- Created on Wednesday, 02 April 2003 16:18
- Written by Staff
Secondary research was conducted, consulting the following sources (this is not an all-inclusive list): Health, United States, 2001, Statistical Abstract of the United States: 2001, Statistical Abstract of the U.S. and 1999 National Hospital Discharge Survey, The National Nursing Home Survey: 1999, NIC National Supply Estimate of Seniors Housing & Care Properties , Modern Healthcare’s Annual Contract Management Surveys (2002, 2000, 1998), The National Center for Health Statistics 1997 National Nursing Home Survey, The American Health Care Association (AHCA) “Profile of An Aging Nation U.S. Census Bureau Facts Economic Census, (various years).
The project explored trends in healthcare laundry, including in-house versus outsourcing, space, volume, costs, disposables versus reusables, and regulations affecting healthcare laundry. The following summary synthesizes information obtained from secondary research as well as from respondent interviews.
LAUNDRY FACILITIES IN HEALTHCARE INDUSTRIES
Industry size and On-Premise Laundry (OPL) percentage:
- Nursing Homes: 18,000 facilities, 2 million beds, 78% OPLs.
- Assisted Living Facilities: 36,000 facilities, 1.1 million beds; estimated 90% OPLs nationwide (100% of study participants had OPLs). Significant growth in past four years, and projected growth rate between 3% to 8% in upcoming years.
- Hospitals (acute, long term, psychiatric, specialty): 6,200 facilities, 1 million beds; 18% OPL, 10% Shared Facility (laundry done within same owner hospital system); 33% co op, 19% textile rental; 21% commercial laundry.
Best Practice: According to a laundry healthcare expert, one of the best ways to decrease laundry costs is to reduce the number of items that are being inventoried and washed. The optimum for any size hospital should be 40 items, and some hospitals have over 600 items.
Trends and Drivers of Long Term Care Laundry (LTC consists of nursing homes, assisted livings, continuing care retirement centers, and mixed units):
Regulations: There are no significant healthcare related regulations affecting LTC laundry
Reusables vs. Disposables: There is a slight increase in Long Term Care to use disposable incontinent pads and bed pads. This has not affected the volume of laundry or chemical usage significantly.
Space: 80% of the Long Term Care respondents do not have a problem with space and laundry, as opposed to hospitals, which do. Facilities are built outside of urban centers with laundries in them, and real estate is not at a premium.
Outsourcing: For Long Term Care, there is no move towards outsourcing. There is a move towards outsourcing for hospitals. A few Assisted Living facilities outsource table linens because they do not have an ironer. Assisted Living also outsources a small amount of personal care laundry.
OPLs: Approximately 90% of Assisted Living facilities have OPLs. 75% have personal care laundry as well, which may be part of the OPL, or consist of residential sized washer and dryers dispersed throughout the facility.
Laundry staff: The majority of Assisted Living OPLs are run by employees of the Long Term Care facility. Smaller facilities have residential aides and housekeeping staff operating the laundry in addition to other duties.
- Typical Long Term Care Laundry Room Equipment: Depending on the size of the facility, washers range from 55 to 135 pounds, with residential washers and dryers dispersed throughout the Assisted Living facility for personal care laundry, or in the same room as the OPL.
- Assisted Living Linens and Supply: Many Assisted Living Facilities have the residents supply their own towels and sheets, but launder them for them. Others supply them for the residents.
- Nursing Homes Linens and Supply: Skilled nursing facilities supply all the linens for residents.
- Personal Care Laundry: 95% of facilities interviewed provide personal care laundry service, and 85% offer the option for residents to have their personal care laundry done for them, or to do it themselves. Residents may want to do personal care laundry as a form of exercise or an activity. Many facilities provide residential size washers and dryers on different floors for personal care laundry. Some launder the personal care laundry in the same room as the institutional linen. Some do not provide chemicals to the residents.
- Issues Impact on OPLs: Cost and personnel are the most mentioned issues that may impact laundry in the future for Long Term Care facilities. As reimbursement issues have an impact on the industry overall, facilities will have to be very cost effective. However, several respondents mentioned that their corporate department did an outsourcing study for laundry, and concluded that it was better to keep laundry in-house.
