10 STATES TMENT OF MERCE

ICATION NBS TECHNICAL NOTE 777

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Cost Analysis of

Blood Banking Alternatives

U.S.

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NATIONAL BUREAU OF STANDARDS

The National Bureau of Standards 1 was established by an act of Congress March 3, 1901. The Bureau's overall goal is to strengthen and advance the Nation's science and technology

and facilitate their effective application for public benefit. To this end, the Bureau conducts

research and provides: (1) a basis for the Nation's physical measurement system, (2) scientific and technological services for industry and government, (3) a technical basis for equity in trade, and (4) technical services to promote public safety. The Bureau consists of the Institute for Basic Standards, the Institute for Materials Research, the Institute for Applied Technology,

the Institute for Computer Sciences and Technology, and the Office for Information Programs.

THE INSTITUTE FOR BASIC STANDARDS provides the central basis within the United

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Sciences " — Applied Radiation 2 — Quantum Electronics 3 — Electromagnetics 3 — Time

and Frequency 3 — Laboratory Astrophysics 3 — Cryogenics 3

. THE INSTITUTE FOR MATERIALS RESEARCH conducts materials research leading to improved methods of measurement, standards, and data on the properties of well-characterized

materials needed by industry, commerce, educational institutions, and Government; provides

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distributes standard reference materials. The Institute consists of the Office of Standard

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Radiation — Physical Chemistry.

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the use of available technology and to facilitate technological innovation in industry and Government; cooperates with public and private organizations leading to the development of

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Environment * — Technical Evaluation and Application 4 — Fire Technology.

THE INSTITUTE FOR COMPUTER SCIENCES AND TECHNOLOGY conducts research and provides technical services designed to aid Government agencies in improving cost effec- tiveness in the conduct of their programs through the selection, acquisition, and effective

utilization of automatic data processing equipment; and serves as the principal focus within

the executive branch for the development of Federal standards for automatic data processing

equipment, techniques, and computer languages. The Center consists of the following offices and divisions: Information Processing Standards — Computer Information — Computer Services —

Systems Development — Information Processing Technology.

THE OFFICE FOR INFORMATION PROGRAMS promotes optimum dissemination and

accessibility of scientific information generated within NBS and other agencies of the Federal Government; promotes the development of the National Standard Reference Data System and

a system of information analysis centers dealing with the broader aspects of the National Measurement System; provides appropriate services to ensure that the NBS staff has optimum

accessibility to the scientific information of the world. The Office consists of the following

organizational units: Office of Standard Reference Data — Office of Technical Information and Publications —

Library — Office of International Relations.

1 Headquarters and Laboratories at Gaithersburg, Maryland, unless otherwise noted; mailing address Washington, DC. 20234.

1 Part of the Center for Radiation Research.

3 Located at Boulder, Colorado 80302.

* Part of the Center for Building Technology.
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Cost Analysis of

Blood Banking Alternatives

T. Miller, M. King, J. Flannagan,

E. Nilsson, and B. Lemieux

Technical Analysis Division

Institute for Applied Technology

National Bureau of Standards

Washington, D.C. 20234

Sponsored by

Office of the Assistant Secretary for Planning and Evaluation, Department

of Health, Education, and Welfare

HEW North Building, Washington, D.C.

20201

,< °' co.

U.S. DEPARTMENT OF COMMERCE, Frederick B. Dent, Secretary

NATIONAL BUREAU OF STANDARDS, Richard W. Roberts, Director

Issued September 1973
National Bureau of Standards Technical Note 777

Nat. Bur. Stand. (U.S.), Tech. Note 777, 121 pages (Sept. 1973) CODEN: NBTNAE

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 (Order by SD Catalog No. C13.46:777). Price $1.35
Executive Summary

The purpose of this analysis has been to establish base line data

on the national blood banking system and to project the cost impact and

health risk associated with changes to the current system of blood banking

through adoption of alternative legislative, technological, and operational policies. Reliable data on nonmilitary blood use and the ancillary

problem of post -transfusion reaction due to poor quality blood are not

readily available. Thus, a major portion of the study has been directed

to the compilation and, where needed, estimation of operational and cost

data.

In 1971, an estimated 7.3 million units of blood were collected by

nonprofit and for-profit organizations. Of these about 6.2 million units

were actually used for whole blood transfusions for about 2 million

Americans. Approximately 3,000 of those transfused died of complications

directly attributable to blood- induced reactions; and a substantially

larger number remained in hospitals or underwent an extended convalescence, primarily due to hepatitis reaction. Hepatitis risk is several

times higher when blood is obtained from a paid donor.

Currently, there are only about 62 million eligible donors, of whom

81 gave one or more units of blood last year. While this resource is

capable of providing all blood needed now and even the estimated 7.7

million units projected to be required in 1976, unpaid volunteer donors

presently account for only 75% of whole blood collected. There is a 20%

annual turnover rate in the volunteer donor population; adverse reactions

experienced during the donation process are a major cause of the high

turnover rate. These factors point to the need for stronger donor re- cruitment and retention programs and for improvements in "blood letting"

techniques

.

The physician, not the blood recipient, controls the demand for

blood. Many medical schools do not give sufficient instruction in

proper blood utilization practices, and as a result, many physicians are using blood improperly. Frequently whole blood is transfused when

packed red cells would be medically superior. This is a major cause of

shortages in blood components and derivatives. Also many single unit

transfusions are given needlessly. Improved physician training and

education appear to be in order; peer review of transfusion practices is a possible first step in achieving improved blood use. A second factor hindering more efficient blood utilization is the

lack of cooperative and structured procedures for distribution and control

of blood among collectors and users. Regional coordination of banking

facilities is frequently lacking. As a consequence, outdating, shortages,

and stockpiling occur more frequently than is necessary and greater

reliance is placed on the paid donor.

There is risk associated with any transfusion and while most are unaffected, the few that contract hepatitis or cytomegalovirus or sustain

an allergic reaction will pay a heavy price physically and economically.

iii
Hospitalization, disability or death resulting from blood-related adverse

reactions represent a major component of cost to the public. If the

risk is to be reduced, efficiencies must be realized which will serve either to eliminate the paid donor from the system or to satisfactorily

screen out all hepatitis carriers. A more effective Hepatitis Associated

Antigen test is needed and alternative procedures described in the report

require consideration if the Nation is to move to an all volunteer blood

banking system.

Presently three Federal agencies, four national organizations, and

at least eight states impose regulations on the blood industry. The

nature of the regulatory controls, their degree of coverage and their

manner of enforcement differ widely. There are deficiencies in Federal

standards development, and administration; however, the principal "gaps

lie in the lack of (1) full coverage of the industry and (2) uniformity

among licensing agencies.

The report includes a cost analysis of the current blood banking

system and nine alternative system structures, namely:

(1) Tax Incentive - Adoption of a policy which provides a $25 tax

deduction to blood donors (proposed legislation)

(2) Regional Coordination - Organization of the banking system on a regional basis with establishment of blood inventory control

system.

(3) Regional Coordination (28 day life) - Like (2) above with the

added assumption that use of CPD as a blood preservative (in

lieu of ACD) will permit extension of blood "shelf life" to

28 -days.

(4) "Milwaukee" Donor and Coordination Programs - A regionally

operated banking system augmented by establishment of blood

inventory control, donor registry and call-up procedures, and

limited donor education programs.

(5) Transfusion Review Board - Adoption of peer review of blood

utilization procedures to regulate and reduce improper blood use

practices

(6) Frozen Blood - Conversion of the existing banking program to a regionally controlled program involving transfusion of almost all

red blood cells only if they have been frozen during processing.

(7) Legislative Elimination of Paid Donors - Elimination of all whole

blood paid donors through Federal and State legislative means

(8) "Milwaukee" Plus 28-Day Life - A combination of alternatives (3)

and (4) above.

(9) "Milwaukee" Plus Transfusion Review - A combination of alternatives (4) and (5) above.

The analysis of costs indicates that alternatives 5, 8, and 9 are particularly advantageous

Figure 1 shows the range of values over which these alternatives are preferred as a function of the cost associated with death and the level

of HAA test effectiveness. This figure shows, for example, that at the

iv
350

i

1 1 r 2 4 6 8

HEPATITIS TEST EFFECTIVENESS

FIGURE I

i.o
current 30% HAA test effectiveness, a decision maker would conclude that

frozen blood is preferred if he feels that the cost associated with death

exceeds $65,000. If he chooses a cost associated with death between

$50,000 and $65,000, he would conclude that the Milwaukee program with

transfusion review is preferred at this test effectiveness level. If he

feels that a cost of less than $50,000 is associated with death, then the

Milwaukee program with 28 -day life would be preferred at this level.

Analysis of uncertainty in the cost estimates reveals that it would

probably be unwise to use unit cost as a criterion of choice between the

Milwaukee alternatives. A choice might be based on the fact that "Transfusion Review" should improve blood utilization, thus reducing the

average cost of health care to the patient. The regional frozen blood

program results in a minimum of transfusion related disease and death,

but at a higher cost per unit for preparation and storage.

The findings of the study suggest the feasibility of an effective

department approach involving minimum Federal control, but with Federal

support of developmental efforts which will lead to adoption of an effective blood banking system. At the moment, a frozen blood system or

a regional donor registry and call-up system administered by presently

organized or chartered organizations such as the ANRC and AABB or a combination seem to be the principal candidate systems. Regional groups

would develop and operate a comprehensive information system to foster

the use of on-call volunteer donors and to reduce blood wastage associated

with overcollection, maldistribution and outdating. Complementary actions

in which DREW has a greater or lesser involvement include donor recruitment and retention programs; development of improved standards for

collection, processing, and storage; and professional education programs.

Specific findings of the study are:

1. The standards promulgated and enforced by the Division of

Biological Standards should be strengthened and broadened to

achieve a scope and comprehensiveness consistent with the

standards of the American Association of Blood Banks.

2. The DHEW can assume responsibility for development and/or adaptation of a model state standard which serves to regulate

the operations of blood handlers not engaged in interstate

commerce and not licensed/accredited by the AABB or ANRC.

Joint participation of a DHEW agency and state agencies should

be considered as a feasible approach to standards development

Adaptation of the model standard by all states lacking equivalent

legislation might be fostered and promoted by appropriately

revising or strengthening DHEW policies vis-a-vis Medicaid

reimbursement, categorical fund distribution, etc.

3. Methods of streamlining DBS procedures should be examined and

means considered to promote research necessary to establish the

safety and stability of blood derivatives and blood products.

4. Economic loss and health risk to a patient from post-transfusion

hepatitis argues for continuation of the strong National Heart

VI
and Lung Institute-sponsored research efforts on improved HAA

testing. * 5. Research on the approved use of CPD as a "28-day" blood additive

and of blood derivatives from CPD-stored blood should be initiated

in FY 73.

6. Veer/utilization review might be desirable as a means to establish

and maintain higher standards of blood utilization.

7

Consideration should be given to JCAH-HEW cooperative efforts

which would result in an added request for hospital review of

transfusion as a requirement for JCAE-Medicare certification.

8. There is evidence that the use of tax incentives3 monetary payment and other economic rewards to obtain blood may be counterproductive and should not be furthered without careful study of

the likely effects.

9. A regional computerized donor registry and call-up system3 supplemented with donor recruitment through advertising and other

means3 offers a way to increase blood supplies from unpaid volunteers. Central development and distribution of quality media

advertising will be more efficient than many independent local

efforts. Improved donor retention is crucial.

10. Elimination of the paid donor from the system concurrent with

(9) is desirable from a cost standpoint in the absence of a highly effective HAA test or if the frozen blood concept is not

adopted for nationwide use.

11. The physiological and psychological effects of blood donation and

alternative procedures for collection of blood should be further

analyzed and evaluated.

12. A regional system is preferred from a cost standpoint. Successful

programs in a number of cities indicate that adequate administration

can be exercised by organizations that have current responsibility

for blood collection. An important feature that should be included

in the regional control system is a donor registry and call-up

system.

13. Carefully developed decision rules for inventory control^ priority

of blood use3 collection quotas3 etc 3 are also important features

of an efficient system. These rules should replace the arbitrary

and sometimes erroneous procedures currently in use.

14. Reduction in post-transfusion complications is a dominant consideration in seeking blood banking system improvement. A nationwide

frozen blood system would provide the most equitable distribution

of costs and the greatest reduction in patient risk, but would not

require elimination of the paid donor. If frozen blood is judged

to be too costly3 the poorly screened paid donor should be eliminated through legislation, regulation3 economic boycott or other

means but only in conjunction with establishment of a regionallycontrolled donor registry, call-up recruitment system and either

transfusion review or 28 -day CRD certification programs.

*This conclusion is warranted until such time as a nationwide frozen blood

program is adopted and implemented.

Vll
15. Transition to a frozen blood system must be accompanied by^

recruitment or retraining of technicians to staff the facilities,

vui
Contents

Page

Executive Summary iii

1

.

Introduction 1

2

.

Background 2

2.1. Problems 2

2.2. Policy Issues 3

2.3. Proposed Legislation 4

2.4. Need for Analysis 4

3. The Existing System 5

3.1. Collection 5

3.1.1. Some Statistics 5

3.1.2. Donor Population: Attitudes and Motivation. ....

.

8

3.2. Processing 15

3.3. Storage 16

3.4. Distribution 17

3.5. Utilization 21

3.6. Post-Transfusion Reaction 25

3.7. Frozen Blood 26

4. Description of the Cost Analysis 28

4.1. Need for Cost Analysis 28

4.2. Costing Methodology 28

4.3. The Direct Costs and Charges 29

4.4. The Indirect Costs 30

4.5. Summary of the Cost Factors 33

IX
Contents (continued)

Page

5. Analysis of Alternatives 34

5.1. The Current System 36

5.2. Tax Incentive 37

5.3. Regional Coordination 40

5.4. Regional Control and 28-Day Blood Life - 41

5.5. Milwaukee Donor and Coordination Programs 42

5.6. Transfusion Review Board 43

5.7. Frozen Packed Red Blood Cells 44

5.8. Outlawing of the Paid Donor 46

5.9. Combinations of Alternatives 47

5.10. Comparison of Costs 49

5.11. Sensitivity Analysis 54

6. Capital Cost for a Frozen Blood Program 60

6.1. Introduction 60

6.2. Alternatives 60

6.3. Equipment Costs 62

6.4. Federally Subsidized—Locations Chosen by Federal

Government 62

6.5. Federally Subsidized—No Federal Location Preference.... 64

6.6. Long-Term Low- Interest or Interest-Free Federal Loans... 65

7. Standards and Regulations—An Overview 66

7.1. Introduction 66

7.2. DBS • 66

7.3. AABB and ANRC 67

7.4. Other Standards and Regulatory Bodies 71

X
Contents (continued)

Page

7.5. State Regulation . 72

7.6. Problems and Deficiencies 72

8. Policy Alternatives and Suggested Courses of Action 75

8.1. Standards , Regulations , and Surveillance 76

8.2. Research 76

8.3. Professional Education 77

8.4. Donor Recruitment and Retention 78

8.5. Regional Coordination 80

8.6. Blood Storage Methods. 80

8.7. Financing and Cost 82

Postscript 83

Appendix A. Derivation of Statistics on Blood Supply and Demand. .

.

84

Appendix B. Analysis on Eligible Donors 92

Appendix C. Derivation of Equation Relating Percentage of Paid

Donors to Outdate Rates 96

Appendix D. Sensitivity Analysis Derivation. 97

XI

Cost Analysis of Blood Banking Alternatives

Ted Miller

Marge King

John Flannagan

Ernst Nilsson

Bob Lemieux

This report provides a description of the current blood

banking system and of the collection and derivation of quantitative information concerning system operation and blood cost.

A reasonably accurate but somewhat incomplete profile of

practices, attitudes, and likely costs of present and alternative systems has been developed. Among the topics presented

are: (1) a discussion of the blood collection process including

statistics on present use and future needs ; (2) information

relating to donor motivation, attitudes and incentives; (3) a brief summary of demonstration programs in the U.S. and national

blood programs in other countries which provides some insight

concerning means for improving blood quality and availability;

(4) a description of blood processing, storage and distribution

procedures; (5) narrative and statistical information relating

to blood utilization practices; (6) discussions of posttransfusion reactions and frozen blood programs; (7) a discussion of current governmental and professional standards,

regulations and controls which influence many, but not all,

concerns involved in blood collection and processing.

This information serves as the basis for the selection

of alternatives analyzed in a cost effectiveness analysis

of eight apparently viable alternatives to the current system.

Because of the possible variation which might be ascribed to

many of the parameters used as a basis for costing alternatives,

the sensitivity analysis is crucial in the comparison of

alternatives.

Key words: Blood banks; blood utilization statistics; cost benefit

analysis; donor profiles; peer review; regulatory activities;

sensitivity analysis.

1 . Introduction

The present report documents the results of three months of analysis

of the national blood banking system and specifically addresses alternatives or actions which should be considered as a means for improving

the current banking system.

The fundamental contribution of this report is the description of

the current banking system and the collection and derivation of quantitative information concerning system operation and blood cost. As a result of extensive literature search and discussions with medical

practitioners, researchers, knowledgeable blood banking officials, blood

1
donors , etc . , a reasonably accurate but somewhat incomplete profile of

practices, attitudes, and likely costs of present and alternative systems

has been developed.

Chapter 2 of this report presents an overview of the perceived and

real problems attributed to the current banking system and briefly describes

several legislative proposals which influenced the thrust of some of the

cost analyses reported in later chapters of the report.

Chapter 3 describes the current system in some detail. Among the

topics presented are: (1) a discussion of the blood collection process,

including statistics on present use and future needs; (2) information

relating to donor motivation, attitudes and incentives; (3) a brief

summary of demonstration programs in the U.S. and of national blood

programs in Canada and overseas, which provides some insight concerning

means for improving blood quality and availability; (4) a description of

blood processing, storage and distribution procedures; (5) narrative and

statistical information relating to blood utilization practices; and

(6) subsections on post -transfusion reactions and frozen blood programs.

This information serves as the basis for the selection of alternatives

analyzed in a cost- effectiveness analysis.

Chapters 4 and 5 describe the methodology for and results of a cost

analysis of eight alternatives regarded to be viable alternatives to the

current system. Of particular importance are the results of a sensitivity

analysis summarized in Chapter 5.11 and described in detail in Appendix B.

This analysis was deemed to be necessary because of uncertainty about the

numerical values which might be ascribed to many of the parameters used

as a basis for costing alternatives.

Chapter 7 summarizes current governmental and professional standards,

regulations and controls which influence many, but not all, concerns

involved in blood collection and processing. Gaps in existing regulatory

and control functions are also discussed.

Chapter 8 summarizes the results of the analysis and presents findings

pertaining to (1) standards, (2) research, (3) professional education,

(4) donor recruitment and retention, (5) system operation, (6) storage

methods, and (7) financing and cost.

2 . Background

2.1. Problems

The United States blood banking program has been severely and justly

criticized on several grounds. Foremost among the criticisms are:

1. A lack of integration and communication between the various

agencies involved in the procurement, processing, distribution ,
and utilization of blood . Symptomatic of this problem are:

(a) unnecessary duplication of effort;

(b) high cost associated with collection and processing;

(c) waste due to stockpiling, poor management practices, and

other causes.

2. A significant health risk associated with the transfusion process.

While hepatitis is recognized as a principal problem, other

infectious diseases (e.g., malaria, mononucleosis, cytomegalovirus) can be transmitted through transfusion.

3. A lack of uniform standards for blood collected and processed;

only 15-20% of the blood collected is subject to Federal

regulatory control as a product in interstate commerce and few

states (less than a dozen) have any laws directed to blood

quality or standards. Up to 80% of the whole blood is collected

by agencies which are federally licensed. The residual, estimated at more than 1.4 million units annually, is collected

or processed by concerns which are not required to adhere to

any recognized standard of quality.

4. Unlike England, where 100% of the blood is donated, the United

States must obtain about 25% of its blood (excluding plasmapheresis programs and the like) from paid donors whose blood

has a higher than average health risk.

5. Transfusions of a single unit of blood are often given needlessly , thereby increasing the risk of disease transmis s ion and placing

an unnecessary drain on the blood supply. This unnecessary drain

is furthered by many health professionals who, despite recent

educational efforts by the AMA, continue to use whole blood when

blood components are known to be preferable from a medical as well as a safety standpoint.

2.2. Policy Issues

These problems have led to the formulation of several policy issues

which relate to the acquisition and distribution of whole blood. These

issues are currently under study within DHEW, and are discussed in some detail in a DHEW internal working document of March 20, 1972, entitled

"Revised Outline for Options on Blood Program." The issues relate to six

topics

1. Donor Incentives and Donor Selection.

2. Management of the Blood Delivery System.

3. Regulation and Standards.

4. Costs of Blood Products.

5. Component Therapy.

6. Blood Derivatives.

Each of these topics is discussed explicitly or implicitly in later sections

of this report.
2.3. Proposed Legislation

Several legislative measures dealing with blood banking in the U.S.

have been proposed during the last six months.

Congressman Victor Veysey (R-Calif.) proposes a multiple attack on

the problem (H.R. 11828), including strong Federal initiatives to require

licensing and inspection of all those who collect, process, and administer

blood; encouragement of voluntary blood donation; and the labeling of

paid donor blood. This bill would provide $10 million annually to fund

an Office of National Blood Bank Programs.

A bill introduced by Congressman Edward Koch (D-N.Y.) (H.R. 11853)

addresses the problem of blood supply and blood quality by offering a $25 tax deduction to unpaid blood donors. This proposal resembles H.R.

6416 (1961), which proposed a $50 tax deduction for unpaid blood donors. 1

' 2 Senator Walter Mondale (D-Minn.) has introduced a bill (SI. 3046) which

would provide funds for research into causes, prevention, diagnosis, and

treatment of blood disease, and for the improvement of blood banking

programs at a rate of approximately $50 million annually (i.e., FY 1972-

$50M; FY 1973-$55M; FY 1974-$55M; FY 1975-$50M; and FY 1976-$45M).

2.4. Need for Analysis

These criticisms, issues, and initiatives serve to illustrate the

complexity of the blood banking problem. They also suggest a partial set

of alternative courses of action which might be taken to reduce the cost

and improve the quality, availability, and utilization of whole blood as a medical product. Basic questions must be asked and answered with regard

to the cost and effectiveness of various changes, as well as the identification of the Federal Government's role in this process in the immediate

future

.

The technical approach employed in the analysis has been chosen to

provide a basis for discriminating among a number of viable alternatives

for change. The main variable is the cost of blood, but considerations of

quality, quantity, and use are implicitly recognized and treated within

the context of the analysis. As a starting point, the operational and

economic character of the present blood system is described.

X H.R. 11853 suggests a $125 maximum deduction; H.R. 6416 suggests a $200

maximum.

2 For a discussion of H.R. 6416, see "Science, Economics, Politics, and

Blood," Transfusion , Vol. 1, No. 5, 1961.
3. The Existing System

3.1. Collection

3.1.1. Some Statistics

Accurate information has not generally been maintained on the

number of units of whole blood collected and transfused. The American

National Red Cross (ANRC) compiles and publishes an annual record of its

activities. Members of the American Association of Blood Banks and the

commercial blood banks have not, in general, done so. Periodic attempts

to obtain national statistics have provided incomplete and sketchy

results. For example, only 7,060 of 10,443 facilities responded to a 1968 poll conducted by the American Medical Association. A recent poll

by the American Hospital Association provided accurate data on units

transfused in the first six months of 1971. From this data, ANRC annual

collection reports and information obtained in personal interviews with

AABB and Veterans Administration personnel, a fairly complete set of

statistics on nonmilitary blood collection and transfusion was derived

for 1971.

Using this information and U.S. Census data, the probable nonmilitary

transfusion requirements during the next five years have been projected

and the number of units transfused during the past five years have been

estimated. Appendix A details the analysis and the major results are summarized below. c

In 1971, 7.3 million units were collected; 6.2 million units were

transfused; 151 of the collected units exceeded the 21 -day legal age

limit and were outdated. Donors were paid for 25.5% of the units

collected and 28.91 of the units transfused came from paid donors.

In 1971, 1,500 AABB institutional members (including seven commercial

blood banks) collected over 3.3 million units of blood, accounting for an

estimated 45.4% of total collections. 3 Almost 2.9 million of these units

were transfused (46.2% of total transfused units); the remaining 13.4%

outdated. Donors were paid for about 36% of AABB collections and for

40% of the units which were actually transfused. 4 An unknown percentage

of the unpaid donations were used to fulfill blood replacement obligations

of those receiving AABB blood for which a cash fee would otherwise have

been charged.

3An additional 200,000 units were collected by a Los Angeles blood bank

which the AABB feels is primarily an ANRC collector.

''About 30% of noncommercial collections came from paid donors.
Commercial blood banks, including the seven AABB members, supplied

about 885,000 units, 12.1% of 1971 blood collections; 851,000 of these

units were transfused, accounting for 13.71 of all transfused units.

Less than 4% of the commercial blood outdated. All commercial blood is

obtained from paid donors.

Another 3.2 million units (43.6%) were collected by the 59 ANRC

regional blood centers which coordinate the activities of 1,700 individual

chapters throughout the united States. 5 Only 2.6 million of these units

were administered (41.51 of all units transfused); an estimated 191 of

collections outdated. ANRC collections in 1971 were obtained from over

2.3 million unpaid volunteer donors; an average of 1.37 donations per

donor were drawn during the year. These donors and their families were

guaranteed a free blood supply for one year through their donations.

Eighty-five percent of ANRC collections each year are obtained by mobile

vehicles. The percentage of mobile collections is much lower among the

other collectors.

A telephone survey was conducted in an effort to estimate average

donor payments. Seventeen paying blood banks in 14 cities were contacted,

Fees were found to range from $5 to $25 with an average of about $8.

In many areas, a higher payment was offered for less common blood types.

The survey included hospital blood banks which maintain panels of

medically screened donors who are willing to respond to telephoned

requests for donation, community blood banks which screen their donors

less carefully, and commercial blood banks which may draw blood from

poorly screened donors. An example of the latter group is a blood bank

whose Chicago branch pays $5 in voucher, redeemable only at a nearby

liquor store. The store requires either a purchase or payment of 10<£ as the cashing fee. An official of this blood bank explains the voucher

system:

"There is a currency exchange three blocks away (from the

drawing station) , but some of these guys (paid donors)

would have a hard time finding it." 6

Estimates of demand in the recent past and the immediate future were

based on per capita blood utilization rates and population estimates as described in Appendix A. The U.S. Census Bureau gives four estimates of

future population; the demand for blood was projected for Population

Series B and D. Table 1 contains estimates from 1967 through 1976.

