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Healthcare Small Business Gap Analysis

On behalf of the New Orleans Business Alliance (NOLABA), The Democracy Collaborative and local partner, DMM & Associates, conducted a three-month assessment of the procurement practices and supply chain needs of New Orleans healthcare institutions and the capacity of small, local businesses to fulfill those needs. This Healthcare Small Business Gap Analysis grew out of the anchor institution strategy identified in ProsperityNOLA, the five-year plan for economic growth in New Orleans, published by NOLABA in 2013. Our findings are based on interviews with nearly  50 representatives from area hospitals, additional anchor buyers, technical assistance organizations, small businesses, and other public stakeholders.

We found that New Orleans has all of the ingredients necessary for a successful anchor development initiative and that the opportunity for greater small business-healthcare partnerships is compelling. While hospitals in New Orleans purchase relatively few goods and services from local small businesses, small, local businesses currently supply goods and services to some of New Orleans’ largest public agencies and private corporations, offering proof that multiple sectors of the New Orleans small business community do possess the necessary capacity to serve large customers.

And although small businesses face a unique set of challenges, such as lack of experience with the bidding process, barriers to capital access, or uncertainty about how to navigate hospital purchasing, these can be addressed through simple efforts on the part of buyers, like unbundling bids or improving payment terms. Where capacity gaps may still exist, we found that there is a robust ecosystem of local business development assistance available to strengthen and prepare small businesses for success with large contracts. With strong leadership and shared commitment, the New Orleans hospital industry can transform from laggard into leader, through strategic local sourcing that meets institutional needs and creates economic opportunity in New Orleans.