Business is Business

Creative Testing Solutions (CTS), the American Red Cross (ARC), and OneBlood have announced the consolidation of their donor testing services into CTS. If my eyeball is accurate, that will concentrate 75 percent of the U.S donor testing volume with a single supplier. The size of the “new” company offers the prospect of economies of scale, not just on prices, but perhaps as leverage with test builders and maybe even with the regulator. No doubt this is a good business decision by the principals of the three organizations. Time will pass and we will understand the impacts.  

I fielded, in the eight hours or so after learning of the merger, perhaps a half-dozen calls or e-mails from colleagues essentially asking whether this is another “nail in the coffin” of the community blood center. The issues centered mainly on the ability of three large blood operators to advantage themselves on the costs associated with donor screening while disadvantaging “external customers,” reducing the competitiveness of smaller labs and blood centers in the long run. 

A concern and a comment. 

The concern—really one we should have recognized and been addressing much earlier: ≥75 percent (and to grow I suspect) of a critical blood processing step, donor testing is already and will continue to be done on the nucleic acid testing and serology equipment of one company each. Recall that we have, in the past year, seen a highly disruptive blood bag and leukoreduction filter “crash,” where we have limited vendors. These created substantial difficulties at substantially lower proportional volumes than 75%. What if that happens to one of the two systems in use by this laboratory and an assay or platform is not available for days or weeks or longer? How would that impact the short- and medium-term availability of blood? Is there an imperative that the lab maintains redundant capacity on the alternative testing systems? 

The comment—this should not be a death knell for the community blood center because it is harder to farm out the donor-facing activities at the core of everything we do than very “rote” processes like donor testing and data transfer. Our most important relationships in support of the “community model” are with local donors and groups and with potential donors. I used to work for one of the principals involved in this latest announcement, who always believed there was an irreducible local imperative to putting volunteers on the beds. Is it enough to preserve our community model? Probably, but it will certainly not look like the model we are familiar with (it already does not).

Louis Katz, MD; Chief Medical Officer 

Posted: 08/11/2017 | By: Louis Katz, MD; Chief Medical Officer | Permalink
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