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The Healthcare segment has shown some of the strongest growth in the U.S. foodservice market over the past year and is poised to do the same in 2013
Unprecedented Access to Healthcare Databases
Unprecedented public access to healthcare databases, another trend that will accelerate under Accountable Care, means that public posting of hospital outcome metrics, patient satisfaction scores and other data will have a significant impact on healthcare in both acute and long-term care, says Bill Klein, CEO and President of DM&A.
Such data also will be influential in terms of adjusting a hospital’s reimbursement rate up or down under the new Medicare and Medicaid guidelines and “Informed patients will use this data to make their hospital, physician and provider choices," he says.
This is not a trend limited to acute care. In January, for example, nonprofit new organization ProPublica made available unredacted writeups of problems found in nursing home inspections around the country.
In acute care, the new, national HCAHPS program (Hospital Consumer Assessment of Health Plans Survey) that measures patient perceptions of hospital care is the benchmarking system now on all hospital radars. It is quickly augmenting or displacing traditional benchmarks used internally by hospitals, but results will also be publicly available on the Internet, influencing consumer choices and used to calculate reimbursement rates.
(To see how HCAHPS will look to consumers, go to http://www.hospitalcompare.hhs.gov).
Seeing more of the same ahead, Klein says that by 2016 comparisons will go beyond simple peer group comparisons. "Programs like HCAHPS will include more qualifying questions that allow deeper drill downs into the data and more specific comparisons.
"Administrators will need every tool they can get—including room service— to bump satisfaction scores up,” he says. “When foodservice is rendered properly, patients are more forgiving about other aspects of their experience.”
Klein also believes ACA’s financial pressure will make administrators look more closely at management fees associated with outsourced contracts as well as requiring contractors to buy through hospital GPO networks. “This puts additional pressure on contractors in terms of the margins they can expect,” he says.
Fast Food Brands and Snacks are Under the Gun
On the nutrition front, fast food brands like McDonald’s are under increasing scrutiny where they have hospital locations.
Several prominent institutions, including Parkland Hospital in Dallas and Truman Medical Center in Kansas City, have terminated their relationships with such chains as existing contracts ran out, often at the aggressive urging of top on-staff physicians. Hospitals that do so typically choose to instead emphasize more healthful in-house meal concepts or to bring in alternative franchises with more healthful food profiles.
At the same time, long term fast food contracts have been a cash cow for hospital administrations in the past. They are also popular among visitors and staff, and replacement concepts usually don't generate the same revenue for the institution. Meanwhile, employees and visitors looking for favorite comfort foods can often find them on the street outside, where there are no restrictions.
This puts pressure on hospital foodservice departments to at least partly replace the lost revenue. But the most common way to do that—expanding retail food sales in the cafeteria—is also growing more difficult as snack items and other “less healthy” choices come under the same scrutiny. Nutrition advocacy groups are also targeting hospital food (see this story), demanding that both patient and retail offerings represent idealized meal choices. And new projections from the Robert Wood Johnson Foundation (RWJF) show soaring adult obesity rates over the next 25 years (see Our Big Fat American Future).
RWJF warns that the number of new cases of Type 2 diabetes could increase ten times in the next ten years, then double again by 2030. It also estimates the lost economic productivity that will result might reach as high as $580 billion annually. Such trends are not limited to the private sector, are are causing significant concern for hospital administrators as well, especially as work populations continue to age. Wellness programs to address such issues are being adopted widely in the private sector and most believe the same will happen in not-for-profit institutions, including healthcare.
"Health and wellness is the wave of the future and is where hospital institutions will focus, but it runs askew of revenue generation," says Paul Hysen, president of The Hysen Group. "A hospital director I spoke to recently told me that '57 percent of our menu represents healthful choices, but the other 43 percent is where we make our money.'
"How do you deal with that? It will have to be a gradual process, with calorie counts printed on receipts and with other efforts to change behavior that make it very easy for customers to see the implications of their food choices."
Healthcare institutions and healthcare insurers are both beginning to also promote the kinds of wellness programs that have become common in corporations, sometimes linking participation in them them to reduced health insurance premiums and other incentives (or disincentives.) (See this story about the way several medical centers are taking that approach)