Some contract managers are marketing their skills as a package instead of selling their expertise in particular service departments.
For example, companies combine "hotel services" such as food, housekeeping and laundry into "integrated" departments, and allocate cross-trained workers as needed.
Marriott Management Services, which began marketing such a program two years ago, now runs integrated departments at 80 hospitals, said Anthony Alibrio, president of healthcare services at the Washington-based company. Other companies also say their contracts to run merged departments have grown.
Marriott's total contracts at healthcare facilities grew 5% to 1,317 in 1993, according to MODERN HEALTHCARE's 1994 contract management survey. It reported contract revenues of $3 billion in 1993. A comparable figure isn't available for 1992 because of a company restructuring.
Many service companies changed how they report contracts as integrated departments caught on.
For example, Downers Grove, Ill.-based ServiceMaster Co. said it no longer tracks contracts by individual department because it is consolidating its offerings. That significantly lowered MODERN HEALTHCARE's count of contracts in the categories of food, housekeeping, laundry, equipment maintenance and plant operations (See chart, p. XX).
Total contracts at ServiceMaster rose 2.6% to 1,402. Revenues grew 12% to $2.8 billion in 1993, while profits climbed 19.6% to $146 million.
Food-service departments still are managed under contract more frequently than any other hospital department. Food-service managers reported a 5% increase in hospital contracts to 1,543 in 1993. In last year's survey, companies reported a 5.6% increase to 1,936.
The difference reflects ServiceMaster's change in reporting. It also is due to a change in how Mobile, Ala.-based Morrison Health Care Group reported contracts. The company reported food-service contracts at 217 hospitals in 1993. Previously, instead of reporting total hospital accounts, it reported 509 food-service locations at hospitals.
Emergency departments still make up the second-largest category of contract management. The number of emergency department contracts, however, slipped 1.2% to 1,488 in 1993. That also reflects a change in how companies reported contracts instead of an actual drop in managed departments. In last year's survey, companies reported a 4.8% growth to 1,547 emergency department contracts.
Spectrum Healthcare Services reported 456 contracts to manage hospital emergency departments and 133 contracts to manage urgent/primary-care sites. In 1992, it reported 501 emergency department contracts, which included urgent/primary-care sites.
Spectrum is a division of Philadelphia-based ARA Services, the nation's largest contract manager. Total healthcare contracts at ARA rose 16% to 1,416 in 1993. The company said its revenues stayed level at $4.9 billion. It didn't report profits. In October, ARA will rename itself ARAMark to signal its intent to become the global standard for contract services.