More than Expected 1
As Christine gazed at her sweet newborn daughter, it was dif- ficult to comprehend that this precious child, newly diagnosed with beta thalassemia, would be battling severe anemia and developmental problems throughout her life. Experts at the local children’s hospital placed Lauryn on blood transfusion therapy, the typical treatment for this disease. Lauryn has already received more than 70 specially-matched red blood cell transfusions. In spite of additional health challenges, Lauryn has a zest for life. As a first grader, she enjoys dancing, arts and crafts, swimming and animals. “Blood donors are her guardian angels,” Lauryn’s mom, Christine, says. “Every donation they make gives Lauryn the opportunity to grow up. Without them, she wouldn’t be here today.” 2 Lauryn Acosta, transfusion recipient, Mesa, Arizona.
T he image on the cover of this annual report might have puzzled you. It’s hardly the stereotypical blood service organization annual report photo. It is, however, a metaphor for where we’ve been, where we’re going and how we’ll get there. With the continuing uncertainty in the economy and the accelerating pace of change in healthcare, blood service providers—even integrated, multi-faceted transfusion medicine organizations like Blood Systems—faced complex choices in 2012. Should we surrender to escalating market pressures and pare our service down to the essentials to succeed in a price-based commodity environment? Or should we rally to our mission, vision and values and do more to advance our service to donors, our support to customers and our care for patients? Admittedly, those are leading questions. Of course, we have chosen to do more—much more—than the minimum, as you will see in this report. At the same time, we live in the current environment and so, even as we expanded and enhanced our services to exceed expectations in 2012, we diligently improved our effectiveness and continued to drive out costs. Blood Systems is an organization that functions on many levels. At the most grass-roots level, we help people make a difference in their communities and provide lifesaving blood to patients in hundreds of cities and towns across 18 states. Taking that service to patients to another level, we provide hospitals and physicians with a wealth of services, tools and expertise to help them effectively and appropriately use transfusion medicine to improve patient outcomes. And on yet another level, we work with health systems and hospital networks in state, regional and even national organizations to help them provide exceptional and cost-effective blood service to their member institutions. Finally, we support the work of our colleagues in blood banking by offering contracted and shared services and other opportunities to help them fulfill their lifesaving missions in a time of rapid change. Blood Systems differs from other blood service organizations in that we are a system with tremendous reach and resources: 18 states, some 75 locations, more “We have chosen to do than 3,000 employees, 21,000 more—much more— blood drives a year, nearly 30 physicians, four high volume than the minimum...” testing laboratories, 4.3 million donor test panels. Our work encompasses all aspects of blood banking: international research, donor testing, specialized plasma derivative therapies, collaboration with physicians and hospitals, and patient outcomes. It’s that concentration of experts, resources, knowledge and capacity that positions us to successfully fulfill our mission in these challenging times. It gives us a solid foundation from which to make the leap into the future, and it shapes our vision of what lies ahead. As an organization, Blood Systems is ambitious, eager and ready. As its leaders, we are grateful to our co-workers; to blood drive sponsors and dedicated donors; and to the blood centers, hospitals, physicians and patients who have put their trust in us to do more. We look back with pride at what we’ve all achieved together in 2012. Armando B. Flores Chairman J. Daniel Connor President & CEO Mr. Flores is the Director of Baseball Administration and Community Affairs at Arizona State University. Prior to joining ASU, he was an executive with Arizona Public Service for 16 years. Specializing in human resources and corporate management, he first brought his skills and experience to the Blood Systems Board of Trustees in 2005 and began serving as Chairman in 2012. His civic involvement has included work with Valley of the Sun United Way, the Boy Scouts and Phoenix Fire Department, among many others. Mr. Connor has served as President and Chief Executive Officer of Blood Systems for the past 17 years. His prior executive experience was with American Red Cross Blood Services in Los Angeles and LifeSource of Chicago. A CPA, he began his blood banking career in 1973 as administrator of North Suburban Blood Center, also in Chicago. He is a past president of AABB (formerly the American Association of Blood Banks) and serves on the National Blood Foundation Board of Directors. 3
• • • • 4 Collected 1,015,776 red cells, down slightly from 2011 as expected due to the continuing decrease in transfusions. Reduced Cost per Unit Distributed by 2.4 percent compared with the previous year. Continued development of innovative patient care programs for our hospital partners and the patients they serve, such as patient blood management, Optimum TxTM, Transfusion Service Diagnostic, Automatic Case Consultations and online enhancements. Added major hospital customers in southern California and Louisiana. • • • Piloted a revised approach for blood donors to do their own health history interviews either online or at the donor site. Continued focus on improving laboratory operations to enhance patient care, adding significantly to the portfolio of services aimed at helping hospitals improve their transfusion services. Improved detection of bacteria in platelets and took steps to identify and educate donors with low iron stores; both are pioneering efforts in the industry.
