Edition 5

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22 Mar 2024

A Delicate Equation

A Delicate Equation
Balancing quality of care with cost efficiency - here, we discuss the challenges of maintaining a balance between delivering excellent care services and managing costs in care homes.

Providing exceptional care services while managing costs efficiently is a perpetual challenge faced by care homes worldwide. As the demand for elderly care continues to rise, alongside increasing healthcare costs, finding the equilibrium between delivering high-quality care and maintaining financial sustainability has become paramount.

In this article, we delve into the intricacies of this balancing act, exploring the challenges, strategies and potential solutions in navigating the delicate interplay between quality of care and cost efficiency.

The primary challenge in balancing quality of care with cost efficiency lies in the inherent tension between these two objectives. On one hand, care homes are entrusted with the wellbeing and dignity of their residents, necessitating a commitment to providing compassionate, personalised care that meets individual needs. On the other hand, care homes operate within tight budget constraints, facing pressures to optimise resources and minimise expenditure to remain financially viable.

Staffing costs are currently something which centre the equation. Skilled and compassionate staff are the cornerstone of quality care provision, yet staffing expenses typically account for a significant portion of a care home's budget. Striking a balance between adequate staffing levels to ensure resident needs are met and controlling labour costs presents a constant dilemma.

Implementing flexible scheduling practices, such as part-time, temporary or per diem staff, to cover fluctuations in demand will allow you to adjust staffing levels, based on peak times or resident acuity levels.


Alongside this, look to train staff to handle multiple roles within the care home. This increases flexibility and allows for better utilisation of resources, reducing the need for specialised staff in every position.


From medical supplies to facility maintenance, allocating resources effectively is crucial for maintaining both quality standards and financial stability. However, resource constraints often force care homes to make difficult decisions regarding prioritisation, potentially compromising on certain aspects of care. To prioritise effectively, you should conduct thorough assessments of the needs of each resident upon admission, and regularly thereafter. Develop individualised care plans based on these assessments, which outline the specific resources required for each resident.

In the current climate, escalating healthcare costs, including medication, medical equipment and specialised treatments, impose a significant financial burden on care homes. Balancing the need for essential healthcare services with budget limitations is a perpetual challenge. But while the challenges of balancing quality of care with cost efficiency are formidable, there are various strategies which can be employed to navigate these complexities effectively, one of these being through embracing technology. Leveraging technology solutions, such as electronic health records (EHRs), telehealth platforms and remote monitoring systems, can enhance efficiency, improve communication and streamline care delivery processes.

Laura Taylor, Group Buyer at Allmanhall, explained how, as we have seen over the past year, food supply can be a volatile market and, when combined with the challenge of food inflation, it is easy for costs to spiral and for food production to become inefficient, unsustainable and expensive. Whilst negotiations work to mitigate price increases from suppliers, Laura believes, “There are some key - and often simple - strategies that can be implemented to ensure that caterers are managing both their sourcing and production in the most efficient and cost-effective way.”

Laura revealed how, in December 2023, the Consumer Price Index (CPI) recorded a year-on-year increase of 4%, marking the first uptick since February 2023. Notably, the month-on-month increase stood at 0.4%, mirroring the rate recorded in December 2022. However, the year-on-year inflation rate for food and non-alcoholic beverages reduced from 9.2% in November 2023 to 8% in December 2023, which is the lowest figure since April 2022.

“If we look at the past two years, a substantial overall increase of approximately 26% in the prices of food and non-alcoholic beverages can be seen. During the previous decade, this increase was a mere 9% (ONS).

“The December PPI figure for the prices of imported goods into factories was a record high. This is normally an indicator that the CPI figure will rise again over the coming months. The inflation rates for domestic inputs and output prices for food manufacturers also remain high, with the output figure 15% above the five-year average, and it is reasonable to expect that these increasing costs in the food supply chain will ultimately be passed on.”

When managing the supply chain, there are several areas a care home can focus on to help reduce costs within the purchasing process, starting with identifying the key suppliers to the catering function. Laura sees how tendering allows for the direct comparison of suppliers with one another based on specific criteria, allowing caterers to identify beneficial changes and opportunities. She says, “Whilst it is important to consider factors such as product specification, supplier service and delivery, commercial terms and, of course, price, tendering can be an effective way to evaluate, improve and change suppliers, with the overall aim of ensuring the most preferable pricing, whilst still maintaining quality.

“Consolidating can help to reduce the number of suppliers within your portfolio and, therefore, reduce the number of deliveries to a single site. Through consolidating suppliers, purchase volumes will increase, as will the delivery value, making it easier to negotiate preferential pricing, consequently helping to reduce the overall cost of goods.”

Consolidation doesn’t have to be limited to suppliers, but can also be applied to range management. By reviewing your buying list and consolidating duplicate lines, volumes on key lines will increase and your product catalogue, menus and spend will be more consistent.

“When reviewing a buying list, it is important to sample products and consider all factors before implementing any restrictions,” added Laura.

Laura explained how employing a dedicated procurement organisation to oversee various aspects, such as supplier performance management, the tendering process, ongoing pricing management and invoice management, can play a pivotal role in securing competitive pricing and providing assurance to the catering function. This strategic approach not only streamlines these critical processes, but also allows the catering function to concentrate on its core operations. “The procurement organisation’s involvement in supplier performance management ensures that vendors consistently meet, or exceed, predefined contractual requirements,” she added.

Once goods are purchased, Laura advises looking at operational practices, assessing and adjusting the processes to reduce their financial impact.

By improving the skillset and efficiency of the catering team, chefs may be more motivated to cook from scratch, rather than relying on higher cost pre-packaged products. For example, ready-prepped veg can be up to 50% more expensive than loose boxed veg. If sandwiches were sourced from a sandwich supplier, it may then free up a chef’s time to prepare vegetables, thereby using their time more efficiently and reducing the cost of the ingredients.

Laura said, “Measuring and reducing waste will inevitably help eliminate unnecessary costs, as well as helping to reduce your carbon footprint. Consider whether the portion sizes are correct for the customer, or do they need to be adjusted to ensure there is less waste? Another area that can have high outgoing costs is equipment. Whilst it can be expensive, new technology is a long-term solution to driving efficiency, with the benefits often outweighing the initial investment. However, it is important to ensure that any equipment you do have is maintained regularly, so that the quality of food is not compromised, waste is kept to a minimum and excess water and energy are not used.”

Balancing quality of care with cost efficiency is an ongoing challenge for care homes, requiring a nuanced approach that considers the unique needs of residents, financial constraints and regulatory requirements. By implementing strategic initiatives focused on optimising staffing, embracing technology, prioritising preventive care and fostering collaboration, and by fostering a culture of continuous improvement, you can navigate these challenges effectively, ensuring that residents receive the highest standard of care, while maintaining financial sustainability in an increasingly complex healthcare landscape.


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