naacp opportunity & diversity report card …action.naacp.org/page/-/economic opportunity...

N A A C P O P P O R T U N I T Y & D I V E R S I T Y R E P O R T C A R D

HEALTHCARETHE

INDUSTRY

EQUAL OPPORTUNITY FOR PEOPLE OF

COLOR IN THE UNITED STATES HAS

REMAINED AN UNREALIZED GOAL.

WITH THE COUNTRY ON TRACK

TO BECOME A MINORITY-

MAJORITY BY 2043, RACIAL

ECONOMIC INEQUALITY

INCREASINGLY IMPEDES

THE COUNTRY’S ECONOMIC

ADVANCEMENT.

The Healthcare Industry

N A A C P E C O N O M I C D E P A R T M E N TF I N A N C I A L F R E E D O M C E N T E R

W A S H I N G T O N , D C

S P R I N G 2 0 1 5

Roslyn M. Brock, Chairman

Cornell William Brooks, President and CEOClaudia A. Withers, Chief Operating Officer

Peter Williams, Executive Vice President Programs Department

AuthorsDedrick Asante-Muhammad, Senior Director of Economic Department

Dawn Chase, Manager of Diversity and InclusionJason Richardson, Fair Lending and Inclusion Specialist

This report is a product of the NAACP National Staff.

NAACPO P P O R T U N I T Y & D I V E R S I T Y

R E P O R T C A R D

iv

N A A C P O P P O R T U N I T Y A N D D I V E R S I T Y R E P O R T C A R D

ACKNOWLEDGMENTS

The NAACP Economic Department acknowledges Leonard James, Chair of the Economic Development Committee of the NAACP National Board of Directors’ and Karen Boykin-Towns, Chair of the Health Committee of the NAACP National Board of Directors ‘ for their leadership and support.

© 2015 NAACP National Association for the Advancement of Colored PeopleNational Headquarters4805 Mt. Hope DriveBaltimore, MD 21215www.naacp.org

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T H E C O N S U M E R B A N K I N G I N D U S T R Y

CONTENTS

Acknowledgments .......................................................................................................................................................ivOverview .......................................................................................................................................................................2Executive Summary .....................................................................................................................................................3Sector Analysis ..............................................................................................................................................................5Historical Perspectives on the Healthcare Industry .................................................................................................5Current State of Diversity in Healthcare Industry ...................................................................................................9Methods .....................................................................................................................................................................15Report Cards ...............................................................................................................................................................16Ascencion Health .......................................................................................................................................................16Catholic Health Initiatives .........................................................................................................................................18Community Health Systems .....................................................................................................................................20Dignity Health ............................................................................................................................................................22Hospital Corporation of America ............................................................................................................................24Tenet Healthcare .........................................................................................................................................................26Discussion and Findings ...........................................................................................................................................29Works Cited .................................................................................................................................................................34Appendix A: Detailed Report Cards ........................................................................................................................36Appendix B: Methods ................................................................................................................................................37

LIST OF FIGURESFigure 1: The aging population of the United States ..............................................................................................5Figure 2: Real Healthcare growth by subsector .......................................................................................................6Figure 3: Manufacturing work was, at one time, a major source of work for African Americans ...................7Figure 4: Many African Americans and People of Color found employment in the public sector, where Equal Opportunity laws produced greater impact. .....................................................................8Figure 5: Race and ethnicity of medical schools by year, 1978–2008. Source: Laura Castillo-Page, Castillo-Page. (2010) Diversity in the Physician Workforce Facts & Figures 2010. Washington, DC: Association of American Medical Colleges. .............................................................9Figure 6: Geographic location of black medical doctors. Source: Laura Castillo-Page, Castillo-Page. (2010) Diversity in the Physician Workforce Facts & Figures 2010. Washington, DC: Association of American Medical Colleges. ..........................................................................................10Figure 7: Hospital Participation in Diversity Improvement Plans ......................................................................12

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Figure 8: Hospital Leadership Goals .......................................................................................................................13Equal opportunity for People of Color in the United States has remained an unrealized goal. With the country on track to become minority-majority by 2043, racial economic inequality increasingly impedes the country’s economic advancement.1

During this period of great inequality and economic insecurity, which is even more pronounced for African Americans and other People of Color, Americans need living wage jobs with long-term career tracks now more than ever. Given these economic circumstances, the NAACP is investigating the inclusion and diversity of industries with the greatest potential to influence job creation and wealth building in the African American community and other communities of color. Through the NAACP Opportunity and Diversity Report Card: The Healthcare Industry, the NAACP recognizes the need to diversify major U.S. industries and seeks to move the country beyond the racial divides that continue to shape its current economy. Through the Opportunity and Diversity Report Card series, the NAACP regularly examines the current state of inclusion and diversity in various U.S. economic sectors, highlighting the sectors that exhibit the greatest potential for job growth for African Americans and other People of Color. The NAACP also partners with industry leaders to advance best practices for racial and ethnic inclusion and diversity.

Focusing on specific industries and their issues will permit greater collaboration between the NAACP and industry leaders to advance best practices in inclusion and ensure opportunities for diverse groups. We believe this strategy aligns with the NAACP Economic Department’s objective to “ensure that government and industry are knowledgeable and committed to bridging racial inequality, particularly as it relates to employment, wealth, lending and business ownership.”

The NAACP Opportunity and Diversity Report Card: The Healthcare Industry is the third in a series of reports and is based on the earlier Economic Reciprocity Initiative: NAACP Consumer Choice Guide. In this report card the NAACP analyzes the consumer healthcare industry’s inclusion and diversity practices as they pertain to the race and ethnicity of its workforce, management, and suppliers. The report card assesses the performance of six of the leading healthcare corporations in the United States in recognition that these healthcare corporations possess the greatest potential to influence industry trends, policies, and practices. In addition, the report card will inform the public about

OVERVIEW

“To be a poor man is hard, but to be a poor race in a land of dollars is the very bottom of hardships.”

-W.E.B. Dubois

1 U.S. Census Bureau. (2012) “U.S. Census Bureau Projections Show a Slower Growing, Older, More Diverse Nation a Half Century from Now.”

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T H E C O N S U M E R B A N K I N G I N D U S T R Y

EXECUTIVE SUMMARY

career opportunities and realities in the healthcare industry as the nation strives to strengthen its economy.

Our aging population and the declining percentage of uninsured Americans are driving the creation of 5 million healthcare jobs between 2012 and 2022.2 While other sectors will add more jobs in raw numbers, the healthcare sector alone will add jobs that are open to entry level, unskilled, and semi-skilled workers and that pay living wages. In addition, the growth offered by healthcare management positions, and the broad opportunity for other businesses to support this expanding healthcare industry, provide People of Color a particular opportunity to become a part of an expanding and lucrative job sector. The equitable distribution of those jobs is of paramount importance to the NAACP. The Opportunity and Diversity Report Card: The Healthcare Industry is designed to help the leading healthcare firms advance diversity and inclusion and in doing so take another step in bridging racial economic inequality.

The six healthcare firms discussed in this report card include: Ascension Health; Catholic Health Initiatives; Community Health Systems; Dignity Health; Hospital Corporation of America; and Tenet Healthcare. Each report card is discussed in depth and detailed information about each healthcare firm grade can be found in Appendix A.

