The Changing Landscape of Blood Banking

Vol. 24 • Issue 4 • Page 28

Blood Banking

“The only thing constant in life is change.” We’ve all heard this quote before, and nowhere is it more true than in the evolving world of blood banking-particularly for the many independent blood donor centers experiencing profound changes in recent years. Pay attention to industry news and reports and you’ll quickly learn why.

Here’s a quick snapshot of several trends currently at work:

Trend #1: Mergers and acquisitions are shrinking the number of independent blood centers.

In the past, 75 independent donor centers operated within the U.S. (not affiliated with the American Red Cross). Together these centers controlled about 55-60% of nation’s blood collection and blood supply. After several years of mergers and acquisitions, the number of independent blood centers is now less than 65, and the consolidation trend continues.

Trend #2: Many donor centers are no longer testing their own blood.

In the past, independent donor centers collected and tested their own blood, making it a one-stop resource. Today, with the increased cost pressure on blood centers, many independent centers are now outsourcing blood testing. (Our lab is one of only two centers in California that still performs its own testing.)

Trend #3: Large hospital systems are moving toward a single-supplier model.

Instead of supporting the local blood centers located in the individual hospital communities, large healthcare networks are creating RFPs for single-supplier support for all hospitals within an entire multi-state area.

Trend #4: Service territory lines continue to blur.

Twenty years ago, independent blood centers were quick to respect each other’s customer relationships and geographic service area boundaries. Today, those “gentlemen’s agreements” are gone, leaving behind a battle over territories and fierce competition for a shrinking pool of customers and blood testing businesses. It’s a fight for survival within an unsettling business climate.

Trend #5: Price continues to rule the day.

First and foremost, hospital supply chain managers are looking for quality service that fits within tight budgets. They want the lowest price, which often excludes independent, community based blood centers, ðespecially those in California and other areas where labor costs are above the national average.

Trend #6: Transfusions (and blood usage) are dropping.

In addition, blood product management programs and other factors continue to affect the amount of blood that’s needed and used. Ten years ago, blood centers could sell as much blood as they could collect, but not anymore. Today, everyone must adjust to a decreasing need for blood. Several factors contributing to this trend include:

• An increase in patient blood management programs

• A continued trend toward less invasive surgeries

• A greater number of surgical procedures being performed outside the traditional operating room (e.g., cath labs, outpatient centers)

• Advanced equipment that monitors blood during surgery

• Revised transfusion guidelines (e.g., lower hemoglobin and platelet count thresholds), which are reducing the number of patient transfusions

How One Center is Surviving (and Thriving)

Despite these trends and their significant impact on the blood banking industry, some independent blood centers are finding a way to survive – and even thrive – amidst the new landscape. Our organization, the Central California Blood Center, is one of them. Over the past few years, our organization has not only experienced the impact of recent market changes, we’ve worked hard to adapt to “the new normal.” Here are several strategies that are helping maintain our viability in the community, hopefully for years to come.

Strategy #1: Keep a sharp eye on pricing and profitability.

We continually examine our pricing structure, even within “high cost” California, we have found we can be extremely competitive in our local market.

Strategy #2: Stay in touch with hospital needs.

As a non-profit, community-sponsored donor center located in Fresno, Calif., we are the sole provider of blood and blood products for 31 hospitals in Fresno, Tulare, Madera, Kings and Mariposa counties. We service a wide variety of centers, including a Level One Trauma Center, a regional burn center and a children’s hospital. To stay in touch with the needs of every hospital customer, we have regular meetings with them to discuss how we can continue providing the best possible service tailored to their needs. By communicating frequently – and ultimately delivering on their needs – we keep them satisfied and prevent them from looking elsewhere.

Strategy #3: Offer value-added services.

We also make it a priority to offer value-added services that customers simply won’t find from other providers. Here are a few examples:

• Offer continuing education – We host free CE teleconferences for the hospital’s clinical lab scientists.

• Assist with inventory management – We help hospitals manage their blood inventories and offer suggestions for keeping costs contained.

• Demonstrate through leadership – Our medical director publishes newsletters and articles about transfusion medicine topics in medical society journals, demonstrating our commitment and knowledge of the industry.

• Attend hospital meetings – As our customers’ blood supplier, we attend the hospital’s blood transfusion meetings and discuss blood supply issues, blood management programs and ways to control blood costs.

• Offer blood on consignment – By selling blood on consignment, we assume all the risk on blood out-dates. Other centers provide blood on a “sold” basis, which offers lower prices but the hospitals have the burden of managing their own inventory and outdates.

Strategy #4: Invest in product training for key operators.

No blood center can afford to have instruments down and blood products sitting around untested and unused. To optimize instrument efficiency and reduce potential downtime, we’ve trained key operators on each of our testing instruments. These experts are not only diligent about performing maintenance, which prolongs the life of the instrument, they can also troubleshoot issues quickly and provide knowledge that helps service teams order the correct parts the first time.

Strategy #5: Develop close working relationships with equipment providers.

Because instrument durability is critical to making blood inventory available, it’s important to choose reliable instruments backed by manufacturers with a proven track record of great service. For example, with our instrument (PK7300 Automated Microplate System, Beckman Coulter), the service team is proactive about scheduling preventative maintenance and ensuring maintenance is performed on time. This team also knows which weekdays to avoid to minimize impacting our testing schedule. Having that knowledge and open communication goes a long way to keeping our lab running at peak efficiency.

Staying in tune with your hospital customers’ needs, offering value-added services and aligning with instrument manufacturers who understand your business are several ways you can increase value and viability heading into the future.

Steve Negin is technical laboratory director, Central California Blood Center.

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