The Problem with the Blood Business

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Have you ever wondered what happens to blood after you donate it? I never wondered either. Now that I know, however, it bothers me. 

Apparently, it's no secret. In 1990, long before I listened to the RadioLab podcast on blood, and before articles about blood bank activities appeared in such widely read publications as Forbes, Slate, and the New York Times, The Philadelphia Inquirer won a Pulitzer Prize for Gilbert Gaul's five part investigative series on the blood business. Gaul's reporting shed light on blood bank activity in what turns out to be much more than a cottage industry, but a 45 billion dollar a year behemoth complete with brokers, arbiters, and incredible profits. 

The Community Blood Center in Appleton, Wisconsin, for example, sold "half its monthly blood supply--at a profit--to other blood banks around the country," wrote Gaul, and "contracted to sell 200 pints a month to a blood bank 528 miles away in Lexington, KY.  [The blood bank in] Lexington sold half the blood it bought from Appleton to yet a third blood bank near Fort Lauderdale, Fla. Which in turn sold thousands of pints it bought from Lexington and other blood banks to four hospitals in New York City."

Given my role as a business professor, I am supposed to know about these sorts of things. But my ignorance isn't what bothers me. Nor does the industry itself. If the persuit of money--even by non-profit organizations--facilitates the availability of harvested blood, then it also creates value in society. 

Nor do I dispute the value of sharing blood. Giving blood is the 'gift of life'. But despite their altruistic intentions, and before their blood saves lives at a rate of $200 to $230 a pint, donors give the gift of a lifestyle to blood brokers, who transform their gift into an actively traded commodity, not unlike gold or wheat or pork bellies. 

In order to keep this commodity flowing, blood banks make less than honest appeals to mankind's more noble virtues: a hunger to make a difference and a willingness to help others in need.  For example, the very same month they sold half their blood supply to other blood banks, the executive director of the Appleton Community Blood Center, Alan Cable, announced "we've never had it quite this tough". He implored the people of Appleton "to dig farther, wider, and deeper to keep local blood supplies at desired levels." This 'desired level' is misleading, as it refers to the quantity of blood required to fulfill profitable obligations, not the level needed to help others in the community. 

Not unlike blood banks' less than truthful messages to donors, I now realize the partial truth of my message to students about transparent markets.  The subprime mortgage market before 2008, I taught, is a prime example of the dangers inherent in an opaque market. Although a transparent blood market would limit blood banks' abilities to fib, I wonder if it would also limit their abilities to save lives. 

The current market is win-win-win. Some people profit, others experience the joy of making a difference, and others live who otherwise would die. If the market for blood were transparent, if people saw the profits brokers make on their gifts of life, if blood centers asked people in their community to share with others who live 2,777 miles away in New York, would people in the Appletons of the world respond in the same number? In other words, if the market were more transparent, would we have enough blood?

Photo credit: Bart Maguire