American red cross consent decree 1993

4 7 6

CASE

Community Blood

Center of the

Carolinas: Donations,

Donations, Donations

This case was written by Linda E. Swayne, The University of North Carolina at Charlotte and Thomas Hassett, Group Vice President for Carolinas Healthcare System. It is intended as a basis for classroom discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Used with permission from Linda Swayne.

3

Tom Hassett, group vice president for Carolinas Healthcare System, was responsible for studying the laboratory service line for his hos- pital system in 2002 (one of 17 service lines with escalating costs). He recalled, “Our costs were actually going down from vendors who were working with us in a very tight time for health care in general and hospitals specifically. But blood costs kept increasing. In just one year, our cost for blood doubled! Discussions with the Red Cross – which was the dominant supplier of blood in our area – went nowhere. I think there were a couple of reasons for that. Charlotte is headquarters for a blood services region for the Red Cross and one of eight national blood testing labs is located

both03.indd 476both03.indd 476 11/11/08 11:12:52 AM11/11/08 11:12:52 AM

4 7 7

here, but all business decisions are made in St. Louis and they don’t appreciate our problems since they have problems of their own. They’re trying to cover the costs for all the activities required by the consent decree. The St. Louis guys told us if we didn’t like their prices we should get our blood elsewhere. That’s when we really got serious about an independent blood center.”

Discussions Begin

“We began to talk with hospitals in our immediate area about their experiences and found them to be similar to our experience. As informal word got around, more hospitals called to express their interest in looking at an alternative. Then we discovered America’s Blood Centers – a national group serving as the umbrella organization for some 75 independent community blood centers spread around the country. When we approached them, ABC suggested that we contact two or three members about their centers and their willingness to help our group look at how we might set up an independent community blood center,” Hassett explained.

He continued, “We then found out some interesting things. The Red Cross had a blood center in Springfield, Missouri that the hospitals there were not very happy with. When discussion began about a community blood center in Springfield, the Community Blood Center of Greater Kansas City was contacted for assistance. Don Thomson, CEO of the Red Cross center was hired to become the executive director of the Springfield area center, named the Community Blood Center of the Ozarks. Not long afterward, almost the entire staff of the Red Cross resigned and moved to the Community Blood Center of the Ozarks. This caused such a wrangle that the Red Cross filed lawsuits against the Ozarks and brought in a Red Cross executive by the name of Bob Carden. After an unfruitful battle against the community blood center, Bob resigned from the Red Cross, switched sides, and became the executive director at Virginia Blood Services, a community blood center in Richmond, Virginia.

“With the Ozark group’s experience in mind, we pulled together the 22 hospi- tals that had indicated interest in a community blood center and asked these two gentlemen to speak to our group. Certainly, the event in Springfield became a model for what could happen with the start-up of a new center – both positively and negatively. Shortly thereafter, the North Carolina Hospital Association became interested in what was going on. At a meeting they organized for the state, some 60 hospitals attended to hear these same speakers, as well as Bill Coenen, the CEO of Community Blood Center of Greater Kansas City.”

Although a statewide effort did not emerge, ten Charlotte-area hospitals com- mitted to work together to develop a community-based blood organization. It was the first time that there had been such collaboration. Hassett recalled, “The hospitals worked extremely well together to resolve a common problem. The rising cost of blood was an issue for us all and blood is critical to all hospitals’ opera- tions. Although there is pretty intense competition among some of us, we had a common need and blood was neutral territory.”

D I S C U S S I O N S B E G I N

both03.indd 477both03.indd 477 11/11/08 11:12:52 AM11/11/08 11:12:52 AM

C A S E 3 : C O M M U N I T Y B L O O D C E N T E R O F T H E C A R O L I N A S4 7 8

Charlotte Area Hospitals Agree to Investigate

Hassett continued, “Although the Red Cross says it has ‘national pricing,’ Premier did a study that documented the variation in the cost of blood across the United States. The lowest costs were in places where there was competition. We decided that we needed the competition in the Charlotte area and, despite some misgivings over tackling the Red Cross, we decided to investigate an independent blood center.”

