Values-based food procurement in hospitals: the role of health care group purchasing organizations

Abstract

In alignment with stated social, health, and environmental values, hundreds of hospitals in the United States are purchasing local, organic, and other alternative foods. Due to the logistical and economic constraints associated with feeding hundreds to thousands of people every day, new food procurement initiatives in hospitals grapple with integrating conventional supply chain norms of efficiency, standardization, and affordability while meeting the diverse values driving them such as mutual benefit between supply chain members, environmental stewardship, and social equity. This paper provides empirical data and analysis on emerging values-based supply chains in hospitals that attempt to meet both the scale-based requirements and values-based goals of alternative food procurement initiatives. In particular, it examines tensions among industrial, economic, and alternative agrifood values in relation to a particular set of hospital supply chain players called Group Purchasing Organizations (GPOs). Hospital membership in GPOs in the United States is ubiquitous, and 80–90 % of a hospital’s foodservice procurement comes through GPO channels in keeping with contract terms. GPO-governed supply chains are deeply rooted in industrial and commercial norms, in other words, price competition, economic efficiency, and forces of standardization through adherence to technical and quality standards. The bulk of alternative food procurement initiatives in the health care sector currently occur outside of the GPO–hospital relationship, however, over 90 % of hospital foodservice directors interviewed for this research expressed a desire to increase sustainable food procurement through their GPO. This study finds that, if alternative agrifood efforts in the health care sector are to integrate with GPO-governed supply chains without losing the robustness of the original values and goals that brought them into being, concerns related to supply chain structure, transparency and traceability of alternative food attributes, and alignment of definitions of local and sustainable food between all supply chain members will need to be addressed. This study also details points of flexibility in health care food supply chains and the potential for hospitals to create purchasing and informational alliances around common food goals in order to create new, values-based supply chain relationships both within and beyond GPO procurement channels.