The grades noted above reflect a high level overview of the performance of each firm across a broad spectrum of criteria. This report is focused on the workforce, recruitment, retention, and advancement of People of Color in the healthcare workforce across our increasingly diverse nation. The report also places a strong emphasis on the diversity of each firm’s procurement systems and supply chain.

2 Bureau of Labor Statistics. (2013) “Employment Projections—2102–2022.”

OVERALL GRADES

Ascension Health

Catholic Health

Initiatives

Community Health

SystemsDignity Health

Hospital Corporation of America

Tenet Healthcare

C C F B D- C-

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The major findings of the report are as follows:• For the foreseeable future, the healthcare industry in the United States is expected to be a

significant source of well-paying jobs, including a number of occupations that do not require a college degree. This attribute is unique to the healthcare industry and is critical for increasing employment opportunities. It is important that the healthcare sector is active in bridging our nation’s gap in racial economic equality and in closing the employment divide that still exists for People of Color.

• Diversification of upper management remains a challenge, despite the long history of diversity in areas related to patient care.

• Areas of the healthcare workforce that are diverse are currently under pressure to reduce costs through automation, closing off a critical pathway to skilled and leadership employment for diverse candidates.

• The monitoring of procurement diversity is lacking or at best rudimentary, and reflects a blind spot that is more pronounced in the healthcare industry than any other industry the NAACP has surveyed to date.

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T H E H E A L T H C A R E I N D U S T R Y

HISTORICAL PERSPECTIVES ON THE HEALTHCARE INDUSTRY The healthcare industry has been a growing source of employment in the United States for decades. As it has grown and become more complex in the services it delivers to a rapidly growing population, the healthcare industry has become a larger segment of our workforce than ever before. As the Bureau of Labor Statistics notes, “The health care and social assistance sector is projected to grow at an annual rate of 2.6 percent, adding 5.0 million jobs between 2012 and 2022. This accounts for nearly one-third of the total projected increase in jobs.”3 While other industries, in particular retail sales and professional services are larger and have grown faster, the medical field tends to offer better wages and benefits.4 Also unlike the retail and professional sectors, the medical field displays greater diversity in occupations that offer middle or even upper class incomes, such as nurses and physicians. Aside from the benefits of greater access to medical care for our diverse population, the healthcare sector also provides an opportunity for minority communities traditionally excluded from well-compensated employment.The concern over diversity in health care is certainly not a new subject. For decades, the lack of racial, ethnic, and gender diversity has been a concern to industry professionals as well as outside observers.5,6 There is already a substantial amount of research into the impact of cultural awareness on the patient population.7 The overwhelming conclusion of this research has been that a diverse healthcare workforce is not only desirable as a fair and inclusive goal for our

Figure 1 The aging population of the United States

3 Bureau of Labor Statistics, “Employment Projections — 2012-2022.”4 Despite the name, diverse occupations within the Professional and Business Services sector are dominated by occupations such as security guard, waste disposal, office assistant, and other low wage positions. 5 American Hospital Association and Institute for Diversity in Healthcare. (2012) Diversity and Disparities: A Benchmark Study of U.S. Hospitals Chicago: Institute for Diversity in Health Management. 6 JD Moore, Jr. (1997) “The Unchanging of Healthcare. Diversity Still Hard to Find in Top Executive Ranks,” Modern Healthcare Volume 27, No. 50. 7 India J. Ornelas. (2008) “Cultural Competency at the Community Level: A Strategy for Reducing Racial and Ethnic Disparities.” Cambridge Quarterly of Healthcare Ethics 17. 8 John R. Stone. (2008) “Healthcare Inequality, Cross-Cultural Training,and Bioethics: Principles and Applications,” ; Ebbin Dotson (2012) “Setting the Stage for a Business Case for Leadership Diversity in Healthcare: History, Research, and Leverage,” Journal of Healthcare Management Volume 57, No. 1.

SECTOR ANALYSIS

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country to strive for, but that it has a real impact upon patient outcomes.8 Yet, in study after study, we see that although some of the less skilled positions in the healthcare field are highly diverse, the middle and upper reaches of management, and the so-called “C-Suite” of corporate governance, remains almost exclusively the domain of white men.9 It is paradoxical that an industry more aware of the concrete benefits of diversity than most other industries has been unable to achieve it. POSITION OF THE HEALTHCARE INDUSTRY IN THE AMERICAN WORKFORCEThe baby boomer generation—those born between 1946 and 1964—is aging and quickly becoming more reliant on healthcare.10 This demographic transition11 is increasing the demand for healthcare workers at the same time that access to healthcare for younger Americans is expanding due to the Affordable Care Act.12,13,14 These dramatic increases in the demand for

The overall trend has been a de-emphasis of the hospital as the center of care for most healthcare

consumers… Doctor’s offices, outpatient clinics, physical and occupational therapy centers, and long term nursing facilities will continue to experience the

fastest growth.

9 American Hospital Association and Institute for Diversity in Healthcare. (2012) Diversity and Disparities: A Benchmark Study of U.S. Hospitals Chicago: Institute for Diversity in Health Management. 10 Community Health Systems. (2013) “Annual Report to Shareholders 2013.”11 This term refers to a shift from higher birth and death rates, which create a younger society, to lower rates of both births and deaths. This results in a society with a larger percentage of older persons.12 Michael J. Chow and Bruce D. Phillips. (2009) Small Business Effects of a National Employer Healthcare Mandate. Washington, DC: National Federation of Independent Business Research Foundation.13 Community Health Systems. (2013) “Annual Report to Shareholders 2013.” In their report to shareholders, Community Health Systems—who declined to participate in this survey—noted that the Affordable Care Act was expected to dramatically expand demand for healthcare services. They go on to note that while complying with the employer provisions of the law may increase some costs, the ultimate gain in revenue would result in a net profit.14 U.S. Department of Health and Human Services, Health Resources and Services Administration, National Center for Health Workforce Analysis. (2013) Projecting the Supply and Demand for Primary Care Practitioners Through 2020. Rockville, MD: U.S. Department of Health and Human Services.

Figure 2 Real Healthcare growth by subsector

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healthcare services have also increased the need for more capacity in the healthcare industry: more caregivers, more locations, and more supplies.THE CHANGING HEALTHCARE INDUSTRYThese pressures have dramatically altered and expanded the landscape of work in the healthcare sector that impact minorities working in these occupations. The overall trend has been a de-emphasis of the hospital as the center of care for most healthcare consumers. The aging population is much more likely to need preventative and/or long term care. Doctor’s offices, outpatient clinics, physical and occupational therapy centers, and long term nursing facilities will continue to experience the fastest growth. The Bureau of Labor Statistics reports these positions under the sub-sector “Ambulatory Health Care Services.” Understanding these changes is critical to understanding the role minorities will play in this new medical landscape, as there are occupations that have traditionally shown a higher propensity for diversity and those occupations that have not. According to the Bureau of Labor Statistics, among the healthcare positions with more than 100,000 jobs, those that have grown the fastest between 2011 and 2013 are those focused on preventative care and long-term care. Included in these positions are several which also have seen rapid growth in minority employment, including dental hygienists, speech therapists, and physicians. In addition, the expanded need for long term care, both in nursing facilities and in private homes, has expanded the need for nurse aides and home health aides, occupations which traditionally have very high levels of diversity.

CHANGES IN THE AFRICAN AMERICAN WORKFORCEAfrican American workers have traditionally been concentrated in a few specific industries and job sectors. Public employment, especially working for local government agencies, and union protected manufacturing positions became critical supports for a small but growing African American middle class in the decades following the Second World War. Both industries offered African

Figure 3 Manufacturing work was, at one time, a major source of work for African Americans.

