The Laundry Dilemma: In-House or Outsource?

The Laundry Dilemma: In-House or Outsource?

By Tina Brooks

Every ambulatory surgery center (ASC) faces the decision whether to process its laundry in-house or to contract for outside services. While outsourcing is the most common avenue taken by many of today’s ASCs, the lure of potential savings may be too much to resist. Understanding in-house and our sourcing options can lead to the best use of a center’s resources to meet its goals.

Weighing In-House Factors

When considering performing a function in-house, several associated costs should be weighed. Roger Cocivera, director of industry affairs at Textile Rental Services Association of America (TRSA), suggests looking at the following:

• Utilities. Larger quantities of gas, electricity, water and sewer will be used.
• Machinery acquisition, repairs and maintenance — 50 to 70 percent above the purchase cost may be required for installation.
• Cost of space that can be used to generate revenue. For example, if it cost an ASC $120 or $150 a square foot to build the center, the amount of space that the new laundry occupies must be considered as a capital cost. In addition, another room is needed for folding and storing the linen.

Other costs, which are often underestimated, are general and administrative. “You really have to weigh the pros and the cons,” says Sandra Jones, principal and director of management services at Woodrum/ASD. “How much time do your employees have to spend on it and the cost of actually doing it. It’s not free because you have a washer and dryer there.”

An administrator’s time spent in coordinating the in-house laundry activities is important, too. “It is one more thing as an administrator that you have to do: monitor, maintain and train staff,” says Catherine M. Weaver, CASC, CHFA, healthcare consultant at Somerset: Accounts and Advisers. “So, that is definitely a disadvantage.”

Fred Ortmann, president of Ortmann Healthcare Consultants, stresses the importance of fully costing the idea of processing laundry in-house. “A simple cost analysis of ‘Here’s what it costs for us to send it out’ and ‘Here’s what it’s costing us to buy the machine, pay for the detergent and manpower,’ may reveal that it might not be adequate.” TRSA provides a free pamphlet on how to conduct a analysis of laundering and linen costs. Although written for hospitals, many of the pamphlet’s instructions can be applied to the ambulatory surgery environment.

Besides crunching the numbers, administrators should be armed with as much information as possible about laundering, including trends and infection control issues. The industry’s standards for processing and cleaning soiled linen are established by such agencies as the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), the Centers for Disease Control (CDC), and the Occupational Safety and Health Administration (OSHA). From an infection control standpoint, an ASC needs to evaluate its staff’s aptitude for doing laundry.

After taking into account the aforementioned considerations, a client of Somerset chose to process its laundry in-house. “It has worked out really well for them,” Weaver says. “As their volume has increased, they’ve had to make some adjustments. Whose doing it and how often? I imagine when their facility is working at full volume they’re going to have some difficulties keeping up, but at this point they’re not really having any issues,” Weaver says.

The Outsourcing Solution

For small ASCs, it may be feasible to process their own laundry; however, for larger facilities with high patient volumes, it makes more sense to outsource it. ”I think that most people outsource because it is the easiest option,” Weaver says.

ASCs may purchase linen and have it laundered, but the most common choice is to have a turn-key type of service, where the linens and laundry service are provided by the linen rental service. Purchasing and care of specialized linens and uniforms are done by the vendor as well. Customized apparel such as embroidered lab coats and uniforms or scrubs are also available from these linen rental services.

If considering a vendor and its services, an ASC should use a facility that is familiar with the requirements for healthcare linen.

“Policies and procedures for proper handling, including blood-borne pathogens protocols should be established and documented by the laundry facility,” says Rick Kislia, chief operating officer of Crescent Laundry, a division of GenVentures, Inc.. “Not all laundries provide service to healthcare providers or have the necessary procedures in place for proper handling. One good guideline would be membership in a trade association such as TRSA that has training seminars and publications for their members so they can properly and professionally handle healthcare laundering.”

Mark Sussman, vice president of sales at Image First Healthcare Laundry Specialists, says that a laundry vendor should:

• Maintain a large product inventory
• Provide clean products of high quality
• Offer appropriate products for ASCs
• Handle product shortages expediently
• Offer multiple pick-up and delivery options
• Provide invoices that are easy to understand
• Facilitate communication with ASC
• Not require investment in rental service’s inventory
• Furnish a laundry facility statement, which can be left with the ASC

“That’s a document that identifies the fact that we use universal precautions and we are in compliance with OSHA’s bloodborne pathogen standard,” says Sussman. During surveys, regulation agencies can ask to see documentation proving that linen is processed to industry standards.

Beside the services they provide, linen rental companies are valuable resources when they serve as auditors of laundry-related areas for ASCs — recommending improvements in inventory management and preventing shortages, or offering inservice seminars on proper linen handling.

“Outsourcing or doing laundry in-house is a matter of preference,” Weaver says. “I don’t think there is a right or wrong way to do it. But if you are going to do it in-house, you need to go into it with an understanding that there is going to be a financial commitment;. there is going to be a commitment to making sure that the quality is maintained. Some people just look at it as a matter of dollars and sense. If that is important to you, just understand there’s a lot more to it than just money.”