Thursday, April 26, 2018
Business

Three-way blood bank merger in Florida yields a behemoth

Big Blood is coming to the Tampa Bay area.

Three of Florida's biggest blood supply service organizations are about to meld into a nonprofit giant. The merger will create the third-largest blood bank system in the United States, and some concern about lopsided competition.

Big Blood's more than 2,700 employees will collect 1 million pints of blood a year, contributing to an annual income near $300 million.

Only the Red Cross, which handles about half of the nation's blood supply needs, and another blood bank group in Arizona will be larger than the new entity about to form out of Florida Blood Services in St. Petersburg, Florida's Blood Centers Inc. in Orlando, and Community Blood Centers of Florida in Lauderhill, near Fort Lauderdale.

No word on the new name, so I'm calling it Big Blood for now.

"We are trying to deal with the challenge of these economic times," Don Doddridge, the veteran CEO of Florida Blood Services in St. Petersburg, says of the merger. "We've seen a lot of consolidation of hospitals into regional systems like BayCare and national systems like Tenet and HCA. We want to service hospitals with a larger geographic base than we've worked with before."

Consolidating three big Florida blood providers, Doddridge suggests, is an opportunity to run a single and more efficient system to collect blood from donors, test it to be sure it is safe, maintain an ample supply and price it affordably.

Executive pay may be one place to see some immediate savings. The CEOs of these three nonprofits received a very generous $608,973 (Lauderhill), $606,724 (Orlando) and $485,439 (St. Petersburg), according to 2009 tax reports. Having just one post-merger chief will mean instant savings of more than $1 million.

Combining these three providers may happen as early as next month. That's when we officially learn who the new CEO will be. I'm guessing the 64-year-old Doddridge gets the initial nod, given his 40 years of experience and the fact that the other two blood service groups in the merger have suffered recent executive turnover and interim appointments.

Once a network of 21 community blood banks, Florida will be down to just four after the three-way merger. And Big Blood will loom in size over the state's three remaining independent nonprofit blood supply providers: LifeSouth Communities Blood Centers in Gainesville, the Blood Alliance in Jacksonville and Sarasota's Suncoast Communities Blood Bank.

Big Blood's Goliath size has not gone unnoticed at Sarasota's blood bank. Earlier this month, the small nonprofit asked Florida Attorney General Pam Bondi to stop the merger. The resulting blood bank, Sarasota said, would dominate the state, raise blood prices and perhaps squeeze the smaller Sarasota organization, which supplies 10 health care facilities.

The Attorney General's Office said it had no antitrust concerns with the pending merger.

No, Sarasota isn't paranoid. The larger Florida Blood Services in St. Petersburg in 2011 began collecting blood in Sarasota — turf that by gentleman's agreement has been Suncoast's for 63 years, says Suncoast Communities Blood Bank spokeswoman Jayne Giroux. "That raised confusion in the community and confused our donors," Giroux says. "We need 125 units a day. If someone else collects 25, then we risk a shortage."

Initially Florida Blood Services, which collects closer to 1,000 pints daily, argued that plenty of Sarasota residents use Tampa Bay area hospitals, so tapping donors there made sense. But the St. Petersburg blood bank has since backed off, though both the St. Petersburg and Sarasota blood banks compete for blood donations in Manatee County.

Sarasota's all for competition, Giroux says, but there's also a larger mandate of nonprofits to serve local blood needs with local donors.

"We do not want a blood war," she says.

Blood banks of all sizes now face a bigger challenge: dwindling donors. Folks most prone to give in the past — the so-called "greatest generation'' alive during World War II — are getting too old and, more often, receive rather than donate blood.

Younger folks, blood bank officials worry, are too busy and, frankly, less community-oriented. And more and more blood restrictions continue to limit the number of people who are even eligible to give blood.

Taken a cruise ship to Mexico? That exposure to potential diseases prohibits you from donating blood for at least a year. I used to give blood, but blood banks banned me ever since I lived in England 30 years ago. They fear the long-term possibility of mad cow disease lurking in my blood.

Even in good times, less than 5 percent of the U.S. population supplies 100 percent of the U.S. blood supply. If donors become more scarce, the nonprofits will have to spend more money marketing the need for blood. That will only raise the cost of the nation's blood supply.

At the same time, Doddridge says, increasingly cost-conscious hospitals want to know what's behind any increase in blood prices.

From an era of community blood banks to the dawning of Big Blood, it's not only about efficiency. It's also about big business.

Contact Robert Trigaux at [email protected]

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