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R&IEditorial Archives2004 — August 15 — Special Report

Vital Signs
Efficient operations and attention to the bottom line help remedy what ails healthcare foodservice.

Healthcare foodservice directors wear many hats. They are dietitians and building contractors, human-resources referees and financial planners. When food prices soar, they rework menus, and when labor pools shrink, they find ways to be more efficient with fewer workers. When renovations disrupt customer-traffic patterns, they reconfigure flow. The business of hospitality goes on.

Soaring costs and financial constraints in healthcare—from insurance, government reimbursements, food, fuel and labor—put the squeeze on foodservice. There’s pressure to increase retail sales, motivate employees to handle additional duties and deliver excellence in food and service.

Seventy percent of meals at UCLA Medical Center are retail transactions overseen by Executive Chef Mark Dyball and a kitchen staff of 37.

The focus in recent years has expanded from patient satisfaction to customer satisfaction, a more retail-oriented mindset, says Lynne Ometer, president of the Washington, D.C.-based National Society for Healthcare Food Service Management (HFM) and director of food and nutrition services at Emory Hospitals in Atlanta. “Food is a measurement of satisfaction. It touches everyone in the hospital,” she says.

Striving to please visitors, medical staff and employees—in addition to patients—raises overall standards. As foodservice is improved through renovated facilities and development of fresh-foods concepts, serving stations, better tray presentation and innovative menus and room-service programs, its role within healthcare is better understood and appreciated, and its financial contribution enhanced. Customer-focused programs “show that foodservice can be a profit-center,” says Ometer.

Foodservice also is a bridge to other departments, says Georgie Shockey, a foodservice consultant in Houston. “Clinical people are a link to patients. Nurses, doctors, clerks are front-line people. How they feel [about foodservice] gets passed on to patients,” she explains.

As hospitals come under pressure to cut costs yet increase service in almost all departments, foodservice increasingly is considered a revenue center. “With pressures for higher census, the focus is on productivity. It’s a volume business, like grocery stores. To compete, you increase services. The kitchen is an intense [capital-producing] area,” says Shockey.

Decrease in the number of U.S. hospitals of all types (from 6,965 to 5,810) between 1980 and 2000. (American Hospital Association)

In 2003, healthcare (hospitals and nursing homes) represented 2.8% (or $12.4 billion in sales) of the total $436.2 billion generated in retail-equivalent sales by the U.S. foodservice industry, according to Chicago-based Technomic Inc., an industry researcher. Hospitals alone accounted for $3.3 billion in annual food purchases, about 2.2% of the total $151.5 billion in purchases in food industry. Technomic forecasts nominal growth of 1.7% in 2004 for the sector.

Emphasis on foodservice’s financial performance is a result of changes in the healthcare profession. “Five years ago, 85% of my time was focused on cafeteria sales, catering business and outside contracts,” says Donald Reynolds, assistant foodservice director at Hartford Hospital in Hartford, Conn. “Today, 70% of my time is focused on how to balance costs with less labor, and on patient care and food quality. The environment is constantly changing.”

He and thousands of colleagues in self-operated healthcare settings use every available tool—technology, room-service delivery, new retail concepts, branding tactics and menu re-engineering as well as chef-recruitment and employee-training programs—to produce results. They also leverage inherent advantages, adds Shockey. “Foodservice has the best carrot in the world to dangle: food.” Use it to improve communication between departments and raise foodservice’s profile, she suggests.

Play the Numbers
What foodservice directors want—capital expenditures from administrators for renovation, new-equipment purchases and more full-time employees—is what all other hospital departments seek. Foodservice gets its share only if the role it plays is understood at the top.

Hartford Hospital upgraded morning coffee service with two new carts, better-quality coffee and baked goods.

“When a hospital administrator looks at the budget and priorities, foodservice usually sits at the bottom of those requests,” says Shockey. To get noticed in the corporate office, foodservice directors have had to learn the languages of executive decision-making, how to present data and numbers and to prove foodservice’s value with measurable results. Once the numbers are there, then market people, product and passion, Shockey advises. “More importantly, market the potential of what can be achieved.”

