GRAND RAPIDS — At $6.9 billion in revenue for its most recent fiscal year, Spectrum Health holds significant economic clout and buying power in the Michigan economy.
The Grand Rapids-based health system now looks for more opportunities to put that buying power to work locally.
One element of a 10-year corporate strategic plan for 2020 to 2030 developed under President and CEO Tina Freese Decker calls for Spectrum Health to support the regional economy and “to build and partner innovatively,” said CFO Matt Cox.
“We just do our best to try and buy local where we can and that’s an effort that we’ve really ramped up. We’re getting a lot more intentional about it now,” Cox said. “It’s much more natural to do it with our friends and neighbors that are located in Michigan, and even better in Grand Rapids.”
Spectrum Health began executing last summer on that aspect of the strategic plan by looking at its supply chain. That includes where it buys medical supplies and equipment and orthopedic implants such as hip and knee replacements, to food services, construction contractors and even parking valets.
In medical equipment and supplies, Cox gave supply chain managers the task of looking at “what is manufactured in Michigan? What could be manufactured in Michigan? And they started conversations.”
“There are some additional local manufacturers that we talked to,” he said. “We’re certainly looking at what can be manufactured locally as opposed to imported.”
Spectrum Health annually spends “hundreds of millions” of dollars on supplies, equipment and services, Cox said. Across a region that includes Grand Rapids and stretches from Ludington in the north to St. Joseph in the southwest part of the state, Spectrum Health spent $2.3 billion on goods and services alone from vendors in 2018, according to data provided by the health system.
Cox cited some examples to MiBiz where Spectrum Health’s new strategy to buy more locally has already been implemented.
• The health system this year formalized an agreement with Grand Rapids-based Life EMS Inc. for patient transports between the Butterworth Hospital and Blodgett Hospital campuses, moving the business from a national firm.
• Preferred Construction Group LLC, a minority-owned company, now supports many of Spectrum Health’s small projects throughout the system.
• In food services, which Cox calls a “natural area” to buy more locally, Spectrum Health’s Michigan Street Market and Grill in the downtown Butterworth Hospital campus uses Tolman’s Wholesale Meats in Hudsonville for meats sourced from within 250 miles of Grand Rapids. That’s resulted in a six-fold increase in spending with Tolman’s since Spectrum opened the Michigan Street Market and Grill in 2019.
• In 10 months, Spectrum Health has purchased 57,000 boxes of sushi from the minority-owned Anu-Sushi of Michigan LLC, which transitioned from an incubator kitchen to a facility in Kentwood and hired more staff from the Burmese refugee community.
• Spectrum Health as well uses Grand Rapids bakery Field and Fire LLC for bread at the Michigan Street Market and Grill.
• To push the buy local approach, the health system collaborates with the Good for Michigan program to advance best practices doing social good and Local First to support local business development.
• Spectrum Health is “actively looking for new partnerships” and plans to collaborate with Start Garden “to support the growth and development of local businesses” in food services, Cox said.
“We’ve just scratched the surface on what’s possible,” Cox said of the buy-local emphasis. “Now that we’re focused on it, I suspect there’s going to be a lot more opportunities.”