Department  of  Health  and  Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
NATIONAL  MARROW  DONOR  PROGRAM 
FINANCING  DONOR  CENTERS 
# 0EI-01-95-O0123  OFFICE  OF  INSPECTOR  GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 
protect the integrity of the Department of Health and Human Services programs as well as the 
health and welfare of beneficiaries served by them.  This statutory mission is carried out through a 
nationwide program of audits, investigations, evaluations, sanctions, and fraud alerts.  The 
Inspector General informs the Secretary of program and managementproblems and recommends 
legislative, regulatory, and operational approaches to correct them. 
OFFICE  OF  EVALUATION  AND  INSPECTIONS 
The OIGSOfficeof EvaluationandInspections(OEI)conductsshort-termmanagementand

program evaluations(calledinspections)that focuson issuesof concernto the Department, the

Congress, andthe public.  The inspectionreportsprovidefindingsand recommendationson the

efficiency, vulnerability, and effectivenessof departmentalprograms.

OEISBostonRegionalOfficepreparedthis reportunderthe directionof MarkR. Yessian, Ph.D.,

Regional Inspector General.  Principal OEI staff included:

Boston  Region  Headquarters

Russell W. Hereford, Ph.D., ProjectLeader  Alan Levine, ProgramSpecialist

Elizabeth Robboy, ProgramAnalyst

To obtain a copy of this report, contact the Boston Regional Office by telephone at

(617) 565-1050 or by fax at (617) 565-3751.
 Department  of  Health  and  Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
ONAL  MARROW  DONOR  PROGRAM 
FINANCING  DONOR  CENTERS 
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# OEI-01-95-O0123
 EXECUTIVE  SUMMARY 
PURPOSE 
To help assess the relative  efficiency  and effectiveness  of donor centers paid on a contract 
basis and those paid on a fee-for-service  basis in the National  Marrow  Donor Program. 
BACKGROUND 
The Natioml  Marrow  Donor Program  (NMDP)is a nonprofit  organization  based  in 
Minneapolis,  Minnesota  that finds matching  donors for patients  seeking a bone marrow 
transplant.  The NMDPoperates  the congressiomlly  authorized  marrow  donor  registry 
under  contract  with the Health Resources  and Services Administration  (HRSA). 
The NMDPuses two methods  to finance the donor centers  that recruit  volunteers  to join  the 
registry.  Thirty-five  donor centers  are paid through  a cost-based  contract  that is 
negotiated  between  NMDPand each center;  22 contract  centers  are paid through  HRSA 
funds,  and  13 from NMDPprogram  income.  Sixty-two centers  are paid on a fee-for-
service basis for file maintemnce,  donor recruitment,  and donor  search activities;  fee-for-
service  centers  are all paid using NNIDPprogram  income,  not HRSAcontract  funds.  This 
report  is based on a review  of data maintained  by the NMDP. 
FINDINGS 
For  the  year  ending  April  30,  1995, NMDPSpayments  to the  35 contract  donor 
centers  comprised  80 percent  of payments  to all donor  centers. 
The 35 contract  centers  received  $11.8 million.

The 62 fee-for-service  centers  received  $2.9 million.

The  contract  centers  are  more  expensive to NMDP than  fee-for-service  centers on five 
of six key funding measures. 
II Derdonor  I $  12.74  I  $  8.89  II 
IIper net newdonorrecruited  60.28  35.64  I
I I 
IIper request for first level followuptesting  423  323  I 
I 
I 
IIper donor retainedat first level followuptesting  618  426  I 
per request for confirmatorytesting  2,044  1,522 
(differencenot statisticallysignificant) 
per donor retainedat confirmatorytesting  2,654  1,871 
i  Despite  receiving  higher  per  unit  payments,  the  performance  of contract  centers  is 
lower  than  that  of fee-for-service  centers  in overall  recruitment  and  in donor 
retention.  While  contract  centers  perform  better  in minority  recruitment,  both  types 
of centers  could  improve  their  performance  on this  measure. 
percentof total NMDP funding  80 %  20% 
OVERALL RECRUITMENT:  percentof donorson registry  74  26 
percentof newdonorsrecruited  70  30 
MINORITY RECRUITMENT:

(percentof centersthat exceed  Blacks
 38  28 
local~ouulationdistribution)  Hispanics
 29  12 
DONOR RETENTION RATE:  first levelfollowup  68  76 
confirmatorytesting  77  81 
RECOMMENDATIONS 
The  Health  Resources  and  Services  Administration  and  the  National  Marrow  Donor 
Program  should  reexamine  the  method  used  to finance  donor  centers.  The goal of 
this reexamination  should be development  and implementation  of a financing  approach 
containing  incentives  that encourage  an efficient  and effective  donor center  system.  Such 
a system should emphasize  recruitment  and retention  of donors,  and it should place 
particular  emphasis  on donors from racial  and ethnic minority  groups. 
Because revising  the financing  system may take some time,  we urge the NMDPand HRSA 
to commence  this effort  immediately.  In addition,  we recommend  that the following  short 
term actions  should be undertaken: 
HRSA  should replicate  the analysis conducted  in this report,  or a similar financial 
analysis,  at the close of each fiscal year. 
HRSA  and the NMDP should develop procedures  for conducting  a performance  audit of 
donor centers  and a plan for implementing  performance  audits throughout  the 
network.  The plan for conducting  and implementing  these audits should be in place  so 
that the audits,  where  necessary,  can be carried  out within the first year of the 
forthcoming  contract. 
HRSA  should collaborate  with the NMDPto develop efficiency  measures  and procedures 
for requiring  centers to meet these measures.  These measures  and procedures  should 
be implemented  within the first year of the forthcoming  contract. 
.. 
11  COMMENTS  ON THE  DRAFT  REPORT 
We received  comments  on the draft report  from the Health Resources  and Services 
Administration  (HRSA), who in turn requested  comments  on the report  from the National 
Marrow  Donor  Program  (NMDP). 
HRSAand NMDPcite a number  of additional  factors that should be considered  in 
developing  a multivariate  analysis model that would provide  additional  information  on 
financing  donor  centers.  We agree that analysis of these factors could be useful. 
However,  we still urge reexamination  of the financing  system.  We continue  to believe 
that the financing  system should contain  incentives that encourage  an efficient  and 
effective  donor  center  system. 
HRSA and NMDPgenerally  agree with our other recommendations.  We adopt their 
suggested  revisions  in the language  of them.  But we also emphasize  that these 
recommendations  shouId be implemented  within the first year of the new contract.  We 
are concerned  that an open-ended  time frame could result  in unnecessary  delays. 
... 
111  TABLE  OF  CONTENTS 
PAGE 
EXECUTIVE  SUMMARY

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

FINDINGS


Total paymentstodonor  centers  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..4


Contrac  tcenter  smoreexpensive toNMDP . . . . . . . . . . . . . . . . . . . . . . . ...4

  performance  ofcontract  centers lower  . . . . . . . . . . . . . . . . . . . . . . . . . . ..6

RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..8

COMMENTS  ON T~D~  REPORT  . . . . . . . . . . . . . . . . . . . . . . ...10

APPENDICES

A:  Detailed  payment  andretentiondati  . . . . . . . . . . . . . . . . . . . . . . . . . . .  A-1

B:  Methodological  notes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..  B-1

c:  Textofcomments  onthedraft  repoti  . . . . . . . . . . . . . . . . . . . . . . . . . ..  C-1

D:  Endnotes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-D-1
 INTRODUCTION 
PURPOSE:

To help assess the relative  efficiency  and effectiveness  of donor centers  paid on a contract

basis and those paid on a fee-for-service  basis in the National  Marrow  Donor Program.