5An additional 200,000 units were collected in New York by a community

blood bank which we feel is primarily an AABB collector.

6 "Blood Banks: Pay Stations of Winos, Addicts," Chicago Tribune , September 14, 1971.
Table 1. Estimates of Number of Units of

Blood Transfused

Year Population Units Transfused

1967

(1000's)

198,629

(1000's)

5,899

1968 200,619 5,958

1969 202,599 6,017

1970 204,800 6,083

1971 207,006 6,148

Future Estimate Based on Population Series B

Year Population Units Transfused

1972

(1000's)

209,484

(1000's)

6,222

1973 212,155 6,301

1974 215,053 6,387

1975 218,177 6,480

1976 221,519 6,579

Future Estimate Based on Population Series D

Year Population Units Transfused

1972

(1000's)

209,181

(1000's)

6,213

1973 211,530 6,282

1974 213,999 6,356

1975 216,561 6,432

1976 219,239 6,511

Thus we estimate that blood utilization increased by 250,000 units

between 1967 and 1971 or about 60,000 units per year (1.1% per annum).

Depending on which population series is used, blood utilization is

projected to increase between 360,000 and 430,000 units by 1976. The

average increase is about 80,000 units per year (1.3% per annum).
3.1.2 Donor Population: Attitudes and Motivation

Blood donor eligibility, attitudes, and motivation are extremely

important considerations for determining the effect of programs designed

to alter the donor population. At the start of this study, it was anticipated that only the results of a literature search on these topics

would be reported; however, the paucity of information in this area, some obviously erroneous, required that limited survey work and analysis be

performed. Consideration of incentive programs which have been tried in

the U.S. or other economically developed nations proved another valuable

source of insight into these questions.

The volunteer donor in the U.S. is on the average older than the

paid donor, better educated and more likely to have church affiliations.

Eighty percent of the volunteers are men. About 801 of all volunteers

are employed and less than 20% are students or nonworking women. 7 The

main reasons cited for voluntary donor participation are the benefits of

a protection plan, replacement for a friend, altruism and social

pressure. Volunteers expect no recompense for participation, except

possibly membership in a protection plan or cancellation of another's

debt. Many give three or more times a year; these people have largely

altruistic motives. 8 Some consider payment for blood to be immoral, but

it is not clear what portion of the donor population holds this view. 9 It follows that those who feel strongly about the morality of selling

blood might be lost to the system if blood is treated as a commodity.

Blood banking organizations generally state that there are 100

million eligible blood donors in the U.S. but that only 2-41 of those

available actually donate. 10 This leads to the conclusion that there

is a vast untapped resource of donors who could, if motivated, satisfy

all conceivable national blood needs. However, if a random sample of

7S. Condie and N. Maxwell, "Voluntary and Paid Donors," Transfusion , Vol. 10, No. 2, pp. 84-88, 1970.

Korzekawa, Jordan, and Alsever, "The Blood Donor: I. Who Are Our

Donors? An Analysis of Social and Other Characteristics of 12,759

Donors," The American Journal of the Medical Sciences , Vol. 240, July

1960, pp. 36-46.

8 Condie and Maxwell, "Social Psychology of Blood Donors," Transfusion , Vol. 10, No. 2, 1970, pp. 79-83.

London and Hemphill, "The Motivations of Blood Donors," Transfusion , Vol. 5, No. 6, 1965, pp. 559-568.

H. Grace, "Blood Donor Recruitment: A Case Study in the Psychology

of Communications," The Journal of Social Psychology, Vol. 46, pp. 269-

276, 1957.

9T. Ireland and J. Koch, "The Political Economy of Blood," presented at

the 1972 Meeting of the Public Choice Society, Pittsburgh, May 3-6, 1972.

10See e.g., Supply, Demand, and Human Life , AABB, 1970.

8
mature individuals is polled regarding participation, it" is likely that

a good many more, perhaps 20-25%, have attempted to donate blood at one time or another. In fact, the number of units drawn at most installations

which are visited by an ANRC mobile unit is between 15 and 251 of the

number of people in the organization. These anomalies, together with

other data appearing in the literature, indicate that many more eligible

donors may be currently participating, or have previously participated,

in blood collection programs.

An analysis was performed using available data in an effort to

estimate the situation with respect to donor eligibility and participation.

The analysis is reported in Appendix B and is summarized here.'

While there were 114,525,000 residents in the U.S. and its territories during 1970 who were between the ages of 18 and 65, and therefore

age-eligible to donate blood, many were ineligible to do so because of

health disorders, pregnancies, weight conditions, etc. 11 ' 12 For example,

about 11 million of the 114 were ineligible because of heart disease.

During 1970, about 4 million otherwise eligible women were pregnant.

Another 24 million men and women were ineligible on the basis of weight

or anemia. Active allergies or asthma accounted for another 11 million.

In summary, age, health, or health-related problems reduced the number

of eligible male donors to about 35 million and the number of females to

less than 27 million giving an estimated 62 million eligible donors nationwide during 1970.

Based on other information reported in Appendix B, it appears that

of the 5.45 million units donated by unpaid donors, about 1.1 million

come from "first -time" donors and the remaining 4.35 million from approximately 2.9 million individuals who were already in the program. The

1.85 million paid units were obtained from about .95 million individuals.

Thus, it is estimated that to satisfy 1971 blood needs about 8% of the

eligible population were involved. Moreover, because of the relative

stability of donors entering and leaving donor programs over the last

decade, it appears that approximately 25% of the eligible population has

given one or more units since 1960. The turnover is estimated to be

approximately 20% per year. 13

uMany areas do not allow donation after age 60.

12According to Blood Center Operations for the Year Ended June 30, 1971 , the ANRC exempts about 12.0% of prospective donors each year. However,

the majority of medically exempted donors never again attempt to donate;

many others do not attempt an initial donation because a recruiter informs

them that they would be rejected. The percentage of age-eligibles who

are medically exempt is, therefore, probably much higher.

13The ANRC's Blood Center Operations, states that 20% of ANRC donors were

first-time donors in both 1970 and 1971. Those exempted for medical

reasons are not counted as donors. Since our estimates indicate an annual

increase in collections of only about 1%, almost 20% of the donors who

give in any year must never give again.
The next question that must be asked is: what causes this stable,

but high, turnover of blood donors? Of the 4 million who participate

in some form of voluntary blood donation during any year, only about

3.2 million ever give again. A portion would be expected to drop out

due to ineligibility (e.g., age, health defect), but a 201 loss rate

indicates that part of the solution to satisfying blood needs with

healthy donors may lie with the retention and not the initial recruitment

of such donors.

Some studies have been undertaken on the psychology of the blood

donor. For example, London and Hemphill investigated the extend to

which blood donations in San Francisco might be increased through

education concerning the blood banking system. The study involved

previous donors who would be expected to have a greater knowledge of the

blood banking system than those who had not participated in any program.

While the authors concluded that more education would be beneficial,

several collateral findings of this study, not necessarily related to the

primary study objective, are of greater interest. In the course of

interviewing their donor sample, London and Hemphill found that there was

a great deal of concern about the "blood letting" process. Twenty-nine

percent of those donors interviewed felt that most people might feel

weak after a blood donation, and 46% indicated that most people might

feel faint or dizzy after giving blood. Since these were donors, it seems reasonable to hypothesize that their responses were based, at

least in part, on their personal reactions or on observation of other

donors in the process of giving blood. A study by Condie and Maxwell

reaffirms that there are psychological, if not physiological, drawbacks

to giving blood, even among veteran donors. Seventeen percent of

veteran donors in their study anticipated more than a little difficulty

in donating, and 301 were bothered by the feel of the needle. 14 The U.S.

Army has found that 6.71 of their donors reacted on the donor bed, and an additional 3.8% reacted after leaving the bed but before leaving the donor

area. Seventeen percent of the donors who were questioned expected difficulty. Twenty- three percent of those expecting difficulty and 81 of

those not expecting difficulty had reactions. 15

The literature provides little information concerning donor habits;

the effectiveness of education programs; incentives for obtaining or retaining donors; or the reasons that people choose not to donate. The

only other finding of interest from the literature survey is that there

is no significant correlation between number of blood units collected and

the socio-economic characteristics of the community. 16 The donor turnover

1 ^'Social Psychology," loc. cit.

15 C. Shields, "Quality Control Approach to Improve Donor Care," Transfusion , Vol. 10, No. 5, 1970, pp. 272-278.

16T. Rockwell and R. Hanlon, "The Effect of Community and Chapter Characteristics on Blood Donations," Transfusion , Vol. 3, No. 5, pp. 401-407, 1963,

10
rate (as measured by the percentage of repeat donors) , the donor

reaction rate, and the number of replacement donations also have no effect

on the collection rate. However, the rate of volunteer donation is

highly correlated with the size and concentration of the age-eligible

donor population and the amount of blood used in a region. It thus

appears that the rate of donation is determined by the demand in the

immediate area and by the availability of eligible donors. These factors

probably influence the level of donor recruitment activity, but verification of this hypothesis has not been attempted.

Because of the limited information in the open literature, a very

limited survey was designed and carried out to (1) obtain further information on blood donor reaction and (2) determine the reason for non- participation of those who do not donate. Fifty- two male and 42 female

Federal employees were arbitrarily selected and interviewed. Each had

the opportunity to donate at mobile red cross collection units which

arrived periodically, and each was aware of an active donor recruitment

program. The males interviewed were on average older and better educated

than the females. The results of the survey are not conclusive; however,

responses did tend to support the fundamentals of London and Hemphill in

San Francisco and to provide some new information on non-donor attitudes.

Twenty- seven of the 52 males and 23 of the 42 females had at one

time volunteered to give blood; 14 of the males and nine of the females

continue to give blood. More than half of those who stopped giving did

so after donating more than once.

The majority of those who had donated blood at least once indicated

that they had some adverse reaction such as weakness, dizziness, fainting,

pain, or hematoma during or after at least one donation. In most cases,

this reaction occurred after the donor left the collection area and was

not reported to the ANRC. This implies that published nonmilitary

figures which show a 4.5% donor reaction rate probably underestimate the

situation. Twenty- eight percent of those interviewed (eight women and

six men) had stopped future donations due to adverse reaction. An

additional 30% (eight women and seven men) no longer donated because of

medical ineligibility. Three other individuals had stopped donating

because they believed blood was no longer in short supply.

Non-donors represented about 47% of the random sample selected from

this agency. Lack of participation was usually attributed to one of four

reasons: Over 451 (seven men and 13 women) indicated that they had not

tried because they believed they were disqualified from doing so for

medical reasons. Another 23% (six men and four women) indicated that

fear of adverse reactions, such as fainting in front of others or pain of

the needle, was the primary reason for nonparticipation. An additional

four men and two women had not given because they knew they would have

an adverse reaction if they gave. Seven men indicated that failure to

participate was primarily due to lack of interest or any incentive to

"get involved"; many of these individuals may have been unwilling to admit

that they were "scared" to donate.

11
It would appear, then, that retention rates among mobile unit donors

are low because of medical disqualifications and adverse reactions to

donating. Anticipation of medical disqualification, anticipation of a recurrence of adverse reaction, and primal fear of donating are major

causes of nonparticipation.

It appears that donations can be increased by a more intensive

recruitment campaign or by efforts to reduce donor reactions. We hypothesize a higher payoff from increased efforts to reduce donor reactions

than from additional efforts to recruit new donors. However, we cannot

test this hypothesis because the scope of this study is not broad enough

to permit accurate definition of the relationship between amount of blood

collected and efforts exerted. The data problems that would be encountered

in attempting to develop this relationship from published ANRC data are illustrative: (1) Practices at local chapters within a region vary

widely and only regional totals are readily available. (2) Canteen cost

is the only readily available surrogate for donor retention efforts.

Other expenditures for donor retention may not correlate with the canteen

cost, and if they do, total retention expenditures are assumed to be

higher than canteen costs. (3) Volunteer workers do much of the recruitment and canteen work. No measure for the amount of volunteer work is

readily available. (4) It is difficult to cost vacation time and other

recruitment incentives donated by employers.

A rough analysis using the available ANRC data 17 was, nevertheless,

attempted. It was possible to explain 861 of the variation in regional

collections (at statistically significant levels) as a linear function of

regional population, regional canteen expenditure and regional recruitment cost. Despite the extreme limitations of the data, this crude

analysis gives further credence to the hypothesis that there is greater

cost benefit in retaining donors rather than recruiting new ones. A number of American cities have recently adopted new recruitment

tactics, accompanied by installation of a management information system

and regional control of blood resources. Most notable are: (1) an AABBcoordinated demonstration program in the Passaic Valley of New Jersey;

and (2) a project supported by the NHLI in Milwaukee, Wisconsin.

The Passaic Valley program seems rather drastic. Except in emer- gencies and extreme hardship cases, patients in area hospitals are expected to supply donors at the blood bank in advance to fill their

anticipated surgical blood requirements. "If the blood was not administered to the patient, either a credit of $15 for each pint (but not

more than $30 total) was applied to the patient's hospital bill or the

blood was held as a credit for the patient Once the policy had

become firmly established, it was rarely necessary to delay admission

I7Blood Center Operations for Year Ended June 30, 1971

12
until donors were provided." 18 Not surprisingly, donations received

through blood assurance programs have increased considerably since this

policy was adopted, and the need for paid blood donors has been almost

completely eliminated.

In Milwaukee, five donor retention strategies have been instituted:

(1) Voluntary donors have been "offered the opportunity to complete a form expressing their willingness to become an on-call donor for cardiac

surgery." Approximately 1,000 donors, about 8% of those who gave blood

during the first four months of the program, completed the form. (2)

Donor club membership lists are being placed on computer files. When a mobile unit visit to a club is planned, special appeals are sent to

those who have blood types which are in short supply. (3) Members of the

blood assurance plan are automatically called by blood type at peak

demand periods. Although these donors need only give once a year to

maintain coverage, if possible they must respond when called. (4) First

time donors are called after their donation and encouraged to return.

Questions relating to procedures or problems that were encountered are answered for these donors. (5) A public relations firm was hired to

prepare media and news campaigns intended to increase the number of

assurance plan and replacement donors

.

J 9

The effect of these strategies has been spectacular. At the start

of the program over 40% of the units came from paid, on-call donors.

Eighteen months later, all paid donors had been eliminated. Many of the

on-call donors continued to give without payment. About 4,500 phone

calls are currently made each month in attempts to obtain blood. Approximately 20% of these calls result in a donation within 24 hours. The success of this program is partially the result of a quality mass media

campaign which recently won a Public Relations Society award. The cost

of donor recruitment, including fees paid to the public relations firm,

three telephone operators, and an additional staff of three full time

employees, adds less than $.80 to each unit of blood collected. 20

A review of donor incentive programs in foreign countries is informative. Notable are programs in the U.S.S.R. , Canada, Great Britain,

Sweden, and Japan.

In the U.S.S.R., about 50% of the donors are paid, but many areas supply all their blood needs by voluntary donations. Most blood is

18J. Churg, P. Steindaut, R. Brilly, J. Gannon, A. Ellis, H. Sobel, and

I. Weiss, "Passaic Valley Blood Program," Transfusion , Vol. 11, No. 2,

pp. 102-105, 1971.

19S. Masouredis, D. Roseth, R. Stelloh, J. Perine, I. Nehama, T. Hurst,

A. Rimm, G. Becker, E. Strei, S. Krenz, and R. Aster, "Development of

an Automated Blood Inventory and Information System for a Regional

Transfusion Service," Transfusion , Vol. 10, No. 3, pp. 182-193, 1970.

20Personal communication with Mr. T. Hurst, MBC.

13
donated in mobile units, and a special effort is made to provide a warm

and attentive atmosphere. All donors receive a day off from work to give

their donation. They also receive written thanks for each donation, a "Drop of Blood" badge for the first donation and special badges for the

fifth, tenth, and fifteenth donations. Paid donors receive 60 rubles per

liter of blood. This amounts to between 15 and 25 rubles for an average

donation (16-27 dollars). Voluntary donors are given a free meal and an additional day off from work.

All donors in the U.S.S.R. are thoroughly examined by a physician

who determines how much blood the patient will be allowed to give. "The

usual initial donation is 250 ml rising at subsequent donations by 50 ml

to a maximum of 450 ml." 21 A waiting period of eight weeks is required

between donations.

The British and Canadian blood donation systems have always been

completely voluntary, and there has never been a charge for blood products.

There is a transfusion fee, but in most areas, the national government

pays all costs of hospitalization so the fee is not directly assessed on

the patient. In Canada, over 30% of collections outdate before they can

be used. An average of .0325 units are transfused per person each year22

which is slightly higher than a comparable figure for the U.S.

The Canadian Red Cross (CRC) has an "overwhelmingly positive public

image," and carries out massive recruitment campaigns. 23 Recruitment

costs are about $1.80 per unit collected and account for over 20% of total

CRC expenses. This is a considerably larger amount than the ANRC presently

spends on recruitment. Recruitment methods used include spot ads "on the

radio, in newspapers, and to a lesser extent on TV"; scheduling of collection clinics for most employers and organized groups (recruitment of donors

is handled by group members) ; and telephone scheduling of donations from

those who have previously donated. A special program is conducted in

the high schools to obtain donations from males over the age of 16.

Finally, personal appeals to recruit donors are made to all those receiving

transfusions.

In British Columbia, 13.7% of the units were obtained from new donors

in 1971, 8.4% of them from high school students. Collections in 1971

totaled 95,000 units; 200,000 donors (probably about 20% of the eligible

population) have given in the past five years. There is thus an average

21 "The Public Health Service and the Blood Donor Problem - Abstract,"

Transfusion , Vol. 6, No. 3, p. 276, 1966, and J. Vaughn, "Blood Transfusion

in the U.S.S.R.," Transfusion , Vol. 7, No. 3, pp. 219-229, 1967.

22Canadian population estimates used in analyzing this data from Information Please Almanac 1967 .

23Much of the raw material on the CRC is based on findings in internal

working documents of the DHEW Task Force on Blood Banking.

14
of only 2.5 units per participating donor over the five year period,

indicating that the CRC, like the ANRC, has donor retention problems.

In Great Britain, blood donations take on the aspect of a social

function. Retention in the English system appears to be very high although

the percentages are not available. 24 Employers are cooperative, and it is

not unusual for an employee to call in and report that he is taking the

morning off to give blood. To enhance the social aspect of the donation,

the atmosphere at the blood bank is warm and pleasant. Surprisingly, 40%

of British donors are women. Donations are limited to two per person per

year. In many areas, danger of shortage occurs several times a year;

special media appeals are used to recruit during these periods. 25

In Sweden, all blood donors are paid. Such payment serves as a reimbursement for community service and an incentive for the young to

participate. Donors are given annual physical examinations. Extensive

health records are maintained and all cases of transfusion-related

disease are traced back to the carrier. Recruitment drives are held at

most places of work. Attempts are made to schedule donations about one month before a mobile vehicle or blood bank visit. The system is augmented

by soliciting emergency donations from registered donors via telephone and

maintaining supplies of frozen blood as protection against shortages.

Donors are encouraged to give blood four times a year.

In Japan, until recently, almost all blood was obtained commercially,

There was a large population of professional donors who had no other

source of income. To increase their donation frequency, these donors

reportedly drank a mixture of sea water, iodine, and iron filings which

was intended to raise their hemoglobin level. The majority of these donors

had hepatitis. When U.S. Ambassador Reischauer contracted a muchpublicized case of serum hepatitis during surgery in Japan in 1970, the

Japanese Government initiated a program designed to eliminate paid donations. 26 No further information is available on the results of this

action.

3.2. Processing

After collection, each unit of blood is tested for group, type,

antibodies, venereal disease (VDRL test), and hepatitis associated antigens (HAA). If the VDRL and the HAA tests are negative, the unit is

labeled by group and type, screened for antibodies, and refrigerated.

2kR. Titmuss, The Gift Relationship , Random House, 1971.

25Personal communication with Mr. Raymond Ward, English management

consultant and former director of the Local Government Operations Research

Unit, Royal Institute of Public Administration.

26C. Holden, "Blood Banking: Tangled System Resists Swift Change,"

Science , Vol. 175, pp. 1444-1446, March 31, 1972.

15
To save time and money, the ANRC frequently pools samples from several

units of blood for the antibody screening.

Upon receipt of requested blood units from the processing agency,

the hospital laboratory will often repeat the group, type, antibody screen,

and HAA test to verify the original work of the processing agency. This

process is normally done on six to ten units at a time, and takes one medical technologist 1-1/2 to 2 hours. After verification of the lab

work, the unit is inventoried for use.

When a transfusion is needed, the laboratory performs a group, type,

and antibody screen of the patient's blood, then does a major screen

cross -match. Finally, the correct unit in inventory is pulled, verified

to still have satisfactory salinity and albumin levels, and again rechecked

for group and type. This process takes a technologist approximately 45

minutes. It is estimated that for every 2.7 times a unit is cross- matched, processed, and reserved for an operation, only one unit is

actually transfused. 27 Consequently, a pint of blood will normally be

processed several times before it is transfused or its maximum legal

storage date is reached.

The processing at the time of collection, receipt by hospital, and

prior to transfusion is usually, but not always, done in accordance with

Public Health Service Regulations or AABB Standards for Transfusion

Services

.

3.3. Storage

Whole blood is normally stored at approximately 4°C in either an

acid citrate dextrose (ACD) or a citrate phosphate dextrose (CPD) anticoagulant solution. CPD is a newer solution which is claimed to ensure shelf life up to 28 days. 28 (Canada presently allows 28-day storage in

CPD.) After this amount of time, the unit is considered unusable because

less than 70% of the red cells can be expected to survive transfusion.

The Division of Biologic Standards (DBS) has placed a shelf life of 21

270'Hara and Josephson, "Automated Data Processing System for Blood

Banks," Transfusion , Vol. 10, No. 4, p. 220, 1970.

Confirmed by personal communication with Col. Peak, Congressional

Liaison Representative of AABB, who estimated a 3-1 ratio.

28 See, for example, Dawson, Ellis, Kocholaty and Shields, The Hemoglobin

Function of Blood Stored at 4°C, U.S. Army Medical Research Laboratory

Report No. 836, or Bowman, "Red Cell Preservation in Citrate- PhosphateDextrose and in Acid- Citrate-Dextrose," Transfusion , Vol. 3, No. 5, 1963,

p. 364.

16
days on both ACD and CPD until more conclusive tests can be made. 29 In

addition to permitting storage in solutions of ACD and CPD, DBS permits

blood to be stored in heparin solution.

Another means of extending shelf life is to freeze the red cell

portion of the blood. At present there are two major processes by which

this can be done. The first involves a very rapid freeze in a solution

which has not received DBS approval because it is partially retained in

the body. The second method involves a much slower freezing in an anticoagulant solution of ACD and glycerol. During the post- thaw period,

the red cells must be washed to remove the glycerol. There are two slow

freeze methods which have been in use for over ten years. 30 No upper

bound on shelf life has been established for the Cohn fractionator slow

freezing techniques through which at least 11 years storage is achievable. 31 DBS has approved a three- year shelf life for blood frozen by

the Huggin's slow freeze technique.

3.4. Distribution

Distribution systems within the United States vary widely. Their

characteristics are influenced by the size of the region served and by

sources of the blood supply available for transfusions. Some areas have

a single supplier. For example, in Connecticut, a state-wide collection

and distribution system has been established by the Red Cross. There

are virtually no paid donors, and user organizations deal directly with

a central Red Cross facility to obtain their supplies of blood. The city

of Milwaukee also has a highly centralized and fully volunteer collection

and distribution system. Blood is processed and stored by the Milwaukee

Blood Center and is requisitioned, on the basis of need, by hospitals in

the area. Since blood is readily available and the source is centralized,

there is less stockpiling in user facilities. This is reflected by

substantially less outdating and wasted blood than is found in other

metropolitan areas.

Unfortunately, these examples appear to be the exception rather than

the rule. In many areas, particularly large cities, the ANRC, the AABB

and various commercial blood banks co-exist. A hospital will normally

deal with a single supplier such as the ANRC; however, when blood is scarce or a less common blood type is needed, a commercial bank may be

29The U.S. Army has developed methods using ACD with two additional

additives, adenine and inosine, which allow safe storage for up to 42

days, but the additives are partially retained in the body. Further

research on their long-term effects is required before a decision can be

reached on their safety.

30Valeri and Runck, "Long Term Frozen Storage of Human Red Blood Cells,"

Transfusion , Vol. 9, No. 1, 1969.

3ITullis, Transfusion , Vol. 11, No. 2.

17
contacted or a hospital donor registry used to fill the gap. In areas where there is no recognized single source of supply or a clearinghouse

to maintain records of inventories, a great deal of blood waste by outdating apparently occurs.

Regional coordination has been attempted in a number of areas. The

ANRC has developed a computerized management information system which

costs about $.40 per collected unit to operate. This system has been

tried in many ANRC regions. Some regions have encountered difficulty in

convincing hospitals to report their inventories fully. The main problem

is with the reporting of rare blood units which the hospitals fear they

might be unable to replace if the need arose. 32

The AABB is presently operating pilot regional clearinghouse programs

in the San Francisco area, the Passaic Valley, New Jersey area and in the

Washington, D. C. area. All of these programs are based on frequent

telephone checks of hospital inventory levels. Special recruiting

policies exist in all programs, and paid donors have been virtually

eliminated.

In San Francisco, all blood is supplied by the Irwin Memorial Blood

Bank. The majority of blood is distributed in accordance with preassigned quotas which are reviewed every six months. In addition,

inventory checks are made four times a day, and blood is redistributed

as necessary. Since blood is on consignment until transfused, the

central blood bank encounters no difficulty in obtaining cooperation

from the hospitals. The outdating rate is estimated to be between 6 and

8%. 33

In the Passaic Valley region, each hospital collects its own blood.

The AABB Clearinghouse functions as an exchange center and accounting

agent. To date, no problems of cooperation have been reported. To

reduce outdating, the AABB- endorsed policy which suggests that blood

transfers between hospitals should be restricted to units less than five

days old has been replaced by a policy of transferring the oldest unit

first. Outdating has averaged less than 5% since 1967. 3t+

In Washington, D. C, the majority of the blood is drawn by the ANRC.

