Finding savings in laundry operations

A 450-bed hospital, operating at 75 percent occupancy, which has a cash outlay of $10.00 per patient day for linen service, will spend $1,231,875 on linen service per year.

If the cash outlay for linen service can be reduced to $7.00 per patient day, the hospital will save $369,562 per year. This article details the factors that affect linen service operations expenses, suggests ways such operations may be improved, and provides a method of measuring the potential savings.
 

As the reimbursement noose tightens, many healthcare financial managers are faced with the need to cut costs within their organizations. Often the most immediately apparent way to cut costs is through service cutbacks and/or staff reductions. Many times the potential savings to be found in routine facility operations such as linen service are totally overlooked. Although expenditures for such operations may not comprise a large percentage of the total budget, the dollar amounts can be significant. The elements of total cost The total cost of linen service is the sum of four cost elements: processing cost, replacement cost, level of consumption, and cost of delivery and collection. The processing cost and the replacement cost (usually measured on a cost-per-pound basis) often receive the most attention. Examining only these two cost elements, however, will not provide an accurate picture of real costs. The actual cost of service should be measured on a total dollar-cost or cost-per-patient-day basis, since it is materially influenced by the level of consumption, as well as the cost of delivery and collection.

The level of consumption factor of operation can be misleading. A higher level of consumption will result in a lower cost-per-pound if poundage and cost-per-pound have become the only measurement of a facility's linen service operation. The astute financial manager will look beyond cost-per-pound to cost-per-patient-day. The cost of delivery and collection also can be a misleading indicator if not considered in relation to the other costs. In some on-premise laundries, the responsibility for delivery and collection of linen is assigned to the housekeeping or materials management departments; associated expense does not appear as part of the cost of linen service. Some hospitals contract to have their linen washed on a "wash-job" basis and are quite satisfied with the low processing cost they have negotiated. In these instances, they must add to that low cost of service the costs associated with mending, marking, replacing, purchasing, preparing user area deliveries, distributing, collecting, and warehousing linen.
 

It is not unusual for a hospital to experience total linen service costs of double the processing costs when these other elements are handled in-house. These costs are often not considered when contracting for a wash-job level of service.
 

Assessing operations
An assessment of a facility's linen service operations may reveal areas of potential savings. Before commencing such an assessment, however, the total cost of service incorporating all the elements previously described should be calculated. The findings of the various steps of the assessment may then be compared to the total cost of service. The assessment itself can be broken into several relatively informal tasks. The assessment should include the following considerations.
 

Perform a consumption and replacement inspection. Between the hours of 10:00 a.m. and 12:00 noon, on randomly selected days, walk through the patient care areas. Concentrate on the high turnover medical/surgical units. Look into patient rooms. If there is a significant amount of unused linen in the patient rooms, if linen is in several locations, or if there appears to be a surplus of clean linen on carts in the hallways, quite possibly a consumption and replacement problem exists.
 

If a hospital were to lose only 1 percent of everything delivered for use each day, half of the total inventory would be lost in a year. The linen inventory in a typical acute care hospital is worth approximately $700.00 per bed. Unused linen in the patient rooms is the largest
single contributor to casual patient and visitor theft.
 

Unused linen in patient rooms also contributes to unnecessary consumption. If enough linen is distributed to each room each day to change everything in the room, the chances are very good that everything will be changed, even if all or some of the items have not been used. Unless it is wrapped in plastic, linen not used must be treated as soiled linen if the patient is
discharged.

Talk to the nursing staff. During the patient area inspections, talk to the nurses. Written policies regarding linen use should exist, and nursing staff should be aware of these policies.

In the nursing profession, more linen often has been equated with better patient care. Traditionally, nurses have been trained to change all of the linen as part of the morning patient care routine. But sometimes this routine is not appropriate. There is no need for towels to be changed if they have not been used; there is no need for a thermal spread or blanket to be changed if it has been rolled up at the foot of the bed; there is no need to change the bed at all if the patient is going to be discharged or if it was just changed on the previous shift.

Continue reading this article online at http://findarticles.com/p/articles/mi_m3257/is_n7_v47/ai_14466023/pg_2/?tag=content;col1