ARTICLE
Diversity improves performance and outcomes
L. E. Gomez, M.D., M.B.A., Patrick Bernet, Ph.D.
Funding: This research did not receive any specific grant from funding agencies
in the public, commercial, or not-for-profit sectors.
Abstract: Background: Research on the effects of increasing workplace diversity
has grown substantially. Unfortunately, little is focused on the healthcare
industry, leaving organizations to make decisions based on conflicting findings
regarding the association of diversity with quality and financial outcomes. To
help improve the evidence-based research, this umbrella review summarizes
diversity research specific to healthcare. We also look at studies focused on
professional skills relevant to healthcare. The goal is to assess the association
between diversity, innovation, patient health outcomes, and financial
performance.
Methods: Medical and business research indices were searched for diversity
studies published since 1999. Only meta-analyses and large-scale studies
relating diversity to a financial or quality outcome were included. The research
also had to include the healthcare industry or involve a related skill, such as
innovation, communication and risk assessment.
Results: Most of the sixteen reviews matching inclusion criteria demonstrated
positive associations between diversity, quality and financial performance.
Healthcare studies showed patients generally fare better when care was
provided by more diverse teams. Professional skills-focused studies generally find
improvements to innovation, team communications and improved risk
assessment. Financial performance also improved with increased diversity. A
diversity-friendly environment was often identified as a key to avoiding frictions
that come with change.
Conclusions: Diversity can help organizations improve both patient care quality
and financial results. Return on investments in diversity can be maximized when
guided deliberately by existing evidence. Future studies set in the healthcare
industry, will help leaders better estimate diversity-related benefits in the context
of improved health outcomes, productivity and revenue streams, as well as the
most efficient paths to achieve these goals.
Keywords: Diversity
-
Outcomes
-
Profits
-
Innovation
-
Risk
Author affiliations: L.E. Gomez, Howard University College of Medicine, 520 W Street NW,
Washington, D.C. 20059, USA; Patrick Bernet, Florida Atlantic University, 3200 College Ave,
Liberal Arts, Room LA.435, Davie, FL 33314, USA
Correspondence: Patrick Bernet, Ph.D., Florida Atlantic University, 3200 College Ave,
ª 2019 by the National Medical Association. Published by Elsevier Inc. All rights reserved.
https://doi.org/10.1016/j.jnma.2019.01.006
INTRODUCTION
D
iscussions about workforce diversity too often
become distracted, revolving around hot-button,
politically-charged language, missing opportunities
to focus simply on making a clear case for the value of di-
versity that demonstrates clinical and financial
improvements.
1
Both the IOM and NIH have long reported
the potential value of diversity in maximizing health benefits
of medical teams that bridge cultural and linguistic gaps.
2,3
Unfortunately, many patients are still managed by
homogenous care teams, with outcomes reflecting large
disparities in clinical care efficacy. Blacks are 30% less
likely to receive revascularization at coronary angioplasty
and 40% less likely to receive coronary bypass surgery.
4
Black women are 40% more likely to die from breast
cancer,
5
and their babies have a mortality rate 2.5 times
greater than whites.
6
Disparities even occur in the man-
agement of simple chronic conditions, with black and
Hispanic youth much more likely to die from diabetes
complications.
7
Beyond the human cost lies a financial
edge, as revenues decrease under pay-for-performance
reimbursements that penalize quality shortcoming associ-
ated with such disparities.
Several studies speci fic to the healthcare setting support
the growing disparities listed above. Studies find greater
diversity improves the accuracy of clinical decision-
making, leading to higher patient satisfaction and result-
ing in improved health outcomes.
8
Yet many studies were
unable to find significant association between diversity and
clinical outcomes, even in simple concordance relations
matching patient and physician characteristics.
9,10
The paucity of studies specifically focusing on diversity
and medical outcomes is not necessarily a barrier to action;
just a note of caution. Our strategy with this paper is to
identify diversity research relating to the business side of
healthcare because the ability to ’keep the doors open’ is
an essential precursor to improving healthcare delivery for
all patients. We also include a look at studies focusing on
other professions that use similar skill-sets to those needed
in healthcare, including risk assessment and communica-
tion. Like much progress in medicine, several large sample
population-specific studies would be generally preferred,
but ignoring related research while waiting for that ideal
study can be outright irresponsible.
