High Blood Pressure

He’s healthy. He’s got big veins. And he regularly supplies raw material for what’s becoming one of Southern California’s most fiercely competitive industries: blood.

On a recent Friday, Brian Williams even spent the two hours it takes to give platelets, the blood cells used for clotting. While ensconced in a high-tech lounge chair at UCI Medical Center, his forearms propped on heated pillows and trailing IVs, the 35-year-old repairman noted that his sense of duty to help others this way sets him apart.

“I’m a rarity,” says Williams, a volunteer donor. “People I’ve talked to don’t like to get poked by a needle.”

Williams, who gives blood simply because it might save some stranger’s life, represents an increasingly scarce breed of donor across Southern California. His sort of commitment to the community has grown increasingly old-fashioned in a region of transient, culturally diverse populations and corporate downsizings that have weakened employer support for local blood drives.

The scarcity of people like Williams only intensifies a growing rivalry between the American Red Cross and many other smaller community-based “banks”--most of them nonprofit--that draw and sell blood products.

Until recent years, the Red Cross, the giant disaster relief agency that supplies nearly half of the nation’s blood products, used to divide up the market with the community banks, with an understanding that each would work its own assigned geographic territory and respect the other’s boundaries.

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Now, however, it’s open season on those once-exclusive territories. As the blood banker’s chief customers--hospitals--face severe pressure from the managed care industry to control their costs of supply, the Red Cross and community banks, both here and across the country, are charging into one another’s territories to compete.

On top of that, for-profit entrepreneurial companies see opportunities to grab business, even while the Red Cross and the community banks are fighting to wrestle it back. And though state law forbids banks from paying donors of whole blood, some banks now even compete for platelet donors like William by paying them.

“The competition is cutthroat. It’s simply price, quality and service,” says Dr. Jose Ocariz, director of UCI’s blood bank.

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Adding to the competition is the fact that blood banks here, like those across the country, must cope with the rising cost of selling a highly regulated commodity. The multitudes of people who contracted AIDS from blood-product transfusions in the 1980s spawned toughened rules that jacked up bankers’ costs for screening and tracking donors.

The number of tests for infectious microbes has tripled with the inclusion of HIV and others. Scientists say that while the tests for infectious diseases still aren’t perfect, and some infected products get transfused, the blood supply generally is far safer than it was a decade ago.

Twenty years ago, testing made up about 5% of the $17 cost of producing a pint of red blood cells. Today, that pint costs $100 and testing runs about 30% of the cost.

Meanwhile, local blood banks must scramble harder than ever for donors. They point to corporate downsizings across Southern California in recent years as a major part of the problem.

The Red Cross reports, for instance, that annual contributions at Hughes Electronics’ operations in El Segundo, Long Beach and Fullerton have plummeted to 780 units a year from 4,050 since the early 1990s.

Similarly, the charity can no longer count on support from top corporate executives.

Pat Conlee, a Red Cross manager, remembers how, in 1989, Richard Ortwein, then Koll Co.’s president and the Red Cross’ local volunteer board chairman, kicked off the company’s blood drive with a spirited speech before a luncheon of its corporate tenants. The tenant rep who corralled the most donors won a weekend for two at Koll’s Baja California resort.

But times have changed, she says. Ortwein is still first in line to donate in the annual drive, Conlee says, but he has another job with the company now and doesn’t give the speech. The luncheon is an on-again, off-again affair, she says.

“Our commitment is still very strong to the Red Cross,” a company spokesman said. “We may not have the personal involvement of our highest-ranking executives, but that’s simply because we are a bigger company and they don’t have the time.”

Blood bankers also find the changing demographics of Southern California make it especially difficult to serve. Latinos primarily donate blood for relatives, not for the general population.

Richard Krieg, the Red Cross’ chief operating officer for blood services in Southern California, notes that in the local Asian community, “many have hepatitis B core markers”--a condition that means their blood won’t meet standards for donors.

Krieg said that, although the organization doesn’t turn away Asian and Pacific Island donors generally, he said that in some cases, as much as 40% of the blood drawn in a local church drive has tested positive for hepatitis markers.

Says Dr. Ocariz: “It’s sad, because we have cases of a Vietnamese father going to donate blood for his premature baby and we can’t use it.”

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It’s hardly surprising that Southern California often runs short of blood supplies.

Only 3% of Orange and Los Angeles county residents donate, half the rate of many metropolitan areas that are self-sufficient, according to the Red Cross.

Shortages in the summer, when the vacation season thins the ranks of local donors, gives more aggressive blood banks from elsewhere a chance to expand here.

During this year’s Fourth of July week, for instance, when supplies of platelets used to stimulate blood clotting ran low, Sacramento Medical Foundation Blood Center shipped 500 units of blood products to Los Angeles and Orange counties, double its weekly average from earlier this year.

Its shipment level jumped the following week to 600, then retreated to about 400, where Paul V. Holland, the center’s chief executive, predicts it will hold until Labor Day, “when I bet it goes up again.”

Of course, competition isn’t new for the Red Cross.

Several years ago, the charity learned the hard way about being a reliable supplier in Southern California. Its annual sales here of red cells--the product in greatest demand--slipped from 400,000 in its 1987-88 fiscal year to 290,000 in 1991-92, largely because of service problems, officials say.

The charity tried to save money by importing more blood from other states, where cheap labor made its collection costs much lower. The trouble was, says the Red Cross’ Krieg, “The imports didn’t flow as well as we’d hoped, there became a supply issue, and we were not as reliable as we should have been.

