Introduction: Modern hospitals are matrix organizations with a high investment in terms of capital, labor, and resources. It is imperative for the hospital administration to provide right material of right quality at the right time. Hospitals that set up in-house laundry operations generally make the decision without thoroughly identifying and accounting for total linen and laundry costs. Now evidence has emerged that hospitals that outsource were seeing improved linen utilization rates. If proper and clean linen is not provided, this can result in patient dissatisfaction. Further, innovations in laundry equipment have led to tremendous increases in efficacy. So, there is a need to ascertain the cost incurred in providing linen and laundry services so as to gauge the plausibility of transitioning to outsourcing-based models. Aims and objectives:To study the cost incurred in providing linen and laundry services at an apex tertiary care hospital and to evaluate outsourcing model based on rental linen management. Materials and methods:A descriptive, cross-sectional, retrospective, record-based study was conducted during a period of 1 month from March 1, 2016 to March 31, 2016. Observations:The quantity of monthly linen washed in Dr Rajendra Prasad Centre was found to be 22,465 kg. The monthly laundry expenditure in Dr RP Centre was Rs. 1,415,295. The linen procurement expenditure per month at Dr RP Centre was Rs. 419,386. So total expenditure on linen and laundry per month at Dr RP Centre was Rs. 1,834,681. Thus, cost/kg (with inclusion of linen cost) was Rs. 82. Discussion and conclusion:The rate quoted by a leading vendor to supply washed, sterilized linen to the hospital was Rs. 55 per kg. Since the expenditure incurred per kg at Dr RP Centre was Rs. 82, this amounted to a saving of around Rs. 27 per kg. It would mean saving of around Rs. 606,555 per month and Rs. 7,278,660 per annum. So, it was recommended that rental linen management services may be hired for Dr RP Centre after taking care of functional, operational, and strategic contingency.