Are B Corps right for healthcare companies?
Cathy Thomas Hess, RN, a clinical wound care expert, founded Wound Care Strategies in 1995 as a healthcare business consulting company. Now called Well Care Strategies, the company has expanded to locations in three states, offers its own electronic medical record software system and has evolved into a new business model: In 2010, the company became a benefit corporation.
Known informally as B Corps, benefit corporations are a new class of corporation. They are just like traditional corporations except that their corporate purpose obligates them to create “material” positive public and environmental benefits while still providing value for shareholders.
Opting into the B Corps model was an experiment for Well Care Strategies, said Hess. “Frankly speaking, it was a low cost option and it seemed like a healthcare company should be a ‘benefit’ corporation,” she said. “Also, B Corps’ mission/vision/values are easy to get behind for any entrepreneurial company. Banding together to bring change to the world through our business practices – it just sounds like a good idea.”
The B Corps model is a trend that is gaining steam with entrepreneurs and investors.
Since 2010, seven states have passed B Corps legislation and several others have legislation pending. More than 500 B Corps have been certified by the nonprofit certifier, B Lab.
“This new generation of entrepreneurs is increasingly saying the best path forward for me is to figure out how to use business as a tool to solve social and environmental problems,” said Jay Coen Gilbert, co-founder of B Lab.
“And investors are saying, ‘I want to put my money to work for companies (whose) purpose is to try to do good in the world.’”
As of yet, the number of healthcare companies becoming B Corps is small but with the mission as its core focus, B Corps may strongly appeal to healthcare companies.
“My sense is that a lot of businesses in healthcare are mission-driven … and that probably makes it easier for them to look at what B Corps are and what they’re trying to be and see themselves in that B Corps space,” said Paul Tarini, senior program officer, Pioneer Portfolio, Robert Wood Johnson Foundation. RWJF’s Pioneer Portfolio program gave a grant to B Lab to create health and safety metrics that companies use to score themselves in the B Corps certification process.
“If nothing else,” Tarini added, “it makes you sit back and think about how you conduct your business and what your relationship is with your employees and their families and the community within which you practice your business.”
Being a benefit corporation has benefitted Well Care Strategies, Hess said, but she thinks most healthcare companies aren’t currently looking at the model as an option.
“Today, the B Corp movement is still predominantly offering soft benefit so healthcare companies getting involved are doing so because they are led by people that care about B Corp values and think it’s important to represent these publicly,” she said. “I think there could be a sea change within healthcare toward the B Corp movement, but that will come when there is obvious hard value and measurable ROI.”