The surprisingly high hidden costs of in-house laundry
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How closely are you evaluating your laundry costs?
Helene Jones, UK Head of Care Homes at international multi-service provider Elis, explores some of the hidden factors driving up the cost of care home laundry.
Care homes with an in-house laundry facility are rarely able to say with accuracy how much in-house laundry costs. From investment in equipment to repair and maintenance, utilities, staff wages, agency costs, lost or damaged garments, and laundry supplies, there are a number of elements that need to be factored in. With inflation remaining high and energy unit rates rising once again, the cost of in-house laundry continues to increase.
Care providers need to be able to control costs and forecast expenditure and a professionally managed laundry service can ensure high-quality and efficient laundry management at all times, meaning the benefits of moving in-house laundry to a professional outsourced laundry service provider are not to be overlooked.
A review of in-house laundry processing in 48 care homes with an average of 37 beds showed that a typical facility of this size has two 13kg washers and two 13kg dryers running an average of 12 loads in each per day. This results in an astonishing and almost unbelievable cost of around £50 per resident per week to launder in-house.
The average cost was calculated using electricity, gas and water consumption rates for the washing and drying machines, detergent costs and hands-on staff time of 30 minutes per load at minimum wage, including loading and unloading the machines and minimal ironing and folding.
Astounded by the hidden cost of in-house laundry, Care England calculated the cost of a single full-time employee managing a laundry in a 40-bed care homes with two washers and dryers. This included the cost of energy consumption. Care England calculated the cost of labour and energy consumed alone to be around £35 per week without the additional
cost of consumables, equipment hire/purchase and maintenance costs.
A like-for-like comparison with professional laundry services highlighted that outsourcing provides an average cost saving of 35% even before savings on machine costs, maintenance and spending on replacement linen are factored in.
Equipment costs
When it comes to initially setting up an in-house laundry facility, one of the major decisions to consider is whether to purchase or rent laundry equipment. With rental options, there is a reduced upfront cost and the supplier takes responsibility for upgrading and maintaining the machines. However, these agreements can come at a premium price point. One tactic is for equipment providers to tie care homes into lengthy contract terms or sell new contracts before expiry, tying care providers into even longer-term and sometimes more costly contracts for multiple years. This can mean that costly maintenance contracts are included.
Purchasing laundry equipment upfront is a major capital investment, especially considering the cost of commercial-grade machines capable of meeting the heavy demands of laundry duties within the care home. While it does have the advantage of providing the facility with full ownership of the equipment, and there are some tax advantages to CapEx, the ongoing costs associated with repair and maintenance can be unpredictable and quickly add up over time, especially if the equipment is not well managed or regularly inspected, tested and maintained.
It is estimated that around half of all care homes with in-house laundry facilities suffer
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a machine breakdown once every six months, and for some this can occur as many as four times per year, causing significant disruption. As well as this disruption, equipment failure can have major financial implications. Not only is there the cost to service and maintain items, including parts and labour, but there may also be the requirement to outsource laundry services at short notice temporarily. Some care homes have no option but to use the local launderette, for which there can be a premium to pay.
Energy prices
Energy is a significant element of in-house laundry costs. Energy commodity price volatility began mounting in December 2021 when reports of a potential Russian invasion of Ukraine increased. In the first two weeks after the invasion, the prices of oil, coal and gas went up by around 40%, 130% and 180% respectively.
Initial support was provided in the form of the Energy Bill Relief Scheme, which was applied to energy usage by non-domestic customers in Great Britain and Northern Ireland from 1st October 2022. This was later replaced by the Energy Bills Discount Scheme which is set to expire on 31st March 2024 and offers nothing to care home providers unless the energy rate increases by around 300% from late 2023 levels. As energy unit rates have once again risen as a result of global gas prices, it is difficult to predict what the future may hold.
Last year, energy regulator Ofgem admitted that some suppliers may be charging small companies rates that cannot be justified and Care England warned that care home energy bills had soared by 500%, leaving a third of establishments across England considering closure because of ‘financially crippling’ running costs. Care home operators or managers are keenly aware of the impact of high prices and market volatility but have not always considered exactly where their energy is being used and the most effective ways of reducing consumption.
In-house laundry is an energy-intensive process and as well as the power required to wash garments, there is also the drying and pressing to consider. Consumer group Which? has suggested that domestic households can save energy by washing at lower temperatures, but unfortunately, this is not an option for care homes due to infection control and prevention guidelines and the need to ensure compliance with the Department of Health’s HTM01-04 policy.
