Impact Blog
Systemic racism and inequality in health care

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      By Laura AhmadiESG Research Analyst, Calvert Research and Management and Bianca MinnsSenior Research and Project Assistant, Calvert Research and Management

      Washington - More than a year since the first COVID-19 case appeared in the United States, the pandemic has been a catalyst for reexamining systemic racism and inequality. Recent data on the disproportionate impacts of COVID-19 on certain racial and ethnic groups serve as the latest reminder of the harmful and lasting consequences of inequality in the United States.

      Inequality in health care in the United States

      Inequality in health outcomes across racial groups, while spotlighted by COVID-19, is not a new phenomenon. For example, in the U.S., Black Americans have long had the highest death rates and shortest survival of all racial and ethnic groups on most cancers, the highest burden of coronary heart disease mortality and higher incidences of respiratory diseases like asthma.1 Preliminary numbers on COVID-19 are in step with this grim pattern, with Black and Hispanic populations experiencing higher rates of hospitalization and death from the disease.2

      Today's situation is in large part due to enduring racist systems, policies, and attitudes, both implicit and explicit, that have for generations posed barriers to equal health outcomes for all. Evidence suggests that income inequality between racial groups is significant and growing. This has significant implications for health outcomes, as lower earnings correlate with higher rates of behavioral risk factors like smoking, obesity and substance abuse, which all may lead to health complications. Earnings and employment status also have an impact on access to and quality of health insurance, a necessity in the United States for affordable health care.3

      In addition, bigoted real estate practices have led to systemic underinvestment in neighborhoods predominantly occupied by people of color. Research shows that many of these communities are more vulnerable to dangerous temperature highs, have lower densities of primary and specialty care providers, and are more likely to lack intensive care unit beds.

      Why inequality matters to investors

      Inequality in health outcomes among racial groups is more than just a public health issue. A 2015 McKinsey study of 366 public companies across various geographies demonstrated a correlation between strong racial and ethnic diversity performance and financial returns above the national industry median. In McKinsey's follow-on research published in 2020, the financial significance of diversity and inclusion programs was reaffirmed, and the authors went on to assert that the following benefits accrue to diverse and inclusive companies:

      • The ability to make bigger and bolder decisions
      • Stronger global image and license to operate
      • Greater sense of employee solidarity and employee motivation

      These attributes - agile and strategic decision-making capabilities, strong brand and investment in human capital - have become even more important to a company's success in light of COVID-19.

      Calvert's approach

      Calvert has committed to examining the private sector's role in addressing systemic racism in order to enhance the sustainable growth prospects of companies and society overall. In addition to promoting a diverse workforce, the health care sector has a unique opportunity to address some of the underlying causes of health disparities that affect corporate diversity. The below section highlights select commitments that health care companies can make to ensure their business models actively work to disrupt racist paradigms:

      • Health insurers can design policy benefits to address the social determinants of health, simultaneously resulting in cost savings and improved health outcomes.
      • Health care providers can offer implicit bias training for employees and develop techniques for measuring and monitoring its presence among staff.
      • Health technology firms can commit to addressing implicit bias reinforced by artificial intelligence and machine-learning technologies increasingly used in software to aid predictive analytics, diagnosis and treatment.
      • Pharmaceutical, biotechnology and life sciences companies can commit to including people of color in research in adequate numbers, including clinical trials and genetics research, to ensure medical advancements are equally as effective for all racial and ethnic groups.
      • All firms can promote diversity and equity in the workplace by utilizing diverse pipelines and recruitment networks, reporting publicly on racial and ethnic makeup of workers across all organizational levels, and continuously monitoring equity within the firm using analytics and employee feedback.

      Bottom line: While COVID-19 has cast a spotlight on enduring structural racism, it also highlights an opportunity. Health care firms now have the chance to embrace practices during the pandemic that rebuild trust with communities of color, dissipate inequities in health outcomes and improve diversity prospects.