Observatory commissions study to estimate cost of racism in healthcare

The NHS Race and Health Observatory has commissioned a major study to investigate the economic cost of racism in health and healthcare in England.

This study will aim to calculate the economic impact of racial inequities across healthcare and the NHS workforce; exploring health outcomes, access to treatment and workforce issues, findings are expected by May 2027.

NHS Health Economics Unit, the Strategy Unit, and Charity, People Street have been appointed to undertake the work to estimate costs which impact patients, individuals, communities, the NHS, public finances and wider society, typically over a 12 month period. The partnership will ensure expertise is factored across health economics, data evaluation, population health analysis, community research and co-production.

Researchers will study the financial consequences of racial inequity, including differences in access to and use of healthcare, delayed diagnosis and treatment, patient experience, avoidable or additional healthcare, and health outcomes. In addition, workforce issues including experiences of discrimination, sickness absence, recruitment, career progression and retention, alongside wider system consequences such as complaints, grievances and litigation will be examined.

Professor Habib Naqvi, chief executive, NHS Race and Health Observatory, said:

“This research has the potential to change how we understand, measure and respond to the true cost of racism in the NHS. Racism is not only a profound moral and social injustice; it also carries a significant financial cost to the public purse through avoidable litigation, delayed care, poorer outcomes, workforce harm and lost productivity. But the heaviest toll is borne by individuals, families and communities — and that ‘human cost’ cannot be captured fully in pounds and pence.

“As the largest employer in Europe, the NHS has both a responsibility and an opportunity to lead the way in tackling racism and discrimination. Our diverse workforce is the backbone of the health service, and our patients deserve systems that are fair, equitable and free from discrimination, bias and harm. None of us can afford to be bystanders.”

Ultimately, the study will provide more than a single financial figure. It will establish an evidence-based guide for understanding where the economic consequences of racism arise, what can be quantified, where evidence is missing, and areas where further research or policy action are required.

Another central aim of the study is the development of a robust and transparent approach to understanding the economic cost of racism. Researchers will identify and measure relevant differences between ethnic groups, assess the evidence for how racism contributes to those differences, and estimate the resulting economic consequences.

Chief Health Economist Wayne Smith, NHS Health Economics Unit, said:

“This is an important collaboration, bringing together health economics, quantitative evidence, research expertise and lived experience to address an issue of considerable importance to the NHS and wider society.

“The work will seek to develop a robust and credible understanding of the economic consequences of racism in health and healthcare, while recognising the complexity and sensitivity involved in measuring and attributing these impacts.

“We hope the study will strengthen the evidence base and provide meaningful insights to inform future policy, research and action to address racial inequity.”

Professor John Appleby, an Observatory Board Member and former Chief Economist, who led the Observatory’s original Cost of Racism study, noted that this was a very under-researched issue.

“This current study will provide important details to help our understanding of the economic costs of racism as it relates to health and health care.”

The study will also consider limitations and gaps in the available evidence when determining what can be reliably measured and estimated. Where relevant data is incomplete or unavailable, these limitations will be made transparent and reflected in the interpretation of the findings. This will also help identify areas where further evidence or research may be valuable.

Abeda Mulla, Process Evaluation Lead, Strategy Unit, said:

“This ambitious piece of work, of national significance, seeks to both acknowledge and quantify racism in health and healthcare. Our hope is that this work will provide the much-needed impetus for individuals, institutions, systems and society to take action for the benefit of all of us.”

People Street, a social research agency, campaigning for design justice to tackle health inequalities will bring the lived-experience evidence to the study. They will head a team, engaging local community researchers and leaders to co-produce a diverse range of resource materials, alongside the facilitation of a series of local panels, individual interviews and focus groups with those affected. Patients with lived experience of race discrimination and care inequality will be invited to share feedback and have opportunities to contribute.

Welcoming the announcement, Nilushka Perera, Director of Impact and Innovation, People Street, said: 

“At People Street, we believe that research rigor and lived experience aren’t in tension, they shape and strengthen each other. Our community-led research has shown us, time and again, that robust honest evidence comes from listening and connecting to people on the ground. With this landmark study, we’re excited to challenge the limits of a traditional economic study: to deepen our collective understanding of the specific nuances that data alone can’t capture.  We seek to bring real richness into the findings. This is about honouring the lived, living and learned realities of racism in healthcare that surround all of us, every day.”

The final report in 2027 will incorporate a range of resources including a literature review examining earlier papers quantifying the cost impact  of racism in health and healthcare, a framework for the analysis, co-produced with racially minoritised communities, and recommendations for policy and further research, these results will be produced across a number of practical resources and platforms.

Working alongside a Lived Experience panel, People Street’s community researchers will co-produce resource materials and facilitate research conversations with communities at the highest risk of health inequity including health and care staff.

This approach is designed to surface the living racial discrimination and care inequality that administrative data cannot capture. Crucially, those with lived experience are co-producers of the research. This qualitative evidence will feed directly into the study’s causal reasoning and economic modelling, standing alongside the project’s literature review and economic analysis as one of three equal evidence streams.

Yakub Umer, People Street Community Panel member, added:

“Official systems can erase the very harm they’re meant to record. One family’s complaint about their child’s care was only accepted once the word ‘racism’ was removed from their account. That’s exactly the kind of evidence this study is designed to surface. We didn’t want to start by talking about racism, we wanted to start with what actually happened to us, and allow space for people to work out for themselves whether race was part of it.’’