Aligning Blood Services Across the Health System
A large West coast IDN utilizes 6 different blood banks across the state.
The Challenge
A large West coast IDN utilizes 6 different blood banks across the state. Fees differ across these suppliers and even within the same suppliers, largely due to geographical restraints. In addition, suppliers were increasing their fees across all sites at the beginning of the calendar year. There were many agreements throughout the health system, spread across each region and individual sites, which were not co-terminus.
Solutions
The health system’s goals included enhancing product quality, improving standardization of current services (delivery times, return policies), and lowering the cost of blood products and services across the system. A Request for Proposal (RFP) was distributed to allow incumbents to bid on their current business, and provided them the opportunity to gain additional regional business. In this RFP, it requested suppliers to agree to contract terms to enhance flexibility and support utilization policies. Multiple rounds of negotiations were conducted prior to selecting finalist(s) for the health system.
Results
Utilizing Pathstone’s laboratory consulting services, the health system conducted an RFP allowed for them to select the best option for each regional facility. Though many regional facilities stayed with their incumbent, it allowed others to select another supplier if the proposal responses more closely aligned with the site’s goals. Suppliers agreed to a co-terminus end date to allow the health system to evaluate as a whole once the contracts expire.
During COVID-19, there has been an extraordinary demand for blood and blood products, yet a shortage of donations. Therefore, blood pricing has largely been dependent on availability and donations.
Key Takeaways
New Sites
If new sites are acquired, transition the new site onto the Master Services Agreement rather than allowing the new site to create its own regional agreement. Though blood centers can be regional, selecting a blood bank that can service multiple regions will provide not only the most competitive pricing, but also ample selection and availability.
Blood Utilization
By creating a robust utilization program, it allows hospitals to reduce blood waste and track demand. Though many suppliers provide credits for un-utilized blood, credits often are not the same initial purchase amount.
Supply Needs
Many suppliers are able to propose multiple options based on supply needs of the hospital. For example, utilizing more O neg blood results in a higher leukoreduced red blood cell unit pricing, so clearly tracking utilization and requirements by blood type will allow for the most accurate pricing proposal.
Pathstone affected $120K+ annual savings for the highest-cost program via management fee reduction and program director cost reduction.
Pathstone was able to reduce the overall annual cost of bulk oxygen by nearly 25%.
Staff turnover decreased resulting in $100k of wage savings.
Through collaboration with physicians and the supply chain team, Pathstone achieved an estimated ~$630K in annual savings.