To organize the business justifications for diversity, our
study provides an objective review of recent research on
diversity, testing the evidence for possible links to financial
and quality outcomes. Our goal is to address the following
four questions: Is there a correlation between diversity and
patient health outcomes? Is there an association between
workforce diversity and financial outcomes? Does that
strength of association differ between worker-level diversity
and that of top management? Are there associated corporate
conditions that moderate those relationships?
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Table 1. Summary of related research.
Review Methods and setting Diversity dimension Findings
Outcomes studies
LaVeist, Pierre,
2014.
8
This meta-analysis cites 25 studies of diversity and
cultural competence in the healthcare industry.
Workforce diversity in:
Race, Ethnicity.
Outcomes:
Patient compliance,
Consumer satisfaction
More diverse medical teams gave more accurate
diagnoses, had higher patient satisfaction, and saw
greater compliance.
This study also hints at lower long-term costs as
another possible benefit.
Jerant
et al.2011
9
Healthcare
Focus
Measures patient-physician concordance, care
management process measures.
Concordance
between physician
and patient race
and/or gender.
Three of 24 measures showed positive findings, such
as a higher likelihood of mammography adherence
for female patients with female doctors. All other
measures showed no association with concordance.
Schnittker,
Liang, 2006.
10
Healthcare
Focus
1999 survey of 4000 patients about
concordance and encounter impressions.
Concordance
between physician
and patient race
and/or gender.
No significant association between concordance
and impressions, such as, whether the patient felt the
doctor "knew enough or asked enough questions
about your health".
Pitts, 2005.
11
Longitudinal study of 2500 Texas public
school districts 1995e1999, measuring:
outcomes/performance
BStandardized sufficiency exams
BDrop-out rates
BHigh-SAT performance
company characteristics:
BRacial diversity
BRepresentation (The match between race-
ethnic-gender diversity of the company and
that of the community they serve.)
Workforce and
management: Race,
Representation.
Outcomes:
Sufficiency exams,
Drop-out rates, SAT
performance
Teacher-level diversity:
Bimproved standardized sufficiency exams worsened
Drop-out rates
worsened High-SAT performance
Administrator-level diversity:
Bno impact on standardized sufficiency exams no
impact on Drop-out rates
worsened High-SAT performance
Teacher-level representation:
Bno impact on standardized sufficiency exams no
impact on Drop-out rates
worsened High-SAT performance
Administrator-level representation:
Bimproved standardized sufficiency exams improved
Drop-out rates
improved High-SAT performance
Levine et al.,
2014.
12
Representative samples of financial traders from
several markets buy and sell in simulated markets
based on real world data.
Market-level diversity in
Ethnicity
Outcome:
Price prediction
accuracy
The diversity of the entire pool of traders impacts the
accuracy of the market price established by that
pool.
Given that each trader works in isolation, the effect is
continued.
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continued.
Review Methods and setting Diversity dimension Findings
purely due to conflicting assessments of valuation
(implicit in buy-sell decisions of others).
Viewed another way, ethnic homogeneity induces
confidence in the decisions of other group members,
whether warranted or not.
Risk assessment skills studies
Muller Lewellyn,
2011.
13
1997e2005 longitudinal study of 74 US banking
industry companies; half of which specialized in
subprime lending. Measured excessive risk-taking
behavior based on participation in subprime
lending.
Board-level diversity
in: Gender.
Outcome:
Risk assessment
Boards with higher gender diversity were much less
likely to engage in excessive risk taking (subprime
lending).
Chapple,
Humphrey,
2014.
14
Includes
Healthcare
Companies
Industry-level assessment of Australia S&P 300
companies, measuring the impact of portfolio-
average board gender diversity on the financial
performance the entire portfolio of industry
companies.
Board diversity in:
Gender
Outcomes:
Portfolio returns.
Board gender diversity showed no significant impact
on overall industry average returns.
Post, Byron,
2015.
15
Includes
Healthcare
Companies
Meta-analysis of 140 separate studies on board
gender diversity and corporate performance.
