This article is sponsored by PRIME Services. This article is based on a Senior Housing News discussion with Eric Mesimer, Director of Business Development at PRIME Services. The discussion took place on June 6, 2023 during SHN DISHED/WELLNESS Conference. The article below has been edited for length and clarity.
Senior Housing News: Eric, can you tell us a little bit about yourself and your background and what brought you to PRIME?
Eric Mesimer: I’m relatively new to PRIME. I’ve been with PRIME for about six months. I worked for Ernst & Young in their healthcare turnaround practice. I’ve been in the senior living GPO space now for 18 years. Before my current role, I was at Synergy HealthCare Alliance and foreign purchasing.
Can you tell us a little bit about Buyer’s Edge. What is it? What does it do?
Buyer’s Edge Platform is the parent company for PRIME Services. Buyer’s Edge Platform has multiple components. The first is group purchasing organizations. Buyer’s Edge grew up out of the restaurant industry. For those of you who may be familiar with Dining Alliance, Dining Alliance was the original GPO and part of the platform. We have verticals also in hospitality and, of course, PRIME Services and health care. We also have produce programs. We own Produce Alliance and Fresh Concepts. That’s a big component. We do $50 billion of transactions through the platform today. That’s obviously a huge number and it allows us to compete with anyone.
We also have some consulting services that we offer around operations and some fairly niche things down to helping you negotiate your beverage contracts for soda and things like that. We offer a lot of back office software, accounting, accounts payable, and then technology. The big technology program we have is called ‘Inside Track’ which brings in data, cleans the data from multiple distributors, audits the pricing against the distributors in your contracts, and makes sure that everything is going well. We can also bill invoices for rebates and identify contract holes.
At the end of the day, the most important thing is we can provide you actionable recommendations from a GPO standpoint to help you reduce your cost. Because things are moving at a breakneck speed, we want to provide very live data that is following the market to make sure that what was the right decision 30 days ago is still the right decision today. Because PRIME Services is part of the platform, we are able to operate very much as a boutique niche or nimble company. We are trying to provide services that make sense. We don’t want to just give you a list of contracts and prices and say, “Here, use this, have fun.” Our goal is to be your partner to provide you with information that is going to be helpful.
What are some of the most significant challenges that you’re seeing operators face in this current market?
We’ve heard a lot about the current challenges and just doing more with less, whether that’s staffing or budgets and whatever that looks like. Especially when it comes to time, the big risk that I see is people reacting in firefighting mode and putting band-aids on things. I’ve been happy to hear a lot of people doing some cool stuff strategically and making sure that they are building out a strategic plan. That’s I think the big challenge for everybody right now is to make sure you’ve got that two, three-year, five-year roadmap so that when it’s time and you’re looking at your budgets and you know that staffing’s not getting any easier — hopefully, inflation eases at some point, but costs aren’t going back down — how can you help your company and be ready to do different things?
Are there any specific challenges on the procurement side that you’re seeing right now?
Yes. The biggest challenge in procurement is the disparate systems and how you are going to identify the problem. That’s one of the places where technology is so important. Whatever platforms you’re using, you have to make sure that the stakeholders and the decision-makers all have the information they need in front of them to make the right decision quickly. We’ve all, at some point, I’m sure, experienced somebody with analysis paralysis, and we don’t have the luxury in this industry of thinking too much. We need to know what’s happening. It’s like the Wayne Gretzky quote, “Skate to where the puck’s going to be, not where it is.” The market’s moving quickly and we’ve got to make sure that you’re reacting now and not 30 days from now because the answer may be different.
Could you tell us a little bit about specifically how technology can help play a role in procurement and what your platform does to ease that process?
There’s a couple of components there and the first is, what is the market and what are the right products for what you’re trying to do? We’ve heard a little bit about creative menus, getting that information from your chefs, and different things. Obviously, if you’re reacting to those market pressures and creating the new menus because of that, you then have to put that in place quickly.
You need consistency in your products. There’s a lot of variability, whether it’s because of timing, product availability challenges, whatever that looks like that you can react to in time. As everybody’s trying to become much more efficient and nimble, waste is nothing more expensive than something you throw in the trash. You literally got nothing out of it. How do you drive that? Then making sure you’re getting the right price, what you paid for, and capturing all of the rebates that are available to you. Technology drives all of that at the end of the day.
Have you seen any innovative approaches among your client base relative to procurement?
