How the U.S. ended up in a serious blood crisis

All across the country, they’re calling for blood. Type O blood especially.

After years of decline, instability caused by COVID-19 has left the blood banking industry in desperate need of a long-term change—and more donors, as soon as possible. Blood banks worry that the coming months will bring extreme shortages of essential products as their newly vaccinated pool of potential donors heads out into the world. Current demand is higher than in a normal year. But supply, which comes from volunteer donors, is lower than in typical times. This has prompted the country’s fewer than 100 blood collecting entities to begin their annual summer appeals for more donors early, highlighting vulnerabilities in America’s supply of this vital fluid.

How blood banking works

Blood banks walk a knife’s edge every summer. “From Memorial Day to Labor Day in a good year, it’s still a bad year,” says Louis Katz, chief medical officer of ImpactLife, a blood center that serves hospitals in Illinois, Iowa, Missouri, and Wisconsin.

Two of the three core blood products have short lives. Red blood cells last between 35 and 42 days. Platelets last for just five to seven days. Plasma lasts longer, because it can be frozen, but it’s good for only one year. That means a continuous supply of donations is essential to meeting demand.

Having enough product on hand to meet three days of demand is ideal, Katz says. His bank, which uses the consignment model, keeps blood spread through its 120 client facilities in four states, and if demand spikes somewhere, it can move that blood around. Some other blood providers sell the blood directly to hospitals.

In lean months, that supply can drop as low as one day’s or even half a day’s worth of blood products—a dangerous state to be in when demand spikes. Blood shortages can cause hospitals to delay nonessential procedures, a category which includes both elective procedures and those which can dramatically affect someone’s quality of life, such as joint replacements.

Many such procedures were already delayed by the pandemic. Over the past six months, hospitals have begun working their way through the backlog—one reason for the spike in demand. Another, according to blood bankers, is the increase in violent crime around the country.

“We’ve been doing everything we can for weeks and weeks and weeks to avoid difficulty,” says Katz. But appeals to donors can only go so far. Right now, he says, “a bad trauma could push one or more of our hospitals over that threshold.”

A liver transplant going south, a shooting, a bad car collision—it doesn’t take much to mess with the blood supply. Katz notes that the consignment model gives his center some flexibility, but it isn’t the primary model anymore. Many centers that sell directly to hospitals can’t pull their supply back if it’s needed elsewhere.

In a joint statement earlier this month, the American Red Cross, America’s Blood Centers, and AABB (formerly the American Association of Blood Banks) called for donors to step up. The Red Cross, which currently supplies about 40% of the nation’s blood, estimates that it would need more than 1,000 additional blood donations each day to meet current demand.

“We’ve been rationing blood to hospitals now for months,” says Chris Hrouda, president of biomedical services at the American Red Cross.

Businesses and community groups such as churches, two lifelines that blood bankers rely on through the summer months, are still not up to full capacity. Even if they are, navigating their own health and safety measures remains a challenge, preventing them from hosting the kinds of large-scale blood drives that would keep supply at necessary levels.

In a usual year, the fall would bring some relief. High schools and colleges are mainstays of the blood industry, providing about 20% of supply. They’re full of young, healthy people who are likely to respond to a call for blood and to be eligible to donate. This year, that relief is uncertain.

Jed Gorlin, vice president of quality and regulatory affairs at Innovative Blood Resources, which serves hospitals in Nebraska and Minnesota, says in his experience people respond to the call for blood out of altruism and a desire to help. In the jaws of a global pandemic and a major economic downturn, altruism, he fears, may be in short supply—especially when people are finally offered the relief of a vacation or a reunion with family and friends.

It’s understandable that a voluntary process involving a series of 44 personal questions and two blood draws isn’t at the top of people’s list of things to do post-lockdown, he says. But the need is still there.

A shifting business model

This tightly regulated industry saw unprecedented demand and supply shifts during the pandemic, but things had been changing for a while. “Over the last 20 to 30 years, there’s been a great deal of consolidation,” says Thomas Gniadek, associate director of blood banks at the NorthShore University HealthSystem, based in Evanston, Ill., just outside Chicago.

