Improving Diversity Performance in Healthcare: Supplier & Distributor Diversity
Kevin Lewis
Vice President at BlueBin | Transformational Healthcare Performance Leader | Resilience | Sustainability | United Nations Speaker | White House Advisor | 130+ Articles | Published by TIME, N.Y. Times, The Wharton School
In the complex ecosystem of healthcare, the strength of diversity extends far beyond the workforce, embedding itself into the very fabric of supplier and distributor networks. For healthcare organizations, hospitals and non-acute facilities, fostering diversity among suppliers and distributors isn’t just a moral imperative; it's a strategic advantage that directly influences diversity performance. This approach not only mirrors the diverse populations served but also drives innovation, resilience and quality in patient care. Embracing diversity among suppliers and distributors enhances healthcare organizations' ability to offer empathetic, culturally sensitive and safe care to every patient. It encourages a broader range of products and services, fostering innovation and improving the quality of patient care. Moreover, it builds resilience by mitigating risks associated with supply chain disruptions. In essence, diverse procurement strategies are not just about equity; they're about excellence in healthcare.
Here are ten actionable strategies for health systems, hospitals and non-acute providers can implement today to improve supplier and distributor diversity.
Conduct a Comprehensive Enterprise-Wide Diversity Audit of Current Suppliers
Conducting a comprehensive diversity audit of suppliers and distributors helps healthcare organizations, both acute and non-acute, match their supply chain with the diverse needs of their patients. This process is crucial for improving diversity performance because it ensures the products and services provided are suitable for all patient demographics, leading directly to higher patient satisfaction and better care outcomes. For entry-level healthcare facilities, a straightforward action is to start sourcing from local minority-owned businesses and include diversity as a criterion in their procurement policies. More advanced institutions might implement specific diversity spending targets or develop programs to mentor and support minority-owned suppliers. This targeted approach allows healthcare organizations to discover and fill gaps where innovative, diverse suppliers can offer new, more relevant products. The result is a supply chain that not only supports diverse economic growth but also introduces a wider range of products and services that better address the complex needs of a diverse patient population, enhancing overall healthcare delivery.
Set Clear and Measurable Goals for Supplier Diversity
Setting clear and measurable goals for supplier and distributor diversity directly impacts the improvement of diversity performance in healthcare organizations, both in acute and non-acute facilities. For instance, a basic-level healthcare facility could aim to allocate 10% of its purchasing budget to diverse suppliers within the next year, ensuring these suppliers meet the healthcare industry's stringent safety and reliability standards. On the other hand, an advanced healthcare organization might commit to diversifying its sources for at least three critical supplies to mitigate risks of shortages, again with the stipulation that these new partners uphold the necessary quality and safety requirements. Such specific goals ensure that the inclusion of diverse suppliers contributes positively to the organization's operational resilience and patient care quality. This approach not only helps in maintaining continuity of care during supply chain disruptions but also supports the economic growth of diverse communities by actively involving them in the supply chain. The outcome is a more resilient, inclusive and high-performing supply chain that is better equipped to address the nuanced needs of a diverse patient population, leading to improved patient care and community engagement.
Explore and Build Partnerships with All Types of Diversity Businesses
Building partnerships with diverse businesses, including minority-owned (e.g., African American, Hispanic), women-owned, LGBTQ+-owned, veteran-owned and disability-owned enterprises, directly improves the diversity performance of healthcare organizations, both acute and non-acute facilities. By engaging with these varied businesses, healthcare providers can access products and services that are better tailored to the cultural and specific health needs of their diverse patient populations. For instance, a basic-level healthcare organization could partner with a minority-owned business to supply traditional herbal medicines that are popular among certain ethnic groups within the patient base, ensuring these are provided safely alongside conventional treatments. An advanced facility might work with a veteran-owned tech company to develop telehealth services that are sensitive to the needs of patients with PTSD, enhancing access for communities that may struggle with traditional healthcare settings. These specific actions enable healthcare organizations to offer more personalized and effective care, improving patient outcomes and satisfaction while also supporting economic growth within diverse communities by fostering an inclusive procurement strategy.
Implement Supplier Mentorship and Development Programs
Implementing supplier and distributor mentorship and development programs significantly boosts diversity performance in healthcare organizations, including both acute and non-acute facilities. By nurturing diverse suppliers through targeted mentorship, these programs directly contribute to creating a supply chain that is both resilient and sensitive to the nuanced needs of a diverse patient base. For example, a basic-level healthcare facility might start by offering quarterly webinars for diverse local suppliers, focusing on navigating the healthcare sector’s compliance landscape. In contrast, an advanced-level healthcare institution could create a year-long mentorship initiative, pairing new minority or women-owned suppliers with established industry veterans to refine their operational strategies, improve product offerings and tailor their services to address specific health issues prevalent in underrepresented communities. Such tailored development programs ensure that diverse suppliers can successfully meet the healthcare industry's stringent requirements while innovating in ways that enhance patient care. The outcome is a supply chain that not only supports economic diversity but also contributes to more empathetic, inclusive and effective healthcare delivery.