Water and detergent use
Water consumption is another major contributor to utility costs in care home laundries. With high volumes of laundry being processed daily, water usage can quickly add up and inefficient or outdated washing machines can consume more water than necessary. A professionally managed laundry service can deliver enhanced operational efficiencies. For example, by the end of 2021, Elis had successfully reduced water consumption per kilogramme of linen delivered in its European laundries by 40% compared to 2010 levels and aims to increase to 50% by the end of 2025. Targets like these are not currently on the agenda or even possible for most care services.
Some of the ways in which this improvement in water consumption can be achieved include optimising the amount of detergent according to the actual weight of the textiles and utilising new types of detergent and activation technologies in a controlled environment, with carefully monitored programmes and processes which are not possible in a care home.
When it comes to in-house laundries, when staff members manually measure and dispense detergent there is a risk of error in dosing. Too little detergent can lead to ineffective cleaning, while overdosing is not only a waste of resources but can also cause build-up or residue in machines resulting in clogs and decreased performance. This can lead to ineffective laundry and increased maintenance and repair costs, further adding to the overall cost of in-house laundry.
While automated dosing systems can help to address such issues, they can do little to mitigate against the rising cost of consumables such as detergents and fabric conditioners. This is one area where the effect of high inflation has been keenly felt over recent months, resulting in additional impact on the bottom line for many care home facilities. Professional laundry service providers can purchase detergents at bulk rates, generating significant savings compared to individual care homes purchasing detergents independently.
Staff time
‘Time is money’ rings true when it comes to care home staff who collect garments, load machines, and wait for wash and dry cycles to finish, then press, fold, and sort items before they are returned to each resident. In-house laundry is a never-ending, resourcefully
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draining process that requires significant and constant input from employees at times, detracting valuable staff from the provision of care.
Those laundering in-house will understand how time-intensive this can be, especially considering the high volume of laundry that needs to be processed daily. Time spent searching for lost or misplaced items can also have an adverse effect, as well as causing distress to residents if items cannot be relocated and can lead to significant replacement costs by the care provider.
Additional space
Space is a major issue for care homes. While it has been traditional to install, equip and operate in-house laundries, those that have chosen to outsource this service have benefited greatly from the opportunity to reclaim valuable space. This could be space that is used for other operational activities, staff areas, storage, to provide enhanced facilities for residents and/or other revenue opportunities.
Cupboards for storing clean linen and a separate area for handling soiled items are still required to ensure compliance with Government HTM01-04 guidelines for the decontamination of linen for health and social care. However, these are likely to take up a significantly smaller area than a typical, in-house, infection-control-compliant laundry.
A professional approach
As well as providing a rental and reprocessing service for flat linen items, professional laundry service provider Elis offers a personal service for laundering residents’ clothing where every resident is provided with their dedicated mesh bags, with separate bags available for delicate garments where each bag is typically labelled with the resident’s name and a unique QR code. Bags are collected and scanned on arrival at the facilities. They are then tracked through the washing, drying, and finishing process before being wrapped and returned. As a result, items linked to individual residents are traceable throughout the entire laundering process, leaving less room for error and resulting in a smoother and more efficient service.
Insurance premiums can also be reduced due to a lower risk of fire or staff injury, while
using a flat linen hire service where the laundry company provides all linen and towels offers further financial benefits by freeing up capital that would otherwise be used to purchase items.
As professional laundry suppliers operate on an industrial scale, they can process items more efficiently and pass savings on to customers by using machines designed to process the equivalent of around eight to 10 conventional loads of washing in one go and using energy recovery to ensure the environmental impact of the laundry process is much lower than can be realistically achieved in a care home.
Outsourcing laundry services relieves employees from the task of dealing with equipment breakdowns and maintenance issues so, instead of spending time troubleshooting or managing machine servicing schedules, staff can dedicate their energy to residents’ needs. Ultimately, this means more time for resident interactions, personalised care, and engaging activities that will contribute to residents’ happiness and wellbeing, as well as staff morale.
Staff can also be repurposed from working full or part-time in a laundry to providing frontline care or fulfilling other essential roles, helping to reduce the cost of agency staff and overtime etc.
Identifying opportunities
There is no ‘one size fits all’ approach to laundry but we know that there are significant savings to be made from outsourcing to a professional laundry service for some care providers, as evidenced in recent case studies. This is why Care England has proudly partnered with Elis to offer care providers the opportunity to complete a cost-benefit analysis for in-house vs outsourced laundry services. Care homes of all sizes are invited to take part, from individual facilities to larger corporations, to accurately identify the ‘tipping point’ for each provider at which outsourcing laundry services becomes a more viable option in terms of costs and resources.
For more details on outsourced care home laundry services or to complete a cost-benefit analysis for your organisation, please contact: Helene.Jones@elis.com.
Helene Jones, UK Head of Care Homes at international multi-service provider Elis. Email: Helene.Jones@elis.com @ElisGroup
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