Mid-South Regional Blood Center: J. Daniel Garrick, Chief Operating Officer

by HCE Exchange on March 23, 2012

About 70 percent of people will need blood before they hit age 70, but fewer than 10 percent of the general public donates blood. The American Red Cross is the largest national blood collection agency, but smaller, independent centers are vital to providing blood to local hospitals and health systems around the United States. All in all, these smaller, independent centers provide more than half of the national blood supply.

The Mid-South Regional Blood Center in Memphis, Tenn., is a non-profit volunteer blood center. It provides about 70 percent of the blood used by patients in its 20-hospital service area that covers 15 counties in the Mid-South region. The center acquires about 50,000 volunteer collections each year.

Chief Operating Officer J. Daniel Garrick said the company began as a recruitment arm for the local hospitals and became an independent blood collection center in the 1970s.

“We have a good relationship with hospitals, and we stay focused on hospitals locally, which gives us a competitive advantage,” Garrick said.

Facing indirect pressure from reform

Garrick said the relationship with hospitals has changed in recent years, especially as hospitals have fallen under stricter budget restraints. All areas of healthcare have had to find ways to cut costs and looking at blood supply has been no exception.

“As there’s more pressure on hospitals, we are looked at more as a vendor rather than a partner,” Garrick explained. “Some decisions about where blood is being sourced from are not made by the blood bank, but by people who are managing the supply chain at the hospital.”

Garrick said the industry has seen changes in how blood is being provided to different hospitals. As many hospitals are owned by heath systems located outside the region, Mid-South supports only about 10 percent of hospitals not based locally.

“We have lost the support of a couple of  hospitals owned by larger chains outside the region, as purchase decision was based more on price than service and the ability to meet specific patient needs,” Garrick said.

As hospitals face more pressure to cut costs, so does the blood center. The center has had to eliminate positions, having had three reductions in force in the past two years. For long-term viability, the center has looked at further ways to improve efficiency and cut costs.

Furthermore, as with many healthcare services, Garrick is also seeing more mergers and consolidations of independent blood centers. Mid-South is exploring its options to partner with other organizations.

“We would like to be independent with our own local board to drive the organization,” he said. “But we also realize we need to be competitive, be more streamlined, and cut costs as best we can. In the next five years, I see us being affiliated with other centers that would make us more efficient and give us more stability and support our ability to provide blood locally.”

This relationship isn’t a huge stretch, as Mid-South already has contracts with other centers to share supply. Being located in a metro area, Mid-South tends to have more demand for blood than it does donors, while rural centers tend to have more donors than need. So Mid-South has contractual relationships with rural centers that can over-collect.

An eternal need for blood

Despite pressures to cut costs, the need for blood is ongoing, so Mid-South has to evaluate its collection methods and where to invest in growth. Garrick said the center is outgrowing its existing facility and will need to make investments in a new center to house its manufacturing and distribution operations.

Also, the mobile-collection side of the business  continues to grow, creating a need for more buses, trailers, and vans. The center used to collect about 70 percent of donations at fixed sites and 30 percent through mobile units, but that has changed to about 50/50.

Bringing the collection site to donors is likely going to be an important part of the business going forward, as centers need to maintain an adequate supply at all times. The need for blood becomes present in the public’s mind when disasters hit, and local centers like Mid-South are poised to support hospitals within their region. Larger suppliers may have depots, but when time constraints are a factor, blood may not have the ability to be transported in time.

Regardless of the future, the need for blood donation will always exist, and Garrick looks toward ways centers can better work together. When the devastating tornado hit Joplin, Mo., in May 2011, for example, Mid-South worked with its sister center in Joplin to supply blood to nearby hospitals. The center then saw an outpouring of people wanting to donate, but Garrick emphasizes that the desire to give blood should continue even when there’s not an immediate disaster.

“Blood donation is critical to healthcare, and it’s something that has to be done continuously,” Garrick said. “Blood is perishable, and it has to be replenished before disaster hits. It doesn’t do any good if blood is not on the shelf.”

-by Patricia Chaney

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