The healthcare industry spends over $4 trillion dollars annually. The time has come for those dollars to be spent equitably.
The healthcare industry is a major contributor to the U.S. economy, accounting for 18% of the country’s gross domestic product (GDP) and employing more than one out of every ten, U.S. workers. Healthcare is also one of the most ethnically diverse sectors, with African-Americans and Hispanic Americans accounting for approximately 20% of the workforce.
Despite these statistics, diverse populations continue to be underrepresented in many aspects of healthcare — especially among suppliers and vendors who sell products or services to hospitals, health systems, and other providers. Many major health systems have taken action to alleviate this discrepancy by adopting the Impact Purchasing Commitment, designed to increase business with diverse suppliers in their supply chains and procurement activities.
The signatories of the Impact Purchasing Commitment, led by the Healthcare Anchor Network, have committed to spend $1 billion over the next five years with minority and women-owned business enterprises (MWBEs), as well as local and employee-owned, cooperatively owned, and/or nonprofit-owned businesses.
Healthcare organizations are increasingly committing to supplier diversity as a means of improving patient access and lowering costs. When healthcare systems create opportunities for minority- and women-owned businesses (MWBEs), they improve patient outcomes and reduce costs while supporting long overdue economic equity.
A recent report from Healthcare Purchasing News shows that more than half of the purchasing executives surveyed believe that their organization’s commitment to supplier diversity has been good for business. The study also found that healthcare organizations plan to increase their use of diverse suppliers by 5% over the next year.
To encourage supplier diversity, healthcare systems can take a few critical steps:
- Commitment from senior leadership: A strong commitment from senior leadership is crucial for the success of any supplier diversity program. Senior leadership must be aware of the financial and strategic benefits of increasing the number of MWBEs within the supply chain. They should also be aware that under federal law, minority firms have legal duties in terms of equal opportunity and affirmative action.
- Public commitment: A public commitment by a healthcare system can help increase awareness among suppliers about its efforts to increase access for MWBEs. It can also assist MWBEs looking to do business with the healthcare system in developing their partnerships.
- Supplier diversity policy: A formal policy outlining goals, objectives, guidelines, and decision-making criteria will help ensure consistent implementation across divisions and departments within a healthcare system. It should outline how decisions on awarding contracts are made, who can make them, and what factors are considered when making those decisions (e.g., cost).
To learn more about how to integrate Supplier Diversity within your organization, contact our Vice President of Supplier Diversity: Stephanie.Armstrong@J2MedicalSupply.com.