Archive for January, 2008
Leading the Sustainability Charge
The doctor over at SourcingInnovation has teed up a cross-blog dialogue about Sustainability, because in his words:
With the recent focus on corporate social responsibility, carbon footprint, the environment, green supply chain, and regulatory compliance, sustainability, in some way, shape, or form is on everybody’s minds – even if they can’t really define what it is. Thus, the doctor thinks it’s the perfect time to address this topic.
At the surface, sustainability seems an admirable goal, a no-brainer way to live and to operate our businesses. Even people who never leave their couches like forests. People far from the shore appreciate clean beaches. And global warming, regardless of the cause, is going to change that delicate balance of eco-librium.
At the same time, the average American wants to sustain those two cars, that morning latte, that drive-through fast-food life style. Oh, in a “green” moment, he will carry reusable sacks to the grocery store, install some compact fluorescent lights and even drive a Pius, er-r-r, I mean Prius. But all of this is for naught if we continue to want the bigger house, Susan Susanka’s Not So Big House movement notwithstanding. A few CFLs isn’t significantly going to make up for the additional energy consumption of a house that is 15% larger and filled with more electronics than one built 10 years ago.
Sustainability hasn’t proven to be the kind of movement that takes the world by storm. It’s not yet a Pet Rock, Beatles or Rubick’s Cube moment.
So where can true sustainability impact come from?
First, achievable sustainability requires that current quality of life isn’t degraded. It means that I don’t sacrifice my all of my “wants” and meet only my essential “needs,” but somehow reach an amenable compromise to the choices that drive my behavior.
Second, it needs multiple, simultaneous ripples that compound the impact and benefits to make serious noise for any chance at adoption around the world. The actions of the individual consumer, while commendable, do not reach critical mass, and history suggests that most people aren’t willing to sacrifice continually and significantly for the common good.Centuries of failed communal living and socialist experiments show that we’re not willing to go that far.
Finally, sustainability needs a champion that can embrace the concept based on the inherent incentives and benefits that will be garnered as a result of investment and action. That means large institutions will drive great impact. Major retailers, regardless of their motivation (be it profit or benevolence), are doing their part to “green” their operations. Wal-Mart is pushing their suppliers to be more responsible by reducing their carbon footprint.
But Wal-Mart is not really the biggest fish in the pond. From an industry as a whole, US hospitals have a trillion dollars (representing nearly 5% of GDP) in spend opportunity to make a difference. Healthcare and hospitals can be the catalyst for true impact. So why would a hospital make the jump?
1. Common Sense: Healthier hospital environments lead to more positive patient outcomes
2. Competition: A healthier hospital with better patient outcomes attract more patients
3. ROI: More energy efficient hospitals lead to lower costs
4. Social Responsibility: Hospitals have incentive to lead the charge in the recycling movement
It will not be easy. Sustainability tradeoffs are complex. Look at the ethanol debate – alternative fuel savior or cash crop agricultural blight. Hospitals will be challenged to ensure that my access and quality of care aren’t jeopardized for the sake of greening the supply chain, nor is sustainability sacrificed for convenience or convention. But hospitals are accustomed to making that kind of difficult, ethical decision making. They have spent years doing so in triaging emergency rooms, transplant priorities, and a myriad of daily decisions.
If hospitals take the “do no harm” oath to heart, they could well be the leader that sets the bar and reaps the benefits of a sustainable supply chain.
Add comment January 28, 2008
New Year, Old Issues
If you ever need a reminder of why you’re spending your time working in compliance and monitoring, all you need to do is scan two emails, HCCA’s This Week In Corporate Compliance and Society of Comporate Compliance and Ethics’ E-Corporate Compliance News. With each edition, you’ll see example after example of the exposure unethical business partners create.
One of the recent articles highlights conviction of a physician who accepted kickbacks for using specific products during surgeries. Strikingly, the criminal issue that convicted him isn’t the kickback itself, but rather the recovery of funds paid by Medicare and Medicaid after the physician filed reimbursement claims.
This situation clearly demonstrates the intersection of compliance monitoring with supply chain management. Here you have a case of apparently unmanaged physcian preference purchases intersecting with unethical behavior. How was the physician able to make these purchases outside the hospital’s contracts? If the physician had been unable to make those purchases, could the fraud have been prevented?
Another interesting twist to this case is that the whistleblower wasn’t a member of the physician’s or hospitals’ staff, but rather a former medical-device salesperson. How much would it be worth to you to have the type of relationship with your vendor representatives that they would come to you first with this type of information?
Our Take: It’s the close relationship between vendor management and vendor compliance that continues to intrigue us. Just as the gangsters of the 1920s were taken out of business on tax evasion charges rather than criminal charges, we have the opportunity to use vendor and materials management processes as the tool to help reinforce vendor ethics.
1 comment January 14, 2008