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American workers wages more on par with white workers as well as benefits including pensions and insurance that allowed them to begin building family wealth. Manufacturing employment has been on a steady downward trajectory in the United States since its peak in 1979. This is a result of the increasing scope of globalization, which is itself a confluence of trans-national trade agreements, better transportation, and increased communications technology.

As the Great Recession of the late 2000s imposed strains on the private workforce, a political effort was underway to reduce the public workforce as well. Previous American recessions saw relatively short durations and quick recoveries in large part due to this workforce, which is estimated to have employed, at the Federal, State, and local levels, about a quarter of all working Americans. Due to austerity budgeting, local and state governments—the largest public employers of African Americans—cut their workforces dramatically, either relying on private companies to provide services while offering workers lower pay and fewer benefits, or reducing the services they offer. These changes have pushed African American workers to find employment in other industries. The positions these job seekers find have overwhelmingly been in the retail, professional,15 and healthcare fields.16 Among these three fields, only healthcare offers wages and benefits similar to the manufacturing and public jobs that have been lost. Retail and professional occupations tend to be in lower wage positions and often lack consistent scheduling or retirement options. Even in healthcare positions, we find that there is a dichotomy between the occupations that employ the most minorities—home health and nursing aides—and those that enjoy the highest wages and best benefits. Minority workers in health care occupations which require less education, such as home health aides or nurse aides, experience more and longer periods of unemployment than their white

Figure 4 Many African Americans and People of Color found employment in the public sector, where Equal Opportunity laws produced greater impact.

15 Within the Professional and Business sector, minority workers are concentrated in administrative support positions, security, waste removal and other positions characterized by low wages and little labor organization.16 Steven Pitts. (2011) “Black Workers and the Public Sector.” Berkeley, CA: Center for Labor Research and Education.

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counterparts. Meanwhile, those workers with higher levels of education, such as nurses, physicians, and therapists, see a far smaller employment gap between white and minority workers.

Minority participation in hospital management is, by all estimates, lower than almost anyone is prepared to accept.17

The NAACP Opportunity and Diversity Report Card: The Healthcare Industry is focused on the impact of employment in the healthcare sector and the economic opportunity offered by the healthcare industry as a major source of employment and as a major consumer of related goods and services.

To analyze the diversity of this industry, the NAACP has conducted a survey of the six healthcare networks that are the largest in terms of staff, beds, and geographic coverage. These six firms were asked questions related to their workforce diversity, from the senior management to un-skilled labor. In addition, the survey looks at procurement, or the extent to which the firms monitor the diversity of the companies that they buy goods and services from. The NAACP feels that the industry “footprint” created by the procurement process gives major industries such as healthcare an impact that far exceeds that which their staff size suggests.

There are numerous sources that discuss the diversity of medical doctors in the United States.18 These reports are not encouraging. The surveys, analyses of medical school graduation rates, and a look at the population of practicing physicians by state reveals that the growth numbers for black and Latino physicians are stagnant. The share of the physician graduates who identify as Asian has steadily increased while the number of white physician graduates has declined. The studies reveal a pessimistic attitude about race and the healthcare profession, in particular the opportunity for advancement into healthcare management for African Americans and Latinos.19,20 Despite sustained efforts to recruit and train a more diverse healthcare workforce, most seem to have failed to increase the level of minorities, other than Asians, at the higher levels of patient care and healthcare management.21 More recent studies on the diversity of the nation’s Registered Nurses, suggest a change may be underway. Although the current RN population of the United States, about 3 million nurses, is still solidly white and non-Hispanic, the level of minority nursing students pursuing

CURRENT STATE OF DIVERSITY IN HEALTHCARE

17 Gary Gaumer and Robert F. Coulam. (2009). “Geographic Variation in Minority Participation in HospitalManagement in the United States.” Hospital Topics: Research and Perspectives on Healthcare Volume 87, No. 2: 13-24.18 Castillo-Page, “Diversity in the Physician Workforce, Facts & Figures 2010.”19 Barbara Kirchheimer, “Sustainable Diversity,” Modern Healthcare 38, no. 14 (. 4/7/2008, Vol. 38 Issue 14, p6-31. 8p. 27). p6-31. 8p. 27 #83120 American College of Healthcare Executives, “A Racial/Ethnic Comparison of Career Attainments in Healthcare Management,” (2008).21 Michael Romano, “Minority Hires Still Lagging,” Modern Healthcare 34, no. 24.22 Janice M. Phillips and Beverly Malone, (2014) “Increasing Racial/Ethnic Diversityin Nursing to Reduce Health Disparitiesand Achieve Health Equity,” Public Health Reports Volume 129, Supplement 2.

Figure 5 Race and ethnicity of medical schools by year, 1978–2008. Source: Laura Castillo-Page, Castillo-Page. (2010) Diversity in the Physician Workforce Facts & Figures 2010. Washington, DC: Association of American Medical Colleges.

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advanced degrees is increasing at a strong pace, with over ¾ of minority nursing students enrolled in the bachelor, master’s, or doctoral programs which open doors to the healthcare management field.22

Significant portions of those who derive their income from the healthcare sector are in fact support personnel with occupations as diverse in skills and training as security officer, parking lot attendant, building engineer, HVAC technician, administrative support, and waste disposal. These positions occupy a far more prominent position in this industry than in those that have been the subject of previous Opportunity and Development Report Cards (ODRCs).

This ODRC also looks at the governing body, including the top or upper management of the Hospital System. These positions have traditionally been dominated by medical doctors and hospital administration specialists. These positions have historically lacked diversity although the studies and reports that do exist on the topic indicate some effort on the part of some healthcare providers and hospital administration training programs to change this fact.23 The NAACP has developed a grading scale that reflects how a company is doing in relationship both to the rest of the industry and to NAACP standards. The rationale for doing so is not to reward the industry for uniformly low diversity, but to tease apart the industry grades to identify if any one firm is performing better than its peers, while the collective diversity of the upper management of the entire industry may be considered ‘poor.’

Figure 6 Geographic location of black medical doctors. Source: Laura Castillo-Page, Castillo-Page. (2010) Diversity in the Physician Workforce Facts & Figures 2010. Washington, DC: Association of American Medical Colleges.

23 American College of Healthcare Executives, et. al. (2008) A Racial/Ethnic Comparison of Career Attainments in Healthcare Management.

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Hospital Diversity Improvement Plans24Percentage of Hospital Participation

Hospital has a nondiscrimination policy that includes the ethnic, racial, lesbian, gay, bisexual, transgender, and transsexual communities. 89%

Hospital educates all clinical staff during orientation about how to address the unique cultural and linguistic factors affecting the care of diverse patients and communities.

81%

Hospital collaborates with other health care organizations on improving professional and allied health care workforce training and educational programs in the communities served.

75%

Hospital requires all employees to attend diversity training. 61%

Hospital has a documented plan to recruit and retain a diverse workforce that reflects the organization’s patient population. 48%

Hospital has implemented a program that identifies diverse, talented employees within the organization for promotion. 42%

Hospital hiring managers have a diversity goal in their performance expectations. 18%

HEALTHCARE LEADERSHIP COMMITMENT TO WORKFORCE AND SUPPLIER DIVERSITYThe commitment of leadership to increasing the diversity of the workforce and procurement efforts has been identified as the primary enabling factor in the success of these efforts. This commitment is not limited to the healthcare industry; previous reports by the NAACP and others have noted that without the participation of both upper and middle management it is unlikely that a company or an industry will see diversity challenges accepted or surmounted.