BACKGROUND:

Bone Marrow  Transplantation

Bone marrow  transplantation  is a treatment  for blood borne diseases  such as leukemias

and lymphomas.  About  16,000 people are diagnosed each year with leukemias  and other

fatal blood  diseases. 1  Many of these people could benefit from a bone marrow

transplant,  a procedure  in which the patients  diseased bone marrow  is destroyed  and

marrow  from  a healthy  donor  is infused into the patients  blood stream.  Bone marrow

produces  platelets,  red blood cells,  and white blood cells,  the agents of the bodys  immune

system.  For  a bone marrow  transplant  to be successful,  the patients  and donors  antigens

must match  as closely  as possible.  About thirty percent  of the time the patient  finds a

sibling with matching  antigens.  In the other seventy percent  of cases the patient  must seek

an unrelated  donor.

Three  pairs  of blood  cell proteins,  known as the Human Leukocyte  Antigen  (HLA)-A,

-B and -DR, are important  in determining  whether  a match will be successful.  One antigen

in each pair  is inherited  from an individuals  mother,  the other from the father.  Because

there  ar~ numerous  antigens  at each HLA-A,-B, -DR locus,  more than 600 million

combinations  are theoretically  possible.2

The National  Marrow  Donor Program 
The National  Marrow  Donor  Program  (NMDP) is a nonprofit  organization  based in 
Minneapolis,  Minnesota.  The NMDPoperates  the Congressionally  authorized  marrow 
donor registry  under  contract  with the Health Resources  and Services  Administration 
(HRSA). The contract  is fimded at $40,471,000,  from July  1994 through  April  1997. 
The NMDPbegan  operations  in September  1987 as a non-profit  organization  fimded 
through  a contract  from Office of Naval Research.  The NMDPwas created  through  a 
cooperative  effort  of the American  Association  of Blood Banks, American  Red Cross,  and 
Council  of Community  Blood Centers.  The NMDPbegan search operations  with  10 
transplant  centers,  49 donor centers  and 8,000 donors listed on the registry.  As bone 
marrow  transplantation  came to be seen as viable technique,  the U.S.  Navy recognized 
that it was inappropriate  for the military  to maintain  a civilian  registry.  In 1989, 
responsibility  for the contract  was transferred  to the National  Heart,  Lung,  and Blood 
Institute  in the National  Institutes  of Health.  Contract  oversight  for the NMDPwas again 
1
 transferred  in 1994, this time to HRSAin recognition  that NMDPwas a service  delivery 
program,  rather  than a basic research  initiative. 
The major  functions  of the registry  are to: (1) establish a system for finding marrow 
donors  suitably matched  to unrelated  recipients  for bone marrow  transplantation; 
(2) recruit  potential  donors;  and (3) increase the representation  of individuals  from 
racial  and ethnic minority  groups  . . . in order  to enable  an individual  in a minority 
group,  to the extent practicable,  to have a comparable  chance of finding a suitable 
unrelated  donor  as would an individual  not in a minority  group.   In addition,  the statute 
calls for a system of patient  advocacy,  support studies and demonstration  projects,  and the 
collection  and dissemination  of data concerning  bone marrow  transplantation  and 
collection.3 
The NMDPaccredits  donor centers  that recruit  volunteers  to join  the registry.  As of 
October  1995, the registry  contained  almost  1.5 million donors  in 97 domestic  donor 
centers,  and an additional  450,000  donors from 6 foreign  centers.  Eighty-one  of the 
domestic  centers  are blood centers,  either Red Cross-affiliated  or part of community  blood 
centers;  13 centers  are departments  of hospitals,  and 3 are free standing centers.  Six of 
the domestic  centers  have more than 50,000  donors on their list; another  35 centers  have 
between  10,000 and 50,000  donors each.  The remaining  56 centers  have fewer than 
10,000 donors. 
Financing  Donor  Center Operations 
The cost of NMDPS3-year contract  with HRSAis $40,471,000.  This funding covers  only 
a portion  of the NMDPSoperations,  which has a total annual budget  of approximately  $65 
million.  Over the 3-year contract  period,  $23,287,969  million  in HRSAfinds  is allocated 
for 22 cost-based  contract  donor centers  and $1,836,373  million  is allocated  for 3 cost-
based  recruitment  groups.  The remaining  HRSAcontract  funds go for general  operational 
costs for the registry  and for research. 
The NMDPfunds participating  donor centers  and recruitment  groups through  two distinct 
approaches,  cost-based  contracts  and fee-for-service  payments. 
Conrract reimbursement.  Thirty-five  donor centers  are paid through  contracts.  Twenty-
two of these centers  are reimbursed  through  HRSAfunds,  and 13 centers  are reimbursed 
by NMDPthrough  program  income.  Contract  centers  are paid on a prospectively 
negotiated  cost-based  contract.  Payments  to these centers cover  direct  expenses,  such as 
labor and fringes,  office supplies,  travel,  and donor expenses.  These centers  also receive 
a negotiated  overhead  amount that covers  items such as rent and indirect  administrative 
costs.  The NMDPalso reimburses  cost based centers  for certain  supplies related  to testing 
for donors  who have been identified  as potential  matches.4 
Fee-for-service  payment.  Sixty-two centers  are paid on a fee-for-service  basis.  These 
2
 centers  are paid only for specified  activities.  The fee-for-service  payments  come from 
NMDPprogram  income,  not from HRSAfunds.  The payments  fall into three  broad 
categories: 
- File maintenance  and support payments  at $25,000  for every 20,000  donors  on 
the centers  list; 
- Recruitment  fees at $10 for each new white donor,  $28 for each new donor  from 
a racial  or ethnic minority  group,  and $2 per donor for data entry following 
a recruitment  drive; 
- Search-related  expenses,  covering  both staff time and supply costs for donors 
who have been identified  as potential  matches.5 
SCOPE  and  METHODOLOGY 
This report  addresses  the domestic  donor centers  only.  We compare  the 35 contract 
centers  with the 62 fee-for  service  centers.  Our report  excludes the U.S.  Navys  Bill 
Young Marrow  Donor  Center,  because  that center  is funded through  a budget from the 
Department  of the Navy,  rather  than the contract  and fee-for-service  mechanisms  that this 
report  analyzes. 
This report  is one of four companion  reports  addressing  the National  Marrow  Donor 
program.  The other three  reports  are:  National  Marrow Donor  program:  Progress in 
Minori~  Recruitment  (OEI-01-95-00120);  National  Marrow Donor  Program: Effectiveness 
in Retaining  Donors  (OEI-01 -95-0012 1); and National  Marrow Donor  Program: 
Geographic  Overlap Among  Donor  Centers (OEI-01-95-00122). 
We used four primary  data sources in this report: 
1)  Aggregate  statistical  data maintained  by NMDPon donor center  activities  regarding 
donor recruitment  and donor retention. 
2)	 Aggregate  financial  data from NMDPon payments  made to the donor centers  for the 
fiscal year  running  from May  1, 1994 through  April 30,  1995. 
3)  A mail survey  of the 97 domestic  donor centers.  We received  88 responses,  a 
response  rate of 91 percent. 
4)	 Site visits to donor  centers  in California,  Massachusetts,  Minnesota,  New Jersey, 
North  Carolina,  and South Carolina. 
Appendix  B provides  a more detailed  description  of our methodology. 
We conducted  this study in accordance  with the Quality Standards for  Inspections  issued 
by the Presidents  Council  on Integrity  and Efficiency. 
3
 FINDINGS

