INDIANAPOLIS — A major Indiana blood bank is losing its contracts with two large hospital systems in the state as they look for cheaper prices from blood suppliers.
The Indianapolis-based Indiana Blood Center said it is being dropped early next year by the Indiana University Health and St. Vincent Health hospital systems, along with Terre Haute's Union Hospital. Those facilities are switching to the American Red Cross as their blood supplier.
Those three contracts bring in about one-third of the Indiana Blood Center's $61 million annual revenue, the Indianapolis Business Journal reported. The center says it collects and tests blood from about 100,000 donors a year, then delivers it to 60 central Indiana hospitals.
Byron Buhner, CEO of the Indiana Blood Center, said the center's leadership is reviewing its business model and has started talks with centers in Illinois, Michigan and Wisconsin to join a group they formed called the Centers for Transfusion and Transplant Medicine. Joining that group would allow the Indiana Blood Center to consolidate some office functions and possibly reduce its staff of 345 full-time workers.
"We know that we're going to have to bring our costs down," Buhner said.
Indiana University Health, which has 19 hospitals around the state, said its contracts with the Indiana Blood Center and the American Red Cross were due for renegotiation. The Red Cross "was selected as the sole provider based on best pricing and service," IU Health officials said.
Joining the new partnership could also mean more of the Indiana Blood Center's blood going outside central Indiana, said Wendy Mehringer, the center's vice president of blood services.
"We don't have revenue except for what we charge the hospitals, that service fee, for the blood that we provide," Mehringer told WISH-TV.
The demand for blood dropped by 8.2 percent from 2008 to 2011 and continues to drop, according to a report by the AABB, formerly known as the American Association of Blood Banks. Contributing to the decline are fewer elective surgeries being performed and medical advances that curb bleeding in the operating room.
Studies published over the past 15 years also show that too much transfused blood can be harmful, said Susann Nienhaus, director of client services and patient safety at Indianapolis-based Strategic Healthcare Group LLC, a blood management consulting firm for hospitals.
"I foresee continuing reductions in blood transfusions across the U.S. in the coming years," Nienhaus said. "I see that we're just now beginning to get traction on that."
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