Using the systems thinking approach to tackle the complex issues of health equity and DEI

Denese Neu: We say we want to dismantle these barriers, but if those conversations aren’t designed well, I think all it does is sometimes reinforce the barriers because people stop talking.

Erika Grotto: A holistic approach to DEI and health equity, today on HFMA’s Voices in Healthcare Finance podcast.

Hello, and welcome to the podcast. I’m your host, Erika Grotto. Today, we’re talking about how the systems thinking approach can help healthcare organizations formulate better health equity and DEI strategies. But first, let’s discuss some healthcare finance headlines and how HFMA is covering them. Here’s HFMA director of content strategy Brad Dennison.

Brad Dennison: Thanks, Erika. I have with me today Senior Editor Nick Hut from the HFMA editorial team. You probably know Nick from the Beyond the News segment on the podcast, but Nick is so much more. He’s also day-to-day policy regulation and trends reporter and editor of our popular HFMA Daily e-newsletter. Welcome, Nick.

Nick Hut: Hey, thanks a lot, Brad.

Dennison: So you actually have three stories trending right now over at hfma.org this month, led by a piece titled “The financial crunch of the pandemic is unlikely to subside anytime soon.” You reference a Kaufman Hall report that says the median hospital margin is about -3%. Things are certainly not looking up, Nick. Tell me a little bit about the major storylines in your article.

Hut: Yeah, absolutely. So indeed, even though healthcare providers are on a bit more stable footing as far as the pandemic goes—and how long that lasts remains to be seen—the financial impact of the past two years is going to reverberate for awhile, and in recent weeks there were reports from Kaufman Hall and Fitch Ratings, really kind of showcasing and quantifying the impact. Fitch did not lower its credit rating for the industry. It stayed at neutral. But their report pretty much indicated that things are on shaking ground, and Fitch expects operating margins to weaken over the rest of the year, potentially, and that would leave hospitals and health systems in a pretty tough spot because, like you said, Kaufman Hall reported that in April, even with fewer Covid-19 admissions and a reduction in contract labor relative to January, the median hospital margin stayed pretty solidly in negative territory. So the challenges persist, without question.

Dennison: And this is all really directly related to pandemic issues, government subsidies and things like that, right Nick? And it certainly doesn’t look like we’re at the bottom of the valley yet in terms of what’s ahead when you start to take inflationary issues into account.

Hut: Yeah, inflationary issues are significant to say the least. As you look ahead, the inflationary impact of wages and supplies is going to leave hospitals and health systems certainly in a crunch, especially come budget time. What’s more, there’s already mounting pressure on the sector to figure out a way to do something about prices, but it’s like, how are they supposed to do that at a time when their costs are mounting so much? So it’s almost like they’re in a vice being squeezed on both ends. It’s definitely a difficult time.

Dennison: No doubt, and I think it’s really changing attitudes about certain things that hospital folks maybe didn’t want to do before that there’s some who would prefer to have a local workforce, even if it’s hybrid, and I think there’s just a lot of things right now that aren’t realistic that people are having to relent on and starting to think of the entire country as potential workforce to help ease some of the burden. So I think it’s going to create a lot of innovation as well.

Hut: Yeah, that’s the up side. Out of tough times often come really bold solutions that change the landscape for the better. Certainly, the industry—while it has a reputation for not being the most innovative compared with certain other industries and sectors—it’s very resilient and very adaptive and, you know, it will certainly be interesting to see what comes of the situation that we’re in right now.

Dennison: No doubt, Nick. Well hey, thank you for those insights, and listener, if you don’t receive the HFMA Daily e-newsletter and want to read more from Nick, just log into hfma.org, go to your account in the upper right of your screen and click on “Communications preferences.” For a direct link, check out this podcast episode’s show notes.

Hut: Thanks, Brad. Great chatting with you.

Grotto: While you’re on the website signing up for newsletters, I also encourage you to check out the Podcasts section, even if you listen through a podcast app on your phone. We now have transcripts and blog posts for every episode, so if you hear something you want to go back to, you can take a look at those materials and share the information.

I recently had a conversation on this podcast with Tammie Jackson, HFMA’s 2021-2022 National Chair. Among the topics we discussed was health equity and DEI, and one of her comments was that many organizations are experiencing fatigue as they think about how to approach these topics.

There could be many reasons for this fatigue, but according to my guest today, one of them could simply be that creating a strategy around health equity and DEI—which she and Jackson agree go hand in hand—is an overwhelming task. Denese Neu has had a 30-year career working at the intersection of community and economic development and health. She’s also someone I’ve known a long time, so when we got to talking recently about social determinants of health and making improvements in healthcare, I knew she’d have a lot to share. What we’re discussing today is the systems thinking approach and how looking at issues holistically can lead to better strategies.

Before we really get into the topic of health equity, DEI, let’s just talk about systems thinking. What is it? If it’s something that people listening don’t really know a lot about, what is it, and how might you use it in healthcare?

