Key Terms

Defining the critical VOCABULARY FOR INCLUSIVE, LOCAL SOURCING

ANCHOR INSTITUTION

Anchor institutions are nonprofit or public institutions that are firmly rooted in their locales, including hospitals, universities, local governments, and utilities. These institutions often have a social or charitable purpose, and unlike for-profit corporations that can relocate, are place-based and tend to stay put. As such, they have a vested self-interest in helping to ensure that the communities in which they are based are safe, vibrant, healthy, and stable.1See Tyler Norris and Ted Howard, Can Hospitals Heal America’s Communities? “All in for Mission” is the Emerging Model for Impact (Takoma Park, MD: The Democracy Collaborative, 2015), 8

ANCHOR MISSION

A commitment to intentionally apply an institution’s long-term, place-based economic power and human capital in partnership with community to mutually benefit the long-term well-being of both. 2See Tyler Norris and Ted Howard, Can Hospitals Heal America’s Communities? “All in for Mission” is the Emerging Model for Impact (Takoma Park, MD: The Democracy Collaborative, 2015), 7

Business certifications (MWBE/DBE/HUB)

Throughout the toolkit, multiple definitions and certifications are referenced when discussing institutions’ supplier diversity programs. Women- and Minority-owned Business Enterprises (MWBE): Women and Minority Owned Business Enterprises (MWBE) is an industry term to refer to businesses owned and operated by women or historically underrepresented groups, and particularly those that have gone through a national or local certification process. The National Minority Supplier Development Council defines minority-owned businesses as those that are “owned, operated and controlled by minority group member,” which include Asian, Black, Hispanic and Native American residents. Many institutions require a MWBE certification for participation in their supplier diversity programs.3For more information about MWBE certification, see: “Certification Overview,” MWBE.com, accessed November, 2016, www.mwbe.com/cert/certification.htm“What is a MBE?” National Minority Supplier Development Council, accessed November, 2016, www.nmsdc.org/mbes/what-is-an-mbe/  

Other certifications and definitions include Disadvantaged Business Enterprises (DBE) and Historically Underutilized Businesses (HUB). The DBE certification is implemented by the U.S. Department of Transportation and is open to small businesses where “socially and economically disadvantaged individuals own at least a 51% interest,” defining this as including African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans, women, and others on a case by case basis.4For more information on DBEs, see: “Definition of a Disadvantaged Business Enterprise,” Department of Transportation, accessed November 2016. www.transportation.gov/osdbu/disadvantaged-business-enterprise/definition-disadvantaged-business-enterprise  HUB certifications are generally operated by state governments and refer to enterprises that are at least 51% owned by minorities, including the groups listed above, and disabled-owned business enterprises. Some states have included restrictions on the size of businesses.5“Historically Underutilized Business (HUB) Owned Business Definition,” ThomasNet, accessed November, 2016 certifications.thomasnet.com/certifications/glossary/ownership_diversity/ownership_diversity/historically-underutilized-business-hub/ 

Business Intermediaries

For the purposes of this toolkit, the term business intermediaries refers to organizations that strengthen the capacity of small, local, diverse, and/or employee-owned businesses to serve institutional purchasers. In this context, these organizations include technical assistance providers, business incubators, organizations that help connect businesses to capital, and supplier development councils.

COMMUNITY BENEFIT

Activities of hospitals and health systems that contribute to the health and well-being of their surrounding community. Non-profit hospitals and health systems must report on their community benefit activities in order to maintain their federal tax-exempt status. Traditionally, community benefit reporting has included free and discounted care, unreimbursed care, community health improvement efforts, efforts to expand access to care, training for health professionals, and research. In 2011, the IRS issued guidance that “community building activities” also counted as community benefit. Defined as hospital activities that foster health improvement through physical and environmental improvements, community capacity building, and economic development, this expanded the range of community benefit activities to include sectors such as housing and workforce development.6For further definitions and information about Community Benefit, refer to: “Jargon Buster,” Build Healthy Places Network, accessed August 2016 www.buildhealthyplaces.org/jargon-buster/; and “What are hospital community benefits?” (Baltimore, MD: The Hilltop Institute, 2013), accessed August 2016 www.hilltopinstitute.org/publications/WhatAreHCBsTwoPager-February2013.pdf

COMMUNITY HEALTH NEEDS ASSESSMENT (CHNA)

