Healthcare Operations Playbook

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REVISION HISTORY

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1 INTRODUCTION

1.1 Toolkit Organization

This toolkit is organized into 4 main sections. Refer to the Table of Contents, which contains active links to each section to allow for easy navigation through this document.

You should read the entire toolkit at least once. Then later, when you refer to the toolkit, the detailed Table of Contents will help you find the section relevant to the topic on which you need more information.

1.2 Ownership of the Toolkit

This toolkit is owned by ServiceMaster Clean Limited Partnership. We want you to reference this toolkit to ensure you are following the ServiceMaster Clean approved process for providing services in a healthcare facility Treat the material herein as confidential.

You will be required to return all copies (printed or digital) of this document when your franchise agreement with ServiceMaster Clean concludes; however, we encourage you to make notes or highlight areas of importance to you.

1.3 Overview

This toolkit serves as a guide for:

• Understanding the healthcare and environmental services (EVS) market and its potential

• Successfully marketing and selling to healthcare prospects

• Customer and Employee training and onboarding

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2 UNDERSTANDING HEALTHCARE

2.1 Why Healthcare is the Right Choice

As a ServiceMaster Clean franchise owner, here’s why you should be excited about healthcare:

• Huge revenue and profit potential in this large and growing market with growing profit margins

• Fewer competitors, since healthcare cleaning has high standards

• SMC is well positioned to be very successful in healthcare due to our history, processes and expertise

• Faster, more profitable growth in healthcare

• 3.3% CAGR for Cleaning Services industry

• 6% EBIDTA CAGR for Healthcare industry

• 6.3% expected increase in the number of cleaning service providers to 2027

• Largely small, “Mom & Pop” players, which is a problem for general janitorial

• Mom & Pops not as relevant for the complex healthcare cleaning market

• ServiceMaster Clean is a well-known brand with a history of industry-leading cleaning and disinfection products & processes

Healthcare offers SMC franchisees a large, profitable market where it will be easier to win business

2.2 Why Healthcare is a Strong Opportunity

• Opportunity Size – The size of the market opportunity for healthcare is huge, growing, and changing. Healthcare is a large opportunity for SMC in terms of revenue potential, and differentiation.

• Earnings before interest, taxes, depreciation, and amortization (EBIDTA) growth across healthcare expected to grow by 6% per year

• High barriers to entry: Unique footprints & High levels of required expertise

• High revenue potential driven by value

• Strong National Accounts potential

• Market Demand – Specialized cleaning for healthcare presents a range of challenges and needs not found in traditional facilities, and our competition is not equipped to meet those challenges.

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• Market Expectation – Healthcare decision-makers want cleaning providers to understand their specialized needs & standards, and perform against them consistently, for a competitive but not low bid price. Expectations have shifted during COVID from lowest price to quality and best value.

• Positioned to succeed – We pioneered cleaning for healthcare and are defining its future with innovative processes and programs. ServiceMaster Clean offers healthcare facilities a remarkable cleaning experience by transforming the consistent completion of ordinary tasks into extraordinary service.

• Healthcare profit pools are expected to show a strong recovery post-COVID-19, with payer and services segments growing fastest.

• 60% of the network has been CSCT-trained

• Partnership with AHE

• Brand history and authenticity in healthcare

• Franchise network means agility in adapting to the changing healthcare landscape

*SMC’s average revenue per sqft, but actual revenue will differ.

2.3 Choosing the Right Targets

Targeting the right healthcare institutions to be more successful

2.3.1 Why Outpatient

• Care is moving to outpatient facilities like Ambulatory Surgical Centers (ASCs) and Medical Office Buildings (MOBs)

• Number of ASCs increased 7% in last 5 years

• Often co-located with medical office buildings and diagnostic testing facilities

• Limits on what spaces can be shared leads to mild complexity

• Large amount of square footage and growing faster than office buildings

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• Higher barriers to entry than regular cleaning services/commercial cleaning

