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CHP Makes the Case for Supplier Diversity

Philip Betbeze, for HealthLeaders Media, March 22, 2013

As Connelly says, less-visible benefits accrue to organizations that keep close tabs on this metric. Focusing on improving diversity spending, if it costs are low, is the right leadership move for an industry that claims it is all about reducing waste in healthcare.

"There's another important aspect to this and [that is] the belief that this is stimulating competition," Connelly says. "In the end we get better quality at better cost, because you in effect throw a new competitor into the mix. Everyone wins from doing this."

Everyone, that is, except maybe overpriced vendors, because let's dispel one myth right now. It's not that any of these women-owned or minority businesses get preferential treatment. They have to win the bid on price just like everyone else. When I asked about this, Connelly responded with true incredulity, but I had to ask the question.

"Of course they have to win the bid," he says.

It's about leadership, not necessarily about righting a wrong, and leadership requires synthesizing the important reasons surrounding any initiative, and making sure that not only do those initiatives provide solid thinking on the social and political reasons such changes are undertaken, but also for business reasons.

Why not go with the status quo?
Building up your diversity spending it not as easy as it sounds. Some lines of business are traditionally not places where women- or minority-owned businesses can effectively compete.

"It's hard to get a minority banking vendor, for example," says Connelly.

Many hospitals or healthcare facilities spend a lot on big supplier vendors, many of which, like GE and Johnson & Johnson, are huge multinational corporations, owned by shareholders—not women or minorities. Second, it's difficult to get certified as a minority vendor under CHP's definitions.

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