BY LAUREN SILVERMAN January 13th, 2015 | 14:20
For hospitals, blood is a core commodity.
“It’s not like if you run out of milk you’re fine, we’ll go without milk,” says Chris Godfrey. “If you run out of blood, there are lives at risk, so the stakes are very high.”
Most hospitals rely on regional blood centers, which is why Godfrey started Bloodbuy. It’s like Priceline, but for blood products – a cloud-based platform connecting supply with demand in a multibillion-dollar industry.
Managing a blood supply is more complex than managing hospital products like morphine or pain pills. Two main factors make blood a tricky business:
- Blood products can expire quickly: While red blood cells have a shelf life of 42 days, platelets last only five days before they need to be tossed.
- Blood supply varies greatly by region: Blood donations in Des Moines, Iowa, might be high, while in Houston there may be shortages.
“You have blood centers on the supply side and hospitals on the demand side,” Godfrey says. “So we act as a technology backbone that sits in between them and connects everybody.”
Where blood buyers and sellers unite
Like Priceline, Bloodbuy uses a series of algorithms that match a hospital’s needs with what’s available for the best deal. And the suppliers, not the shoppers, pay a fee to list what’s available. So far, there are users in six states.
Mike Dossey of John Peter Smith Hospital in Fort Worth, doesn’t use Bloodbuy, but says he can see how the service could save blood, and money, by making availability and prices more transparent across the country.
“Because it’s such a rare commodity, and you’re asking people to donate their precious blood, you don’t want to waste any of it,” he says. “We spend just under 4 million dollars a year on blood products.”
Today, a hospital pays from $170 to $300 for a pint of blood.
In a pilot program, Bloodbuy’s technology saved Texas Medical Center in Houston more than 20 percent on blood expenditures.
Dossey with John Peter Smith Hospital says there are risks to using the Priceline model.
“It might also affect your buying power with your current vendors if you’re using less of their products and going somewhere else,” he says.
Maintaining a good relationship with the blood bank in town is crucial, Dossey says, when there’s unexpected trauma.
“You could have a 10-car pileup out on the interstate and need those products swiftly,” he says. “And having that relationship with our vendors is also key to getting those products here when you need them.”
Both Dossey and Godfrey say they hope easier access to prices and inventory for hospitals will help even out supply and demand so blood can, yes, circulate better.
Featured in: Marketplace for Tuesday, January 13, 2015