Today Kaiser Permanente announced its new Sustainability Scorecard initiative, which will help the company in meeting its overall sustainability goals. The new scorecard will require suppliers to provide environmental data about the equipment used in Kaiser Permanente hospitals and health care facilities.
Kaiser Permanente is following in the footsteps of other companies that are examining the environmental footprint of their supply chain including Walmart and IBM. However, this is the first initiative of this type being implemented in the health care industry. The company does plan to share its results with other health care companies in order to create a more eco-friendly industry.
Kaiser Permanente is working with Broadlane to implement the new scorecard. In its first phase, the scorecard will cover $1 billion worth of medical purchases. As the year continues, the scorecard will cover more products with an estimated purchasing value of $10 billion.
Requesting environmental information about products from suppliers is a growing trend. I was curious to know how companies that supply products to Kaiser Permanente have responded to this new requirement. Robert Gotto, executive director in Kaiser Permanente’s Procurement & Supply group gives us a bit of insight into the process.
"Overall, our suppliers have reacted positively to the Sustainability Scorecard. Some suppliers are working through how to piece the information together, but our sourcing managers are helping them along the way. We see this Scorecard as a huge step towards a greener medical supply chain, and Kaiser Permanente remains committed to improving health and wellness through green buying practices and larger sustainability efforts.
"We worked closely with our top eight major medical products suppliers through our supplier development program to jointly develop and to pilot the Sustainability Scorecard starting in October 2009. The feedback was that the information Kaiser Permanente was requesting was easy to obtain. For example, to supply products in California, suppliers need to have and provide information regarding chemicals in their products in accordance with CA Proposition 65. In many cases, the supplier's customer-facing sales and service functions are not familiar with this information, as no one has requested it before. The Scorecard has therefore required sales departments to connect with other areas of their organization who do manage product-level environmental information to jointly organize and deliver the data in a format that makes sense and is useful to the customer.
"We designed the Scorecard process so there is a large incentive for suppliers to complete it fully, as any non-responses are counted as a negative score, which directly impacts the total score they receive for their overall proposal. The total score leads directly to the contract award of new business, often in the multi-millions of dollars.”
Last month the first purchasing contract that used this environmental score was signed. Kaiser Permanente cites the environmental score of a specific pulse oximetry sensor as the deciding factor in choosing a supplier for this often used medical product.
The new environmental scorecard is just one of many sustainable initiatives at Kaiser Permanente. The company recently announced that it would be installing solar systems at 15 California facilities by next summer. Kaiser Permanente also has a green building initiative and is home to one of the nation’s greenest health care facilities, the Modesto Medical Center.
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