Since 2009, the Institute for Diversity in Health Management has issued a biannual benchmarking survey and report on diversity in health care systems in the United States.25 The Institute is a subsidiary of the American Hospital Association, the largest trade association in the healthcare industry. These reports assess the level to which hospitals are committed to collecting data on patient population, training staff in cultural competency issues, and recruiting People of Color for leadership and management positions. The reports consistently identify the commitment of a company’s leadership to diversity as a key enabler of a successful diversity strategy. This is not a finding limited to the healthcare industry and the concept of biannual tracking of “buy in” from executive leadership highlights just how necessary monitoring reports are.26 In the

Figure 7 Hospital Participation in Diversity Improvement Plans: The presence of such plans is widely understood as a signal of the value an organization places on diversity. Notably, those survey respondents who report meeting more of these criteria perform better in general on this report card.

24 American Hospital Association and Institute for Diversity in Health Management. (2012) Diversity and Disparities: A Benchmark Study of U.S. Hospitals.25 American Hospital Association and Institute for Diversity in Health Management. (2012) Diversity and Disparities: A Benchmark Study of U.S. Hospitals.26 Asante-Muhammad, Dedrick, Dawn Chase, and Jason Richardson. (2014) NAACP Opportunity and Diversity Report Card: The Banking Industry. Baltimore, MD: NAACP.

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2013 update to the benchmarking survey, the Institute reported that since the 2011 survey,

• The percentage of minorities serving as board members remained the same at 14 percent• The percentage of minorities serving in executive positions remained the same at 12 percent• The percentage of minorities in first and mid-level management positions increased from 15

percent to 17 percent27

To place this data in the proper context, in 2012 about 38 percent of the American workforce was not a non-Hispanic white adult. This apparent stagnation in leadership and governance of the healthcare workforce is common to other industries and the problems with attracting and retaining qualified staff is not idiosyncratic to the healthcare industry. We believe that successes discovered in other industries can be transferred to the healthcare field.

The Opportunity and Diversity Report Cards produced by the NAACP Economic Department

Hospital Leadership Goals28Percentage of Hospital Participation

Funding resources allocated for hospital’s cultural diversity/competency initiatives are sustainable. 45%

Hospital governing board has set goals for creating diversity within its membership that reflect the diversity of the hospital’s patient population. 33%

Hospital incorporates diversity management into the organization’s budgetary planning and implementation process. 30%

Hospital has a plan to specifically increase the number of ethnically, culturally, and racially diverse executives serving on the senior leadership team. 23%

Hospital governing board members are required to demonstrate that they have completed diversity training. 15%

Hospital ties a portion of executive compensation to diversity goals. 10%

Figure 8 The presence of leadership diversity goals is consistently cited as a critical step to increasing diversity. Source: American Hospital Association and Institute for Diversity in Health Management. (2012) Diversity and Disparities: A Benchmark Study of U.S. Hospitals. Chicago: Institute for Diversity in Health Management.

27 American Hospital Association and Institute for Diversity in Health Management. (2012) Diversity and Disparities: A Benchmark Study of U.S. Hospitals.28 American Hospital Association and Institute for Diversity in Health Management. (2012) Diversity and Disparities: A Benchmark Study of U.S. Hospitals.

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use a self-reported survey method to assess the diversity of the workforce and supply chains of the survey respondents. For workforce data, the NAACP uses standard Equal Employment Opportunity Commission (EEOC) categories that each firm already uses in their reports. The survey questions also ask about the amount of money spent in “sourceable” spend (as opposed to non-sourceable spending on things like energy).

The responses are checked by NAACP staff for obvious errors and then compared with the target scores that the NAACP has established for each category to determine the percent grade. These grades are discussed with each respondent in turn and new data can be submitted, errors identified, and methods explained. The firms are also asked a series of ungraded qualitative questions regarding their attitudes towards diversity and hiring policies. While not included in the calculation of the final grade, these answers help inform the sector analysis and discussion parts of the report card and, where relevant, are mentioned in the report card page for the firm that submitted the answer.

Each category grade is translated into a letter grade. The African American and People of Color category grades are average and the results are weighted and then combined to produce a single final grade. The report card has ten graded categories and each is equally weighted at 10 percent of the final grade.The grading scale is listed below.

For more information on methods, please see Appendix B.

METHODS

97–100 = A+92–97= A90–92= A-

86–89= B+82–86= B79–82= B-

76–79= C+72–76= C69–72= C-

66–69= D+62–66= D59–62= D-

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REPORT CARDS

Ascension Health Grade: C

Overall Grade: African Americans People of Color

Governing Body D+ D+

Executive/Senior Level Officials and Managers D- F

Mid/Lower Management F F

Highly Skilled D C

Semi-Skilled A+ A+

Unskilled A+ A+

Supplier Diversity Tier 1 & 2 F F

New Hires A+ A+

Promotions A+ A+

Total Turnover (all types) B+ B+

ASCENSION HEALTH

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ASCENSION HEALTH NOTABLE AREAS OF PERFORMANCEAscension Health returned very positive grades in entry-level positions critical to minorities entering the healthcare workforce at the semi-skilled and unskilled levels. Ascension also was also one of just two firms that scored all A and B grades for the categories of New Hires, Promotions, and Turnover. Retention of qualified diverse staff is often a stumbling block that keeps firms from achieving better results in workforce diversity. Positive grades in these areas indicate that, although Ascension may not show the diversity we would hope to see in upper areas of the workforce, they are able to attract and retain diverse candidates in proportion to their non-minority workforce in lower level positions. AREAS FOR IMPROVEMENTAscension Health has substantial opportunity to improve via tracking of their procurement spending, establishing diversification goals for this spend, and developing partnerships with diverse suppliers to help grow a network of suppliers which can better support the local economies that their facilities are located in.

Regarding workforce diversity, although Ascension displays a normal industry lack of diversity in the executive and mid-level management levels, their response also reflects a significant opportunity in the highly skilled occupations as well. Representatives from Ascension noted that their human resources and workforce diversity activity was handled individually by each location, resulting in difficulty mandating a unified diversity strategy that may have impacted their score. According to the response of Ascension to this survey, few hospitals in their system have dedicated EEO or diversity personnel to oversee diversity and inclusion programs. Similarly, few have diversity counsels or boards to set goals and processes for locating and engaging diverse suppliers. Ascension uses a single outsourced firm for the majority of their procurement activity, prohibiting them from knowing the diversity status of many of their suppliers. They note that, as they replace this firm with direct purchasing from suppliers, they will gain more insight into the diversity of their supply chain.

DIVERSITY EFFORTSAscension Health leadership supports equal opportunity efforts and addresses values and multi-cultural strategies in Orientation programs. They report having established diversity recruitment policies—diverse candidate pools, candidate slates and successors. In some cases, leaders have established and support Diversity Councils. Ascension also notes that their leadership encourages and supports diverse board membership. Many of their leaders are engaged with community organizations as partners and/or as board members.

