“The nation’s blood supply is regulated by the FDA—just like pharmaceuticals,” observed Red Cross executive Jeff Meyer in Professor Anna Nagurney’s* course, Humanitarian Logistics and Healthcare. Meyer, who is CEO of Red Cross Blood Services for Massachusetts and Connecticut, gave students a nuanced introduction to blood’s supply-and-demand dynamics, focusing principally on the national distribution of red blood cells (RBC).
RBCs, which have a shelf life of 42 days, are the leading component of blood in circulation (national and otherwise). In addition, Meyer touched briefly on platelets, which with a five-day shelf life, call for distribution approaching Just in Time standards.
Since 2008, demand for RBCs in the U.S. has declined steadily, although that trend has varied considerably among the states. (Demand has remained flat in Canada and the U.K.) The U.S. phenomenon, Meyer explained, is attributable to system-wide consolidation and greater efficiency in American medical practices.
Medical innovations like bloodless surgeries and the salvage of blood cells have effected change. But, by and large, cost- and waste-reduction practices have been the principal drivers. To that end, hospitals are doing fewer questionable surgeries and encouraging surgeons to be less wasteful in their deployment of blood. And evidence-based medical practices, including blood management targeted to specific patients, are also cutting excesses.
Adding complexity to the equation, Meyer remarked that some medical innovations, demographic trends (like aging baby boomers), and expanded coverage through the Obama Administration’s Patient Protection and Affordable Care Act are exerting upward pressures on demand.
Change on the Supply Side
Consolidation among suppliers has also brought efficiency. “Smaller blood centers simply can’t compete with consolidated buyers [owing to the mergers of hospitals and other medical facilities and various purchasing alliances],” emphasized Meyer. An ongoing shakedown among blood suppliers, he added, has brought their numbers down from above 90 several years ago to 65 today. Even the nation’s leader—the Red Cross—which accounts for 40% of the U.S. blood supply, is consolidating within by trimming its blood-centered divisions and testing labs (both categories from five to three) and by merging its three blood manufacturing centers.
Social media through Facebook and Twitter, Meyer added, are also bringing efficiency. That includes the Red Cross Blood App for Android and iPhone, which with more than 250,000 downloads, is yielding significant results: 80% of potential donors who schedule donor appointments via the app have shown up for their appointments. That compares with 50% who scheduled through a traditional phone call.
*Professor Nagurney and her former Ph.D. students, Amir Masoumi and Min Yu, have examined blood supply chains in the journal, Computational Management Science 9(2). Nagurney and Masoumi have also addressed the subject in the book, Sustainable Supply Chains (Springer).