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Title: Making Cents Out of Cultural Competence
By Lawrence W. James
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The need for hospitals to be “culturally competent” received new emphasis with this fall’s announcement by the Joint Commission that culturally competent care will be measured via their hospital accreditation survey process in the near future. Also, given that the Hispanic, African American and Asian populations are rapidly expanding, hospitals are given further motivation to make changes now rather than later. However, in spite of these circumstances, hospitals are still asking whether it is worth the time and money to invest in cultural competency training and development, especially when the economy is uncertain and there are so many other budget dollar demands.
What is the monetary value and ROI for cultural competence training and development? The following is an example hospital scenario for your consideration . . .
ABC Hospital is located in an affluent northeastern suburb of a major metropolitan area. This area has been experiencing unprecedented growth in diverse households (people of color) for more than two decades, with long term projections indicating more of the same for decades to come. One of the largest and most affluent diverse patient populations is the area’s African American population. Hispanic and Asian American populations are not far behind in growth projections, with all three groups growing at a rate that is five times faster than the rest of the service area. Some key statistics from an independent analysis of this hospital’s service area and discharge data appear below:
Patients Population Admits Pt. Days Avg. LOS Readmits
Total Area 366,491 15,668 53,730 3.4 220
African Am. 42,317 1,566 6,538 4.2 106
Pct. Of total 11.5 10.0 12.2 123.5 48.2
As is noticed from the exhibit, ABC is realizing slightly less than its fair share of the African American population based on that population’s percent of the total population. Second, this particular population is experiencing an average length of stay that is almost 24% longer than the rest of the house. Finally, this population is also experiencing a very high readmit rate relative to their admit rate at ABC. If that is not alarming enough, let’s take a look at the dollars associated with such disparities.
First, if the readmit rate for African American patients at ABC (48%) was more in line with the admit rate for this population (10%), it would translate into a 42% reduction in readmissions or roughly 93 fewer readmissions and approximately $835,000 in cost savings based on the average $9,000 cost per stay reported by the American Hospital Association in their 2008 Report on Hospital Statistics.
Second, if ABC were able to bring the average length of stay for their African American patients (4.2 days) down to the average for all patients (3.4 days), it would be able to save approximately 1,214 patient days per year or roughly $2 million based on AHA’s 2008 estimated cost per patient day.
Finally, from a market share perspective, that 1.5 share point deficit may not seem significant. However, using the average gross revenue per admission rate of $30,000 (based on actual AHA data), the additional 1.5 share translates to an incremental 235 admissions or more than $7 million in new revenue.
As the above demonstrates, the new dollars that can potentially be received or saved based on a more effective and efficient targeting and delivery of care and service to diverse patients can be highly significant. And to realize this new level of effectiveness and efficiency, the government, the Joint Commission and hundreds of healthcare thought leaders across the country believe that hospitals must build and maintain a higher level of cultural competency within their operating infrastructure and amongst their staff. Plus, being known as a hospital of choice by these emerging majority communities has even greater value in building and sustaining unassailable market leadership for your brand.
However, none of this can occur without investing in cultural competency training and development for hospital administrators, physicians, nurses, admissions, case workers, food service, housekeeping and all other areas of the hospital where patients and their families are interfacing with your institution. Independent consulting consortiums like The Center for Multicultural Competence in Healthcare Organizations (CMCHO) can provide “ready to use” cultural competency programs that are based on the Federal Government’s CLAS standards, that are easy to implement and that produce results quickly. Interested organizations should contact the American Hospital Association’s Institute for Diversity in Health Management or the U.S. Department of Health and Human Services’ Office of Minority Health for guidance in identifying and contacting such vendors.
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The Center for Multicultural Competence
in Healthcare Organizations
4555 Lake Forest Drive - 650 Westlake Center
Cincinnati, OH 45242
P: 513.563.3004 - F: 513.563.3011
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