The hospitals’ leadership group commissioned Astraea, Inc., parent company of Virginia Blood Services (VBS) in Richmond, Virginia, to evaluate the feasibil- ity of starting an independent blood center to serve the Charlotte region. The VBS study showed that more than 1.5 million people lived in the region and if 60 percent of the population was eligible and able to donate blood, there were 900,000 potential donors in the area. Typically, about 5 percent of the population actually donated (75,000 people).

CBCC Begins

Community Blood Center of the Carolinas, the first community blood center in North Carolina, was the result of the collaboration by the hospitals. Because licensing generally takes three years to complete and the hospitals were anxious to begin operations, CBCC began by working under Virginia Blood Center’s US Food and Drug Administration blood license. CBCC focused on serving the needs of blood donors, patients, and health care providers in the Charlotte region. (See Exhibit 3/1 for an overview about blood and blood collection.)

Exhibit 3/1: Blood: The River of Life

Using human blood to treat disease and trauma began in France in 1667 when Jean-Baptiste Denis documented a direct human blood transfusion. These early direct donor-to-patient transfusions were often unsuccessful because it was not possible to predict donor–recipient blood type compatibility. In 1901, a German scientist, Dr. Karl Landsteiner, discovered that there were different blood groups. Since he found that all humans fall into one of these groups, the ABO system provided an answer to the puzzle of why some transfusions had worked and others failed.

Blood had no substitute. Individuals who donated blood literally saved lives – more than 4.5 million American lives each year. Someone needed blood every three seconds. One pint (unit) of donated blood could save three lives. One out of ten hospital patients needed blood. Car accident and blood loss victims often needed transfusions of 50 pints or more of red blood cells. Bone marrow trans- plant patients needed platelet donations from about 120 people and red blood cells from about 20 people. Severe burn victims typically needed 20 units of platelets during their treatment.

The amount of blood in the body of an average adult was ten pints. Blood made up about 7 percent of a person’s body weight. Sixty percent of the US population was eligible to donate blood but only 5 percent did so. About 32,000 pints were used each day in the United States.

When patients had organ transplants, cancer treatments, gastrointestinal disease, trauma, aneu- rysms, anemia and clotting disorders, accidents, open heart surgeries, burns, and so on, blood was required. However, blood from anyone would not necessarily be what the patient required.

both03.indd 478both03.indd 478 11/11/08 11:12:53 AM11/11/08 11:12:53 AM

4 7 9

BLOOD TYPES Blood came in four different types – A, B, AB, or O – and differed by Rhesus factor (RH) as either positive or negative (approximately 15 percent of the population had negative blood). Nearly half of the blood “ordered” by hospitals was O– because it was the universal donor, meaning that everyone could safely receive O– type blood. Patients with any of the positive blood types could safely receive O+ blood, but only O– could be used safely with all blood types. The most common type of blood was O+ (37.4 percent of the population) and the least common was AB– (0.6 percent).

Blood types in the population were as follows:

Type Percent of the population

AB– 0.6 B– 1.5 AB+ 3.4 A– 6.3 O– 6.6 B+ 8.5 A+ 35.7 O+ 37.4

Blood type compatibility was as follows:

Type Could be transfused to patients with blood type:

O+ O+, A+, B+, AB+ A+ A+, AB+ B+ B+, AB+ AB+ AB+ O– O+, A+, B+, AB+, O– , A– , B– , AB– A– A+, AB+, A– , AB– B– B+, AB+, B– , AB– AB– AB+, AB–

THE PROCESS Volunteers were screened to determine whether they were likely to be successful blood donors. The screening process became far more arduous after the emergence of HIV/AIDS and the discovery that numerous patients were infected from blood transfusions and organ transplants. Volunteer donors used to answer about 15 questions. After belatedly understanding that HIV was carried in trans- fusions, screening intensified. With the advent of mad cow disease, SARS, and West Nile virus, the number of questions increased to 50 or more, covering health, travel, and sexual history.

