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Nutrition

Evaluations Report

V. PROGRAM FUNDING, COSTS, AND EFFICIENCY

A. COST OF TITLE III MEALS Part 1

The services provided by the Elderly Nutrition Program (ENP) are defined by legislative authority but are shaped in large part by the costs associated with providing such services and by the diverse funding structure of the program. This chapter examines these factors. Section A provides estimates of the costs of providing ENP meals. Section B discusses program funding. Sections C and D discuss the transfer of funds among different parts of the Title III program.

A. COST OF TITLE III MEALS

The evaluation's cost analysis of meals provided under the ENP studied the key factors most likely to affect meal costs and program efficiency. After calculating unit costs of congregate and home-delivered meals, we examined the degree to which costs varied by program size, setting (urban or rural), and geographic location of the project, as well as by the type of meal preparation method used by the project. We also conducted a regression analysis to jointly examine the effects of these factors on meal costs. We found that project size and the geographic location of a project were key indicators of meal costs. In addition, only a slight difference existed between the cost of a congregate meal and a home-delivered meal.

In this section, we discuss the methodology used in collecting the cost data. Next, we present average meal costs and average meal costs by selected nutrition project characteristics. Results of a regression analysis are then presented to examine further the effect of these characteristics on average meal costs. We conclude the section with a discussion of nutrition projects' perceptions of the cost of the special meals they provide to participants.

1. Methodology

Two main principles guided the development of the methodology for the cost data collection process. First, the process required a random sample of projects from which to collect the data. After these projectswere selected, the cost data collection focused on one randomly selected congregate and home-delivered meal distribution site within each project. Second, the data collection methodologies at each site had to be consistent to provide uniform data, so that costs across sites could be averaged. The sampling methods are discussed in detail in Volume III, Appendix A. Here, we provide a brief overview of the data collection process.

In collecting the cost data, we tried to achieve uniform cost measures for all nutrition projects in the sample. Thus, we requested a standard set of information on the resources that projects used at the individual sites in preparing and delivering meals. ENP nutrition project staff recorded these data on cost data collection instruments, which were developed for the ENP evaluation and mailed to sites. In addition to other items, these instruments requested information on such meal components as the staff and volunteer time used to plan, cook, serve, and deliver the meals and each staff member's wages and fringe benefits; the cost of the food ingredients or payments made to vendors for already prepared meals; the cost of supplies and equipment used in preparing meals; and the number of meals served or delivered by the selected sites in an average week. [ Nutrition projects do not always allocate nonlabor costs to individual sites. Thus, although the cost data collection focused on a particular congregate and home-delivered site at each project, the nonlabor costs were most often collected for the overall nutrition project and allocated to the site in proportion to meals it served or delivered.]

The data forms filled out by the projects were then mailed or faxed to MPR, where they were reviewed by MPR analysts, who made follow-up calls as necessary to clarify any possible problems. [ The analysts who performed this work were individuals with master 's degrees with several years of policy analysis experience.] With these detailed data collected for each project, the MPR analysts could be reasonably confident thatconsistent data had been collected for each project. [ We received complete cost data for 178 Title III projects. Of the 272 projects in the original sample, 26 were found to be ineligible because they were not, in fact, elderly nutrition projects. (As discussed in Volume III, Appendix B, many of these organizations turned out to be sites that had been mistakenly included in the project sample from data supplied by the Area Agency on Aging [AAA].) Thus, the final completion rate of the eligible sample was 72 percent (or 178 completes). Of these 178 projects, 170 operated congregate meal sites, and 156 operated a home-delivered meal program. ] Then, using the costs of these meal components, the analysts calculated (or "built up") the total cost of preparing and serving (or delivering) meals at a particular project. The cost per meal for a particular site was calculated by dividing the weekly meal program costs by the number of meals served (or delivered) in the same week.

2. Analysis of Title III Nutrition Projects Average Meal Costs

The average full costs of a congregate meal and a home-delivered meal, including volunteer labor and donated food or space, were $5.17 and $5.31, respectively (see Table V.1). [ These are weighted averages. For a discussion of the weighting algorithm, see Volume III, Appendix C.] Paid labor accounted for 35 percent of the full cost of a congregate meal and 37 percent of the full cost of a home-delivered meal. Most paid staff members worked at the meal sites and were involved in preparing or serving the meals. Transporting meals to homes in the home-delivered meal program cost an average of 34 cents, or 17 percent of paid labor costs paid. Food costs--ingredients or payments made to vendors for already prepared meals--were approximately $1.75 in both programs.

TABLE V.1
AVERAGE COST PER TITLE III CONGREGATE AND HOME-DELIVERED MEAL  (In Dollars)

Cost Component

Title III Congregate

Meals

Title III Home-Delivered

Meals

Total Labor Costs

$2.22

$2.43

Paid Labor

1.79

1.96

Site

1.18

1.04

Central kitchen

.11

.13

Central administration

.47

.42

Transportation to site

.04

.03

Transportation to homes

NA

.34

Volunteer Labor

.43

.47

Site

.42

.10

Central kitchen

*

*

Central administration

.01

.01

Transportation to site

*

*

Transportation to homes

NA

.36

Total Nonlabor Costs

2.95

2.88

Foods/Vendor

1.74

1.72

Supplies

.13

.11

Rent

.14

.13

Insurance/Utilities

.30

.30

Equipment

.26

.30

Other Costs

.11

.06

Donated Food/Space

.28

.26

Total Paid Costs

4.46

4.57

Total Costs (Paid and Nonpaid)

5.17

5.31

Unweighted Sample Size

170

156

Source: Elderly Nutrition Program Evaluation, cost data collection instruments, weighted tabulations.