- Trends and Drivers of Hospital OPLs and Hospital Co-Ops:
- OPL Defined: Many hospital OPLs do laundry for more than one hospital within the same parent ownership. These OPLs are called shared facilities. Throughout this report “OPL” will mean OPL and/or shared facility.
- Hospital Co-OP Defined: Hospital co-ops are laundries owned by several different hospitals, usually not-for-profit, and often run by outside management that specializes in healthcare laundry.
Consolidation/Outsourcing: Many hospitals have discontinued their OPLs due to space limitations, cost-effectiveness, not wanting to spend capital expenditure funds, capacity limitations, lack of labor expertise, and wanting to focus on core issues. Approximately 18% of hospitals have OPLs and another 9% have their laundry done by an OPL of the same parent owner. Respondents agree that the overall number of OPLs is declining. About 33% of hospitals use a co-op laundry (as an owner, or non-owner customer). 19% of hospitals use textile rental companies. Approximately 21% use a commercial laundry.
- Regulations: Hospital and Co-op respondents say that they already follow standards when processing healthcare laundry. The majority of them have not had to significantly change their laundry practices or increase their chemical use in order to comply with OSHA regulations regarding blood-borne pathogens, JCAHO (Joint Commission on Accreditation of Healthcare Organizations) standards, and state regulations. No respondent mentions having a violation of regulations. If they did have a violation, many would solve the problem themselves, and some might confer with their chemical company.
- Reusables vs. Disposables: There is no clear increase or decrease in the volume of either resuables or disposables. There seems to be a constant flux of use for each, depending on personal preference of a decision making person, such as the Chief Medical Officer of the OR, or the Head Nurse. There may be utilization of resuables and disposables in different sections of the same hospital. Disposables are used more in specific cases such as with smallpox vaccine and AIDS treatment. Hospital and Co-op Laundry Business from Non-hospital Segments: All hospital OPLs, co-ops, and for-profit outsourced laundries do healthcare laundry for hospital affiliates, as well as non-hospital affiliates. These include other hospitals owned by the same parent, and affiliate and non-affiliate surgery centers, diagnostic imaging centers, physician groups, and Nursing Homes.
- OPL Locations: OPLs are either in metropolitan areas, and have a significant volume of laundry to remain cost-effective, or they are in more remote areas. It seems that many of the OPLs that still exist have invested capital expenditure in more efficient equipment, have some level of laundry management expertise, and have a relatively high volume of laundry.
- Co-op Locations: Co-ops are often typically in metropolitan areas, but may provide service for hospitals ninety miles away.
- Future Issues Impact on OPLs: Many respondents see space, cost, capital expenditure, and productivity as forces that may cause hospitals to outsource. Other future issues mentioned include increased environmentalregulations, and overall cost pressures on hospitals to be cost-effective. A small percentage of respondents think that the lack of quality when outsourcing will cause some hospitals to re-open their OPLs.
Typical OPL Laundry:
- Volume: OPLs did an average of 4.8 million pounds of laundry per year. Hospitals see their laundry volume as stable.
- Equipment: Hospital co-ops have a variety of washers with components that range from fifty pounds to nine-hundred pounds. 25% of the hospital OPL respondents had a tunnel washer. Hospitals who invest in more efficient and cost effective equipment have been able to manage their cost and maintain their OPLs.
- Laundry Costs: All OPL respondents track chemical, utility, and labor cost, as well as other costs such as replacement, equipment, and distribution. Costs per pound for laundry only (no replacement cost) range from 18 cents to 40 cents per pound, and average 28.5 cents per pound. Replacement costs are estimated to be between 7 and 10 cents a pound.
- Person in Charge of OPL: People who run OPLs have the following titles: Director of Environmental Services, Operations Manager for Linen Services, Director of Textile Services, and Director of
Typical Hospital Co-OP Laundry:
- Volume: Co-ops annual laundry volume ranged between 7 million and 26 million, with an average of 14.2 million pounds per year. Co-op volume is slightly increasing primarily through adding customers.
- Laundry Costs: Processing costs for co-ops ranged from 30 cents to 45 cents per pound, and averaged 36 cents per pound. All respondents consider energy, utilities and labor, in addition to other costs, such as equipment, management, and replacement costs.
- Equipment: All co-ops have tunnel washers, or will soon be adding one.
- Person in Charge of the Co-Op: In most cases, the co-op is run by the General Manager.
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