Neu: Right. Why does it matter? How can it be helpful?  Systems thinking is a—the best way to think about it is a holistic approach. It’s not necessarily a particular method, but it’s a holistic approach to understanding and finding solutions to very complex problems. And as we know, healthcare and healthcare outcomes is a complex problem in the United States. Systems thinking as an approach takes into account a variety of the elements that interact, not just contribute to that problem. And then it also is the process of helping form processes that can help achieve that goal or the goals of that particular system and in this case, it would be healthcare system, or the system of systems that are supposed to make up our healthcare system, which don’t always come together neat and orderly. So that’s where systems thinking can actually be very, very beneficial, because you have all these different players within the healthcare system, working sometimes against each other, sometimes they’re working together, sometimes they are completely separate systems within what we call our healthcare system. When you hear the word “systems thinking,” it’s a way of connecting the dots, and a lot of dots out there in different places. So it’s finding that interconnectivity versus just a, “We have a problem, and here’s the solution that I think might work, let’s test it.” It’s all that stuff in between. Why are we doing this to begin with? Why do we have a problem? Why are we recognizing this? Why are we wanting to commit resources to it? And then, giving to the, and how are we going to do something about it? And it’s all that stuff in between that systems thinking can help identify and get in alignment. So it’s not just starting from scratch—a brand new program—it’s, here’s what’s already in play, here’s what’s in action. And that’s important. You’re working in a very complex system, the healthcare system. You don’t get to just take a broom and sweep it all away and start from scratch. You have to start with what you have.

Grotto: We talk with a lot of hospitals and health systems who care deeply about these issues. They want to do something about these issues, and perhaps they have tried some things or are currently working through some of these things, but I know a lot of people are struggling with this. They’re spinning their wheels. They don’t know how to actually make progress. And you’ve talked about the why being kind of the first thing to talk about. You don’t want to go straight to the what or the how. Get to the why. So why is that so important, and what might the why be?

Neu: The why? Well, you know, bad health outcomes are expensive to society. They’re expensive to the individual, the family, the community, society as a whole. And if the evidence is showing us that there is a problem, the data tells us there is a problem. These disparities that exist in healthcare and healthcare outcomes of people who live in the United States and the different populations. So, you know, that’s the why. That’s why this is worth doing. And an organization needs to get clear about why they want to do something about it. And there are some organizations that are going to say, “We don’t care. We don’t want to do anything about it.” And then there are those that care very, very, very deeply about it and they want to effect change. They want to improve people’s lives by improving their health outcomes. And we know that there’s an interrelation between health and wealth. So can systems thinking within a healthcare system fix the economic issues of a patient or a community? Absolutely not. But it can help people who are designing healthcare interventions to better understand those elements and forces at play without becoming so overwhelmed and then suddenly there’s mission creep. And I think that’s where a lot of times people basically abort the challenge altogether because the problem just becomes too complicated altogether. It’s like, well, we need to build a grocery store and we need to build better housing and we need to create small businesses and better jobs. But that’s not the job of the healthcare system. The job of healthcare is providing medicine and improving the health of the people who are served by that system.

Grotto: Once you’ve got the why and you’re saying, OK, I want to bring people together to discuss these issues. I want to think through them in this way, what’s next? Is what next?

Neu: I’d say what. The what and the who. Who do we need to have at the table to provide us feedback, to inform us, to serve as sounding boards, to help us start thinking about what are we going to do differently before we get to the, and how are we going to do that differently? And it’s also getting clear around the why and issuing that invite. It also helps really center people on the challenge itself and allows the creation of helping people become comfortable with the discomfort of the types of conversations that are really necessary around health equity. The diversity, equity and inclusion components of moving the needle on health equity. Those are hard conversations for a lot of people, to sit around at a table to talk about racism and systemic racism. That creates a lot of discomfort for probably the vast majority of people, but we can’t start getting to health equity if we’re not willing to have those conversations, and so systems thinking as an approach can also help guide those conversations so people can sit in the discomfort a bit more comfortably. We are focused on the solutions and moving toward those processes that are necessary for a solution versus just sitting around talking about the problem and sometimes maybe shutting down or…we say we want to dismantle these barriers, but if those conversations aren’t designed well, I think all it does is sometimes reinforce the barriers because people stop talking.

Grotto: The challenges in healthcare are significant. We’re dealing with an ongoing pandemic. We’re dealing with workforce shortages. We are dealing with cybersecurity concerns that are mounting by the year. That’s just naming a couple of things. So how do you prioritize? How do you focus on these efforts when there are so many other things taking up your time, your energy, and most importantly perhaps, your money, to move forward? And how can embarking on some of these efforts help with some of the other things you want to do? Or can they?