A research process non-profit hospitals must implement as part of their community-benefit reporting. Instituted by the Affordable Care Act of 2010, CHNAs must be completed by hospitals and health systems every three years and identify the most pressing community health concerns. An implementation plan must then be developed to address identified community health needs. CHNAs and the resulting implementation plans are publicly reported, and subject to review by the IRS.7For further definitions and Community Health Needs Assessments, refer to: “Jargon Buster,” Build Healthy Places Network, accessed August 2016 www.buildhealthyplaces.org/jargon-buster/

COMMUNITY WEALTH BUILDING

A systems approach
to economic development that creates an inclusive, sustainable economy built on locally rooted and broadly held ownership. Community wealth building calls for developing place-based assets of many
kinds, working collaboratively, tapping large sources of demand, and fostering economic institutions
and ecosystems of support for enterprises rooted in community.8See Marjorie Kelly and Sarah McKinley, Cities Building Community Wealth (Takoma Park, MD: The Democracy Collaborative, 2015), 16

Group Purchasing Organization (GPO)

A Group Purchasing Organization (GPO) is an entity that aggregates purchasing volume with the objective of achieving cost savings for its members by negotiating deals with vendors, distributors, and manufacturers.9Despite this intended goal, the Government Accountability Office, in a 2010 literature review, could not find any peer-reviewed studies with empirical analysis to show that GPOs lower costs to hospitals. See: U.S. Government Accountability Office, Group Purchasing Organizations: Research on Their Pricing Impact on Health Care Providers (Publication No. GAO- -323R), Washington, DC: U.S. Government Accountability Office. Jan 29, 2010, p 1. Accessed Mar 21, 2014.

Participating institutions engage in a contract with a GPO by becoming members, and agreeing to direct a certain percentage of their spending through the organization rather than engaging in contracts directly. According to the Healthcare Supply Chain Association, more than 70% of purchases that U.S. hospitals make are done through GPO contracts. A GPO is one type of Supply Chain Integrator (see definition below).10“Frequently Asked Questions,” Healthcare Supply Chain Organization, accessed November, 2016, www.supplychainassociation.org/?page=FAQ

Employee-owned Business

An employee-owned business is one in which the ownership of a company is held broadly by the employees themselves, rather than a sole proprietor. Employee ownership can take multiple forms: Worker cooperatives are businesses that are owned and governed by their employees. Workers, who are member-owners of the cooperative, invest and own the business together and are voting members of the board of directors and have equal voting power. This creates a more democratic and equitable governance structure, as well as wealth building opportunities for employees through profit sharing.  Employee Stock Ownership Plans (ESOPs) allow employees to become shareholders in the business, often through holding company stocks in the form of a retirement plan. This structure provides additional financial benefit to employees through profit sharing and can increase participation through decision making for employees. 11 For more information about worker cooperatives, see “Worker Cooperatives,” Community-Wealth.org, The Democracy Collaborative, accessed November 2016, community-wealth.org/content/worker-cooperatives and “Worker Cooperative FAQ,” Democracy at Work Institute, accessed November, 2016, institute.coop/worker-cooperative-faq#Q2. For more information about ESOPs see: “Employee Stock Ownership Plans (ESOPs),”  Community-Wealth.org, The Democracy Collaborative, accessed November 2016, community-wealth.org/strategies/panel/esops/index.html and “An Introduction to the World of Employee Ownership,” National Center for Employee Ownership, accessed November, 2016 www.nceo.org/employee-ownership/id/12/  

HEALTH & HEALTH EQUITY

More than just the absence of illness, these toolkits utilize the World Health Organization’s definition of health, “a state of complete physical, mental, and social well-being, and not merely the absence of disease or infirmity.” Health equity refers to the notion that all people should be able to achieve their highest level of health, regardless of their race, gender, class, sexual orientation, or other identities. Achieving health equity requires addressing the systemic factors shaping the social determinants of health.12Health and health equity are defined by The Build Healthy Places Network, which utilizes definitions from the World Health Organization.. For more information, see: “Jargon Buster,” Build Healthy Places Network, accessed August 2016, www.buildhealthyplaces.org/jargon-buster/; and “WHO definition of Health,” World Health Organization, accessed August, 2016, www.who.int/about/definition/en/print.html. For further definitions of health equity, see “Glossary of Terms,” National Partnership for Action to End Health Disparities, Office of Minority Health, accessed August 2016, minorityhealth.hhs.gov/npa/templates/browse.aspx?lvl=1&lvlid=34