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Catholic Health Initiatives Grade: C


Governing Body A+ C-

Executive/Senior Level Officials and Managers C F


Highly Skilled F D

Semi-Skilled A+ B-

Unskilled A+ A+


New Hires B+ B+

Promotions A+ A+

Total Turnover (all types) A A-

CATHOLIC HEALTH INITIATIVES

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CATHOLIC HEALTH INITIATIVES NOTABLE AREAS OF PERFORMANCEAs predicted by the literature on diversity, diversity in senior leadership can shape the diversity of the rest of the organization. Kevin Lofton, the long-time CEO of Catholic Healthcare Initiatives (CHI), is one of two African American CEOs included in this survey. Catholic Health Initiatives receives an A+ grade for African American diversity of their governing body, with two African Americans out of 15 members of the board of directors. They also received a C grade, the second highest grade in the report, in the overall low scoring category of Executive and Senior Level Officials for African Americans.

Outside of the workforce categories, CHI also showed good results in the categories of Promotions and Turnover. This indicates very low turnover for both African Americans and People of Color. This category is critical, as research in the topic indicates that minorities in the workplace often report feeling excluded or socially isolated. AREAS FOR IMPROVEMENTAlthough the diversity of executive leadership is superior to other firms in this survey, the results for highly skilled and mid-level management were below optimal. In particular, the highly skilled sector that includes both registered nurses and on-staff physicians received low grades. According to other survey responses and existing literature, the diversity of this sector of the healthcare workforce has long been a priority for cultural competency and patient outcome reasons.

As with most of the industry, Catholic Health Initiatives lacked a comprehensive supplier diversity tracking system. Yet CHI did put forward a strong effort to review their records and provide us with updated information on the diversity of their procurement practices. Although this impressive effort failed to have an impact on their grade, the fact that Catholic Health Initiatives undertook it at all represents an important step forward in terms of understanding the importance of tracking the diversity of their procurement. DIVERSITY EFFORTSAmong other things, CHI is one of only two large health systems in the entire United States with both an African American CEO and COO. CHI has a third senior level executive, the Chief Human Resources Officer (CHRO), who is an African American woman. CHI has a 30 percent representation of the senior most executive officers who are African American. In terms of mentoring, CHI’s coaching programs are strategic vehicles that support talent development by providing a focused, individually tailored process for developing a leader’s growth. At CHI, coaching is designed to positively impact results, reaffirm core values, and develop leaders capable of sustaining CHI’s health ministry for the future. Coaching is an effective tool because it focuses on specific goals, occurs over a period of many months, allows for learning, achieves and maintains gains, and creates a partnership between the coach and leader-client.

Catholic Health Initiative is growing the ability to better manage and develop diverse supplier relationships, and currently monitors suppliers for diversity status.

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Community Health Systems Grade: F


Governing Body F F

Executive/Senior Level Officials and Managers F F


Highly Skilled F F

Semi-Skilled F F

Unskilled F F


New Hires F F

Promotions F F

Total Turnover (all types) F F

COMMUNITY HEALTH SYSTEMS

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COMMUNITY HEALTH SYSTEMS PARTICIPATIONCommunity Health Systems (CHS) was the only firm that refused the request of the NAACP to take part in this survey. Refusal to participate in the survey results in an F grade.

We sincerely hope that, moving forward, Community Health Services will make the choice to allow independent access and frank discussion about their successes and challenges with regards to workforce and supplier diversity. In response to the NAACP survey, Community Health Systems sent a letter to acknowledge the receipt of our request and to discuss their diversity philosophy and efforts.

In the letter to the NAACP, CHS outlines a system that includes a diversity council, a supplier diversity vetting process and the use of a minority contractor in the construction of a new facility. They also note that they recruit via outreach to colleges and universities as well as minority organizations and recruitment firms. They conclude by stating that the trust of their patient population is of great importance to them and that they strive to ensure cultural competency on the part of all of their staff.

In lieu of receiving a survey back from Community Health Systems, the NAACP assigns a grade of F to both the overall grade and all category grades. It is our determination that a failure to have an open and honest discussion about diversity in their workforce reflects an unwillingness to address this issue. We hope that in follow up discussions with healthcare firms and when we return to survey this industry again Community Health Systems will participate.

DIVERSITY EFFORTSCommunity Health Systems noted in their letter to the NAACP that they participate in career fairs, recruit at colleges and universities, offer employee referrals, and notify communities near their facilities of available positions. While none of these are specifically intended to increase access to minority labor, they also describe partnerships with minority organizations in some communities and that they have voiced their desire for diverse candidates to the recruitment and employment agencies they work with to fill available positions.

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Dignity Health Grade: B


Governing Body A+ A+

Executive/Senior Level Officials and Managers A+ F

Mid/Lower Management A D-

Highly Skilled A+ A+

Semi-Skilled A+ A+

Unskilled A+ A+


New Hires A+ A+

Promotions A+ A+

Total Turnover (all types) A+ D-

DIGNITY HEALTH

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DIGNITY HEALTH NOTABLE AREAS OF PERFORMANCEOne of two firms included in this survey with an African American CEO, Dignity Health receives the highest grade in the report card. Dignity Health displayed very strong diversity in all African American workforce related categories, achieving A grades at every level. At the highly skilled level and below, the company achieved A+ grades in both People of Color and African American workforce diversity. New Hires and Promotions also reflect a commitment to diverse hiring and the promotion of diverse workers.

In addition, the enthusiastic participation of Dignity Health in the process of this report card has been apparent in every discussion and communication during the survey process. It is likely that their enthusiasm is related to their performance. A willingness to engage in a discussion on workforce and supplier diversity suggests that Dignity Health has already considered the challenges in these areas and devoted resources to overcoming them. AREAS FOR IMPROVEMENTAt the executive and mid-management levels, Dignity Health received poor grades for People of Color diversity. This may correlate with a tendency to see higher than hoped for levels of turnover in minority employees. In these two categories, we feel Dignity Health has a significant opportunity to improve their performance.

Like every other firm surveyed, supplier diversity is a particular issue in need of attention. Dignity Health is one of only three firms that collected data prior to this survey on the specific race of their diverse suppliers. While this indicates a commitment to understanding the importance of diversity in procurement, Dignity Health does not, at this time, report that they have a comprehensive plan to encourage, develop, and track the growth of the use of diverse suppliers nor track the race and ethnicity of subcontracted companies. DIVERSITY EFFORTSDignity Health reports that it is the strong commitment of the Dignity Health board of directors that imbues their organization with a welcoming environment for diversity. Three out of the ten board members are African American and four are People of Color. When asked, as a part of this survey, if they could explain the high level of diversity at the executive and mid-level management positions, Dignity Health noted that the recruiting and mentoring activity of board members, including CEO Lloyd Dean, set an expectation throughout the organization. They went on to note that those professionals wishing to work in a progressive healthcare environment that led to greater opportunities and allowed them to care for the health of others sought out Dignity Health based on the commitment of their leadership to a diverse and vibrant workforce. They cite in their response to the survey that their CEO retains strong ties to minority organizations and universities such as Morehouse College, Spelman College, the National Association of Health Services Executives (NAHSE), and the United Negro College Fund. In addition, they set yearly goals for diversity that are explicit and measurable, meeting a condition found in previous reports cards that is proven to foster greater diversity.

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Hospital Corporation of America Grade: D


Governing Body F F



Highly Skilled D A-

Semi-Skilled A+ A+

Unskilled A+ A+


New Hires B A+

Promotions D- B+

Total Turnover (all types) B C-

HOSPITAL CORPORATION OF AMERERICA

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29 U.S. Census American Community Survey 5 year data from 2010 Sex by Occupation of the Civilian Employed Population 16 Years and Over was used to calculate the number of individuals employed in healthcare related occupations (ambulatory, hospital, or nursing home) by region broken down by race and ethnicity.

