Answer Man: It's a dog-eat-dog world in food service
Dear Answer Man, is it common for health systems such as Mayo to contract out for their food service operations?
There aren't many health systems such as Mayo, in terms of size and reach, so it's tough to make an apples-to-apples comparison. But yes, it's common for health systems and hospitals to contract for food services.
Morrison Healthcare , the company that Mayo plans to contract with for its food and nutrition services, works with about 650 hospitals and health systems nationally. They include New York's Mount Sinai Medical Center (1,171 beds), Yale-New Haven Hospital (1,541 beds), Grady Memorial Hospital in Atlanta (945 beds) and hundreds more.
Another of the biggies is Aramark , which employs or manages about than 50,000 people who provide food services to more than 1,100 health care organizations across North America. Among the latest additions: Kennedy Health in New Jersey (607 beds), Vanderbilt University Medical Center in Tennessee (nearly 1,000 beds, plus the Vanderbilt Medical Group and its 200 clinics), Thomas Jefferson University Health System in Philadelphia (951 beds), and Einstein Healthcare Network in the Philadelphia area (1,200 beds).
I made a few random calls for my own information. A spokeswoman for Minneapolis-based Fairview Health Servicessaid only that they "contract with another company to provide food service."
A spokeswoman for Johns Hopkinsin Baltimore said by email, "We do contract our food services out. We use Sodexo," the firm that Mayo is transitioning away from. According to a news story about Hopkins' food program, they serve about 13,000 meals a day for patients and workers.
Sodexo , by the way, is a multinational giant. The parent company is in France; Sodexo USA cranked out 41 percent of the conglomerate's revenues in fiscal year 2015, according to the website Food Management , which ranked it as No. 3 among food services companies. Among its newer clients: The U.S. House of Representatives and three UMass Memorial Medical Center campuses in Massachusetts.
Cleveland Clinic, another of Mayo's arch-rivals, switched last year from Aramark to Sodexo for chow on its main campus and at its children's hospital. They kept Aramark for their eight regional hospitals and their facilities in Florida. About 350 Aramark employees were given the "opportunity" to work for Sodexo when that change occurred. That's the type of opportunity that hundreds of Mayo's current food workers are being given with Morrison, which has led to union protests and pickets.
Interestingly, Cleveland Clinic was with Sodexo as well as AVI Foodsystems Inc. prior to 2012, when it changed to Aramark.
As you can see, it's a dog-eat-dog world in health care food service, and in the health care world as a whole. Mayo is hardly alone in looking for cost-savings and new ways of delivering quality services, including food services, so that another health care system doesn't eat their lunch.
An article in Modern Healthcare a few years ago said this about the food service part of the health care business:
"Annual spending on food does not make up a large percentage of a typical hospital's total expenses. For example, Fletcher Allen (Medical Center in Burlington, Vt.) spent about $4.2 million on food in fiscal 2012, compared with the roughly $956 million in total expenses the hospital reported that year.
"However, food prices are generally rising about 3 percent to 5 percent each year, putting ongoing pressure on budget-conscious hospitals to develop strategies that offset rising costs. And as reimbursement cuts weigh on financial decisions, some hospitals are re-evaluating whether to outsource food service as they address patient-satisfaction scores, the health of the communities they serve and growing food costs."
That's what's going on at Mayo, for better or worse, and that's why there's now a firestorm led by the powerful Service Employees International Union , which has 2 million members in North America. SEIU Healthcare claims to be the largest health care union in the U.S. and Canada, with 1.1 million members.
One last scrap of information, and there's plenty out there on the topic: According to the website Food Service Director , a recent survey of 184 hospitals showed that 76 percent of food service programs were self-operated; 20 percent were contract-operated; and 4 percent were a blend, which apparently is where Mayo fits in.