Outcomes measured:
Profit (accounting profit)
Market performance (Tobin’s q, for long-term
market expectations),
Monitoring (oversight of managerial activities)
Strategy involvement (board influences
strategic decision making)
Board-level diversity
in:
Gender.
Outcomes:
Profit, Market
performance,
Monitoring
oversight, Strategy
involvement
Profit was higher with greater gender diversity
Monitoring oversight was higher with greater gender
diversity
Market performance was unaffected by gender
diversity
Strategy involvement was unaffected by gender
diversity
Productivity studies
Kunze, Boehm,
Bruch, 2013.
16
Study of 147 German companies measuring the
impact of age-diversity on Operational
performance (employee productivity and
employee retention)
Organizational performance (current profits
and expected growth)
Workforce diversity
in:
Age.
Outcomes:
Operational,
Organizational.
Age diversity is associated with improved Operation
and Organizational performance.
Age diversity was also associated with greater group
conflict, but this effect disappeared with diversity-
friendly company climate and policies.
continued.
DIVERSITY IMPROVES PERFORMANCE AND OUTCOMES
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continued.
Review Methods and setting Diversity dimension Findings
McKay, Avery,
Morris, 2008.
17
Study of salesperson performance in 743 US retailer
stores in 2005. Measured worker perceptions of the
company’s diversity climate.
Workforce diversity
in:
Race, Gender.
Outcomes: Sales
Pro-diversity work climate was associated with signifi-
cantly higher sales production for black and Hispanic
employees. Specifically, blacks in low-diversity
climates made $8.90 per hour less than whites, but
7.41 more in pro-diversity climates. The improvement
was even greater for Hispanics.
Gender differences in sales performance were not
impacted by the diversity climate.
Diversity climate had no signi fi cant effect on white
productivity, making the net effect of a pro-diversity
climate on overall company sales was strongly
positive.
Dreachslin,
Portia, Sprainer,
2000.
18
Healthcare
Focus
Focus groups of Nursing Care Teams at large US
hospitals evaluated factors impacting
performance.
Team-level diversity
in:
Race, role.
Outcome:
communication
effectiveness
The alternate perspectives within racially diverse
groups are a source of potential conflict.
This can be mediated through leadership that ac-
knowledges alternate perspectives
Innovation studies
Lorenzo et al.,
2017.
19
Includes
Healthcare
Companies
Survey of 171 German, Swiss and Austrian
companies of all sizes, representing many
industries (chemicals, technology, manufacturing,
finance and healthcare). Measured diversity and
financial performance, identifying the share of
revenue drawn from new products and services
in the most recent 3 years.
Management-level
diversity in:
Age,
Gender,
Immigrant status,
Experience variety:
-Industry
-Company
-Academic
Outcomes: Revenue
from new products
Revenue from new products and services is higher in
companies with higher diversity in 4 dimensions:
Immigrant status (1st or 2nd generation), gender,
multi-industry and multi-company experience).
Specifically, companies with above-average levels of
these diversity measures earned 38% more revenue
from new products and services.
Gender diversity only pays off beyond tokenism (20%)
Age diversity had a negative impact on revenues
from innovation and diversity in academic back-
grounds had no impact..
Co-variate: Large and complex companies benefit
more from higher levels of diversity (in all dimensions).
Co-variate: Openness in work environments and
continued.
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continued.
Review Methods and setting Diversity dimension Findings
encouragement of different perspectives amplify the
positive impact of diversity.
Crisp, Turner,
2011.
20
An extremely broad meta-analysis of over 100
studies of diversity in the workplace.
Team diversity in
Race
Gender.
Outcomes: Various
measures of
Productivity and
Creativity.
Finds the process of adapting to greater diversity
stretches ’cognitive flexibilities’, making everyone on
the team more creative and improving collective
and individual judgement
Miller, Triana,
2009.
21
Includes
Healthcare
Companies
Compare Fortune 500 companies using 2003
data. Measured:
Board racial and gender diversity
Innovation (proxied by the proportion of sales
invested in Research & Development).
Reputation (Fortune’s reputation measure
based on opinion of peer executives in the
same industry)
Board-level diversity
in: Race, Gender.