Control of the remaining supply is coordinated by the Metropolitan

Washington Blood Plan. The MWBP polls inventories at 13 area hospitals

twice each day, and units are redistributed as necessary. The only

charge to the hospital for this service is $1 per unit transported. The

total cost is not clear because additional funds are obtained through an

32 Personal communication with Dr. William Sherwood, Philadelphia ANRC.

33 Internal working documents of the DHEW Task Force on Blood Banking.

31+ Churg, et al., op. cit.

18
annual blood protection plan membership for $10 per family. Figures on

outdating are not available. 35

The Lockheed Missiles and Space Co. has done extensive developmental

work on systems for regional control of blood inventories. The system

developed by Lockheed, like the AABB clearinghouse pilot projects, relies

on telephone monitoring of hospital inventories. The Oakland demonstration

project is illustrative. Oakland has a central blood bank facility.

In Oakland, five control policies were adopted:

(1) Blood in a hospital which has a low utilization rate is moved

to a hospital with a high utilization rate if it is not transfused within ten days after collection.

(2) If a unit which has been cross-matched is not used or released

within two days, the reservation is reconfirmed with the

requesting physician.

(3) If the average inventory in a hospital is several times the

weekly utilization (computed over a 13- week period) , an attempt

is made to convince the ordering pathologist to change his

ordering policy.

(4) Blood presently in the system is checked before on- call paid

donors are contacted.

(5) The performance of all participating hospitals is rated and the

ratings are distributed.

These policies have resulted in reduction of outdating from a 13%

level to a 5% level, 30% reduction in blood bank inventories, and a major reduction in shortages at the central blood bank. The service costs

about $.45 per unit. 36

A similar system in Milwaukee was developed with the assistance of

former Lockheed personnel. There is again a central blood bank, the

Milwaukee Blood Center (MBC). The control policies, many of which are based on an analysis of early system operations, are:

(1) The central blood bank sends the oldest blood in stock first.

Blood less than four or five days old is normally sent out only

for special orders, such as cardiovascular surgery where a very

high percentage is transfused within one or two days. Such

usage constitutes about 22% of total blood transfused in the

Milwaukee region. Blood over 19 days old is normally only sent

to hospitals with immediate transfusion needs.

35Personal communication with Mr. Kenneth Staffa, Executive Director MWBP.

35Catassi and Peterson, "Blood Inventory System - Helping Blood Bank

Management Through Computerized Inventory Control," Transfusion , Vol. 7,

No. 1, pp. 60-68, 1967.

19
(2) If a unit of AB positive, AB negative or B negative blood is

held at a hospital for more than three days, the hospital is

called to verify that the need is still imminent. If it is not,

the unit is recalled to the central bank.

(3) The performance of all participating hospitals is rated, and

the ratings are distributed.

Little control is exerted over order and return policies for units

of common blood types because MBC personnel fear that an attempt to

exercise such control would hinder cooperation. Recently published

results show that the probability of a unit outdating at a hospital with

a low volume of transfusions need not exceed that at a hospital with a higher volume. The key indicator of unnecessary outdating is an average

daily inventory level which exceeds nine times the average daily number

of transfusions 37

Introduction of inventory control in the Milwaukee area has reduced

outdating from 7% to 6%. The percentage of blood obtained from paid on- call donors has been reduced from 40% to zero. 38

Regional coordination efforts, to date, are deficient in two respects,

First, as J. B. Jennings points out, with the partial exception of the

Milwaukee system, regional inventory control systems seem to be based on arbitrary rules of thumb. 39 To find the best decision rules, analysis of

data from the existing systems will be required. Secondly, all of the

systems use the percentage of paid donors, shortage rate and outdate rate

as performance measures. This set of performance measures does not allow

for consideration of blood potency. Many policies intended to reduce outdating, for example the policy of transfusing oldest blood first, lead

to the use of the least potent product available in order to assure sufficient supply. Such policies may be unwise if supply can be maintained by calling in medically screened paid donors. Cost, shortage rate,

average age of transfused blood, and percentage of paid donors would

probably be a preferable set of inventory system performance measures.

37D. Yahnke, A. Rimm, C. Mundt, R. Aster, and T. Hurst, "Analysis and

Optimization of a Regional Blood Bank Distribution Process: I. Introduction and Descriptive Analysis," Transfusion , Vol. 12, No. 2, pp. 111-

118, 1972.

Personal communication with Mr. T. Hurst.

38Masouredis et al. , op. cit.

Yahnke et al. , op. cit.

Personal communication with Mr. Hurst.

39J. B. Jennings, Inventory Control in Regional Blood Banking Systems , Technical Report No. 53, MIT Operations Research Center, July 1970.

20
3.5. Utilization

A unit of blood can be transfused or it can be split into components.

If the unit is split into components, it is first separated as plasma and

packed red cells. Further separation of the plasma into cryoprecipitate,

platelets, leucocytes, and a residuum is possible. The residuum is

usually processed to obtain a number of blood derivatives. These include

serum albumin, gamma globulin, fibrinogen, and various immune serums. Most of the derivatives can be recovered from outdated blood and this is

often done if blood is returned to a component processing facility.

During FY 1971, the ANRC prepared the following amounts of whole

blood and blood products for medical use:

1*

Whole Blood 2,921,258 units

Red Cells 483,934

Cryoprecipitate 248,107

Fresh Frozen Plasma 183,048

Platelet Concentrate 201,707

Platelet Rich Plasma 5,268

Common situations which require the use of whole blood are severe blood loss, exchange transfusion and open heart surgery. However, pathologists agree that less than 151 of those patients receiving transfusions

need whole blood. Seventy- five percent currently receive this type of

transfusion, although in most cases, packed red cells would have been

preferred. kl

There are many advantages to using packed red cells rather than

whole blood. The reduced volume of fluid minimizes the possibility of

circulatory overload and cardiovascular failure; the lower concentrations

of sodium, acid, potassium, ammonium, and citrate are preferable for some medical conditions; and post- transfusion reactions are minimized because

of the decreased amounts of plasma.

Unlike packed red cells, which are generally useful in situations

where transfusion is required, most components and derivatives of whole

blood have specialized applications. Cryoprecipitate, fibrinogen,

platelets, and fresh frozen plasma are all used in treating clotting

deficiencies. Serum albumin is available in a 5% buffered saline solution

or a 25% "salt-poor" form. Both solutions may be used interchangeably for

the treatment of shock due to hemorrhage, trauma, infection, or operation.

Gamma globulin and leucocytes relate to the body's ability to fight

^ANRC, 1971 Annual Report of the American National Red Cross .

^Committee on Plasma and Plasma Substitutes of the National Academy of

Sciences -National Research Council, An Evaluation of the Utilization of

Human Blood Resources in the United States, 10/70.

21
disease. 42 Since many of the blood components and derivatives are in

short supply, increased use of packed red cells instead of whole blood

would make more plasma available for fractionation and thus ease the

shortage.

Both the American Medical Association and the National Academy of

Sciences have initiated education campaigns to encourage physicians to use components in lieu of whole blood. The AABB, since 1967, has sponsored

a series of component therapy workshop programs. In some areas, most

notably in Massachusetts, the percentage of transfusions performed with

packed red cells has increased dramatically as a result. Some hospitals

now use packed red cells in 80% of all transfusions.

1* 3

On the other hand conversion to component therapy has been ardently

resisted by many physicians , as the NAS-NRC report on blood utilization

points out:

In many communities, the physician, even if he is aware of

the benefits ascribed to component therapy, continues to regard

whole blood in an almost mystical light and is reluctant to

deny his patient any of its potential restorative powers. He

may acknowledge that red cell preparations alone can restore

oxygen transport and that albumin alone can restore blood volume

;

but he still believes that the natural combination is best for

his own patients. Neither the surgeon, with his attention

focused on his patient undergoing surgery, nor the internist,

dealing with his patient with anemia, is likely to be moved by

economic considerations or by the need of other patients for

products present in the plasma of the blood about to be transfused.

The NAS-NRC report goes on to discuss the effects of the physician's

educational process:

That process has three main components : formal medical

education, continuing education by peers, and experience and

circumstances. Most physicians now in practice were taught

very little in medical school about the use of blood and have

since acquired little knowledge of component therapy, primarily

because the papers concerned with it have usually been directed

at hematologists and those involved in blood banking. Interns

and residents learn from the attending staffs of their hospitals;

because the staffs are representative of the practitioners

referred to above, there is little opportunity for house staffs

to acquire familiarity with the concept of component therapy.

It does not appear that the present generation of medical

lt2 AABB, Physician's Handbook of Blood Component Therapy , 1969.

^Committee on Plasma Substitutes, op. cit.

22
students will stimulate wider acceptance of the concept. The

competition for curriculum hours and the trend away from required

subjects in favor of early electives do not favor any attempt

to teach component therapy to the student. In one Eastern

medical school last year, only 50% of the students were exposed

to hematology, and the one scheduled period covering component

therapy was canceled because of the visit of a distinguished

lecturer.

In lieu of straightforward education, it has been

demonstrated that a measure of control over access to blood

products within a hospital can alter usage patterns. In a few hospitals, the director of the blood services is permitted

in some circumstances to request justification of orders for

whole blood, as opposed to red cell preparations. In some

cases, rules require that a specific proportion of blood given

to a single patient be in the form of red cell preparations.

This type of action, taken in the interest of conservation of

blood as well as in patient welfare, may be construed by some

as infringing on the privileges of the practitioner. However,

it should be noted that, where it has been taken, a genuine

acceptance of the concept of component therapy has ultimately

been achieved. 44

Yet, the trend toward component therapy appears to be on the upswing,

as illustrated by statistics on blood usage in "short-term" hospitals

which are members of the American Hospital Association. 45

Number of Patients (1000' s) 1969 1970 1971

Receiving

Whole Blood 1,510 1,222 1,151

Packed Red Cells 376 464

% Packed/Total Transfusions 23.5% 28.7%

In addition to component therapy, a number of other aspects of

blood utilization merit discussion. These include the average number of

units used per transfusion and the total number of patients transfused.

A blood utilization study46 on hospital patients under Medicare

during 1970 states that 487,000 Medicare patients (7.5% of all Medicare

44Committee on Plasma and Plasma Substitutes, National Academy of Sciences

National Research Council, An Evaluation of the Utilization of Human Blood

Resources in the United States , 10/70.

45Commission on Hospital and Professional Activities, Hospital Record

Study , Volumes for 1969, 1970, and 1971.

46Henry L. Savitt, "Blood Utilization by Hospital Inpatients Under

Medicare, 1969 and 1970," Health Insurance Statistics , DHEW, 7/22/71.

23
patients) received 1,590,000 units of blood, an average of 3.3 units

per patient. The number of units transfused per transfusion episode was broken down as follows:

Number of Percentage Units

Units Transfused of of

Per Episode Patients Blood

1 pint 24% 117,000

2 pints 31.7 309,000

3 pints 15.0 219,000

4 or more pints 29.2 945,000

Assuming the Medicare ratio (3.3 units per episode) to be representative of the general United States population, it is estimated that there

were almost 1.9 million transfusion episodes in 1971. (6.2 million units

trans fused/ 3. 3 units per transfusion.) However, some adjustment must be

made because Medicare patients are believed to have a higher incidence of

serious operations than the population as a whole and therefore utilize

more units of blood per operation. Red Cross data in Massachusetts

indicate an average of 3.0 units per transfusion episode in 1970 .

7 Using 3.1 units per episode48 gives an estimate that there were 2 million

transfusion episodes in 1971.

The data on blood transfused to Medicare patients reveals a facet of

blood utilization which should be highlighted. Single unit transfusions

represent a significant proportion of the total patients transfused; in

this instance about 241. While there may be instances where one unit of

blood is needed, many believe that the vast majority of such transfusions

are either unnecessary or not worth the inherent risks. Education and

training of health professionals in the effectiveness -versus -risk aspects

of single-unit transfusions is needed, particularly as regards patients

over 40 for whom the mortality rate associated with post- transfusion

hepatitis is substantially greater. The AABB has recommended that

hospital transfusion committees review all single unit transfusions and

many hospitals have implemented this recommendation. A one-third reduction in single unit transfusions has been achieved at many hospitals

where transfusions are occasionally reviewed. 49 However, single unit

transfusions still persist in most areas. For larger transfusions,

evaluation of physician decisions on the number of units to transfuse is

extremely rare. One study which reviewed multiple unit transfusions

47D. Kinloch and A. Kliman, "Blood Misuse in Massachusetts," New England

Journal of Medicine , Vol. 284, pp. 446-447, 2/25/71.

48E. Diethrich, "Evaluation of Blood Transfusion Therapy," Transfusion , Vol. 5, No. 1, 1965, pp. 82-88.

49See e.g., J. Morton, "Surgical Transfusion Practices, 1967," Surgery , Vol. 65, No. 3, pp. 407-416, 1969.

24
found no justification for 13% of the surgical transfusions, 22% of the

medical transfusions, and 33% of transfusions for obstetrics and

gynecology. 50

A 1960 study provides data on likely effects of transfusion review.

Physicians involved in this study were forewarned that the study would be

performed. Even then, 6.5% needless transfusions were detected during

the study. In addition, 16% fewer units were transfused than during

comparable periods with no review. 51

3.6. Post-Trans fusion Reaction

A good deal of attention has been given to the problem of posttransfusion hepatitis and the means whereby this infectious disease can

be detected or eliminated from the transfusion process. Other posttransfusion reactions can also result in extended hospital stay and even

death. These include syphillis, malaria, and cytomegalovirus.

In addition to the diseases transmitted by transfusion, there are four major classes of noninfectious post- transfusion reactions: (1)

allergic reaction to donor plasma; (2) allergic reaction to donor

leucocytes (white cells) ; (3) reaction to an excess of antibodies present

in the donor blood (due, for example, to a cold or an active allergy);

and (4) reaction to an increase in the circulating amount of a chemical

constituent (e.g., sodium or potassium). Allergic reactions frequently

manifest themselves shortly after the start of a transfusion and may force

interruption of the transfusion if a fever develops.

A large number of antibodies are present in the plasma portions of

blood, including anti-A, anti-B, anti-Rh- positive, and anti-Kell-positive.

An allergic reaction occurs when a blood antigen and its antibody mix.

Fevers as high as 106° and urticaria develop fairly frequently. This is

commonly referred to as a febrile reaction.

Allergic reactions to transfused blood are not uncommon. Although

most allergic reactions are not life threatening, they may impede the

recovery of the patient. 52 In rare instances, an allergic reaction and

the attendant transfusion interruption have been contributory factors

in the death of a patient.

A severe allergic reaction may cause the red cells to break down and

release hemoglobin. The effects and symptoms of mild hemolytic reactions

are basically the same as for other febrile reactions but can be fatal.

50Diethrich, op. cit.

51 C. Graham- Stewart , "A Clinical Survey of Blood Transfusion," Lancet , Volume 2 for 1960, p. 421.

52 From Physician's Handbook of Blood Component Therapy , AABB, 1969, pp. 9-10,

25
A post- transfusion reaction may also become evident several days

after the transfusion by the appearance of jaundice and increasing anemia.

Such reactions are usually severe. 53

3.7. Frozen Blood

Frozen packed red cells reconstituted in 5% albumin saline solution

have proven to be a satisfactory replacement for whole blood.

The Washington, D. C. , ANRC states that frozen blood should be used

"for specialized surgery and for other instances when reaction- free

transfusions are required." 54 Mr. Henry, the Director of the ANRC blood

program, states that "all of us in blood banking have had in the backs of

our minds an all frozen program, but we very quickly discarded it because

we couldn't afford it." Dr. Meryman, of the ANRC Research Laboratory,

states that "barring unforeseen circumstances, we can expect to see freezing of all blood administered within this decade." 55 Conversion to

a frozen system is impeded in part because most users have several blood

suppliers and each supplier hesitates to be the first to adopt the more

expensive system.

The statements that have been made about frozen blood suggest various

advantages and disadvantages of using red cells which have been frozen,

thawed, and thoroughly washed. These are:

A. Advantages 56

1. The hepatitis virus is virtually eliminated by slow- freezing

methods if the red cells are not reconstituted in plasma.

2. The cleansing of plasma virtually eliminates one type of

febrile reaction, and makes Type blood truly universal.

3. The removal of leucocytes eliminates almost all other

febrile reactions.

53 Standards for Blood Banks and Transfusion Services , Fifth Edition, AABB,

1970.

54D.C. Red Cross Annual Report , June, 1971.

55Personal communication with Mr. Henry and Dr. Meryman.

55 Sources for 1 through 7 include:

B. Hum, Storage of Blood , 1968.

A. Turner7"Frozen Blood, A Review of the Literature, 1949-1968 , 1970.

Personal communication with Dr. C. E. Huggins of Massachusetts

General Hospital and with Dr. Meryman of the ANRC.

J. L. Tullis, J. Hinman, M. T. Sproul, and R. J. Nickerson, "Incidence

of Posttransfusion Hepatitis in Previously Frozen Blood," Journal of

the American Medical Association , Vol. 214, 1970, p. 719.

26
4. Since outdating is virtually eliminated, storage of uncommon

blood types is simplified.

5. Since frozen blood can be shipped for long distances, distribution can be centralized and greater control established.

6. Preparation for freezing includes splitting the blood into

components; therefore, use of frozen blood promotes a far

more adequate supply of plasma products and less requirement

for plasmapheresis. 57

7. Since frozen blood is reconstituted in an artificial medium,

it can be tailored to meet specific requirements. For

example, low potassium blood can be reconstituted for the

treatment of burn patients.

8. Exchange transfusions for newborns with erythroblastosis are improved. The use of frozen blood minimizes concern over

electrolyte and pH changes which may occur if citrated blood

is used.

9. Massive transfusions in children can be given without the

danger of citrate toxicity. 58

B. Disadvantages

1. The direct cost of frozen blood is, at present, substantially

higher than that commonly charged for whole blood.

2. Few facilities are currently equipped to process and thaw

blood for transfusion. The Red Cross is opening 18 frozen

blood centers in the country this year. They expect that

the frozen blood will be used in kidney and open- heart

surgery virtually as fast as it is produced. 59

3. Extra time is required while thawing proceeds. Dr. Huggins

of Massachusetts General Hospital suggests an emergency

procedure. Small samples of recently frozen blood are refrigerated for about 15 days. While a cross-match is being

performed on a sample (a 45 minute procedure) , the blood can

be thawed simultaneously, (a 30-60 minute procedure). If

transfusion must be started immediately, blood of the

appropriate type which has been thawed for a forthcoming

operation can be used. Most frozen blood researchers agree

that it is possible to store a few thawed units for at least

one week in case an emergency occurs.

5 Plasmapheresis is the process of drawing blood and removing plasma, then

reinfusing the red cells and other blood components. Approximately

2,000,000 liters are collected and processed annually. The reactions asso- ciated with plasma collected by pheresis are not discussed in this report.

58The source for 8 and 9 is:

Becker, Pribor, and Remington, "Routine Use of Frozen Blood in a Community Hospital, Economic Dream or Reality?,

Transfusion , Vol. 11,

No. 5, 1971, p. 293.

59Personal communication with ANRC headquarters personnel.

27
4. Description of the Cost Analysis

4.1. Need for Cost Analysis

It has been argued that blood is a gift, not a commodity, indicating

that cost analysis is not applicable. 60 This concept is open to criticism

for the following reasons:

1. Not all blood is donated as a gift (i.e., without cost) by the

donor.

. 2. Even blood that is donated (as a gift by the donor) has associated

with it direct costs of collection, processing, storage, and

transfusion. These costs are at least partially paid for by the

blood recipient.

3. In addition to these direct costs, the total cost to the patient/

user includes indirect costs of disease, reaction, and shortage

that cannot be reflected in the price charged per unit and, in

specific instances, can be substantial.

4.2. Costing Methodology

The fee a recipient pays for whole blood and its administration by

the health practitioner is generally cited as the cost of blood to a patient. However, indirect costs (such as the cost of an extra preoperative day spent in the hospital because blood was not available on

the scheduled operation day and the cost of continued hospitalization for

post- trans fusion hepatitis) should also be considered. Similarly, cost

subsidies provided from charitable or Federal contributions are costs of

the system which must be included in a cost analysis of a set of alternatives if the results are expected to reflect the relative cost of each

alternative to society. Therefore, this report estimates the total cost

of a unit of blood as the sum of indirect costs and direct costs, whether

or not the payment of such costs is subsidized. The total cost does not

include artificial user penalties which are related to donor recruitment

philosophies and do not relate to the actual cost of system operation.

It also does not include costs of time spent by volunteers and incentives

provided by employers because sufficient data on the magnitude of these

costs is not available. Fortunately, there is no reason to expect that

the alternatives considered in this report will greatly affect the level

of such activities, and therefore, the effect of this omission on the

ranking of alternatives should be trivial.

Major cost related problems for which cost estimates have been

considered in this analysis are: outdating of blood which has been

collected; delay of operations due to blood shortage; allergic or febrile

reaction to transfused blood; transmission of serum hepatitis by transfusion; and transmission of cytomegalovirus or mononucleosis by transfusion.

60R. Titmuss, The Gift of Blood , Pantheon Books-Random House, 1971.

28
4.3. The Direct Costs and Charges

Direct charges to the user include a processing fee and a transfusion

fee, and sometimes, a replacement fee and a donor payment.

Most members of the American Association of Blood Banks adopt the

policy that blood donations would be encouraged by charging a high price

to any recipient who does not replace blood used, usually on a two-for- one basis. Those who do not replace blood are commonly charged $25/unit.

Their payments are sometimes used to defray the $15 processing charge for

those recipients who provide replacement donors. The replacement fee is

not charged for units supplied by the ANRC. Since the replacement fee is an artificial user penalty, it will not be counted as a cost factor in

subsequent analysis. The processing, transfusion, and replacement fees

are actual costs.

The processing cost has risen rapidly in the past five years. The

$15.10 per unit average ANRC processing cost for 1971 is used in our

analysis. Approximately $5 per unit was subsidized by community contributions, to the ANRC, but this subsidy is not included in the analysis.

The components of the $15.10 fee are:

Laboratory Supplies $2.45

Overhead and Amortization 2.00

Labor 7 . 00

Distribution .35

National Administrative and

Research Program 1.90

Recruitment, Canteen, and Mobile

Unit Operation 1.40 61

Using community contributions, the ANRC also absorbs the processing

cost of blood which outdates. Average cost due to outdating of processed

units in 1971 was approximately $2.65 per transfused unit (7.3 million

units collected x 15% outdate rate x $15.10 processing cost/ (7. 3 million

units collected x 85% transfused)).

A telephone survey of hospitals in several areas indicated that the

average transfusion fee is around $25 per unit. This fee covers costs of

transportation (approximately $2), laboratory work, tranfusion, and

administration of the hospital blood program.

In 1971, about 25.2% of the blood was obtained from paid donors who

are paid an average of $8 per unit. The donor payments are a direct cost

factor which currently average $2.40 per unit transfused (7.3 million units

collected x 25.5% paid x $8 payment/ (7. 3 million units collected x 85%

transfused)). The price charged by a commercial firm for blood includes

6I Blood Center Operations for the Year Ended June 50, 1971 , and the ANRC

Annual Report for FY 71 . This cost factor ignores the "costs" of time

spent by donors, donor incentives provided by employers, etc.

29
the processing fee and the firm's profit. In this analysis it has been

assumed that the firm's profit is approximately equivalent to recruitment

costs for a volunteer donor. Donor recruitment costs for paid non- commercial and unpaid donors are assumed to be approximately equal.

4.4. The Indirect Costs

Shortage Cost

It is estimated that approximately 3% of the operations for which

bloOd is reserved (whether or not it is actually transfused) are postponed for at least one day before enough blood of the correct type is

available. 62 Such delays are infrequent for common blood types (e.g.,

positive and A positive) but occur frequently for rarer types such as AB and B negative. The cost of such delays, including hospital fee, tests,

and lost earnings, is estimated to be $110/day. 63 (This is made up of an

average hospital cost per day of $90 plus lost wages conservatively

estimated at $20 per day.) In addition, such delays can contribute to

hospital overcrowding or place an unnecessary burden on hospital staffs.

Febrile and Hemolytic Reaction Costs

Febrile reactions are estimated to occur for 2.5% of all units transfused. 6t+ The cost of treatment for febrile reaction is negligible. However, there are also costs associated with discontinuing a transfusion

and with the effects that fever, urticaria, or related reactions will have

on a seriously ill individual. It is estimated that 10% of the febrile

reactions which occur result in a one day average prolongation of hospital

stay and that 90% will have negligible effect. Further, it is estimated

62Estimates of this value range from 1-8% based on hospital management

practices and other factors. A national average of 3% has been used for

the purposes of this cost analysis. This is consistent with figures in

J. B. Jennings, "An Analysis of Hospital Blood Bank Whole Blood Inventory

Control Policies," Transfusion , Vol. 8, 1968, p. 335.

63 Basic Facts on the Health Industry Prepared for the Committee on Ways

and Means , 1971 - adjusted for 1970 and 1971 hospital cost increases.

64 Kevy, Schmidt, McGinniss, and Workman, "Febrile, Nonhemolytic Transfusion

Reactions and the Limited Role of Leukoagglutinins in Their Etiology,"

Transfusion, Vol. 2, No. 1, 1962, pp. 7-16 found an incidence of 2.5%

of all units transfused. Personal communication with Lt. Col. Charles E.

Shields, Army Medical Research Laboratories, Ft. Knox, Ky. reveals that

the U. S. Army also experiences a 2.5% incidence. . "Evaluation of Blood

Transfusion Therapy," loc. cit. cites a per unit incidence of 2.8%.

30
that febrile reaction is a contributory cause of death in .01 percent of

transfusion episodes. 65

A serious hemolytic reaction which involves a potential direct life

hazard occurs to about one of every 2,500 patients (.04%). One in four

people experiencing a serious hemolytic reaction dies as a direct result.

Treatment in an intensive care ward is usually required, and an average

additional hospital expense of $3,000 is estimated for those patients

who suffer serious hemolytic reactions. This estimate does not include

the patient's wage loss.