• Clean already uniquely positioned for ASC cleaning

• Healthcare institutions are willing to pay more for cleaning and disinfecting services, especially after the COVID-19 pandemic

• Outpatient settings have smaller footprints, lower overhead costs, and greater profit margins

2.3.2 Why Not Hospitals

• Healthcare is moving OUT of hospitals and into outpatient facilities

• 181 rural hospitals closed since 2005

• Hospitals spread nosocomial diseases and infections

• Patients prefer the convenience of outpatient facilities

• Competition is tough: industry giants like Crothall, Aramark and Sodexo focus on large footprints

2.4 Healthcare Basics

2.4.1 Know the Lingo

ASCs: Ambulatory Surgical Centers are outpatient (ambulatory) facilities that focus on surgical procedures, they’re often found in MOBs

Environmental Services (EVS): Cleaning services in healthcare settings

HAIs: Healthcare-Associated Infections

• CMS monitors 2 primary HAIs

• C.Diff

• MRSA

HAC Penalties: When a hospital has too many reported HAIs, CMS will penalize the healthcare facility by reducing reimbursement amounts

• This is less of a problem for a healthcare facility that receives reimbursements primarily from private insurance, and a large problem for facilities that have a majority Medicaid/Medicare patients

Inpatient Facilities: Anywhere a patient is admitted, mainly hospitals

MOBs: Medical Office Buildings, often clusters of large buildings where all or most of the tenants are medical practitioners

Outpatient Facilities: Patients are not generally admitted here, such as clinics, ASCs & MOBs

Patient-Centered Care: Trendy but critical term for putting patients first – their clinical and non-

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clinical experience in a healthcare facility

Patient Experience: A critical element of CMS reimbursement that started in 2010 with the move to Pay for Performance

Terminal Cleaning: End-of-day surgical room disinfection

Click HERE for CDC’s comprehensive list of key definitions and acronyms

2.4.2 Know the Stakeholders

CDC: Centers for Disease Control (gov)

Additional CDC resources for key program elements for effective EVS cleaning programs that include:

• Organization/administration

• Staffing and Training

• Infrastructure and Supplies

• Policies and Procedures

• Monitoring, Feedback, and Audit

CMS: Centers for Medicaid and Medicare Services (gov)

• CMS monitors healthcare facilities, including infection rates, and publishes reports online

• CMS is the largest single payor for healthcare, reimbursing healthcare institutions for all Medicare and Medicaid patients

GPO: Group Purchasing Organization

• GPOs are how healthcare facilities primarily purchase equipment, PPE and healthcare services

• The dominant healthcare GPOs are Vizient, Premier and HealthTrust

The Joint Commission (TJC): A non-profit 3rd party healthcare accreditation organization

• TJC is an independent, not-for-profit organization that healthcare looks to for guidance and compliance

• TJC seeks to continuously improve healthcare for the public, in collaboration with other stakeholders, by evaluating healthcare organizations and inspiring them to excel in providing safe and effective care of the highest quality and value.

• TJC accredits and certifies more than 22,000 health care organizations and programs in the United States, including hospitals and healthcare organizations that provide ambulatory and office-based surgery, behavioral health, home health care, laboratory and nursing care enter

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services.

For TJC-related resources, navigate to ServiceConnection > Intranet > Library > CleanBusiness Services > Clean Playbooks and Toolkits > Healthcare Industry > Joint Commission

Press Ganey: The leader in patient experience, its surveys (or Rounding) influence reimbursement rates and hospital ratings. There are 2 EVS-related questions

Leapfrog Hospital Safety Grade: A rating system for hospitals, available nationally

• Easy reference to see how a target hospital is performing

2.4.3 Know the Decision Makers

Different organizations have different final decision-makers. It depends on the size of the organization, and several people could influence the decision.