Outcomes:
Reputation,
Innovation
Board racial diversity associated with higher
reputation
Board racial diversity associated with higher
innovation.
Board gender diversity associated with higher
innovation
Hints that diversity improves innovation via more ac-
curate risk assessment. A new opportunity that feels
unfamiliar (thus riskier) to a homogeneous group may
be better recognized (thus less risky) to a more diverse
group (with broader experience)
Financial studies
Erhardt,
Werbel,
Shrader,
2003.
22
Compare 1993 and 1998 financial performance
for 127 large US companies representing many
industries (manufacturing, finance and
transportation-utilities).
Board-level diversity
in:
Race, Gender.
Outcomes:
Return on Investment
Return on Assests.
Return on assets increases associated withracial and
gender board diversity increases.
Return on investments increases associated with
racial and gender board diversity increases
Richard, Murthi,
Ismail, 2008.
23
Includes
Healthcare
Companies
6-year longitudinal study of Fortune 1000 firms
(representative sample), estimating the impact
of racial diversity (entire staff) on short-term
outcomes (revenue per employee) and
long-term profitability (Tobin’s q, based on
market valuation).
Workforce diversity
in:
Race.
Outcomes: Short-t
erm productivity
and Long-term
profitability
Short-run productivity:
Increases with diversity up to a point, then decreases.
Co-variate: Service industries gain the most from
diversity.
Co-variate: Unstable environments hurt the most from
diversity.
Long-run productivity:
Increases with diversity.
continued.
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MATERIALS AND METHODS
Our analysis begins with an umbrella review of studies
focused on the impact of diversity in the workplace. For
the purposes of our research, ’diversity’ is broadly defined
to recognize differences in race, age, ethnicity, educational
background and gender of workers, managers, customers
or teams, including nurses, technicians and physicians.
Inclusion criteria
Studies published in English after 2000 were eligible for
inclusion if they assess clinical or business outcomes
associated with workforce diversity. US-based studies
were preferred, but international studies were included if
carried out in a similar business environment. Studies set
in the healthcare industry were preferred, and studies of
professionals using healthcare-related skills, such as risk
assessment, were also included. Studies must focus on
diversity of a group of people. Meta-analyses or large
sample size studies were preferred, but integrative research
was included if analysis was based on a broad collection of
related research. Studies focused exclusively on a single
clinical condition were excluded, as those would limit the
generalizability of findings. Additionally, studies must link
workforce diversity to either a clinical or business
outcome. That outcome can be the ultimate outcome, such
as business pro fit or patient health, interim outcomes, such
as employee productivity, or quality measures, such as
clinical protocol adherence.
The MEDLINE and Web of Science indices were
searched for studies using the term ’diversity’ in combi-
nation with any of the following terms: outcomes, dis-
parities, profits, returns, revenues, costs, compliance,
mentoring, and leadership.
Evaluation process
The initial catalogue of studies was built by merging the
independent searches of two investigators, both of whom
independently reviewed, summarized and coded each.
Information collected included industry setting, sample
size, research methods, type of diversity, outcome mea-
sures, and findings. We also documented author sugges-
tions on causal linkages or underlying mechanisms
associating outcomes to workforce diversity.
RESULTS
The literature search grossed 675 papers as possibly
eligible for inclusion. Many of these were excluded from
consideration because their focus was a single medical
condition rather than a global effect. Concordance studies,
of which there are many, were also excluded due to a
narrow focus on the characteristics of only physicians
continued.
Review Methods and setting Diversity dimension Findings
Co-variate: Gains stronger in munificent industries
(with multiple strategic options enabled by ample
resource availability).
Carter, Simkins,
Simpson,
2010.
24
Includes
Healthcare
Companies
Meta-analysis of 7 studies of publicly traded
companies, all of which looked at the impacts
of gender and race diversity on outcomes:
Return on assets
Market performance (Tobin’s q, for
long-term market expectations),
Board diversity in:
Race Gender
Outcomes:
Return on Assets
Market Performance
Board diversity showed no significant impact on return
on assets, or on market performance. Nor was it asso-
ciated with decreasing returns or performance.
Diversity was also associated with greater group
conflict.
Herring, 2009.