Blood was withdrawn from the volunteer to fill several vials and a one pint plastic bag (each marked with a unique bar code to match a particular donor’s record and to track it electronically until the pint was delivered to a hospital and administered to a patient). The actual blood donation only took about 10 to 20 minutes, although the entire process took from 45 minutes to an hour. The blood was kept refrigerated until it reached a lab, where the unique bar code was read into the computer for tracking and monitoring of test results. The vials were used to type the blood (O, A, B, AB, plus RH factor) and to determine whether there were any transmissible diseases present. Fourteen tests (11 for infectious diseases) were performed on each unit of donated blood.

The pint of blood was separated into its components: leukocytes (white blood cells), red blood cells, platelets, and plasma. (Some patients required whole blood, but some did not. By separating the blood into these components, as many as three patients’ lives could be saved from one donated unit.) Then the blood was stored under refrigeration until the test results were received. Testing generally took 12 to 16

Exhibit 3/1: (cont’d )

C B C C B E G I N S

both03.indd 479both03.indd 479 11/11/08 11:12:53 AM11/11/08 11:12:53 AM

C A S E 3 : C O M M U N I T Y B L O O D C E N T E R O F T H E C A R O L I N A S4 8 0

hours and the results were returned electronically, enabling the blood to be distributed for use generally within 24 hours. Hospital professionals transfused the blood (or blood components) to the patient.

Blood Components Patients seldom required all the components of whole blood. The request for blood transfusion was specified based on the blood component needed for the patient’s condition or disease. Thus, several patients benefited from a single pint of donated blood.

Apheresis, an increasingly common procedure, was the process of removing a specific component of the blood, such as platelets, and returning the remaining components, such as red blood cells and plasma, to the donor. This process allowed more of one particular part of the blood to be collected than could be separated from a unit of whole blood. Apheresis was also performed to collect red blood cells, plasma (liquid part of the blood), and granulocytes (white blood cells). The apheresis donation procedure took longer than the 45–60 minutes for whole blood donation; an apheresis donation might take between one to two hours. Not only were blood components different in the benefits they offered to patients, they had different shelf lives.

Red blood cells – Red blood cells had a shelf life of 21 to 42 days and could be treated and frozen for up to ten years. Red blood cells were particularly needed by patients who had chronic anemia, malignancies, gastrointestinal bleeding, and those with major blood loss from trauma.

Patients scheduled for surgery might be eligible to donate blood for themselves, a process known as autologous blood donation. In the weeks before nonemergency surgery, an autologous donor could have blood drawn that was stored until the surgical procedure.

White blood cells (leukocytes) – White blood cells protected the body from invasion by bacteria and viruses but they were also a factor in making some patients intolerant to blood transfusions. There- fore, much whole blood was filtered to remove leukocytes. The filtration had to occur within 48 hours of donation. However, for immunosuppressed patients, one type of white blood cells – granulocytes – were used to attempt to improve resistance to infection. Granulocytes were collected through apheresis donation or through centrifuging whole blood. White blood cells had to be transfused within 24 hours.

Plasma – Plasma was 90 percent water and contained albumin (protein), fibrinogen (helps with clotting), and globulins (antibodies). Although it looked like dirty river water, plasma maintained blood volume and pressure, supplied critical proteins for blood clotting and immunity, and provided a medium of exchange for vital minerals. This liquid component of blood was frozen soon after donation and could be stored for up to one year.

Platelets – Platelets helped to clot blood (stop the bleeding). They were collected by apheresis (or plateletpheresis) and through centrifuging whole blood. Platelets could be stored for up to five days at room temperature, provided that temperature was maintained at 72°F and the platelets were kept moving to avoid sticky clumps.

Blood Testing Blood was tested for a variety of diseases that were determined to be transmitted (or theoretically could be transmitted) through blood donation. Prior to identification of the HIV/AIDS virus, blood was tested for syphilis and hepatitis B. During the 1980s, a number of tests were added: HIV/AIDS antibody tests (starting in 1985, with additional tests in 1992, 1996, 1999), hepatitis C (with additional tests for hepatitis A in 1986 and hepatitis B in 1987), human T-cell, and human lymphotropic virus. During 2000, blood tests and screening questions were added for SARS; in 2003, tests were added for West Nile virus.