* = Less than one cent.

NA = Not applicable.

Nutrition projects relied heavily on volunteer labor and donations to obtain additional resources to provide meals to their clients, and the full cost estimates cited here include the value of these resources. When only direct monetary costs are considered, the average costs were $4.46 for congregate meals and $4.57 for home-delivered ones. Volunteer labor accounted for much of the differences. Most projects employed volunteers in the kitchen to help with food preparation, in the dining rooms to help serve the congregate meals, and as deliverers of meals to individual homes. In-kind contributions mostly involved space donated or leased at very low prices for use by the nutrition projects.

TABLE V.2
TITLE III PROJECT DISTRIBUTION OF AVERAGE COSTS PER MEAL  (Percentage of Projects)


Title III

Congregate Meals

Title III

Home-Delivered Meals

Cost per Meala

Less than $3.00

7.7

4.0

$3.01 to $3.50

13.6

12.5

$3.51 to $4.00

12.8

9.8

$4.01 to $4.50

11.5

16.1

$4.51 to $5.00

9.1

8.5

$5.01 to $5.50

13.3

11.8

$5.51 to $6.00

5.9

13.2

$6.01 to $6.50

5.2

2.9

$6.51 to $7.00

3.7

4.8

$7.01 to $7.50

3.8

4.2

$7.51 to $8.00

3.4

0.8

More than $8.00

10.1

11.2

Average Cost

$5.17

$5.31

Median Cost

$4.69

$4.74

Unweighted Sample Size

170

156

Source: Elderly Nutrition Program Evaluation, cost data collection instruments, weighted tabulations.

a Includes all paid and nonpaid costs, including volunteer labor and donations.

Average meal costs showed a broad distribution among the 170 congregate programs and 156 home-delivery programs included in the cost study. For both congregate and home-delivered meals, Figure V.1 shows that the average meal costs, including volunteer time and donated supplies, were clustered between $3.00 and $6.00. There were outliers at both extremes, however; the maximum congregate meal cost reported was $14.20, and the minimum was $1.65. About 10 percent of the congregate programs and 11 percent of the home-delivered meal programs reported an average meal cost that was more than $8.00 (see Table V.2). The average cost of the congregate meals ($5.17) was higher than the median cost ($4.69), demonstrating the effect of these more expensive outliers. [ These outliers were retained in the cost analysis data file, after the data were checked through a four- step process. First, when the completed cost data collection instruments were returned to MPR, the cost analyst processed the data and noted any problems or irregularities in the data. Second, the cost analyst conducted a follow-up telephone call with the respondent to clarify or revise the data and record explanations for any data that appeared questionable. Third, one of the evaluation 's principal investigators reviewed the final calculations that resulted in the project 's cost per meal and directed the cost analyst to follow up again with the respondents if any questions were still unanswered. Fourth, the cost analyst made a final telephone call to the respondent to clarify further or revise the cost data.]

Average paid costs of a congregate and a home-delivered meal were slightly higher than the costs calculated by Kirschner (1981). (See Table V.3.) According to the Kirschner study, the average paid cost of a congregate meal was $3.86, or 13 percent lower than the cost per meal calculated in this study. [ Data for the Kirschner report were collected between January and April 1981. We constructed an index to inflate the data to December 1994 dollars. ] The cost of a home-delivered meal was calculated at $4.42 in the Kirschner study, only 15 cents less than the cost per meal calculated in this evaluation.

TABLE V.3
COMPARISON OF TITLE III AVERAGE MEAL COSTS  (In Dollars)


Title III

Congregate Meals

Title III

Home-Delivered Meals

Paid Costs



MPR

$4.46

$4.57

Kirschnera

3.86

4.42

All Costs, Including Volunteer Labor and Donations



MPR

5.17

5.31

Kirschnera

5.09

6.14

Sources: Elderly Nutrition Program Evaluation, cost data collection instruments, weighted tabulations; Kirschner et al. (1981).

a Cost data from Kirschner (1981) have been inflated to December 1994 dollars.

Both sets of analyses also showed that home-delivered meals cost more than congregate meals. However, our data show that, on average, the home-delivered meal cost only 11 cents more in paid costs than a congregate meal and only an additional 3 cents in donated or volunteered costs. Kirschner's results Sindicated that the monetary and nonmonetary cost of a home-delivered meal is, on average, 20 percent (or $1.05) more than a congregate meal. Kirschner's study attributed most of this difference to the increased cost of packaging and shipping the meals to individual homes. However, our analysis suggests that, while the home-delivered meal programs incurred significant costs transporting meals to homes, they incurred significantly less on-site staff costs than congregate programs--thus requiring relatively few on-site staff to operate the home-delivered programs and offsetting the transportation costs.


Last Modified: 12/31/1600