Question

A hospital care system is considering implementation of a Healthier Hospitals Initiative (HHI). Of the six HHI challenges, the hospital is interested in implementing the “Healthier Food” challenge, designed to “promote healthfulness by increasing access to healthier, more sustainable food choices.“ If the hospital accepts the challenge, it will make a commitment to write healthier menus, work with local farmers to purchase local sustainably-grown products, reduce the amount of meat purchased and served, and purchase more fair trade and certified organic products. Signing up for the program is free and provides access to free tools and resources, such as how-to implementation guides, a mentor program, webinars and a network of peers. Implementation will require the addition of one additional part-time (one quarter full-time equivalent) dietitian at an annual salary of $17,000 (including benefits), and 5 hours of training for each of 10 dietitians (at an average cost of $30 per hour). If the program is implemented, the hospital is expected to reduce its meat purchases by 20% (meat purchases currently represent approximately $200,000 of the current budget). Cost-savings related to the purchase of locally grown produce is expected to offset the increase costs associate with the purchase of organic foods. Is this a financially attractive innovation? What additional factors should the hospital consider when deciding to implement this project?

Answer 1

To implement this program we would need the following budget provisons

1) Dietician partime would cost the hospital $17,000

2) Training of dieticians who need 5 hour training at cost of $30 per hour would be 5x10x30 = $1500

Total cost of the implementation would be $17,000+ $1500 = $ 18,500

Now there would be reduction in quantity of meat purchased that would save 20% in 200,000 budget which would account for $40,000

200,000 * 20/100 = 40,000 ( Percentage calcuated like 20/100 formula)

Now total savings to hospital minus expenses would be 40,000-18,500 = 21,500

$ 21,500 is what hospital would save.