The tests were performed to maintain a safe blood supply, but many blood collection organizations were concerned that the increased number of deferrals (healthy individuals who are not permitted to donate because of their travel or place of residence) would decrease the number of blood donors and endanger the blood supply.

Exhibit 3/1: (cont’d )

both03.indd 480both03.indd 480 11/11/08 11:12:53 AM11/11/08 11:12:53 AM

4 8 1

As a blood center, CBCC gathered blood donations – the raw material for its operations – from people in the community and after breaking down the whole blood into red cells, plasma, platelets, and other components and test- ing for safety, the blood was returned to the community that donated it. CBCC planned to serve residents in York, Chester, and Lancaster counties in South Carolina; and Anson, Cleveland, Cabarrus, Catawba, Gaston, Iredell, Lincoln, Mecklenburg, Rowan, Stanly, and Union counties in North Carolina (Exhibit 3/2 maps the service area). Residents in these counties were served by the ten hospitals that originally developed the plans to establish CBCC (see Exhibit 3/3 for a brief description of the hospitals). The CBCC partner hospitals had 2,985 beds and used about 62,000 units of red blood and about 6,000 platelet doses annually.

Exhibit 3/2: Map of CBCC’s Service Area

I R E D E L L

R O W A N

Salisbury

C A B A R R U S

S T A N L Y

U N I O N A N S O N

L A N C A S T E R

Y O R K

C L E V E L A N D

C A T A W B A

L I N C O L N

GASTON

Lincolnton

Shelby

Gastonia

Rock Hill

York

Chester C H E S T E R

Lancaster

Monroe Wadesboro

Albemarle

Concord

NC

SC

NC

SC

I-77

I-40

I-85

74

24

24 27

74

M E

C K

L E

N -

B U

R G

HH

I-85

H

H

I-77

H

H H H

Charlotte

H H

C B C C B E G I N S

both03.indd 481both03.indd 481 11/11/08 11:12:54 AM11/11/08 11:12:54 AM

C A S E 3 : C O M M U N I T Y B L O O D C E N T E R O F T H E C A R O L I N A S4 8 2

The Organization

Gregory A. Ball was hired as the first executive director in November 2002 to start the Center. A native of Gastonia, he had worked for the American Red Cross for 26 years before doing consulting work in the blood industry. At the Red Cross he was credited with starting one of the first automated platelet-collection programs in the industry and building four local offices or manufacturing facilities. He had managed eight different Red Cross business units around the country. As a consultant, Ball worked with Astraea, Inc. (Virginia Blood Services) to develop the feasibility study for CBCC. He was then hired as the first executive director responsible for start-up, from identifying a local board of directors and a medical advisory board to finding a facility and beginning production.

Exhibit 3/3: Hospitals that Formed CBCC

Ten hospitals came together to form the Community Blood Center of the Carolinas. Carolinas Healthcare System, a not-for-profit, self-supporting organization, was the largest health

care system in the Carolinas and one of the largest publicly owned systems in the nation. CHS was a vertically integrated system that owned and managed hospitals, nursing homes, physicians’ prac- tices, and physical and radiation therapy facilities in both North and South Carolina. It was comprised of more than 4,900 beds and employed more than 23,000 people. Its physicians’ network included approximately 640 primary care doctors and other providers. The flagship hospital, Carolinas Medical Center, was named in US News & World Report ’s 2002 America’s Best Hospitals list. CMC Mercy Hospital, CMC – University, and CMC – South were three partner hospitals to Carolinas Medical Center, the region’s only Level 1 Trauma Center.

Gaston Memorial Hospital, with 1,543 employees, was operated by CaroMont Health and located in Gastonia, North Carolina (to the west of Charlotte). The 442-bed, independent, not-for-profit hospital was recognized nationally as one of the 100 top hospitals in the country. The growth of spe- cialty services, such as the CaroMont Heart Center, the Comprehensive Cancer Center, and Women’s and Children’s Services, along with the addition of state-of-the-art surgical and treatment options, underscored Gaston Memorial Hospital’s commitment to meeting the region’s health care needs.

