Diversity: A strategic imperative

Owens & Minor sponsors 6th Healthcare Supply Diversity Forum

Supplier diversity isn’t just a nice thing to do, says Angela Wilkes, director of supplier diversity and small-business liaison officer, Owens & Minor. It’s a business imperative. “It brings value to the bottom line as well as value to the communities we serve.”

Healthcare providers seem to be getting the message. “We’ve come a long way,” she says. “Other industries – automotive, technology, communications – have been at it for 20 or 30 years. But I’ve seen progress get ramped up in healthcare over the past five to seven years.” Still, much work remains to be done. “There are still tremendous opportunities ahead of us.”

Owens & Minor attempts to help minority- and women-owned businesses – and providers – exploit those opportunities through the Healthcare Supplier Diversity Symposium. Sponsored by Owens & Minor, the Virginia Minority Supplier Development Council, the Healthcare Supplier Diversity Alliance and the National Association of Health Services Executives, the symposium brings together representatives from the entire healthcare supply chain for networking and to identify opportunities for the development of new products and services. The recent symposium, held in Richmond, Va., was the sixth annual event.

The rationale for supplier diversity
In today’s increasingly diverse society, cultivating a diverse supplier base is good business, says Wilkes. If the hospital or IDN establishes business relationships with diverse businesses in their community, then they are helping ensure the strength of that community, and hence, the financial strength of the people who come to those providers for healthcare, she says. “At the end of the day, all hospitals want to serve patients well; they want patients to come in, so they will have occupancy; and they want to be paid.” Working with diverse suppliers can help.

“Hospitals need to look at the demographics of a changing society,” adds Tracey Jeter, president and CEO, Virginia Minority Supplier Development Council. In many areas, the minority population consists of the customers of the hospital or hospital system. “These are the customers of today and tomorrow. [Healthcare providers] have to understand not only how to serve them, but they need to understand that if there’s an opportunity for [diverse suppliers] to compete for contracts and employ others as a result of those contracts, then providers are essentially reinvesting in the communities in which we all live and work.”

But it’s not easy. “Access to capital for small and minority businesses will be high on the radar screen,” says Jeter. What’s more, healthcare carries with it more regulatory hurdles than many other industries.

And diverse suppliers face the same challenges as any other small or emerging businesses, most notably, gaining the attention of hospital decision-makers. “It’s tough for any small business to navigate the healthcare supply chain,” says Jeter. But those who do their homework, study their potential customers’ needs and decision-making processes, can crack the code. “Healthcare isn’t something that you wake up one morning and say, ‘I want to get into it,’” she says.

A more fundamental challenge is educating minority businesses and healthcare providers on the opportunities that exist, says Wilkes. “These entrepreneurs are brilliant people, and they come up with ideas that become part of a deliverable that is very creative and innovative,” she says. “The opportunities for networking and getting involved have not been as readily apparent and open, and that’s where I see the biggest changes taking place. Doors are being opened.”

For example, Owens & Minor’s healthcare supplier diversity program has grown to include about 300 companies, she says. And other organizations are getting involved, including GPOs, Fortune 500 manufacturers, and organizations such as the National Association of Health Services Executives and the Virginia Minority Supplier Development Council.

In Virginia, the Healthcare Supplier Diversity Alliance provides a forum for diverse suppliers to learn how to engage hospitals, how to work with distributors, and how to transition from non-healthcare businesses into healthcare-related ones, says Jeter. Regarding the last point, she says that HSDA has worked with suppliers of information technology services to adapt those services to healthcare.

Providers face challenges too
Providers face their own set of challenges, not the least of which is time. “Their sense of urgency is, ‘How do I get ahead of the game and make the connections that are necessary in order to satisfy my market or my healthcare system today?’” says Wilkes. Simultaneously, they must work on long-term strategies to increase the presence of minority-, women- and veteran-owned suppliers in their supply chain, she adds.

“Timing is critical. There are companies out there that have the scale to assist some of the major IDNs, but we have to get to the table and get everyone talking, and we don’t have a lot of time.”

The very top members of provider organizations must be seated at that table, agree Jeter and Wilkes.

“We have found that those organizations – no matter how large or small – that have top down support, meaning support from the CEO and board of directors,” will have a successful diversity program, says Jeter. “If they feel supplier diversity or supplier development is important to the culture of the organization, and that it does in fact contribute to the bottom line, then it really does have a much greater success rate. These programs are much more seasoned and sustainable over a long period of time, because it’s ingrained in the culture. It’s not just HR or community relations.”