Incorporate Diversity Metrics into Supplier and Distributor Evaluation and Selection
Incorporating diversity metrics into the supplier and distributor evaluation process directly improves diversity performance in healthcare organizations, both acute and non-acute. For entry-level facilities, a practical step is to amend their Request for Proposal (RFP) templates to include questions about the diversity of the supplier’s leadership team, staff and any initiatives to support diversity within their organization and supply chain. This could involve asking for the percentage of their business that is conducted with minority-owned, women-owned, LGBTQ+-owned, veteran-owned and/or disability-owned businesses.
For more advanced healthcare organizations, a deeper integration of diversity metrics might involve creating a weighted scoring system for supplier evaluations. This system could, for example, allocate points based on the diversity of the supplier's workforce, their engagement with diverse subcontractors and/or the innovation of their products in addressing the needs of diverse patient populations. Additionally, these organizations could set clear benchmarks or goals for diversity — for instance, aiming for a certain percentage of their total procurement spending to go towards diverse suppliers each year.
By taking these steps, healthcare organizations ensure that they are not only sourcing from suppliers that reflect their commitment to diversity but are also more likely to introduce innovative and culturally sensitive healthcare solutions into their supply chain. For instance, a distributor known for collaborating with minority-owned businesses might offer unique insights or products tailored to the healthcare needs of specific ethnic groups, which could lead to improved patient outcomes in those communities. This approach not only supports the organization’s diversity and inclusion goals but also enhances the overall quality of care by ensuring that services and products are aligned with the needs of a diverse patient base.
Monitor and Evaluate the Diversity of Secondary Suppliers
Monitoring and evaluating the diversity of secondary suppliers is crucial for healthcare organizations to ensure a resilient and flexible supply chain, particularly important in both acute and non-acute facilities. For basic-level healthcare facilities, a practical step might be to require primary suppliers to list their top secondary suppliers and provide data on the diversity of these partners annually. This could include information on whether these secondary suppliers are minority-owned, women-owned, LGBTQ+-owned, veteran-owned and/or disability-owned businesses. For more advanced healthcare organizations, a further step could be the introduction of a policy mandating that a certain percentage of a primary supplier's secondary suppliers meet specified diversity criteria. This could also involve setting up a system of rewards or recognition for primary suppliers who consistently promote diversity in their secondary supply chains.
Such measures not only ensure a more diverse supply chain but also enhance supply chain resilience by providing multiple sourcing options during disruptions, such as a pandemic or natural disaster, ensuring that patient care remains uninterrupted. Additionally, the push for diversity among secondary suppliers encourages innovation by bringing in a myriad of perspectives and solutions, potentially uncovering new, more efficient products or methods for healthcare delivery. For instance, a diverse secondary supplier might introduce a novel medical device that is more suited to the specific needs of a particular patient demographic, directly impacting patient satisfaction and outcomes. This focus on secondary supplier diversity thus directly contributes to a healthcare organization's ability to provide high-quality, uninterrupted patient care while fostering innovation and inclusivity in the healthcare sector.
Implement Diversity Reporting and Accountability Measures
Implementing diversity reporting and accountability measures specifically benefits healthcare organizations by ensuring that their supply chains actively contribute to a diverse and inclusive healthcare delivery system. For instance, a basic-level healthcare facility could start by requiring all suppliers to annually report the demographic makeup of their leadership teams and staff, as well as detail their engagement with minority-owned, women-owned, LGBTQ+-owned, veteran-owned and disability-owned businesses. This step ensures that suppliers are at least aware of and potentially committed to diversity, which is crucial for organizations aiming to reflect the communities they serve.
Advanced healthcare organizations, on the other hand, might take things a step further by incorporating diversity metrics directly into their supplier performance evaluation processes. This could involve setting specific, measurable diversity targets for suppliers, such as a minimum percentage of procurement to be sourced from diverse businesses. Suppliers' performance against these targets could then be regularly reviewed, with results impacting contract renewals or the allocation of future business. This approach not only makes diversity a key component of supplier performance but also incentivizes suppliers to innovate and broaden their networks to include a wider range of diverse businesses.
Such measures have tangible benefits, including increased supplier innovation, improved patient safety and more culturally sensitive healthcare delivery. For example, suppliers might be motivated to develop products that address the specific health concerns of underrepresented groups or to provide medical devices that are more accessible to patients with disabilities. Ultimately, integrating diversity reporting and accountability into supplier relationships helps healthcare organizations better serve their diverse patient populations, leading to improved health outcomes and patient satisfaction.
