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 OIG’SOffice of Evaluation and Inspections(OEI) conductsshort-term management and


program evaluations(called inspections)that focus on issues of concern to the Department, the


Congress, and the public. The inspectionreports provide findings and recommendationson the


efficiency, vulnerability, and effectivenessof departmentalprograms.


OEI’SBoston Regional Office prepared this report under the direction of Mark R. Yessian, Ph.D.,


Regional Inspector General. Principal OEI staff included:


Boston Region Headquarters


Russell W. Hereford, Ph.D., Project Leader Alan Levine, Program Specialist


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 

4’ 

+ “$ 

$ JUNE GIBBS BROWN .

~ 

s Inspector General 

% 

%++ 

# 

%d~~ DECEMBER 1996 

>

# 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-forservice basis for file maintemnce, donor recruitment, and donor search activities; fee-forservice 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, NMDP’Spayments 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 

I 

423 I 

323 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 

OVERALL RECRUITMENT: percentof donorson registry 

percentof newdonorsrecruited 

MINORITY RECRUITMENT:


(percentof centersthat exceed Blacks


local~ouulationdistribution) Hispanics


DONOR RETENTION RATE: first levelfollowup 

confirmatorytesting 

RECOMMENDATIONS 

80 % 20 % 

74 26 

70 30 

38 28 

29 12 

68 76 

77 81 

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 patient’s diseased bone marrow is destroyed and


marrow from a healthy donor is infused into the patient’s blood stream. Bone marrow


produces platelets, red blood cells, and white blood cells, the agents of the body’s immune


system. For a bone marrow transplant to be successful, the patient’s and donor’s 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 individual’s 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 NMDP’S3-year contract with HRSAis $40,471,000. This funding covers only 

a portion of the NMDP’Soperations, 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 costbased 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. Twentytwo 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 center’s 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. Navy’s 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 President’s Council on Integrity and Efficiency. 

3

FINDINGS


FOR THE YEAR ENDING APRIL 30, 1995, NMDP’S 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 center’s 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

F	 Payments per new donor recruited in the year ending April 1995 averaged 

$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 center’s 

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 patient’s 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 center’s code numbers has been selected. The donor center contacts that donor for 

first level followup testing (DR) to type the donor’s 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 donor’s HLA-DRantigens match the patient’s, the patient’s 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. 

F	 Payments per CTrequest actually completed averaged $2,654 in the contract 

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 director’s 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-FORSERVICE 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 

NMDP’sperformance 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 KMPLEMENT’ED 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

DETAILED 

I 

! 

II 

APPENDIX A 

PAYMENT and RETENTION DATA 

Table 1


Payments per Donor
 I I I I 

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 (onecontractcenterexcludedfromcalculationsbecauseit was an extremeoutlier) 

Fee-for-servicecenters: n=62 ***p < .01 

 p < .001 

Contract Centers I $423 ] $130 I $482 I $251 \ $ 783 

Fee-for-service Center I $323 1 $191 I $359I $101I !$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 (one contractcenterexcludedfromcalculationsbecauseit was an extremeoutlier) 

Fee-for-servicecenters: n=62 ** *p < .01 

****D < .001 

A-1

,.:,, .... ........... ,,. ,,,, ,,,., .,, ....... .... ...... .......

............. ...,.......... .... ,;

Table 3


Payments for CT Testing


:::.:,::.:.:,.:. .!.:::.; . .., . ., .,.,., .:. ...,~.,..:.,.:......... .....,, ,., ...,.::::, 

$F#m8m@P&GRtiii::.:.::,,,: 2:: Mean Standard Median Minimum Maximum . .:.:.;.{,:.:.:.:.;,,.:.: . ,. ...,. ....<... :, :...:,:.,;.,:,.;.,, 

: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 

~~ Deviation 

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 

Confirmatory testing 

Infectious Disease tests 

Research Samples 

Pre-Transphint Donor Sample 

Fee-for-Service Centers 

These centers are paid as follows: 