The blood system Gniadek describes is captured in a Department of Health and Human Services (HHS) report from 2020: “a complex web of private and public stakeholders including blood centers, hospitals, device manufacturers, testing laboratories, accreditation organizations, and government agencies.” Most blood centers are not-for-profit enterprises, but they’re strung between government regulators, for-profit suppliers, and hospitals that have a near-monopoly on the ability to purchase their product. (Gniadek consults for one of those suppliers, Fresenius Kabi, which makes a number of blood collection products.)

At present, there are only a few national blood centers, including the Red Cross and Vitalant. Local blood centers, often linked to a hospital system, serve portions of the remaining need. Regional blood centers serve the rest. These regional centers occupy the middle of the market and are FDA-licensed to cross state lines with their products, which local blood centers are not.

Further change occurred in the past five to 10 years, as tightly squeezed hospital systems sought to reduce costs by renegotiating contracts with suppliers. At the same time, the amount of blood consumed by hospitals dropped by about 25% because of a shift toward using blood transfusions more sparingly—a shift that Jackie Fredrick, former CEO of Versiti and current chair of the Health and Human Services Advisory Committee on Blood and Tissue Safety and Availability, characterizes as “appropriate utilization.” Like any other medical intervention, blood transfusions carry some risk.

“Everyone followed prices down,” Fredrick says. “Margins became negative to nonexistent. Capital obviously deteriorated.”

The pandemic could have easily driven many of them out of business. As hospitals shut down whatever procedures they could and people stayed home, demand dropped precipitously. So did supply, but the two more or less matched during the worst of the lockdown. And yet the fixed costs of running blood centers, which require trained staff and complicated equipment, didn’t go down at all.

The only thing that saved them was a COVID-19 treatment whose efficacy is still unestablished: convalescent plasma. As early as April 2020, the Biomedical Advanced Research and Development Authority (BARDA) of HHS was paying blood centers to collect and store plasma from recovered COVID-19 patients.

“The money that was put into that program is the reason why blood centers didn’t go bankrupt during this interim year,” says Gorlin.

Changes ahead

Back in an era when margins were looser for health care, the core baby-boomer donors whom blood banks relied on were younger, and more blood was used, the legacy model of blood banks worked well, says industry veteran Jay Menitove, a former CEO and medical director of the Community Blood Center of Greater Kansas City and a previous chair of the HHS committee that Fredrick now heads. Over the past decade, as things went downhill, he and others in the industry recommended action, but nobody stepped forward to change the model. The blood industry continued limping along, at once essential and incredibly vulnerable.

Menitove and Fredrick cochaired the steering committee behind the 2020 HHS report. Prepared for Congress as part of the requirements of the Pandemic and All-Hazards Preparedness and Advancing Innovation Act of 2019, the report identified two key vulnerabilities in the blood industry: no centralized way to track donated blood in real-time, and “dangerous weaknesses in the supply chain for blood collection and manufacturing.”

Blood is currently treated as a commodity, gathered by blood centers and sold to medical providers through a spectrum of different agreements. Under those agreements, blood centers are paid only for the blood that’s used; nobody pays them for collecting it or for courting donors. In fatter days, that didn’t matter so much, because the price per unit of blood was high enough to make up the difference. In these lean times, however, blood bankers say the compensation needs to change—either by raising the price per unit of blood used, altering the compensation model, or through some other means of reform.

Payment is just one piece of a bigger picture, however. “We need a national blood policy,” says Fredrick. “Instead of taking things as they hit us, we would actually have, together with government, a framework and a road map for the future.”

That could take a while. The newly elected Congress received the report in late January, but the steering committee has yet to receive feedback, says Fredrick. As the country heads into its first post-vaccine summer with demand remaining high, the need for its recommended changes could become all too apparent.

How the U.S. ended up in a serious blood crisis

How blood banking works

A shifting business model

Changes ahead

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