The Dayton Daily News dug into Worland’s case after he contacted the paper. At the newspaper’s request, both Community Blood Center/Community Tissue Services in Dayton and Miami Valley Hospital agreed to discuss their pricing of blood products, providing a rare glimpse inside the region’s blood business.
Worland’s case sheds light on how expenses accrue within the U.S. health care system, which now accounts for about 18 percent of the nation’s gross domestic product.
But both Community Blood Center and the hospital said handling blood typically isn’t profitable for them.
“We clearly lost money on this patient’s blood,” said Mark Shaw, vice president of managed care and chief revenue officer for Premier Health Partners, the health system of which Miami Valley Hospital is part.
As it turns out, the submitted charges Worland saw on his medical paperwork represent the “retail cost” of blood. Health insurance companies negotiate lower costs. In Worland’s case, Anthem paid the hospital 32 percent of the billed charges, or just more than $5,700. Anthem has a lower negotiated rate for blood than other health insurers, Shaw said.
The hospital also discounts the cost of blood for people whose earnings are up to 400 percent of the poverty level.
“The reality is it’s rare that anyone pays the retail rate,” Shaw said.
Community Blood Center charges Miami Valley Hospital $571 per unit for the kind of irradiated platelets that Worland received. After accounting for its own costs, the hospital’s actual unit cost for such platelets is roughly $900 to $1,000, Shaw said.
Overall, Shaw said the hospital breaks even or ends up just slightly in the black on blood.
Worland said he hopes his experience doesn’t deter others from donating blood. Still, he said, charging $6,000 for a product he donates struck him as “a little excessive.”
“Nobody asks why it’s so expensive,” he said.
Community Blood Centers said it, too, makes no money on blood.
In fact, the Dayton-based nonprofit lost a total of $8.7 million on blood between 2005 and 2010, said Julie Belden, chief financial officer for Community Blood Center/Community Tissue Services. That part of the nonprofit was subsidized by its rapidly growing tissue services business. In fact, in 2010, revenues for the entire organization, including blood and tissue services, exceeded expenses by $9.1 million, according to Community Blood Center’s 990 form.
Community Blood Center’s blood business finished in the black last year thanks to greater-than-expected volume, but it is expecting to show a loss again this year, Belden said.
The nonprofit’s blood-related costs include donor recruitment, collection, separating blood into its components, infectious disease testing, packaging, labeling and distributing, Belden said.
She said Community Blood Center charges less than the national average price for blood products, which are $186 per unit of red blood cells, $213 per unit for leuko-reduced red blood cells, and $558 per unit for single-donor platelets. She declined to provide Community Blood Center’s exact costs.
Community Blood Center recently trimmed costs by $4 million annually by using phlebotomists rather than registered nurses to collect blood and making other process improvements that eliminated the need for registrars at mobile collection sites, she said. “We’ve gone through some extensive cost-cutting and cost-saving measures,” Belden said.
Community Blood Center is the sole blood supplier to 25 hospitals in 15 local counties, including Miami Valley Hospital. The American Red Cross collects 40 percent of the blood in the United States, more than any other single entity, but the Dayton region is not one of its collection areas. The Red Cross’ collection region in central Ohio does extend west to include Champaign and Logan counties.
Last year, Miami Valley Hospital, the region’s only Level I trauma center, transfused 26,813 blood products. Once the hospital obtains blood products from Community Blood Center, it undertakes a number of steps prior to transfusions. For example, it performs confirmatory testing and compatibility testing, and prepares the blood by thawing it and pooling multiple units of a blood coagulation agent into a single dose.
The hospital also takes various safety measures to ensure blood is not infused into the wrong person, said Dr. Paul Gibbs, a pathologist and associate medical director for the hospital’s blood transfusion service.
For example, the hospital’s final safety barrier is a locking system on an outer bag of each unit of blood products. The lock must be matched with the combination on a patient’s wristband before the blood can be transfused, he said. Infusing the wrong blood type can sometimes create catastrophic reactions in a patient, from shock and kidney damage to death, depending on the person.
“In a way, we’re backstopping” Community Blood Center’s work to ensure patient safety, Gibbs said.