Disease

Diseases which are known to be transmittable through transfusion

include serum hepatitis, mononucleosis, syphilis, malaria, and

cytomegalovirus. A rapid and reliable test for syphilis exists, and a four-day incubation period appears to totally mitigate transmission of

the disease. Malaria was relatively uncommon prior to the Vietnam

conflict and donors who have had the disease are rejected. Despite a massive research effort, the best approved hepatitis screening test is

reported to be only 25-30% effective. There are, in addition, about .2%

false positives. For the purpose of the cost analysis provided in

Chapter 5, the effectiveness of hepatitis testing has been parameterized

since a 50-601 effective test exists which has not been fully tested yet.

Post- transfusion hepatitis is sufficiently common that many hospitals

require patients to sign a form releasing the hospital from responsibility

before performing an operation in which blood may be required. Before

any HAA test became available, it was estimated that 1.5% of the patients

receiving transfusions were later hospitalized for overt (icteric) serum

hepatitis. 66 Approximately 10% of those hospitalized for the disease

die. 66 The average hospital stay is estimated to be 28 days. Hospitalization is followed by a one-month convalescence period if the patient

recovers. 66 Costs of medical care and lost wages during convalescence

are assumed to be $750.

6 Consensus arrived at through personal communication with most of the

physicians who have published information on febrile incidence.

66NAS-NRC, op. cit.

Dr. Sam Gibson, JAMA , Vol. 186, p. 272, 1963.

Chalmers, Koff, and Grady, "A Note on Fatality in Serum Hepatitis,"

Gastroenterology , Vol. 49, pp. 22-26, 1965

internal working documents of the DHEW Task Force on Blood Banking.

Personal communication with Dr. Huggins.

31
Incidence of anicteric (no overt symptoms) hepatitis has been shown

to be approximately four times the incidence of icteric hepatitis. 57

Anicteric hepatitis can become chronic, but no costs have been assigned

for it in this report.

There has been considerable public discussion of the fact that

commercially purchased blood involves a much higher risk of serum

hepatitis. Studies have produced widely varying estimates of the difference, but a common figure is ten times the risk associated with freely

donated blood. Hepatitis incidence in blood obtained from paid donors

by nonprofit groups is between these extremes, although some have even claimed that paid registry donors are safer than volunteers. 68 In the

subsequent analysis, we assume that blood from paid donors has five times

as high an incidence as blood from unpaid donors. To determine the

volunteer incidence, y, we observe that pre-HAA incidence with 25.51

paid donors is 1.5% = .745y + .255(5y) % 2y. Thus, volunteer incidence

is .75% and paid incidence is 3.75%.

Cytomegalovirus is a disease in which interest has recently been

shown. In its mild form, cytomegalovirus results in fever, anarexia,

and malaise; more severe reactions frequently involve hemolytic anemia

and mild hepatitis. Incidence of the disease is largely unstudied, but

appears to be significant. Furthermore, a close relative of cytomegalovirus, the Epstein Barr virus, has been identified as the cause of

heterophile positive mononucleosis, and has been tentatively associated

with a number of other very serious diseases. This family of viruses is

clearly dangerous, and cytomegalovirus may prove to be as costly as febrile reaction or hepatitis.

A very recent study shows that leucocyte poor blood significantly

reduces cytomegalovirus risk, but the mechanism involved is unknown.

For the purpose of this cost analysis, it is postulated that cytomegalovirus results in an average two day increase in hospitalization. Almost

no data is available on the post- transfusion incidence of cytomegalovirus

but a small sample of major surgery patients evidenced a 32% incidence

of mild attacks of the virus. Figures from open-heart and renal surgery

indicate that fifty to seventy- five percent of the patients whose

operations require blood pumps contract the disease. At least ten thousanc

67 Since the average transfusion involves in excess of three pints, the

incidence of hepatitis per unit of blood is less than 1/3 of this figure,

Personal communication with the ANRC indicates that they have found 1.3

positives per hundred units tested by a 25% effective HAA test. This

implies that 5 . 2 volunteer units in every hundred carry hepatitis . The

detection rate has been reduced to 0.85 per hundred through use of a donor registry.

68 See e.g., J. Alsever, "The Blood Donor II. Blood Donors Associated

with Homologous Serum Hepatitis: An Analysis of 211 Donors Involved in

70 Cases," The American Journal of the Medical Sciences , Vol. 240,

July 1960, pp. 48-56.

32
such operations are performed each year. In about 5% of .these operations

a severe case of cytomegalovirus develops, requiring an average of 15

days additional hospitalization. Approximately one percent of these

reactions cause terminal complications

6 9

4.5. Summary of the Cost Factors

The cost factors of importance are:

Direct

Processing fee:

Transfusion fee:

Outdating:

Donor payment:

Indirect

$15.10

$25.00

Processing fee x % outdate/% transfused

$8 x % paid/ % transfused

Hepatitis Hospitalization:

Hepatitis Convalescence

Hepatitis Death:

Shortage:

Febrile Reaction:

Febrile Death:

Serious Hemolytic Reaction:

Serious Hemolytic Death:

.751 of patients ((100% - % paid)

+ 5 x % paid) x % test effectiveness x 28 days x $110 per day

.75% (100% + 4 x % paid) x % test

effectiveness x 90% recover x $750

convalescence

.75% (100% + 4 x % paid) x % test

effectiveness x 10% die x cost

associated with death

2.7 million delayable operations x % of operations delayed x 1 day of

delay x $110 per day

2.5% of units x 10% serious x 1 day

of hospitalization x $110 per day

.01% of episodes x cost associated with

death

.04% of episodes x $3000 treatment

.04% of episodes x 25% die x cost

associated with death

69This section is largely based on private communication with researchers

in the field, largely with Dr. David Lang of Duke University. Also see Kantor and Johnson, "Latent Cytomegalovirus Infection and Blood Transfusion," Annals of Internal Medicine, Vol. 73, No. 2, pp. 333-334.

33
Indirect (continued)

Minor Cytomegalovirus Reaction: 10K operations x 50% minor reactions

x 2 days of hospitalization x $110

per day

Major Cytomegalovirus Reaction:

Cytomegalovirus Death:

10K operations x 5% serious reactions

x 15 days of hospitalization x $110

per day

10K operations x 5% serious reactions

x II die x cost associated with death

5. Analysis of Alternatives

This chapter presents a cost analysis of seven alternative concepts

for a blood banking system. These alternatives are representative of

certain legislative proposals discussed in Chapter 2 of this report or other possible choices suggested by the debate on blood banking. The

alternatives are:

(1

(2

(3

(4

(5

(6

(7

(8

current system

tax incentive

regional coordination

regional coordination with 28- day blood life

Milwaukee donor and coordination programs

transfusion review board

frozen blood

legislative elimination of paid donors.

Based on the analysis, cost- efficient combinations of the alternatives

are developed. Details of the alternatives appear in the appropriate

sections. To facilitate comparison, Table 2 lists the values for outdate

rate; number of units to be collected and transfused; and percentage of

paid units, which were ascribed to the alternatives. The estimated

percentages of paid units were based upon the assumption that a reduction

in collection requirements would not affect the availability of blood

given voluntarily. Data relating to disease incidence, effect, and

cost are extremely limited; therefore, it must be cautioned that the

analysis which follows has been based on estimates or judgments that

could be inaccurate. The basic data developed and used is not intended

to be precise but is believed to have value for ranking the relative

cost of blood banking alternatives. Concern with data reliability and

the possible implications of selecting an improper parameter value

necessitated the sensitivity analysis. This is reported in Section 5.11.

As the cost of contracting hepatitis is a major component of indirect cost, each alternative has been evaluated at three different

levels of hepatitis test effectiveness (301, 60%, and 90%). A 30%

effective hepatitis test is assumed for the current system. Graphs in

34
Section 5.10 show direct, indirect, and total cost for these levels and

permit interpolation for other test effectiveness levels. —

.

Table 2

Alternative Number Percentage Outdate Number

of Units of Units Rate of Units

Collected from Paid (%) Transfused

(Millions) Donors (Millions)

Current System 7.3 25.5 15 6.2

Tax Incentive

(Mean Effect) 7.3 12.75 15 6.2

Regional Coordination

(RC) 6.6 18.5 6 6.2

RC with 2 8- Day Life 6.4 14.8 3 6.2

Transfusion Review

Board 7.3 22.3 15 5.96

Milwaukee Control

Program (MCP) 6.6 3.0 6 6.2

MCP with 2 8- Day Life 6.4 0.0 3 6.2

MCP with Transfusion

Review 6.35 0.0 6 5.96

Frozen Blood 6.25 12.8 1 6.2

The cost analysis uses estimated 1971 figures which have been

discussed in previous chapters. Some of these are restated here to

facilitate the understanding of the next sections.

7.3 million units of blood were collected in 1971

5.45 million units were collected from volunteers in 1971

« 6.2 million units of blood were transfused in 1971

2 million persons were transfused in 1971

blood was cross-matched and held for 2.7 million delayable

operations in 1971

blood was actually transfused in 1 million of these operations

10 thousand open- heart and renal operations were performed in

1971

$110 per day is the average cost of hospitalization and lost wages.

In addition, some number is needed to represent the value of a human

life. Although the cost of a life depends on the person's age and many

other specific factors, data limitations almost always restrict cost

considerations to the use of a single average value. The most commonly

cited dollar value of a human life is the $45,000 figure estimated and

publicized by the National Safety Council in July 1971. The National

Highway Traffic Safety Administration, in attempting to determine the

cost-benefit ratio of a proposed safety standard for large trucks, cited

the NSC's calculated per life estimate of worth but used its own

"preliminary estimate" of $200,000 per life. The highest value of human

35
life used in conventional cost-benefit analysis was a Federal Aviation

Administration estimate of $300,000. Another air travel related estimate,

contained in a 1968 report entitled 'Aviation Safety" which was written

by Gary Fromm, then of Duke University, and reprinted by the Brookings

Institution, concluded that "a conservative estimate. . .of the value of

life based only on lost productive services and resources expended would

be $275, 000.

70 We will use the conservative $45,000 as a base value in

this analysis and subsequently parameterize it for the interesting

alternatives.

5.1. The Current System

Direct Cost of Transfused Units

Direct costs associated with a transfused unit total $45.15. The

direct cost components are:

Processing: $15.10

Transfusion: 25.00

Outdating: 15% outdated x $15.10 processing fee/85%

transfused71 2 . 65

Donor Payment: 7.3 million collected x 25.5% paid x $8

average payment/6. 2 million units transfused 2.40

Total $45.15

Indirect Cost

Aggregate indirect costs for all units transfused are:

Operation Delay: 2.7M operations x 3% delay x 1 day of

delay x $110 per day $ 8.9M

Febrile Reaction: 6.2M units transfused x 2.5% febrile

reaction x 10% serious x 1 day of hospitalization x $110 per day 1.7M

Febrile Death: 2M transfusion episodes x .01% febrile

deaths x $45K per death 9.0M

Hemolytic Reaction: 2M transfusion episodes x .04%

hemolytic reaction x $3K per reaction 2.4M

Hemolytic Death: 2M transfusion episodes x .04%

hemolytic x 25% die x $45K per death 9.0M

70This discussion was based on an article entitled, "Worth of Life,

Dollar Estimates Vary Widely," Status Report , Insurance Institute for

Highway Safety, Vol. 7, No. 4, 2/28/72, p. 4.

7I Fifteen percent outdated x $15.10 x 7.3 million collected/ (85% x 7.3

million collected)

.

36
Indirect Cost (continued)

Icteric Hepatitis Reaction: 2M transfusion episodes x 1.5%

hepatitis x 70% ineffective hepatitis test x 28 days

of hospitalization x $110 per day 64. 7M

Icteric Hepatitis Convalescence: 2M transfusion episodes x 1.5% hepatitis x 70% ineffective test x 90% recover x $750 per convalescent 14. 2M

Icteric Hepatitis Death: 2M transfusion episodes x 1.5%

hepatitis x 70% ineffective test x 10% die x $45K per

death 94. 5M

Major Cytomegalovirus Reaction: 10K open-heart and renal

operation x 5% major reactions x 15 days of

hospitalization x $110 per day .8M

Cytomegalovirus Death: 10K operations x 5% major x 1%

die x $45K per death .2M

Minor Cytomegalovirus Reaction: 10K operations x 50% minor

reactions x 2 days of hospitalization x $110 per day 1.1M

Total 206.5M

M = million K = thousand

Indirect costs per unit transfused total $206.5M/6.2M

units or $33.30/unit.

Currently, the average cost of a unit of blood is estimated to be

$78.45"! If hepatitis testing became 60% effective (which will probably

cost $1 more than the $ . 50 cost of the current HAA test) , the total cost

per unit would be $67.45 and the hepatitis attack rate would be 0.6%;

if it became 90% effective (a 0.15% attack rate), total cost would be

$55.45.

The estimated 2,505 transfusion-related deaths for 1971 are broken

down as follows:

Febrile: 2M x .01% 200

Hemolytic: 2M x .04% x .25 200

Hepatitis: 2M x 1.5% x .7 x 10% 2,100

Cytomegalovirus: 10K x 5% x 1% 5

Total 2,505

With more effective hepatitis testing, total projected deaths drop to:

60% effective 1,605

90% effective 705.

5.2. Tax Incentive

Under this alternative, proposed by Rep. Edward Koch, (D-NY) , each

person who gave a pint of blood would receive a $25 income tax exemption,

up to a maximum of '$125 per year. According to an estimate made by the

Internal Revenue Service, this program would be the equivalent of a $3.10

37
Federal subsidy per voluntarily donated unit. 72 The ANRC and the AABB

point out that a tax write-off could tempt donors to withhold pertinent

health facts, thus contributing towards contamination of blood quality.

Furthermore, ANRC studies show that an increase in donations is mainly

achieved by personal appeals, not minor monetary incentives. Since the

monetary incentive is small, it is unlikely that employer attitudes about

the charitable nature of blood donation will be significantly affected.

We assume that the tax incentive will not affect current outdating

and shortage rates. The only cost factors which will differ from the

current system are the hepatitis incidence, the subsidy cost, and the

average donor payment. Assuming that hepatitis incidence is five times

as high with paid blood, all of these costs become functions of the

percentage of paid donors. Therefore, the key to estimating the cost of

blood after institution of a tax incentive program is to determine what

percentage of paid donors will be eliminated. In this analysis, the costs

for three possibilities were investigated:

(1) All paid donors are eliminated.

(2) 50% of current paid donors are eliminated.

(3) No paid donors are eliminated.

The tax subsidy is treated as a direct cost.

All Eliminated

In this case, the hepatitis incidence is expected to be reduced by

50% 73

, and the hepatitis costs become:

$32. 3M

7.1M

47. 3M

86. 7M

Since indirect costs other than the hepatitis costs are $32. 1M, total

indirect costs are $119. 8M or $19.30/unit transfused.

The average donor payment of $2.40 is eliminated in this instance,

and the subsidy of $3.10 is paid for all units collected. Average subsidy

per unit transfused is thus $3.65 (7.3M units collected x $3.10 subsidy

per unit/6.2 million units transfused). Total direct costs including

subsidies therefore increase to $46.40 per unit transfused.

Reaction: 2M x .75% x .7 x 28 x $110

Convalescence

:

2M x .75% x .7 x 90% x $750

Death: 2M x .75% x .7 x 10% x $45K

Total Hepatitis :

72Range of the estimate was between $2.50 and $3.75 tax loss per donation.

73 If all volunteer incidence is X, incidence with 25.5% paid donors is

.7451 + .255(5X) ^ 2X. The reduction in incidence is X/2X or 50%.

38
Total cost per unit transfused in a tax incentive system with no paid donors is $65.70. The cost with a 60% effective hepatitis test

would be $60.70/unit. With a 901 effective hepatitis test, the cost would

be $54.70/unit.

The number of hepatitis deaths is expected to be halved, and total

projected deaths become:

30% effective test 1,455

60% effective test 1,005

90% effective test 555.

50% Eliminated

In this case, the hepatitis incidence is expected to be reduced by

25%

7i+

, and the hepatitis costs become:

Reaction: 2M x 1.125% x .7 x 28 x $110 $48. 5M

Convalescence: 2M x 1.125% x .7 x 90% x $750 11. 8M

Death: 2M x 1.125% x .7 x 10% x $45K 70. 9M

Total Hepatitis: 131. 2M

Total indirect costs are thus $164. 3M or $26.45/unit transfused.

The average donor payment becomes $1.20 (7.3M x 12.75% paid x

$8/6. 2M) and the average subsidy per unit transfused is $3.20 (7.3M x

87.25% unpaid x $3.10/6.2M). Total direct costs, including subsidies,

therefore increase to $47.15 per unit transfused.

Total cost per unit transfused is $73.60. The cost with a 60%

effective hepatitis test would be $65.55/unit. With a 90% effective

hepatitis test, the cost would be $56.50/unit.

The number of hepatitis deaths is expected to be reduced by 25%,

and total projected deaths become:

30% effective test 1,980

60% effective test 1,305

90% effective test 630.

None Eliminated

If the tax incentive did not reduce the current number of paid

donors, the indirect costs would not change. The direct costs would

increase by the amount of the subsidy. The subsidy is $2.70/unit

7t+ If all volunteer incidence is X, incidence with 25.5% paid donors is

2X and incidence with 12.75% paid donors is .8725X + .1275(5X) * 1.5X.

The reduction in incidence is .5X/2X or 25%.

39
transfused (7.3M x 74.51 unpaid x $3.10/6.2M). Direct costs are $47.85,

and total costs are $81.15. Total projected deaths are the same as projections for the current system.

5.3. Regional Coordination

This alternative assumes nationwide implementation of a regional

management information and inventory control system. Such a system cost<

about $.45/unit collected. 75

Regional coordination has cut outdating from 15% to 6% and shortage

from 3% to 1% in a number of regions. 76 With 6% outdating, 6.6M units

of blood are required. Since approximately 5.45M unpaid units are assumec to be collected, 1.15M paid units will be required (18.5% of total

collections). Commonly two to five years will be required before a coordination program reaches operational efficiency.

When the coordination program is in operation, the hepatitis

incidence is expected to be reduced by 12. 5% 77

, and the hepatitis costs

become

$56. 6M

12. 4M

82. 7M

151. 7M

The shortage cost becomes:

Operation Delay: 2.7M x 1% x 1 x $110 3.0M

Costs of cytomegalovirus and febrile and hemolytic reaction remain at

$24. 2M. Indirect costs total $178. 9M or $28.85/unit transfused.

Direct costs are $43.05/unit broken down as follows:

Processing: $15.10

Added Processing Cost for Program Operation: .45

Transfusion: 25 . 00

Reaction: 2M x 1.31251 x .7 x 28 x $110

Convalescence

:

2M x 1.3125% x .7 x 90% x $750

Death: 2M x 1.3125% x .7 x 10% x $45K

Total Hepatitis:

75Personal communication with ANRC on cost of their system. See also

e.g., Masouredis, op. cit.

76J.B. Jennings, "An Analysis for Hospital Blood Bank Whole Blood

Inventory Control Policies," Transfusion , Vol. 8, 1968, p. 335.

77 If all volunteer incidence is X, incidence with 25.5% paid donors is

2X and incidence with 12.75% paid donors is .815X + .185(5X) = 1.75X.

The reduction in incidence is .25X/2X or 12.5%.

40
Outdating: 6% x $15.55/99% 1.00

Donor Payment: 1.15M paid x $8 payment/6. 2M units transfused 1.50

Total cost is thus $71.90/unit with regional control and a 301

effective hepatitis test. The cost with a 601 effective hepatitis test

would be $62.40/unit. With a 90% effective hepatitis test, the cost

would be $51.90/unit.

The number of hepatitis deaths is expected to be reduced by one- eighth, and total projected deaths become:

30% effective test 2,275

60% effective test 1,485

90% effective test 695.

5.4. Regional Control and 28-Day Blood Life

Here the assumption is that a regional control program which allows

paid donor participation is coupled with use of the CPD blood additive

to extend shelf life to 28 days. The cost increase is $.45/unit

collected. 78 A one week extension in blood life with regional control

is estimated to result in a reduction of outdating from 15% to 3% and to

eliminate shortage. With 3% outdating, 6.4M units of blood are required.

Since 5.45M unpaid units are assumed to be collected, .95 paid units are required (14.8% of total collections). At least one year would be required

in order to obtain approval for the increase in legal blood life with CPD

storage. Two to five more will probably be required before the control

program reaches operational efficiency.

When the coordination program is in operation, the hepatitis

incidence is expected to be reduced by 20% 79

, and the hepatitis costs

become

Reaction: 2M x 1.2% x .7 x 28 x $110 $51. 8M

Convalescence: 2M x 1.2% x .7 x 90% x $750 11. 3M

Death: 2M x 1.2% x .7 x 10% x $45K 75. 6M

Total Hepatitis: 138. 7M

Costs of cytomegalovirus and febrile and hemolytic reaction remain at

$24. 2M. Indirect costs thus total $162. 9M or $26.25/unit transfused.

78 In large quantities, ACD and CPD are equal in cost and the regional

control program is the only anticipated cost increase.

79 If all volunteer incidence is X, incidence with 25.5% paid donors is 2X

and incidence with 12.75% paid donors is .852X + .148(5X) RJ 1.6X. The

reduction in incidence is .4X/2X or 20%.

41
Direct costs are $42.25/unit broken down as follows:

Processing: $15.10

Added Processing Cost for Program Operation: .45

Transfusion: 25.00

Outdating: 3% x $15.55/991 .50

Donor Payment: .95M paid x $8 payment/ 6. 2M units transfused 1.20

Total cost is thus $68.50/unit with regional control and a 301

effective hepatitis test. The cost with a 60% effective hepatitis test

would be $59.90/unit. With a 901 effective hepatitis test, the cost would

be $50.30/unit.

The number of hepatitis deaths is expected to be reduced by one- fifth,

and total projected deaths become:

30% effective test 2,085

601 effective test 1,365

90% effective test 645.

5.5. Milwaukee Donor and Coordination Programs

This alternative assumes nationwide adoption of the regional

coordination, donor recruitment and donor retention programs now in use

in Milwaukee. The cost of these programs is about $2.90/unit collected

(including all costs of donor recruitment, canteen, and mobile unit

operations—the processing cost therefore increases by $1.50/unit).

The Milwaukee system cuts outdating to 6% and shortage to 1%. With

6% outdating, 6.6M units of blood are required. As a result of the donor

programs, the paid noncommercial donors will be replaced on a one-for-one

basis by unpaid donors. Since 6.4M noncommercial units are assumed to be

collected, only . 2M commercial units will be required (3.0% of total

collections) . Once again, two to five years will probably be required

before the coordination programs reach anticipated operational efficiency.

With the Milwaukee program in operation, the hepatitis incidence is

expected to be reduced by 44% 80

, and hepatitis costs become:

Reaction: 2M x .84% x .7 x 28 x $110 $36. 2M

Convalescence: 2M x .84% x .7 x 90% x $750 7.9M

Death: 2M x .84% x .7 x 10% x $45K 52. 9M

Total Hepatitis: 97. 0M

The shortage cost becomes

Operation Delay: 2.7M x 1% x 1 x $110 3.0M

80 If all volunteer incidence is X, incidence with 25.5% paid donors is 2X

and incidence with 3% paid donors is .97X + . 03(5X) = 1.12X. The

reduction in incidence is .88X/2X or 44%.

42
Costs of cytomegalovirus and febrile and hemolytic reaction remain at

$24. 4M. Indirect costs thus total $124. 2M or $20/unit transfused.

Direct costs are $42.90/unit broken down as follows:

Processing: $15.10

Added Processing for Program Operation: 1.50

Transfusion: 25.00

Outdating: 6% x $16.60/94% 1.05

Donor Payment: . 2M paid x $8/6. 2M .25

Total cost is thus $62.90/unit with the Milwaukee program and a

301 effective hepatitis test. The cost with a 60% effective hepatitis

test would be $57.20/unit. With a 90% effective hepatitis test, the

cost would be $50.50/unit.

The number of hepatitis deaths is expected to be reduced by 44% and

projected deaths become:

30% effective test 1,580

60% effective test 1,075

90% effective test 570.

5.6. Transfusion Review Board

Under this alternative, peer review of physician decisions in a 5%

sample of all transfusion episodes would become a requirement for

Medicare certified hospitals. 81 It is estimated that approximately one hour of physician time (at $35 per hour) will be required for each review.

The review is assumed to eliminate all of the unnecessary single unit

transfusions. Currently, an estimated 20% of all transfusion episodes

involve a single unit; at least 60% of these transfusions are now considered unnecessary. Using these proportions, peer review is assumed to

reduce the demand for blood by 240,000 units (2M transfusion episodes x 20% single unit x 60% unnecessary) and the number of transfusion episodes

by an equal amount. Assuming continuation of the existing 15% outdate

rate, 7.0M units must be collected so that 5.96M units can be transfused.

The number of paid collections required is reduced to 1.56M units (22.3%

of total collections)

.

Total direct cost is $45.35 broken down as:

Processing: $15.10

Transfusion: 25.00

Outdating: 15% x $15.10/85% 2.65

Donor Payment : 1 . 56M x $8/5 . 96M 2 .10

Transfusion Review: 1.76M transfusion episodes x 5%

reviewed x $35 per review/5. 96M units transfused .50

8I This will cover about 85% of the hospitals. However, it is assumed that

the AHA certification committee will follow suit.

43
The hepatitis incidence is expected to be reduced by 5%. 82 The

indirect cost equations parallel those for the current system. Aggregate

indirect costs for all units transfused are:

Operation Delay83 : 2.7Mx3Ulx $110 $8.9M

Febrile Reaction: 5.96M x 2.5% x 10% x 1 x $110 1.6M

Febrile Death: 1.76Mx .01% x $45K 7.9M

Hemolytic Reaction: 1.76M x .04% x $3K 2.1M

Hemolytic Death: 1.76M x .04% x 25% x $45K 7.9M

Icteric Hepatitis Reaction: 1.76M x 1.425% x 70% x 28 x $110 54. 1M

Icteric Hepatitis Convalescence: 1.76M x 1.425% x 70% x 90% x $750 11. 8M

Icteric Hepatitis Death: 1.76M x 1.425% x 70% x 10% x $45K 79. 0M

Major Cytomegalovirus Reaction: 10K x 5% x 15 x $110 .8M

Cytomegalovirus Death: 10K x 5% x 1% x $45K .2M

Minor Cytomegalovirus Reaction: 10K x 50% x 2 x $110 1.1M

Total $175. 4M

Indirect costs per unit transfused total $175.4M/5.96M units or $29.40/

unit.