HOSPITAL CORPORATION OF AMERICA NOTABLE AREAS OF PERFORMANCEHospital Corporation of America (HCA), with over 205,000 employees, is one of the larger systems that the NAACP surveyed. They are also one of just three firms measured that tracked supplier diversity before inclusion in the survey. In addition, HCA excels at including in their highly skilled workforce People of Color that includes most of the medical professions in the industry. These positions are important not just for their role in the healthcare workforce but also because they tend to pay well above the median income for People of Color. AREAS FOR IMPROVEMENTAlthough HCA facilities are overwhelmingly located in the American South and West, their workforce largely fails to reflect the diversity of the local labor pools. In the South, the healthcare workforce is 19 percent African American and 33 percent People of Color. In the West, People of Color are 36 percent of the healthcare workforce.29

Supplier diversity tracking is another area where HCA would benefit from improvement. While HCA is one of the few firms to track diverse spending, greater detail in tracking would have added dramatically to their score in this area. A breakdown of diversity should ideally include the specific race or ethnicity of the business leadership. Tier 2, the sub-contractor supplier diversity, is not tracked by HCA or any of the other corporations surveyed for this report. This area is found to be the most fertile for diverse minority-owned businesses, which are often smaller than the primary contractors used by firms the size of HCA. Experience has shown that tracking diversity, and requiring contractors at the Tier 1 level to consider diverse subcontractors and to track their use, can raise the demand for small businesses owned by People of Color.

DIVERSITY EFFORTSThe HCA Diversity and Inclusion Council is comprised of employee representatives from across the United States.. The Council serves as a think tank of thought leaders in both a strategic and advisory capacity. HCA also offers an Executive Development program, which includes the Chief Operations Officer, Chief Financial Officer, and Chief Nursing Officer, provides leadership training and skill development. Learning and development activities for Associates in the Executive Development program take place in their individual facilities and/or other line of business.

HCA has a corporate lead for contracting and each division has a Division Director of Contracting & Supplier Diversity and each facility has a Supply Chain Director. Each year, a portion of the bonuses paid to contracting staff is partially tied to achieving supplier diversity spend goals for the year.

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Tenet Healthcare Grade: C-


Governing Body F F


Mid/Lower Management D B-

Highly Skilled B+ A+

Semi-Skilled A+ A+

Unskilled A+ A+


New Hires A+ A+

Promotions B+ A+

Total Turnover (all types) C+ D-

TENET HEALTHCARE

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TENET HEALTHCARE NOTABLE AREAS OF PERFORMANCEIn both entry level semi-skilled positions and highly skilled positions, Tenet displays excellence in both African American and People of Color diversity. These workforce sectors include both administrative support personnel and skilled healthcare professionals, such as nurses, which are the backbone of any medical facility.

In addition, Tenet displays success at attracting new hires from minority communities. A+ grades for new hires in both African American and People of Color categories shows a critical commitment to diverse hiring practices. AREAS FOR IMPROVEMENTUnfortunately, Tenet’s retention of minority staff is poor, which could indicate a problem retaining qualified minority staff. This could lead to their lower than desired grades in mid-level and executive management, both of which show considerable opportunity for improvement. Tenet also faces a challenge with regard to the diversity of their governing board. It is noted that Tenet appointed a new African American woman director in late 2014, which of course is not reflected in the analysis of the 2012 data. Supplier diversity is also a weak area for Tenet, with minimal tracking of the diverse status of their suppliers. The use of third party purchasing agents that do not track supplier diversity also contributes to the tracking and purchasing challenges. Tenet is not alone in this lapse as most of the respondents to this survey lacked a full understanding of the impact of their procurement on diverse businesses.

DIVERSITY EFFORTSIn the spirit of identifying the most qualified candidates for our open positions, Tenet deploys tools to eliminate the possibility of ethnic/gender/age bias and focuses on individual competencies. Every applicant for a Tenet job is assessed with a “People Answers” assessment tool, which provides an objective assessment of whether the candidate is a good fit for the position. Tenet’s peer interviewing process ensures that a diverse employee population participates in recruiting and selection, avoiding individual subjective perspective.

An emerging leaders program targets high potential new recruits from top MBA and MHA programs such as Harvard, Duke, University of Texas, and Trinity.

Tenet Healthcare acquired Vanguard Health Systems in late 2013. This report makes use of Tenet “legacy” data, and does not include Vanguard data. Prior to the acquisition, Tenet’s local approach to diversity and inclusion (D&I) served it well in its interest to be relevant in its communities. The acquisition increased the scale of the firm – the number of employees and hospitals increased by over 50%, making Tenet one of the largest healthcare services employers in the country. Tenet now reports that they are seeking a more centralized D&I approach that combines best practices across its system, giving Tenet a chance to dramatically improve their score in following reports.

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DISCUSSION AND FINDINGS

The healthcare industry is a fascinating and critical part of the United States economy and labor market. This massive sector of the workforce supports an equally massive supply system and provides one of the most critical services, healthcare, to 350 million Americans. Due to these and other factors, a survey of the healthcare industry is different from any other industry that the NAACP reviews. Much of the literature on diversity in healthcare has explored the role of the cultural competency for those persons charged with direct patient contact with the patient population. There is dramatically less research on the impact of the race and ethnicity of leadership, supplier, and support functions on their primary mission.30 The NAACP acknowledges this, but remains focused on the healthcare field as a major employer and, in a post-Great Recession era, the only growing segment of the job market that offers living wages to many People of Color.

This industry is also difficult to grade for other reasons. Every healthcare organization is organized and managed in a unique manner. The firms occupy different geographies with access to vastly different patient and labor pools. Finally, many healthcare workers are employed via complex contractual relationships with hospital systems that are difficult to reconcile with each other. For these reasons, the findings of this report card are limited in some ways. Foremost among these is the data on physician and surgeon demographics. Many of the doctors working at the hospital are, in fact, employed by private practices that may or may not be owned by the same hospital system that owns that hospital. Several of the hospital systems that we surveyed included facilities they own, some they manage, and others that have recently acquired vast holdings. All of these factors raise data issues that we have attempted to accommodate and normalize to produce a uniform dataset.

