Neoliberalism and Blood

A significant internal problem for the left is that the term “neoliberalism” is used as an epithet that now means “anything Democrats do that I don’t like.” This is a terrible thing, because neoliberalism is an actual thing with an actual meaning with actual consequences that has an enormous impact on our society and upon the global economy. And when I read this op-ed on the blood supply chain, I was struck by how deeply the idea of the privatization of public services and the potential to profit on them has advanced.

Still, a multi-billion dollar industry has evolved out of the demand for and supply of blood, with the global market for blood products projected to reach $41.9 billion by 2020. The United States constitutes the largest market for blood products in the world. Donors in the U.S. and some others countries are typically not paid.

In the U.S., the American Red Cross supplies about 40 percent of the blood, with America’s Blood Centers, with 600 blood donor centers, providing about 50 percent (and about one-quarter of the blood in Canada). The remainder is collected by hospitals and medical centers themselves or, lately, by profit-maximizing blood suppliers.

Prior to 2008, hospitals and other surgical centers consistently reported blood shortages every year. This resulted in the cancellation and postponement of elective surgeries.

Things changed. In part because of medical advances, some procedures do not require as many pints for transfusion. This decrease in demand for blood is posing great challenges for the industry, resulting in consolidations and mergers of testing labs and processing facilities.

In response to the drop in demand, suppliers formed partnerships. Mergers have taken place to counteract rising costs of blood banking operations and even to work for enhanced safety, availability and affordability of blood for hospital partners and patients. At times, the reconfigurations have included the closing of testing facilities as done by the Red Cross.

According to the America’s Blood Centers, the largest network of nonprofit community blood centers in North America, 19 partnerships and mergers were formed in the five years from 2010-2015 among their member blood banks, reducing the size of the network from 87 to 68 members. That represents a doubling from the 1990s, when 19 mergers took place during 10 years rather than five.

My colleagues and I have been researching blood supply chains, from enhancing their operations with collection, testing and distribution to hospitals and medical centers. The goal is to minimize costs as well as risk and waste and to optimize the supply chain network design.

More recently, our research has turned to the assessment of mergers and acquisitions, since some of its evolving features have taken on the characteristics of corporate supply chains, which we can learn from and take advantage of.

Now, I suppose blood transfusions have never exactly been a public service in the sense of the government actually controlling the supply. But should blood be seen as having a supply chain within a profit-seeking corporate structure? This is not to impinge the research of the writer of the above piece because if it exists, we have to understand it. But the entire premise of a blood supply chain should deeply offend us. People need blood and someone has to ensure that said blood gets where it needs to go. But given that most of our blood supply comes from the unpaid labor of people volunteering in blood drives, should it exist under a corporate structure? To me, the answer is that this is a public good that should be collected and supplied as such, without having to worry about mergers, corporate structures, or profit (which of course even in “nonprofits” absolutely matters in the sense of the heads of these organizations becoming wealthy). But of course one can say this about the entire medical industry, which is part of the reason why the AMA has done more than anyone to ensure that Americans don’t have universal quality health care.