Total cost per unit transfused is $74.75 with a transfusion review

board and a 30% effective hepatitis test. The cost with a 60% effective

hepatitis test would be $65.35/unit. With a 90% effective hepatitis

test, the cost would be $54.95/unit.

Total projected deaths are expected to be:

30% effective hepatitis test

8t+ 2,110

60% effective hepatitis test 1,355

90% effective hepatitis test 605.

5.7. Frozen Packed Red Blood Cells

Under this alternative, except in cases of dire emergency, red cells

would always be frozen after collection. Dr. Meryman of the ANRC Research

Laboratory estimates the added costs of processing frozen blood in

82 If all volunteer incidence is X, incidence with 25.5% paid donors is

2X and incidence with 22.3% paid donors is .777X + .223(5X) ^ 1.9X. The

reduction in incidence is .1X/2X or 5%.

83We assume that the number of operations delayed for a single unit

transfusion is negligible.

175

175

1,755

44

^Febrile: 1.76M x .01%

Hemolytic

:

1.76M x .04% x 25%

Hepatitis

:

1.76M x 1.425% x 70% x 10%

Cytomegalovirus

:

10K x 5% x 1%
comparison to current processing techniques is $19.15. 85 This is made up

of:

Bag $2.00

Solutions 5.55

Plastic Tubing and Disposable Wash Bowl 7.60

Technician Time (6 Units Per Hr. Freeze - 3 Per Hr. Thaw) 3.50

Amortization of Equipment 2.00 86

Material Not Used, But Used in Current Nonfrozen Processing -1.50 87

Total 19.15

Frozen blood banking has been shown to reduce outdating to 1%. With \%

outdating, only 6.25M units are required. Since 5.45M unpaid units are assumed to be collected, only . 8M paid units will be required (12.8% of

total collections). Before implementing a frozen blood system, it would

be necessary to obtain DBS sanction for an increase in approved thawed

blood life from the current 24 hours to one week.

Direct costs for frozen red cells total $60.65 broken down as follows

Current Processing: $15.10

Added Processing Cost: 19.15

Transfusion: 25.00

Outdating: \% outdated x $34.25 processing fee/99% transfused .35

Donor Payment: . 8M paid x $8 payment/6. 2M transfused 1.05

Total 60.65

As stated in Section 3.7, frozen blood effectively reduces hepatitis

risk to zero and results in almost no febrile and hemolytic reactions.

Although it appears that frozen blood does not transmit cytomegalovirus,

this has not been scientifically demonstrated as yet, and we will ignore

the possibility. Frozen blood banking virtually eliminates shortages.

Thus, the only indirect cost is cytomegalovirus at $2.2M/6.2M units or

$.35/unit. The cost of frozen blood is thus estimated at $61 unit for

all hepatitis testing levels (i.e., hepatitis risk is eliminated at all

levels)

85Personal communications with Dr. Meryman. Figures obtained from

Dr. Huggins are consistent with these. See also Becker, Pribor, and

Remington, "Routine Use of Frozen Blood in a Community Hospital, Economic

Dream or Reality?" Transfusion , Vol. 11, No. 5, 1971, p. 293. Becker's

calculations do not "assume widespread adoption of blood freezing.

86Based on the equipment requirements calculated in Section 6.4. Freezing

equipment has a 15 -year life and washing equipment has a five-year life.

87Blood bag: $1.40, materials for minor crossmatch exempted by DBS:

$0.10.

45
Total projected deaths are expected to be five people at all levels

of hepatitis testing. There are several differences between this alternative and those discussed previously:

(1) The cost of the system is distributed evenly among all blood

recipients. Those unfortunates who have rare blood types,

allergic constitutions, or bad luck are not forced to bear a disproportionate share of the costs.

(2) The quality of the blood is higher.

(3) Since most blood antibodies are eliminated, blood becomes

truly universal.

(4) A wide spectrum of blood derivatives will become less scarce because components separated in preparation for freezing (such

as plasma) and not used for transfusion can be diverted for other

purposes. As these products have economic value, component

sale has the effect of spreading blood cost over several users,

i.e., the average cost of any individual component is reduced.

Becker estimates that in today's blood market, component

separation and sale could reduce the average cost of a unit of

frozen blood by more than $10. 88

The reader is referred to Section 3.7 for a discussion of additional

uncosted benefits of frozen blood banking.

5.8. Outlawing of the Paid Donor

In costing the seven alternatives, it was assumed that an adequate

supply of blood could only be made available by using some paid donors.

The projected number of deaths and the cost per unit proved highly

sensitive to the percentage of paid donors. In this section, the choice

between an inadequate supply with no paid donors and an adequate supply

with paid donors is analyzed. The specific question which is addressed

here is:

Given that a 30% effective HAA test is in use, is it ever

cost effective to outlaw the paid donor?

The unit of measure will be the cost per unit required for transfusion.

We assume the case that blood unavailability will be absorbed by

transfusing one less unit than the attending physician considered desirable. The effects of such a policy would probably be less harmful than

the effects of alternative policies. For example, under this policy,

unavailability of 100,000 units means that 100,000 transfusions will be

one unit short rather than that 30,000 transfusions will not be performed.

88 Becker, Pribor, and Remington, "Routine Use of Frozen Blood in a Community Hospital - Economic Dream or Reality?" Transfusion , Vol. 11,

No. 5, 1971, p. 292.

46
The effects of unit unavailability under the chosen policy are assumed to

be that 3% of those shorted die, 48.5% are hospitalized for two extra days,

and 48.5% are hospitalized for ten extra days. It is quite possible that

the effects would be more drastic.

On the basis of the assumptions, an equation is derived in Appendix

C which expresses the maximum percentage of paid donors which could be

cost- effectively eliminated as a function of the outdating rate before

and after the paid donor is eliminated. This equation shows that being

short a unit is worse than using a paid unit. Thus, if the outdate rate

does not drop, it is never cost effective to outlaw the paid donor.

Table 3 shows the percentage of paid donors which could potentially

be replaced by strategies designed to reduce outdating. These values

were obtained by using the initial outdating rates in the alternatives

and a final outdating rate of zero. In general, if a decrease in outdating is achieved, the percentage decrease is approximately equal to

the percentage of paid donors which can be cost-effectively eliminated.

Table 3

Initial Outdating (%) Maximum Achievable Reduction

in % Paid Donors

1%

3%

6%

15%

1.04%

3.11%

6.23%

15.53%

Thus, among the alternatives that have been considered, the strategy

of reducing outdating could only potentially eliminate all paid donors in

the Milwaukee control program. It is difficult to estimate the chance of

eliminating all paid donors from the tax incentive alternative by an outdate reduction stragegy. Similar estimates of potential payoff can be

anticipated when considering strategies intended to reduce the demand

for blood.

5.9. Combinations of Alternatives

Since the cost equations are sensitive to the percentage of paid

donors and even more sensitive to blood unavailability, alternatives

which provide fully adequate supplies of blood from unpaid donors are desirable. Situations which do not require paid units will result from

two combinations of the alternatives which were previously considered:

(1) Milwaukee control program with 28-day blood life.

(2) Milwaukee control program with transfusion review.

47
As before, it is expected that two to five years will be required

before the "Milwaukee program" reaches operational efficiency and that a decision on licensing of CPD will require at least a year.

The Milwaukee program can be expected to provide 6.4M unpaid units.

6.4M units will be required with 28-day blood life and 6.34M units will

be required with transfusion review. Therefore, no paid units will be

required for either alternative. As shown on page 38, the hepatitis

incidence is expected to be halved.

28-Day Life

The hepatitis costs become

Reaction: 2M x . 75% x

Convalescence

:

2M x .75% x

Death: 2M x . 75% x

Total Hepatitis

70% x 28 x $110

70% x 90% x $750

70% x 10% x $45K

$32. 3M

7.1M

47. 3M

86. 7M

Cost of cytomegalovirus and febrile and hemolytic reaction remain at

the current level of $24. 2M. It is assumed that there will be no shortage

with 28-day blood life. Indirect costs total $110. 9M or $17.85/unit

transfused.

Direct costs are $42.15/unit broken down as follows:

Processing:

Added Processing for Program Operation:

Transfusion:

Outdating: 3% x $16.60/97%

$15.10

1.50

25.00

.55

Total cost is thus $60/unit with a 30% effective hepatitis test.

The cost with a 60% effective hepatitis test would be $55/unit. With a

90% effective hepatitis test, the cost would be $49/unit.

The number of hepatitis deaths is halved and total projected deaths

are expected to be:

30% effective test

60% effective test

90% effective test

,355

955

555,

Transfusion Review

The hepatitis costs become:

Reaction: 1 76M x .75% X 28 x $110

Convalescence

:

1 76M x .75% X 70% x 90% X $750

Death 1 76M x .75% X 70% x 10% X $45K

Total Hepatitis

$28. 5M

6.2M

41. 6M

80. 3M

48
Costs of cytomegalovirus and febrile and hemolytic reaction are $21. 6M

as calculated in Section 5.6. The Milwaukee program reduces shortages

to 1%, and the shortage cost becomes:

Operation Delay: 2.7M x II x $110 3.0M

Indirect costs total $100. 9M or $16.90/unit transfused.

Direct costs are $43.15/unit broken down as follows:

Processing: $15.10

Added Processing for Program Operation: 1.50

Transfusion: 25.00

Outdating: 6% x $16.60/941 1.05

Transfusion Review: 1.76M x 5% x 1 x $35/5. 96M .50

Total cost is thus $60.05/unit with a 30% effective hepatitis test.

The cost with a 60% effective hepatitis test would be $55.55/unit. With

a 90% effective hepatitis test, the cost would be $50.05/unit.

Total projected deaths are:

30% effective test 1,280

60% effective test 885

90% effective test 485.

5.10. Comparison of Costs

Eight alternative concepts for a revised blood banking system have

been presented:

(1) Tax incentive (50% of current paid donors eliminated gives the

mean effect)

.

(2) Regional coordination.

(3) Regional coordination with 28- day blood life.

(4) Transfusion review board.

(5) Milwaukee donor and coordination programs.

(6) Milwaukee programs with 28- day blood life.

(7) Milwaukee programs with transfusion review board.

(8) Frozen blood.

Table 4 lists the direct, indirect, and total costs separately for

each alternative for three levels of effectiveness of hepatitis testing.

When comparing these figures, it is important to consider that direct

costs are borne by all blood recipients whereas indirect costs are average costs of reactions which strike at random and affect only a small

segment of blood recipients. Average cost figures mask the fact that

very high costs are borne by a few. Thus, the inequity of a situation

increases as the indirect costs increase. Figures A, B, and C show graphs

of total, indirect, and direct costs for each alternative.

49
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50
I 65-

r 30 40 50 60 70 80 90

HEPATITIS TEST EFFECTIVENESS (%)

100

FIGURE A -TOTAL COST

51
30

HEPATITI

50 60 70 80 90

TEST EFFECTIVENESS (%)

100

FIGURE B- INDIRECT COST

52
70

60-

<

-I 50-

OQ

40-

Frozen

RC With 28 Day Life

Milwaukee Control Program (MCP)

Tax Incentive (Mean Effect)

/ Transfusion Review Board

Regional Coordination (RC)

^f Current System

MCP With Transfusion Review

MCP With 28 Day Life

30

i i i i

1 1 r

20 30 40 50 60 70 80 90

HEPATITIS TEST EFFECTIVENESS (%)

FIGURE C - DIRECT COST

100

53
It is evident that, for liquid- stored blood, there is little var- iation among the alternatives in direct cost per unit of blood transfused.

Frozen blood costs are higher. Note that the difference in direct costs

of liquid storage alternatives decreases considerably as HAA test effectiveness increases.

The indirect cost of frozen blood is virtually nil; this is the only

alternative in which costs are uniformly distributed among blood recipients. The Milwaukee control program yields lower indirect cost than

other liquid storage alternatives which were considered. Differences in

indirect cost are reduced as the effectiveness of the hepatitis test

increases

.

Total costs show some similarity among the alternatives. Costs for

the current system are highest with the tax incentive system and the

transfusion review board close behind. Costs with regional control are intermediate, and the alternatives involving the Milwaukee control program

are considerably lower in cost. Frozen blood cost is comparable with

Milwaukee control program cost with 30% HAA test effectiveness; with 90%

effectiveness, frozen blood becomes the most expensive alternative.

For each alternative, Table 5 shows the number of units transfused,

the percentage of units from paid donors and the projected number of

deaths at each level of hepatitis test effectiveness. Frozen blood

results in fewer deaths than any other alternative. The number of deaths

in liquid- storage alternatives decreases as the number of units transfused

and/or the percentage of units from paid donors decrease.

5.11. Sensitivity Analysis

Eight feasible blood banking systems have been costed. Identification of the least costly system will be difficult because of the high

level of uncertainty in the components of the cost equation (Table 6) and

the small differences in cost between systems. This identification

problem is partially resolved by noting that, although the parameters are uncertain, they will assume the same values for all alternatives. As a result, some alternatives will always dominate others. Analysis reveals

that MCP is superior to regional control, tax incentive, and current

systems; and that 28 -day life is cost effective in situations where blood

is not frozen. Thus, despite the high uncertainties, it is possible to

state that the only alternatives which might prove optimal are MCP with

28 -day life; MCP with TR and 28 -day life; and FB.

Several methods were considered for distinguishing between these

three remaining alternatives. Since the estimated costs are close and

the possible errors are large, evaluation of the uncertainty range of the

estimates on a percent error basis would only reveal that any of the three

alternatives might be optimal. Therefore, some form of sensitivity

analysis will be necessary. One form of sensitivity analysis would

begin with evaluation of the cost equation at, for example, ten levels of

each uncertain parameter. In one sub- type of this form of sensitivity

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56
analysis, the end result is the identification of the range of the parameters in which each alternative is optimal. This would be of little

value here since there is no hope of obtaining accurate parameter values

in the near future, and action decisions are imminent. In a second subtype, a count would be kept of the number of times that each alternative

was considered optimal, and a probability of optimality would be developed.

However, use of this complete enumeration method with 22 uncertain parameters would require 1022 calculations of the cost equation, a prohibitively large task even on a computer. A second form of sensitivity analysis could be attempted in which the uncertain parameters are defined as random numbers, and the cost equations are repeatedly evaluated for

numbers sampled from the parameter distributions. When a sufficient

sample size is achieved, the probability of optimality of each alternative

can be estimated accurately. Since the distribution of the parameters is

unknown, it would be necessary to perform this analysis for two different

distributions selected in a manner which would yield bounds on the

optimality probabilities. Sensitivity analysis is often performed by

this randomized technique, but the process is bulky and time consuming.

Because of the time and effort that would be required to use the

randomized approach, an attempt was made to develop closed-form equations

which would yield the optimality probability bounds. Appendix D contains

the theoretical mathematical development. The application of the results

is reported here.

A further explanation of Table 6 is helpful in understanding the

implications of the sensitivity analysis which was performed. In the

earlier cost analysis, $19.15 was used as the increased cost of storing

blood in frozen rather than liquid form. It is reasonable to believe

that, if frozen blood use becomes widespread, unit costs will be reduced

through bulk purchase of equipment, reductions in technician time, refinement in techniques, and cost savings which accrue in blood component

preparation. These features may also reduce disposable equipment costs.

Similarly, for one or more reasons, the processing cost could be an underestimate despite the fact that the ANRC currently anticipates these costs

for limited applications. For example, in areas of low population, unit

costs may increase because equipment and technicians are not kept busy.

To account for these contingencies, a range of frozen processing costs

should be considered; therefore, a low estimate of $15 per unit and a high estimate of $30 per unit were used in the sensitivity analysis.

Any value within this range was considered equally likely to be correct.

Because the distribution of possible costs for any alternative is

unknown, it is impossible to exactly determine the probability (as a function of HAA test effectiveness) that a decision maker would be

correct in concluding that a unit of blood will cost less if the Milwaukee

donor program with transfusion review is adopted than if the Milwaukee

donor program with 28 -day life is adopted. However, limits on this

probability can be calculated. Figure D illustrates the range in which

this probability lies. Because of the magnitude of uncertainty in the

cost factors, the unit cost preference between these alternatives is

never as much as 80% certain, and over much of the likely HAA effectiveness

57
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58
range, the two alternatives are nearly equal in unit cost preference.

Above 75% HAA effectiveness, there is a 60% certainty that 28-day life

is slightly more likely to be the least costly. A choice between these

alternatives could, perhaps, be based on the fact that transfusion review

will reduce the number of units transfused, and therefore, result in

a lower total cost of the system. Figure E illustrates the range of the

probability that a decision maker would be correct in concluding that a unit of frozen blood will be less costly than a unit from either Milwaukee

program. There is a 30% probability that frozen blood might be less

costly with a hepatitis test which is 60% effective, but the likelihood

decreases rapidly as testing becomes more effective.

The principle reason for the high uncertainty is that there is no agreed value of a human life to use in the cost computations. The substitution of a range of equally probable values with mean of $62,500

increases the attractiveness of the transfusion review and frozen blood

alternatives over the initial analysis which used a $45,000 value.

Figure F shows which of these three alternatives is the probable least

cost alternative as a function of the hepatitis test effectiveness level

and the average cost associated with death. Above a $315,000 average

cost associated with death, frozen blood is preferred regardless of HAA

test effectiveness. With a 30% effective HAA test, the Milwaukee programs have smaller total cost per unit of blood if the cost associated

with death is valued at $65,000 or less.

6. Capital Cost for a Frozen Blood Program

6.1. Introduction

Previous chapters of this report contrasted the costs and benefits

which accrue to various blood banking alternatives. Federal actions

required for implementation seem relatively straightforward for most of

the alternatives. (Suggested Federal actions are discussed in Chapter 8.)

This is not true of the frozen blood alternative. Estimation of the cost

of this alternative requires the adoption of several assumptions and the

use of some tenuous data. The results are, nevertheless, suggestive.

6.2. Alternatives

Three alternatives for Federal participation are compared. These

are as follows:

1. The Federal Government fully subsidizes the equipment costs

associated with freezing, storage, and reconstitution of whole

blood, under the provision that it specifies where this equipment will be located.

2. The Federal Government fully subsidizes the equipment cost

associated with the freezing, storage, and reconstitution of

whole blood by providing funds to the American Red Cross,

59
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ceHEPATITIS TEST EFFECTIVENESS

FIGURE F

61
nonprofit members of AABB and a few public hospitals currently

engaged in blood collection and distribution.

The Federal Government provides long-term interest free loans

which are repaid over a five-year period, to all organizations

engaged in blood collection and distribution.

6.3. Equipment Costs

There are two partially automated means for freezing blood. These

are the Fenwal variation of the Huggins method and the Meryman method.

The wash unit for either system costs about $15,000. Freezer sizes

currently available and estimated volume prices are. 9

1,100 unit capacity $12,000/freezer

288 unit capacity 6,500/freezer

168 unit capacity 5,800/freezer.

6.4. Federally Subsidized- Locations Chosen by Federal Government

In order to estimate the requirements for freezing and washing

equipment for the first alternative, the following data are needed: 90

1. The average freezer requirements per hundred population.

2. Freezer capacity needed for cities of a given size.

3. Additional blood bank centers needed to insure service to rural

areas

.

In 1971, approximately 7.3 million units of blood were drawn from a total U.S. population of approximately 207 million people, an annual

average of 3.55 units per hundred population. Dr. Meryman of the ANRC

Research Lab states that their initial experience dictates a freezer

capacity equal to five times the projected average monthly usage. Using

a monthly average of 0.3 units per hundred population (3.55/12) this

equates to a freezer capacity of 1.5 units/hundred population .

On this basis, the freezer requirements for urban places with a population of 250,000 or more were obtained by multiplying the population

in hundreds of thousands by 1.5. (This procedure allows for at least 100

units of slack in each freezer.) For places between 50,000 and 250,000,

two 1,100 unit freezers per hundred thousand population were assumed to

be necessary (areas in this size range will usually require one and a

89Private communications with Mr. Edward Sweeney of Harris Manufacturing

Co. and Dr. Meryman of the ANRC Research Laboratory. These prices reflect

recent cost reduction which resulted from increased equipment sales volume.

90The interest expense for Federal Government funds, has not been included

in the analysis.

62
a fraction freezers and a whole freezer must be purchased whenever a fraction is needed). One 1,100 unit freezer will be allocated for each

area of 25,000-50,000 people, and areas with 10,000-25,000 population will

each be allocated one 288 unit freezer. The use of the 168 unit freezers was not contemplated.

Total freezer requirements are therefore projected to be 3,151

(1,767 of the 1,100 unit freezers and 1,384 freezers capable of handling

288 units at one time)

:

Urban Place i¥ of Total # of # of

Size 91 Places Population 1,100 Unit 288 Unit

(1,000's)

18,742

Freezers

281

Freezers

>1M 6

500K-1M 20 12,967 195

250K-500K 30 10,442 152

100K-250K 100 14,285 285

50K-100K 240 16,724 335

25K-50K 519 17,820 519

10K-25K 1

2 ,384

,299

21,414

112,394

1,384

Total 1,767 1,384

Total freezer cost of $30.2 million is determined as follows:

1,767 x $12K = 21. ZM

1,384 x $6.5K = 9.0M.

One wash unit, used eight hours per day, five days per week, can

handle 500 units per month. The monthly throughput of an 1,100 unit

freezer is 220 units, but demand is not uniform and therefore, one wash

unit per freezer was allowed, even though there will be some installations

with two or three freezers. Wash unit cost is thus computed to be

3,151 x $15K or $47.3 million.

It is assumed that many rural areas will be served by centralized

facilities, probably located in a nearby city. In fact, 9.75 million

units of freezer capacity and almost 19.0 million units of washer

capacity have been allocated to areas with population of 10,000 or over. However, it is also recognized that some provision must be made to serve elements of the population who live in extremely remote rural areas which

are served by small hospitals in towns of less than 10,000 population.

To provide a margin of safety in the estimate, we have arbitrarily

provided for 500 centers in rural locations. The additional cost is

9I Statistical Abstract of the United States, 1971 , U.S. Bureau of the

Census, p. 17.

63
approximately $10. 4M (500 x ($15K + $5800)). Total cost for this alternative is therefore $87. 9M.

6.5. Federally Subsidized—No Federal Location Preference

A basic assumption for this alternative is that each major blood

collection organization will have its own freezing and washing equipment.

For example, a city having one ANRC chapter, two AABB members and one commercial firm would probably maintain four separate freezer and washer

installations.

Currently there are 1,700 ANRC chapters and 1,500 AABB members. The

number of commercial blood bank locations in the United States was

estimated as follows: (a) the average commercial installation is assumed

to collect 85 units per week, (b) roughly 885 thousand commercial units

were collected in 1971, equal to approximately 17,020 units collected per

week, (c) an estimate of approximately 200 commercial blood banks is

derived by dividing 17,020 by 85. Predicated on this reasoning the total

freezer requirements would be as follows:

1,700 ANRC

1,500 AABB Members

200 Commercial

Total 3,400

It is assumed that each AABB member and commercial blood collector

will have one 1,100 unit capacity freezer. According to Dr. Meryman, the

ANRC will attempt to centralize its washing and long-term storage facilities. Some chapters will, therefore, require only a 288 unit freezer

to handle daily collections which are shipped to a central facility.

An estimate of the total number of ANRC chapters needing freezing

and washing equipment, was prepared by dividing the total regional

collections by the number of blood units that an 1,100 unit freezer can

handle. According to Dr. Meryman, ANRC experience to date is that a freezer capacity of five times the average monthly throughput is needed.

Therefore an 1,100 unit freezer would adequately handle 2,500 units

collected annually.

The ANRC has tabulated their collection information on a chapter

and regional basis. 92 For example, the St. Paul region, which has 92

chapters, collected 109,546 units in 1971. Dividing 109,546 by 2,500

results in 43 plus (rounded up to 44) chapters which would have complete

facilities, leaving 48 chapters needing only the 288 unit freezer used

for freezing units after collection. According to this estimation

procedure, approximately 525 of the ANRC chapters will only require small

freezers.

)2ANRC, Blood Center Operations for the Year Ended June 30, 1971

64
Equipment requirements are therefore projected to be:

Freezers Washers

1,100 unit 288 unit ($15K)

($1210 ($6.5K)

ANRC 1,175 525 1,175

AABB 1,500 1,500

Commercial 200 200

Total 2,875 525 2,875

The total cost of this system is determined by adding the three costs

involved: (a) 2,875 @ $12K = $34. 5M, (b) 525 @ $6.5K = $3.4M, (c) 2,875

@ $15K = 43. 1M. The total cost is $81. 0M . To insure a high level of

service in rural areas, we will again allow for 500 additional centers,

resulting in a total cost of $91. 4M ($81. 0M + $10. 4M). The Federal

expenditure could be held to $86. 0M by requiring the commercial blood

banks to assume their costs of $5.4M (200 washers @ 15K plus 200 freezers

@ 12K). Thus the reduction in Federal expense for this alternative,

compared with the first case cited, is $1.9M ($87. 9M - $86. 0M).

6.6. Long-Term Low- Interest or Interest-Free Federal Loans

The scenario for this alternative is that the Federal Government

provides low- interest or interest-free loans to all organizations engaged

in blood collection and distribution. 93 It is assumed that: (1) loans

are made for a five-year period, (2) the usable life span for the wash

equipment is five years and of the freezers is 15 years, (3) the industry

will replace outdated equipment with monies accrued through the sale of

whole blood and components, (4) the average demand for blood over the

next five years will be 6.4 million units, and (5) increased equipment

costs due to inflation will be matched by interest accrued to the depreciation fund.

To get an upper estimate of equipment replacement costs, it is

assumed that at the end of five years the blood banking industry would

need to replace all washers and have accumulated one -third of the cost

of the freezers in a depreciation fund. This will be a high estimate

because washers will be used at less than capacity in many places and

will consequently last longer than five years.

After five years the depreciation fund is $62. 4M consisting of

$50. 6M for the washers and one -third of the cost of the freezers

($35.4M/3 or $11. 8M). In addition to this cost, the blood banks need to

repay the five-year loan of $86. 0M for the cost of the equipment. The

total $148. 4M would be generated through the transfusion of approximately

93 For this alternative, the total equipment cost is projected to be

$86. 0M, equal to the cost of Federal subsidy without location preference.