Use Technology to Enhance Diversity Data Collection and Analysis
Leveraging technology to enhance diversity data collection and analysis offers tangible benefits for healthcare organizations seeking to improve their diversity performance. At the basic level, healthcare facilities can start by using straightforward data management software to record and monitor the diversity of their suppliers. This could include creating a database that tracks whether suppliers are minority-owned, women-owned, LGBTQ+-owned, veteran-owned and/or disability-owned businesses. Additionally, these organizations should request that their Group Purchasing Organizations (GPOs) provide detailed reports on the diversity of suppliers within their networks, ensuring transparency and accountability.
For more advanced healthcare organizations, the implementation of advanced analytics, artificial intelligence (AI), machine learning (ML) and/or robotic process automation (RPA) can take diversity data analysis to the next level. These technologies can process vast amounts of data to identify specific areas where the diversity of suppliers could directly impact patient care. For example, AI algorithms could analyze patient outcome data in conjunction with supplier diversity data to identify correlations between the diversity of medical suppliers and patient satisfaction or recovery rates. This could highlight opportunities where introducing more diverse suppliers into the supply chain could fill gaps in care delivery, such as sourcing culturally specific medical products or services that better meet the needs of diverse patient populations.
Moreover, advanced healthcare organizations could utilize these technological tools to simulate the impact of changes in their supplier diversity on patient care outcomes, guiding strategic decisions. By making data-driven decisions based on comprehensive analytics, healthcare organizations can ensure their procurement strategies are not only aligned with diversity goals but are also effectively contributing to improved patient care and inclusivity. This approach underscores the importance of diverse perspectives and solutions in enhancing healthcare delivery and patient outcomes.
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Foster Transparency and Collaboration in Sharing Diversity Data
Fostering transparency and collaboration in sharing diversity data among healthcare organizations, including both acute and non-acute facilities, is crucial for improving diversity performance. Basic-level healthcare facilities can start by engaging with healthcare GPOs to both access diversity data and contribute their own findings. For instance, they could share annual reports on their supplier diversity metrics with GPOs and request similar data from other members, fostering a culture of open exchange. This simple step could help identify gaps and opportunities in the current supply chain diversity landscape.
Advanced healthcare organizations might take this a step further by establishing formal networks or consortiums dedicated to sharing and analyzing supplier diversity data. These networks could organize regular meetings, workshops and/or webinars where members present case studies on successful diversity initiatives, discuss challenges and brainstorm solutions. For example, an organization that has successfully increased its engagement with veteran-owned suppliers could share the strategies that worked, the obstacles encountered and the impact on their supply chain and patient care. Additionally, these advanced organizations could collaborate with non-profit organizations specializing in supplier diversity to enrich their data pool and gain new insights into the effectiveness of different strategies. They might also develop shared digital platforms or databases where healthcare organizations can anonymously contribute and access supplier diversity data, best practices and resources.
By taking these steps, healthcare organizations not only improve their own diversity performance but also contribute to a sector-wide enhancement. This collaborative effort can lead to a more resilient healthcare supply chain, characterized by a rich diversity of suppliers that are better equipped to meet the needs of a diverse patient population. Sharing both successes and challenges in implementing diversity initiatives ensures that the entire sector learns and grows together, ultimately leading to improved quality of care and patient outcomes.
Regularly Review and Adapt Your Diversity Procurement Strategies
Regularly revising diversity procurement strategies is essential for healthcare organizations to enhance diversity performance effectively. This means actively monitoring how partnerships with diverse suppliers affect patient safety and care quality. A basic-level healthcare facility might start by implementing a yearly audit of its suppliers, focusing on specific diversity metrics and their impact on healthcare delivery. This could help to pinpoint where new, innovative suppliers could be introduced or where existing relationships could be strengthened. For more advanced organizations, adopting a real-time supplier performance dashboard could be beneficial. This tool would allow for the immediate adjustment of procurement strategies based on up-to-the-minute data on supplier performance, innovation contributions and the overall impact on patient care. Such organizations could also proactively seek out emerging technologies and methods from diverse suppliers, ensuring the procurement strategy not only supports diversity but also drives healthcare innovation. This approach ensures that the supply chain is not just diverse but also directly contributes to better patient outcomes and positions the organization at the forefront of healthcare innovation.
In conclusion, improving supplier and distributor diversity is not merely a checkbox for compliance; it's a strategic move towards building a more empathetic, innovative and resilient healthcare system. By taking actionable steps towards embracing diversity in procurement, healthcare organizations can significantly enhance their diversity performance, reflecting positively on patient care quality, safety and satisfaction. Let's commit to these changes, not just for the sake of diversity, but for the future of healthcare excellence.
If you liked this article and would like to learn more about improving performance and resilience in healthcare, please check out the following links.
Diversity performance
Financial performance
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Resilience performance
Sustainability performance
Leadership performance
Technologies to consider