Neu: I think it can. Again, recognizing that healthcare is a business, and it’s a big industry, right, 20% of the gross domestic product. So business leaders are strategizing, they’re prioritizing. They do that every day. That’s their job. You have your boards. Ultimately, I think a lot of this is a political decision, and I don’t mean that as in government politics, but you know, the politics of operating a business and what decisions and what to prioritize and where to put your resources. Certainly during times of crisis, there isn’t a whole lot of time and energy to do the other stuff, but recognizing and staying in the conversation around health equity and systems thinking as a way to help organizations to get started in doing something very actionable. This is what we do. This is why we do it. This is what we are prioritizing, and how do we start doing what we do but doing some things differently to get to better outcomes. It’s not about putting the brakes on anything else. It’s a way to sit down and start connecting the dots. And sometimes, systems thinking can start with one person, the one person sitting at the desk saying, OK, I’ve just sat in 10 meetings over the course of the past three weeks listening to people complain about the same problem. We’re talking about the same problem, we’re not getting closer to the solutions. Here’s what I’m hearing. Let me map it out. Let me use this technique to start mapping it out and see if I can get to some of those oh’s and a-ha’s that make it start making more sense so I can go back to that same group of people and say, you know what, we’re not at a solution yet, but is this reflective of why we even want to be doing this? Because it’s time we stop talking about the problem. It’s time we start talking about the solutions. And systems thinking can start as simple as that, you know, the one person sitting down and mapping, starting to map it out and play with it and putting it up before a group to get feedback. One last thought regarding the what and the how, I think that’s where a lot of organizations become overwhelmed and then quit. The what, or just defining it as health equity versus that really breaking it down of why do we care about health equity and asking a series of, answer that question and then ask another why and then ask another why and ask another why until it’s like, we now have that answer for ourselves that aligns with our mission, aligns with what it is we do every day. Then we can start getting into the what, and what can we do about that problem? What’s our piece of this greater undertaking? And then how do we start going about that? What are the processes for that? And I think a lot of organizations or groups or people become overwhelmed by the hugeness of health equity. We call it a complex problem for a reason because it’s a bunch of stuff going on all at once. There’s so many different elements, and no one organization can tackle all of those different elements. And so that’s where a lot just shut down because it just becomes too enormous and then it becomes the, we sit around and we talk about the problem, the enormity of the problem and then it becomes a buzzword, you know, like, well, systemic racism is part of this problem of health equity. Gotta have trust, but how? How do you start building trust? You can’t just talk about how important it is. You have to have the important conversations to start building that trust. So the what and the how is critical because that’s actually where things stop in my opinion, from what I’ve observed over 30 years of working in this space.

Grotto: I’ve really enjoyed our conversation, and thank you so much for joining me on the podcast today.

Neu: Thanks for having me, Erika.

Grotto: Voices in Healthcare Finance is a production of the Healthcare Financial Management Association and written and hosted by me, Erika Grotto. Sound editing is by Linda Chandler. Brad Dennison is our director of content strategy. Our president and CEO is Joe Fifer. I hope to see you in Denver next week at our Annual Conference. If we don’t connect there, why not send our team an email? You can reach out to us at [email protected].

On a recent episode of HFMA’s “Voices in Healthcare Finance” podcast, Denese Neu, a consultant who has had a 30-year career working at the intersection of community and economic development and health, discussed how the systems-thinking approach can help healthcare organizations tackle the complex issues of health equity and diversity, equity and inclusion (DEI).

About systems thinking

Systems thinking is not a method but a holistic approach to problem solving, Neu said. It considers all of the systems that contribute to a situation an organization is in.

“You have all these different players within the healthcare system, working sometimes against each other, sometimes they’re working together. Sometimes they’re completely separate systems within what we call our healthcare system,” she said. “Systems thinking … is a way of connecting the dots.”

Taking such an approach allows an organization to take stock of everything contributing to a problem and starting from where the organization is, rather than trying to create a program from scratch, Neu said.

“It’s, ‘here’s what’s in play, here’s what’s in action.’ You’re working in a very complex system. You don’t just get to take a broom and sweep it all away and start from scratch. You have to start with what you have,” she said.

Start with the why

A crucial element of systems thinking is identifying why solving an issue is important, Neu said. With health equity and DEI, the why can be as simple as the high cost — financial and otherwise — of bad health outcomes. Defining the why first can help organizations focus on achieving the goals they set for themselves.

The what and the who

Once the why is clearly stated, organizations can begin thinking about what to do and who to involve, Neu said. It might be important to bring in partners from other community organizations, or even certain people from within the healthcare organization that would not otherwise have been involved. Health equity and DEI can be difficult topics to discuss, but getting everyone centered around the why can make uncomfortable conversations easier, she said.

Prioritizing in a complex system

With myriad challenges in the healthcare system, issues like health equity and DEI can easily fall by the wayside when leaders are occupied with something else. According to Neu, however, the systems-thinking approach allows for ongoing work without making initiatives major projects.

“Systems thinking can start with one person,” she said. “It’s time we stop talking about the problem. It’s time we start talking about the solutions.”