Yes. What’s important is that everybody has a couple of key partners that you’re working with. Those key partners need to be bringing you solutions. If they’re not bringing you solutions and they’re trying to push you into a box, then you’re not going to be able to react fast enough. Whether that’s a technology best practice, a new technology solution, a different way to manage staffing, whether that’s robots, whatever that may be, that’s what everybody needs to be looking at.
We’ve heard a lot about dining as a cost center or profit center, profitability being the key that everybody is focused on. What are some things operators can do to improve profitability? What have you seen that actually works?
The profitability around the dining center is very much a challenge in this environment. It gets down to being nimble in the competitive nature. What is your competitive pricing? It was really interesting this morning to hear people opening outside, making sure that you’re capturing family meals and capturing that revenue that are real costs. If you’re serving meals to people, make sure you capture that. Then, of course, on the expense side of the ledger, we get back to what is that and are you making the right decisions. It’s so easy to fall into the patterns of this is what we use. You pick your ingredients. This is the chicken breast we use. That may have been the right chicken breast a month ago. It may not be now. It may have been the right bacon a month ago. It may not be now. You have to make sure that you’re tracking that.
Are there any trends that you’re seeing in your experience of what is being demanded?
Mesimer: Yes. Well, everybody’s trying to do as much as they can to make things work without much staff, right? What’s being demanded is very much a case of how do we get through the day? That’s back to my point that firefighting doesn’t work for very long. Everybody needs to make sure that they have a good handle on every dime that they’re spending. It’s easy to say, right, it’s much harder to do. If we can capture that information, if we can capture and let you know you’re buying three different products that are the same product at five different price points, that’s where we were able to make recommendations and use the artificial intelligence that’s in the system to drive that. Like I said, whatever platform you’re using, you need to be getting recommendations on that.
Let’s talk a little bit about resident satisfaction. Can you improve resident satisfaction while reducing costs?
You absolutely can I mean, you start with in this industry, a few non-negotiables, right, you need clean buildings, quality service, and good food but if you can engage the residents, I know earlier, it was mentioned a few times of getting residents feedback getting there. Whether it’s a council or whatever that looks like collecting that information, make your residents part of the process, part of the decision making and if they can be engaged, they’re going to be happier.
Everybody likes to provide input, as long as they feel heard, and you incorporate it, then you’re going to get a lot better results. The other thing that is important that we talked a lot about today is staffing. You and I can go to the same restaurant, sit at different tables, order the same entrée, and have very different experiences, depending on our interactions with the staff with the server and what things, just how that flow goes for the day. Again, we get back to the robots and making sure that people are out, having conversations with the residents, building that rapport. That’s a huge part of the resident’s satisfaction is they know that their favorite employees are there, and you build that personal relationship with them.
We were talking a little bit earlier about where things are going. Where should operators be focused right now, based on everything that you’re seeing and hearing?
I think as much as everybody would like it, I don’t foresee any major changes in this post-COVID staffing world. Maybe inflation uses a little bit, it’s certainly not going to recede to a deflation standpoint. There is very much a case of driving that and finding ways to differentiate yourself.
Does that mean you’re serving fewer meals a day? Are you meeting the resident where they are? People are coming into the world with Uber Eats and DoorDash. People are going to want to be served in different capacities in different ways, on different days. There’s not one answer. “This is the mood I’m in today. I don’t want to go downstairs. This is what I want tomorrow, which is different” That flexibility is going to be the biggest single component.
What should an operator look at every day to drive savings?
The first is making sure that you’re minimizing your waste, and making sure that you’re driving that to as low a point as possible, because again you bought it and you’re thrown in the trash. The second component is the trends in the market and understanding when I say “The market.” Everybody knows eggs have gone haywire, does that mean your egg pricing should be up 15% or 50%?
Are they going to come down at some point and how do you know when they come down? Are you going to capture that right away? Are you going to capture that six months later? You need to have a good understanding of what the marketplace as a whole is doing and hopefully, your suppliers are helping you with that, but if you can stay on top of that, then that will provide a lot of flexibility and agility to make sure that you’re where you want to be.
PRIME Services is focused on lowering cost of procurement for the post-acute and senior living healthcare markets. PRIME offers cost savings programs and rebates with manufacturers and suppliers in most areas of purchase for a long-term healthcare and senior living facility. To learn more, visit: https://www.primeservicesinc.com/.