When attempting to improve EBITDA, the initial reaction is to cut dollars in the cost centers, such as food service or environmental services, hoping these expenses will increase operating profit. We want to challenge that thought process and encourage you to consider how enhancing your cost centers can lead to revenue generation. As a result, strategic solutions will offer added benefits and bridge the gap between the hospital’s capabilities and patient/staff desires, to improve satisfaction.
Managed customized solutions integrate programs most important to hospitals and expertly crafted strategies provide senior executives with clear, measurable goals. Seamless operations of dining services can impact the entire organization positively. There are four areas of opportunity to start ramping up operations:
- Mobilize with enhanced program processes to maximize participation and satisfaction
- Engage team members
- Collaborate to make well-informed decisions
- Innovate to decrease costs and increase revenues
No matter the circumstance, every hospital, regardless of size and location, should have access to the same resources and tools available to large hospitals in major metropolitan areas. Understanding short- and long-term goals for dining services and environmental services as it impacts satisfaction will help build comprehensive solutions that improve an organization’s capital structure through value-added programmatic changes. Solutions include:
- Refining retail opportunities
- Combating labor shortages
- Improving procurement and supply chain
- Incorporating technology
- Reputation management
RETAIL SALES AND ENHANCED SPACES
Increasing engagement – it’s vital for health systems and healthcare organizations to create and ensure a solid infrastructure and adequate resources are available to support physicians, nurses, caregivers and patients. From menu development based on local preferences to products that can withstand delivery to branded packaging options, operators can increase interest by investing in tools and resources to add flexibility, variety and hospitality. Catering to the needs of a broader audience promotes more opportunities for alternative points of sale and additional revenue streams.
Inviting cafés offer your customers a space to enjoy inspired culinary creations that increase purchase interest. Online ordering allows hospital staff to place orders anytime, anywhere from the web or mobile app for pick up, while grab-and-go stations have ready options with no wait time. Curbside pickup adds a revenue source and empowers integrated community wellness initiatives. A partner can help to provide the necessary capital for such projects and the added benefit of launching retail programs.
The success of the dining operations relies on team members. Staffing shortage and turnover have been a constant challenge in our industry, but today more than ever, keeping an entire, engaged team is paramount. You need extensive local, regional and national recruiting resources to match the right talent to the role to ensure an individual is both a cultural fit and has the skills needed to perform in a hospitality-centric environment. How do ensure that you are armed with capabilities and resources to support each team member, empowering and immersing employees in a more enjoyable work environment? Employees should have access to improved growth opportunities and work-life balance to minimize staff burnout which could lead to reduced turnover. When team members feel they have the tools they need for success, they tend to be more committed to higher quality and service excellence.
In addition to combating labor shortages, wage inflation is an added pressure on employee retention. Increasing compensation and incentives based on market analysis improves recruitment and retention efforts. An experienced provider can help to minimize the impact because of their labor management processes and systems that maximize productivity by staff.
COST CONTROL – SUPPLY CHAIN AND PROCUREMENT
Measures such as food cost control, waste management, streamlined inventories, and intelligent ordering are top priorities in an ongoing inflated economy. Group purchasing organizations (GPOs) help mitigate inflation through managed relationships with vendors to minimize price volatility, optimize purchasing and ensure the availability of resources. A working partnership allows for quick adjustments so that forecasted expenses remain constant.
Partnerships, such as with dining and environment management companies, allow a small community hospital to leverage the size of the provider to negotiate pricing agreements with the GPO. Therefore, keeping costs of food and supplies below the current market price. From a consumer perspective, this ensures that quality is still at the forefront, creating memorable experiences to drive a positive response while remaining within a manageable operating budget that improves EBITDA. This evens the playing field for smaller community hospitals when analyzing profitability and successful outcomes against competitors.
Healthcare facilities that incorporate technology solutions significantly improve the efficiency and outcomes of dining and environmental service departments. Automated in-room dining management systems link menu ordering and patient information systems directly to the dining operations. Eliminating the “call down” ordering system improves the accuracy of orders, eliminates waste and improves the timeliness of delivery through the help of guest service representatives. In addition to making food more accessible, it frees the nursing staff from these responsibilities, allows them to focus on patient care and leads to happier nurses. In retail spaces, digital displays and mobile ordering add convenience while offering cost-effective solutions to improve presentation. While innovative solutions improve infection control efforts in the care environment, adding greater quality assurance and ensuring regulatory compliance.
Technology solutions can be challenging to obtain if in-house budgets are tight. Similar to retail spaces, the right partner can help to take the ownership of delivering technology necessary to improve the efficiency and perception of a current, up-to-date facility regarding the environment of care and dining services.
The Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) and Press Ganey are crucial indicators of patient perception of performance, including responsiveness of staff, cleanliness of the hospital environment and overall rating. As healthcare consumers become savvier, experience and satisfaction are critical performance measures. In addition to regulated surveys, online platforms are a go-to source for information. Reviews can be shared more quickly with a broader audience and impact an organization’s reputation in general. A customer who has had a negative experience is likelier to leave a negative review, whereas those who had a positive experience are less likely. Incorporating a reputation management strategy is powerful as it takes approximately 40 positive reviews to undo the damage of a poor review. As a result, improving the revenue centers increases the value-added benefits and translates to greater satisfaction and higher EBITDA.