Supplier Diversity in the Health-Insurance Industry

July 9, 2011 3:52 pm
Supplier Diversity in the Health-Insurance Industry

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A: Based on data we’ve collected over the years, the health-insurance industry, collectively, is slightly below average in supplier-diversity efforts.

The industry scored 7 (out of 11) points for supplier diversity, behind those such as technology, consulting and pharmaceuticals (an industry that historically has not been strong in supplier diversity but has ramped up efforts in the past few years). This is not to say that every health-insurance company is not competitive in supplier diversity. In fact, Aetna, Health Care Service Corp., and WellPoint, Nos. 19, 26 and 36 on The DiversityInc Top 50 Companies for Diversity, respectively, are significantly ahead of their industry peers in procurement spent with minority- and women-owned business enterprises (MWBEs) and are competitive with the DiversityInc Top 50.

Consider the additional facts we extrapolated about these three competitors:

  • All have their CEOs signing off on supplier diversity versus 84 percent of the DiversityInc Top 50 and 36 percent of industry peers.
  • All require second-tier supplier diversity versus 90 percent of the DiversityInc Top 50 and 36 percent of industry peers.
  • All include supplier-diversity metrics in their RFPs and/or vendor contracts versus 98 percent of the DiversityInc Top 50 and 73 percent of industry peers.
  • All tie procurement-management compensation to supplier diversity versus 94 percent of the DiversityInc Top 50 and 64 percent of industry peers.

In conclusion, while your industry is historically behind in supplier diversity, Aetna, Health Care Service Corp. and WellPoint are ramping up their efforts. Since 2008, the three have increased their procurement spend with MWBEs by 25 percent while their industry peers have decreased spend by 3 percent. Developing strong relationships with suppliers builds brand loyalty and leads to increased business opportunities, partnerships and exposure.

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