Influencers

• Infection Preventionist: Responsible for lowering HAIs in the facility

• Driver: Infection rates, CMS reports

• Chief Financial Officer: Involved in big expenditures

• Driver: Price

• Chief Nursing Officer (Hospital): In charge of keeping patients and nurses safe

• Driver: Quality

Decision-Makers

• EVS Director: Ensure the cleanliness of the facility and safety of patients

• Driver: Balance of price and value

• Procurement/Sourcing: Delivers savings & has a strong say in choosing a provider

• Driver: Lowest price

Decision-makers rely heavily on in-person and social media-based informal communities to ask about vendor quality and price, over more traditional outlets like conferences and associations. When the decision is made by committee, final budget approval may involve the Governing Board Chairman or Board of Directors.

2.4.4 Know the Landscape

• Nearly 200 hospitals have closed since 2010 with the change to Pay-for-Performance leading to lower reimbursement amounts

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• Dozens of hospitals closed down to COVID-19-related bankruptcy

• Healthcare has been stabilizing over 2021 and 2022

• According to a Modern Healthcare article, about 65% of hospital revenue is derived from outpatient services

• ASCs are a growing source of outpatient revenue

• ASCs predominantly have Medicare patients aged 65-74

• Joint partnerships with hospitals will enable ASCs to provide more outpatient services despite the limited number of physicians

• Since ASCs have a smaller number of operating rooms than a typical hospital inpatient center, it will likely be easier for ASCs to comply with quality control processes

• An aging population and greater demand for healthcare services will bolster demand for cleaning services at medical and surgical hospitals and outpatient facilities

• The effect of COVID is not expected to be temporary. Heightened awareness of variants will likely transform cleaning standards and their importance across all sectors

2.5 Healthcare Research

2.5.1 Commercial Cleaning Industry

Post-pandemic, the cleaning industry is expected to surpass its pre-pandemic growth rate

• 2016-2021: 3.1% Annual Growth Rate (AGR)

• 2022-2027: 3.3% Annual Growth Rate (AGR)

• Healthcare growth will be ~2x cleaning services industry growth

Industry Trends:

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• COVID-19 has heightened cleaning standards, long-term

• Demand for cleaning services is recovering in certain sectors.

• Headwinds: pressure on cost containment and profits, brick & mortar closures driven by ecommerce and continuing softness in office occupancies

• Number of competitors expected to increase to 1.6M enterprises in 2027, largely small players

• Healthcare growth expected to outpace general industry growth

2.5.2 Understanding Outpatient Facilities

Regulatory environment – As outpatient facilities grow in popularity, new regulations are being made specific to these facilities, as opposed to blanket hospital regulations.

Outpatient-specific regulations include 2018 guidelines on building codes and payment reimbursement structures.

A wide range of building types and services:

2.5.3 Outpatient Facility Facts

• ASCs are largely inside MOBs

• Cleaning opportunity for an ASC could include a bid for MOBs and vice versa

• MOBs require less disinfection than an ASC, but more than a traditional office building

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• In 2021, over $16 Billion in medical investment real estate properties closed, a record number and a dramatic 75% increase from the previous year.

• On average, ASC surgeries are:

• 30% ophthalmology

• 15% orthopedic

• 14% gastroenterology

• 10% pain management surgeries

• ASCs predominately have Medicare patients aged 65 to 74, a susceptible population for HAIs

*1-5 scale based on number of cleaning minutes per room type in each facility.

2.5.4 Introduction to ASCs

ASCs are modern health care facilities that provide same-day surgical care and preventive procedures. Patients being treated in an ASC have been scheduled and often referred by a primary physician.

ASCs are dedicated to outpatient procedures in these specialties:

• Pain management

• Urology

• Orthopedics

• Plastic surgery

• Gastro-intestinal

• Ophthalmology

• Other

Cleaning and Disinfection Services are similar to those for operating rooms but may require less equipment.

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ASCs are a growth opportunity in healthcare, which is moving away from hospitals.

• More convenient for patients: location & size

• Cheaper to operate, which is good for both management and insurance purposes

• Less risk of communicable disease compared to hospitals

• ASCs are growing at a rate faster than the cleaning industry

Rapid growth is due to:

• Tech advances allowing for non-hospital settings

• Patient/physician convenience

• Fiscal incentives for physicians who can own ASCs

• Higher safety/quality ratings in ASCs combined with lower costs

ASCs are more likely to outsource EVS.

