Two men and two women dressed in business attire stand shoulder-to-shoulder in a room with various people in the background

UC Davis Health ramps up work with small, diverse local businesses by 23%

Health system’s focus on local spending and hiring in underserved areas reflects commitment to community


UC Davis Health reported nearly $62 million in spending with small and diverse-owned suppliers in fiscal year 2023, an increase of 23% from the previous year. This represents significant progress toward the health system’s commitment to support local business growth, especially in underserved areas.

Portrait of a woman with dark hair below her shoulders and wearing a tan blazer
Annie Reyes-Salgado is the director of Supply Chain and Contracting Services for UC Davis Health.

“Our procurement and contracting team at the medical center has leaned in on this initiative over the last four years,” said Annie Reyes-Salgado, the director of Supply Chain & Contracting Services.

On April 11, UC Davis Health held hosted its first in-person Small and Diverse Supplier Expo at the Oak Park Community Center, in a neighborhood that is vital to the economy surrounding the Sacramento campus. About 100 suppliers showed up to learn what it takes to sell their goods and services to UC Davis Health and UC Davis.

UC Davis leaders wanted to hold the inaugural in-person Expo four years ago, but the pandemic turned it into a virtual event from 2020 to 2023.

The 2024 Expo was co-hosted by four UC Davis units and departments:

“We have made tremendous strides in connecting small and diverse businesses to our key stakeholders, streamlining the new vendor process, educating our internal departments, and helping to level the playing field with large suppliers,” Reyes-Salgado said. “With more work to be done, it’s encouraging to not only see overall program growth, but also to take pride in the increased spend right in our own backyard.”

A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of an underrepresented or underserved group.

UC Davis’ concerted efforts to boost spending with local businesses have yielded significant results for diverse suppliers in the surrounding community. The progress is a key component of UC Davis Health’s Anchor Institution Mission for Community Health. The goal is to leverage the health system’s economic power and human resources to increase the economic vitality, health, welfare and well-being of its surrounding communities and residents. This includes actively hiring, investing and volunteering in Sacramento’s diverse and economically distressed communities.

As a result of this initiative, the medical center’s spending data for the fiscal year 2022-23 showed that:

  • Total spending with small and diverse-owned businesses was $61,927,905, a 23% increase from prior year. This represents 28% of total spending unrelated to medical costs.
  • UC Davis Health did business with more than 150 new small and diverse-owned business in fiscal year 2023.
  • Local neighborhood spending accounted for more than $17 million. UC Davis Health expanded to 20 economically disadvantaged ZIP codes across Sacramento, a 275% increase. Even without these additional ZIP codes, there was a 19% increase in the original ZIP codes that surround UC Davis Health as part of the Anchor Institution Mission.

The UC Davis Health Community Health Needs Assessment in 2019 identified 19 ZIP codes of concern that revealed the highest social and economic disparities in the Sacramento region. UC Davis Health is focusing its work on the communities in the CHNA that are closest to the health system – additional Sacramento ZIP codes were subsequently added.

“These efforts have helped build a more robust and resilient supply chain and the double-digit growth in spending from the prior year is a testament to our commitment and collective efforts,” Reyes-Salgado said. “I am truly proud of the progress we’ve made and look forward to continuing this important work.”

Khoban Kochai
Core to our anchor institution work are strong, trusting relationships with our surrounding communities. We have been working hard to strengthen these relationships and center the expertise and wisdom of our community partners.” Khoban Kochai

Community partners

This type of growth and progress would not be possible without active engagement and collaboration with community partners.

“Core to our anchor institution work are strong, trusting relationships with our surrounding communities. We have been working hard to strengthen these relationships and center the expertise and wisdom of our community partners,” said Khoban Kochai, director of the Anchor Institution Mission in the UC Davis Health Office for Health Equity, Diversity and Inclusion. 

Local business partners in the health system’s supplier diversity efforts include the Sacramento Asian Pacific Chamber of Commerce, Sacramento Black Chamber of Commerce, Sacramento Hispanic Chamber of Commerce, Sacramento Rainbow Chamber of Commerce, and Sacramento Metropolitan Chamber of Commerce.

Local, diverse employee hiring

On a related front — local recruitment and hiring — UC Davis Health  has developed a roadmap for increasing workforce diversity across the industry. That approach is described in a case study published in New England Journal of Medicine Catalyst’s January 2024 issue.

Two men and two women dressed in business attire stand shoulder-to-shoulder in a room with various people in the background
Some of the 2024 Small and Diverse Supplier Expo leaders, from left to right: Mike Kuhner, Jita Pandya Buño, Annie Reyes-Salgado and Hendry Ton.

Thanks to local hiring and workforce development efforts, 19.2% of new hires were local in the specified ZIP codes this fiscal year (July 2023 to present). That’s up from 12% before the new policies took effect.

The health system has also been recognized by Forbes as a "Best Employer in California."

Hendry Ton, associate vice chancellor for health equity, diversity, and inclusion, noted the benefits of stable employment. They include improved access to health care, better food security, more resources to address socioeconomic challenges and longer and healthier lives.

“UC Davis benefits as well,” he said. “Our locally recruited staff possess a rich understanding of Sacramento's diverse communities, enabling us to better foster meaningful and enduring partnerships. Other institutions are now looking to UC Davis to start similar efforts in their region.”

Ton expressed gratitude for all the teamwork from multiple departments on both campuses.

“As a physician, I want to extend recognition to my colleagues who have joined forces to leverage the economic and business practices of our university and health system for the betterment of our local communities,” he said. “Their collective efforts have subtle yet profound effects on health outcomes, comparable in significance to the interventions provided by health care professionals at the bedside.”

Click here for more information on UC Davis Health’s supplier and diverse businesses efforts.

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