It was a big wake-up call for one major hospital system in pursuit of value and quality. Last year Scripps Health in San Diego discovered enormous variation and expense throughout its five hospitals in just one little perk.
Scripps' bean counters, in consort with the hospital system's food service, decided to, well, count beans. And they discovered that various departments were spending $675,000 per year supplying caffeine throughout the 1,323-bed healthcare system.
Areas of some hospitals were getting free coffee while the same areas in other hospitals weren't. Many were slurping expensive "pod" style coffees in gourmet flavors, while others were swilling cheaper drip. Some areas had special "toppings," but not others.
Adding to the cost, there was considerable waste because expensive less popular coffee flavors just sat on the shelves.
Scripps' coffee quandary sounds a lot like the overall healthcare industry’s struggle, doesn't it?
"We had three master vendors and at least 15 types of coffee available," explains Tim Collins, Scripps' horizontal lead of support services. The choices, he says, "were overwhelming."
Scripps needed to know: is there a best coffee for the price? Committees and focus groups were formed, part of a much larger overhaul of the entire Scripps system to reduce costs and variability in major and minor healthcare expenses such as orthopedic knees, purchases of rubber gloves or medication.
"We need to look closely at our processes and ask ourselves why, from one Scripps site to another, there is so much variation in how we deliver care to our patients and run our facilities," noted Chris Van Gorder, Scripps' CEO in the hospital's internal newsletter. "Is there a best practice? If so, why isn't everyone doing it?"
The hospital's coffee task force went to work. "Our food and nutritional service directors all compared the prices of coffee – price per cup, price per pound, cost per day were all evaluated by the team," Collins says.
After this "deep comparison," they asked, "did it make sense to buy beans and grind? How complex is the package? How do we get this to work and what are the implications to the staff?" Collins says.
Lo and behold, after analyzing all the variation, Scripps realized it could save up to $350,000 in the first year by consolidating its caffeine delivery systems into one – the type that serves coffee on a per cup basis, or "on demand." They picked coffee from the Javo Beverage Co.
"The 'old' brand 'pod' was 30 cents per cup and with the toppings it equated to 48 cents per cup," Collins says. "The new coffee is now seven cents per cup. In addition, we found from our analysis that we were spending $985 per machine per year in rental fees."
Now, each hospital offers only two to three types of coffee, one decaf choice, three teas, and of course creamers and sweeteners. They also looked at areas that needed coffee, just not very much. "In some cases, the cost per cup was significant because an entire carafe would be made for a single cup," Collins says.
"There was debate over the vendor and flavor...We also did a taste test to ensure the coffee and equipment would meet expectations," Collins says.
The verdict? Collins says the team "was pleasantly surprised... it was actually an improvement over what we were getting before in the 'pods.' People likened the taste of the new coffee to Starbucks. I personally actually like the new coffee better - we offer a Northwest, Kona, and I believe a French Roast option for brewing."
There was some fallout, as to be expected. Coffee "is a funny thing, and people can get upset over little issues like coffee," Collins says.
For example, at one hospital some physicians were displeased. They "viewed this as an indication of 'respect' and that by not offering 15+ types of coffee, we did not respect them."
Apparently, the physicians have gotten over it, or they sought comfort from an outsourced barista. "We have had tremendous support from our physician partners across the system," Collins says.
"The pods are nice, (but) they are expensive and not where we need to focus our resources," which should be on providing patients high quality care, excellent clinical outcomes and a positive experience at each of our facilities.”
Areas of the hospital that always had free coffee continue to offer it, such as in areas open to patients and families on a 24-hour, seven-day-a-week basis, including the emergency department, nursing units or physician respite areas like the surgical lounge.
Throughout the system, Scripps has saved $150 million per year on just these sorts of examinations.
"We need to eliminate things that don't create value," Collins said in a hospital newsletter. "This was an opportunity for us to reduce the variation across the system, work together, and save money."
Van Gorder says that as a former police officer, he long ago learned how to survive on any sort of coffee. And if someone must have a more expensive concoction, well, he says, "Sure. They can just go to the store and buy it."