10 Tips to Decrease Food Costs at Your Health Care Facility

Food is one of the largest expenses for health care facilities.

As such, health care facilities are continuously looking for ways to slash food costs.

However, finding ways to reduce these costs without sacrificing patient satisfaction or quality can be challenging — but it doesn’t have to be.

Here are 10 practical ways to decrease food costs at your nursing home, assisted living facility, hospital, or other health care facility.

1. Know your budget

Know your budget — it may sound obvious, but not everyone does.

You should know your actual patient per day (PPD) food cost and your PPD food budget.

To determine your actual PPD food cost, divide your monthly food expenses by the number of patient days in the month.

For example, if you have 25 residents in a 30-day month, multiple 25 by 30 to get 750 patient days.

Using this information, let’s say your total monthly food costs were $4,000. To determine your food PPD for that month, divide $4,000 (food cost) by 750 (patient days) to get a food PPD of $5.33 for that month.

Your actual food PPD may vary month-to-month, but you can understand whether you’re below or above the amount budgeted for that month and make adjustments as needed.

2. Use fewer convenience items

It’s the convenience factor of an item or service that makes life easier – and more expensive.

Make sure your menu doesn’t contain too many convenience items like pre-cooked meats, salad kits, ready-to-eat desserts, pre-made hot dishes, and single-serve items.

Although these convenience items require minimal preparation and can be useful when you’re short on staff, they can significantly increase your food expenses if not properly balanced with scratch cooking.

3. Reduce food overproduction

Overproducing food is one of the main reasons for high food expenses, especially when the food is being thrown and not repurposed for a different meal.

Many times the overproduction of food occurs when staff do not follow the standardized recipes, but it can also occur when staff intentionally overproduce to take food home with them.

Portion control can be another factor, so make sure your staff are using the correct scoop and ladle sizes based on the production sheets.

4. Buy produce in season

Fresh fruits and vegetables help liven up meals while offering a changeup from their canned or frozen counterparts.

However, fresh fruits and vegetables can be relatively expensive at times, especially when you purchased off-season.

Off-season fruits and vegetables can also be of poor quality and visually unappealing, resulting in food waste.

You can refer to the United States Department of Agriculture’s (USDA) Seasonal Produce Guide to determine which fruits and vegetables are in season throughout the year.

5. Know your inventory

If you don’t know what you have on hand, you risk ordering more or fewer items than you need.

In the case of ordering more, you not only take up valuable storage room, but you may put your food PPD for that month over budget.

Depending on the item, ordering too much of something can also cause it to go to waste.

Conversely, ordering fewer items than you need may require a visit to your local grocery store to pick up those items, adding extra food and labor costs.

Based on your menu cycle and number of patients, establish a par level for each item. Having a par level system in place can also prevent staff members from ordering too much or too little in your absence.

6. Buy in bulk

More often than not, buying items in bulk is cheaper than buying in smaller quantities.

If space allows, purchase items in bulk that you regularly use or that have a long shelf life to decrease food costs.

These items may include:

• milk
• juices
• coffee
• cereals
• frozen meats
• condiments
• soups and other canned goods
• ice cream
• pre-thickened liquids

7. Ask your foodservice distributor

Establish a close relationship with your foodservice distributor representative.

He or she can fill you in on seasonal deals and coupons and provide you with different product options to meet your budget.

Your foodservice distributor may also offer rebates on the purchase of their branded products, rebates based on the volume of products you purchase, and discounts for quick payment on invoices.

8. Liberalize diets when possible

Therapeutic diets are often a component of a patient’s overall treatment plan.

These diets limit or restrict specific nutrients to help manage diseases like chronic kidney disease, diabetes, and heart failure.

Although therapeutic diets are necessary for certain instances, moving towards a more liberalized approach to diets — specifically for nursing home residents — can help decrease food and labor costs.

This is because therapeutic diets often require more expensive items because of the different ingredients and nutrients they contain. Making these additional foods can also consume staff time.

In addition to decreasing food costs, a more liberalized approach to diet can help improve residents’ quality of life and nutritional status as well as reduce food waste (1).

Work with the dietitian and physician at your facility to determine which residents may benefit from a liberalized diet.

9. Take credit for the “other” meals

Keep track of guest meals, employee meals, and other meals or snacks that you provide for meetings or special fundraisers.

The money spent on food, labor, and supplies for these instances should be accounted for in the food budget but not included in your food PPD calculation.

If your facility has more than one service line, such as a skilled nursing facility and an assisted living facility, make sure the food expenses are allocated appropriately based on usage.

10. Utilize a group purchasing organization (GPO)

A group purchasing organization (GPO) is an organization that combines the buying power of its members, which usually includes other health care facilities.

This combined buying power enables the GPO to obtain lower prices for its members like health care facilities.

Participating in a GPO can save your facility thousands of dollars each year.

However, there are general guidelines that you must follow to reap these savings, such as standardizing your purchases to specific food category brands.

The bottom line

Reducing food costs is a top priority among all health care facilities.

Following these tips can help your facility decrease food costs without sacrificing patient satisfaction and quality.