The states with the most socially responsible hospitals included Hawaii, Delaware, Washington D.C., Oregon and Colorado. To see where your state and facility rank, you can go to the following website and click on the rankings tab at the top: Lown Institute Hospital Index (lownhospitalsindex.org). If you’d like to know more about MiraMed Global Services and how we may assist you in your business needs, please contact us at info@miramedgs.com