65
32 million units of blood (based on the projections shown in Table 1,

page 7). The cost of frozen blood cited in Section 5.7 included $2 per

unit for equipment amortization. Under this alternative the cost to the

blood recipient during the five-year start-up period would increase by

$2.65/unit ($48.4M/32M - $2). The loan alternative includes interest

expense to the Federal Government. Assuming a 5% interest rate, interest

would amount to approximately $12. 8M for the loan alternative. The

administrative costs will be ignored for the loan alternative.

In summary, expenses incurred by the Federal Government and commercial firms would be:

1. Federal Control $87. 9M

2. Federal Subsidy

a. to existing organizations $75. 6M

b. adding 500 blood centers $86. 0M

c. commercial expenditure $ 5.4M

3. Interest Free Loan $12. 8M

7. Standards and Regulations—An Overview

7.1. Introduction

A cursory examination of the standards and regulations governing the

blood banking process reveals several problems, some gaps, areas of duplication, and a general lack of a coordinated approach to standardization.

At present the Division of Biologic Standards, the Center for Disease

Control, the Food and Drug Administration, the American Association of

Blood Banks, the American National Red Cross, the Joint Committee on Accreditation of Hospitals, the College of American Pathologists and

eight individual states have some form of blood licensing and/or inspection

programs. Over the years standards have been developed in response to a specific need or problem. As the "industry" has grown, no central governing body has emerged. Thus, a number of organizations share the responsibility for safeguarding the Nation's blood banking operations.

7.2. DBS

The Division of Biologic Standards (DBS) of the National Institutes

of Health is responsible for regulation of the interstate shipment of

biological products. DBS has primary responsibility for regulation of

blood, blood derivatives and components, as specified in Section 351 of

the Public Health Service Act (42 USC 262) . DBS issues mandatory standards

for blood banks and other manufacturers of biological products who are engaged in interstate commerce. It also issues product and establishment

licenses. Each establishment is inspected annually by an "officer of the

66
Public Health Service having special knowledge of the methods used in the

manufacture and control of products." 94 At present there are 72 DBS

licensed blood products and 165 licensed blood collection and processing

establishments in the U.S. Many of the establishments operate several

facilities (e.g., the American National Red Cross has one license to

operate 1,700 chapters engaged in blood collection). Approximately 80%

of the blood collected in the U.S. is processed as a product licensed by

DBS.

The DBS standards for blood and blood products cover (a) physical

equipment (facility) and personnel; (b) donor criteria; (c) collection of

blood; (d) processing for storage and identification; and (e) production

of red blood cells, cryoprecipitate and immune serum. Of the aforementioned, the only standards unique to DBS are those prescribing dating

periods and/or storage methods for specific products and formulas for

admissible anticoagulants. The dating periods are "based on data relating

to usage, clinical experience or laboratory tests that establish the

period beyond which the product cannot be expected, beyond reasonable

doubt, to yield its specific results and retain its safety, purity, and

potency." 95 Table 7 shows the currently enforced dating periods for

various blood products.

DBS must necessarily receive considerable experimental evidence of

the safety and utility of a blood derivative or additive before it will

issue a license. As a consequence, many years of research effort may

be involved in satisfying DBS licensing requirements, and submissions for

Federal licensure may be rejected on the basis of inconclusive evidence.

Conversely, DBS has no direct responsibility for initiation or continuance

of studies required for licensure of a new product. Because the initiative

lies with the product developer, a useful component may be in experimental

use for several years before initiation of studies aimed at obtaining a Federal license are attempted. This subject is discussed further in

Section 7.6.

7.3. AABB and ANRC

The AABB and ANRC have developed voluntary standards/directives

which are, in many ways, the most comprehensive and most stringently

enforced. It must be stressed that these are voluntary standards; it is

thus possible for those blood banks not engaged in interstate commerce to

be in operation without regard to any recognized standard.

The AABB program was initiated in 1955 when the AABB Committee on Standards first prepared the Standards for Blood Banks and Transfusion

9t* PHS Regulations for Manufacture of Biological Products , Title 42, Part

73, Section 73,400, U.S. GPO, 1971.

95PHS Regulations , Title 42, Part 73, Section 73.870.

67
Table 7. DBS Dating Periods for Human Blood Products

Product Name Storage Labeling Temperature

Time Required

1 . Cryoprecipitated 12 Months Yes Below - 19°C

Antihemophilic Factor

2. Fibrinogen Five Years - - 3. Normal Plasma

a. Liquid Three Years Yes 15 - 30°C

b. Dried Seven Years Yes Below 38 °C

4. Normal Serum

a. Liquid 18 Months - - b. Dried Five Years - - c. Frozen Three Years Yes Below - 19°C

Thawed One Year

5. Plasma Protein Fraction

a. Either Five Years - 5°C for one year

b. Or Three Years Yes Below 31 °C for Two

Years and 5°C One

Year

6. Red Blood Cells

a. Fresh 21 Days Yes Between 1-10°C

b. Frozen Three Years Yes Below - 66°C

Thawed 24 Hours Yes Between 1-10°C

7. Resuspended Red Blood

Cells Ten Days

8. Single Donor Plasma

a. Either Five Years Yes Below - 19°C

b. If Used in

Coagulation Defects One Year Yes Below - 19°C

9. Whole Blood

a. In ACD Solution 21 Days Yes Between 1-10°C

b. In Heparin Solution 48 Hours Yes Between 1-10°C

c. In CPD Solution 21 Days Yes Between 1-10°C

68
Services. The purposes of the standards were "to provide maximum safety

for those individuals involved in the transfusion service," to be a "measure of protection afforded the physician who orders the transfusion,"

and to "form the basis on which the Inspection and Accreditation Program

has been established." 96 This program is administered by the AABB

Committee on Inspection and Accreditation comprised of 13 physicians and

approximately 270 professionals who serve as voluntary inspectors. AABB

members may participate without any fee payment and accreditation is

granted for a three-year period. Non-AABB members pay an inspection fee

and accreditation is granted for one year. Currently, approximately

1,400 establishments have AABB accreditation. The only non-AABB members

participating in the program are commercial blood banks. 97

The Standards Committee meets yearly to consider any necessary

changes to standards. Frequently, such changes seem to reflect practice

and experience of the members rather than scientific evidence. This was

illustrated in 1966 when a letter to the editor in Transfusion (the AABB

Journal) questioned the one- year waiting period for a donor who received

a rabies vaccination. The reply stated one reason, but added, "how valid

these observations are I do not know, but this is probably the origin of

the one-year timing." The reply then cited another reason and concluded,

"inasmuch as this is all more or less hypothetical, the one- year interval

must have been arrived at on a purely arbitrary basis (emphasis added)

;

. . . I have a feeling that three months is a much more realistic figure

than one-year, but that it is mostly a matter of foreseeing possible

legal problems . .

.

9 8 » 9 9

The AABB is the only organization with standards which encompass

the total collection, storage, distribution, and blood administration

processes. Standards are provided for all components in common use even

if they have not been licensed by DBS.

Standards dealing with the actual transfusion are unique to the AABB

and are designed to insure patient safety. The requirements for labeling

and testing of blood are detailed and specific. The standards provide

for verification of all information before a transfusion is performed.

The standards do not require the attending physician to specify why the

blood is needed, or to provide a justification for the request. Following

a transfusion, there are no requirements for recording of amount of blood

96J. R. Jennings, "Standards and Accreditation Programs of the American

Association of Blood Banks," Transfusion , Vol. 5, No. 2, 1965.

97Personal communication with Col. Peak, AABB representative in

Washington, D.C.

98 "Questions and Answers—Donation After Rabies Vaccination," Transfusion , Vol. 6, No. 4, 1966.

"The current AABB standards require a 24- hour wait after a prophylactic

rabies vaccine.

69
requested and amount of blood utilized or for review of the physician's

transfusion decision.

The ANRC, through 59 regional centers, administers the activities

of 1,700 Red Cross chapters currently engaged in the collection of blood.

The ANRC is licensed by the DBS and adheres to DBS standards. In addition,

however, the ANRC publishes, "Blood Program Directives." The directives

are divided into six subject areas: (1) Organization and Administration,

(2) Budget and Finance, (3) Supplies and Equipment, (4) Medical, (5)

Nursing, and (6) Technical. Generally, the Directives may be thought of

as a complete handbook for the organization and administration of the Red

Cross National Blood Program. As such, the Directives also contain the

standards necessary for quality control within the operation of the

program.

The Medical Director of the National Blood Program, ANRC, is responsible for "establishing goals and standards and developing criteria to

measure medical, nursing, and technical effectiveness of the program."

The Administrator of the Blood Program is responsible for "insuring that

standards established by the Red Cross Blood Program are followed and

maintained." 100 The ANRC standards program is supported by contributions

to the ANRC; no part of the cost is passed on to the blood user.

For many years the ANRC has operated an internal inspection program

to monitor quality control, In 1970, a proficiency testing program

administered by National Headquarters was added. This program is intended

to meet the inspection requirements of a number of new State and Federal

laws including the Clinical Laboratories Improvement Act of 1967 administered by the Center for Disease Control, DHEW. "When the program is in

full operation (the ANRC plans)... to obtain the necessary approvals for

acceptance of (their) .. .testing program by State and National Regulatory

Agencies." 101 The testing consists of two parts: proficiency of technical

skills and testing of center produced products. Each center receives four

sets of blood samples at intervals throughout each year. The samples are processed within ten days of receipt, and copies of the results are sent

to National Headquarters. Periodic tests and assays are performed on all

products; samples are shipped to National Headquarters upon request. A

report of the findings is returned to the center where it is kept on file

in a loose-leaf notebook which is available for public review.

All three organizations promulgate standards or directives for (a)

physical equipment/facility/personnel, (b) donor criteria, (c) blood

collection, and (d) processing for identification and storage. Frequently,

DBS develops the base standard or minimum requirement, the AABB upgrades

and adds further qualifications for performance of the standard, while

the ANRC provides the level of detail in management and organization

100 Blood Program Directive 1.2, ANRC, July 1971.

101 Blood Program Directive 6.14, ANRC, April 1970,

70
necessary to achieve a given performance level. The ANRC directives tend

to be more exacting than either DBS or AABB standards.

To illustrate the relationships, DBS standards include ten criteria

for donor selection:

(1) Minimum of eight weeks between donations.

(2) Normal body temperature.

(3) Normal systolic and diastolic blood pressure.

(4) Hemoglobin level of at least 12.5 per 100 ml. of blood.

(5) Free from acute respiratory diseases.

(6) Free from any disease transmissible by blood.

(7) Free from infectious skin disease at phlebotomy site.

(8) Free from indications of narcotic addiction.

(9) No history of or close contact with person having viral

hepatitis. 102

(10) A minimum of six months after last transfusion with human whole

blood or any blood derivative which can transmit viral hepatitis.

Both the AABB and ANRC further detail the ten criteria listed (e.g., body

temperature, taken orally, shall not exceed 99. 6° F) plus adding a substantial number of criteria. Most of the additional criteria (e.g.,

minimum weight requirements, exclusion of pregnant women and the requirement that male hemoglobin level be at least 13.5 per 100 ml. of blood)

provide for increased donor safety. Other additional restrictions (e.g.

,

on drawing from those with active allergies and on waiting periods after

vaccinations and immunizations) protect the recipient. The ANRC directives

are more detailed and specify more restrictions than the AABB standards

(e.g., on those under medication).

7.4. Other Standards and Regulatory Bodies

Two other Federal agencies, the Food and Drug Administration and the

Center for Disease Control, are also tangentially concerned with assuring

the safety and quality of our national blood delivery system through

regulatory action. The Federal Food, Drag, and Cosmetic Act has authority

over interstate commerce of misbranded or adulterated food, drugs, device,

or cosmetic. A drug is defined to include, "articles intended for use in

the diagnosis, cure, mitigation, treatment or prevention of disease in

man or other animals." 103 Thus, the FDA regulates the quality of packaging and labeling of blood products, 104 and requires that those who

manufacture, prepare, propagate, compound or process blood products shall

102Public Health Service Regulations for the Manufacture of Biological

Products , Title 42, Part 73, Subpart D, Section 73.3001, Revised 6/1/71,

pp. 83-84.

103 Food, Drug, and Cosmetics Act , as amended January 1971, Section 201

(321) (g) (1) (B).

10i+ Ibid., Section 502 (352) (a, h)

.
annually register "name, places of business, and all such establishments"

with the Secretary of HEW. 105

The Center for Disease Control (CDC) establishes standards for and

inspects and tests those clinical laboratories which are engaged in

interstate commerce and which examine material from the human body. Their

standards encompass the hematological portion of the lab work, which may

include cross -matching and processing. CDC is concerned primarily with

clinical laboratories. Its effect on blood services is incidental, and

reflects only on those standards involving hematological processes.

The Joint Committee on Accreditation of Hospitals and the College

of American Pathologists have inspection and accreditation programs which

include standards on blood banking procedures carried out in hospitals

and clinical laboratories, respectively. JCAH standards and CAP standards

are based on the AABB standards.

7.5. State Regulation

Eight states currently have a licensing and/or inspection program

for blood banks. The states of California, Georgia, New Jersey, New York,

Massachusetts, and Illinois have very detailed regulations covering the

complete blood collection process. Where standards exist, these tend to

parallel those of the AABB. For example, the Clinical Laboratory Licensure

Law of Georgia states that the criteria for donor selection and the methods

for collection, storage, processing, and transfusion shall conform with

current AABB standards. Florida's law primarily covers clinical laboratory operations although it does state that the same regulations apply to

blood banks. Commercial blood banking has been outlawed in Wisconsin,

while Massachusetts requires that all blood usage be reported.

7.6. Problems and Deficiencies

It was pointed out previously that DBS requires sound and conclusive

evidence in order to license blood derivatives or additives. Such clinical

testing is necessary to protect against unsafe products and there are instances where failure to obtain sufficient evidence could have had severe

consequences. 106 Unfortunately, licensing procedures and attendant

gathering of conclusive scientific evidence also serve to restrict the

adoption of new techniques and have slowed distribution and utilization

of new products. As examples:

1 ° 5 Food , Drug , and Cosmetics Act , as amended January 1971, Section 510

(3607(a) (1) (c).

106The most effective plasma substitute discovered to date (high molecular weight-polyglucine) has been shown to result in liver and kidney

damage: precipitous licensing of this product could have been catastrophic.

72
stored in ACD but not CPD (an additive regarded to be superior)

,

because of lack of clinical evidence to support licensure. As

a result, CPD has not come into common use and many potential

benefits of this additive including increase in blood survival 107

and ability to recover fractional units of blood108 have not

been realized.

(2) Platelets, a blood derivative, have been widely accepted for

therapeutic use, but have not as yet been licensed by DBS.

Because of the interstate commerce constraint, the Philadelphia

Red Cross charges $10 for a unit of platelets used in Pennsylvania but supplies the unit free of charge if used in New Jersey,

thereby adding to variance in blood pricing. 109

(3) Blood freezing techniques have been the subject of considerable

technological development aimed at achieving longer shelf life

and increasing blood quality. Almost every advancement has

resulted in a slight change in the processing technique and,

from the view of DBS, in a new product. Considerable experimental work is carried out in testing each new technique, but

DBS requirements are exacting, and sufficient evidence for

licensing has only been submitted for one technique to date.

The approved technique is generally regarded to be obsolete.

Another perceived problem encountered in the study of regulatory

activities affecting blood is the reactive rather than active character

of control and enforcement practices. DBS, the AABB and the ANRC appear

to wait for a crisis situation to develop before establishing regulations.

For example, there is much current interest in transmission of hepatitis

through transfusion. The problem has long been recognized, but it has

only recently become controversial. The current AABB standards contain

no mention of methods for dealing with the problem. 110 In July 1971,

the ANRC ordered hepatitis testing for all donor blood. 111 On November

1, 1971, DBS amended part 73 of the Public Health Service Regulations to

provide: (1) that all human blood in interstate commerce be tested for

hepatitis associated antigen; (2) that the blood container label indicate

test results; and (3) that all donors with positive results be permanently

deferred. Although donor registries are finding increasing use in hepatitis

prevention, only the ANRC standards mention them.

107 See footnote 2.8, page 16.

108Orlina et al. , "Transportation and Red Cell Survival," Transfusion,

Vol. 8, No. 3, 1968.

109Personal communication with Dr. William Sherwood, Philadelphia ANRC.

110 "Blood Use in Massachusetts," New England Journal of Medicine , Vol. 284,

p. 447, 2/25/71.

111ANRC Blood Program Directive 4.29.

73
Similarly, when a published standard is found insufficient, imprecise or confusing, change is often slow in coming. For example, the ANRC

is the only group which has a standard on the volume of blood to collect.

They prescribe a standard unit of 450 ml. However, any unit containing

405 ml. to 495 ml. of blood is considered acceptable. Since the containers

are packaged with 50 ml. of anticoagulant, the concentration of anticoagulant varies. 112 The resultant problems were discussed in a letter

to the editor of Transfusion in 1964, but no change has, as yet, been

made

.

1 1

3

Another more obvious deficiency lies with gaps and variations in

the present standards. Those blood banks which conform only to DBS

standards are subject to less stringent rules than those which conform

to AABB regulations . For example , many of the donors excluded as un- healthy under AABB and ANRC standards can give in blood banks licensed

by DBS. Most state laws have apparently been motivated as much by a desire to tighten the DBS- imposed standards for interstate blood banks as to set standards for intrastate blood banks. For example, blood bank

regulations which were recently enacted in Illinois are largely the result

of unfavorable publicity received by a DBS-licensed blood bank. 114

There is a small segment of the blood collection and distribution

system that can operate without adherence to any of the standards and

regulations previously discussed. These groups need not adopt AABB/ANRC

quality standards, test for hepatitis, operate donor registers, or properly screen donors unless it suits their purpose to do so.

This is not to suggest that there are a large number of organizations

who operate in an objectionable manner; in fact, the industry will

usually drive such organizations out of the market. 115 Nevertheless,

some undesirables do exist, often in areas where demand for blood exceeds

noncommercial supply and the consideration of availability outweighs the

question of blood quality.

This latter factor must be considered when suggesting changes to the

current blood banking system; more stringent regulatory action could

influence both the availability and cost of blood. Fear of curbing

112ANRC Blood Program Directive 4.11, April 1969.

113nLetters to the Editor," Transfusion , Vol. 4, No. 1, 1964, p. 60.

llt+ Personal communication with M. Clune, Illinois Department of Public

Health.

115The most famous example of a DBS-licensed but unsanitary commercial

blood bank which was driven out of the market occurred in Kansas City.

In that case, the Federal Trade Commission ruled that the methods used

violated antitrust laws; this ruling was eventually overturned by the

U.S. Supreme Court.

74
blood availability is one reason for current DBS policy. Dr. Sam Gibson,

former Assistant Director of DBS, says, "we have the obligation not to

make regulations so strict that the blood supply dries up." 116 If

availability is curtailed, it is reasonable to believe that quality could

suffer unless: (1) the regulatory actions are extended to include all

blood banking participants and/or (2) another mechanism is employed,

such as donor education and incentives, to increase blood resources.

The evident inertia and the gaps in standards appear to be natural

functions of a system which encompasses a weak Federal regulatory system

and two large private organizations with different philosophies of

proper system structure and donor recruitment methods. No one has assumed

the role of leadership for the regulatory process; each organization

guards and administers its own area of responsibility. In short, the

regulatory and standardization activity is best represented as a group

of detached segments working more or less toward common objectives but

without general direction and continuity.

8. Policy Alternatives and Suggested Courses of Action

There are many aspects of the blood banking system that would benefit

from change. Increases in blood supply, improvements in blood quality

and a reduction, or redistribution of user costs are all desirable and

technically feasible.

To move toward achieving these goals, modifications in the present

system should be considered. These modifications are related to seven

topical areas of system organization and operation. Subsections which

follow highlight the results of study in these seven areas and suggest

certain actions which should have a positive influence on components of

the blood banking system. Some of these actions are within the purview

of DHEW and might be undertaken unilaterally without direct assistance

from state agencies, organizations or individuals within the private

sector. For the most part, however, implementation of suggested actions

will require the cooperation and direct participation of both governmental

and private organizations, as it is the latter that have responsibility

for and greatest vested interest in the national blood banking system.

It appears possible to develop a department approach involving

minimum Federal control, but with Federal support of developmental efforts

which will lead to adoption of an effective blood banking system. At the

moment a frozen blood system or regional donor registry and call-up

systems administered by presently organized or chartered organizations

such as the ANRC and AABB or a combination seem to be the principal

candidate systems. Regional groups would develop and operate a comprehensive information system to foster the use of on-call volunteer donors

116"Blood Banking: Money Is at Root of System's Evils," Science , Vol. 175

No. 4028, 3/24/72, p. 1346.

75
and to reduce blood wastage associated with overcollection, maldistribution, and outdating. Complementary actions in which DHEW has a greater

or lesser involvement include donor recruitment and retention programs;

development of improved standards for collection, processing and storage;

and professional education programs.

8.1. Standards, Regulations, and Surveillance

An analysis of regulations and standards pertaining to blood

collection, processing, storage and administration indicate that there

are at least three actions which may have a positive influence on blood

quality.

1. The stand.ards promulgated and enforced by the Division of

Biological Standards should be strengthened and broadened, to

achieve a scope and comprehensiveness consistent with the

standards of the American Association of Blood Banks.

2. The DHEW can assume responsibility for development and/or

adaptation of a model state standard which serves to regulate

the operations of blood handlers not engaged in interstate

commerce. Joint participation of a DHEW agency and state agencies should be considered as a feasible approach to standards

development. Adoption of the model standard by all states

lacking equivalent legislation might be fostered and promoted

by appropriately revising or strengthening DHEW policies

vis-a-vis Medicaid reimbursement3 categorical fund distribution,

etc.

3. Methods of streamlining DBS procedures should be examined and

means considered to promote research necessary to establish the

safety and stability of blood derivatives and blood products.

8.2. Research

Viewed within the context of present problems, there are several

areas of research that can lead to better blood quality and blood availability.

Dominant in this category is the development of an effective (> 95%)

Hepatitis Associated Antigen (HAA) test.

A second area involves definitive determination of allowable storage

periods for CPD- stored blood and blood products.

There are a number of other research activities, which could have

pronounced impact if technological breakthroughs are achieved and if the

results of research can be implemented by a large segment of the blood

banking or medical community. These are:

(1) Further improvement in techniques for component preparation

and component therapy.

76
(2) Development of improved blood expanders and blood substitutes.

(3) Development of techniques to reduce donor reaction rate.

(4) Development of blood sterilization techniques.

(5) Improvement in blood storage equipment and techniques.

It is inappropriate for this report to judge research priorities or

to propose a level of effort for the research potentials in this area. However, two actions relating to blood research and additive testing

deserve strong consideration:

4. Eoonomia loss and health risk to a patient from post-transfusion

hepatitis argues for continuation of the strong National Heart

and Lung Institute-sponsored research efforts on improved HAA

testing. 1I7

5. Research on the approved use of CPD as a "28-day" blood additive

and of blood derivatives from CPU-stored blood should be

initiated in FY 73.

8.3. Professional Education

There is general consensus that use of packed red cells is generally

safer and a preferred alternative to whole blood transfusion. It is also

pointed out that there are a large number of transfusions (mainly single

unit) which need not be administered; unnecessary transfusions are estimated to consume over 4% of all blood collections and thereby increase

the requirements for paid blood.

The doctor or surgeon is often inadvertently doing a disservice to

his patient when blood is transfused, primarily because the inherent risk

of the transfusion process has not been fully recognized and because of

the physician's natural hesitancy to convert to component therapy techniques. In fairness to the physician, the magnitude of medical problems

associated with blood transfusions has only recently been widely publicized. Yet the chance of mismatching, allergic reaction, disease, etc.,

have long been recognized and should, in themselves, mitigate against

the single unit practice.

There are few, if any, review procedures that would identify if a physician is using blood properly. Death and Tissue Boards have been

established at most hospitals to serve as peer review committees to judge

and advise the physician. This has proved to be an effective technique

for maintaining high quality care if the review program is properly administered. Perhaps a similar review procedure should be established for

transfusion review.

In addition, the NA.S-NRC reports that medical schools are not providing sufficient training in such subjects as component therapy, blood

117This conclusion is warranted until such time as a nationwide frozen

blood program is adopted and implemented.

77
expanders and general blood utilization. The suggestion has been made

that the Federal Government might exert pressure on medical schools in

order to have this sort of training provided, but many medical schools

view direct Federal intervention in their curriculum as improper. Feedback from practicing professionals who are worried about transfusion

review requirements may be a less controversial and equally effective

means of achieving curriculum changes.

The previous discussion suggests that:

6. Peer'/utilization review might be desirable as a means to

establish and maintain higher standards of blood utilization.

7. That consideration should be given to JCAH-HEW cooperative

efforts which would result in an added request for hospital

review of transfusion as a requirement for JCAE-Medicare

certification.

8.4. Donor Recruitment and Retention

The examples of blood banking systems such as those in Canada and

Milwaukee indicate that stronger donor recruitment and retention will

yield more adequate blood supplies. The Milwaukee system involves a computer registry used for telephone call-up of donors, quality media

advertising and follow-up contact with first- time donors. It is also

noted that the registry serves a second important function since it

provides a means for detection and elimination of disease carriers.

Establishment of an effective donor recruitment and retention program

on a nationwide basis appears to be both feasible and cost effective. It

is expected that the operational costs of the registry and call-up system,

supplemented by limited advertising and recruitment programs, would not

exceed $1.50 per unit after the program becomes operational. There is,

however, a nontrivial start-up cost to establish and maintain computer

regional registers. Based on an estimated five million donor population,

total start-up costs are estimated to range between $7.5 and ten million

dollars. These costs could be passed on to the blood recipient or various means of Federal subsidization might be considered. Partial or

full Federal subsidization might be advantageous in that such an arrangement would permit limited government involvement which could be helpful

in speeding implementation. The cost of donor registry and the use of

call-up procedures have been found to significantly reduce the need for

blood obtained from paid donors. Indirect costs of health care associated

with post- transfusion hepatitis should also be curtailed accordingly.

The cost of a quality media campaign is clearly subject to economies

of scale. An advertising campaign, developed under Federal contract,

could serve the entire nation; otherwise, perhaps 60 regions will have

to develop their own campaigns at a cost of about $100, 000/region/year.

Limited data on behavioral response to blood donation supplemented

by survey data collected as a part of this study corroborates the finding

78
that a large percentage of donors are lost to the system because of

adverse reaction. These reactions appear to be of two types:

(1) The donor experienced pain, discomfort or hematoma due to

procedural practices, or other causes.