T hroughout 2012, the Blood Centers Division continued enhancing our menu of customer offerings, helping hospitals improve patient outcomes and save money at the same time. Programs such as Optimum TXTM, Transfusion Service Diagnostic and Automatic Case Consultations have allowed our blood centers to establish innovative improvements in transfusion medicine so that we exceed the performance of traditional blood centers, which focus primarily on product. Whether we’re developing new programs or delivering a hospital’s standing order, we keep the welfare of the patient at the core of all we do. One of the unique strengths of the Blood Centers Division is its collaboration with the medical affairs and quality leaders at Blood Systems’ central office, with the scientists at Blood Systems Research Institute, with the clinical services team at Blood Systems Laboratories and with the donor testing experts at Creative Testing Solutions (Blood Systems’ joint venture with OneBlood and the Institute for Transfusion Medicine). In 2012, that collaboration helped the division launch an alternative method for platelet bacterial detection to improve patient outcomes. The Blood Centers Division worked with Blood Systems Laboratories to initiate support for a new bone marrow transplant program in Scottsdale, Arizona with cellular therapy processing, HLA typing and CD 34 enumeration. Patients throughout the regions we serve benefited from the laboratories’ enhanced capabilities for DNA sequencing and high volume DNA isolation. The across-the-system collaboration also contributed to new interventions to help reduce donor reactions and to the implementation of ferritin testing for donors with hemoglobin levels close to the donor eligibility cutoff. • • Achieved a “fill rate” better than 99 percent for all special antigen negative units by the end of 2012. Of those orders, 96 percent were filled from local inventory and average time to fill was 5 hours, with STAT orders turned around in less than half that time. With Clinical Services at Blood Systems Laboratories, began support for a new bone marrow transplant program, delivered faster results on patient testing and increased HLA typing of plateletpheresis donors. Left: Hospital Services Representative scans a unit of red cells to pack and deliver to an area hospital. Right: Collecting cells from a cancer patient at Mayo Clinic Hospital in Phoenix, Arizona. Our blood centers continue to adapt and adjust to changing conditions. We welcomed significant new customers in southern California and Louisiana; however, by the fourth quarter, red cell usage by continuing customers was 6 percent less than the same quarter of the previous year, a trend observed by other blood centers across the country. Contracts to provide red cells to other blood providers helped to maintain revenues and allowed us to keep in place the resources necessary to accommodate future growth. “We remain focused The division recorded progress in many aspects of on providing more than its operations. Customer sat- expected to our hospital isfaction levels for both hoscustomers, creating tools pitals and donors improved and techniques for imover the previous year. New proved patient outcomes workflow standards brought and providing a better additional consistency and uniformity to the way work is experience for blood conducted and, together with donors.” an online donor interview pilot, helped streamline the donation process. Cost per Unit Distributed decreased by 2.4 percent over the previous year and productivity on blood drives increased. The employee retention rate improved to 82 percent for the year. As the healthcare environment continues to evolve, the Blood Centers Division remains focused on providing more than expected to the hospitals and communities we serve by creating tools and techniques for improved patient outcomes and by delivering a better overall experience for volunteer blood donors.
