By Lars Thording

Opportunities are not equal in American healthcare. Minorities do not have the same access to lucrative jobs as others, and upward socio-economic mobility is difficult for minority business owners and employees in healthcare.

Hospitals and health systems are increasingly addressing this challenge by requiring a certain percentage of the facility’s (or system’s) spend to be so-called “minority spend.” For example, in 2021, 12 large hospital systems (Advocate Aurora Health, Baystate Health, Bon Secours Mercy Health, Cleveland Clinic, CommonSpirit Health, Henry Ford Health System, Intermountain Healthcare, Kaiser Permanente, Providence, Rush University Medical Center, Spectrum Health, and UMass Memorial Health) signed the Impact Purchasing Commitment and committed to increase spending with Minority and Women Owned Business Enterprises (MWBEs) by at least $1 billion over five years. While the appetite for making large-scale commitments may have lessened in the current administration, many health systems across the country continue follow corporate mandates for minority spending.
The Group Purchasing Organizations are following suit: “GPOs are now working to provide their members with more access to diverse suppliers, and with good reason. When a hospital’s supplier network reflects the diversity of the patient population served, great things happen. Innovation flourishes, barriers are eliminated, and relationships are formed within the diverse patient communities receiving care. As a procurement strategy, supplier diversity has the power to enhance patient experiences and improve the quality of patient care.”

The idea behind this is that if a certain amount of money is spent with companies that are predominantly minority employees and leaders, then we provide real opportunity for minorities to grow, create wealth, and raise their standard of living. And the healthcare supply chain in particular is uniquely positioned to expand social impact through inclusive sourcing strategies and diverse supplier partners.

The “minority spend” category at times includes spend with disabled, minority, service-disabled, LGBTQ, veteran, disadvantaged and women owned businesses. BIPOC (Black, Indigenous, and People Of Color) owned businesses are a part of the “minorities” included. WMBE as a category looks at women and minority owned businesses together. Different hospital systems have formulated their requirements differently when it comes to minority spend criteria. The Harvard Business Review defines a diverse supplier as “at least 51% owned and operated by members of a traditionally underrepresented or underserved group.”

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