SPRINGFIELD — A dozen hospitals and health systems across the country, including Baystate Health, signed the “Impact Purchasing Commitment” to build healthy, equitable, and climate-resilient local economies through what and how they spend their dollars.
The commitment, designed by the Healthcare Anchor Network (HAN) in partnership with Health Care Without Harm and Practice Greenhealth, includes increasing spending with minority- and women-owned business enterprises (MWBEs) as well as local and employee-owned, cooperatively owned, and/or nonprofit-owned enterprises, by at least $1 billion over five years. The institutions also agree to work with at least two of their large, existing vendors to create hiring pipelines in the disinvested communities they serve. The HAN member signatories also commit to adopting sustainable procurement goals, which helps build additional momentum garnered by hospitals in the Practice Greenhealth network to purchase goods and services that minimize damage to health and the environment.
“The Impact Purchasing Commitment represents a key part of our anchor mission strategy to address structural bias, the root causes of health disparities, by investing in the economic future and well-being that comes from the impact vibrant minority- and women-owned businesses have in our communities,” said Dr. Mark Keroack, president and CEO of Baystate Health. “The IPC pledge is a capital investment that aims to advance racial and gender equity and improve community health.”
It is estimated that roughly one in five (or 420,000) small businesses have closed during the COVID-19 pandemic. These closures have disproportionately impacted small businesses owned by immigrants, women, and black, Latinx, and Asian individuals, all of which have experienced higher rates of closures and sharper declines in cash balances. The number of black business owners decreased by 41%, Latinx business owners by 32%, and Asian business owners by 26%. Immigrant business owners decreased by 36%, and women business owners by 25%.
These businesses generate local jobs, including downstream jobs with suppliers and other vendors, as well as economic opportunities and community wealth building that works to produce broadly shared economic prosperity and ownership. So the loss of these small and MWBE businesses also has a massive impact on broader racial inequality and health equity.
“Health systems are uniquely positioned to have positive impact as leading employers and economic engines in their communities,” said David Zuckerman, executive director of Healthcare Anchor Network. “In addition to providing quality healthcare, they can leverage institutional resources, including almost $500 billion in annual spending, to help address the economic, racial, and environmental resource disparities that impact community-health outcomes.”
Small, local businesses struggle with tapping large, stable contracts, and MWBEs historically lack access to capital. This contributes to spending that is mostly leaving communities already struggling with underinvestment.
Even small shifts in the health systems’ spending portfolio can make a difference. Hospitals and health systems can be anchor companies that help local businesses and MWBEs stabilize and begin to recover, which facilitates employment and, in turn, increases access to health insurance and builds individual and community wealth and health. When local businesses and MWBEs are awarded business contracts, they are able to employ local residents and provide stable wages that allow employees to securely afford food, rent, and other necessities — all of which are crucial to individual and family health. This local spending also has a multiplier effect that can increase local economic activity beyond the one purchase.
Inclusive local purchasing also makes sense from a business-impact standpoint. By sourcing products and services locally and from MWBEs, these health systems can further align their capital with sustainability, diversity and inclusion, and community-benefit priorities. They can also strengthen their reputation as a local provider of choice, address supply-chain needs, and create more efficient and resilient supply chains. Sustainable procurement has positive societal impacts such as reducing pollution particulates, which contribute to chronic health conditions like asthma, and switching to clean energy, which reduces air-pollution deaths.