(2) Weakness and/or dizziness occurred during or several hours

after donation.

Both problems can strike even veteran donors.

It would appear that more research is needed on the physiological

and psychological aspects of blood donation with a view toward identifying

and correcting those factors that discourage individuals from first or subsequent donations. For example, many donors complain of a stinging

sensation during blood draw. This is usually caused by the unnecessary

presence of anticoagulant in the needle. 118 Similarly, dizziness, weakness, and hematoma caused by search for a second vein if the first vein

collapses might be alleviated by drawing less blood or by adjusting the

quantity drawn on the basis of patient characteristics and/or prior

donation record. This practice is standard in the USSR and offers other

advantages in that minimum weight and hemoglobin levels might be lowered

if smaller amounts of blood are drawn. Conversely unit costs of blood

and risk of transfusion- related reaction would be increased if less than

standard amounts of blood are taken.

The previous discussion and related analysis elsewhere in this

report indicate that:

8. There is evidence that the use of tax incentives3 monetary

-payment and other economic rewards to obtain blood may be

counter-productive and should not be furthered without careful

study of the likely effects.

9. A regional computerized donor registry and call-up system^

supplemented with donor recruitment through advertising and other

meansj offer a way to increase blood supplies from unpaid

volunteers. Central development and distribution of quality

media advertising will be more efficient than many independent

local efforts. Improved donor retention is crucial.

10. Elimination of the paid donor from the system concurrent with

(9) is desirable from a cost standpoint in the absence of a highly effective BAA test or if the frozen blood concept is not

adopted for nationwide use.

11. The physiological and psychological effects of blood donation

and alternative procedures for collection of blood should be

further analyzed and evaluated.

118Personal communication with Dr. Paul Schmidt of the NIH Blood Bank

indicates that this is a common problem because it is easier for the

manufacturer to sterilize the blood bag if there is anticoagulant in the

needle. The NIH blood bank does not allow the manufacturer to put anticoagulant in the needle of its blood bags.

79
8.5. Regional Coordination

The Federal Government has a major role to perform in developing

and fostering regulatory and control measures for donor selection and

blood collection j processing, storage, and use.

The Federal Government can also serve as a catalyst to further

cooperation between competing organizations. However, it is considered

desirable that responsibility for operation of the system remain with

those organizations who have a present vested interest in these programs.

Successful demonstration programs point to the fact that a coordinated activity at the regional level can significantly reduce outdating,

shortage, and the need for paid donors, even in large metropolitan areas like New York City. Coordination activities and donor registry and callup are easily interrelated and are most beneficial in combination.

Adaptation of a regional coordination concept places a high degree

of reliance on the establishment of a cooperative program in which all

existing and competing blood collection agencies participate. Since,

in principle, a program aimed at reducing the risk of disease will result

in the elimination of some of the initial participants (i.e., commercial

blood banks) it is questionable how much support can be expected from

this quarter. (The frozen blood alternative discussed in Section 8.6,

which follows, does not create this problem.) A catalyst may be needed,

and Federal support of some aspects of a responsive system (e.g., donor

registry) may be a viable course of action to achieve majority acceptance

and joint implementation.

12. A regional system is preferred from a cost standpoint. Successful programs in a number of cities indicate that adequate

administration can be exercised by organizations that have cur- rent responsibility for blood collection. An important feature

that should be included in the regional control system is a donor registry and call-up system.

13. Carefully developed decision rules for inventory control, priority

of blood use, collection quotas, etc., are also important features

of an efficient system. These rules should replace the arbitrary

and sometimes erroneous procedures currently in use.

8.6. Blood Storage Methods

The results of the cost analysis presented in this report suggest

that a Milwaukee control type program with an effective, low cost transfusion review probably represents the least costly solution to blood

banking of all alternatives considered. The Milwaukee program coupled

with 28-day blood life has an equally low unit cost, but requires more

units. There is over a 301 chance that frozen blood will have an even

lower cost per unit if hepatitis testing is less than 65% effective.

Considerations relating to cost equity (especially when human life values

are included) argue for the preferability of the frozen blood alternative

80
since the principal advantage of frozen blood is the expected reduction

in numbers of transfusion- related diseases and deaths. There are other

advantages including:

virtually unlimited blood life (in particular with respect

to rare blood types) ; and

retention of the commercial blood bank and paid donor as active components of the blood banking system.

The principal drawbacks of the frozen blood concept are: (1) high

start-up cost, (2) high unit cost, and (3) requirement for additional

technician staff.

19

Unless rapid conversion to an all frozen blood system or a 95%

effective HAA test is imminent, it appears that some form of regional

control and donor recruitment/retention programs in conjunction with

other programs designed to eliminate the paid donor is the most attractive

approach to take. It should be cautioned that major reduction or elimination of the paid donor category should not be attempted before

start-up of regional inventory control, and the establishment of donor

registry and call-up systems.

Either of two possible supplements to the control and call-up system

appear to substantially eliminate the need for the paid donor. These are:

(1) extension of the legal CPD storage period from 21 to 28 days; or

(2) institution of an adequate transfusion review process.

Transfusion review will result in less transfusions and less transfusionrelated deaths, and is probably the preferred choice. Consequently, the

findings of this study indicate that:

14. Reduction in post-transfusion complications is a dominant

consideration in seeking blood banking system improvement.

A nationwide frozen blood system would provide the most

equitable distribution of costs and the greatest reduction in

patient risk3 but would not require elimination of the paid

donor. If frozen blood is judged to be too costly3 the poorly

screened paid donor should be eliminated through legislation,

regulation, economic boycott or other means but only in con- junction with establishment of a regionally-controlled donor

registry3 call-up recruitment system and either transfusion

review or 28- day CPD certification programs.

15. Transition to a frozen blood system must be accompanied by

recruitment or retraining of technicians to staff the facilities.

119Labor costs of technicians have been included in the cost analysis of

alternatives in this report.

81
8.7. Financing and Cost

Several alternative means for system change are described in the

report. Four of these alternatives (two of which involve the frozen

blood concept) are regarded as best candidates for selection.

a. Alternative 1 : Adaptation of regional systems administered by

existing blood organizations including the establishment of

donor registries, call-up and retention procedures, media

advertising, inventory control procedures, and use of CPD to

extend blood storage life to 28 days.

b. Alternative 2 : Adaptation of regional systems administered by

existing blood organizations including the establishment of

donor registries, call-up and retention procedures, media

advertising, inventory control procedures, and transfusion

review.

c. Alternative 5 : Adoption of frozen blood nationwide in conjunction with (1) establishment of regional inventory control; (2)

full Federal subsidization of start-up costs.

d. Alternative 4: Adoption of frozen blood nationwide in conjunction with (±J establishment of regional inventory control; (2)

low interest five-year loans to nonprofit and for-profit organizations to cover start-up costs.

Alternative 120 Deaths Total Cost to Total Average Total

(Annually) Federal Gov't. Annual Costs Annual Cost

(Millions) to User

-1st 1st 3 years

3 years

418

(M) (M)

Current System 2,285 _ 418

Alternative 1 995 11 341 345

Alternative 2 885 11 330 334

Alternative 3 5 88 378 407

Alternative 4 5 .121 395 395

It will be noted that current system cost exceeds all alternatives

for the first year even when start-up costs for frozen blood and regional

controls are fully amortized in the first three years.

Alternatives 1 and 2 appear to be favored over alternatives 3 and

4 because of the high start-up costs of either a fully subsidized or

non- subsidized frozen blood program. Whereas alternatives 1 and 2 are less expensive in terms of average patient payment, there are approximately

900 more deaths associated with these alternatives. The question of

whether the expense involved in saving these lives is too high is largely

a policy consideration.

120Assumes 60% HAA test effectiveness.

121 Lost opportunity costs to government associated with low interest loans

have not been treated in this comparison.

82
Postscript

Since the completion of this report, two major events have impacted

on the blood banking system. The more significant event resulted from

the transfer of the Division of Biologic Standards from the National

Institutes of Health to the Food and Drug Administration, where it was

renamed the Bureau of Biologies (BOB). Since its relocation, BOB has

been able to apply a broader interpretation to existing laws governing

blood banks. The new interpretation has allowed BOB to regulate and

inspect all American blood banks, whether or not they are engaged in

interstate commerce. Thus, the problem addressed in recommendation 2 of this report has been resolved.

The second significant event is that 21 American National Red Cross

(ANRC) Blood Centers are now engaged in red cell freezing operations.

Large ANRC equipment orders have resulted in a considerable decrease from

the estimates of capital costs for red cell freezing equipment given in

the report. Freezing equipment now is $10,000 per unit rather than

$12,000 and thaw-wash equipment for the Meryman technique now costs

roughly $3,800 rather than $15,000. The capital equipment purchase

program described in Chapter 6 of the report would thus cost:

Federally subsidized—locations chosen by Federal Government:

$42.5 million

Federally subsidized—no Federal location preference: $44.1 million

Federal expenditure plus $2.8 million commercial expenditure

Interest free loan: $6.1 million.

Furthermore, the report's claim of technical feasibility for this alternative appears to have been confirmed. Dr. Meryman of the ANRC Research

Laboratories has stated that the ANRC would convert its 40% of the blood

supply to an all -frozen red cell system within three years if ten million

dollars were made available for equipment purchases. The 1973 ANRC budget

for purchase of red cell freezing equipment is on the order of one-half

million dollars.

In retrospect, it would appear that the alternative MCP with transfusion review should also have included 28 -day life. This inclusion would

reduce the direct cost of that alternative by $.50 at all levels of

hepatitis testing and would slightly expand the range over which this

alternative is preferred to MCP with 28 -day life and frozen blood.

83
Appendix A. Derivation of Statistics on Blood Supply and Demand

The literature contains a broad range of estimates on the number of

units of blood currently collected and transfused. However, in no

instance do these estimates derive from hard analytical evidence. This

appendix contains the results of an analytic approach to the derivation

of estimates of nonmilitary blood use during the period 1967-1971 and the

prediction of probable levels of nonmilitary blood use during the period

1972-1976.

Red cells are the only blood component which cannot be obtained by

plasmapheresis. Therefore, for purposes of estimation, the number of

units of blood needed for patient transfusion is defined as the sum of

the whole blood needs and packed red cell needs.

The estimates of future usage assume that current transfusion

practices will be continued. However, a number of factors could change

current practice. Notable are:

1. Increased effectiveness of education programs aimed at ending

single unit transfusions.

2. A change in attitude towards and/or technology for blood

substitutes and expanders.

3. The possibility of blood utilizing or saving medical breakthroughs

(e.g., the recently announced "cure" for childhood leukemia).

These events have not been included in the projection of future blood

requirements because it is unlikely, given the current situation, that

factors of this nature will have a major effect on usage in a period as short as four or five years.

In order to arrive at past and future requirements for whole blood,

two estimation procedures were considered:

1. Estimation of current use and future need based on (a) longitudinal data on the number of units transfused per capita and (b)

Census Bureau estimates of population increase during 1967-1976.

2. Direct estimation based on blood usage during the last several

years

.

Method 1

Only limited data are available to support the first estimation

method because national statistics on per capita blood utilization are not available. However, the ANRC has supplied all of Connecticut's blood

requirements for several years and these data are available for four years.

As these data are almost complete and deal with a known population, they

have been used as a basis for the first estimation method. U. S. Census

and ANRC data can be used to compute the ratio of the number of units

transfused in Connecticut to the population of Connecticut for the years

1967-71. The data and results are shown in Table Al.
Table Al

Year Units Transfused122 Population 123 Ratio

1967

1968

1969

1970

1971

88,815

Not Available

88,548

88,319

91,316

2,935,000

3,000,000

3,032,000

3,065,000

.00303

.00295

.00291

.00298

The annual per capita transfusion rate in Connecticut is stable, (.00297

+ .0006) based on four years of data. If these results are assumed to

be representative of the Nation, blood usage can be obtained by applying

a utilization rate of .00297 to U.S. population estimates for 1967-1971

and projections for 1972-1976. This assumption of representativeness

can be investigated by deriving an estimate of 1971 blood usage from other

data sources and comparing it to the estimate obtained by using the

Connecticut data. If the two estimates agree, the assumption gains

credence. The U.S. Census Bureau gives four estimates of future population; the demand for blood was projected using Population Series B and D.

The results are contained in Table A2.

The method predicts that approximately 6.15 million units of blood

were transfused in 1971. Blood utilization increased by 250,000 units

between 1967 and 1971 or about 60,000 units per year (1.11 per annum

over the 1967 estimate). Depending on which population series is used,

blood utilization will increase between 360,000 and 430,000 units by 1976.

This is about a 1.3% per year increase over the 1971 estimate.

122 1967 figure from the AMA's Directory of Blood Banking and Transfusion

Facilities and Services , 1969. All other figures from ANRC's Blood

Center Operations reports as product of accountable supply used and

sum of whole blood and red blood cells retained by civilian and military

hospitals or sent to other blood banks.

1231971 Statistical Abstract of the U.S.

85
Table A2

Population Units Transfused

1967

(1000's) 12H

198,619

(1000's)

5,899

1968 200,619 5,958

1969 202,599 6,017

1970 204,800 6,083

1971 207,006 6,148

Population Series B

12t+ Population Series D

124

Population Units Trans. Population Units Trans.

(1000's) (1000' s) (1000's) (1000's)

1972 209,484 6,222 209,181 6,213

1973 212,155 6,301 211,530 6,282

1974 215,053 6,389 213,991 6,356

1975 218,177 6,480 216,561 6,432

1976 221,519 6,579 219,239 6,511

If an outdate and wastage rate of 151 is applied to the estimated

total units transfused, then it appears that about 1.25 million units

were collected but not used in 1971.

Method 2

Use of the second estimation method proves to be difficult because

of lack of data on blood utilization nationwide. AMA statistics on units

transfused, published every four years, suffer from severe underreporting.

ANRC statistics report on collections and on transfusions where the

ANRC was involved. The AABB records only collections. Reasonably complete

national data on the number of units transfused and their source is only

available for transfusions in Veteran's Administration hospitals and

from a special AHA Survey of transfusions in "short-term" nonfederal

hospitals during the first six months of 1971.

Consequently, if the second method is employed, calculations must be

based on six months of utilization data, and unsupported assumptions con- cerning blood used in "long-term" hospitals must be made. Thus, the

second estimation method can, at best, be used as a reliability check of

12l+U.S. Bureau of the Census, Current Population Reports , Series P-25,

No. 476, "Demographic Projections for the United States," 1972.

86
the first method. It does, however, provide insight on sources and usage

in 1971 (e.g., collection agency, % paid donors).

Table A3 contains the AHA data on sources and quantities of blood

transfused in short-term nonfederal hospitals between January 1, 1971

and June 30, 1971. 125 Table A4 contains data on sources and quantities

of blood obtained by Veteran's Administration (V.A.) hospitals in 1971.

Of the 253,000 units collected, 230,000 were transfused and 23,000 were

outdated. 126

Additional reliable data available for 1971 are:

The ANRC collected 3,182,000 units; 127

AABB members collected 3,312,000 units; 128

Those commercial blood banks which are AABB members collected

284,000 units. 129

t To prepare a detailed estimate of the current situation from this

raw data, a number of arbitrary, but plausible, assumptions must be

made as follows:

1. Blood use in short-term nonfederal hospitals was the same in the

first and second halves of 1971.

2. Blood is used at the same rate per bed in long-term nonfederal

and in V.A. hospitals.

3. Blood is obtained from the same sources by short and long-term

nonfederal hospitals.

4. Blood obtained from all sources outdates at the same rate in

V.A. hospitals.

5. All non-V.A. units from paid donors outdate at the same rate

(3.6I) 130 as blood collected by Blood Services, a multi-state

community blood banking operation which pays over 75% of its

donors

.

I25American Hospital Association News, press release of December 8, 1971.

Based on a special National Hospital Panel Survey released October 12, 1971

125Personal communication with Mr. Lee Johnson of the Veteran's Administration.

127ANRC, Blood Center Operations for the Year Ended June 50, 1971 . Another 223,000 units were collected by the Greater New York Blood Program

which we feel is primarily an AABB collector.

128 Personal communication with Col. Ben Peake, AABB Congressional liaison.

Another 194,000 units were collected by a Los Angeles blood bank which the

AABB feels is primarily an ANRC collector.

129Personal communication with Col. Peake.

130 Internal working documents of the DHEW Task Force on Blood Banking.

87
Table A3

Spurce # of Units % of Units

Transfused ('000s)

2,943

Transfused

All 100.0

Drawn by Hospital from

Voluntary Donors 171 5.8

Drawn by Hospital from

Replacement Donors 280 9.5

Drawn by Hospital from

Paid Donors 162 5.5

Drawn by ANRC 1,192 40.5

Drawn by Community

Blood Bank 603 20.5

"Drawn by Commercial

Blood Bank 400 13.6

Transfer from Other

Hospital 50 1.7

Other 85 2.9

Table A4

Source # of Units % of Units

Obtained ('000s)

253

Obtained

Ail 100.0

Drawn by Hospital from

Voluntary Donors 32 12.5

Drawn by Hospital from

Paid Donors* 31 4 1.6

Drawn by ANRC 174 68.7

Drawn by Commercial

Blood Bank131 43 17.2

131 The breakdown between these two categories is only an estimate.
6. All non-V.A. volunteer blood outdates at the ANRC outdate rate.

7. Donors are paid for one -half of all transfused blood obtained

from community blood banks.

8. All units collected from replacement donors and all units

transferred between blood banks were collected by AABB members.

9. The percentage of total collections which were made by AABB

members is the same for each of the following categories in

Table A3: hospital paid; hospital volunteer; community; and

other

.

Using assumption 2 and the fact that there were 38% as many V.A.

beds as long-term hospital beds in 1965,132we estimate that about 87,000

units were transfused in long-term hospitals in 1971. The sources of

the 87,000 units transfused by long-term nonfederal hospitals can be

calculated using assumption 3 and the percentages shown in Table A3.

Similarly, the sources of the 230,000 units used in transfusions by the

V.A. can be calculated from assumption 4 and the data in Table A4. Using

assumption 1 and the data in Table A3, the sources of all units transfused

in short-term, nonfederal hospitals in 1971 can be calculated. Table

A5 shows the estimated sources of all transfused units which derive

from those calculations. These estimates are the sum of the estimated

quantities transfused by short-term, long-term and V.A. sources. The

estimated number of units transfused is within 1% (57,000 units) of

the estimate made by the first estimation method. This lends greater

credence to the assumption that utilization in Connecticut was representative of U.S. blood utilization.

Estimates of collections by source and of AABB activities can also

be prepared for 1971. Table A5 shows that 2,577,000 of the 3,182,000

units collected by the ANRC were transfused; this indicates that

approximately 19% outdated or was wasted. Using the data in Tables A4

and A5 and assumptions 5 and 6, it is possible to estimate the collections

by source. These are listed in Table A6. The overall outdate rate is

151 ((7303-6204)/7303).

An estimate of the sources of the 3,312,000 units of blood supplied

by AABB members can also be made. Recall that 284,000 commercial units

were collected by AABB members. According to assumption 8, 827,000 units

were obtained from replacement donors and hospital transfers. 2,201,000

AABB units are unaccounted for and must have been supplied by four

sources: hospital paid, hospital volunteer, community, and other.

This accounts for 92.5% of collections by these sources. Assumption

9 provides that these units were divided equally between these sources. Table A7 summarizes blood collection and disposition by AABB members.

The salient results of this analysis are discussed in detail in

the text.

132H. Herman and M. McKay, Community Health Service , ICMA Municipal

Management Series, 1968, p. 106. Data from the AHA.

«Q
Table A5

Source # of Units % of Units

Transfused ('000s)

6,204

Transfused

All 100.0

Hospital -VoluntaryDonor 375 6.0

Hospital -Paid Donor 333 5.4

Hospital -Replacement

Donor 568 9.2

ANRC 2,577 41.5

Community- Paid Donor133 612 9.9

Community-Voluntary

Donor133 613 9.9

Commercial 851 13.7

Hospital Transfer 102 1.6

Other 173 2.8

Paid 1,796 28.9

Unpaid 4,408 71.1

AABB13l+ 2,867

assumption 7.

46.2

13 distribution based on

13,4 From Table A7.

Table A6

Source # of Units % of Units

Collected (

? 000s)

7,303

Collected

All 100.0

Hospital -Voluntary Donor 459 6.3

Hospital -Paid Donor 345 4.7

Hospital -Replacement

Donor 701 9.6

ANRC 3,182 43.6

Community- Paid Donor 645 10.4

Community-Voluntary Donor 756 8.7

Commercial 875 12.1

Hospital Transfer 126 1.7

Other 214 2.9

Paid 1,865 25.5

Unpaid 5,438 74.5

AABB 3,312 45.4

90
Table A7

Source # of Units # of Units

Collected ('000s)

3,312

Transfused ('000s)

All AABB 2,867

Hospital -Voluntary

Donor 396 321

Hospital -Paid Donor 316 305

Hospital - Replacement

Donor 701 568

Community- Paid Donor 589 568

Community-Voluntary

Donor 701 568

Commercial 284 274

Hospital Transfer 126 102

Other 199 161

Paid 1,189 1,147

Unpaid 2,123 1,720

% Paid 35.9 40.0

Noncommercial Total 3,028 2,593

Noncommercial Paid 905 873

% Noncommercial Paid 29.9 33.7

91
Appendix B. Analysis on Eligible Donors

In 1970, there were 114,525,000 residents of the U.S. and its territories who were between the ages of 18 and 65. The analysis reported

in this Appendix was used to estimate how many of these people would be

able to meet donor acceptability standards as published by the ANRC.

Using ANRC criteria^ 3 Acceptable donors must satisfy a large number

of requirements including the following:

1. systolic blood pressure less than 200;

2. diastolic blood pressure less than 100;

3. no donation during or six months after pregnancy;

4. no major surgery or transfusion within six months;

5. not suffering from active allergy or asthma;

6. not in a mental or penal institution;

7. not suffering from diabetes controlled by medication;

8. not suffering from heart disease or active rheumatoid arthritis;

9. females must weigh at least 110 pounds and males 130 pounds;

and

10. female hemoglobin must be at least 12.5 g/lOOmland male at

least 13.5 g/100 ml.

For the most part, these criteria reflect an attempt to further define

and quantify the basic criteria that blood donors must be in overall

good health and capable of donating a full unit of blood without

deleterious effects.

There are two factors which had to be recognized and resolved before

an analysis could be conducted. First, levels of health vary considerably

with age and sex. Therefore, all computations had to be done using data

which related to these factors. Second, once a person contracts an

exemptable health problem, the probability that he will contract another

exemptable health problem is much greater than that of a normal person.

The most notable example of this relationship is the correlation

between the incidence of hypertension (high blood pressure), diabetes,

and heart disease. Important data on multiple disease incidence in the

general population is not available and therefore some assumption had

to be made on disease relationships. To avoid double counting of

ineligible donors, it was assumed that those persons with hypertension,

those having undergone major surgery and those institutionalized would

not be classified as ineligible because it was felt that their ineligibility would be manifested in another category. Conversely, it was assumed that there is independence among the other disease categories

considered (e.g., heart disease and anemia).

135ANRC Blood Program Directive 4.12, September, 1971.

92
The 1971 Statistical Abstract provided data on pregnancy, heart

disease, and rheumatoid arthritis. 135 Data on incidence of anemia

(hemoglobin level); allergy and asthma; diabetes; and underweight were

obtained from two sources. These were: (1) observations made on 8,420

males and 15,207 females who underwent a free multiphasic screening

examination at the Public Health Service demonstration center in Brookdale

Hospital, Brooklyn, New York; 137

(2) data from the Metropolitan Life

Insurance Company which recently screened its home office employees for

health information. l38 The groups involved in the two studies had

obvious differences in population characteristics; yet the results were

similar. This indicated to us that the data might be generally applicable

to the total donor population.

Table Bl contains the data by age, group, and sex, used in the analysis to estimate the total number of eligible donors. The table starts

with a total of 114,525,000 age-eligible donors in the U.S. The size of

the group is then systematically reduced to account for those persons who

do not meet the ANRC blood donor qualifications.

Heart disease and active rheumatoid arthritis resulted in the

elimination of 10,987,000 persons from the age- eligible sample. These

conditions affect mainly those over 45 years old.

Pregnancy, according to ANRC criteria, results in a 15 -month period

of blood donor ineligibility. To estimate the number of persons affected

by this restriction we have assumed that the percent decrease in eligible

women is 1.25 times the annual birth rate. The incidence of miscarriage

was not included in the estimation. Pregnancy, thus reduced the size of

the potential donor population by approximately 4 million females.

The inability to meet the minimum weight criteria affects approximately 6,300,000 men and women, thereby excluding them from the potential

donor population.

Anemia, which occurs most often in women who have not reached

menopause, reduces the potential donor population by an additional 19

million individuals.

Of the remaining potential donors about 11 million are eliminated

because they suffer from asthma or active allergies, and another 1

million are ineligible because they take insulin.

13 ^971 Statistical Abstract , Washington, D. C, U.S. Government Printing

Office, 1971.

13 Unpublished material obtained from Multiphasic Systems, Inc. of

Norristown, Pennsylvania.

13€Bulletin of the Metropolitan Life Insurance Co.

,

July 2, 1970.

93
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The analysis indicates that of an initial 56,083,000 male donors

between the ages of 18 and 65, 34,847,000 are eligible. The comparable

reduction for females is from 58,442,000 to 26,729,000. The total donor

base has been reduced by 46.6%; the female base was reduced by 55%, and

the male base by 37.9%. Of the 48.8% of those under 35 ruled ineligible,

61.3% were women.

We have estimated that 7.3 million units of blood were drawn in 1971.

5.45 million units came from unpaid volunteers. Several studies indicate

that approximately 20% of all volunteer units are drawn from donors who

are giving for the first time. 139 Based on this, an estimate of 1.1

million "first- time" donors will be used for 1970. Sixty percent of the

remaining volunteer donors and 25% of the paid donors give only once a

year. The remaining donors give approximately 2.25 times a year.

Thus, it is estimated that in order to achieve the 7.3 million units

of blood, approximately 4.0 million volunteers and .95 million paid donors

(about 8% of all eligible donors) gave blood. lhl Of special note is the

figure of 1.1 million "first- time" donors each year. This implies that

in any given year, about 1.75% of all eligible donors will give for the

first time. Over a ten-year period, as many as 25% of all eligible

donors will have given blood.