� File maintenance and support 

$10.00 

$17.50 

$90.00 

$13.50 

$13.50 

$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 

follows: 

DR Sample Collection 

Confirmatory testing 

Infectious Disease Test 

Work-up. Coordination 

centers, we determined staff related costs 

$28.00 ($38.00 minus $10.00) 

$82.50 ($100.00 minus $17.50) 

$40.00 ($130.00 minus $90.00) 

$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)+(s~ +n2-1)], 

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 descn”be) 10 17


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


Non-responseto these questionswas coded as “No.” No response to these questionswas received


from one contract centers and 2 fee for service centers -


B-3

Contract Centers 

Staff


Physical plant


Administrativesupport


Laboratoryservices


Other services


Total SUppOfi 

8 0 12 

(40%) (60%) 

7 1 15 

(30%) (4%) (65%) 

7 0 14 

(33%) (67%) 

3 1 17 

(14%) (5%) (81%) 

6 0 12 

(33%) (67%) 

5 0 14 

(26%) (74%) 

5 12 I 13 II 

(25%) (10%) (65%) 1 

7 3 13 

(30%) (13%) (57%) 

4 0 17 

(19%) (81%) 

2 5 14 

(lo%) (24%) (67%) 

3 2 13 

(17%) (11%) (72%) 

5 2 12 

(26%) (11%) (63%) 

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

Non-responseto these questionsis not includedin frequenciesor percentages. 

Fee-for-Service 

Centers 

Staff


Physical plant


Administrativesupport


Laboratory services


Other services


Total SUppOrt 

14 5 30 10 6 33 

(29%) (10%) (61%) (20%) (12%) (67%) 

6 3 38 4 1 42 

(13%) (6%) (81%) (9%) (2%) (89%) 

11 2 35 8 3 38 

(23%) (4%) (73%) (16%) (6%) (78%) 

9 5 27 5 4 32 

(22%) (12%) (66%) (12%) (lo%) (78%) 

6 1 24 6 1 31 

(19%) (3%) (77%) (16%) (3%) (82%) 

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 

TO:


FROM:


SUBJECT :


ServicesAdministration C!CT ~ 3 lg~~ Rockviile MD 20857 

Inspector General, DHHS 

Deputy Administrator


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 Overl’apkong Donor Centers


OEI-01-95-00122


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


specification of 

made. HRSA plans 

contained im these 

of the contract. 

Questions may be 

Attachment 

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 

examination regarding some issues, such as restructuring of donor


centers, implementation of performance indicators, and 

before specific changes retention rates, are 

to utilize the findings and recommendations 

reports as an integral part of the development 

referred to D~irdre Walsrh on x35181. ‘ 

k 1“ 

J hn D. Maho y 

y% 

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 

portion of their expense covered by their parent organizations, a 

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


be limited to recruitment and retention. The number of


transplants, properly typing donors, recruiting minority donors,


completing search processes promptly, and containing costs are


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 

represents an optimal system have been ongoing. There was


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 

proportion of minority donors and whether recruitment is passive 

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


Tracking and Registry system. When complete, this analysis


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 
. ,. 

Nxtimd Marrow 

Donor Prugmm 

NationalCootinatinc Ccnhx 

MSS mmriwiiysme( NE 

Suite 500 

Mjnnqn{is. ~ 5541 ~ 

612-G27-$5M) 

1.lUX)-52b-7~) 

FAX: 61>627.5gW 

Board ofDircdom 

Herbert A. Perkinx, M.D., C.huir 

Jondrun R Leong, KCCChair 

C]MBPadilli Andrcws 

I?ichmd H A$ter. M.D. 

Lauccncc D. Atlas, J-l). 

Jnwph ‘C BclL M.D. 

B(JDupon[, AM.D.,O..k 

Rogcr W. I?WUWWD. 

Bart S. E%her.J.D.. Ph.D. 

Dovid B. Frohnnmycr. J.IJ. 

