Hospitals, Red Cross fight over blood prices

CHARLOTTE, N.C. -- With health-care costs soaring and hospitals looking for ways to cut expenses, skirmishes are being fought from California to the Carolinas for control of a $2 billion industry: the collection and sale of blood.

The need for blood remains fairly constant in the United States, at about 34,000 pints a day. But the price has escalated dramatically, up to nearly $200 a pint in some areas, and supplies are unsettlingly low in many regions in the wake of a traditionally slow summer donor season and a patriotic rush to donate unneeded blood following September's terrorist attacks.

In protest against rising prices, 10 Charlotte-area hospitals last month took an unusual step that is likely to heighten competition and aggressive marketing in the blood business. They announced they were breaking away from their traditional supplier, the American Red Cross, and banding together to form their own center for collecting and processing blood in an 11-county area with a population of 1.5 million.

The decision, hospital administrators said, was largely a business one, because the price per pint had almost doubled in the region since 1999. They believe they can market blood for $150 a pint, saving $3 million a year. They also want to keep control of the community blood supply in the community, and they said decisions made in St. Louis or Washington by a large, bureaucratic organization such as the Red Cross were not always in the best local interests.

Tried in Missouri

The last time a group of hospitals took a similar step was seven years ago in Springfield, Mo. The Red Cross responded by suing the new blood center, charging theft of trade secrets and improper business practices. The case was settled confidentially in 1999 and the Community Blood Center of the Ozarks has emerged as the predominant supplier in Southwest Missouri.

Rick LeGrand, a Red Cross spokesman, said the agency supported moves that would get more people to donate blood but feared Charlotte's blood center might just move donors from one group to another, thus not increasing the donor base.