• ASC survey respondents were more likely than other facility-type respondents to outsource services, averaging 64% outsourcing of the services surveyed

• By comparison, Skilled Nursing facilities only outsourced 30% of services, and Outpatient facilities only 52%

• For the services they don’t currently outsource, 66% of respondents said they would be comfortable outsourcing to a cleaning services company

ASCs have varied ownership with 60% being owned by physicians only.

• Revenue-generating surgeries moving to ASCs

• 12 large ASC chains (1,400 locations)

• Often affiliated with a hospital group

• Infection Preventionists have more influence in EVS decisions post-pandemic

• Healthy balance of opportunities for National Accounts & local franchisees

• Being owners in our communities is particularly excellent positioning in healthcare

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2.5.5 An Existing Fit for SMC

ASC interview participant needs most closely aligned with SMC's current marketing messaging for healthcare institutions:

• Rely on overnight terminal cleaning

• Prioritize infection control

• Seek better oversight of their janitorial vendors when onsite

• Rely heavily on janitorial service vendors to stay up to date on regulatory cleaning needs

2.5.6 Customer Insights Research

How to avoid HAIs and improve the patient experience.

Cause of HAI

Unwashed/poorly washed hands of carers

Ways to Combat the Infection

• Signage around hospital to remind people to wash hands

• Easily accessible hand sanitizer

• Regular handwashing of EVS staff

Poorly cleaned/disinfected rooms

Fomites (objects or materials that can transmit infection) e.g., blood pressure cuffs, IV poles, curtains, wooden furniture, lab coat

• Accurately follow chemical dilution and cleaning processes

• Cleaning and disinfecting common fomites between uses

• Managing healthcare technology inventory that moves from patient room to patient room, or disinfect equipment that’s touched by multiple patients in a day

Ways to Improve Patient Experience with EVS

Encourage & train EVS staff to have a conversation with patients while cleaning their rooms

Schedule room and hall cleanings during the day, so patients can see the EVS staff at work

Reduce HAIs to keep patients safe & healthy, and keep infection rates low

Switching Providers

• Service consistency – Most customers seek out cleaning services due to issues with their current provider such as not cleaning well and Service consistency. Price increases, new location addition and Salesperson are key to driving sales in Healthcare.

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• Quality and Reputation – Over half of those who decided to change reported that better reputation and superior quality of services justified their switch to a new cleaning company.

• Best in class equipment, and better selection of services were also relatively popular when selecting a new disinfecting company.

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Midsize Footprints in Class A or B Buildings

In November 2021, healthcare respondents shared information on their facility sizes and types. This sample size and snapshot is a good indication of the overall market today.

2.6 SMC Healthcare Opportunities

2.6.1 Red Ocean vs. Blue Ocean

Go where the opportunity is…

Red Ocean Strategy

Competing in a commoditized market with more of the same

• Focusing only on beating the competition at the current game

• Exploiting existing demand

• Making the value-cost trade-off

• Choosing to align all your activities with low differentiation and/or low cost

Blue Ocean Strategy

Finding new opportunities in the market space

• Creating a new niche of uncontested market space

• Making the competition irrelevant through differentiation and value

• Creating and capturing new demand

• Breaking the value-cost trade-off

• Aligning all activities in pursuit of differentiation and value

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Ways to implement a Blue Ocean Strategy

Create a new niche of uncontested market space

• ASCs and MOBs have traditionally not been addressed by the big players

• Mom & Pops are out of their depth in healthcare

• Outpatient EVS focused on quality disinfection is a niche in high demand

• Work with Regional and National Accounts to partner with SMC franchisees in your area

Making the competition irrelevant through differentiation and value

• Post-COVID, EVS isn’t as much of a price war – decision-makers want value from service consistency and quality