J, Cunyrm Gordon. J.D. 

John A. 1{.tmen.M.D. 

‘rcdmckJ. Harris. M.S.F.E. M.B.A. 

. bfJry M. Hnrtiu- M.D.. M.S, 

Er-mtR. JiI!K. M.D. 

Naocy A. Kcmu M.D. 

Sussn izitmun. MD. 

Nicholx+J. Ncuhnusd. J.D.. M.S.M. 

ml- PIIgC.Mll 

ChdG A. (CAP) Pdier 

r- PUWXM M.D.. ~.D. 

LL Gcn. F~k E. P~cr= JrKobl K. Row M-D. 

&jw,wd i? .%xmLM.D. 

Mid F. Srronc.k MD. 

Jdrn S. 77turoPwxt.M-Ochartcs H. WSIIIIS.M.D. 

!ltewmN. WrlIT. Ml). 

Aotrune[k K YmxY. M.D., MJ’-H. 

@niral & k firnwnk k. 

CiaQ W S. Hr)w%M.D.. Ph.D. 

Ur&fJ2rculivr O@cf 

~mirs F3neritrw 

Rnhcrt C. Owes. D.V.M. 

Adnrird E. R. Zumwdt. Jr. 

LauFJ G- Awx~: 

l?tc HnmwnlJlcC. W. %11” Ycurtg 

John A. Hm.c% M.~­

(hude fxnfunLMD. 

A collutxrrutim effoft of the 

Amwinut Red CrOm 

coancil	 of Commonity

BlooriCen@fi 

With funding from 

Hcshh RIWUKCS and Scwims 

Admimfitition and 

Navai Medical March nnd 

DCWILlpment CommiMd 

September 4, 1996


Judith Braslow


Director, Division of Organ Tranmiantation


Health Resources and S.emiccs A&ninistraticm


Park Lawn Building


5600 Fishers b.ne - Room 729


Rockville, MD 20857


i)ear
Ms. B!’adow:


Thank you very much for providing the Natiord Marrow Donor


Program@ (NMDP) with an opportuni~ to review the draft reports of the


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


Services. The draft reports were sent to members of the Minori~ Affairs,


Membership and Prmss Improvement, Donor Recruitment and Executive


Committees as well as the NMDP’s Network Evaluation Advisory Panel


and setecti members of the staff.


The comments received have been collared and a synthesis of the


responses is presented below. The i.utent of the NMDP is not to criticize


the draft repo~, but rather to add information from a variety of


respondents, M of whom have been invoivti with aspects of donor center


operations and/or donorrecruitment.
 As youknow theNMDP iswell


alonginits ownanalysis ofdonorcenter functions, the fidings
ofwhich


should provide further usefhl
 recommendations.


Following
 theSLly of comments on each draft qort we have . 

provided ourown list ofrecommendations formodification of the OIG 

document. 

Fmcing DonorCenters


You should beawarethat theactual
 amountpaid to contract

ccntcrs for work performed during our f~cal year, 1995 was $10.5


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


million not $2.9 milIion.

since the impiernetition Seved ye~ 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 VCrSUSComet =~r PC~OrRMU=. Specific 

factors feit to be @o~. but not included are age of tie ce~r, sue of the donor 

file,proactive (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 portion of the:r expms= covered by their parent organizations. And whileitwas 

feltthat b co~~cnt Wasstable inthe*dtite ~m, ti=ewasuncertainty
 for

tiefuture
 offee-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 

numerousother factors affecting costs needtobeconsidered
 in a multivariate

analysis before concluding that the methodofreimbursement k responsible
 for


thedifferences incosts. Thesefactors include (amongothers)
 theageofthe


donorfile (the earlier recruited, thelowertheretention), theproportion
f 

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 < 

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=e wmme~ helpfil.
 l%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. National MarrowDonorProgram,
TheLiving 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. Navy’s Bill Young Marrow Donor Center. 

D-1