Typically 35% of a long-term healthcare facility’s operating costs are non-labor. Of this amount, roughly half is attributed to the food service department. The director of food service has so many responsibilities that supply costs are often overlooked. It is certainly not from a lack of knowledge, but more from the standpoint of priorities and having the time to implement and monitor systems to control the dietary departments’ supply costs.

If you feel that your costs per resident day are not in line with where you think they should be, we are providing below some suggestions to help. As with any system, this must be an on-going process and not a one-time event. Some of these ideas are fairly simple to implement where others are more complex. If staff and/or time do not permit, PRIME Services can assist you in understanding how to lower your costs per resident day.

It is easy to say that the food and supplies have been bid out. It takes a very dedicated effort to keep costs per resident day down. This effort needs to encompass activities such as:

1. All orders should be inspected, verified and counted.
2. A scale should be used to weigh appropriate products.
3. Understand inventory turnover for dietary should be between 23-26 turns per year. Being outside of this range on either side it not good.
4. Understand how your distributor prices your account by “mark up” or “margin”. There is a big difference in the prices you pay between a 10% markup vs. a 0% margin.
5. Place orders electronically and utilize reports available to improve your operation.
6. Product theft will cost your operation. There should be controls on all exit doors and delivery areas.
7. An order guide should be followed based on what is on the menu. Items that are ordered and are not on the menu need to be questioned.
8. On a regular basis, evaluate products by doing blind cuttings to verify that you are receiving the quality expected.
9. Don’t allow suppliers to substitute products without your permission.
10. Don’t allow suppliers to go into your storeroom and determine what is needed.
11. Do you know how your costs per resident day compare to other facilities similar in size?
12. Make sure staff knows how to use equipment and does not use excess products/supplies, thinking that if one is good, two must be better.
13. Use a Group Purchasing Program to help lower your costs.
14. Check prices and verify you are receiving the correct contract prices.
15. All suppliers must be thoroughly evaluated and preferably a request for proposal should be sent to competing suppliers at least every two years to keep your pricing competitive.
16. Communicate with suppliers to let them know of any problems and learn from them, ways to reduce costs such as increasing order size, taking fewer deliveries, buying close out items and what specials they may have.
17. If products come in damaged or not at all, make sure you receive the appropriate credit on your invoice.
18. If using a manual tray card system, consider upgrading to an electronic version to save on time.
19. If you are performing resident care functions manually, consider upgrading to an automated system to manage your residents’ needs.
20. Don’t assume larger sizes are less expensive than small sizes on a comparable basis, like per ounce.
21. Intake studies are time consuming, but they can help understand what residents are not eating. This information if used properly, will help to lower foods and supplement costs.
22. Technology can be a great tool and time saver.
23. Don’t be afraid to make changes to benefit your facility.

PRIME Services has worked with many facilities to assist them in establishing systems and helping monitor them to reduce total costs. You may not have the staff and/or time and this is where can assist you and bring a focus to this area.

For more information, please contact Valerie at 866-585-3344, Ext. 115, or email valeried@primeservicesinc.com.

Thank you