To match the supply of blood products to demand, a clever entrepreneur has created an award-winning business that may help clinical laboratories better manage the cost of blood products in their hospitals and health systems
There’s something new and exciting in the world of blood banking and medical laboratory medicine. It’s a unique approach to matching the availability of blood products to the demand for those same products and it’s catching the attention of medical laboratory directors and blood bankers in many of the nation’s hospitals.
How did an ice storm and a Super Bowl factor into the development of an innovative and disruptive technology that addresses a persistent gap in the US blood products supply chain? In February 2011, central Texas was hit by fierce weather that not only disrupted flights, snarled traffic, and threatened Super Bowl XLV, it also impacted the local and regional hospitals’ ability to access blood for patients in need. Enter a young entrepreneur who saw a critical problem and understood that the raw materials for a solution already existed.
“I found it absurd that, with all the advances in data management and integration, as well as the rise of predictive analytics, that a predictable weather event could cause our patient population to face such a major public health risk,” stated Christopher Godfrey, founder and CEO of Bloodbuy, a healthcare information technology (HIT) company in Dallas that operates a cloud-based network connecting hospitals and blood centers. Godfrey’s comment appeared in a story featured on PharmExec.com, the website of Pharmaceutical Executive.
No Way to Track Availability and Cost of Blood Products
The cost and supply of donor blood varies with geography and season, creating uneven supply and demand. Godfrey looked at the problem from the supply as well as the logistics perspective. He saw that there was no central nationwide database to track the availability and cost of blood products. “It [has been] a massively fragmented patchwork,” he stated in a recent story published by Wired.
Godfrey used modern IT infrastructure and proprietary algorithms to develop a solution that would bring the entire blood ecosystem online. This enabled stakeholders to match need with available supply at a cost-effective price based on real-time conditions in the marketplace, according to the PharmExec article.
Chris Godfrey, CEO, Bloodbuy (2nd from right), stands with Ryan Prater, Chief Technical Officer at Bloodbuy (far left), Richard Hamermesh, Professor of Management Practice at Harvard Business School (2nd from left), and Michael Norris, Harvard Business School Research Associate (far right), during a visit to BioBridge Global (BBG), a nonprofit company that oversees and supports the South Texas Blood and Tissue Center, QualTex Laboratories, GenCure, and The Blood and Tissue Center Foundation. (Photo copyright: BioBridge Global.)
For hospitals and blood centers, the benefits can be significant. Hospitals can benefit by avoiding supply shortages or overpaying for blood products, reported a Harvard Business Review (HBR) story. For blood centers, it means:
• Direct reach to a broader base of hospitals across multiple geographies;
• Increased inventory turns;
• Less waste; and
• Accelerated growth.
Bloodbuy Wins Harvard Forum on Healthcare Innovation Award
Godfrey’s innovative “scale-up” solution to a broad, long-standing problem earned Bloodbuy top honors in the first Harvard Health Acceleration Challenge. The competition is an initiative of the Harvard Forum on Healthcare Innovation, a collaboration of Harvard Business School and Harvard Medical School.
According to an article published in the Dallas Business Journal, Bloodbuy beat out nearly 500 applicants from 29 countries and 43 states. Among the competitors were industry-leading healthcare innovators, such as:
• Mayo Clinic;
• Kaiser Permanente; and
Bloodbuy Fills Niche Where Laboratory Needs and Supply Chain Intersect
Incorporated in 2013, Bloodbuy raised $3.75 million in an institutional financing round, partnering with investors Premier Inc. (NASDAQ:PINC) and St. Joseph Health. According to the HBR article, the start-up had achieved average per unit cost savings, when compared to the incumbent processes, as follows:
• 20% on platelet orders;
• 24% on leukoreduced red blood cell orders;
• 27% on orders for fresh frozen plasma.
These savings resulted in a blended net reduction in total blood spend of 22%.
Bloodbuy’s niche is the intersection where medical laboratory and supply chain meet, the PharmExec article noted. It is a point where multiple functions converge, ranging from medical laboratory scientist to medical director of transfusion services to materials management personnel and even to the CFO.
“There are so many competing priorities,” declared Godfrey in the PharmExec story. “[L]ab people are focused on safety and workflow, while those engaged in the supply chain are anxious about managing costs effectively. The solution ha[d] to be dynamic in a way that works in line with the commercial interests of each stakeholder, consistently and repeatedly, and at very low risk. Our model had to be … easily relatable and implementable for each of these key stakeholders.”
Hospital medical laboratories generally house in-hospital blood banks and are responsible for collecting blood and implementing blood management programs (See Dark Daily, “Rapid Cost Increases for Blood Products Cause Clinical Pathology Labs to Seek Solutions,” May 13, 2010). Thus, pathologists and clinical laboratory managers will appreciate this story as a reminder of the great potential for transformational change that can happen when innovative thinkers combine their talents with modern HIT. What can result are solutions to systemic problems in ways that improve patient outcomes and lower costs.
—Pamela Scherer McLeod
Related Information:
Going Down the Rabbit Hole: Christopher Godfrey, Founder and CEO, Bloodbuy
This Startup Is Pretty Much a Priceline for Buying Blood
The Harvard Contest That’s Trying to Improve Healthcare Delivery
In the Market for Blood? Here’s How to Keep from Getting Squeezed
Rapid Cost Increases for Blood Products Cause Clinical Pathology Labs to Seek Solutions
