Laundry/housekeeping feature: Helping hands

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More nursing homes are beginning to see the benefits of contracting out their laundry and housekeeping services.

Laundry and housekeeping are two household tasks most homeowners would rather leave to other people.
Many in long-term care feel the same way.
Just as cleaning services serve a purpose on the home front, contract companies fill a need in the nursing home setting.
"What you're finding is there's an enhanced business approach to operating these skilled facilities," says Joseph Cuzzupoli, part of the executive management team of Healthcare Services Group Inc., a major housekeeping and laundry contractor. "They have to focus on the occupancy, the residents and the payer source. Housekeeping and laundry are not their business. Let's bring in someone who is in the business."
Companies such as Healthcare Services Group, which also offers food service and maintenance, say there is a lot of untapped potential in long-term care. This is in large part because facilities are looking for relief from the cost squeeze related to the government's prospective payment system. And as companies expand their services and offerings, more providers are contemplating the switch.
Providers typically outsource their laundry and housekeeping together, experts note.
Extendicare Health Services Inc., for example, has been relying on Healthcare Services Group, of Bensalem, PA, to provide laundry and housekeeping services for most of its 147 facilities in the United States.
"We evaluated what efficiencies we could get out of going to the expert on healthcare and laundry," says Debbie Howe, senior vice president of Extendicare Health Services. "That was the reason we started on the journey several years ago."
She appreciates the fact that Healthcare Services Group pulls from a large employee base to fill positions when people don't come to work or there is a loss of employees.
"That is one upside of a contract vendor," she says. "They can move folks around in a backfill position."
She notes that while outsourcing relieves the burden of these tasks, it does not remove the facility's responsibility of overseeing these areas. The relationship is more of a partnership, Howe says. The administrator is ultimately in charge of the operations at the facility, she adds. As a result, the administrator and regional manager frequently interact with the contracting company to make sure it is meeting the terms and conditions of the contract and maintaining a high level of service.

Core competencies
While some companies boast of efforts to expand into long-term care, still only a small number of facilities contract out services, experts say.
Only about 8% of nursing homes outsource their laundry, says Glen Phillips, president of Phillips and Associates Inc., a consulting firm near Minneapolis. Many have to provide laundry service for personal apparel and believe that as long as they have washers and dryers, they will continue to do it on site, he says. They also think they control their costs better by keeping it in-house.
Healthcare Services Group, one of the largest healthcare outsourcing companies, says the in-house market continues to be its biggest competition.
Costs, in particular, have been a concern since the nursing home industry became subject to the federal prospective payment system in 1998. The system moved nursing home costs away from a cost-based system to a fixed-cost system, forcing facilities to watch their wallets.
"We go into a nursing home and say the costs should be fixed and we won't vary from the billing," Cuzzupoli says. "We take a systematic approach to housekeeping and laundry."
Savings from outsourcing in many instances can total 5% or more, companies say.
Contracting out laundry allows nursing homes to focus on their competencies, one of which is resident care.
Other benefits of outsourcing are economies of scale, particularly when it comes to supplies and staff. Also, companies can draw on specific expertise.
Liability relief is yet another attractive feature. Jani-King International Inc. of Addison, TX, performs background checks on its employees and screens them for drugs. Employees then undergo training to become certified so administrators can feel secure in the competency of the staff.
"Administrators can worry about keeping the beds full and not worry about housekeeping, food service and laundry," says Mark Regna, director of environmental services for Jani-King's healthcare services division. The unit provides laundry, housekeeping and food service.

Contract options
Nursing homes today can choose from an array of contracts, which can vary based on the facility's size and need.
There are three typical types of outsourcing, Regna says. One involves total outsourcing, where the contractor is in charge of everything, from the management and staff to training and supplies.
Another arrangement allows the facility to use its own staff and outsource the management. The staff still belongs to the facility. For example, the contract company supplies the environmental services supervisor who manages the in-house staff. This situation offers the facility the benefit of using its own staff under the guidance of a qualified contract management program.
The third option, which is called in-sourcing, is becoming more popular among healthcare operators, Regna says. Here, the facility is in charge of the management and housekeeping staff but contracts out certain projects or portions of the facility.
"It's a blend of in-house and outsource, but it still falls under the purview of the facility," Regna says.
For example, a facility may need a relief staff or a temporary environmental services director. It also may choose to contract out the common areas or a third shift of workers.

