Foodservice facelifts pay off. "In the past, many administrations tended to ignore the need to modernize kitchens, but that need is becoming critical because of their increasing age," observes Sharon Cox, director of nutrition at Memorial Sloan-Kettering Medical Center and this year's president of HFM (National Society for Healthcare Foodservice Management).

"We are also finding that capital projects in the front of the house are usually associated with increases in revenue," she adds. (Fig. 24)

A recent survey by HFM (Fig. 25) shows that 72 percent of respondents have completed a construction project in the last 12 months or have one planned for 2006.

Over one third of these are servery renovations or kiosk-type additions and another quarter are kitchen renovations; many of the rest are related to equipment replacement or the addition of new patient service options.

Most of those upgrading front of the house facilities saw a growth in sales, and of these, a quarter saw increases of more than 10 percent.

"I see both acute and long-term care focusing more on their retail opportunities in the future," adds Georgie Schockey, principal with Ruck-Shockey Associates. "An analysis of one of our projects showed that a new retail area would help the department deliver about $6 more per patient day in revenue, which in effect will reduce the department's bottom line cost."

Competition for capital. Cox cautions that competition for capital remains a key issue for healthcare operators. "You are not the only department looking for upgrade dollars and you need to be able to show the experience other hospitals have had with projects like those you are proposing," she says.

Operators who do not receive the funding they are hoping for "should make it a point to review with their healthcare executive what was missing in their financial requests," offers Shockey.

"They should also know what is being done by competing hospitals in their markets to upgrade facilities and use that information in the next year's budget requests.They should also look for any additional revenue generating opportunities that can help the overall ROI of a project."

Broadening the measures of customer satisfaction. Cox points out that "many administrators are partly compensated based on their Press-Ganey scores. These surveys measure patient satisfaction, but don't measure the satisfaction level of other customers, like visitors and hospital employees who dine in the cafeteria. Yet, this is typically where 70 percent of the department's foodservice budget goes."

Cox says HFM has added overall cafè satisfaction metrics to its benchmarking programs. "We believe it is important to provide an ' internal customer' satisfaction measure for administrations to consider," she says. "That way they can see more clearly the relationship between these metrics and the costs associated with maintaining higher levels of internal customer satisfaction."

Food safety programs also remain a top concern, Cox notes, with many operators looking to automate documentation systems and better monitor food production and service.

Emergency preparedness "has been getting more attention, especially since hurricane Katrina's devastating impact last fall," she adds. "We were always required to have a contingency plan on hand, but now there is more concern about departments also being able to show 'physical readiness,' in terms of having emergency supplies on hand in case they are needed."

CCRCs are booming. In the extended care market, traditional nursing homes are losing some share to CCRCs (continuing care retirement centers), where Technomic says foodservice sales grew seven percent last year, and will grow an equal amount in 2006.

That translates into retail sales equivalent of about $1.7 billion. CCRCs thus have only a quarter the sales of the nursing home segment, but are growing almost three times as fast. For a complete review of trends in the CCRC market, reference the special report that appeared in the August 2005 issue of FOOD MANAGEMENT.

Resources:
For information on the NACUFS Benchmarking program, call (517) 332-2494.

For information on obtaining a complete copy of the SFM Benchmarking Survey Results, contact SFM at (502) 583-3783.

For information on HFM, its benchmarking programs and surveys, contact HFM at (212) 297-2166.

For a copy of the GAO report, School Meal Programs: Competitive Foods are Widely Available and Generate Substantial Revenues, GAO-05-563, go to www.gao.gov

For a copy of the FRAC report, School Breakfast Scorecard, 2005, go to www.frac.org