FOR THE  YEAR  ENDING  APRIL  30,  1995, NMDPS  PAYMENTS  TO THE  35 CONTRACT 
DONOR  CENTERS  COMPRISED  80 PERCENT  OF PAYMENTS  TO ALL  DONOR  CENTERS. 
.  The 35 contract  centers received  $11.8 million: 
  $6.2 million  (53 percent)  for staff compensation; 
E  $0.7 million  (6 percent)  for direct  supplies; 
  $4.9 million  (42 percent)  for overhead. 
The contract  centers  are the largest centers  in the program,  in terms  of number  of donors, 
requests  for follow-up  activities,  and actual marrow  collection.  The range of total 
payments  to centers  for this  12-month period  was $82,151  to $1,294,451,  with a median 
payment  of $242,797.  All but three  contract  centers  received  larger  payments  than the 
highest paid fee-for-service  centers. 
.  The  62 fee-for-service  centers  received  $2.9 million: 
  $2.7 million  (92 percent)  for staff compensation; 
  $0.2 million  (8 percent)  for direct  supplies. 
The range  of total payments  in the fee-for-service  centers  was $6,644 to $114,375,  with a 
median  of $40,604.  Out of 62 centers,  all but 9 received  lesser amounts man the lowest 
paid contract  centers. 
THE  CONTRACT  CENTERS  ARE  MORE  EXPENSIVE  TO  NMDP  THAN  FEE-FOR-SERVICE 
CENTERS. 
We present  summary  data on different  aspects of payments  to donor centers  in an effort  to 
help assess the overall  cost-efficiency  of donor centers  in the two categories.  Appendix  A 
provides  more  detailed  data on each of these factors.  With one exception  (cost per CT 
request  made),  all the differences  are statistically  significant. 
  Payments  per donor: 
F	 Payments per  donor listed on the registq  on April  30,  1995 averaged 
$12.74  in the contract centers,  versus $8.89  in the fee-jor-service  centers. 
We calculated  total payments  made by NMDPover the course of the year divided  by the 
number  of donors  on each donor centers  list at the close of the year.  This measure 
provides  an indication  of comparable  costs that donor centers  incur in recruiting  donors 
and in maintaining  the current  donor list. 
4
 Payments per  new donor recruited  in the year  ending April  1995 averaged 
F	
$60.28  inthe  contract centers,  versus $35.64  inthefee-for-semice  center. 
This measure  defines payments  for the net number  of new donors  added to each centers 
list during  the year,  thus reflecting  cost of new activity  over that time period. 
.  Payments  per donor retained  at first stage follow-up testing  (DR testing): 
The patients  physicians  at the transplant  center  select potential  donors from the formal 
search report  for fhrther  compatibility  typing.  These requests  are sent to the NMDP 
coordinating  center,  which then notifies the appropriate  donor center  that one of their 
donor  centers  code numbers  has been selected.  The donor center  contacts that donor  for 
first level followup  testing  (DR) to type the donors HLA-DRantigens. 
	 Payments per DR request made in the year  ending March  1995 averaged 
$423 in the contract centers,  versus $323 in the fee-for-service  centers. 
	 Payments per DR request actually  completed averaged  $618 in the contracl 
centers,  versus $426 in the fee-for-service  centers. 
.  Payments  per donor retained  at second stage follow-up testing  (CT  testing): 
If the donors  HLA-DRantigens match the patients,  the patients  physician  may decide that 
the donor represents  a potential  match.  In that case,  the physician,  through  NMDP,will 
ask the donor center  to contact  the donor for second level testing,  called confknatory 
testing  (CT). 
	 Payments per  CT request made in the year  ending March  1995 averaged 
$2,044  in the contract centers versus $1,522  in the fee~or-service  centers. 
The difference  between  contract  and fee-for-service  centers  in payments  made per CT 
request  made was not statistically  significant. 
Payments per  CTrequest actually  completed  averaged  $2,654  in the contract 
F	
centers,  versus $1,871  in the fee-for-service  centers. 
.  One factor leading to higher payments for contract centers is explicit  inclusion 
of administrative  overhead  in the payment rates that these centers receive. 
Overhead  costs in the contract  centers  ranged  from 20 percent  to 51 percent  of total 
payments  made,  with a median  of 42 percent.  In two centers,  payments  for overhead 
exceeded  50 percent  of total payments;  in 4 centers  overhead  payments  exceeded  payments 
for direct  staffing costs. 
These  overhead  payments  averaged: 
5
 .  $5.39 per donor  on their  lists.

  $26.03  foreach  new donor.

.  $180 per DR request.

.  $264 for each DRrequest  filled.

  $850 per CT request.

  $1,153  for each CT request  filled.

Responses  to our survey  indicate tiattie  parent  imti~tions  of fee-for-semice  centers, 
rather  than the NMDP,are paying the substantial  share of overhead  for the fee-for-service 
donor  centers.  84 percent  of the fee-for-service  centers  reported  that they receive 
financial  support for center  staff (such as the center  directors  salary) from their parent 
institution,  versus  37 percent  of the contract  centers. b 
DESPITE  THE  HIGHER  PER  UNIT  PAYMENTS  TO  CONTRACT  CENTERS,  THE  OVERALL 
PERFORMANCE  OF CONTRACT  CENTERS  IS LOWER  THAN  THAT  OF THE  FEE-FOR-
SERVICE  CENTERS  ON THREE  OF FOUR EFFECTIVENESS  MEASURES  WE DEVELOPED. 
We developed  four effectiveness  measures,  two related  to recruitment  and two related  to 
donor  retention. 
Recruitment  Effectiveness  Measures 
  Overall  Recruitment.  Contract centers,  which receive 80 percent  of hMDP 
j?nancial  support,  listed  74 percent  of donors on the registry in April  1995, and  70 
percent  of the increase in donors from  May 1994 through April  1995. 
On April  30,  1995, the domestic  registry  contained  1,234,272  donors,7 up from 964,790 
12 months  earlier.  Contract  centers  listed 908,765  of these donors  (74 percent),  while 
325,507  (26 percent)  were on the lists of fee-for-service  centers. 
Of the 269,482  new donors  added to the list,  188,320 (70 percent)  were recruited  by 
contract  centers,  and 81,162  (30 percent)  by the fee-for-service  centers. 
	 Minority  Recruitment.  Contract centers were more likely than fee-for-service 
centers to have a proportion  of minority donors that equals or exceeds  the 
propotiion  of minorities  living in their service area,  although  both types of centers 
could improve  their pe~ormance  on this measure. 
F	 Thirty-eight  percent  of the 35 contract  centers  have recruited  a higher 
proportion  of blacks than reside in their  service area,  versus 28 percent  of 
the 62 fee-for-service  centers. 
	 Twenty-nine  percent  of the contract  centers  have recruited  a higher 
proportion  of Hispanics  than reside  in their service  area,  versus  12 percent 
of the fee-for-service  centers. 
6
 On April  30,  1995, the domestic  registry  contained  284,658  minority  donors.  Of these 
minority  donors,  213,955  (75 percent)  were in contract  centers,  70,703  (25 percent)  in 
fee-for-service  centers.  Contract  center  lists comprised  77 percent  of black donors,  70 
percent  of Asian/Pacific  Islander  donors,  78 percent  of Hispanic donors,  and 74 percent  of 
American  Indian/Alaska  Native donors. 
One explanation  we heard  for the success of contract  centers  in this area is the flexibility 
their contracts  give them to hire staff and focus on minority  recruitment.  One donor 
center  that had recently  moved to a contract  from fee-for-service  payment  described  this 
as follows:  It is so much easier  to recruit  now.  We are able to attend minority  related 
conventions  because  we have a budget for them.  
Our companion  report,  National  Marrow Donor  Program:  Progress in Minority 
Recruitment  (OEI-01-95-00120),  provides  additional  information  on our assessment  of the 
NMDPsperformance  in increase the representation  of donors from racial  and ethnic 
minority  groups  on the registry. 
Donor Retention  Measures 
The NMDPidentifies  four reasons that an individual may not come forward  for fi.uther 
testing  at either  DR or CT:  unable to contact donor,  donor not interested,  donor  medically 
deferred,  donor  temporarily  unavailable.  Our companion  report,  National  Marrow  Donor 
Program:  Effectiveness  in Retaining  Donors  (OEI-01-95-00121),  provides  an assessment 
of the overall  effectiveness  of the program  in retaining  donors at both the DR and CT 
stages. 
	 Retention  at DR testing.  l%e contract centers retained 68 percent  of donors at DR 
testing,  versus  76 percent  in the fee-for-service  centers. 
Donor  centers  received  36,170  requests  for DR testing  in this l-year  period.  Contract 
centers  received  27,211  (75 percent)  of these requests,  and were able to fill  18,540  (68 
percent  of requests).  These comprised  73 percent  of all DRrequests  filled. 
Fee-for-service  centers  filled 6,786  out of 8,959 requested  (76 percent).  These  comprised 
27 percent  of all DR requests  filled. 
	 Retention  at CT testing.  The contract centers retained  77percent  of donors at CT 
testing,  versus 81 percent  in the fee-for-service  centers. 
Donor  centers  received  7,667  requests  for CT testing  in this l-year  period.  Contract 
centers  received  5,766  (75 percent)  of these requests,  and were able to fill 4,441  (77 
percent  of the requests  that they received.  These requests comprised  74 percent  of all CT 
requests  filled. 
Fee-for-service  centers  filled  1,546 out of 1,901 requested  (81 percent).  The  1,546 
comprised  23 percent  of all CT requests  filled. 
7  RECOMMENDATIONS 
This report  raises  a number  of concerns  about donor center  costs and performance.  Most 
importantly,  we found that centers paid on a contract  basis are more expensive  to the 
program,  primarily  because payments  to these contract  centers  includes additional  funding 
for overhead.  Had this higher expense  also led to higher performance,  it would be 
possible  to justify  the additional  costs.  However,  we found the opposite to be true: 
contract  centers  performance  actually  was lower than that of fee-for-service  centers  based 
on three  of the four performance  measures  we developed. 
We base our recommendations  on the underlying  premise  that payment  levels and methods 
should support those activities  that produce  the desired  results.  In the case of donor 
centers,  we believe  that payment  policies  should support recruitment  and retention,  the 
activities  that deliver  the product  this program  is designed to effectuate--bone  marrow 
donors. 
THE  HEALTH  RESOURCES  AND  SERVICES  ADMINISTWTION  AND  THE  NATIONAL  MARROW 
DONOR  PROGRAM  SHOULD  REEXAMINE  THE  METHOD  USED TO  FINANCE  DONOR 
CENTERS. The goal of this reexamination  should be development  and implementation  of a

