New Ukiah contract, budget initiatives stabilize key supplier

[caption id="attachment_15291" align="alignright" width="108" caption="Cathy Bryan"][/caption]

SANTA ROSA – A little more than a year after the loss of its largest single revenue source, Blood Bank of the Redwoods has successfully filled the gap, signing a new contract this summer and finishing the fiscal year with a positive balance sheet.

“When our client base changed that drastically, we knew we would have to make some changes,” said blood center President and Chief Executive Officer Cathy Bryan.

“Really it was evaluating what we were taking in, what the new demand was, what we are manufacturing and ‘right-sizing’ the business to fit those adjustments.”

In June 2008, following a three-month competitive bidding process, St. Joseph Health System — Sonoma County announced that it would no longer contract with  the 60-year-old community blood bank. The longstanding agreement at the time accounted for about $3.5 million of the blood bank's $15 million annual budget.

In preparation for the official announcement, the blood bank had already eliminated seven positions, and the month after the contract closed, officials reorganized again and implemented another small lay-off. Plans to expand were halted, and efficiencies were implemented where possible. Off-site donations that typically cost more than units taken at the center were reduced or eliminated, and the bank created new ways to bring in blood.

“In some ways we were ahead of the curve. We were already operating lean before the recession, so when it really set in we were already set to be more fiscally conservative,” said spokesman Kent Corley.

As local businesses implemented staff reductions, some of the blood center’s largest donation sources also dried up, and officials created new collection promotions and events. In March, the organization launched a revitalized Web site that, among other services, allows donors to schedule appointments online.

The recession also caused some downstream impacts on blood bank revenues as patients delayed elective surgeries and hospital blood needs dropped. At the same time, some local inpatient caregivers have transferred surgeries out-of-town, which has also caused the need for blood to sag.

Despite the fiscal challenges, the blood bank was able to break even at the close of the fiscal year June 30. At about the same time, the organization garnered a new blood contract with the Adventist Health-run Ukiah Valley Medical Center, which for a long time contracted with San Francisco provider Blood Centers of the Pacific.

“In an effort to keep costs down as much as possible, we entered into a competitive bidding process and ultimately chose Blood Bank of the Redwoods,” said Arpad Peter, regional director of laboratories for two Adventist hospitals in Mendocino.

“The other factor was service. For us, the proximity of the blood bank does factor into how well we can serve our patients.”

Currently, the one-year contract only covers the Ukiah hospital and the Frank R. Howard Memorial Hospital in Willits, but Mr. Peter said it is possible it will be extended to Adventist’s other facilities.

Mr. Corley said the blood bank will continue to look for additional contracts or buyers. Currently, about 20 percent of blood is exported statewide or nationally to areas with an acute need. The organization has not made any other staffing changes than the ones implemented last summer, and no pay cuts were ever enforced.

“We are very proud of what we have been able to accomplish, and in the end we have our donors to thank, and we continue to wish all of the hospitals well,” Ms. Bryan said.