With longer life expectancy, senior citizens are the fastest growing segment of population in Europe, and consequently the health & care sector for the elderly is growing. This sector is however facing strong financial pressure as the public funds committed are no longer sufficient but equally the target of budget cuts. Those cuts force care homes to do more with less, which means that there is an opportunity for Expense Reduction Analysts to step in and provide creative solutions that cannot be found in-house.
This is how Luis Lozon from Spain was asked to step in by the Financial Officer of a group of care homes. The government-allocated funds, which represents a certain amount per person, had gone down whilst other expenses had gone up and the care home managers had revised every expenditure; they tried everything to cut costs and were actually starting to lose money.
It is against that background that Luis was commissioned to find savings for the Fundacion Matia, a Basque not-for-profit organisation dedicated to the care and wellbeing of the elderly, in 10 cost categories: Cleaning, laundry, oxygen, gas, electricity, temporary work, telecommunications, MRO, and food supplies and catering, which being a delicate and pivotal issue, were attributed last. The successful outcome was yearly savings of 1 million Euros. Luis acknowledged straight away the corporate culture and the extreme sensitivity required in dealing with the needs of the elderly. For instance seniors may have some form of dementia, and in many cases physical issues that prevent them from being active. Therefore mealtimes are often the highlight of their days. Additionally there are are obvious cleaning and hygiene requirements of a very high level with this segment of population.
For the touchy subject of the food supplies and catering, Luis had to get a wide range of stakeholders on board before being able to progress, not least of which the Chef - master of the kitchens, and in charge of meals for several hundred residents – who was very reluctant at first, had to approve every change proposed by ERA. He requested a testing period for some of the changes before agreeing to their implementation.
Other stakeholders to convince were the members of a committee made of care home residents, families, catering providers and staff. All put the emphasis on the importance of meals for older people at many different levels: nutritional (meeting specific dietary requirements), psychological (food is often the only comfort for lonely seniors) and social (mealtimes are the main social activity in the care home).
Another challenge, on top of the fluctuating prices of food supplies, was the difficulty for many elderly to chew their food, which means they have to be served mashed food; this makes dishes plain-looking, often tasteless and frankly unappetising.
To tackle the difficulty of benchmarking fresh food prices, Luis developed the purchase of frozen food, hence helping to reduce food waste as well.
Another solution was through R&D development: one of the biggest suppliers on the market was able to develop high-quality mashed food, containing all necessary nutrients for the target customers, with pleasant aspect and odour and offered in 11 different tasty flavours – for instance enabling the elderly to enjoy again the taste of paella or other dishes reminiscent of better times. So whilst staying within the budgetary constraints, the ERA expert managed to meet qualitative requirements of great importance to the end user – and meeting the values of the client.
Improvement in timetables and better organisation enabled savings in the category of temporary work, making sure the times declared matched the amount of tasks actually done. With better control came better efficiency and savings.
Finally, cleaning is a core category for care homes, not only for health and safety reasons but also because there are specific circumstances with elderly and dementia patients. The intervention of ERA to improve costs and processes saved 10% there.
With a Degree in Economics and an MBA, Luis Lozon has 20 years’ experience in various executive positions in finance and general management for several industrial groups. Member of the board of directors with a special focus on the fields of finance, sales, legal, organisation and coordination between the different services he was in charge of: finance and administration, sales, legal, and organisation.
Luis has a wealth of experience in the implementation of effective practices for performance and productivity, and for team leadership and personal development.
Most of Luis’ career was spent as CFO, then Deputy General Manager and General Secretary in the Tubular STS Group, manufacturer and distributor of pipes for the transport of high pressure fluids.