financing  approach  containing  incentives that encourage  an efficient  and effective  donor

center  system.  Such a system should emphasize  recruitment  and retention  of donors,  and

it should place particular  emphasis  on donors from racial  and ethnic minority  groups.

We offer two options for consideration.  We encourage  HRSAand NMDPto examine  and

evaluate  other options that would achieve the goals we cite above.

The program  could move to a fee-for-service  payment  schedule for all centers,  with

incentives  built in to reward  centers  with high retention.  Such an approach  could build on

the system currently  in place,  with the important  addition of a mechanism  that encourages

high levels of donor retention.

The program  could consider  a bid system.  Each donor center  would bid for and negotiate

a competitive  price  which it would be paid for recruiting  donors to the registry  and for

producing  donors  in response  to requests  for donation.  Any such approach  would also

contain  performance  standards  that the center  would be required  to achieve.

We recognize  that any such effort will take some time to develop,  and we urge  the NMDP

and HRSA  to commence  its development  immediately.  Therefore,  in addition to revising

the payment  system,  we believe  that the following  short term actions  should be

undertaken:

HRSA  SHOULD  REPLICATE  THE  ANALYSIS  CONDUCTED  IN THIS  REPORT,  OR A SIMILAR 
FINANCIAL  ANALYSIS,  AT  THE  CLOSE  OF EACH  FISCAL  YEAR.  We analyzed  data for the 
first year  of the contract  with HRSA. It should be relatively  easy for HRSAto replicate  this 
analysis using cost,  donor  list, and retention  data from subsequent contract  years to 
8  determine  ifthe  patterns  weidentified  inthis  report  continue.  WeencouragemsAto 
conduct  this analysis  retroactively  for the fiscal year ending April 30,  1996, and in future 
years.  We believe  that monitoring  these costs is one important  way to establish  a baseline 
against which future  changes  can be measured.  Monitoring  also should provide 
information  that will be useful for continuous  quality improvement  purposes. 
HRSA  AND  NMDP  SHOULD  DEVELOP  PROCEDURES  FOR CONDUCTING  A PERFORMANCE 
AUDIT  OF DONOR  CENTERS  AND A PLAN  FOR IMPLEMENTING  PERFORMANCE  AUDITS 
THROUGHOUT  THE  NETWORK.  The plan for conducting  and implementing  these audits 
should be in place  so that the audits,  where necessary,  can be carried  out within the first 
year of the forthcoming  contract.  In the course of our review we found that some centers 
had high costs on all measures  at which we looked.  We believe that the contractor  should 
determine  if these centers  continue  to show these high costs, using a framework  that is 
developed  in consultation  with HRSA. We urge the contractor  to review  these centers 
operations  closely  to determine  whether  the amount of money paid to them is yielding  the 
results  desired,  in terms  of the number  of donors on their list, their retention  rate,  and 
their performance  on minority  recruitment.  To help ensure cost efficiency  and 
effectiveness  within the registry,  we believe  that arrangements  for these audits  should be 
in place  as quickly  as possible  within the new contract  period. 
HRSA  SHOULD  COLLABORATE  WITH  NMDP  TO DEVELOP  EFFICIENCY  MEASURES  AND 
PROCEDURES  FOR  REQUIRING  CENTERS  TO MEET  THESE MEASURES.  THESE  MEASURES 
AND  PROCEDURES  SHOULD  BE KMPLEMENTED WITHIN  THE  FIRST  YEAR  OF THE 
FORTHCOMING  CONTRACT.  We believe  that the contractor  should continue  to focus on 
continually  improving  the operation  of this program.  The contractor  already  has in place 
some performance  indicators  around donor registration  and donor retention.  One option 
that the contractor  might consider  as it seeks efficiency  in the program  is linking ongoing 
funding to the efficiency  and effectiveness  of donor centers.  We believe  that simple 
indicators  of efficiency  and effectiveness,  such as those we used here  or others,  are 
readily  available.  We also believe  that,  if HRSAis to hold the contractor  accountable  for 
performance  and if the contractor  is to hold the donor centers  accountable  for 
performance,  any such measures  must be in place as early  as possible  within the 
forthcoming  contract  period. 
9
 COMMENTS  ON  THE  DRAFT  REPORT 
We sought comments  on the draft report  from the Health  Resources  and Services 
Administration  (HRSA),the Assistant  Secretary  for Plaming  and Evaluation  (ASPE),and 
the Assistant  Secretary  for Health  (ASH). In addition,  HRSAsought comments  on the 
report  from the National  Marrow  Donor Program  (NMDP). They made similar  comments 
about the substance  of our recommendations,  and our response to their comments  reflects 
that similarity. 
HRSA agrees  with the need to reexamine  the financing  method,  but raises a number  of 
points  about the complexity  of such an analysis.  We recognize  that options other than 
those presented  in the draft report  may be appropriate.  We encourage  HRSAand NMDPto 
consider  any other approaches  that may be worthwhile.  Our bottom  line is that the 
financing  system should contain  incentives that encourage  an efficient  and effective  donor 
center  system,  with respect  to recruitment  and retention  of donors,  and with particular 
emphasis  on donors  from racial  and ethnic minority  groups. 
HRSA and NMDPcite a number  of additional  factors that should be considered  in 
developing  a multivariate  analysis model that would provide  additional  information  on 
financing  donor  centers.  In essence,  the agency and the NMDPare saying that the issue is 
more  complicated  than we present.  Clearly,  a multivariate  model would shed further  light 
on factors  that might be considered  in developing  a payment  system.  Toward  that end, 
we are pleased  to learn  that NMDPis now consolidating  multiple  data sets,  which should 
enable  the organization  to better understand  these factors  and their contribution. 
Certainly,  a reexamination  of the financing  system will require  that HRSAand the 
contractor  consider  all important  aspects of the system. 
HRSA and NMDPgenerally  agree with our other recommendations,  although  they suggest 
some revisions  in them.  We adopt the proposed  changes,  but now we recommend  that 
they be implemented  within the first year of the new contract.  We believe  that such a 
time frame  is adequate  to achieve these changes,  and that HRSAand NMDPshould focus on 
reforming  the current  financing  system as quickly  as is feasible. 
HRSA and NMDPraise  a technical  question about the amount paid in FY  1995 to contract 
and fee-for-service  centers.  We revised  Appendix  B (Methodological  Notes) to explain 
how we derived  our figures,  based on data provided  by NMDP. We continue  to believe 
that the figures used in our draft report  are appropriate  for the analysis  we performed. 
ASH and ASPEprovided  no comments  on this report. 
10
 APPENDIX  A 
DETAILED  PAYMENT  and  RETENTION  DATA 
I 
Table  1