Locally Owned Business

A locally owned business refers to one in which the company is owned and operated by residents of a designated geography. Purchasing at locally owned businesses has a multiplier effect for local economic activity. Dollars spent at locally owned businesses recirculate in the community at a greater rate than money spent at national chains and absentee-owned businesses. 13For further information about locally owned businesses and the multiplier effect see: BALLE, “Local Economy Framework,” BALLE, (2016) accessed November, 2016, bealocalist.org/local-economy-framework-8-strategies-build-healthy-local-economies/ and “The Multiplier Effect of Local Independent Businesses,” American Independent Business Alliance, accessed November, 2016, www.amiba.net/resources/multiplier-effect/ 

Mentor-Protégé Program

A mentor-protégé program connects large vendors with smaller local and diverse vendors in order to provide training and capacity building opportunities. More commonly employed in construction, mentor-protégé programs help build capacity across the supply chain, as protégés receive coaching around important business practices, such as putting together bids and organizing the back office. Programs can take the form of informal mentorships, which encourage relationships between tier-one and tier-two suppliers (see below), or formalized programs where the health system acts as a matchmaker and facilitator.14For more information on mentor-protégé programs, see the Building Capacity section of this toolkit. hospitaltoolkits.org/purchasing/infographic/building-capacity/critical-strategies/ 

Procurement, Purchasing and Sourcing

Purchasing and sourcing refer to different stages of the procurement process, or the way in which institutions procure items. Although each of these terms has its own specific parameters and functions, in this toolkit we use them interchangeably to refer to activities that are part of the supply chain, or the entire process of procuring items from identifying needed goods and services to distributing them within the hospital.

SOCIAL DETERMINANTS OF HEALTH

A complex of social, economic, and environmental factors that drive health outcomes. The World Health Organization defines the social determinants of health as “the conditions in which people are born, grow, work, live, and age.” They represent the wider set of forces and systems shaping the conditions of daily life that drive health outcomes, such as inequality, social mobility, community stability, and the quality of civic life. Sometimes referred to as “upstream” determinants, research indicates that 40 percent of the factors that contribute to health are social and economic.15See “Social Determinants of Health,” World Health Organization, accessed April 2015, www.who.int/social_determinants/en/; Tyler Norris and Ted Howard, Can Hospitals Heal America’s Communities? “All in for Mission” is the Emerging Model for Impact (Takoma Park, MD: The Democracy Collaborative, 2015; and “County Health Rankings & Roadmaps,” University of Wisconsin Population Health Institute, accessed September 2015, www.countyhealthrankings.org/Our-Approach

Supplier Diversity

Supplier diversity refers to an institutions’ vendor base, and the degree to which the businesses institutions procure from are owned by diverse suppliers. It has developed as an industry term to refer to working with businesses that are at least 51% owned, managed and operated by businesses owned by minorities, women, veterans, or other designated groups that have historically been underrepresented in industry supply chains. In this toolkit, we focus on supplier diversity programs that explicitly work with minority-owned businesses.16For more information about supplier diversity within healthcare, see: Health Research & Educational Trust, Increasing Supplier Diversity in Health Care, (Chicago, IL: Health Research & Educational Trust, September, 2015), accessed at www.hpoe.org/Reports-HPOE/2015/2015_supplier_diversity_FINAL.pdf

Supply Chain Integrators

The term supply chain integrator refers to business entities that perform aggregation or distribution functions in the purchasing process. These include Group Purchasing Organizations, which aggregate purchasing volume; medical supply distribution companies; and distribution and transportation companies. Although the integrators themselves are often national in scale, many of their supply chain functions can be localized and diversified.

Tier-one and Tier-two Suppliers

Tier-one (or prime) suppliers refer to vendors that institutions directly contract with when procuring a good or service. Tier-two suppliers refer to vendors that tier-one suppliers subcontract with in order to fulfill the contract. Subtracting requirements can encourage tier-one vendors to work with and mentor local and diverse suppliers.

 

How to use this toolkit

This toolkit offers a guide for how to leverage hiring practices to advance inclusive, local job creation and career development for communities experiencing the greatest health and wealth disparities.

