Isle donors’ blood sold to hospitals

One hundred fifty to 200 people a day roll up their sleeves to donate lifesaving blood used by 17 hospitals across the state, according to the Blood Bank of Hawaii.

The blood bank, opened in 1941, says on its website it has been "saving lives for more than 70 years." In 2014 it distributed 77,719 blood components.

"Why donate?" the nonprofit asks. "An hour of your time spent donating blood can mean a parent will see a child grow up. A son marry. A daughter graduate. It can mean a neighbor will come home from the hospital. A mother hold a newborn. A friend survive cancer."

But the gift of life is no longer a gift once it leaves the arms of donors, and less advertised is the fact that the Blood Bank of Hawaii — like other nonprofit centers around the country — sells that blood to hospitals for not insignificant sums.

Donated human blood is the largest generic pharmaceutical drug in the United States, generating more than $6 billion in annual sales at anywhere from $160 to $250 per pint, according to Minneapolis-based Hema­Vista, which supplies and consults with hospitals on blood supply.

Blood can be divided into different components, and Blood Bank of Hawaii acknowledges it sells component units at prices from "well under $100 to many hundreds of dollars" depending on the complexity, perishability and difficulty of processing.

The nonprofit’s Form 990 tax filing shows the business had $20.9 million in revenue for 2013 and $16.6 million in expenses.

Ben Bowman, founder and chief executive officer of Hema­Vista, started in 2010, has said that perhaps 99 percent of people nationally don’t know their blood is sold.

Although the sale of blood has been reported on sporadically by the media, greater transparency is needed in the industry, Bowman contends.

"I think the public needs to know the truth, and the truth today, barring some very minor exceptions, has been hidden from the public," Bowman said in a phone interview.

"And I don’t know if necessarily people would mind if they knew (blood was sold), but they certainly have a right to know; and blood centers have been doing blood center work for decades and, for whatever reason, haven’t decided to share that fact," Bowman added.

He calls it "lies of omission."

The Blood Bank of Hawaii, however, said it is "forthright" with donors. The blood bank prefers to say that it charges hospitals "processing fees" to offset costs for the recruitment of donors and for blood collection, processing, testing, storing and distribution.

Kim-Anh Nguyen, president and CEO of the Blood Bank of Hawaii, said it’s extremely expensive to operate a blood center and that the blood collection role is one that hospitals generally can’t efficiently afford to do themselves.

"We actually are very forthright with our donors, and we do talk about the Blood Bank of Hawaii having to operate as a business," Nguyen said.

In a "frequently asked questions" section on the blood bank’s website and under "What happens to my blood after I donate?" the center states, "The blood is taken to our laboratory, where it is separated into three components: red blood cells, platelets and plasma. Thirteen different tests are performed to ensure safety and then the lifesaving products are transported to civilian hospitals all over the state to meet the needs of Hawaii’s patients."

The blood bank also says it does not offer any payment because "studies have shown that volunteer donors provide the safest blood."

But it does not explain that hospitals pay for the collected blood.

On the disclosure issue, Nguyen said: "If the question is, Do we say to every donor that walks through and rolls up their sleeve, ‘Aloha, thank you for coming in, your blood is sold to hospitals’? no, we don’t. But I don’t think that that’s necessary.

"I think we do tell donors that their blood is tested with over 10 tests, and the cost of those tests is not cheap," said the medical doctor, who also has a Ph.D.

Asked what would happen if all donors knew their blood is sold to hospitals, Nguyen said, "I think very little." The motivation for 150 to 200 people to donate every day in Hawaii, as well as nationally, is, "‘I walk through the door because my blood saves lives,’" she said.

Gary Sturdy, 65, a retired Hawaii County firefighter who lives in Kailua-Kona, in March reached a milestone of donating a whopping 20 gallons of blood over at least four decades. He said he tries to donate every eight weeks.

Asked if he knew whether Blood Bank of Hawaii gives or sells that blood to hospitals, Sturdy said, "As far as I know, they don’t sell it."

When told the blood bank does sell it, he wasn’t fazed.

"The money they get from selling the blood (is) what they use to maintain the blood center and their (bloodmobiles) and their sterile equipment and pay their nurses?" Sturdy asked. "I assume the money doesn’t just fall out of the sky, so I’m not surprised that there is a market."

The Blood Bank of Hawaii says it is the sole blood provider for civilian hospitals in Hawaii, and a supplemental provider to Tripler Army Medical Center. The American Red Cross is responsible for about 40 percent of the nation’s blood supply elsewhere, officials say.

The Hawaii center said it imports some blood on an "ad hoc" basis, with 4 percent of blood components imported in fiscal 2014.

"We reciprocate with occasional blood component shipments to mainland centers, especially to provide certain rare blood types and universal plasma," the organization said.

A generalized fear in the industry may be that if people know their blood is sold, donations will drop, but even with greater transparency, Hema­Vista’s Bowman maintains donors will continue to give if centers "put it in the context of what the costs are, right?"

"If I receive a blood transfusion, I want to make sure it was tested, that it’s in a good bag, that it was collected in clean facilities," he said.

Sturdy puts it this way: "I wouldn’t want to go down to the local 7-Eleven if they said, ‘Hey, we’ll stick a needle in your arm and collect a pint of blood.’"

Bowman also takes issue with the pay of some nonprofit blood bank CEOs on the mainland, which in one case is $650,000, but he doesn’t have a problem with Nguyen’s compensation, which she confirmed is about $300,000.

"That’s one of the more moderated salaries I’ve seen," Bowman said.

Bowman wants to more efficiently distribute blood around the country, and he said his company could supply Hawaii at $190 a unit for leukocyte-reduced red blood cells, a "bread-and-butter product," while he speculates Hawaii hospitals are paying $240 to $250.

Nguyen said the specific costs it charges hospitals are proprietary.

The blood bank said it "serves hospitals by providing so much more than units of blood."

That includes a blood return policy for unused blood, and an immunohematology reference lab staffed by specialists. Modified blood components for specific patient needs can be produced. The blood bank also has the state’s only liquid and frozen rare-blood repository.

"The expertise and partnership we provide to the community and hospitals simply cannot be drop-shipped as a commodity," the business said.

All of that does not come cheap.

Nguyen said the blood bank is licensed and regulated by the U.S. Food and Drug Administration as a drug manufacturer. The business has 120 paid employees, including marketing staff, donor recruiters and lab techs, and about 190 volunteers, she said. Employee pay accounts for 43 percent of revenue.

There are two buildings, three 40-foot bloodmobiles and travel costs for blood collections on the neighbor islands, according to the center.

The $20.9 million in revenue in 2013 represented a "surprisingly good year," Nguyen said.

"We strive to have a margin or cushion between revenue and expenses," and that margin usually is razor thin, Nguyen said. "Where that margin goes is directly back to the organization, so employee pensions, employee benefits and then savings for repairs for facilities."