Why Health Equity Matters



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Why Health Equity Matters

The move toward health equity is rooted in two goals – ensuring everyone has the opportunity for quality outcomes and to lower costs. Health equity is an admirable goal for the richest nation in the world, especially because it has one of the highest levels of health inequity in the developed world. 

Advances in health equity

We have made great advances in bringing better health equity in the nation already. The passage of the Affordable Care Act (ACA) has done a great deal to lower the health insurance coverage gaps between minority populations and the white population in America. The Commonwealth Fund finds that the coverage gap between Hispanics and whites dropped from 25.6% percentage points to 16.3 percentage points since the Medicaid expansion and Exchanges went live in 2014. The coverage gap between blacks and whites dropped from 9.9 percentage points to 5.3 percentage points.

Still, more needs to be done

Social determinant factors keep many groups from not only enrolling in coverage but accessing it consistently. This impacts quality outcomes tremendously. These involve access to food, housing, and transportation as well as health literacy. We know that minority populations are impacted greatly by these social determinant barriers. Studies indicate that social determinant factors can be a greater predictor of health outcomes (including costs and quality) than underlying disease states or conditions. Various studies attribute social determinant impacts as having anywhere from a 50% to 80% influence.

There is evidence that there are other biases in our system, such as structural racism, that impact closing the gap between outcomes of various population groups. These need to be tackled as well.

The costs of inequity

All told, the costs and impacts on Americans are huge. One study finds that over a four-year period from 2003 to 2006, eliminating health disparities would have reduced healthcare costs directly by $230 billion and the indirect costs related to excess disease and mortality by more than $1 trillion. These numbers have only grown since then.

Medicare Advantage Star Health Equity Index is first step

The Health Equity Index in the Medicare Advantage (MA) Star program will be the first coherent step in beginning to address these disparities. Sure, the initial social risk factors (SRFs) used to gauge progress are a bit old school — dual eligible status, low income subsidy (LIS) enrollees, and those with disabilities. But it is a deliberate first step in the very complex regulatory and data world of healthcare. In due time, we can use the power of data to include other factors and ascertain how we are positively impacting outcomes – or not — for any number of disadvantaged groups. That data will also reveal how we might boost outcomes for these groups and close disparities. 

There are several key state initiatives tackling health equity and social risk issues, including California Medicaid’s CalAIM. And the National Committee for Quality Assurance has launched a health equity accreditation for health plans.

The Health Equity Index is here now!

The Health Equity Index is slated to go into place for the 2027 Star Year. But the truth is health equity is here now. The measurement year for meeting the Health Equity Index includes measurement year 2024 and 2025. So plans need to tackle health equity now even as they work Star Years 2025 and 2026. 

Lilac Software believes in health equity for a number of reasons. First, it is the morally right thing to do. Everyone deserves a chance for a healthy life. As important, healthy equity will generally drive better efficiency and lower costs. Our healthcare system is in desperate need of reform and health equity is one critical part of it.

In Part 3, we will tell you about some of the best practices for HEI.



Lilac Software is developing cloud-hosted, data aggregation solutions for health plans’ most complex problems. Our Star Performance Management Platform gives unprecedented insight into all aspects of the Medicare Advantage Star program, including forecasting of aggregate scores and revenue, individual measure performance, as well as best practice remediations for all measures. Lilac will seamlessly show how plans are doing on each contract from an all-population perspective as well as for social risk factor (SRF) cohorts.

If you are looking for a solution to the Star complexity and best practices, reach out here to start a conversation with the Lilac team