Hospital Laundry Service Options

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Making the Decision to
Outsource Linen and Laundry
Service
Edward McCauley B.S., M.B.A.
CEO, United Hospital Services

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Topics to Cover











Different Types of Healthcare Laundries
Management Structure of Laundries
Keep OPL vs. Outsource Computation
Pound vs. Piece Pricing
Causes of Linen Losses
Products and Services Offered
Linen Service Contract Language
Linen Service Installation
Evaluation of Linen Service
Summary and Questions

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Ways to Provide Linen and
Laundry Service to Healthcare
Facilities

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Ways to Provide Linen and
Laundry Service
• On-Premise Laundry (OPL)
– Laundry is on the campus of the hospital
– Typically only provide service to main hospital and
some clinics

• COG Service (Customer Owned Goods)
– Hospital contracts with independent operator to wash
the hospital’s linens
– Usually on a per pound basis
– Constant push/pull concerning linen loss

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Ways to Provide Linen and Laundry Service
Continued

• Rental Service
– Hospital contracts with outside service to provide
linen service
– Can be mom and pop business or national like
Angelica or Crothall

• Central / Cooperative
– Hospital has some ownership position in the laundry
– Hospital members sit on the board of directors

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Management Structure of
Linen and Laundry Services

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Management Structure
• Hospital Managed
– Managers can be full time laundry managers
or have other responsibilities such as
Environmental Services
• Contract Management
– For example Crothall, Sodexho, Aramark, etc
– Can run on-premise laundries, rental
laundries, or cooperatives
– Will have dual reporting responsibilities
2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Management Structure
Continued

• Proprietorship / Corporation
– Own and run their own laundry companies
– Examples would be Paris Healthcare, Unitex
and Angelica Healthcare
• Independent
– Manager hired by cooperative to run the
laundry
– Reports singularly to the board of directors
– Example would be United Hospital Services
2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Maintain OPL or Outsource

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Reasons for Maintaining the
OPL
• Keep control of size, type, availability and
quality of linens
• Keep long term laundry employees
employed
• Distribution of linens not subject to
weather and natural disasters

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Reasons for Outsourcing
• Space – Hospitals can put existing space to use
for revenue producing services
• Core Competency – Administration does not
want to spend time managing something they do
not understand
• Capital Expense Avoidance – Administration
does not want to retool the laundry because of
high capital expenditure
• Cost – Outsourcing may be less costly than an
OPL
2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

What to Consider When
Choosing Your Linen and
Laundry Provider

2009 ASHES Annual Conference
September 20-24, 2009
Reno, NV

Pricing
• Pound Pricing
– For example, everything costs $0.48 / lb
– Easy and simple however not accurate or
flexible
– Problem is that if any improvements are made
in the process for certain items or conversely
other items’ processing cost increase, the
pricing cannot be...
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