This being said, the NAACP finds, in general, that the healthcare industry displays many of the weaknesses with regards to diversity that are common in other industries. In particular, these weaknesses are related to top management diversity and procurement or supplier diversity. While the governing body of each of the firms surveyed displays relatively high diversity, the small size of the governing body makes diversification a relatively simple process for most companies. Diversifying the top tier of management, those .4–.8 percent of workers who determine much of the policy direction for the company, is a harder goal to achieve. In our survey, only one firm out of the five that responded achieved a grade higher than D in the top management sector for People of Color or African Americans. Organizations that are willing to focus on diversity have a powerful ally in the federal Health Resources and Services Administration (HRSA) of the Department of Health and Human Services. This agency publishes studies on healthcare diversity and its impact on patient care; offers grants to organizations in order to fund investment in new diversity programs; and helps those interested in working in the medical field fund their education or negotiate a reduction of their student debt.31

The healthcare industry is in the midst of reorganization due to the changing mission they are faced with today. Changing demographics and the implementation of the Affordable Care Act (ACA) have shifted the focus of healthcare firms from the acute care hospital facility to smaller offices and clinics focused more on home health and preventative

30 Ebbin Dotson and Amani M. Nuru-Jeter. (2012) “Setting the Stage for a Business Case for Leadership Diversity in Healthcare: History, Research, and Leverage.” Journal of Healthcare Management Volume 57, No. 1: 35–44.31 http://bhpr.hrsa.gov/healthworkforce/index.html

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care. These positive shifts for the patient complicate workforce diversity by spreading out hiring among hundreds of individual sites as opposed to the clusters found in large hospitals. Of particular concern is that the workforce sectors where every firm survey performed well— the diversity of unskilled and semi-skilled occupations—are under threat from an increasing automated workplace.32 Occupations in these categories, such as medical technician, administrative worker, Licensed Practical Nurse, pharmacy technician, etc., are increasingly open to automation.33 This is not unique to the healthcare industry, and while classic economic thought is that automation is a normal process for all industrial systems and will result in new jobs created elsewhere, there is no indication at this time that any jobs created will support the entry-level worker interested in expanding their career in the medical field.34,35

A FEW NOTES ON THE REGIONAL MODIFIERAs noted in full detail in Appendix B, we have applied a regional modifier to the workforce categories to account for differences in the available healthcare labor population. This was adopted pursuant to the concerns of several survey participants in our initial discussions but was heavily influenced by a report on the impact regional variations have on the diversity of upper management. The findings of this study are interesting enough to quote here:

In the 24 largest urban areas…[just] 21% …In small MSAs with fewer than 1 million people, less than 24% of the population is considered minority, and only about 9% of

hospital officials and manager positions are held by minority persons.36

The report notes that in the Southern and Western regions of the United States, minority representation in hospital leadership positions is about twice that of the Midwest, with the Northeast falling in between the two. This reinforces the need for a regional modifier to compare hospital systems that occupy very different labor markets.

Additionally, while there is ample literature on empirical evidence linking the diversity of staff involved in direct care with patient outcome data, there has been very little attention paid to the impact of supplier diversity and upper management diversity.37 Indeed, it is easy to conceive that there may be little or no impact to patient care from increased diversity in these areas. With these factors in mind, the NAACP recommends that the healthcare industry take a look at upper management diversity from a non-patient outcome point of view. It is incumbent upon leadership to understand that by failing to address structural barriers to employment, a critical pool of skilled labor is often never considered for higher positions. This is known to produce inefficiencies in management and procurement, which ultimately impact the

32 Wall Street Journal, “Semiskilled Healthcare Jobs Are Disappearing,” http://www.wsj.com/video/semiskilled-healthcare-jobs-are-disappearing/02129C8F-D1E3-4E43-81E4-48F33C24D436.html.33 Rich Miller. (2014) “How Hospitals Can Cut Costs and Increase Efficiencies through Workforce Management Automation,” Becker’s Hospital Review . 34 Paul Krugman, “Falling Demand for Brains,” http://krugman.blogs.nytimes.com/2011/03/05/falling-demand-for-brains/?_r=0.35 Brad Delong, “The Hollowing out of the U.S. Income Distribution under the Pressure of Technology,” http://delong.typepad.com/sdj/2011/03/the-hollowing-out-of-the-us-income-distribution-under-the-pressure-of-technology.html.36 Gaumer, Gary and Robert F. Coulam. (2009). “Geographic Variation in Minority Participation in Hospital Management in the United States.” Hospital Topics: Research and Perspectives on Healthcare Vol. 87, No. 2: 13¬–24.37 Ebbin Dotson and Amani M. Nuru-Jeter. (2012) “Setting the Stage for a Business Case for Leadership Diversity in Healthcare: History, Research, and Leverage.” Journal of Healthcare Management Volume 57, No. 1: 35–44.

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bottom line of any company in any industry. The recruitment of minorities with offers of fellowships or residencies, the creation of environments to encourage social bonding, and the creation of a proactive diversity and inclusion program are a few of the best practices identified by industry participants. Transparency in organizational decisions and wages and the need for measurable, goal-based metrics were also identified as critical issues for organizations to resolve.

An additional concern is the findings in this survey regarding supplier diversity. While the NAACP has noted that in other industries the diversification of procurement is a challenge for companies, the healthcare sector seems to have lagged behind other industries in terms of tracking this diversity. At the beginning of our survey process, only three of the firms contacted had access to their supplier diversity figures. Two other firms asked for, and were granted, additional time to calculate these figures. The lessons learned from this are that, for two of the five largest healthcare firms in the country, monitoring the use of diverse suppliers is not a priority. Of those we surveyed, only two track diversity in terms of specific race and ethnicity of supplier and none have in place the ability to track second tier suppliers, i.e. subcontracted firms hired by their primary supplier. One of the firms mentioned, during the interviews conducted subsequent to the grading of the survey, that they were discussing this issue with their purchasing company, and they anticipate having a better understanding of the diversity of their supply chain when the NAACP returns to survey the healthcare sector in 2017.Most of the representatives of the firms that NAACP spoke with were unaware of the need to track such data.

To summarize, the NAACP Opportunity and Diversity Report Card: The Healthcare Industry finds three major challenges to increasing the diversity of the healthcare sector.

1. Diversification of upper management remains a challenge, despite the long history of diversity in areas related to patient care.

2. Areas of the healthcare workforce that are diverse are under pressure to reduce costs through automation, closing off a critical pathway to skilled and leadership employment for diverse candidates.

3. The monitoring of procurement diversity is lacking or rudimentary at best, and reflects a blind spot that is more pronounced in the healthcare industry than any other the NAACP has surveyed so far.

Perhaps most interesting to the participants in this survey is that, in general, these findings are no different than those uncovered in every other industry. The literature on diversity in the workforce agrees that the same structural barriers produce the same results regardless of the particular nature of the workforce. One participant in the study asked if we were aware of the shifting skills sets that the healthcare workforce requires. All industries require their own specific sets of skills. It is our finding that while the particular skills may be unique to an industry, the barriers to education and employment for minorities are the same across all industries and occupations.

while the particular skills may be unique to an

industry, the barriers to education and employment for minorities are the same

across all industries and occupations.

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NAACP DIVERSITY RECOMMENDATIONS FOR THE HEALTHCARE INDUSTRYTo help reduce the issues discovered in this report card the NAACP recommends the following five strategies for the healthcare industry:

1. Develop a measurable and achievable goal for diversity in both top management and procurement and a five-year plan to accomplish it.

2. Invoke the “RLJ Rule” where for every top management position at least two minority candidates are interviewed.38 This does not advocate a quota but helps to overcome the traditional social segregation of American society.

3. Create a mentoring program for management staff where less experienced employees are formally paired with a senior staff person to help develop their professional networks and skills.

4. Consider fast tracking a select number of highly capable staff who are People of Color or recruit People of Color from outside the company to fill upper level positions. These “pioneers” may provide both a mentor and an example to younger People of Color.

5. By adopting successful models from other industries, healthcare firms can begin tracking supplier diversity in greater detail and ask primary suppliers to include a specific level of diversity in their subcontracted work as well. The U.S. Department of Transportation Disadvantaged Business Enterprise (DBE) program is an example of a supply model that acknowledges both the issues with scaling inherent to minority owned businesses and the need for greater diversity in this space.

