Food-Service-Manual-for-Health-Care-Institutions

Step 9: Calculating Productivity Indicators
Control Function and Financial Management
Step 9 involves the calculation of productivity indicators for the upcoming fiscal year. Productivity
indicators are the number of meals served per hour paid to an employee as well as the number
of meals served per hour worked by the employee. (The first indicator takes into account actual
costs for vacation days, sick days, and holidays.) The number of meals served per patient day is
also an indicator of the productivity of the food service department.
Labor Hours Data
As mentioned earlier, the same system that provides labor cost data usually is capable of providing
data about the labor hours that were paid for by the department during a specific period.
The system must be capable of providing data about regular productive hours, overtime, and
nonproductive hours (hours paid but not worked, as in the case of holiday or sick pay). These
data are either provided by means of a time-card system or tracked by a computerized system.
Regardless of the method used, labor hours data are a necessary input so that further analysis
of the department’s productivity can be performed.
Volume-of-Service Data
All health care operations should keep a daily record of the volume of services provided to customers.
This includes a count of the number of meals served to patients and nonpatients. The
most accurate method of collecting volume data is to count the number of trays prepared for
each meal and to keep a record of the total number counted for each day (Figure 11.3.)
The nonpatient meal count can be broken down into subcounts, such as meals for staff members,
meals for employees, meals for special functions, catered meals, and so forth. The methods
used for determining the number of nonpatient meals served each day vary among operations,
depending on whether an operation follows a cash payment system or whether employees purchase
monthly meal tickets. Stipend meals (meals provided free of charge to special groups—
interns, for example) also are taken into account. A common method for determining the number
of nonpatient meals requires the operation to track and report total cash sales.
Step 10: Preparing the Proposed Operating Budget
In the final step in budget preparation, the food service director uses all of the financial information
gathered in the preceding steps to prepare a formal operating budget proposal. The following
data are needed to complete the food service department’s operating budget:
• Forecast number of patient days and outpatient clinic visits
• Forecast number of patient meals, cafeteria meals, stipend meals, meals for special functions,
and other nonpatient meals
• Total wage, salary, and benefit expenses for food service employees
• Total expenses for patient and nonpatient meals
• Total supply expenses
• Total of all other direct or allocated expenses (called other expenses)
Occupancy charges
Mortgage payments
Taxes
Insurance (fire and liability)
Depreciation
Security, pest control
Administrative overhead
After the proposed budget has been approved by top-level managers within the health care
institution, the budget will serve as an invaluable tool in the ongoing management of the
department’s performance. Table 11.1 shows a section of an annual operating budget for a
food service department.
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