!  Payments  per Donor

I I  I I 
II  I  Mean  I  Standard  I Median  I Minimum  Maximum 
Contract  Centers  $12.74  $3.39  I  $12.89  I  $7.73  $21.46 
Fee-for-service  Center  I  $8.89  ~  $4.14  I  $9.06  I  $3.31  $24.81 
II  Contract  Centers  I $60.28  I  $42.62  I  $61.63  I  $15.73  $226.08 
Fee-for-service  Centers  $35.64  $28.65  I  $39.04  I  $17.98  $164.39 
Contractcenters: n = 34(onecontractcenterexcludedfromcalculationsbecauseitwasanextremeoutlier) 
Fee-for-servicecenters: n=62  ***p <  .01 
****p < .001 
Contract  Centers  I  $423  ]  $130  I  $482  I  $251  \  $  783 
I $359I  $101I  !$
Fee-for-service  Center  I  $323  1  $191  1,124 
II  Contract  Centers  I  $618  I  $130  I  $641  I  $412  I  $950 
II  Fee-for-service  Centers  I  $426  I  $191  I  $451  I  $144  I  $1,124 
Contractcenters: n = 34(onecontractcenterexcludedfromcalculationsbecauseitwasanextremeoutlier) 
Fee-for-servicecenters: n=62  ***p <  .01 
****D < .001 
A-1
 Table 3

Payments  for CT Testing

:.::. :......:..,.:,~:..,:,....:::,.,.,!.,:....::.. ....:..:...,..........;....... ...... ,..,......,..,. ,...,.,.,,,, .,,,.,..,,,.. ...,.....,..,.::::, 
Mean  Standard  Median  Minimum  Maximum
.$.....F........#... m..::8.;m.{@,.:. ..,.:P.....,..... .:..&...........:....G;,,..,. .R....:...t:<,i ;:i:.,i.. :::....:.::,,,,:.:, ;,.:,2.;,.:, : 
Deviation 
:mR@@BwM$@$;  ~:~;.  
Contract  Centers  $2,044  $1,484  $2,167  $1,034  $  8,117 
Fee-for-service  Center  $1,522  $2,189  $  $  631  $14,092 
1,579 
Contract  Centers  $2,654  $2,101  $2,697  $1,218  $10,906 
Fee-for-service  Centers  $1,871  $2,392  $1,875  $  728  $14,092 
Contractcenters: n = 35 
Fee-for-servicecenters: n=62  *p <.10 
Table 4

Retention  at DR and CT Testing

RETENTION RATEAT DR  Mean  Standard  Median  Minimum  Maximum 
TESTING **  Deviation 
Contract  Centers  68.4  %  10.9 %  74.6  %  46.9  %  92.8  % 
Fee-for-service  Center  75.7  %  12.4  %  81.9  %  37.8  %  100.0  % 
lZETwTIONRATEATcT 
TESTING*** 
Contract  Centers  77.0  %  7.4  %  79.2  %  59.8  %  90.2  % 
Fee-for-service  Centers  81.3  %  13.7  %  86.5  %  33.3  %  100.0  % 
Contractcenters: n = 35 
Fee-for-servicecenters: n=62  ** p <.05 
***p <  .01 
A-2
 APPENDIX  B 
METHODOLOGICAL  NOTES 
Allocation  of Financial  Costs 
Cost-Based  Contract  Centers 
In addition  to their  negotiated  contract  amounts,  NMDP  reimburses  contract  centers  for 
supplies  for: 
DR sample Collection  $10.00 
Confirmatory  testing  $17.50 
Infectious  Disease tests  $90.00 
Research  Samples  $13.50 
Pre-Transphint  Donor  Sample  $13.50 
Fee-for-Service  Centers 
These centers  are paid as follows: 
  File maintenance  and support 
$25,000  for  1 FTE  for every 20,000  donors;  this is prorated,  and computed 
monthly 
.  Recruitment  Fees (per donor) 
White  $10.00 
Minority  $28.00 
Data Entry  !$ 2.00 
.  Search	 Related  Expenses 
DR Sample Collection  $  38.00 
DNA-DR  contact  $  15.00 
Confirmatory  testing  $  100.00 
Information  Sessions  $  200.00 
Physical  Exam Coordination  $  125.00 
Infectious  Disease Test  $  130.00 
Work-Up  Coordination  $1,500.00 
Work-Up  Cancellation  $  500.00 
To arrive  at a comparable  measure  of staff costs, we equated  costs between  contract 
centers  and fee-for-service  centers  by deducting  the supply costs paid to contract  centers 
B-1
 where  appropriate.  Thus in fee-for-service  centers,  we determined  staff related  costs 
follows: 
DR Sample Collection  $28.00  ($38.00  minus $10.00) 
Confirmatory  testing  $82.50  ($100.00  minus $17.50) 
Infectious  Disease Test  $40.00  ($130.00  minus $90.00) 
Work-up Coordination  $1,473.00  ($1500 minus $27.00 
. 
[$13.5(I for research  samples and 
$13.50  for pre-transplant  donor  samples]) 
We made two adjustments  in the financial data originally  provided  to us by the NMDPafter 
discussions  with staff there.  One center  (Center  A) had been listed as fee-for-service  that 
actually  was paid on a contractual  basis.  We were informed  that the contract  was 
different  from the usual NMDPcontract  with these centers.  However,  we made the 
judgement  to include this center  with the contract  centers  because  it received  payments  for 
the same types of service  categories  as did other contract  centers.  We also excluded  from 
the fee-for-service  category  payments  made to another  center  (Center  B) for scientific 
research  that was not directly  related  to donor center  activities.  We subtracted  from the 
fee-for-service  totals the payments  made to Center  A and the research  payments  made to 
Center  B.  We then added the payments  made to Center  A to the contract  center  group. 
We excluded  the Bill Young Marrow  Donor  Center  from this analysis because  it is part of 
the U.S.  Navy.  This center  has a unique  focus on recruitment  of U.S.  Military  Persomel 
worldwide.  Consequently,  we consider  issues related  to operating  costs to be substantially 
different  from the other centers  in the program. 
We tested  statistical  significance  by measuring  the differences  of the means on cost, 
recruitment,  and retention  variables,  with the following  formula: 
z  =  (p~-/.LJ +  <[(s12+n1-l)+(+sn~2-1)], 
where  PI =  the mean and SI =  the standard  deviation  for contract  centers, 
and p2 =  the mean and S2 =  the standard  deviation  for fee-for-service  centers. 
In calculating  the cost per donor,  per net new donor,  and for DR testing,  we excluded  one 
contract  center,  because  it was an extreme  outlier  and significantly  skewed the means and 
standard  deviations.  This center  had costs of $619.95  per new donor,  $970 per DR 
request  made,  and $1,869  per DR request  filled. 
Mail Survey 
In July  1995 we mailed  a survey to each of the 98 donor centers then in operation.  We 
received  responses  from 88, a 90 percent  response  rate.  Because one of those centers  has 
since merged  with another  center,  we chose to omit the responses  of that center  from our 
analysis.  We also do not include responses  from the Bill Young Center  in these tables. 
In this report,  we draw on the questions  appearing  on the following pages: 
B-2  donor  center:  I  I