Creating and capturing new demand

• The demand is already there in healthcare

• Capture that demand through strategic digital marketing

Breaking the value-cost trade-off

• Focus on SMC’s value, not cost, when doing a sales pitch or proposal

• Focus on differentiators like disposables, local care from a local business owner, and the ability to service an operating room and office lobby with the same team

Aligning all activities in pursuit of differentiation and value

• Word of mouth and referrals is a strong lead generation tactic – make sure you take excellent care of every customer AND ask them for referrals, to put in a good word, and if your customer knows anyone else who might be interested in our services

• Send proposals with best-in-class content and delivery for easy signature

Brand Awareness

Approximately 800 participants were surveyed who were users of cleaning services for their businesses located in the US for 12 months.

Brand Strengths

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ServiceMaster Clean understands decision makers’ top concerns. SMC is rarely outperformed by competition and tends to trend toward the middle – not great or bad.

2.6.2 Focus on Differentiation

The SMC Value Proposition is SMC’s unique positioning in the market that makes us stand out against the competition – it’s a great elevator pitch and intro in a proposal

Services that set SMC apart:

• Patient-Centered Cleaning

• Terminal Cleaning

• SaniMaster Disinfection Services

Resources and Certifications that puts SMC in a different class:

• Special products and Disposables

• CSCT – Learn more by navigating to ServiceMaster > Intranet > Library > Clean - Business Services > Cleaning Certifications > Certified Surgical Cleaning Technician (CSCT)

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2.6.3 ServiceMaster Value Proposition

ServiceMaster's mission is to make everyday heroes more heroic.

At ServiceMaster Clean, we developed our leading-edge healthcare environmental services processes in accordance with the most up to date guidelines from The Joint Commission and the CDC.

It is our honor to use our 95+ years of experience to serve the healthcare heroes in our communities by ensuring a clean, safe, and healthy environment.

We bring the value proposition to life by patient satisfaction – keeping your patients happy with patient-centered cleaning that focuses on the patient needs to heal quickly.

We understand that cleaning requirements of healthcare facilities are unique, and that excellent patient satisfaction is more critical than ever.

To meet patient and healthcare facility expectations, we developed our Patient-Centered Cleaning Program. From extensive, customized training to industry-leading processes, our program meets and exceeds the rigorous cleaning needs of today’s healthcare facilities.

To learn more, you can access the promo and the video by navigating to ServiceMaster > Intranet > Library > Clean - Business Services > Clean Playbooks and Toolkits > Healthcare Industry > Healthcare Marketing.

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3 TRAINING AND ONBOARDING

3.1 Training and Customer Onboarding

Customers choose ServiceMaster Clean so they don’t have to worry about their EVS cleaning on a day-to-day basis. Having your EVS technicians trained and bringing customers on board quickly and easily is critical to great customer experience from Day 1.

3.1.1 Training

ServiceMaster Brands has an entire team dedicated to creating and distributing advanced training materials to your franchise business.

This training includes a wide variety of topics from standard operating procedures (SOPs), personnel development, systems and processes, and safety, including Bloodborne Pathogens, Exposure Control Planning, and HazCom. This department is responsible for ensuring your business has the latest training topics and methods.

Our online learning management system (LMS), ServiceMaster Brands University (SMBU), allows personnel easy access to several healthcare topics, and also tracks and records personnel’s training history.

Besides learning how to do the job correctly, proper training helps build self-confidence and pride in a job well done. SMBU has more than 200 courses that will help develop and maintain your personnel’s knowledge for the job at hand.

Certifications

ServiceMaster Brands has a partnership with the Association for the Healthcare Environment (AHE) and invested in certifying trainers to provide the industry recognized CSCT certification for ServiceMaster Clean franchises at a lower cost than obtaining the training from AHE.

• Certification Training for Surgical Cleaning Technicians (CSCT) – This program sets the standard for surgical environmental services technicians responsible for cleaning and disinfecting operating rooms.