BSRI achieved a major milestone in 2012, being voted as one of the top 10 places to work in academia. For the past 10 years, The Scientist’s Best Places to Work in Academia surveys have asked academic researchers to highlight the aspects of work they value the most. In 2012, more than 1,100 full-time life scientists responded to The Scientist’s survey. BSRI employees noted that teaching and mentoring and research resources were particular strengths of the institute, highlighting the synergy between the Blood Systems organization and research institute. 6
O ur award-winning transfusion medicine research team is among the most respected and productive in the world. Blood Systems Research Institute continues to mature and advance in its mission to improve transfusion quality and outcomes worldwide under the leadership of Director Michael P. Busch, M.D., Ph.D. From recommendations for testing methodologies to discoveries of new viruses, our research team provides the innovation and technology “Teaching, mentoring necessary to help assure the safety of the U.S. blood supply. and research resources were particular strengths In 2012, BSRI was honored to be listed among the top 10 of the institute, highplaces to work in academia by lighting the synergy The Scientist. between the Blood SysThe quality and quantity tems organization and of research performed at research institute.” BSRI continued to flourish in 2012, with 83 manuscripts published in peer-reviewed journals. Notable findings include the identification of eight animal and five human viruses through Dr. Eric Delwart’s virus discovery program; measurement of how pathogen reduction technology can affect immune reactivity of treated blood products in Dr. Philip Norris’ lab; and major studies in the U.S. and Brazil by Drs. Busch, Brian Custer and Edward Murphy to understand the risk of transfusion transmission and clinical significance for donors and recipients of West Nile virus, dengue virus and Trypanasoma cruzi (the parasite that causes Chagas disease). BSRI also significantly strengthened its investment in cellular therapy research, hosting a major conference on the topic at the Mission Bay campus of the University of California, San Francisco in 2012. In new research, Dr. Shibani Pati’s group identified an important protein elaborated by mesenchymal stem cells, called TIMP-3, and showed that activity of TIMP-3 could improve outcomes in mice after traumatic brain injury. These findings were published in the journal Science Translational Medicine. BSRI Highlights: Peer-Reviewed Publications 2009-2012 • • • • • • • Published 83 manuscripts in peer-reviewed journals. Identified eight animal and five human viruses in the virus discovery program. Measured how pathogen reduction technology can affect immune reactivity of treated blood products. Conducted U.S. and Brazilian studies of risk of transfusion transmission of West Nile virus, dengue virus and Chagas disease. Hosted a major conference on cellular therapy research. Conducted new research on use of TIMP-3 to improve outcomes after traumatic brain injury. Participated in large study of transfusion support for sickle cell disease patients in Brazil. Extramural Revenue 2009-2012 2009 2010 2011 2012 $0 $2,000 $4,000 $6,000 Extramural Direct Revenue (thousands) $8,000 $10,000 $12,000 Extramural Indirect Revenue (thousands) 100 80 60 40 20 0 2009 2010 2011 2012 7
B ioCARE is a specialty biologics distributor for lifesaving plasma-derivative therapies. Building on its reputation for outstanding service and all-hours responsiveness, BioCARE has become one of the leading distributors of hemophilia products in the hospital market. With hospitals searching for cost-containment opportunities, BioCARE’s success is due in large part to its consignment model that shifts the carrying costs out of the hospital pharmacy. BioCARE experienced its fourth consecutive year of revenue “BioCARE’s success is due growth, exceeding by 1.5 in large part to its consign- percent its net margin goals ment model that shifts the for 2012. In addition to revenue carrying costs out of the achievement, BioCARE made hospital pharmacy.” significant strides in 2012 toward attaining several of its 2011-2013 strategic goals, including its goal to serve even more customers by developing additional relationships with group purchasing organizations (GPOs) and other health systems. When the Children’s Hospital Association, BioCARE’s largest customer group, changed GPO affiliations in 2012 from Premier to Novation, it paved the way for BioCARE to become an authorized distributor to Novation customers. BioCARE’s third GPO contract came with an agreement with Innovatix, which added BioCARE in August as an authorized distributor. Innovatix, the largest non-acute care GPO in the U.S., represented the first non-acute GPO contract for BioCARE. The division’s move in 2012 to the Potter building, a larger facility near Blood Systems Laboratories and Creative Testing Solutions in Tempe, Arizona, provided BioCARE with the perfect space and setting for its new specialty pharmacy slated to open in 2013. Specialty pharmacies provide specialized medication and services to support patients who have complex, genetic, often rare, chronic health conditions. BioCARE has built strength and expertise in the distribution of Factor concentrates, so its specialty pharmacy will focus its initial efforts on delivering service to hemophilia patients. The move to larger, more efficient space and the deployment of BioCARE’s e-commerce website, a first for Blood Systems, both round out the division’s strategic goal for improving its logistical and service capabilities. BioCARE Highlights: • • • • • • Selected for new GPO contracts with Novation and Innovatix. Began first pharmacy contract negotiations (specialty pharmacy to be operational in Q2 2013). Continued to build reputation for outstanding service and responsiveness, receiving the highest customer service score in BioCARE history of 4.83 out of 5. Continued to be a leading distributor of hemophilia products in the hospital market. Exceeded Net Margin goal by 1.5 percent achieving $2.8 million on revenues of $156.2 million. Moved to new Potter Street location in Tempe to allow for growth and improved efficiencies in operations. “I now feel like I have two birthdays...” A freak tractor accident left Tim praying, “Dear Jesus, please don’t let me die,” as massive injuries worked against him. “The tractor tire crushed my pelvis, broke ribs and my collar bone, collapsed my lung and ruptured my spleen,” Tim says. “It is purely by the grace of God that I survived.” Tim received several blood transfusions when his spleen had to be removed. “I realize how precious life is,” Tim adds. “In a way, I now feel like I have two birthdays. I’m extremely thankful for people who give blood—they helped me when I needed it most. Now I donate to help others too.” Left: Tim Dearman, donor and transfusion recipient, Brandon, Mississippi. Opposite page: Customer prepares to dispense coagulation product. 9
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