As a major healthcare services provider, it's no surprise that Kaiser Permanente's Green purchasing takes its inspiration from the Hippocratic oath: first do no harm. But under the direction of CPO Dean Edwards, the procurement organization at Kaiser Permanente in Oakland, Calif. has proven that sourcing environmentally preferable products can be an opportunity for purchasing and it doesn't mean increasing costs—in fact in many areas it can mean a cost reduction.

"The environmental area is becoming a good vehicle for procurement to demonstrate its value," Edwards says, adding that going Green is "very compatible with the strategic sourcing agenda."

Kaiser Permanente's first step in implementing its Green buying strategy was the development of its Environmental Purchasing Policy, which outlined the company's goals and expectations from both its suppliers and its own organization. That policy was shared across the entire company and, perhaps most importantly, it was included as a step in the company's strategic sourcing process.

To drive the strategy home, the procurement organization received training in environmental strategic sourcing from a non-governmental organization called Healthcare Without Harm, ensuring the procurement staff brings a consistent message to the other internal organizations.

The results may surprise even the biggest Green skeptics, both in terms of overall support and cost impact. In short, Edwards has plenty of real-world examples of how going Green can help the bottom line.

For example, Kaiser Permanente recently moved to a PVC-free flooring material for use in all new buildings. Edwards points out that eliminating PVC was an environmentally friendly move and the softer floor surface was an improvement in the case of slips and falls (not all that uncommon in a fast-paced healthcare environment). And while the initial cost of the PVC-free flooring was more, the surface does not require caustic chemicals for cleaning, which produced an additional Green benefit and significant reduction in the cost of the flooring across its total life.

"Our suppliers are very conscious that environmental issues are one of our major selection criteria, right along with quality, service, delivery and innovation," Edwards says. "We've made it clear that the supplier that comes up with an environmentally preferred, cost equivalent product is going to get our business."

Admittedly, Kaiser Permanente may gain some leverage with suppliers that smaller companies may not. For example, the company planned to buy upwards of 67,000 PCs and 60,000 monitors this year as part of a massive IT upgrade—a contract any PC maker would strive to get. Kaiser Permanente built into the specification for those PCs that the product must have the EnergyStar rating from the EPA to qualify for the contract. The result produced such a significant energy (and cost) savings that Kaiser Permanente was recognized by the EPA for its efforts.

But beyond its own company, the procurement organization at Kaiser Permanente is working to share its best practices with other healthcare firms. Edwards feels that in the U.S. market, environmental regulation won't drive change as quickly as a market-driven effort.

Kaiser Permanente is working with another non-governmental organization called ActNow to develop a macro-sourcing strategy identifying a list of materials it uses that can be altered or replaced to have a major impact on the environment and "show there's at least cost neutrality but preferably a cost advantage."

"We're looking to share that list with other healthcare firms so the suppliers will know this is a major focus," Edwards says. "Taking a scattershot approach to the environment may feel good, but doesn't really affect change."