The purpose of the NAACP Opportunity and Diversity Report Card is not to judge specific firms as being successful or unsuccessful. As this report card demonstrates, there are specific, serious barriers to the advancement of African Americans and People of Color in the workforce. These report cards are a way for us, and the industry that we report on, to identify these barriers; note if and when these barriers have been successfully bridged; and then work together to lay out a path to successfully achieve that diversity.

38 http://www.prnewswire.com/news-releases/robert-l-johnson-announces-the-congressional- black-caucus-has-issued-a-letter-strongly-supporting-the-rlj-rule-135506498.html

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34

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Ascension Health

Catholic Health Initiatives

Community Health Systems

Dignity Health

Hospital Corporation of America

Tenet Healthcare

Overall Grade: C C F B D C-

African Americans Target39

Governing Body D+ A+ F A+ F F 13

Executive/Senior Level Officials and Managers D- C F A+ F F 8

Mid/Lower Management F F F A F D 13

Highly Skilled D F F A+ D B+ 13

Semi-Skilled A+ A+ F A+ A+ A+ 13

Unskilled A+ A+ F A+ A+ A+ 13

Supplier Diversity Tier 1 & 2 F F F F F F 6

New Hires A+ B+ F A+ B A+ 13

Promotions A+ A+ F A+ D- B+ 13

Total Turnover (all types) B+ A F A+ B C+ 5

APPENDIX A: REPORT CARDS

39 This is the percentage of the workforce required for a perfect score of 100%.

People of Color Target

Governing Body D+ C- F A+ F F 32

Executive/Senior Level Officials and Managers F F F F F F 25

Mid/Lower Management F F F D- F B- 32

Highly Skilled C D F A+ A- A+ 32

Semi-Skilled A+ B- F A+ A+ A+ 32

Unskilled A+ A+ F A+ A+ A+ 32

Supplier Diversity Tier 1 & 2 F F F F F F 8

New Hires A+ B+ F A+ A+ A+ 32

Promotions A+ A+ F A+ B A+ 32

Total Turnover (all types) B+ A- F D- C- D- 15

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APPENDIX B: METHODS

The NAACP grades are based on the portion of the available workforce that is African American or People of Color. These grades are adjusted to account for the diversity challenges reflected in peer firms, with lower expectations in categories, such as executive leadership or governing body, where firms show significant weakness in diversity. Raw grades were calculated based on the initial survey submission. Several participants in the survey noted that the difference in regional healthcare labor force might have a positive or negative impact on the ability of specific locations to hire minority workers. This was confirmed by the literature review as well.40 This was accounted for by applying a regional modifier to the raw grades of each category with the exception of the supplier diversity category. The regional modifier appears to successfully bridge regional variations in this particular workforce and without specific locations for each employee it provides the best method of accurately grading participants. However, we acknowledge that unseen variables in workforce diversity and variations based on metro-level workforce variations might be a factor.

After applying the regional modifier the scores of each category were compared with the target score to determine a percentage grade. The target score is the same for all survey participants and represents full credit for that category. The target scores were set based on a combination of the available African American or People of Color workforce and the level of integration the industry as a whole displays. These percentage grades for African Americans and People of Color were then averaged for each category and those averages were then weighted and averaged to produce a final grade. Each category that was graded received equal weighting, so a respondent who received a 90 percent grade for African American and a 70 percent grade for People of Color in the Highly Skilled category would have an average grade of 80 percent for Highly Skilled. This grade would then be averaged together with the rest of the categories, with each category weighted at 10 percent of the total grade, to produce a final grade. The grade scale used throughout the report card is as follows:

Regional Modifier: Due to the complexity of the Hospital Systems the researchers have attempted to account for the regional variations in the ethnicity and race of the healthcare workforce. Since data on the location of every employee was not available and the size of the workforce at each facility was not a question on the survey, the location of each facility was used. The U.S. Census American Community Survey 5 year data from 2010 Sex by Occupation of the Civilian Employed Population 16 Years and Over was used to calculate the number of individuals employed in healthcare related occupations (ambulatory, hospital, or nursing home) by region broken down by race and ethnicity. For the purposes of this report, Hispanic (of any race), white non-Hispanic, Asian non-Hispanic, and black non-Hispanic were considered to be the entire universe of workers. Although this does leave out those of mixed race as well as other racial classes, they represent a minute portion of the national workforce as a whole, and an even smaller portion of these specific occupational categories.

For each healthcare provider, the percentage of facilities (x) the region (south, midwest, northeast, west), the percent of the healthcare workforce nationally that is African American (β), and the regional African American healthcare workforce (βR) was used to create a modifier (α) for each healthcare firm.

40 Gary Gaumer and Robert F. Coulam. (2009). “Geographic Variation in Minority Participation in Hospital Management in the United States.” Hospital Topics: Research and Perspectives on Healthcare Vol. 87, No. 2: 13¬–24.

97–100 = A+92–97= A90–92= A-

86–89= B+82–86= B79–82= B-

76–79= C+72–76= C69–72= C-

66–69= D+62–66= D59–62= D-

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β βR=YX*Y=M(south,midwest,northeast,or west)

(Msouth*Ysouth)+(Mmidwest*Ymidwest)+(Mwest*Ywest)+(Mnortheast*Ynortheast)= α

This process was repeated for each firm, yielding a unique modifier for both African Americans and People of Color. The modification of grades using this method allowed the researchers to create a grading scale based upon the national percentage of healthcare workers that are African American or People of Color as well as historical barriers to education and employment for those workers.

Workforce: The categories which include governing body, top management, mid/lower management, highly skilled, semi-skilled, and unskilled workers as well as data on new hires, promotions, and turnover is collectively referred to as the “workforce” section of the report card. A survey instrument was developed which conformed to current EEOC instructions for defining job levels as well as the race and ethnicity of the employee. Instructions for this can be found at the EEOC website.41 This survey asked for information on employees hired during the 2013 calendar year, and includes questions about the number of current employees as well as those hired, promoted, or whose employment ended during the year. The questions were asked twice, once for People of Color and once for African Americans alone.The responses were computed as a percentage of the overall workforce, the regional modifier was applied, and the final percentage of the workforce category that was either African American (percentAA) or People of Color was determined. That amount was compared with the target (targetAA) for each category to determine the category grade in Excel using the following code:

=percentAA/targetAA

Turnover: Turnover refers to the racial and ethnic composition of the workers separately from employment with the firm. Respondents indicated the number of employees that left and of those how many were African American and People of Color. These numbers were then calculated to see how far from the NAACP target the respondent was using the following code in Excel:

=(100-percentAA)/(100-targetAA)

Data limitations: By using industry averages as comparison figures, we cannot fully account for the impact of discrimination in these figures. A high mark in areas such as top management, governing body membership, or supplier diversity does not indicate representation proportional to the United States population. Accounting for the impact of discrimination, including structural racism and implicit bias, is beyond the scope of the current analysis.The ranking system can magnify small differences, particularly for smaller groups. For example, the inclusion of one African American or Person of Color in a small group, such as in a governing body, can have a large effect on the ranking.

Reliance on self-reported totals provided by corporations is not ideal. While we did not receive the raw data used to create the statistics in this report, or have the ability to verify its accuracy, we trust the integrity of the data provided by the corporations.

Disclaimer: The Financial Freedom Center of the NAACP and the Economic Department has received no financial support from any of the firms surveyed.

41 http://www.eeoc.gov/employers/eeo1survey/upload/instructions_form.pdf

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