Ongoing regional training events are accessible in the calendar on the SMBU Home Page. Learn more about this certification by navigating to ServiceConnection > Intranet > Library > Clean - Business Services > Cleaning Certifications > Certified Surgical Cleaning Technician (CSCT).

AHE also provide webinars that are free for members and at a cost for non-members covering topics such as:

• Operational Excellence

• Professional Development

• Leadership

• Disaster Outbreak Preparedness

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• Operations for Environmental Hygiene

• Infection Prevention and Epidemiology

The content in these webinars count as credit to maintaining CSCT certifications, in addition to the training courses on SMBU.

Learning Plans and Courses

There are multiple healthcare-related learning plans and courses available on SMBU, more than 40 safety-related courses that can supplement healthcare training with most translated in Spanish and more than 10 ServiceMaster Clean-specific healthcare-related courses in both English and Spanish

You also have the ability to compile multiple courses to create your own Learning Plan in SMBU as well.

3.1.2 Level 1 Facilities

Healthcare Level 1 Learning Plan

The ServiceMaster Clean Patient-Centered Cleaning Program focuses on improving the environment for patient care. The purpose of this program is to provide specific recommendations for cleaning a Level 1 healthcare facility that includes physician offices, dental offices, and medical clinics

• The program focuses on cleaning for infection control inpatient care areas such as labs, diagnostic areas, patient exam rooms, nurses’ stations, and patient waiting areas.

• For public areas such as offices, break rooms, public restrooms, food prep areas, etc. in a healthcare facility, the cleaning processes will follow general cleaning processes as found in the Capture and Removal program.

There are 6 simple steps to cleaning a Level 1 facility that are covered more in depth in the Healthcare Level 1 Learning Plan.

Typical square footage for Level 1 room types that are cleaned by the hour on average are also shown.

1. Trash and Spot

2. Damp Dust

3. Disinfect Surfaces

4. Vacuum

5. Damp Mop

6. Inspect

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3.1.3 Level 2 Facilities

Healthcare Level 2 Learning Plan

The ServiceMaster Clean Cleaning for Infection Control Procedure for Cleaning Operating Rooms is an evidence-based cleaning system. This system has been developed through research, recommended best practices, and guidelines from industry organizations and includes ambulatory surgery centers, dialysis centers, and terminal cleaning with operating rooms

There are 8 simple steps to cleaning a Level 2 facility that are covered more in depth in the Healthcare Level 1 Learning Plan.

Typical square footage for Level 2 room types that are cleaned by the hour on average are also shown.

1. Prepare

2. Trash and Linens

3. Disinfect Ceiling/Damp Dust

4. Disinfect Floors

5. Disinfect Surfaces

6. Disinfect Walls

7. Inspect

8. Wrap-Up

3.1.4 Customer Onboarding

A standard onboarding process makes it easier to operate sites and navigate any specific needs for that site. Communicating the onboarding plan to customers helps them understand the process and see you as a transparent partner

A Healthcare Customer Onboarding list of tasks has been compiled to facilitate the preparation of starting a new cleaning services account at a healthcare facility from a month out to a month after the cleaning services have started This document can be found by navigating to ServiceConnection > Intranet > Library > Clean - Business Services > Clean Playbooks and Toolkits > Healthcare Industry > Healthcare Level 1-2 Operations

The tasks are broken down with the following timeframe:

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4 RESOURCES

In addition to this toolkit there are several additional documents that have been created to help support your decision to move into the Healthcare industry

All of these documents can be accessed by navigating to ServiceConnection > Intranet > Library Clean - Business Services >Clean > Playbooks and Toolkits > Healthcare Industry.

As an example, you will find information specific to:

• Healthcare Level 1-2 Operations

• Products and Supplies

• The Joint Commission

The ServiceMaster Clean Marketing Department has created a Marketing Playbook for guidance and techniques to generate quality sales leads Please refer to this material for instructions on step-by-step actions you should be taking. You can access the Playbook by clicking HERE

For further “real-world” experience be sure to reach out to your camp to be connected to other owners in the network that have a proven track record with the Healthcare industry.