Blood Center Merger Mania
Blood centers have slim operating margins of 1 to 2% and their costs are rising more than their revenue. The reasons include decreasing transfusion rates due to blood conservation, decreasing revenue from voluntary blood donations, increasing compliance costs, increasing recruitment and collection costs, and increasing testing costs.
There is wide geographic variability in supply and demand of blood components. In many regions, there is a lack of alignment between blood center collection activities and hospital utilization. Today, blood centers have to serve mega health systems that span an entire state or multiple states. These health systems are beginning to seek competitive bidding for blood components and services.
All of these pressures are leading to an increasing number of mergers of independent community blood centers. OneBlood Inc recently announced a merger with the Institute of Transfusion Medicine. The Blood Center of Wisconsin merged with the Heartland Blood Center of Greater Chicago to serve 103 hospitals in Illinois, Indiana and Wisconsin. New York Blood Center just completed the purchase of The Community Blood Center of Greater Kansas City. In the future, more independent blood centers will need to merge in order to compete with the American Red Cross and Blood Systems.
