To increase diversity and promote inclusion, hospitals and health care systems are establishing strategic goals for supplier diversity. These health care organizations are making a deliberate effort to establish goals, track data — including spending and costs savings — and reach out to minority- and women-owned businesses to improve access to economic opportunities.

There is a strong business imperative for focusing on supplier diversity. “An effective supplier diversity process drives economic impact; no supplier diversity process will ensure economic derailment,” says Todd Gray, director, supplier diversity, at Grady Health System in Atlanta. “An effective supplier diversity process has a direct positive effect on the strength and loyalty of any organization’s consumer base.” The University of Chicago Medicine launched its business diversity office in 2002 on the premise that “inclusive sourcing is a good business practice to help us save money, drive innovation and benefit our local community,” says James S. Williams Jr., director of diversity, inclusion and equity. “We wanted to reap the benefits of the minority- and women-owned business communities and strengthen our role as an economic engine for our community.” Saint Francis Care, in Hartford, Conn., has had a supplier diversity program in place for only three years yet experienced exponential growth since fully integrating the program into the supply chain sourcing process, says Tatiana E. Paredes, supplier diversity program coordinator.

Getting good baseline data is key to starting a program and tracking results. “Establish a baseline so the organization can set attainable goals — not something unrealistic,” emphasizes Natalie Barraclough, business diversity manager, UChicago Medicine. Grady Health System conducts a quarterly analysis to track progress toward its supplier diversity goal, including cost savings. Like many hospitals, Saint Francis tracks the number of tier 1 vendors, or direct suppliers, as well as tier 2 vendors, who are key suppliers to tier 1.

Identifying diverse suppliers in health care poses challenges. Gray of Grady Health System suggests identifying nontraditional areas for growth and development — perhaps focusing on tier 2 as a strategy to increase capacity — to help sustain a supplier diversity program. Grady has hosted a health care consortium to introduce buyers and services and to help them understand health care trends.

Creating opportunities for diverse suppliers, including smaller suppliers, takes work and patience to ensure success. At UChicago Medicine, “Initially we connected directly with minority- and women-owned firms to share opportunities we were able to glean from our supply chain, looking at what was coming down the pike and making sure they had access,” Williams explains. The medical center also has encouraged larger strategic manufacturers, whom they cannot buy from directly, to partner with minority- and women-owned businesses and offer lower pricing. Bringing on a new supplier means working to ensure the relationship is successful and takes patience “on both sides,” especially to ensure capacity requirements are met, Barraclough says. UChicago Medicine participates in several local programs and councils, including the Chicago Minority Supplier Development Council, part of a national network that has a health care industry group and provides opportunities to share best practices. This network supports the overall growth, development and capacity building of diverse firms, locally and nationally. 

Kriti Goel is a program manager, Katya Seligman is a program specialist and Sonia Zhang, a 2014–2015 administrative fellow; all with the Health Research & Educational Trust. For more information, visit

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