by Tarrin McGhee
Special to The New Tri-State Defender
Forty-five percent of healthcare systems throughout the country plan on spending more money in capital investment this year than what was spent in the past five years – a move that will present tremendous new business opportunities for minority and women vendors and service providers, according to Gary Shorb.
Shorb, president and CEO, Methodist Le Bonheur Healthcare, relayed that forecast last week as the Mid-South Minority Business Council Continuum (MMBCC) hosted its fifth annual Economic Development Forum (EDF) Aug. 27-29. Representatives from various industries convened at the Cook Convention Center to share best practices and insights with EDF participants on opportunities to position their companies for future success.
One of the forum's primary areas of focus was to give local business owners the inside scoop on how to penetrate the $5 trillion healthcare industry. At a panel discussion entitled "Healthcare: Fueling Growth, Opportunity and Innovation," CEOs and presidents from four large healthcare institutions discussed the economic impact of the industry on communities, and the role that it plays in driving business growth.
Citing interest in increasing minority business inclusion and diversifying the vendor/supplier pool for their corporations, the panelists – Reginald Coopwood, president & CEO, Regional Medical Center (The Med); Stephen C. Reynolds, president and CEO, Baptist Memorial Health Care; Andrea R. Price, president and CEO, Mercy Hospital Health System Northern Region; and Shorb – each emphasized the importance of solid infrastructure and innovation from companies interested in contracting and partnerships.
To take advantage of the opportunities, companies must have the ability to work proactively to help health care corporations meet their objectives, said Shorb.
"Something that our diversity suppliers/partners have in common is anticipating problems before they occur instead of solving problems after they occur, which is of tremendous value to our organization," Shorb stressed.
Methodist Le Bonheur Healthcare is working to increase its minority spending to 20 percent overall. The organization is building a new hospital in Olive Branch, Miss., with a goal of 30 percent minority participation on the $100 million project.
"As part of our mission as a faith-based organization, we try to do what we can to close the gap in health disparities, but we are also concerned about economic disparities," said Shorb.
"We know that the whole community can't prosper if we have parts of the community that really are held back. It's through a focus from senior leadership and visible support that we can (close the gaps) and make this happen."
"From our standpoint, there's value in utilizing a local business to provide some services with some degree of margin. The margin is the value in investing in your community, but that margin can't be such that it affects our bottom line and ability to be competitive," he said.
Over the past three years, The Regional Medical Center has witnessed 100 percent-plus growth in investments in minority and women owned business development, according to Coopwood. About 16 percent of The Med's total spending ($8 million dollars) goes to minority suppliers.
"It's a trajectory that we want to continue, and ensure that we are a good corporate partner for everyone in our community," said Coopwood. "But it all goes back to how well you help us accomplish the things we need. In order for us to work together, you have to get ahead of the curve to provide solutions."
Facilitated by Lisa Kranc, Senior VP of Marketing at AutoZone, the panel discussion centered on ways that minority and women business owners and executives can take advantage of various opportunities that exist within the healthcare industry to increase profits.
Medical research, engineering, information technology, manufacturing, purchasing, construction, facilities management, products and services, and population health management were among the primary areas presented by panelists as business opportunities.
Lack of capacity and capital are two main challenges confronted by small to mid-size companies seeking to gain new business with large corporations such as health care institutions.
As industry leaders seek to identify ways to cut expenditures and increase profits, relationship development and management and innovation were offered as primary ways that business owners can overcome such barriers.
"We are under a tremendous amount of pressure to reduce our costs," Price said.
"But it's not only just pricing or supplying us with products and services, it's about providing us with other value added services...and finding out what it is we're going through and how you can help and assist us in that," he said.
For small to mid-size companies seeking to create partnerships with healthcare corporations, critical factors for success include quality of service, flexibility in meeting the needs of the client, and pricing.
The economic downturn has had a significant impact on the growth rate and success of businesses across the country. Even within the healthcare industry, leaders and executives are working to identify new approaches to sustain.
However, because of its staying power and overall net worth, the healthcare industry presents myriad opportunities for minority and women business owners to forge ahead.
It (healthcare) is creating more jobs than any industry in the country," said Lisa Kranc, moderator of the forum. "There's room for everybody to take a piece of this growth."
Forum Q&A excerpts
Q: Baptist Health Care recently (contracted) $1.2 million with a women-owned firm based in Wisconsin to implement electronic health records across the whole network. What criteria was used for that decision?
S.C. Reynolds: Electronic health records is a new way to connect all caregivers together to benefit patients we serve. We looked for a solution that was being used by other large healthcare systems in the country. (We) found that there were organizations that we respect greatly...like Northwestern in Chicago, Yale, Cleveland Clinic and many others, who had chosen to use this solution (Epic).
We were looking for a solution that matched our position strategy, benefits the safety and quality of care for our patients, a solution that created efficiencies in workflow. (The) selection process was a rigorous process. Once we came to the top choice, we met with the vendor and had 19 demonstrations over 3 weeks, conducted 1200 surveys, and had overwhelming support for Epic as the choice.
Why did we choose (Epic)? We saw the opportunity for very speedy implementation, we looked at their track record of success, and we also saw a tremendous amount of customer support during the selection and the contracting process. Epic brings us a competitive advantage...provides a better record of patient care, provides ease of access to records. It's a huge investment but we see the opportunity in the future to improve the quality of care for patients.
Q: Best way for new vendor to market their services to healthcare organizations?
Reynolds: You can do the full frontal approach, come straight to us with your ideas or through our materials management office or come through our group purchasing organizations.
Q: Supply chain – 30 percent of costs are contained in the supply chain. All panelists talked about the largest area of focus for minority business opportunity...a lot of organizations are focusing on it and want to cut costs as much as 15 to 20 percent. Sounds like a lofty goal. How are you challenging your organizations to meet that goal?
R. Coopwood: We seek to find direction with senior leadership and supply chain management to look at opportunities to continue to narrow down costs....We challenge our GPO (group purchasing organizations) vendors to give us good prices in order to meet reductions in costs.
(The Economic Development Forum brings together local and national business and thought leaders to focus on the power of economic development to transform the Memphis community, and to discuss strategies for minority business development and growth in the Mid-South region.)