Want to be the preferred supplier for major companies like Walmart and Kaiser Permanente? You'll have to measure up on their sustainability scorecards—the newest method of choice to weed out lackluster suppliers. We've covered Walmart's scorecard extensively, but this week Kaiser Permanente became the first health care organization to launch a rating system of its own.
Kaiser's scorecard judges suppliers on a number of factors, including recycling practices, chemical contents of products, and multi-use capabilities. And while Kaiser won't axe a supplier that produces quality products just because it uses harmful chemicals, the company claims that the scorecard will be the deciding factor if all other things are equal. "One contract we went through last year was for a rigid endoscope provider. We evaluated the four major players and found that clinical performance and pricing were comparable, but there were big differences in terms of sustainability performance," explained Robert Gotto, the executive director in Kaiser Permanente’s Procurement & Supply group. "One supplier had the foresight to develop a camera that doesn't need to be sterilized with chemicals. It uses steam instead, and can cut down chemicals in operating room by half." So the steam-sterilized endoscope provider ended up getting the five-year, $100 million contract.
There are plenty of opportunities where environmental factors can be the deciding factor, according to Gotto. And since Kaiser purchases $1 billion worth of medical equipment and products every year, that's a big deal. It will be an even bigger deal when Kaiser’s main supply chain partner, Broadlane, adopts the tool in September. Broadlane influences $10 billion in medical purchasing.
Suppliers may be able to avoid the scrutiny of other health providers for now, but Kaiser's rating system could easily spread. "I regularly talk with some of my peers in major systems. My motivation around that is to encourage other people to adopt some kind of industry standard," Gotto said.