UIC + West Side United

Socioeconomic disparities negatively impact the lives of millions of Americans each year. Disparities often look like having poor or no access to healthcare, having severely limited economic opportunities, and lacking quality nutrition, education, and housing. On Chicago’s South and West Sides, inequities are particularly felt in the areas of economic mobility and wellness. Statistics show the prevalence of systemic barriers toward economic stability and access to quality healthcare are directly correlated with higher rates of poverty, crime, and adverse health outcomes in these communities more so than others.

 For our Spring 2024 semester Capstone project , we teamed up with local nonprofit organization West Side United to explore potential solutions to these ongoing challenges facing Chicago’s West Side communities specifically. West Side United (located in the Homan Square neighborhood on the city’s West Side) works to address inequalities in healthcare, education, economic vitality, and the physical environment of the communities it serves by partnering with local healthcare facilities, education providers, the faith community, business enterprises, and government entities.

WSU would like to assess hospital spend categories to explore the feasibility of local operations supplying WSU hospital partners’ demand with needed intermediate goods and services. The aim is to identify suppliers, industries, sectors, and/or services that may not be currently based on Chicago’s West Side but could be established or relocated there, rather than general spend categories to prioritize. Recommendations will be established from this assessment to inform WSU’s strategies as it seeks to  positively impact the community .

Questions to Answer:

1. Of the designated areas of spending for WSU hospital/anchor partners, which spend categories have greatest potential to create local jobs (considering factors of training, skill set, interest, etc)?
2. To what extent barriers exist for the West Side community to establish businesses in specific service areas?

Of the many community partners WSU works with regularly to enhance the quality of life for Chicago’s West Side area residents, we spoke with representatives of Allies for Community Business, Civic Consulting Alliance, Rush University Medical Center, HAN/Claire sourcing consultants, and PWC to get a sense of what opportunities exist for addressing the West Side’s unemployment problem through different areas of hospital services. Additionally, we connected with one of WSU’s procurement partners through the organization’s Local Procurement Workgroup, Dale Morrison (Supplier Diversity Coordinator at UI Health).

West Side United partnered with consultant experts with the Civic Consulting Alliance and PWC, who invested substantial time and effort into establishing a Local Sourcing and Procurement Playbook, identifying spend categories and local vendors, and understanding efforts and approaches to move spend more locally. There are four main approaches that WSU established that include:

• Switching to local vendors for primary vendors (Tier I - Full list in Figure 2 below)
• Encouraging non-local and secondary vendors to invest in local business (Tier II - Opportunity list in Figure 3 below and mapped with additional details in Figure 4.)
• Engaging Group Purchasing Organizations to focus locally
• Building local capacity for future vendors

In our own research, we began with data from the  Bureau of Economic Analysis - U.S. Department  that show total inputs by industry required (directly and indirectly) to deliver one dollar of industry output to final users. This provides insights into the economic interconnectedness and dependencies between industries within an economy. The comparison between hospital investment categories and number of businesses in these  industries that exist in Cook County  can be seen in Figure 1 below.

•  The total operational spend for all hospitals in Illinois is $17,000,000,000 . There are about 210 hospitals in this average data - so the average operational spend is $80,952,381 per hospital. This will be used as a multiplier in understanding the input-output data.
• For example, Hospitals spend $0.086 on Administrative and support services to produce $1.00 worth of output to hospital visitors and community members.
• Considering what this means for total hospital spend, on average, hospitals spend $6,977,220.95 on Administrative and support services from their budget annually.
•  Administrative and support services  include any of the following specific activities:
  • Security Services
  • Customer Service and Reception Services
  • Landscaping
  • Pest Control
  • Carpet and Upholstery Cleaning
  • Facilities Management
  • Waste Management
  • Travel Arrangement
  • Employment and Career Services

{0.086 x 80,952,381 = 6,977,220.95}

This research shows that some of the most impact on hospital outputs come from service industry inputs. Some of the other top categories such as real estate, professional and technical services, chemical products, wholesale trade, insurance, manufacturing, etc. are also top 10 industries for inputs but we did not consider these in our report because these industries require infrastructure or expertise that we cannot provide reliable insight on and do not align with the vendor procurement goals and priorities outlined by WSU. If we focus on administrative and support services, as highlighted above, we are focusing our efforts in an area with high potential for impact and an area where we can provide valuable knowledge and consideration. When hospitals invest in service industries, the money spent by services is then invested back into many overlapping industries where hospitals spend. This validates the need for Hospitals and direct vendors to invest locally in service areas as this industry then invests back into some of the same industries that have the greatest impact on hospital spending. This shows the continued importance of local spending as these investments will cyclically benefit the same industries and continue to create network support between industries and the surrounding community.

