Blood, Sweat & Tears

Surviving the rising cost of blood supply

The Source recently sat down with HealthTrust subject matter experts Christina Katamay, AVP Purchased Services, Commercial Products, and Trevor Rotondo, Director of Purchased Services Strategic Sourcing, for their insights on the current state of blood supply and expense.

Several years ago, blood expense was manageable, with supply flowing and demand steadily decreasing. Operators implemented blood utilization programs reducing overuse, identifying the appropriate product for a specific procedure and limiting waste. Reductions in demand drove down pricing, and the market leveled as banks started drawing less blood.

In the ensuing years, donorship declined as baby boomers began aging out and Gen Z did not fill the gap. Blood is not a product that can be manufactured. Its supply is dependent upon donor sponsorship, and a lack of supply causes an increase in cost. When COVID-19 began, blood banks took a hit since donors who typically gave blood saw their offices, universities and schools closed, with many sites suspending blood drives. Even now, with many companies moving to work-from-home or hybrid environments, blood drives are still not producing the volumes they once did.

The cost of blood & managing supply expense

The cost of blood products is composed of three components: advertising for donors, hiring phlebotomists and the supply of disposable kits. Each of these areas has been greatly impacted since the onset of the pandemic with providers trying to overcome a 10% cost increase in blood supply expense. While labor and supplies are becoming more stable in cost, donorship remains the biggest variable. Hospitals that sponsor blood drives with their suppliers find an already stressed, reduced staff busy with patient care and unable to participate.

Reducing costs

Cost reduction is about optimizing utilization by selecting the right product for the right procedure. Rotondo suggests that your chief medical officer (CMO) discuss a plan for utilization with your supplier’s CMO as the first step. For example, O-neg usage will be high in a Level 1 trauma center. O-neg percentage over 10% may position suppliers to seek a premium.

A Food and Drug Administration ruling on the preparation of platelets in Q3 of 2021 increased costs, but pricing varies for five-day LVDS (large-volume delayed sampling), seven-day LVDS and PRT (pathogen reduction technology). While some suppliers are trying to move solely to PRT, its costs are higher. Providers have to determine if there is proven value in PRT versus ordering five-day LVDS. PRT may be preferable against the added costs of any pre-transfusion antigen screening and irradiation that may be needed. Perhaps, for example, whole blood is the right answer for trauma versus using several components.

Waste reduction

Katamay and Rotondo agree that reducing waste is also key to managing blood supply expense. Providers must continually reevaluate standing orders to account for fluctuations in forecasting. Standing orders help suppliers to better manage how much blood they need to draw in a given period, keeping costs and waste under control. Reducing ASAP and stat orders can also help to keep costs down. These incur a surcharge or an allotment baked into rates with surcharges for exceeding. Recognizing that many labs are limited in size and/or equipment, a twice-a-day delivery schedule may make more sense than stats.

Increase in apheresis collection levels

Another area where hospitals are seeing cost increases is therapeutic apheresis (TA)—a treatment for sickle cell, autoimmune disease, transplant rejection and other diseases. It is an extracorporeal treatment used to remove harmful, disease-forming proteins, chemicals or cells from a patient’s blood and replace them with saline, plasma or cells from a healthy donor. The number of applications for TA continues to grow exponentially.

According to the Association for the Advancement of Blood & Biotherapies, “There could potentially be a threefold increase in apheresis collection levels in the U.S. from approximately 42,000 collected annually to 132,000 by 2025.” The procedure is performed by a trained nurse with a particular set of skills and knowledge. With the nursing shortage, many hospitals are outsourcing this service to third-party vendors; often their current blood supplier. Due to this shortage, suppliers are raising their rates, which in turn impact a hospital’s margins. Often, this service is included in the contract for routine blood supply and usually not negotiated or clearly outlined in the agreement.

With the projected growth across TA, members are asking for contracting support in standardizing terms and pricing. The HealthTrust team is committed to assisting its members in identifying ways to cut costs in this uptick market. By contracting favorable terms, utilizing the right products at the lowest cost and reducing waste, hospitals will be best equipped to survive the rising costs of blood supply.

Access the optional contracts for blood product and service providers through the Member Portal. Contact your HealthTrust Account Manager or email thesource@healthtrustpg.com for more information or assistance.

For more on blood management, see Putting Patients First.