HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Sunday, February 6, 2005

Blood: Quality, Cost Tradeoff?

Hospitals in Syracuse, NY, are considering the creation of a local blood bank and are betting that they can save about 20%, or $2 million a year, compared to the $11.59 million they paid the Red Cross last year.  Start-up costs are estimated to be $2.6 million.  Is there a trade-off in quality?  The article in this morning's Syracuse Post-Standard isn't clear on this point.  Local hospital officials point out that all blood banks are required to meet FDA standards.  On the other hand:

The Red Cross blood prices tend to be higher because it requires certain genetic testing and filtering that many independent blood banks consider unnecessary, said Arthur Caplan. He is chairman of the department of medical ethics at the University of Pennsylvania medical school and former chairman of the federal Advisory Committee on Blood Safety and Availability.

But there's no difference between the Red Cross and independent centers when it comes to blood product quality, he said.

Even assuming that blood centers meet all of the FDA's minimum standards, does it make sense that the Red Cross builds in a 20% price differential because of tests that add nothing to the safety of their blood products?  Or would it be more accurate to say that local centers enjoy a price advantage because they don't believe the safety margin is worth the extra 20 percent?  [tm]

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