Changes in medicine have eliminated the need for millions of blood transfusions, which is good news for patients getting procedures like coronary bypasses that once required a lot of blood.
But the trend is wreaking havoc in the blood bank business, forcing a wave of mergers and job cutbacks unlike anything the industry, which became large-scale after World War II, has ever seen.
Transfusions are down almost one-third in the past five years, to about 11 million units last year from about 15 million units, according to the American Red Cross, which has about 40 percent of the market. With "minimally invasive" techniques like laparoscopic surgery and other shifts in medicine, demand for blood continues to drop despite population growth and a soaring number of people older than 65, who have the most surgeries requiring blood.
Blood bank revenue is falling, and may reach $1.5 billion this year from a high of $5 billion in 2008.
As fewer units of blood are used, hospitals, seeing strong supply and weak demand, are asking for a lower price per unit.
As a result, the blood bank business has lost some jobs, and the losses will reach as high as 12,000 within the next three to five years, roughly a quarter of the total in the industry, according to the Red Cross. Officials there expressed some concern that the decline could reduce the system's ability to respond to crises or to invest in new products or research.
From time to time since 2008, the Red Cross operated at a deficit. But it balanced its budget partly by cutting 1,500 jobs. Shaun Gilmore, president of Biomedical Services at the American Red Cross, said the organization was also looking to give up some real estate as it shrinks its operations to an appropriate size.
Blood services amount to $1.8 billion to $1.9 billion of the group's budget, which this year is about $3 billion, executives said. Of the organization's 26,500 employees, 17,000 work in the blood program. The Red Cross wants the blood program to cover its own costs, or perhaps achieve a small surplus for reinvestment.
One reason for declining demand is that recent studies have found many transfusions unnecessary, so patients are no longer getting expensive services that did them no good.
Doctors may be adopting the new guidelines faster because of the recent computerization of medical records, which allows a physician to order transfusions from a computer screen. The computer, though, knows the guidelines, and it will alert a doctor if the order falls outside the norm. The same system can collect data on which surgeons routinely exceed the guidelines.
Insurance plans also discourage transfusions.
And blood is expensive. Nonprofit organizations collect whole blood from unpaid donors, but hospitals may pay $225 to $240 a unit, according to executives in the business, which covers a variety of costs, including testing. If the unit is billed to the patient, the price can be $1,000 or more.