Service with a smile
Contract companies, which typically offer several services, are continually trying to find ways to attract new customers. Aramark Senior Living Services, a laundry, housekeeping, maintenance and food service company, is moving toward a resident-centered approach to senior services, offering lifestyle dining options such as coffee shops, juice bars and
à la cart services, as well as healthier choices, in continuing care retirement communities.
It also has introduced dining pods that serve as small kitchens in the dining areas so that family members can get, say, a cheeseburger right on the spot.
A new program, I Impact, also aims to help service workers connect their work to overall patient outcomes.
Often, facilities turn to Aramark for a service that is their "greatest source of pain or the one they need to differentiate to grow," says Aramark senior executive VP Bob Wilson.
Then they find they can take advantage of the company's other services. Aramark officials say they are seeing significant growth among skilled nursing facilities that use facility services and food service.
"We show them there is another perspective," according to Wilson. "We call it the 'fresh eyes' approach and give them a perspective they may not have had otherwise."

Washing away the past
Long-term care could be "the next great frontier for laundries," says Chris Isely, executive director of the Healthcare Laundry Accreditation Council.
"As they get squeezed for money and room and what they want to spend their time on, they're looking to have someone else take care of their laundry needs."
Others in the laundry world agree.
"I think more and more they're looking at outsourcing," says Bill Mann, director of industry affairs for the Textile Rental Services Association of America. "They are starting to look at what their business is for. They are realizing that running a laundry is not why they're in business."
Still, only about 8% of long-term care facilities outsource laundry, according to Glen Phillips, president of Phillips and Associates of New Brighton, MN.
But Phillips believes that the segment offers potential growth.
"There is a great opportunity there, and they have to be creative in their sales and marketing approach," he says.
Providers are starting to outsource items such as bedspreads, geriatric care products, bed gowns and clothing protectors.
"This is nothing more than what has happened in the hospital business," Mann says. "Hospitals traditionally had on-premises laundries. Now that's almost an extinct rare bird. Nursing homes just seem to follow what is going on with the hospitals, and it's just going to continue."

Average processing volume by type of plant

Total plants Avg. annual Avg. number of
surveyed production (lbs.) customer beds

Central laundries 58 6,248,854 129

Commercial (COG)
laundries 87 9,794,258 113

Healthcare textile
rental laundries 63 13,604,992 123

Self-operated hospital
laundries 119 4,681,166 366

Self-operated nursing
home laundries 123 814,342 116


Total number of plants in survey 450
Source: 2005 North American Edition Comparative Operating Revenues and Expense Profile for the Healthcare Textile Maintenance Industry, Phillips and Associates Inc.


Machine magic
Laundries are going high-tech. Whether that means incorporating equipment that spots stains or tracking garments with computer chips, washing clothes has never been more interesting.
Many innovations have taken place on the environmental front.
"Forty years ago we used 3.5 to 4 gallons per pound of laundry. And now we're washing very effectively and efficiently using under a gallon per pound," says Bill Mann, director of industry affairs for the Textile Rental Services Association of America.
Companies agree.
"The laundry industry continues to change and has changed quite a bit
in the last six months to a year," says Chris Olsen, vice president of sales and marketing for American Dryer Corp.
Olsen says his company's SL75 dryer with disease-control deterrent and a bilingual display is a cutting-edge example. It cuts energy costs by 30%, he says.
The TRSA's Tech/Plant Summit 2007, held Feb. 27 to March 1 in Atlanta, highlighted some of the breakthrough laundry technology. Two examples: Radio frequency identification chips are used in linens and garments to monitor the garment throughout the entire plant. New technology that spots stains and holes in linens and rejects them from the machine also is available.
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