“Like Turning a Ship in a Channel”: Reframing Complexities and Solutions for Supplier Diversity and Local Purchasing in Healthcare

Abstract

Background: US healthcare systems have begun establishing and expanding supplier diversity and local purchasing programs, in response to an increasing focus on equity and the role of hospitals as anchor institutions. The literature contains multiple lists of best practices and recommendations but does not contain an analysis of the complexities that stymie successful implementation. Aims: This thesis provides a framework to understand the complexities of impact purchasing and offers some recommendations based on that framework. Methods: The analysis relies on three primary sources of qualitative data: semi-structured interviews with 20 healthcare purchasing experts; insights from five reports highlighting healthcare impact purchasing case studies; and the author’s observations and conversations with colleagues while working at UMass Memorial Health. Structuring the analysis around Bolman and Deal Reframing Organization’s Four Frames, these data sources were coded to identify key themes. Results: Through decades of pressure to reduce costs and respond to increasing quality standards, contracts with vendors in the healthcare sector have grown in scale, complexity, and specificity, limiting the ability of small businesses to respond competitively to bids. The reduced capacity to compete has also been driven by unequal access to capital and rising local labor costs. Common approaches to supplier diversity in healthcare rarely acknowledge or address the historical origins that have created the current purchasing system in healthcare, limiting the health system’s ability to create the desired economic growth impacts. Recommendations: Healthcare leaders should update purchasing processes, ensure adequate staffing to handle the relationship-intensive work of connecting with local and diverse businesses, and build data systems that enable decision-making. Leaders should empower and incentivize staff at multiple levels (within supply chain and the departments making purchasing decisions) to make changes. Senior leaders must link supplier diversity to business strategy, and leaders at all levels should negotiate with vendors and others to create innovative solutions and multiply impact. Finally, by continuously telling stories, leaders can position local and diverse supplier efforts as an important symbol of the organization’s commitment to diversity, equity, and inclusion, likely increasing the interest of local and diverse vendors in doing business with system.