Equity360: Gender, Race, and Ethnicity—The Business Case for Diversity

The phrase “doing well by doing good” is often linked to socially responsible business practices. It is also viewed as the central goal of good marketing: Achieving success and growth by understanding and meeting customer (patient) needs. Conversely, failure to adapt to evolving customer (patient) needs, or to adopt innovative practices, leads to loss of market share and negative financial implications.

The changing demographics in the United States mark a major shift in the patient landscape for medicine. There is no ignoring this transformation. These population changes mean the business case for orthopaedics to embrace diversity and inclusiveness has never been stronger, and applies to both the profession as a whole as well as individual group practices.

The Demographics of Diversity

The demographic shifts taking place in the United States are substantial and irreversible, and as a result, orthopaedic patients are becoming increasingly diverse (Fig. 1). Even with more-restrictive immigration policies, the United States is projected to become “minority white” sometime between 2040 and 2050 [7]. Based on current reproduction trends, most nonimmigration population growth will arise from Hispanic communities with smaller growth from Asian and black communities. Non-Hispanic whites are reproducing less, with some states even experiencing fewer births than deaths [7].

Fig. 1.

The percentage of US population by race/ethnicity is shown. The US is projected to become “minority white” during the 2040s as a result of both declining birthrates among non-Hispanic whites and immigration [7]. Published with permission from Mary I. O’Connor MD, FAOA, FAAHKS, FAAOS.

Our orthopaedic patients also are becoming increasingly obese. Projections suggest that by 2030, half of US adults will be obese [2]. Obesity is more prevalent among women than men, and among Hispanic and black patients compared to non-Hispanic whites. Severe joint pain within the last 30 days is reported by 42% of black patients, 36% of Hispanic patients, and 24% of white patients [1]. The combination of obesity, declining levels of physical activity, and an aging population have contributed to make osteoarthritis a national healthcare crisis, and one that is more likely to affect women than men. Such symptoms will drive patients to seek orthopaedic care.

Put in this context, the growth-oriented orthopaedic practice of tomorrow will be one that attracts patients of color, especially women. Such market opportunity would also mean an increase in the number of patients with obesity given the overall increase in obesity and the higher levels of obesity in patients of color and women. Patients with obesity spend more on direct healthcare costs than healthy weight patients [4], and thus could be financially favorable to an ambulatory orthopaedic practice.

Orthopaedic groups participating in bundled payment programs may find that providing surgical care for patients with obesity increases costs and makes financial success in the bundle more challenging. These groups may be resistant to increased patient diversity and practice “cherry picking” of low-risk surgical patients and “lemon dropping” of high-risk patients. The risk for such practices in this scenario is that the number of patients who are of normal body weight is declining, and the proportion of patients of color who have obesity is increasing. Competitors in the marketplace who are more embracing of diversity will be better positioned for long-term success.

The Economics of Diversity

Large economic shifts are occurring across racial and ethnic groups as a result of social-mobility dynamics. Census data [5] shows that Hispanics are experiencing the most-favorable growth in household income (Fig. 2). Household income rose 3.7% for Hispanics in the United States in 2017, outpacing the 1.8% growth for all households, and representing the third straight year of improvement for persons of Hispanic ethnicity [3].

Fig. 2.

Rising median household incomes since 2013 for all ethnicities have shown the strongest growth rate in Hispanic families as the middle class becomes increasingly race-plural [5].

Changes in private insurance coverage rates reflect the increasing household income of Hispanics. Between 2014 and 2017 the rates of private health insurance for non-Hispanic whites and Asians was essentially unchanged, while blacks had a slight increase of 2.4% in private insurance coverage to a rate of 56.5% in 2017. However, the growth in private insurance coverage for Hispanics was far greater at 4.8%, from 48.7% in 2014 to 53.5% in 2017 [6]. This trend is expected to continue as Hispanics improve their economic status in America.

While the orthopaedic profession recognizes the responsibility to provide care for those in our communities regardless of their insurance status, the business side of medical practice requires a positive financial margin to sustain operations. As private insurance generally pays physicians at rates higher than government insurance, practices look to maintain a sufficient volume of privately insured patients to support financial performance. The middle class in the United States with private medical insurance coverage is becoming increasingly race-plural. Again, the growth-oriented orthopaedic practice must recognize this evolution.

Creating the Orthopaedic Practice of Tomorrow

Forward-thinking orthopaedic groups should assess how attractive they presently are to nonwhite patients and create a plan, essentially a business plan, to move them into the future. The following five suggestions may help:

1. Review your practice’s demographic and disparities data, and use it as a basis for goal setting. How do your numbers compare to the demographics of your community? Is there potential for market growth in specific racial/ethnic segments of your community? Importantly, the number of Hispanics and blacks with employer-based health insurance rose by 22% and 11%, respectively from 2013 to 2017, with each group having > 50% private insurance coverage. Conversely, the number of non-Hispanic whites with employer-based insurance declined slightly during the same period [6].

2. What are the access points for new patients into your practice? Are your medical office(s) only in the most-affluent sections of town? Do you have convenient access for patients in middle or lower-middle-class neighborhoods?

3. Are your surgeons diverse with respect to gender, race, and ethnicity? Is your staff? The growth-minded orthopaedic practices will look to recruit diverse surgeons. While this may be challenging because of the limited diversity among residents graduating from orthopaedic programs, practices can work to mitigate this through diversity in their advanced practice providers and office staff.

4. Do your patients feel they have been treated with respect and empathy? Do you obtain patient satisfaction data and openly share these data in your practice? Have you discussed how your practice treats individuals with obesity? Do you discuss the negative impact of unconscious biases on the care we provide? Have you required training by all staff (surgeons, nurses, office staff) to improve your team’s performance on the topic of bias?

5. Is your marketing inclusive? Is the patient information you provide available both in English and Spanish, which is the second most-spoken language in the United States [8]? Do you have images of diverse patients in your marketing materials and on your website? Do you target outreach to populations of color using diverse media channels?

We can all do well by doing good. The business case to do so has never been more compelling. The orthopaedic practice that attracts diverse patients will be best positioned for market growth and financial success.