About 5000 towels a year are disappearing from Dunedin and Wakari Hospitals, contributing to replacement linen costs of about $60,000 a year.
The hospitals use about 1000 towels a day.
Southern District Health Board Otago diagnostic and support services group manager Sonja Dillon said not all towels and other linen shown as missing was necessarily lost, and staff were working on better ways to keep track of supplies.
Charge nurse managers had been advised of the items going missing, with towel loss a particular concern.
The hospitals' laundry contractor had begun charging for lost linen at the end of 2008.
Every three months, a stocktake is done and details and cost of lost linen are sent to the board.
About 11% of linen was lost annually, Ms Dillon said.
This compared with an average loss of 16% for four North Island boards contacted.
She said while some linen might be deliberately taken by patients, sometimes it might go with patients being transferred elsewhere, or miss being counted because of where it was stored.
If people found hospital linen at home, they could return it to the inquiries desk at Dunedin Hospital, she said.
