Payer Diversity Program Contributes $375M to Economy, Creates Jobs

January 19, 2021 - Independence Health Group’s (Independence) supplier diversity program had a $375 million impact on the national economy in 2018, the company recently discovered.

Independence is an independent licensee of the Blue Cross Blue Shield Association and the parent company of Independence Blue Cross.

The company partnered with and purchased from businesses that were owned by a diverse group of leaders, including women, people of color, LGBTQ community members, and veterans.

“Over the past 10 years, we have spent close to $1 billion with diverse and vibrant businesses who can support our needs,” shared Gregory E. Deavens, president and chief executive officer of Independence.

An economic impact study assessed these business partnerships. Whereas in 2014 Independence’s diverse partnerships contributed $238 million to the national economy, the economic result of these partnerships in 2018 was $137 million higher, the study found.

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“Our diverse supplier program’s broader impact on the national economy has increased by more than 50 percent since our last study four years ago,” Deavens said.

Apart from the fiscal impact, these alliances also increased employment opportunities, creating over 1,700 jobs. This employment boost resulted in over $94 million in salary and benefit payments and more than $30 million in tax revenues.

Many of these newly created jobs were in Pennsylvania, where Independence’s headquarters are located.

This is not a new initiative for Independence. The supplier diversity program started three decades ago.

“In addition to the supplier diversity program, the company is committed to attracting and sustaining a talented and diverse workforce, promoting greater access to health care, addressing health disparities, and building partnerships and supporting organizations that assist people experiencing economic hardship,” the press release added.

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The announcement comes as healthcare professionals focus on supporting the minority community and eliminating healthcare disparities.

In 2020, the national conversation spotlighted racism and racial disparities in healthcare. The coronavirus pandemic’s impact on communities of color was dire. It highlighted even more the fact that payers and providers needed to work together to eliminate racial disparities in healthcare.

Diversifying business partnerships is one element of that effort, but payers have leveraged other strategies as well.

For example, Blue Cross and Blue Shield of Illinois (BCBSIL) sought to increase health equity through a partnership with hospitals statewide. The Health Equity Hospital Quality Incentive Pilot Program aims to serve hospitals that care for large quantities of BCBSIL members, who tend to be at high risk of contracting coronavirus.

The program will also focus on diversifying the provider staff and ensuring positive healthcare outcomes for minority patients.

READ MORE: COVID-19 Amplifies Racial Health Disparities for Coverage

“Even before COVID-19, we knew that to change the way health care is delivered to minority communities, we needed to team with and support our providers,” Salma Khaleq, vice president of Provider Strategy and Partnerships for Blue Cross and Blue Shield of Illinois, said when the payer announced the program.

“By increasing provider capacity and capabilities to deliver care that is more equitable and more responsive to the social determinants of health, we are aiming to make demonstrable progress, which is long overdue.”

Payers also made blunders during the coronavirus pandemic related to decreasing racial healthcare disparities.

When schools began to reopen in New York, for example, payers refused to cover coronavirus tests unless the tests were ordered by a provider for a medical diagnosis. Payers argued that school-required testing fell under occupational testing and, therefore, it was not their responsibility to cover it.

Byron W. Brown, mayor of Buffalo, New York, noted that these policies would directly impact communities of color, as testing sites in minority communities often only accept payer reimbursement.

“The fact that your companies are ignoring the racial equity dimensions to the decision after a summer of racial unrest is the most distressing consequence of your actions,” Brown wrote in a letter to local payers which he published on Twitter.

Additionally, some technological innovations that payers used respond to the coronavirus  deepened healthcare disparities, a PricewaterhouseCoopers (PwC) report showed. Whereas 49 percent of white consumers had technical issues during a virtual healthcare visit, 66 percent of Black consumers and 65 percent of Latinx consumers reported having issues.

“Thrust outside its comfort zone, the healthcare system in 2021 should not regress,” the researchers urged.

"The industry will have to balance the challenges of pressing for innovations while battling the uncertainty of a deadly pandemic and the economy. It should work to right the wrongs of institutional inequities that have disadvantaged communities of color, whether through COVID-19 or through basic lack of access to care.”