NorthEast Medical Center was established in 1937. This private, not-for-profit medical facility offered state-of-the-art services in affiliation with Duke University School of Medicine and Johns Hopkins. Offering a broad scope of services, 457 licensed beds, 275 skilled physicians and 3,500 employees, NorthEast Medical Center was a leading health care facility located in Kannapolis, North Carolina (in the north Charlotte region).

As one of the 118 hospitals owned by Tenet Healthcare, Piedmont Medical Center, located in Rock Hill, South Carolina, prided itself in keeping health care affordable, accessible, and effective for all families. With a staff of 1,400 employees combining advanced technology and highly skilled doctors, Piedmont provided a comprehensive care facility offering a wide variety of programs including cardiac surgery, neonatology services, emergency medical care, a cancer center, and a sleep disorder center.

Based in Charlotte, Presbyterian Healthcare was in the Southern Piedmont Region of Novant Health, the largest private, not-for-profit health care system in North Carolina. Presbyterian was comprised of four hospitals, Presbyterian, Presbyterian Matthews, Presbyterian Orthopaedic Hospital (one of the top 100 orthopedic hospitals in the nation), and Presbyterian North (opened in fall 2004). Novant’s Southern Piedmont Region had 581 licensed beds and 5,772 employees, a skilled-nursing facility, physician division, and ancillary services.

both03.indd 482both03.indd 482 11/11/08 11:12:55 AM11/11/08 11:12:55 AM

4 8 3

In November, Ball stated his goals: “I need to hire 50 people necessary to staff CBCC, find the Center’s first Charlotte collection facility, draw the first unit of blood by spring 2003, raise the percentage from the typical 5 percent of the population donating in Charlotte to 9 percent, and bring in revenues of $3.4 million in the first year.”

In addition to Greg Ball, CBCC was led by a group of local business people who served as its board of directors and advised about the organization’s busi- ness decisions – the products offered, where those products were to be sent, and how much they would cost. A medical advisory committee, comprised of local professionals, counseled the directors about medical concerns. Experts on this team – business and medical – were entrusted as stewards of local health care resources and were responsible for ensuring that the community received the most value possible for its health care dollars. (Exhibit 3/4 lists the 2004 board of directors and the medical advisory board.)

Start-Up

Temporary housing for the Center was in Presbyterian Hospital. The Center handled its first unit of blood on August 15, 2003. Ball estimated that a facility of 20,000 sq. ft. was needed initially, but 32,000 sq. ft. would be needed when CBCC was collecting 60,000 units per year – the community’s annual need for blood. A 30,000 sq. ft. facility was found on South Boulevard, a major artery near Charlotte’s city center, less than five miles from the two major hospitals in Charlotte and with easy Interstate access for the other hospitals. Leased for seven years, the price was $3.50 per sq. ft. in the first year and escalated over the period of the lease to $7.00 per sq. ft. (Exhibit 3/5 has a schematic of the facility.)

Ball stated at a September 19, 2003 open house for the new facility, “My requirements are two: compliance and customer service. Compliance requires that we have the size and the capabilities to keep the blood supply protected. Customer service has enabled us to have one to three blood drives a day with about one-third of the donors not having participated in a drive previously.”

CBCC became a member of America’s Blood Centers (ABC) because the group subscribed to the same philosophy as CBCC – community-focused blood banking – meaning that community donors knew that the blood they gave stayed in the community to help family members, friends, and neighbors. Only excess supply was shared with other communities when needed. CBCC was a member of the American Association of Blood Banks (AABB) as well. (Exhibit 3/6 contains an overview of these organizations.)

CBCC Mission

CBCC’s mission was to provide local control of the blood supply, ensuring that local needs were met first. This local control provided greater choice for blood

C B C C M I S S I O N

both03.indd 483both03.indd 483 11/11/08 11:12:56 AM11/11/08 11:12:56 AM

C A S E 3 : C O M M U N I T Y B L O O D C E N T E R O F T H E C A R O L I N A S4 8 4

products and services. Local doctors could select products and services that best met the needs of their patients. And for the first time in the region, donors had a choice of where they gave blood. CBCC was a customer-focused organization, and its service philosophy was to exceed expectations.