References   [ + ]

1. See Tyler Norris and Ted Howard, Can Hospitals Heal America’s Communities? “All in for Mission” is the Emerging Model for Impact (Takoma Park, MD: The Democracy Collaborative, 2015), 8
2. See Tyler Norris and Ted Howard, Can Hospitals Heal America’s Communities? “All in for Mission” is the Emerging Model for Impact (Takoma Park, MD: The Democracy Collaborative, 2015), 7
3. For more information about MWBE certification, see: “Certification Overview,” MWBE.com, accessed November, 2016, www.mwbe.com/cert/certification.htm“What is a MBE?” National Minority Supplier Development Council, accessed November, 2016, www.nmsdc.org/mbes/what-is-an-mbe/ 
4. For more information on DBEs, see: “Definition of a Disadvantaged Business Enterprise,” Department of Transportation, accessed November 2016. www.transportation.gov/osdbu/disadvantaged-business-enterprise/definition-disadvantaged-business-enterprise
5. “Historically Underutilized Business (HUB) Owned Business Definition,” ThomasNet, accessed November, 2016 certifications.thomasnet.com/certifications/glossary/ownership_diversity/ownership_diversity/historically-underutilized-business-hub/
6. For further definitions and information about Community Benefit, refer to: “Jargon Buster,” Build Healthy Places Network, accessed August 2016 www.buildhealthyplaces.org/jargon-buster/; and “What are hospital community benefits?” (Baltimore, MD: The Hilltop Institute, 2013), accessed August 2016 www.hilltopinstitute.org/publications/WhatAreHCBsTwoPager-February2013.pdf
7. For further definitions and Community Health Needs Assessments, refer to: “Jargon Buster,” Build Healthy Places Network, accessed August 2016 www.buildhealthyplaces.org/jargon-buster/
8. See Marjorie Kelly and Sarah McKinley, Cities Building Community Wealth (Takoma Park, MD: The Democracy Collaborative, 2015), 16
9. Despite this intended goal, the Government Accountability Office, in a 2010 literature review, could not find any peer-reviewed studies with empirical analysis to show that GPOs lower costs to hospitals. See: U.S. Government Accountability Office, Group Purchasing Organizations: Research on Their Pricing Impact on Health Care Providers (Publication No. GAO- -323R), Washington, DC: U.S. Government Accountability Office. Jan 29, 2010, p 1. Accessed Mar 21, 2014.
10. “Frequently Asked Questions,” Healthcare Supply Chain Organization, accessed November, 2016, www.supplychainassociation.org/?page=FAQ
11. For more information about worker cooperatives, see “Worker Cooperatives,” Community-Wealth.org, The Democracy Collaborative, accessed November 2016, community-wealth.org/content/worker-cooperatives and “Worker Cooperative FAQ,” Democracy at Work Institute, accessed November, 2016, institute.coop/worker-cooperative-faq#Q2. For more information about ESOPs see: “Employee Stock Ownership Plans (ESOPs),”  Community-Wealth.org, The Democracy Collaborative, accessed November 2016, community-wealth.org/strategies/panel/esops/index.html and “An Introduction to the World of Employee Ownership,” National Center for Employee Ownership, accessed November, 2016 www.nceo.org/employee-ownership/id/12/ 
12. Health and health equity are defined by The Build Healthy Places Network, which utilizes definitions from the World Health Organization.. For more information, see: “Jargon Buster,” Build Healthy Places Network, accessed August 2016, www.buildhealthyplaces.org/jargon-buster/; and “WHO definition of Health,” World Health Organization, accessed August, 2016, www.who.int/about/definition/en/print.html. For further definitions of health equity, see “Glossary of Terms,” National Partnership for Action to End Health Disparities, Office of Minority Health, accessed August 2016, minorityhealth.hhs.gov/npa/templates/browse.aspx?lvl=1&lvlid=34
13. For further information about locally owned businesses and the multiplier effect see: BALLE, “Local Economy Framework,” BALLE, (2016) accessed November, 2016, bealocalist.org/local-economy-framework-8-strategies-build-healthy-local-economies/ and “The Multiplier Effect of Local Independent Businesses,” American Independent Business Alliance, accessed November, 2016, www.amiba.net/resources/multiplier-effect/ 
14. For more information on mentor-protégé programs, see the Building Capacity section of this toolkit. hospitaltoolkits.org/purchasing/infographic/building-capacity/critical-strategies/
15. See “Social Determinants of Health,” World Health Organization, accessed April 2015, www.who.int/social_determinants/en/; Tyler Norris and Ted Howard, Can Hospitals Heal America’s Communities? “All in for Mission” is the Emerging Model for Impact (Takoma Park, MD: The Democracy Collaborative, 2015; and “County Health Rankings & Roadmaps,” University of Wisconsin Population Health Institute, accessed September 2015, www.countyhealthrankings.org/Our-Approach
16. For more information about supplier diversity within healthcare, see: Health Research & Educational Trust, Increasing Supplier Diversity in Health Care, (Chicago, IL: Health Research & Educational Trust, September, 2015), accessed at www.hpoe.org/Reports-HPOE/2015/2015_supplier_diversity_FINAL.pdf