In Partnership with Our Community

A community blood center partners with hospitals and aligns blood center goals to support our clients’ mission. We know our clients value a safe, adequate and efficiently produced blood supply; competitive pricing; clear, open communication and mutual trust; and products and services specific to hospital needs and goals.

Bonfils Blood Center has achieved significant success assuring a safe and readily available blood supply for the Colorado community and supporting national partners and military needs. Blood is safer than ever thanks to technological advances implemented in the last four years. Our continued efforts in community education and investment in donor care and convenience have resulted in a community which responds readily and regularly to the call to action to save lives.

The economics of transfusion medicine is, however, complex. As an industry, blood product pricing rose dramatically from a decade ago. A number of factors contributed to the rapid rise in costs of transfusion: the pursuit of a zero risk blood supply, increase in product usage, changes in product mix, donor recruitment issues, disaster planning and response and hospital reimbursement and billing issues. We now better understand through communications with our healthcare partners, that while safety and availability of the blood supply are still important to blood product consumers, cost is the primary concern for healthcare facilities when considering from whom to purchase blood products.

Our clients’ concern about the rapidly rising cost of blood is not unfounded. Bonfils, like all blood centers across the nation, raised prices to recoup the costs of safety initiatives mandated and/or recommended by the FDA. In the U.S., the average cost of a unit of red cells increased over 30 percent from 2001 to 2004.[i] An analysis by Americas Blood Centers (ABC) showed annual increases in the median price of red cells for independent blood centers at 12, 23 and 10 percent for the years 2002, 2003 and 2004 respectively.[ii]

The ABC study also revealed the following:

• Blood procurement costs equal less than 1 percent of hospital expenses;
• Transfusion-association activity equals 4.2 percent of all hospital billings;
• 15 to 21 percent of patients use blood ;
• 22 to 37 percent of hospital revenue comes from blood-related DRGs;
• Medicare reimbursement to cost averaged 104 percent;
• and in fiscal year 2000/01, blood-related DRGs generated $1.1 billion in revenue over expenses for 4,423 hospitals included in the study.

Reimbursement rates from Medicare and third party payers did not keep pace with the rising costs of blood, and in some cases, decreased. The Lewin Report, published in 2002, showed that both the processes used by the Centers for Medicare and Medicaid Services (CMS) to update reimbursement rates and by hospitals to track and report to CMS hospital cost data related to blood were flawed. In the years since the report, hospitals have improved reporting practices, and recently, the Bureau of Labor Statistics (BLS) has created a new Producer Price Index (PPI) that more accurately reflects the cost of blood and blood products used by hospitals.

Based on our clients’ concerns related to these issues, we took action to address our fee structure. On July 1, 2006 Bonfils reduced prices for Colorado clients and committed to holding those fees through the end of 2007.

Managing the community blood supply is the core initiative for Bonfils. It requires incorporation of our clients’ perspective and goals into the design of the model. I encourage you to share your ideas and goals with us. It is a continued open dialogue that allows us in partnership to enhance the lives of patients in need.

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