11  47 9

(37%)  (84%) 
Physical  plant  (e. g.,  space)  18  48  8

(60%)  (86%) 
Administrative  support  (e.g.,  secretarial,  accounting)  14  16  10

(47%)  (8;%) 
Laboratory  services  (e.g.,  blood typing)  16  22

(47%)  (67%) 
Other  services  @ease  descnbe)  10  17

Source:  OIG/OEI Survey of Marrow Donor Centers, July 1995

Non-responsetothesequestionswascodedas No.  Noresponsetothesequestionswasreceived

from one contract centers and 2 fee for service centers  -

B-3
 Contract  Centers 
Staff
 8  0  12  5  12  I  13  II 
(40%)  (60%)  (25%)  (10%)  (65%)  1 
Physicalplant
 7  1  15  7  3 13 
(30%)  (4%)  (65%)  (30%)  (13%)  (57%) 
Administrativesupport
 7  0  14  4  0 17 
(33%)  (67%)  (19%)  (81%) 
Laboratoryservices
 3  1  17  2  5 14 
(14%)  (5%)  (81%)  (lo%)  (24%)  (67%) 
Other services
 6  0  12  3  2 13 
(33%)  (67%)  (17%)  (11%)  (72%) 
Total  5  0  14  5  2 12 
SUppOfi 
(26%)  (74%)  (26%)  (11%)  (63%) 
Source: OIG/OEI Survey of Marrow Donor Centers, July 1995 
Non-responseto thesequestionsis not includedin frequenciesor percentages. 
Fee-for-Service 
Centers 
Staff
 14  5  30  10  6  33 
(29%)  (10%)  (61%)  (20%)  (12%)  (67%) 
Physicalplant
 6  3  38  4  1  42 
(13%)  (6%)  (81%)  (9%)  (2%)  (89%) 
Administrativesupport
 11  2  35  8  3  38 
(23%)  (4%)  (73%)  (16%)  (6%)  (78%) 
Laboratoryservices
 9  5  27  5  4  32 
(22%)  (12%)  (66%)  (12%)  (lo%)  (78%) 
Other services
 6  1  24  6  1  31 
(19%)  (3%)  (77%)  (16%)  (3%)  (82%) 
Total SUppOrt  13  2  27  12  28 
(31%)  (5%)  (64%)  (27%)  (9!%)  (64%) 
Source: OIG/OEI Survey of Marrow Donor Centers, July 1995  II 
Non-responseto these questions is not included in frequenciesor percentages.  II 
B-4
 APPENDIX  C

TEXT  OF  COMMENTS  ON  THE  DRAFT  REPORT 
Health Resources  and Services Administration  . . . . . . . . . . . . . . . . . . . . . . . C-2 
National Marrow Donor Program.  . . . . . . . . . . . . . . . . . . . . . . . . . . . ..  C-6 
Note:  The Health  Resources  and Services Administration  and the National  Marrow  Donor 
Program  provide  combined  comments  on four draft reports  that examined  the National 
Marrow  Donor  Program.  This appendix  includes only those portions  of their comments 
that are relevant  to the report  entitled  National Marrow  Donor Program:  Fimncing 
Donor  Centers.  
c-1  Health Resources and 
ServicesAdministration
C!CT  ~  3  lg~~ 
Rockviile  MD  20857 
TO:
 Inspector  General, DHHS 
FROM:
 Deputy Administrator

SUBJECT  :
 Office  of  Inspector  General  (OIG)  Draft  Repo-rts, 
tNational  Marrow  Donor  Program  (NMDP) : 
1)  Financing  Donor Centers 0EI-01-95-O0123 
2) Proqress in Minority Recruitment 0EI-01-95-O0120  

3) Geo~raphic Overlapkong  Donor Centers

OEI-01-95-00122

4) Effectiveness in Retaining Donors 0EI-01-95-00121t~  -

Attached  is  HRSAfs  response  to  your memorandum  requesting 
comments  on the four subject draft reports. 
We appreciate  the  OIG  conducting  the  review,  fBone  Marrow  Program 
Inspection.  The  draft  reports  were forwarded to the NMDP for 
comment.  Their comments have been incorporated into our 
response.  HRSA and NMDP will be performing further analysis and 
such as restructuring of donor

examination regarding some issues, 
centers,  implementation  of  performance  indicators,  and 
specification  of  retention  rates,  before  specific  changes are 
made.  HRSA  plans  to  utilize  the  findings  and  recommendations 
contained  im  these  reports  as  an  integral  part  of  the  development 
of  the  contract. 
Questions  may  be  referred  to  D~irdre  Walsrh  on  x35181.   
k  1 
J  hn  D.  Maho  y 
y% 
Attachment 
c-2  Specific Comments on OIG Recommendations

OIG Reuort:  Financinu Donor Centers  OEI-01-95-O0123

OIG  RECOKKENDATION:  We recommend  that the National Marrow Donor 
Program and the Health R@sources and Services Administration 
reexamine the method used to finance donor centers. 
We recommend  two options  for  consideration.  These  approaches 
could alleviate  the problems  identified  in this report. 
First,  the progiam  could move  to  a  fee-for-service  payment 
schedule  for all centers~  with  incentives  built  in to reward 
centers  with high retention.  Such  an approach  could  build  on  the 
system  currently  in  place~  with  the  important  addition  of  a 
mechanism  that  encourages  high  levels  of  donor  retention. 
Second,  the program  could  consider  a bid system.  Each donor 
center would bid  for and negotiate  a competitive  price which  it 
would be paid  for recruiting  donors  to the registry  and for 
producing  donors  i.n  response  to  requests  for  donation.  Any such 
approach  would  also contain  performance  standards  that the center 
would be required  to achieve. 
we recognize  that any such effort will  take  some  time  to  develop, 
and  we  urge the NMDP and HRSA  to commence  its development 
immediately.  Therefore, in addition to revising the payment 
system, we believe that the following  short  term actions  should

be undertaken.

	 Replicate  this analysis  at the close of the fiscal year 
ending April  30, 1996. 
	 Conduct  a performance  audit  of centers  that  show continually 
high costs and low performance. 
	 Require  centers  to meet  efficiency  measures,  such as those 
we used here~  and minimum  effectiveness  standards,  such  as 
retention  rates  or  minority  recruitment  levels. 
HRSA RESPONSE

HRSA  agrees  that  there  is  a  need  to  review  financing  methods, 
reduce  the  number  of  centers,  pay  attention  to  cost  containment, 
and  reduce  overhead  costs.  A  careful  examination  of  costs  for 
contract versus fee-for-service centers needs to take into

consideration the complexity of this topic.  Additional factors,

such as age of centers, size of donor files, proactive versus

reactive recruitment strategies, association with recruitment

groups, and variability in overhead costs among contract centers

need to be taken into consideration in the analysis of fee-for-

service versus cost reimbursement contracts.  Other factors

affecting costs need to be considered in a multivariate analysis

L-5  before concluding that the method of reimbursement is solely

responsible for the differences in costs.