25
Includes
Healthcare
Companies
Representative sample of 1002 US for-profit
businesses, measuring 1997 sales revenue,
number of customers, market share, and profit.
Workforce diversity
in:
Race, Gender.
Outcomes: Profits,
sales revenue,
customer base, market
share
Racial diversity associated with higher sales revenue,
customer base size, market share and profits.
Gender diversity associated with higher sales reve-
nue, customer base size and profits.
Both racial and gender diversity may also be asso-
ciated with greater group conflict, though that ap-
pears to be healthy for the organization (perhaps
because conflict also breeds innovation).
DIVERSITY IMPROVES PERFORMANCE AND OUTCOMES
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rather than the entire medical team. The 16 reviews that
met inclusion criteria are incorporated into the umbrella
review. The characteristics, populations, methods and
findings are summarized in Table 1.
These papers look at diversity in multiple dimensions.
One subset focuses on diversity of Board leadership, while
others drill down to the shop floor. Some measure changes
in skills or efficiency, while others measure interim out-
comes such as patents or investment decisions, and still
others measure ultimate outcomes such as corporate profits
or consumer satisfaction. Papers are discussed below in
groupings based broadly on the locus of key findings:
outcomes, risk assessment skills, task productivity, product
or service innovation, and financial returns.
Outcomes studies
Increased diversity in the healthcare workforce helps
reduce or eliminate racial health disparities, according to a
2014 meta-analysis of 25 studies.
8
Composed of research
set entirely in the healthcare industry, this broad analysis
included studies that looked at the race, ethnicity, cultural
competence and language diversity of providers, ranging
from characteristics of the entire organization, down to
healthcare teams, including physician and nursing staffs.
Improvements were noted in patient compliance and
satisfaction scores. Additionally, clinical uncertainty of
both regarding diagnoses and treatment options was
reduced. While this is the only sample study focused
exclusively on clinical outcomes, some include healthcare
in higher level multi-industry analyses, and others focus on
core skills central to multidisciplinary professional teams.
A large-scale study of all Texas schools reveals diver-
sity’s impact in public education systems.
11
They find
student performance most-improved when there was
greater management diversity, and a closer racial match
(representation) between management and student.
Notably this was a top management-level effect only; there
was no significant impact of diversity at the teacher level.
Given the importance of communication and education in
healthcare, such findings suggest the significant effect of
diversity, not just of those working directly with patients,
but the hospital leadership who design the content,
distribute the necessary resources and decide which ser-
vices are appropriate for which patients.
Diversification improves performance not just by
“providing variety in perspectives and skills, but also
because diversity facilitates friction that enhances delib-
eration and upends conformity” that results in better risk
assessment.
12
This study of investment company decision-
making found that diversity among investment analysts
resulted in less exposure to involvement in price bubbles,
such as the housing market crash of 2007, allowing those
companies to fare better when the bubble burst and lead to
the financial crisis. A similar effect might reasonably be
expected in clinical decision making based on experiences
with differing patient populations. The ability of invest-
ment analysts to accurately forecast future company per-
formance based on current measures is roughly equivalent
to a physician’s ability to accurately diagnose a condition
based on past clinical experience in cases when tests are
inconclusive. This study looked at the diversity of entire
investor markets, such as soy bean traders or corporate
bond analysts. In healthcare, this might be analogous to an
entire research community spread across universities,
hospital systems, or the pharmaceutical industry, high-
lighting the importance of diversity in all settings.
Risk assessment studies
A longitudinal study of the banking industry that spanned
the sub-prime crisis found that banks with gender-diverse
boards were less likely to get involved with the high-risk
loans that crippled much of the financial industry in the
sub-prime crisis.
13
Specifically, banks with more gender-
diverse boards were less likely to be involved in risky
sub-prime activities associated with the 2007 crisis. If di-
versity dilutes the mono-socioeconomic perspective of top
management, it would be expected that these new points of
view could improve risk assessment which are at least
partially based on the subjective judgements of those
leaders. Similarly, second opinions in healthcare often
contribute to improved patient health outcomes and
reduced risk.
At a higher level of analysis, a market-wide assessment
of Australia S&P 300 companies measured the impact of
industry-average board gender diversity on the financial
performance of entire portfolios of companies.
