How hospitals can strengthen local businesses

A new report that examines the role New Orleans hospitals play in the local economy illustrates the importance of hospitals to area small businesses.

The Democracy Collaborative's report found New Orleans hospitals have deeper roots in the community than many other businesses and spend $1.5 billion on goods and services annually, business that often does not trickle down to the city's small and minority-owned businesses.

Researchers interviewed 170 people associated with the New Orleans healthcare sector and found the city "has all of the ingredients necessary for a successful anchor development initiative and that the opportunity for greater small business-healthcare partnerships is compelling," according to the report.

The report found that hospitals are open to the idea of becoming "anchor institutions," or organizations that build wealth in an area by leveraging their economic power. The collaborative has developed anchor institutions in Cleveland where institutions like the Cleveland Clinic are major community fixtures.

To become anchor institutions, providers must track their local spending and develop a supply chain inclusion program and local contracting goals. To spread awareness, hospitals must conduct information sessions or use the city Office of Supplier Diversity's website and small business assistance associations.

A hospital's involvement with local businesses, the study states, often depends on its regional footprint. For example, hospitals or systems that have locations in other states are more likely to do business with national vendors or those that cover their general region rather than local ones. Other providers are subject to vendor targets. For example, Veterans Affairs facilities are subject to goals for veteran-owned, women-owned and minority-owned businesses and are barred from making selections based on geography.

To learn more:
- here's the report