Furthermore,  cost  contracts  may  require  that  resources  be  devoted 
to  the  creati-on  of  standard  operating  procedures  and  more 
elaborate  auditing  practices  for  government  contract  compliance. 
In  addition,  a  number  of  the  fee-for-service  centers  had  a 
covered  by  their  parent  organizations,  a 
portion  of  their  expense 
situation  that  may  not  continue  given  financial challenges facing 
blood centers.  Notwithstanding these concerns, HRSA  recognizes 
that the type of reimbursement has an important impact on costs. 
In addition, an examination of the payment schedules should not

The number of

be limited to recruitment and retention. 
recruiting minority donors,

transplants, properly typing donors, 
and containing costs are

completing search processes promptly, 
also important performance concerns.

HRSA  agrees  that  future  reimbursement  should  be  based  upon 
performance  criteria.  Explicitly  defining  such  cr~terla  for 
donor  centers  will  be  difficult  in  light  of  the  varied  practices 
and  the  variability  inherent  in  recruiting  and  retaining 
volunteer  donors. 
NMDP stated that the dual reimbursement system was implemented at 
the behest of the National Heart, Lung, and Blood Institute. 
Since  it  was  implemented,  discussions  regarding  whether  i.t 
There  was

represents  an  optimal  system  have  been  ongoing. 
concern  that  the  conclusions  reached  about  performance  of

contract  versus  fee-for-service  centers  did  not  take  into  account

many  differences  between  the two types of centers.  A comparison 
of costs for contract centers versus fee-for service centers may

oversimplify a very complex topic and numerous factors need to be

considered in a multivariate analysis before concluding that the

method of  reimbursement  is  responsible for the differences in 
costs.  These factors include the age of the donor file, the 
and whether recruitment is passive 
proportion of  minority donors 
or proactive.

The NMDP staff has recently collected new information about donor

center-specific cost effectiveness by consolidating data obtained

from Continuous Process Improvement indicators and the Search

When complete, this analysis

Tracking and Registry system. 
should  provide additional information to make decisions regarding

financing of donor centers.

HRSA  agrees  that  reexamining the  method  used  to  finance  donor 
centers  and  the  configuration  of  the  network  Jill  take  some  time. 
Since  the  financing  mechanism  is  only  one of the issues (others 
being geographic ov~rlaPr minoritY  recruitment  ~etention~  and 
donor center  Stablllty),  it would be preferable to emphasize the 
c-4  ~. 
re-examination aspect of the recommendation rather than the sole

goal of revising the payment system.

HRSA  agrees  that the analysis conducted by the OIG ought to be 
replicated,  but does not &oncur with the requirement that this 
analysis  be  replicated April 30, 1996. HRSA suggests that the OIG 
conduct  the  analysis at the close of the fiscal year ending April 
30,  1997  or  1998 to allow NMDP sufficient time to implement 
changes. There  is simply insufficient time for any changes to 
have taken place.  HRSA is considering conducting this analysis

at the close of the fiscal year ending  April  30~ 1997 or 1998 to 
allow the contractor sufficient time to implement changes. 
HRSA concurs that a performance audit might be advisable.  HRSA

and the contractor will develop procedures for conducting a

performance audit of donor centers and a plan for implementing

performance audits throughout the network during the next

contract period, beginning May, 1997.  HRSA recommends the

following modification:

HRSA and the contractor should develop procedures for

conducting a performance audit of donor centers and a plan

for implementing perfo~ance  audits throughout the network.

HRSA agrees that reviewing efficiency and effectiveness of donor

centers is important,  but  HRSA,  the  contractor,  and  the  donor 
centers  need  to  reach  ~  Consensus  on  these  measures  and  methods 
to  implement  them.  Therefore,  HRSA  suggests  the  following 
modification: 
We  recommend  that  HRSA  collaborate  with  the  contractor  to 
develop  efficiency  measures  and  procedures  for  requiring 
centers to meet them.

TECHNICAL COMMENTS

NMDP notes that the actual amount paid to contract centers for

work performed during FY 95 was $10.5 millioni not $11.8 million

as stated and that the amount paid to fee-for-service centers was

$2.7 million, not $2.9 million.

c-5  . ,. 
September  4,  1996

Nxtimd  Marrow 
Donor  Prugmm 
NationalCootinatinc Ccnhx 
MSS mmriwiiysme( NE 
Suite 500 
Mjnnqn{is.  ~  5541 ~ 
612-G27-$5M)  Judith Braslow

1.lUX)-52b-7~)  Director,  Division  of Organ Tranmiantation

FAX:61>627.5gW 
Health Resources  and S.emiccs A&ninistraticm

of Park Lawn Building

Board  Dircdom 
Herbert A. Perkinx, M.D., C.huir  5600 Fishers  b.ne  - Room 729

Jondrun R Leong, KCCChair  Rockville,  MD 20857

C]MBPadilli Andrcws 
I?ichmd H A$ter. M.D. 
Lauccncc D. Atlas, J-l). 
i)eaMrs
 .B!adow:

Jnwph C BclL M.D. 
B(JDupon[, AM.D.O, ..k 
Rogcr  W. I?WUWWD. 
Bart S. E%her.J.D.. Ph.D.  Thank you very much for providing  the Natiord  Marrow  Donor

Dovid B. Frohnnmycr. J.IJ.  Program@  (NMDP)  with an opportuni~  to review the draft  reports  of the

J, Cunyrm Gordon. J.D. 
Office of hs~tor  tied  (OIG), Depa~eti  of Heah.h and Human

John A. 1{.tmen.M.D. 
rcdmckJ. Harris. M.S.F.E.  M.B.A.  Services.  The draft reports  were sent to members  of the Minori~  Affairs,

.  bfJry M. Hnrtiu- M.D.. M.S,  Membership  and Prmss  Improvement,  Donor  Recruitment  and Executive

Er-mtR. JiI!K. M.D. 
Committees  as well as the NMDPs Network  Evaluation  Advisory  Panel

Naocy A. Kcmu  M.D. 
Sussn  izitmun.  MD.  and setecti  members  of the staff.

Nicholx+J. Ncuhnusd. J.D.. M.S.M. 
ml- PIIgCM.ll 
ChdG  A. (CAP) Pdier  The comments  received  have been collared and a synthesis  of the

r-
PUWXM M.D.. ~.D.  responses  is presented  below.  The i.utent of the NMDP is not to criticize

LL Gcn. F~k  E. P~cr=  Jr-
Kobl  K. Row  M-D.  the draft repo~,  but rather  to add information  from a variety  of

&jw,wd i? .%xmLM.D.  respondents,  M of whom have been invoivti  with aspects of donor center

Mid  F. Srronc.k  MD. 
operatioannsd /ord onorrecruitmenAts.y
 ouknow theNMDP  iswell

Jdrn S. 77turoPwxt.M-O-
chartcs H. WSIIIISM. .D.  alonginitso wnanalysoifsd onorcentefru nctiontsh,ef idingosf
 which

!ltewmN. WrlIT. Ml).  shoulpdr ovidfeu rthuesre fhrle
 commendations.