14
While
this study found no evidence of positive returns from
gender diversification, the high level of abstraction
employed likely interfered with conclusive findings. It
nonetheless supported that gender diversity does not
hinder performance in any parameter measured.
A meta-analysis of 140 separate studies
15
finds Boards
with greater gender equity fulfilled monitoring re-
sponsibilities more often, and that this vigilance was also
associated with higher accounting returns. In healthcare,
this kind of due diligence could manifest, for example, in
observations that female doctors monitor patients more
closely, yielding lower rates of hospital readmissions.
26
Similar diligence and patience may partially explain the
diversity advantage derived from race concordance
observed in other studies.
27
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Productivity studies
Age-range diversity also improves corporate performance. A
study of 147 companies finds age diversity associated with
higher employee productivity and retention, as well as higher
profits and growth projections.
16
This study also notes age
diversityisassociatedwithcreatinggreaterinternalconflict.
However, if balanced by a no “age-discrimination" climate
within the company, supported by management and HR
policies, these conflicts do not arise. Other studies also note
potential for increased internal conflict associated with
various forms of diversity but reinforce the neutralizing po-
wer of supporting policies and a positive work environment.
Just such a pro-diversity work climate was associated
with higher sales production for black and Hispanic em-
ployees in a large-scale study of salesperson performance
at a major national US retailer.
17
In lower pro-diversity
climates, blacks trailed white salespeople productivity by
$8.90 per hour, while in diversity supportive climates,
black sales exceeded that of whites by $7.41. Significantly,
white productivity remained relatively unchanged, making
the net effect of a pro-diversity climate strongly positive.
Hispanic employee sales improvements were even more
dramatic, increasing to $25.52 in sales per hour. Viewed
another way, these findings demonstrate that diversity may
be more than a path to equity; it may enable women and
minorities to become top performers, simultaneously
improving overall company profits.
Possibly hinting at background mechanisms through
which diversity-accepting environments achieve higher
performance, a study of nursing care teams found com-
munications effectiveness significantly improved with
greater team diversity.
18
Groups in which leaders set a
positive, accepting tone were associated with lower levels
of team conflict and miscommunication.
Innovation studies
“Companies with higher levels of diversity get more reve-
nue from new products and services”.
19
Focused on man-
agement diversity, this study of 171 companies measured
the impact of gender and racial diversity on innovation
revenues using financial performance, operating statistics,
and employee surveys. They found companies with above-
average diversity were rewarded with 38% more revenue
from innovative products and services. They also empha-
sized that diversity must exceed mere tokenism; particularly
in top management. The study showed that the proportion
women in top management needed to exceed 20%, in order
for the company to experience the most significant increases
in innovation revenues.
A broad meta-analysis of over 100 studies finds the
process of adapting to greater diversity stretches ’cognitive
flexibilities’, making everyone on the team more creative
and improving collective and individual judgement.
20
A study of Fortune-500 firms employing robust statis-
tical methods finds gender and race board-level diversity
associated with both greater innovation and corporate
reputation.
21
Reputation, measured by industry surveys,
improved with racial diversity. Innovation, as measured by
research and development investment, improved with both
racial and gender diversity. Highlighting the importance of
risk assessment, the study concludes “the less information
they have on the attractiveness of the market, the more
innovation is perceived as a risk”. Finally, the authors
attribute improved risk assessment to the greater number
of social ties held by minorities and women, noting “these
weak ties, in turn, are known to be valuable because they
provide non-redundant information”. These gains are
especially relevant in dealing with the diverse consumer
mix of critical access hospitals.
Financial studies
A sizable highly-regarded longitudinal study of 127 large
US companies finds clear evidence that the combined racial
and gender diversity of a board is positively associated with
both return on assets and return on investments.
22
One study found the impact of diversity varied both
over time and by industry. In another longitudinal study of
Fortune-500 US companies spanning 1997e2002,
23
workforce diversity was measured with the sophisticated
Blau’s index of heterogeneity.
