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< Back to news 04 July, 2014

Striking the balance between cost control and resident care

While over 40% of care home operators have worked alongside purchasing companies in the past, an all too heavy focus can be placed on cost control alone and the breadth of changes that can be implemented to affect profitability is not necessarily understood. Our Sales Director, Nick Ryan shares some of his advice for the care home sector...

With pricing obviously playing a pivotal part in profit and margins, tightening up back office operations can also have an enormous impact. Everything from managing invoicing to sourcing suppliers and deciding which activities to implement for residents can affect the bottom line but often, the affect of minimal changes isn’t widely communicated. 

Beacon, which helps businesses in the healthcare sector increase their profitability, has worked with a number of care home operators in order to not only save them time, but to also educate them on the simple changes that can be introduced to increase profitability. For example, by implementing uniformity and consistency across all operational sites, a greater number of the same products will need to be purchased; resulting in achieved economies of scale and improved pricing and service levels.

By centrally choosing approved suppliers, care home operators not only ensure that each site is getting the very best deal, but they are providing a consistent level of care for your residents.

Through working with purchasing organisations such as Beacon, care home operators can also benefit from a Central Billing system. This means that each operator will only receive one bill each month, no matter how many suppliers they procure through. This breaks down each cost so it’s clear to see what has been spent and where. This saves operator’s time, as there is no longer a need to be managing a vast amount of receipts and invoices; one amount is paid to Beacon which then manages payment with each supplier used.

By consolidating and centralising the supply chain, care home operators can easily leverage their growing portfolio’s operational scale. Implementing a centralised approach will ensure residents feel minimal impact during the growth of a business.

To clearly understand how changes can be implemented to ensure profitability is increased, Beacon carries out an internal review of not only the sites, but also the back of house functions, in order to present a number of recommendations. This will also ensure that the procurement strategy is clearly aligned along with the business’ long-term strategic aims.

Understanding that the care home operator’s key focus is ensuring residents are receiving the best care, we know it can be difficult to strike a balance between keeping costs down whilst safeguarding residents. By managing the amount of time and money spent on purchasing, operators can invest more on care and staffing.

To ensure residents can live as routinely as possible whilst inhabiting a care home, quality products will need to be purchased. By working closely with a Beacon account manager, operators can get a clear view of what’s available to suit their requirements. With an abundance of legislation in place to protect those in care homes, it’s easy for operators to stick with suppliers they have always procured through; however, by working closely with a purchasing partner, operators can get a clear view of the options available to them.

Jeremy Gilson, Sales and Marketing Director at one of our key supply partners, Countrywide Healthcare, commented: “Over the last three years we have seen changes in purchasing trends and the importance placed by care providers on selecting suppliers. Working with a purchasing partner with the experience and expertise of Beacon makes this process easier and ensures that the provider gets the right advice to enjoy the best balance of product quality, service and price. Countrywide Healthcare Supplies are proud to be a supplier partner to Beacon and work closely with their team to provide the best advice and pricing on a wide range of product categories from nursing and medical to catering, housekeeping and cleaning chemicals. Together our aim is to guide customers to make the right choices for their business enabling them to improve standards and drive down costs.”

I’d definitely recommend care home operators explore the opportunities available by working with a purchasing partner, not only to save vital funds, but to also save time spent on admin, which could be better spent.