Ball said, “Control and choice lead to lower costs. CBCC is committed to offering services of the highest quality at more affordable and predictable pricing. Lower costs reduce patient charges and help our hospitals to control costs, become better stewards of resources, and improve patient care.” CBCC emphasized regulatory

Exhibit 3/4: CBCC Board of Directors and Medical Advisory Committee

Each of the five hospital systems involved with CBCC had a permanent seat on the board of dir- ectors. The remaining CBCC directors were elected to represent the communities served. These volunteer members of the board were business leaders and medical experts who made decisions to benefit the patients and donors in the greater Charlotte community. Board members included:

Jennifer Appleby – President and Chief Creative Officer, Wray Ward Laseter Advertising Agency. Steven Burke – Vice President, Ancillary Services, Presbyterian Hospital* and CBCC Board Chair. Jeffrey Canose, MD – Vice President, Medical Services Division, Gaston Memorial Hospital.* Bob Carden – President /Chief Executive Officer, Virginia Blood Services. John Cox – Chief Executive Officer, Cabarrus Regional Chamber of Commerce. Scott Gollinger – Vice President, Clinical Services, NorthEast Medical Center.* Mark Keener – Regional Chief Financial Officer, Carolinas Healthcare System.* Edward Lipford, MD – Carolinas Pathology Group. Kim McMillian – Vice President, Marketing/Public Relations, Allen Tate Realty Co. Mark Patafio – Vice President, Small Business Sales Leader, Wachovia Bank. Jeff Smyre – Senior Manager, PricewaterhouseCoopers CPA. Joseph Stough – Vice President, Piedmont Medical Center.* *System permanent seats.

The CBCC medical advisory committee advised the board on medical matters. The medical advisory committee members were:

Linda Boggs – Transfusion Medicine Section Chief, Presbyterian Hospital. Pam Clark, MD – Medical Director, Community Blood Center of the Carolinas. Beth Curtis – Blood Bank Specialist, NorthEast Medical Center. Rita Duffy – Blood Bank Supervisor, Gaston Memorial Hospital. Stephen D. Harris, MD – Presbyterian Pathology Group. Philip Leone, MD – Leone Pathology, Gaston Memorial Hospital. Ned Lipford, MD – Carolinas Medical Center Laboratory. Barbara McElhiney – Manager, Transfusion Services, Carolinas Laboratory System, Carolinas Healthcare

System. Beth Prichard, MD – NorthEast Medical Center Department of Pathology. Rita Tate – Technical Director, Community Blood Center of the Carolinas. Rob Thomas, MD – Piedmont Medical Center. Kelly Ware – Transfusion Services Team Leader. Jennifer Carpenter – Laboratory Director, Piedmont Medical Center.

both03.indd 484both03.indd 484 11/11/08 11:12:56 AM11/11/08 11:12:56 AM

4 8 5

Exhibit 3/6: Blood Banking Organizations

AMERICAN ASSOCIATION OF BLOOD BANKS Founded in 1947, the American Association of Blood Banks (AABB) was organized to support and encourage continued blood research, promote exchange of scientific information, and develop stand- ards of practice for blood banks. The AABB was an international association of blood banks, includ- ing hospital and community blood centers, transfusion and transplantation services, and individuals involved in activities related to transfusion and transplantation medicine. The AABB supported: high standards of medical, technical, and administrative performance; scientific investigation; clinical appli- cation; and education. It was dedicated to encouragement of voluntary donations of blood and other tissues and organs through education, public information, and research. The AABB member facilities were responsible for collecting virtually all of the nation’s blood supply and transfusing more than 80 percent.

The AABB’s mission statement was to establish and promote the highest standard of care for patients and donors in all aspects of: blood banking; transfusion medicine; hematopoietic, cellular, and gene therapies; and tissue transplantation. The AABB International’s mission statement was to

Exhibit 3/5: Plan of the CBCC South Boulevard Facility

1

8

9

3

5 6

4

2

7

5 6 7 8 9

1 2 3

4

Collections

Central Receiving

Component Production and Labeling Hospital Services

Administrative Offices

Collection Staging and Training

Warehouse

Records

Vacant