28
Long-run performance,
based on market expectations inferred by stock valuation,
increased consistently with higher diversity. Measuring
short-run performance based on variations in revenue per
employee, this study finds initially decreasing revenue
with increasing diversity, then an increase after a threshold
is reached. This could indicate that the benefits of diversity
are only achieved after they progress beyond tokenism.
The effect was most pronounced in the service sectors,
which would include healthcare, and also highlighted the
importance of setting a positive climate to minimize fric-
tions and maximize returns.
Not all studies find evidence of positive financial returns
associated with diversity. A narrow study of just 9 com-
panies could detect no improvement to return on assets
associated with the presence of women or minorities on
boards.
24
However, this study did cite similar diversity-
associated internal conflicts reported in the other larger
studies, while it did not control for corporate environment,
missing an opportunity to elaborate on preliminary findings.
A broad study of 1002 US firms found ethnic diversity
was associated with higher sales, more customers, higher
market share, and larger profits.
25
Again, greater gender-
diversity improved sales, customer base and profits. Of
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interest this study is based on the composition of the entire
company workforce; not just that of the board or top
management.
DISCUSSION
Limitations of our study stem primarily from the relative
newness of diversity research in general, and healthcare
applications specifically. Women and minorities have
become more numerous in service and business roles in
just the last few decades, and even less time has passed
since they started appearing on boards. Hungry for a large
enough representation in workforces and adequate passage
of time to track longitudinal change, most studies to-date
do the best they can with limited data. While some
studies can support quantified outcomes with reasonable
confidence, the exact outcome varies somewhat from one
study to the next. Our study explores this growing field,
looking first for evidence of performance consequences of
diversity, and then for mechanisms through which those
outcomes might be achieved. Even with a conservative
research approach, our study draws several key lessons
from past studies.
Our first conclusion is diversity improves performance.
It is associated with higher profits and a range of financial
rewards including: innovation, increased productivity,
improved accuracy in risk assessment and has already been
associated with improved patient health outcomes. Even
the relatively few studies that find no diversity-related
gains do not suggest negative effects on performance.
Future studies should provide more precise estimates of
how much and what kind of diversity has the most positive
effects on performance and health outcomes.
Specific mechanisms through which performance im-
provements manifest are identified in our umbrella study.
Improvements in personal productivity, team communi-
cation, employee retention all have all been shown to
contribute to enhanced outcomes that are both financial
and clinical. Looking deeper, behind these ’interim’ steps,
are several core skills that benefit from diversity. Creativity
and innovation appear to blossom in more diverse setting.
Risk assessment is more precise and balanced in more
creative environments. These two core skills e risk
assessment and creativity e are vital in a healthcare
setting.
Simple diversity is not a panacea. Even these early
studies identify key enabling characteristics. First, the
organization must set diversity-friendly policies and
foster an open e nvironment that minimizes the negative
consequences of frictions that are inevitable with any
culture change, including those associated directly with
diversity.
16,18,19
Second, diversity appears to be
effective only when it extends beyond tokenism
,
.
19,23
Lastly, gains from diversity are maximized when re-
flected in top management and board posi-
tions.
13e15,21,22,24
Although most findings above were
not drawn exclusively from studies set in the healthcare
industry, basic concepts such as diversity-friendly pol-
icies, tokenism, team communication, risk assessment
seem universal and relevant.
Implications
Diversity is associated with better financial performance
and a higher quality of patient care. Many organizations
are already embracing it as a core strategy. In 2016, Intel
initiated a program to invest $300 million to increase the
diversity of its workforce, justifying the move largely
based on its financial returns.
29,30
Beyond parochial mo-
tives, greater industry diversity may also help address
disparities in the population.
31
Despite these benefits, women and minorities are still
poorly represented in professional and management ranks.
Perhaps part of the problem has been where attention was
focused. Unfortunately, much discussion centers on regu-
lations, quotas, tax incentives and other “carrots and
sticks”. Our goal with this paper is to ’boost the signal
above the noise’ of this politically charged discourse.
Appealing simply to the organization’s self-interests, we
attempt to objectively demonstrate the financial and
quality returns to diversity.
APPENDIX A. SUPPLEMENTARY DATA
Supplementary data to this article can be found online at
https://doi.org/10.1016/j.jnma.2019.01.006.
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