Why outsourced meal services don’t pay in aged care

Recent media reports have highlighted the issues associated with cutting costs in the healthcare sector by outsourcing meal services.

The main issue of course seems to be the general consensus that the outsourced meals taste pretty awful - you get what you pay for, or in this case don’t pay for.

Anyone who works in the health and aged care sectors understands the pressures of trying to make menial government funds stretch a long way. One has to get very creative, in an almost war-time like manner, to make those dollars cover all areas of care, without any ability to receive a top up from users of the services even if they wanted to give us one.

It’s understandable then under these trying circumstances, that outsourcing meals seems like a cheaper option than providing meals through in-house kitchens.

Even at Radius Care, we gave outsourced food services a go at one point because it seemed to make so much fiscal sense. However, what we quickly realised is that there is an important factor that doesn’t get taken into account when the sums are being calculated for outsourced verses in-house catering, and that’s margin. Because of the need for the “middle man” to clip the ticket, you actually end up getting less for your money not more.

For example, if an in-house chef directly purchased a $10 cut of meat for a meal, then they’d end up with a $10 cut of meat. The second you outsource this however, your $10 cut of meat becomes an $8 cut of meat with a $2 mark up.

That’s just how business works. We can’t expect to outsource services to businesses that don’t intend to make any profit – they wouldn’t stay in business for long.

As soon as we realised that our dollar was not actually going further, and in fact we were getting an inferior offering for only minimal savings, we took our catering back in-house. And now I realise that the benefits of this go way beyond getting our money’s worth by direct sourcing of ingredients.

Recently, I was at a residents meeting at one of our facilities and the feedback on the food was not “Yeah it’s fine” - which probably would have been a satisfactory response – the residents used words like “fantastic” to describe the food. That’s not normally a word you’d expect to be associated with an aged care facility.

The reason we get great feedback on our food, is because we know that food is something we all look forward to in life, and this never really changes no matter how old you are. It’s our desire to create a warm, homely environment where our residents enjoy living, and frankly you’re not going to get that if you serve up slop.

In the end with our meal services, we decided to do the opposite of what some providers were doing – we kept it in-house and hired a City and Guilds trained chef to design our menus, then photograph them, so that we’d have consistency across all kitchens in our facilities. We have dietitians check the menus to ensure they meet nutritional requirements, but the biggest measurement tool we rely on is our “customer” satisfaction. When we get that great feedback, we know we’ve hit the right mark with our meals.

To me, the long-term financial gain in getting the heart of our homes right by offering our residents food that is heart-warming and nourishing, far outweighs the short term, perceived gain of shaving a couple of percentages off the bottom line by outsourcing to businesses that are primarily focused on their own bottom lines.

Author - Brien Cree

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