When administrators of New Hanover Regional Medical Center in Wilmington, N.C., announce the strategic plan and budget for 2005, Donald Printy and Chris Sheehan, foodservice manager and foodservice director, respectively, expect to hear good news. With smarter business practices, tighter controls and cross-training of staff, they were a financial asset to the medical center, reporting $3.2 million in retail sales in 2003, a 14% increase over the previous year.

Converting part of the cafeteria line into a made-to-order station (waffles for breakfast, sandwiches at lunch) generated an extra $150 in daily sales. Switching from a 14-day menu cycle to an eight-day slashed monthly inventory costs to $30,000 from $70,000. A new coffee cart, branded Kona Coast, adds $250 to daily sales. When a debit system was introduced last October, 20% discounts were offered to new users. Debit cards also result in 60% of transactions being paid through payroll deductions. The technology reduced paperwork and the need for cash on hand, made transactions speedier and triggered more impulse sales, Printy says.

Nursing Relationships
Strengthening a relationship with nursing staff helped Guy Scimenes reduce costs at UCLA Medical Center in Los Angeles. “Nurses have great influence on patients. How they feel about foodservice, negatively or positively, rubs off on the patient,” says the assistant director of food and nutrition services.

A few years ago, nurses were required to deliver food trays in addition to performing their medical duties. Not only did these extra responsibilities contribute to resentment toward the foodservice department, but patient care suffered as well.

“It took us one year of regular meetings with nursing administrators and managers. Our attitude was ‘How can we help you?’” Scimenes says. The sessions paid off. Nurses ultimately were relieved of tray-delivery duties, replaced by a host system and seven full-time employees from the housekeeping staff.

“It doesn’t make sense to pay a nurse $30 an hour to deliver food when an aide can do it for $12,” Scimenes says. As a result of the switch, morale of nurses and patients improved, and the foodservice employees and nurses have better rapport.

Backstage Pass
Heathcare foodservice often is shrouded in mystery, says Shockey. Doctors, nurses, even hospital administrators sometimes are not fully aware of what goes on in the kitchen. In order to get key members of the staff to notice—and to lobby for improvements and budget increases—get professionals and managers involved through tours, lunches, tastings and program catering, he says. “Doctors, especially. They’re the ones who admit patients.”

At Ohio State University Medical Center in Columbus, the relationship between foodservice and the medical staff is sweetened with cookies and Friday afternoon treats. “We offer to bake cookies for their parties and doctors’ programs. We add our logo to platters for name recognition,” says Julie Jones, associate director of nutrition services. The kitchen produces thousands of cookies for the annual Nurses Day. “We figure $30 in food costs is a small price to pay for good relations.”

When an auxiliary department of Hartford Hospital put a competing coffee kiosk off the main hospital lobby two years ago, Donald Reynolds took notes on usage. Visitors instantly were drawn by the convenient location and its stock of upscale coffees, espresso and pastries, says the foodservice director. Never mind that the price for a 12-ounce cup was 55 cents more than Reynolds’ department’s 95-cent cup; sales at the kiosk generated 1.5% of $4.2 million in annual retail sales.

But Reynolds turned the competition into opportunity. It spurred innovation and improvements in his department. He upgraded coffee without raising prices, updated graphics on paper cups and introduced two coffee carts for morning service to all floors. “I even offered to bake an exclusive line of pastries for the kiosk. Today we work together; we support each other.’’

Room Service With a Smile
Hotels, pay attention. Hospitals are raising patient satisfaction scores with room service. No more untouched trays or meaty entrées when a patient really prefers pizza or Caesar salad. Its success will grow in the future, according to a recent survey by Washington, D.C.-based National Society for Healthcare Food Service Management, a 4,200-member organization representing noncontract foodservice operators. It reports that about 42% of respondents intend to implement room service. Almost half (48%) expect introduction in one to two years. Reasons why include increased patient satisfaction and cost reductions.

Switching to a style of service that enables patients to eat when and what they want involves menu innovation, redesigning the physical layout of the kitchen, and often an upgrade to the computer system. Room service also increases labor by as much as 20%.

Respondents were mixed about the type of room service. Up to 35% use a hotel-style call center while 32% utilize a combination of bedside menu entry and call center. About 44% target it for specific areas, namely maternity, pediatrics, oncology and women’s units. The biggest challenge is financial, according to room-service planners, followed by time constraints and getting administration to commit to the program.

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