Qualitative data was collected in the form of in-depth interviews lasting 30-45 minutes. Aligned with the project objectives, these interviews aimed to understand the attitudes prevalent on the West Side and the barriers faced. Additionally, experienced professionals provided insights into hospital vendor procurement. The interviews involved two different types of participants: community health leaders and professionals with experience in the healthcare sector.

• Resilience and Community Engagement: Across all interviews, a recurring theme is the resilience of individuals who overcame personal tragedies and challenges to become leaders in their fields. Their commitment to helping others and their communities underscores the importance of community engagement in driving positive change.
• Healthcare Disparities and Equity: The interviews shed light on the pervasive issue of healthcare disparities, particularly concerning racial and economic inequalities, the interviews highlighted the need for equitable healthcare access and resource allocation.
• Vendor Engagement and Economic Development: Several interviews delve into the complexities of vendor engagement and procurement practices within healthcare organizations. There was a consensus on the importance of promoting supplier diversity and fostering economic development within local communities.
• Community-Centered Approaches: Throughout the interviews, there's a clear emphasis on community-centered approaches to decision-making and resource allocation. From Rush University Medical Center's engagement with the West Side community to Civic Consulting Alliance's collaborative endeavors with local stakeholders, the interviews underscore the importance of listening to community needs and involving community members in the decision-making process.
• Collaboration and Partnerships: Collaboration emerges as a key theme, with healthcare organizations like Rush University Medical Center and Civic Consulting Alliance partnering with external stakeholders to address community needs and drive positive change. Whether through partnerships with community organizations or collective action initiatives like West Side United, the interviews highlight the importance of collaboration in achieving shared goals of equitable economic development and healthcare access.

To address disparities in economic equity and quality of healthcare on the West Side, WSU has developed initiatives to augment economic vitality. Immediately on the horizon is the organization’s aim to increase West Side investment and capital for West Side organizations through “increased investment in ventures related to Social Determinants of Health and improvements in the capacity and performance of borrowing entities” by 2025 ( Source ). By 2030, the organization envisions a significantly transformed economic landscape across the ten communities it serves made possible through its efforts to address food insecurity, concerns for neighborhood safety, displacement, and unemployment. From now until 2050, the organization will be committed to a long-term goal of creating more opportunities for employment. Ultimately, WSU’s plan is to achieve this through ongoing and consistent efforts to increase wages, close race, and gender-based gaps in pay, reduce unemployment, and reduce the burden of housing costs.

The results from our data analysis and interviews with community members validates the accessibility and importance of establishing vendors for increased local sourcing. Furthermore, it was understood that WSU’s biggest impact on the output will be to focus on services to the hospital. Upon reaching this conclusion, we sought to understand whether these industries exist in the local West Side community. We were able to conclude the efforts WSU is making to focus on procurement and spending in the local community has positive implications on areas of need on the West Side. Spending locally-specifically in service industries-can directly benefit designated areas of improvement for neighborhoods in Chicago. These benefits can be applied to enhance the physical appearance of the community, expand, and enrich workforce development, and improve overall health and wellness for society. Through our exploration of Tier II vendors in the West Side community, we found that many of these vendors do exist and there are further opportunities to develop new relationships and continue this growth in local sourcing. The table below summarizes the top 10 impact areas for hospital focus, based on the input-output multipliers and total hospital spending investments in Illinois hospitals. Using the  provided data  and  full analysis report , partners of WSU can review their current priorities and consider internal opportunities to evaluate existing spend and identify opportunities to shift this spend locally.

Tier II vendors are categorized as relationships when non-local suppliers have the ability to subcontract with local vendors. This “Tier II” approach occurs where a Tier I vendor subcontracts with another vendor, a “Tier II” vendor to relocate or establish operations locally, serve as mentors to share business practices, work jointly on projects, and more.