Hospitals Can Be Key to Healthy People, Healthy Economies

From the article by Johnny Magdaleno on Next City:

With the U.S. medical care industry spending more than $340 billion on goods and services every year, health systems and hospitals have the type of money that could revitalize the communities where they save lives.

That is, if they tended to funnel those dollars down to the neighborhood level.

When a hospital needs food for its cafeteria or off-site laundry services, for example, chances are it’s already signed up for what’s called a group purchasing organization. Nearly 98 percent of U.S. hospitals use this system, and have contracts that see big, often national vendors providing bulk orders and service at discounted rates.

But a new online toolkit designed by the Democracy Collaborative, a community wealth research center based in Ohio and Washington, D.C., is hoping to shatter that norm and help institutions look at the main street businesses and local vendors surrounding them to fill their needs. It’s part of a series, rich with guide points as well as examples of the growing number of hospitals that are already looking to rein their purchasing power to within city borders, called Hospitals Aligned for Healthy Communities.

“[M]any of those dollars leak out of their local communities and do not reach the populations facing the greatest health disparities,” notes an intro page for the toolkit. “Only a tiny portion of health system purchasing — less than 2 percent — flows to businesses owned by minorities and/or women.”

Lead author David Zuckerman estimates that fewer than 1 percent of the average national health system’s investment portfolios are devoted to giving local residents economic development opportunities, like job training and wealth building.

“So there’s a lot of opportunity,” he says. “Even small shifts can have huge impacts.”

A group of hospitals in the University Circle area in Cleveland were some of the first to spearhead this model back in 2005. That program led to collaborations between local hospitals, community foundations, colleges and the local government to link resources together and build job pipelines for disadvantaged workers to get into good-paying health jobs. It also created auxiliary services that have since been a boon to the community, like a local laundry cooperative that’s worker-owned and contracts directly with the participating hospitals.

Hospitals in Albuquerque, New Mexico, just rolled out a similar initiative.

In Richmond, Virginia, nearly 500 entry-level medical jobs stay empty while medical colleges see hundreds of students drop out year after year. So local partners — the city and state workforce development organizations, local nonprofits and two major hospital systems — decided to come together to reverse that history.

Read the full article.