Aotrune[k K  YmxY.  M.D., MJ-H. 
@niral & k firnwnk k. 
Followintgh
 eSLly  of comments on each draft qort  we have  . 
CiaQ W  S. Hr)w%M.D.. Ph.D. 
provideodu rown lisotf recommendatiofnosrmodification of the OIG 
Ur&fJ2rculivr  O@cf 
document. 
~mirs F3neritrw 
Rnhcrt C. Owes.  D.V.M. 
Fmcing  DonorCenters

Adnrird E. R. Zumwdt. Jr. 
LauFJ G- Awx~:  You shoulbde awarethatt heactuaalm
 ountpaid to contract
l?tc HnmwnlJlcC. W. %11 Ycurtg  ccntcrs  for work performed  during our f~cal  year,  1995 was $10.5

John A. Hm.c% M.~
(hude fxnfunLMD.  rnillio~  not $11.8 million as stated.  Similarly,  the amount  paid  to

the fee-for-senfice  donor centers during  the same period  was $2.7

A collutxrrutim  effoft  of the  million  not $2.9 milIion.

Amwinut  Red CrOm 
coancil	 of Commonity
BloorCien@fi 
With funding  from 
Hcshh  RIWUKCS and Scwims 
Admimfitition  and 
Navai Medical  March  nnd 
DCWILlpmCeonmtmiMd  since  the impiernetitiSoenvedye~ agoofad~l refibu~~entm-hanism,  at the 
behest  of ~  Natiomi  ~e~,  LUU,  ~  Blood ~tu~,  dis~slo~  ~gtiing  whether 
this  repre$en~s  an optirna~ sys~m  have  - ongoing.  ReSPOIMMto W  OIG  drafi 
report  on  Financing  ~Onor  centers  inclw  concerns  about  f-~s  m  were  not 
included  in tic  amlys~  of f=-for-syvice  VCrSUCSomet  =~r  PC~OrRMU=. Specific 
factors  feit  to be  @o~.  but not  included  are age  of  tie  ce~r,  sue  of  the  donor 
filep,roactive  (felt-to be mom  c~~y)  versu  ~ctive  ~~~ltm~t  stm~gies,  association 
(or  lack  thereof)  with  mcrmtment  groups  and variablhty  m overhead  costs  among  the 
contrac~  centers.  WVeral ~ponde~  ~i~ti  tit  by  tiu@  mi~rity  recruitment 
WaS more  costly  becau  it fmw~tly  invoiv~  a l~gm  ~mwn~t  of c~muni~-baaed 
education  which  did not immedjatily  translate  into vol=n  r~~it~  (but  would 
likely  yield  long-te~  -~itment  ~~fits).  It WaSnod  m  witi  cost contracts  -e 
extra  expenses  in tie  fo~  of r~~s  dcv~~  tO tie  ~~tion  ofs~  opc~@ 
procedures  and more  elaborate  auditing  practices  necessary  for  government  contract 
compliance. 
It was dso  mentioned  on SeWd  OCGISiOnS tbt  a t)~k  Of the  f&-fOr-W~iCe  C&te~ 
had  a portioonf   the:r  expms=  covered  by  their  parenotr ganizationAsn.d whileitwas 
feltthatb   co~~cnt  Wasstablien the*dtite  ~m,  ti=ewasuncertainftoyr

tiefuturoef
 fee-for-seni=  centers  based  upon the financial challenges to blood 
centers. 
III summary,  there was concern  that  the conclusions reached about performance  of 
contract  versus  fee-for-servi=  centers  were based upon  an  apples  and  oranges 
Wlnparison  because  of the many  differences  rx)t taken  into  account  when  comparing  the 
two types  of centers.  There  was agreement  with the draft  report  regarding  the concept 
of future  reimbursement  based  upon  performance  criteria,  although  it was  rccognizd 
that  explicitly  defi~  sufi  CritCria for donor  cerxters would  be d~cult  in light  of the 
varied  practices  and the variability  inherent  in recruiting  and  retaining  volunteer 
donors. 
The  NMDP  staff  has recently  colIected  new information  about  donor  center-specific 
cost  effectiveness  by consofi&ting  data obtained  from  continuous  process  improvement 
indicators  and the Search  Tracking  and Registry  system.  When  complete,  this  analysis 
shouici provide  a more  rafioml  bask  for financial  suppoti  of donor  centers. 
Recommended  Mti!cationstotheDraftReport: 
c  The  nqmrt  shmld  make  clear  that a comparison  of  costs  for  contract  cen~rs 
versus  fee-for-servicz  centers  may  oversirnpiifi  a very  complex topic in that 
numerousotherf actorasf fecticnogs tnse edtobeconsidereind a
  multivariate
analysis before concluding that the methodofreimbursemenktr esponsibfloer
 

thedifferenciencso sts.T hesefactorisn clud(ea mongotherst)h
eageofthe

donorfil(et hee arlireerc ruitetdh,el owertheretentiotnh)e,p roportioofn 

minority  donors  (higher  costs),  and whether  recruitment  is proactive  or  passive. 
c-7  	 If it proves  to be true thht fce:for-service  is more cost effective. this may &lt 
horn  the fact that 
fec-for-servxx  centers  receive  additional  f-id  support 
from  their  parent  organizations-a  situation  urdikdy  to continue  in these  days  of 
cost  constraints. 
we uc hdy 
embark~  upon  c~nIi~ing  tie  effo~  be- wi~  -se  OIG  ~  =po~.  ~ 
own  detaild  Cval=tion  of  COSE to =~jt  don~rs  and rerneve  ~@IY  for  donation  is well  under 
way.  The effecti of geu~phlcoverl~=  be~ e~almtibyourNetwork Evaluation 
Advisory Panei and by several cormnittces.  Minority rcauitment  approaches and donor 
retention  are areas  of high Co=m,  ~ing  ad~s=d  by OIU Minority  M*  Committee,  the 
DonorRecruitnmt  CommitC@%and tie  Matimip  @  Process  Improvement  Committee. 
llese  are ail high  priotiw  it- for 0~  BOWd of Dtirs,  which  will be reviewing  these 
documents  at its  regular  meeting  in several  weeks. 
We  kme  that YOUfi~t.h=ew mme~  helpfill.%
eNMDP thanks you for shariniz  these  &aft 
qom  and lck  forward to a continuing collaboration in improving all aspects of-donor 
center and recruitment  group operations. 
OWC,M. D.,  Ph.D.	 Herbert A. Perkins.  M.D.   
NMDP Board  Chair 
C-8
 APPENDIX  D

ENDNOTES

1. NationaMla rrowDonorProgramT,h
 eLiving  Gijl of Lije.
2. Bone Marrow  Transplants  - A Book of Basics for  Patients  (reprinted  by NYSERnet, 
Inc.  with permission  from BMT newsletter),  chapter  4, pp. 35-36. 
3.42  U.S.C. $274k(b)(l)-(7) 
4.	 In addition  to their  negotiated  contract  amounts,  NMDPreimburses  contract  centers  for 
supplies  for: 
DR sample Collection  $10.00 
Confirmatory  Typing  $17.50 
Infectious  Disease  tests  $90.00 
Research  Samples  $13.50 
Pre-Transplant  Donor  Sample  $13.50. 
5.	 The NMDPreimburses  fee-for-service  centers  for search related  expenses  as follows: 
DR Sample Collection  $  38.00 
DNA-DR  contact  $  15.00 
Confirmatory  Typing  $  100.00 
Information  Sessions  $  200.00 
Physical  Exam Coordimtion  $  125.00 
Infectious  Disease Test  $  130.00 
Work-Up  Coordination  $1,500.00 
Work-Up  Cancellation  $  500.00. 
6.  Eighty-six  percent  of fee-for-service  centers reported  that their parent  institution 
provides  financial  support  for space (vs. 60 percent  of contract  centers);  82 percent  for 
administrative  support vs. 47 percent),  and 61 percent  for laboratory  services  (VS.47 
percent). 
7.  Excluding  the U.S.  Navys Bill Young Marrow  Donor Center. 
D-1