As a senior living community operator, delivering an exceptional resident experience while maximizing profitability is a top priority. Food and dining options are a huge factor in a family or resident’s decision to select a community, so offering a strong menu selection paired with a value-focused meal plan is important.
Operators may be losing money by offering all-inclusive meal plans.
As reported by Senior Housing News, “…to control dining budgets, senior living providers must track food spending at each step, from ordering and inventory to when the food is served to residents.”
Communities have realized that all-inclusive meal plans can be a source of missed revenue, and that a declining balance meal plan and “a la carte dining” can bring substantial value to both residents and operators alike.
As determined in a study by Kendal Corporation, real-time data about meal costs helped them determine that offering grab-and-go options for breakfast was more profitable and that serving breakfast cafeteria-style no longer made sense for their residents.
Understanding your menu, price per plate, and resident preferences on meals is critical to making good decisions, but is hard to do without the help of a POS solution or inventory management tools.
The transition in meal plan styles is being fueled by the huge shift towards technology in senior living communities, including resident portals, point of sale (POS) technology, and EHR/EMR implementations.
With an increasing demand from residents for tech-forward experiences – such as in-room ordering, self-serve kiosks, resident portals for balance checking and more – communities are using technology upgrades as the perfect excuse to go back to the drawing board on meal plans.
What is a declining balance meal plan?
A declining balance is a debit-style meal plan. Accounts are loaded with specific amounts of funds (or points) which trickle down as they are used. The goal of declining balance is to encourage residents to pay for what they get – or at least to have their meals tracked with a dollar amount.
If you are doing a la carte declining balance style, if a resident were to arrive at breakfast and choose a muffin at $2.00 and a coffee at $1.50, their account would be charged $3.50. This is a stark contrast to an all-inclusive meal plan where residents can pick and choose anything they want without seeing a dollar or points amount associated.
If you are doing a flat-fee declining balance program, a resident may be debited $10 for the dinner meal period, then choose from a selection of dinner options that are each $10. Perhaps there are upsell items to add-on, such as a lobster tail for an additional $7.50, but generally speaking: all of the items on the menu are included for a flat fee. Different meal periods may be allotted different dollar amounts, such as $5 for breakfast or $7.50 for lunch.
Usually, residents are allotted a certain number of dollars per month as included in their rent. On the 1st of the month, their account is loaded with these funds. When using a POS to help manage the meal plan, the resident can use their resident card, fob, or name to access their balance. The POS can also manage the automated resets, prorating the balances if a resident joins mid-month, or provide other customizations to the declining balance plan if needed.
What happens when a resident uses all of their funds?
There are several options you can implement, depending on your current technology, to charge residents overages once they have depleted their funds.
You can make the decision to:
- Allow residents to accumulate a charge – which the POS can then send to your billing system monthly, if you are using a POS with integrated billing
- Allow residents to use a credit card, cash, or alternate payment method
- Allow residents to load their account using a credit card so they always have funds available, if they have a resident portal such as My Volanté to help manage this process
- Set up automatic loading of resident accounts where their credit cards are charged automatically once they run out of their initial declining balance funds
A la carte dining paired with declining balance helps ensure residents are charged for what they eat: no more, no less.
With a la carte dining and declining balance, if residents are eating less, they are charged less. If there are premium or more expensive items on the menu, they are charged accordingly, as well. The benefits to this type of meal plan include allowing residents to be in full control of their spending, while giving operators the chance to get better data on what is selling and what isn’t. It also helps communities drive profitability by encouraging staff to promote or sell high profit margin items to residents, the same way they would at a traditional table service restaurant.
Using a Point of Sale will help you properly track and manage declining balance accounts.
If the transition from an all-inclusive meal plan to declining balance seems daunting, that’s where we can help. Volanté has helped transition hundreds of communities from their existing pen-and-paper or all-inclusive meal plans to tech-driven dining. Contact us today to learn more