Managing the costs of laundry

Two percent to 3 percent of a hospital's budget is spent on laundry services, but some facilities achieve greater savings through efficient processes

It might be a dirty job, but hospital linen management doesn’t have to be an overly costly one.

Laundry management agreements typically follow one of two models, rented inventory and owned inventory, each with materially different costs. The American Reusable Textile Association reports that 2 percent to 3 percent of a hospital’s budget is spent on laundry services, including all linen and textiles, but some facilities achieve greater savings through efficient processes.

The University of Pittsburgh Medical Center, which rents its linen, spends a little less than 1 percent (about $15 million) of its total expenses (which include supplies, drugs and purchased services) on linen services.

At UPMC, representatives from the finance, linen service supplier, supply chain, infection control and nursing departments use metrics and technology to identify best practices for linen use protocols, said Dale Perrett, non-clinical commodity manager at UPMC. Those protocols, normalized to specific patient populations, are used to measure variable consumption rates against an objective target.

At Hunterdon Medical Center in New Jersey, where the linen is owned, Marita McGlone Nash, director of the hospital’s environmental and linen services, encourages staff to utilize linen for the asset that it is. “We explain to staff the cost of purchase and processing so they understand the potential impact,” she said.

The best practices the hospital uses to achieve sustainability goals also help it keep its linen management costs down (Hunterdon’s linen management costs are equal to just 0.5 percent of its overall linen department costs, Nash said).

One of the more effective best practices is simply to save a blanket for the length of the stay of a patient, as long as it remains clean, Nash said.

While best practices such as those used by UPMC and Hunterdon are sensible, cost-effective moves, renting linens rather than owning them may be the most sensible decision of all, said Joey Dickson, assistant vice president, strategic sourcing at HealthTrust, a group purchasing organization.

“There is a significant budget impact for those healthcare facilities that manage their own laundry service,” said Dickson. 

Due to the rising costs of utilities, labor and upgrading to more efficient equipment, more healthcare facilities are cottoning on to the benefits of outsourcing laundry service, he said. “Laundry service is probably the fastest growing outsourced service in healthcare facilities.”