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By: Tim Pierce, CEO, Morrison Healthcare
Last year, I spoke to the trends on the horizon for 2022, including workforce challenges, margin pressure and shifting acuity. Those concerns have not diminished, and for many systems, they have become even more pressing, impacting healthcare for the upcoming fiscal year. The pace of change in today’s landscape is unprecedented, but we see opportunities for hospital leadership to regain control of a tenuous market.
From my conversations with clients and leadership across the healthcare industry, in 2023, we will continue emphasizing the following:
Need for Cost Containment
Financial issues persist in the wake of the pandemic. At-risk hospitals may face the worst fiscal year in decades, largely due to shrinking margins. According to a recent report, median hospital operating margins were negative for the year, and during the initial strain of the COVID-19 pandemic, analytics reported a two (2) percent margin.
So, what does this mean for hospitals in the coming year?
Leadership is looking for ways to save money while prioritizing consistent, quality care for their patients. Staffing shortages, workforce challenges and supply chain insecurity—all exacerbated by rising inflation—suggest that pandemic-era challenges may be more systemic than we initially predicted.
As a result, hospitals must stabilize their workforce, reinforce their supply chains, lower costs, and drive efficiency. To do that, they need purchasing power. For us and our clients, this is best represented in our purchasing organization, Foodbuy, which delivers long-term cost and quality control, and more local, sustainable sourcing to Morrison Healthcare clients across the country.
With tight margins, hospitals will seek relief in 2023. It will come down to finding the right strategy–and the right partners— to minimize waste and increase efficiency across the entire food and nutrition operation.
Proactive Hospitals See Staffing Relief
Staffing challenges have become systemic in healthcare. Clinical departments are struggling to fill vacancies and being forced to pay higher hourly rates. Looking at a recent study by Medical Group Management Association (MGMA), all healthcare sectors report that hiring and retaining candidates is a “crucial task”.
Burnout is a major contributor to these trends. COVID-19 and the stress of a global pandemic put undue strain on nurses and caregivers, forcing them to exit or seek other opportunities. As an industry, we are moving past the Great Resignation into a new phase where both employees and employers are seeking normalcy.
Promoting a sustainable staffing model requires investment. Hospitals that invest in recruitment and retention programs will rebound faster in 2023 and outpace the competition going forward. When we look at food and nutrition services, this is particularly true.
Creating training opportunities that lead to career growth greatly impacts retention rates. We have seen significant improvements in retention rates through an online culinary training platform that allows teams to train without leaving the kitchen. The program provides new pathways for career advancement by cross training associates and teaching new skills, which can lead to increased patient satisfaction scores. Associates are building careers, not just punching a clock.
Another way to move this forward—take a different approach. Instead of persisting with a traditional model of recruiting from a set pool of candidates within a geographic area, we have found success by expanding the pool and creating opportunities for people interested in a healthcare career. We developed partnerships with colleges, high schools and community groups that have opened food service positions to a broader pool of applicants, while alleviating the strain on existing staff.
By taking a proactive approach to staffing challenges, healthcare food service operations can lead the way and create sustainable staffing future.
Population Health Takes a Leap Forward
We’ve been talking about population health for the past decade. It’s hard to classify this as a new trend at this point, but we’re on the verge of a population health explosion.
For the past decade, hospitals have worked to better serve communities, reduce readmissions, and improve reimbursement rates. In today’s environment where access to care is truncated by staffing challenges, keeping people out of hospitals can free up bed space and providers to care for the sickest patients.
Food is medicine and it plays a critical, and often underutilized, role in population health. It takes a combination of healthy food and a strategic, programmatic approach to make a difference. In the coming year, we will see more hospitals invest in population health programs that are food centric. Last year, we worked with Virtua Health in southern New Jersey to create a mobile grocery delivery program. Through these healthy offerings, Virtua Health promoted wellness in the broader community.
Population health is not easy. If it were, we would have already implemented global solutions, but I am optimistic about 2023 and our ability to deliver results for our patients and communities through new investments and programs.
Food and nutrition services is paving a path to sustainability and value. Here is snapshot of Morrison Healthcare accomplished in 2022:
Through mindful collaboration and strategic partnerships, we help innovative systems supplement diminished internal resources and address systemic challenges, and we will continue to move the needle with optimism in 2023.
As your strategic partner, we embrace creative and innovative opportunities to support your goals and help you reduce the cost of care. Having a partner that can balance resources with unmatched purchasing power will accelerate your organization’s transformational journey.