“As a result, we had hospitals opening up their own donor rooms and other for-profits and not-for-profits trying to set up business here.”

Though the Red Cross is now rebuilding its local base of donors, its distributions of 385,000 units in 1995-96 still ran shy of its 1987-88 levels.

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The UCI donor center typifies the hospital customer that’s shopping for a better deal.

Two years ago, UCI lined up Inland Northwest Blood Center of Spokane, Wash., as a lower-cost alternative to the Red Cross for red cells. With labor and other costs much lower there, Inland priced a pint of its red cells at $80--nearly $20 less than the Red Cross’ posted price.

This year, UCI experimented with another outsider, Coral Therapeutics Inc. of Braintree, Mass. Coral, which opened its first office west of Philadelphia in Irvine this year, doesn’t sell blood products. But it provides staff to hospitals, on a contract basis, who perform blood-banking services, such as collecting platelets.

UCI’s donor center draws only about 400 platelet units a year, far short of its 1,000-unit goal. So, UCI arranged with Coral to increase its stock of platelets by having Coral provide personnel and equipment to make collections at local businesses.

UCI’s Ocariz says, “If we ever reach the point where we produce more than we consume, we’ll be competing with the Red Cross.”

Coral already has lined up contracts for a variety of services at about a dozen other hospitals in the greater Los Angeles area. John Schumann, its regional general manager, says his customers here are teaching him about the problems of coping with managed care.

“Hospitals here are much more open to working with someone to help them through these changing times,” Schumann says.

With hospitals shopping around, pricing battles between blood banks have grown fierce.

Last year, Hemacare Inc., a for-profit blood bank in Sherman Oaks, sued the Red Cross for allegedly coercing hospitals in Orange and Los Angeles counties into buying its platelets.

In the antitrust action, filed in U.S. District Court in Los Angeles, Hemacare claims the giant charity makes it uneconomical for hospitals to buy their platelets elsewhere, by unfairly tying sales of red cells to those of platelets.

Hemacare alleges that in April last year, the Red Cross discounted red cells and platelets and quit charging for emergency deliveries of platelets if hospitals agreed to buy 90% of their red cells and platelets from the charity.

Hemacare also alleges the Red Cross priced the products below cost, thereby injuring Hemacare, its only sizable rival in the market for platelets drawn from a single donor.

The Red Cross denies the allegations.

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Blood banks compete on service too--something the Red Cross has learned from its competitors.

Consider, for instance, how hard the charity is trying to win back business with UCLA Medical Center. Several years ago, when the Red Cross had trouble meeting UCLA’s blood demands, the hospital lined up Arizona--based United Blood Services Inc. as an alternate supplier of red cells, says Carma Lizza, a UCLA laboratory manager.

This year, however, the Red Cross presented UCLA with a delightful offer: It would help the hospital better manage its inventory of products.

As it stands now, says Lizza, a rash of trauma cases, or even a single liver transplant, which can require more than 100 units of blood products, will deplete its stock and force it to spend extra for emergency supplies.

Says Lizza: “We’d like to work a situation where that wouldn’t have to happen.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Blood Flow The amount of blood collected in Southern California has declined from a decade ago, forcing the American Red Cross to import more blood from other areas of the United States. Units of blood collected locally and imported:

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Collected locally Imported 1986-1987 395,000 53,000 1987-1988 386,000 61,000 1988-1989 379,000 50,000 1989-1990 356,000 62,000 1990-1991 229,000 116,000 1991-1992 194,000 134,000 1992-1993 215,000 103,000 1993-1994 221,000 122,000 1994-1995 225,000 140,000 1995-1996 243,000 155,000

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Blood Facts

* Average adult has about 10 to 12 pints of blood

* Blood transports oxygen, nutrients, hormones and disease-fighting substances to body tissues and carries away carbon dioxide and other wastes.

* The four blood types are O, A, B and AB. Each type has a positive or negative Rh factor.

* More than 4 million Americans receive blood transfusions each year.

* About 14 million units of blood are donated in the U.S. each year by approximately 8 million volunteers.

* Whole blood can be donated every eight weeks, platelets every two to four weeks.

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U.S. Blood Types

Type O is the most common blood in the U.S.:

Type O: 50%

Type A: 33

Type B: 13

Type AB: 4

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Blood Products

A pint of donated blood can help save several lives since it can be screened and processed into components, each with a particular use. Blood and its components:

Whole Blood: Transfused into those with profuse bleeding, usually trauma patients.

Red cells: Oxygen-carrying portion of blood; used during surgery and to treat trauma patients. Most commonly used blood product.

Plasma: Straw-colored liquid used to treat burn patients, those with liver disorders and clotting deficiencies caused by cancer and leukemia.Platelets: Cells that enable blood to clot. Used to treat clotting deficiencies caused by cancer and leukemia.

Cryoprecipitate: Clotting factor concentrate obtained from cooled plasma. Given to those with hemophilia, a condition affecting the blood’s ability to clot, and to cancer patients.

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Blood Components

Here’s roughly how a pint of blood breaks down by component:

Plasma: 55%

Red cells: 40

Platelets/other cells: 5

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Want to Donate?

Call (800) 974-2113 for information on donating blood or platelets.

Source: American Red Cross, American Assn. of Blood Banks, U.S. Department of Health and Human Services