The pros and cons of being an independent operator vs. working for a contractor were presented by long-time healthcare fsds Dale Evert and Regina Toomey-Bueno during the American Society for Healthcare F/S Administrators (ASHFSA) annual conference recently held in Braselton, GA. Both believe that contract and self-op have their merits as well as drawbacks.
Evert currently works for Aramark and, for the past 15 months, has served as general mgr., overseeing several new account openings across the country. He began his career in 1973 working for Aramark but left "to be closer to family and not be required to move around." However, based on experience garnered leading two different teams through the outsourcing process, Evert has now chosen to join the contract company that he felt "would provide the best support and training to become familiar with their processes."
Multi-tasking: Toomey-Bueno started her f/s career with Aramark (4-1/2 years) then worked for ServiceMaster (8 years). She served at six accounts in four years then took a position in 1995 at The Valley Hosp. in Ridgewood, NJ, where she currently manages patient transport, the facilities service center, audio visual, front desk (with its staff of 75 volunteers), the surgical waiting area, as well as foodservice at this 457-bed self-op facility.
"There's no such thing as the 'typical' independent or contract experience. If a facility has financial problems, being with a contractor won't help you," Toomey-Bueno contends.
The 'ultimate' authority: On balance, she says she'd rather be independent, serving as the ultimate authority on foodservice in her operation, a position she equates with being ceo of your own company—plus there's the potential of becoming a multi-department head. "But if we were contract, that would be all right. I don't think people should have this fear of contractors."
Admittedly, the career path is not huge as an independent, while a contractor affords the operator more opportunities to move up as well as offering more geographic options. And, when it comes to salary, Toomey-Bueno points out that the pay scale is typically lower with contractors than self-ops.
However, Evert notes the potential of a bonus for a contract operator meeting or exceeding the requirements of their contract. That bonus amount may vary based on size of the account. Also there are additional bonuses available for recruiting an experienced manager to the company and for submitting a potential client (but a signed contract must be obtained in order to receive this one).
Continuing ed: Citing further education as one reason for his current choice of job, Evert points out that he was recently sent by the contractor for leadership development training to enable him to more effectively coach entry-level managers. On the other hand, Toomey-Bueno, who now holds an MS degree in health systems administration, pursued "distance learning" three years ago with two young children at home (they're now seven and 11) and a full-time job. "You have to aggressively look for those opportunities," she asserts.
In response to panel moderator Don Marsh's question—"What can self-ops learn from contractors?"—Toomey-Bueno promptly cites "controls" as well as a willingness to put money into retail operations. "The more money you can put to the bottom line, the better. And you must learn how to prepare your own pro forma. You should be doing your own operating statement since, with the accounting department, there's no volume or revenue attached to it."
Charge for services: Furthermore, the self-op should never be embarrassed to charge for outpatient services so that it's valued by the customer. "You need to look to those places where you can build income, then get administration to look at your net cost vs. a gross contract. The first year I was at Valley, I reduced the net cost by a million dollars."
Evert concurs, and notes that he still can't go home on a Friday night until he knows his net cost. "If you're not managing the dollars and accounting for everyone, you've got a problem. The contractor knows the cost of a paper plate—and if you're using too many of them."
Albeit with tongue in cheek, Marsh concludes that contractors will probably not "take over the world" (even though he's been a Morrison Mgmt. Specialists general manager for the past five years of his 30-plus-year f/s career), allowing that they don't really want the small, 150-bed or less facility—unless part of a group contract—without the large retail volume opportunity. And Toomey-Bueno offers her take on reality: "It's the execution that's going to make the difference. Every account, independent or contract, is only as good as the person who's running it."