Client

Iowa-based healthcare company that manages and operates 45 skilled nursing, rehabilitation, and assisted living facilities.

Challenge

Food costs are significantly increasing due to inflation and food constraints caused by recent economic factors.  Our client recognized food expense as one of their higher spend categories and requested our support in lowering costs quickly without having to change vendors. Food costs are significantly increasing due to inflation and food constraints caused by recent economic factors.  Our client recognized food expense as one of their higher spend categories and requested our support in lowering costs quickly without having to change vendors.

Solution

Engage directly with the incumbent vendor and collaborate closely to negotiate favorable terms.  Leverage existing relationships to pool resources to provide increased buying power and secure better pricing. Implement a new pricing structure and margins with the vendor’s help.

Results

We successfully updated contract language with essential provisions including price controls for cost stability and a penalty exemption clause for location sale or closure. Additionally, we negotiated extended payment terms which improved financial management. The solution yielded impressive outcomes with $288,000 in annual savings—representing a 6.1% reduction in overall expenses.

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