VA Health Care

Laundry Service Operations and Costs Gao ID: HEHS-00-16 December 21, 1999

The Department of Veterans Affairs' (VA) spends about one-third of its health care budget on support services, such as food services, laundry, and housekeeping, at hospitals, nursing homes, and domiciliaries. Members of Congress have raised concerns that VA could do more to increase the efficiency of these support services. This report, the second in a series on VA support services, provides fiscal year 1998 baseline information on (1) the type and the volume of laundry services that VA provides, (2) how VA delivers laundry services, (3) the costs that VA incurs, and (4) the revenue that VA raises from selling laundry services. GAO's first report described VA's food service operations. (See GAO/HEHS-00-17, Nov. 1999.)

GAO noted that: (1) VA's 210 Health Care Delivery Locations (HCDL) generated nearly 159 million pounds of laundry in fiscal year (FY) 1998; (2) most of VA's laundry services involved the routine cleaning of textiles, although some also included specialized work, such as laundering operating room textiles and uniforms and making textile repairs; (3) the amount of laundry that HCDLs used varied greatly among locations, ranging from 116 pounds at a small outpatient clinic to nearly 3 million pounds at a large health care facility; (4) 68 VA-owned and VA-operated laundries processed 91 percent (145 million pounds) of VA HCDLs' total laundry poundage; (5) laundries varied in the amount of pounds processed, with the larger facilities serving multiple HCDLs; (6) private vendors operating VA-owned laundries or vendor-owned laundries processed about 9 percent (14 million pounds) of VA's laundry poundage; (7) in FY 1998, VA spent about $78 million on laundry services; (8) of this cost, 89 percent was for VA-operated laundries that employed a total of 1,462 full-time-equivalent employees; (9) the other 11 percent was for services that vendor-operated laundries provided; (10) VA's average total cost per pound to process laundry was 50 cents, but VA's unit costs varied from 23 cents to $1.04 per pound; (11) since 1982, VA also incurred modernization costs totalling nearly $256 million for its laundries; (12) 36 VA laundries also sold laundry service to 74 non-VA customers, primarily other public agencies; (13) VA laundries processed almost 11 million pounds for non-VA organizations in FY 1998, generating nearly $4 million in gross revenue while incurring costs of about $3.7 million; (14) more than half of the non-VA customers were federal facilities such as Department of Defense installations and federal prisons; and (15) the others were state and local, private nonprofit, and private for-profit organizations.

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