Fusion Newsletter Article: The Big Merge: How Consolidation Is Shaping Foodservice

The Big Merge: How Consolidation Is Shaping Foodservice

Hospital Consolidation

Over the past decade, hospital consolidation has picked up significant momentum. In 2017 alone, the healthcare industry saw over a hundred deals made, with 11 of them involving net revenues of $1 billion or more. With the industry facing tighter budgets, smaller-staffed departments and mounting paperwork, the need to merge, which can lead to reduced operational costs and increased efficiency, isn’t going away anytime soon. Deloitte, a globally-known accounting organization, even went as far as to estimate 50% of health systems will remain in the next decade.

So what does that mean for foodservice?

Changes in healthcare have also trickled down to hospital foodservice due to the influence of patient satisfaction scores and readmission rates on reimbursements. In addition, because consolidation has led to fewer hospitals, competition among those remaining is tougher than ever. Meaning foodservice departments not only play an important role in their success by providing patients with quality food and exceptional care, but they must do so while accommodating a bigger, more complex enterprise operation. Not to mention, mergers create more budgetary competition between departments, forcing foodservice to often times, do more with less.

How can foodservice departments improve patient satisfaction without increasing costs?

With foodservice caught between both the need to improve the patient experience and be cost-effective, it’s imperative that budgeted money is used intentionally to cover all departmental needs. What can help stretch and even reallocate money is analyzing data to determine what the costs actually are and where they may be substantial. Things like cost per recipe, food waste, and wasted or lost trays can all factor into foodservice departments spending more money than necessary. With that being said though, one of the biggest obstacles hospitals face in larger health systems is effectively tracking data across all sites - especially considering every hospital within a system may have specific processes and schemas.

What can foodservice departments do to better analyze data across multiple sites?

As hospitals merge, the need to also standardize and/or centralize software across sites is essential, especially for foodservice. Consider all aspects of a hospital foodservice operation, from purchasing food and ordering meals to tracking tray delivery and stocking grab-and-gos in retail locations, there are certainly a lot of moving parts to keep up with. And if the ultimate goal of this current healthcare landscape is increased efficiency, then leveraging data to make decisions is key - and can only be done if data collected over time, from all sites, is stored in one system and easily seen on a global level. Moreover, having consistency across all sites can lead to enhanced foodservice quality and improved use of staff time by eliminating redundant tasks, inconsistent data entries, and possible interface issues between disparate systems.

So are you ready to start saving?

Change can be scary, but consolidating to one foodservice software solution doesn’t have to be. If done right, your department can have cost savings of $1,000,000 like one multi-site health system experienced from standardizing their software. Along with that, improved efficiency from using one automated system can translate into more quality time with patients and increased satisfaction. Making your foodservice department a shining example of how to cut costs without impacting the quality of care.


Article by: Jennifer Higgins, Marketing Specialist II; Fusion, 1st Quarter, 2019