CHP Makes the Case for Supplier Diversity

Philip Betbeze, March 22, 2013

Cincinnati's Catholic Health Partners hasn't always put a premium on supplier diversity. In fact, back in 2007,which really isn't that long ago, less than one percent of its total spending on supplies and services was on minority firms.

Today, it's important enough for Ohio's fourth-largest employer (and largest health system) to take the trouble of releasing a self-congratulatory press release on the achievement of reaching nearly 10% (or $92.6 million) of its total spending on women-and minority-owned businesses.

Beyond the obvious public relations value of such an accomplishment, what's so important about supplier diversity? To find out, I spoke with Michael Connelly, the system's chief executive officer.

"It was pretty appalling," he says, of the 2007 number.

Connelly says all the right things about spending on so-called diverse businesses. At one percent, it doesn't come close to reflecting the makeup of the community. As a religious-based nonprofit organization, Catholic Health Partners has a commitment to reflect its community in its business practices. Neither does a one percent spending level on diverse businesses reflect the makeup of the
management and staff of CHP.

"The issue is to make sure those who were never in the bidding process to begin with are included," says Connelly. "It's the right thing to do."

Fine. I get it. Those are admirable reasons.

But as our conversation progressed, I discovered, to my surprise, that increasing that diversity spending level is less important for the public relations and feel-good reasons many people assume it is. In fact, it's more important ultimately not only because it extends to include elements of the community that didn't benefit from CHP's huge purchasing power in the past, but also because CHP wasn't able to benefit from them either.

Philip Betbeze

Philip Betbeze is the senior leadership editor at HealthLeaders Media.

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