In the current environment of healthcare reform, the pressure for cost savings and cost effective healthcare has never been greater. As I define it, blood management is about quality, safety and stewardship, with a goal to ensure the careful and responsible management of the community blood supply as well as the safe and efficient use of healthcare resources involved in blood management. Blood management promotes the optimal use of blood products. Implementing evidence-based guidelines successfully is the most cost effective way to reduce unnecessary blood expenditures. A previous newsletter article emphasized effective blood utilization committees as the heart of blood management programs, making sure patients get no more or no less blood than they need. A quote by Dr. Donald Berwick from the Institute of Healthcare Improvement that sums up this balanced approach is: “Patient’s should get all the care they need and none they don’t; safely, efficiently and at low cost.”
Blood costs are increasingly on the minds of hospital administrators and have recently been in the news1,2. As hospitals try to reduce costs, they first focus on non-labor associated costs savings (e.g., supplies) because lowering operating costs is more popular than laying off healthcare workers. As chief executives lean on their departments to find supply chain savings, laboratory directors quickly discover that their #1 cost item is blood products. In spite of the fact that the price of blood products has tripled since 2001 and that blood use is increasing in most hospitals, lab directors and hospital administrators previously looked at these blood expenditures as the ‘cost of doing business’. In other words, their perception was that these costs were unavoidable, assuming that blood was being used appropriately within their hospitals. The literature and our experience has shown that most U.S. hospitals over-transfuse by at least 20- 30% because of a failure to adapt more conservative, evidence-based guidelines and because of a lack of proactive management of patients at risk for transfusions. As such, better blood management becomes an essential strategy for reducing lab costs while improving quality and patient safety. The word is finally getting out that blood management saves blood, saves dollars and saves lives.
The cost of blood products is a topic that I am very familiar with because I wrote a book chapter on transfusion economics as part of my MBA3. One of the most interesting discoveries for me was the tremendous cost of transfusion costs – icebergstoring, testing, dispensing and administering blood products within the hospital. Blood is a very resource intensive product, consuming large amounts of med tech and nursing labor, as well as significant amounts of supplies and allocated overhead. One activity based accounting study concluded that the cost to purchase blood represents only 19% of transfusion-related costs, and that the total cost to transfuse a unit of blood (in 2009 dollars) was from $850- $9404. A study published in this month’s journal Transfusion used an even more detailed accounting method in a review of surgical blood transfusions. This study also concluded that blood purchase costs represent only 21%- 28% of transfusion-related costs, and that the cost to transfuse a single unit of blood was from $726- $11835. While these costs are considerable, an additional accounting for the cost of transfusion-related adverse events can more than double the final cost to $2100- $3200 per unit6. A variety of controlled studies have demonstrated a direct relationship between the amount of blood products that a patient receives and serious complication rates. These complications are largely due to the immunosuppressive effects of donor blood and include stepwise increases in infection rates, ventilator support times, ICU and hospital length of stay, short term and long term mortality and cancer recurrence rates7. It should be evident from the previous discussion that the total cost of transfusing patients is substantially more than just the cost to buy it. The cost of purchasing blood products is merely the tip of the iceberg of total blood costs, when accounting for transfusion-related labor, supplies, overhead and potential adverse effects.
I hope you can join me for an upcoming Blood Management UniversityTM webinar, “Blood Management Economics” on April 22nd at 1 PM EDT. In addition to exploring the costs of producing and transfusing blood products, we’ll discuss the merits of developing a business case for blood management. A blood management business case is essential for gaining support to start a program, and it also provides ongoing financial metrics for program sustainability and growth.
Submitted by: Timothy Hannon, MD, MBA | Founder & President, Strategic Healthcare Group, LLC
• 1 Tracy D. Blood is big business: why does it cost so much? Orlando Sentinel, April 5, 2010.
• 2 Annual costs total $1.6 to $6 million per hospital surveyed warranting improved conservation & cost containment strategies. PR Newswire, April 5, 2010.
• 3 Hannon TJ, Paulson-Gjerde, K. Contemporary economics of transfusions. In: Perioperative Transfusion Medicine (2nd ed), 2005, Spiess BD, editor. Williams & Wilkins: Baltimore.
• 4 Cremieux PY, Barrett B, Anderson K et al. Cost of outpatient blood transfusion in cancer patients. J Clin Oncol 2000;18:2755-61.
• 5 Shander A, Hoffmann A, Ozawa S, et al. Activity-based costs of blood transfusion in surgical patients at four hospitals. Transfusion 2010;50:753-65.
• 6 Boucher BA, Hannon TJ. Blood management: a primer for clinicians. Pharmacotherapy, 2007;27(10):1394-1411.
• 7 Blumberg N, Kirkley SA, Heal JM. A cost analysis of autologous and allogeneic transfusions in hip replacement surgery. Am J Surg 1996;171:324-30.