139Condie and Maxwell, "Social Psychology of Blood Donors," Transfusion , Vol. 10, No. 2, 1970, pp. 79-83.

London and Hemphill, "The Motivations of Blood Donors," Transfusion , Vol. 5, No. 6, 1965, pp. 559-568.

Korzekawa, Jordan and Alsever, "The Blood Donor: I. Who Are Our

Donors? An Analysis of Social and Other Characteristics of 12,759 Donors,"

The American Journal of the Medical Sciences , Vol. 240, July 1960, pp.

36-46.

1 ^London and Hemphill, loc. cit.

Greater New York Blood Program data cited in internal working

documents of the DHEW Task Force on Blood Banking.

11+1 To check the reasonableness of this estimate, paid and unpaid collections were divided by the average number of units collected per ANRC donor

in 1971(1.37). This calculation showed that there would be 4.0 million

volunteers and 1.35 million paid donors.

95
Appendix C. Derivation of Equation Relating Percentage of Paid

Donors to Outdate Rates

In this appendix, an equation is derived which expresses the maximum

percentage of paid donors which could be cost- effectively eliminated as a function of outdating rates before and after their elimination is effected.

Make the following definitions:

R = fraction of donors who are paid

T = number of units required for transfusion

N = current fraction of collections which is transfused

L = fraction of collections which would be transfused if

shortage occurred.

Cost factors affected by shortage or the percentage of paid donors

are the donor payment, the hepatitis cost, and the outdating cost. With

a fraction R of paid donors, these costs are:

Payment: $8 average payment per unit x R paid x # collected/

(# collected x N transfused) = $8R/N

Hepatitis: (.75% unpaid incidence x (1 - R) unpaid + 3.75% paid

incidence x R paid) x 70% test ineffectiveness x

(28 days of hospitalization for hepatitis x $110

per day + 90% survive x $750 convalescence + 10%

die x $45K per death) (# units transfused/3.1 units

per episode) /# units transfused = (1 + 4R) ($13.98)

Outdating: $15.10 processing x (1 - N) outdate x # units

collected/ (N transfused x # units collected) = $15.10 (1 - N)/N.

With paid donors outlawed, total collections will be T(l - R)/N and

requirements for transfusion will be T/L. Thus, the shortage is T/L - T(l - R)/N, and T - LT(1 - R)/N units will not be available when required

for transfusion. The shortage cost per unit required for transfusion will

be ((T - LT(1 - R)/N) short x 3% die x $45K per death + 48.5% serious

effect x 10 days hospitalization x $110 per day + 48.5% minor effect x

2 days hospitalization x $110 per day)/T units transfused = ((N - L + LR)/

N ($2,038.20)). Outdating cost will be $15.10 (1 - L)/L and unit hepatitis

cost will be $13.98 since R = 0.

Outlawing of the paid donor is cheaper when $13.98 + $15.10 (1 - L)/L

+ $2,038.20 (N - L + LR)N < $13.98 (1 + 4R) + $15.10 (1 - N)/N + $8R/N,

i.e., when R <_ ($2,038.20 + $15.10/L) (L - N)/($2,038.20 L - 55.92 + 8).

Since L > N, we have R = ($2,038.20 + 15.10/L) (L - N)/($2,038.20 L

- — max

55.92 + 8). Thus, we see that if the outdating rate is not reduced,

L - N = 0, R =0, and outlawing of the paid donor is not cost effective.

The maximum percentage paid will occur if there is no outdating when

shortage occurs. The expression becomes R = (2053.3) (1 - N)/ (2030.

2

- 55.92N). Table 2 in Section 5.8 of the text was prepared by evaluating

this expression for appropriate values of N.

96
Appendix D. Sensitivity Analysis Derivation

Dl. Analysis for Figures D and E

The cost of each alternative is computed from many values which

are "best estimates." Any set of estimates of these values can be

considered to be a vector of cost parameters. Call the vector which

contains the "best estimates" of these parameters the mean cost vector , and define the mean cost of the alternative as the cost which is calculated from the mean cost vector. Table 6 in Section 5.11 shows the range

of values which are estimated to be equally likely to be the actual

values. 142 Call any cost vector which contains one or more of these

equally likely, but not "best," cost parameters a possible cost vector . Define the set of possible costs of an alternative to be the costs calculated from possible cost vectors. Obviously, there are an infinite

number of these vectors since many of the cost parameters are "continuous

variables" which might assume any of an infinite set of real-number values,

For the sake of simplicity, the cost comparisons made in Section 5.10

relied exclusively on mean costs. Since each possible cost of an alternative represents a cost estimate which one might consider to be the

actual cost of that alternative if the exact values of the incidence

parameters were known, a decision on the relative cost ranking of two

alternatives based on their mean cost values will not be a good one if

rankings based on possible cost values are likely to differ from the meancost-based ranking. The purpose of the present sensitivity analysis is

to bound the likelihood of such reversals in ranking, between the lowest

mean cost alternative and each of the two other alternatives which have

mean costs close to the lowest mean cost. This type of analysis is

particularly important because some of the parameters (e.g., cost

associated with death) have no "true" value—the value of a life is

perceived differently by different individuals. A high likelihood of

reversal in rankings indicates that many people would not concur with

a decision based on the mean cost ranking. Such disagreements are of

particular concern to political decision makers.

The technical part of the discussion involves the costs 2 X and Y,

of two alternatives. The associated mean costs are denoted X and Y.

The first of the alternatives is assumed to be that with lowest mean

cost, so that

X < Y. (1)

The possible values of X are taken as ranging from a minimum value X . r e.6 min

to a maximum value X (where conceivably X . = -°° and/or X = °0 , max v ; mm max J '

I1+2More precisely, the actual value is regarded as having a "uniform

distribution" over its associated range.

97
and similarly for Y; therefore

X . < X < X , mm max

Y . < Y < Y mm max

(2)

(3)

A reversal of the ranking based on mean costs of the two alternatives will

occur precisely when (in contrast with (1))

Y < X. (4)

Our uncertainty about the values of X and Y is represented by

regarding them as random variables, with distributions (probability

density functions) f(X) and g(Y). Moreover, they will be regarded as independent random variables. At first, this may seem incorrect: the

total costs of the two alternatives may involve certain common uncertain

cost elements (e.g., the basic processing fee), whose presence would, in

general, imply dependence of X and Y. However, such common elements would

"drop out" in comparing X and Y as in (4) , and therefore are assumed to

have been subtracted off in advance.

The aim of this analysis is to bound the probability of a reversal,

denoted P(R). From the material in the last two paragraphs, it follows

that

P(R) = Prob(Y < X)

= J! f 00 g(Y) dX dY (5)

A

where A is the region in the (X,Y) plane defined by the three conditions

(2) , (3) , and (4) . This double integral can be converted into an iterated

integral, with the integration over X performed first. For this purpose,

note that for fixed Y, (2) yields X > X . and (4) yields X > Y, so that ' v J } mm

both conditions together & yield X > max(Y,X . ). / v mm Next, (3) yields Y < Y

max

max- while (2) and (4) together yield Y < X < XmaY , so that all three conditions

yield 3 Y < min(YK ,X ). max' max^

(5) that

It follows from these considerations and from

P(R) = /

"^rnax'W X

Y

g00 /

max

mm max(Y,X . ) ^ ' mur

f (x) dX dY. (6)

Figure Dl. Possible Configurations of X- Interval and Y- Interval

X- Interval

Y- Interval

Formula for P(R) Impossible (7a) (7b) (7e)

98
For convenience six cases will be distinguished, depending on the

relative positions of the four quantities X . , X , Y . r n , Y . (See mm' max' mm max v Figure 6 Dl.)J One possibility v : is that Y < X . , i.e.,. that the interval

max — mm' ' of possible Y-values lies (on the real-number axis) entirely to the left

of the interval of possible X-values. This possibility can be ruled out,

as inconsistent with (1). A second possibility is that X < Y . y J * } , i.e.,

max — mm

that the X- interval lies entirely to the left of the Y- interval. Then

(4) cannot occur, i.e., reversal is impossible, so that

P(R) =0 if X < Y . . (7a)

^ J max — mm s J

In all remaining cases, characterized by

X < Y Y < X

min max' min max'

the two intervals overlap. These cases may be divided into two classes,

according as X-<Y. or Y - < X . . mm — mm mm mm

For the first class, X . < Y holds, so that (6) becomes ' mm *• '

min(Yv ,X ) X

max' max' max

P(R) =

J g(Y) / f (X) dX dY,

or more explicitly

Y . Y mm

X X

max max

POO = / gOO / f (X) dX dY (7b)

Y . Y mm

ifX.<Y.<X <Y mm — mm max — max'

Y X

max max

P(R) = / gOO / f (X) dX dY (7c)

Y . Y mm

ifX.<Y.<Y <X mm — mm max max

For the second class, both X . < Y and X . > Y are possible, so that

(6) becomes min min

99
X X

min max

P(R) = / gOO / £(X) dx dY

Y . X . mm mm

min(Yv ,X ) max' max^

Xmm

X

max

g(Y) / f (X) <3X dY.

Y

The inner integral of the first summand represents the probability that

X falls anywhere within its interval of possible values, and so is equal

to 1. Thus, distinguishing the two cases within the second class, we

have

X Y X min max max

P(R) = / g(Y) dY +

/ g(Y) / f(X) dX dY

Y . X . Y

min mm

ifY.<X.<Y <X mm mm max max

Xmin XX

max max

P(R) = / gOO dY +

/ g(Y) / f (X) dX dY

Y . X . Y mm mm

if Y . < X . < X < Y mm mm max max

(7d)

(7e)

Once the functions f (X) and g(Y) are specified, the desired probability

P(R) can be calculated from (5) or (6) or (7), either exactly if the

functions are simple enough to permit this, or approximately by use of

an appropriate numerical- integration technique. The remainder of our

theoretical analysis is therefore composed of two tasks. First, a rationale is needed for specifying the pair (f,g) of functions. Two

such pairs will be formulated, one to provide an upper bound on P(R) and

the other to provide an approximate lower bound (and estimate) . Second,

for each pair the theoretical calculations directed by (6) must be

carried out. After the theoretical analysis is complete (i.e., both tasks

accomplished.) , its results must still be given numerical application to

the specific situation under study in this report.

Specification of Distributions . Suppose initially that f (X) and_

g(Y) were such as to "concentrate1 ' X and Y very_ tightly about X and Y

respectively, i.e., all values of X - X or Y - Y which differ substantially from had very low probability. Then clearly the ranking (1)

,

based on mean costs, is very unlikely to need reversing. In other words,

P(R) will be near zero. Intuitively speaking, the more X and Y are concentrated about their respective means, the less P(R) will be. And

conversely, the less X and Y are concentrated about their means, the

greater P(R) will be.

100
This observation leads immediately to our choice of a pair (f ,g) of

probability distributions to use in obtaining an upper bound for P(R).

We choose f and g so as to concentrate X and Y "as little as possible"

about their means, namely to be the uniform distributions over the

respective r intervals (Xv

. ,X ) and (Y . ~Y ) over which the possible mm max' v mm' max' v values of X and Y range.

It remains to describe how these two intervals are selected in this

case. The cost (X or Y) of an alternative arises as a sum of products.

Each product has many factors, each of which is an uncertain quantity,

treatable as a random variable (denoted X, . or Y.J . The products, then. can also be regarded as random variables (denoted X. or Y.), so that

X = T.X.

,

Y = y.Y. (8)

(the numbers of summands for X and Y need not be the same) . The mean

values of X and Y can be calculated from those of the X. and Y. , as

i j'

X = lA' ? = Mi (9)

Now each X. has a range ((X-) • ,(X.) ) of possible values, calculable

1 B KK l/min' *• i

J maxJ y ' from Table 6 in Section 5.11, and so one might attribute a value to X

by the formula

X = T-(X.) , (10) max Lx

K i/max' ^

J with similar treatments for X . , Y . , and Y . This approach, however, mm mm' max rr ' ' is felt to lead to unreal is tically wide intervals, and hence to an upper

bound so conservative as to be unnecessarily uninformative. Instead, the

following approach is adopted.

It is well known (and easy to derive) that a uniformly distributed

random variable can differ from its mean by at most f$ times its standard

deviation. Since each X, . is regarded as uniformly distributed, we see that its standard deviation is given by

(s ),. = i I(X .) - (X, .) . J//3. (11) *• x'hi 2

1 ^ hi •'max v hi; minJ/ ^

J

If the X, .'s are assumed independent, as is reasonable in the present

context, then it follows that the variance of X is given by

s^= \l (|| )\\ (12) x hi dAhi A

hi

where the derivatives are evaluated at the mean value of the X, - . From

hi

equation (12) , s can be calculated. We now utilize the relation cited

at the beginning of this paragraph to write

101
Xmm. = X - s /3, X = X + s /3; (13) x

' max x

' K J values for Y . and Y are found analogously. This completes the

specification of the pair (f ,g) to be used in finding an upper bound for

P(R).

To obtain the estimate (and approximate lower bound) , we continue to

make use of the (generally valid) formula (9) for the mean value X of X,

and formula (12) for its standard deviation s , and similarly obtain the

-A. values of the mean Y of Y and the associated standard deviation s . Now,

y

however, we take f (X) and g(Y) to be the normal distributions with these

respective r means and variances. Here X . = Y . = -°°, and X = Y mm mm ' max max

The basis for regarding this pair (f ,g) as an approximation to the

proper distributions of X and Y, and hence the P(R) -value they yield as an "estimate" of the proper value, is provided by the Central Limit

Theorem of probability theory, which asserts that under appropriate

mathematical hypotheses, the distribution of a sum of random variables

like X or Y in (8) is "asymptotically normal." The justification for

believing this estimate to be on the "lower bound" side is hazier and

more intuitive;' some of the (s ), . or (s ) ., are much larger than the

^ xmi v y jk 6

others, and when this situation is examined in the light of the abovementioned "mathematical hypotheses," 1143 it appears to the writer that the

normal -distribution approximation yields more concentration about the

mean (hence, a lower P(R) -value) than is actually the case.

Theoretical Calculations . For these calculations, it is convenient

to introduce the quantity

D = Y - X, (14)

which is non- negative by (1)

.

We turn first to the upper bound for P (R) , involving uniform

distributions. Here it is useful to introduce symbols for the half

ranges of X and Y , i.e.,

a = \ (X - X . ) = X - X . =X -X, (15a)

2

v max mnjr mm max ' b=^(Y - Y . ) = Y - Y . = Y - Y. (15b)

2

v max mm' mm max v J

lk3 See pp. 491-492 of W. Feller, An Introduction to Probability Theory

and Its Applications , Vol. 2, J. Wiley and Sons, 1966.

102
Within the ranges of integration in (7)

,

f(X) = l/2a, g(Y) = l/2b.

Thus for example (7b) becomes

X + a X + a P(R) = / (l/2b) / (l/2a) dX dY,

Y - b Y

yielding

P(R) = (a + b - D) /8ab. Q6b)

Similarly, (7c) and (7e) lead respectively to

P(R) = (a - D)/2a, (16c)

P(R) = (b - D)/2b. (16e)

The conditions for (7d) to apply are inconsistent with (1)

.

Now we consider the lower bound for P(R), involving the normal

distribution. Here it is convenient to write

X = X + us , Y = Y + vs , x

7 y

7

where u and v are normal random variables with zero mean and unit

standard deviation. The probability of reversal is given by

P(R) = Prob(Y < X)

= Prob(Y + vs < X + us )

= Prob (us - vs > D)

.

v x y

Since X and Y are assumed independent, the same is true of u and v, and

so z = us - vs is a normal random variable with mean zero and standard x y

deviation s given by

2 2 2 s = s + s . Q-7)

z x y

J

Continuing

,

P(R) = Prob(z > D) (18)

= Prob(z/s

z

> D/s

z

)

= 1 - F(D/s

z

)

where F is the "standardized" normal distribution. Thus P(R) for the

lower bound can readily be evaluated using standard tables.

Numerical Application . The methodology necessary to determine bounds

on the reversal probabilities P(R) is now complete. The task which

remains is to perform, for each pair of alternatives to be prepared, the

calculations necessary: to obtain the means X and Y, to obtain standard

103
deviations by (12) plus its analog for Y; to obtain the upper bound on

P(R) by use of (13), (14), (15), and (16) or (7a); to obtain the estimate

and approximate lower bound for P(R) by use of (14), (17) and (18). The

required values will be parameterized in terms of HAA test ineffectiveness, which is represented as H. We will not burden the reader with the

calculations.

In computing the standard deviations, it would be incorrect to include

deviation which is present in both alternatives (i.e., joint deviation)

since joint deviation will not affect the ranking of the cost of the

alternatives. Let S. ~ be the standard deviation of alternative A

A vs. B

excluding the joint deviation of alternatives A and B, and let m. be the

mean cost of alternative A. The means and standard deviations of frozen

blood (FB) and Milwaukee programs with transfusion review (TR) and 28 -day

life (28) are:

m

FB

=

$ 24 ' 20 ; S

FB vs. TR or 28

= $8 ' 51;

m

2g

= $6.98 + $24.08 H (+ $1.00 if H < .7);

S

28 v FB

=

($ 7 - 833 + $44,289 H + $155,758 H

2

) 1 ^ 2

;

S„ TM = ($1,367 + $6,734 H + $26,474 H

2

) 1^ 2

; Z O VS . 1

K

11^.= $8.14 + $22.07 H (+ $1.00 if H < .7);

STD CT2 = ($7,356 + $41,568 H + $141,889 H

2

) 1//2

; TR vs. FB K J

Std 90 = ($-89 + $4,013 H + $12,605 H

2

) 1/2

. TR vs. 28 v J

Table Dl shows the means and standard deviations for values of H starting

at 0.0 and increasing to 1.0 in increments of 0.1. Table D2 shows the

bounding probabilities. Figures D and E were prepared using these values.

D2. Analysis for Figure F

Preparation of this figure requires derivation of equations for the

mean cost of the alternatives as a function of cost associated with death

and hepatitis test effectiveness. Since the transfusion fee, cytomegolovirus cost and liquid processing costs are the same for all alternatives,

they can be omitted as cost factors in this analysis. As an aid in

deriving the mean cost equations, the following definitions are used:

H: % hepatitis test ineffectiveness;

CD: cost associated with death;

anu: average number of units per transfusion.

The unit cost of frozen blood is the sum of costs for outdating,

special processing, and donor payment; and equals 1.75% (outdate rate) x

104
I—

1

o

o

I—•8

oo

cm

oo>

•si- cr> oo o oo vo 0>H^00O-* O «sf- LO ^t OO OO H ^ OO H

i—1 l—1 i—1 Csl CM

&e- NMMM^t

pq

Ph

>

CO

HONHMCO N\D\0 N OO O)

tO CD VO «sf- iH

-b=3-

CD O iH CM tO iH iH rH iH

f

ON^HOO^ ^f ** LO MD vO ts. HK1 U5N01H

CM CT> O tO O OOOOOlOH

tO LO t^ O CM OOOK5 l^ NO I—1 iH iH iH CM

-&eCM tO LO OO O

CM CM CM CM tO

m

>

oo

CM

co

NMtJ-OlO N

r—1 LO C7> "vh CO tO

LO\o \o -st- r-» oo co to oo to OO

rH i—1 I—1 CM CM tO

-b«3- tO ^ ^" LO LO

pq

p-t

>

oo

CNJ CO

ONOIMOO oo r-> t-> en i—i to

rH tO vO CT> CM LO N O) H"^"

cm to «st- lo r> co

fee- OOHtO'*

rH rH rH rH

oo

cm O OO O -sKM O OO OOCn O H M

OO \0 «sf CM O CNI tO "St" LO \D

^t 00 CM vO CD

r-» o cm lo r--* o

i—1 i—1 i—1 rH CM

CM tO \0 OO rH

CM CM CM CM tO

pqPk

CO

i—1 rH 7—1 i—1 rH t—1 LO LO LO LO LO LO

rH rH rH rH rH

LO LO LO LO LO

OO OO OO OO OO OO OO OO OO OO OO

pq o o o o o o

CM CM CM CM CM CM O CD O O CD

CM CM CM CM CM

^t- .-st- -st ** -st •*

CM CM CM CM CM CM

-b<3-

•sf H- >vh ** *si- CM CM CM CM CM

pel OHN Kl<*lO vO IN OO Crt o

rH

105
Table D2

H

TR pref 28 FB pref TR or 28

Normal pUniform Normal

pUniform

.220 .236

J

.005 .020

J

.1 .310 .321

J

.068 .071

J

.2 .378 .387

L

.116 .138

J

.3 .427 .433

L

.188 .212

J

.4 .461 .464

L

.273 .288

J

.5 .485 .487

L

.359 .367

J

.6 .504

M

.503

K

.441 .443

J

.7 .SlP .516

K

.482 .483

L

.8 .530

M

.527

K

.544

M

.540

K

.9 .539^ .535

K

.599^ .587

K

1.0 .547^ .542

K

.644

M

.626

K

J: Computed Using Equation (16b)

K: Computed as 1-P(R) Using Equation (16c

L: Computed Using Equation (16e)

M: Computed as 1-P(R)

:)

106
$37.60 (processing cost)/98.25% transfused + $22.50 increased processing

cost for frozen blood + 12.8% of donors paid x $8 av donor payment/98. 25%

transfused or $24.20.

The unit cost of either Milwaukee control alternative (MCP) includes

expectation of costs of hepatitis, hemolytic reaction, febrile reaction,

and program operation. These amount to: (1/anu) [H x (.75% hep incidence

rate) x (28 days of hosp for hep x $110 per day + 90% recover x $750

convalescence + 10% die x CD) + .04% hemolytic reaction x $3000 treatment

+ .04% hemolytic reaction x 25% die x CD + .01% febrile death x CD] + 2.5%

of units cause febrile reaction x 10% serious x 1 day of hosp for serious

febrile x $110 per day + $1.50 for program operation = (1/anu) JH (28.16

+ .00075 CD) + 1.20 + .0002 CD] + 1.78.

When MCP is coupled with transfusion review, costs of outdating

shortage and review total: 6% outdate x $16.60 processing fee/94%

transfused + 1% shortage x 1.75 days of hosp x $110 per day x 1.35/anu

+ $35.00 per review x (5% of units/anu) reviewed. For this alternative,

anu = 3.385 and the mean cost equation is 4.45 + 8.32 H + .000059 CD

+ .00022 CD x H. The cost increases by $1.00 above 30% HAA effectiveness.

When MCP is coupled with 28-day life, costs of outdating and shortage

total: 3% outdate x $16.60 processing fee/97% transfused + .3% shortage

x 1.75 days of hosp x $110 per day x 1.35/anu. For this alternative,

anu = 3.1 and the cost equation is 2.92 + 9.08 H + .000065 CD + .00024

CD x H. The cost increases by $1.00 above 30% HAA effectiveness.

Figure F is prepared by calculating which alternative has the lowest

cost among these three. Thus MCP with transfusion review is preferred

to frozen blood when 18.75 (+ 1.00 if H < .7) >_ 8.32 H + .000059 CD

+ .00022 CD x H, and is preferred to MCP with 28"day life when 1.53 <_ .76

H + .000006 CD + .00002 CD x H. Table D3 shows the values where equality

obtains in these relations.

107
Table D3

H CD for FB Preferred CD for MCP with TR

to MCP with TR Preferred to MCP

(Thousands of $) with 28

(Thousands of $)

41 30

.1 48 35

.2 56 42

.3 65 50

.4 72 60

.5 86 72

.6 105 88

.7 130 108

.8 166 138

.9 221 182

1.0 318 255

* u. S. GOVERNMENT PRINTING OFFICE : 1 973 --542-648/30

108
FORM NBS-114A H-71)

U..S. DEPT. OF COMM. BIBLIOGRAPHIC DATA

SHEET

1. PUBLICATION OR REPORT NO. NBS TN-777

2. Gov t Accession No.

3. Recipient's Accession No.

4.. TITLE AND SUBTITLE Cost Analysis of Blood Banking Alternatives

5. Publication Date September 1973

6. Performing Organization Code

7. AUTHOR(S)

Ted Miller, Marge King, John Flannagan, Ernst Nilsson, Bob Lemtieux

9. PERFORMING ORGANIZATION NAME AND ADDRESS

8. Performing Organization

NATIONAL BUREAU OF STANDARDS

DEPARTMENT OF COMMERCE

WASHINGTON, D.C. 20234

10. Project/Task/ Work Unit No. 4314473

11. Contract/Grant No.

12. Sponsoring Organization Name and Address Office of the Assistant Secretary

for Planning and Evaluation

Department of Health, Education, and Welfare

Room 5526, HEW North Building, Washington, D.C. 20201

13. Type of Report & Period Covered Final 3/72 - 8/72

14. Sponsoring Agency Code

15. SUPPLEMENTARY NOTES

16. ABSTRACT (A 200-word or less factual summary of most significant information. If document includes a significant bibliography or literature survey, mention it here.) This report provides a description of the current blood banking system and of the

collection and derivation of quantitative information concerning system operation and

blood cost. A reasonably accurate but somewhat incomplete profile of practices,

attitudes, and likely costs of present and alternative systems has been developed.

Among the topics presented are: 1) a discussion of the blood collection process

including statistics on present use and future needs; 2) information relating to

donor motivation, attitudes and incentives; 3) a brief summary of demonstration

programs in the U.S. and national blood programs in other countries which provides

some insight concerning means for improving blood quality and availability; 4) a description of blood processing, storage and distribution procedures; 5) narrative

and statistical information relating to blood utilization practices; 6) discussions

of post transfusion reactions and frozen blood programs; 7) a discussion of current

governmental and professional standards, regulations and controls which influence

many, but not all, concerns involved in blood collection and processing.

This information serves as the basis for the selection of alternatives analyzed

in a cost effectiveness analysis of eight apparently viable alternatives to the

current system. Because of the possible variation which might be ascribed to many of the parameters used as a basis for costing alternatives, the sensitivity

analysis is crucial in the comparison of alternatives.

17. KEY WORDS (Alphabetical order, separated by semicolons) Blood banks; blood utilization statistics; cost benefit analysis; donor

profiles; peer review; regulatory activities; sensitivity analysis

18. AVAILABILITY* STATEMENT

r^l UNLIMITED.

C J FOR OFFICIAL DISTRIBUTION. DO NOT RELEASE

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21. NO. OF PAGES

121

22. Price

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