Needed: A Market for Blood
The status quo:
- The American Red Cross is easily the largest player in the sector — it controls 44 percent of the nation’s blood supply — and its lack of innovation has allowed for stagnation.
- Under the status quo, hospitals rely upon donations from local donors who are within driving distance, creating an inefficient market that sells the same goods at different prices simply because they are in different locations.
- For example, a pint of blood might cost a hospital $210 in Wisconsin but $265 in New Jersey.
Furthermore, the current market allows these isolated regional markets to waste product.
- By confining purchases to local operations, some hospitals find themselves with unexpected surpluses while other hospitals in other areas are in dire need.
- Additionally, hospitals with surpluses often fail to use blood before it expires, contributing to national figures for wasted blood that government data peg at between 5 and 14 percent.
- Given that red blood cells have a shelf life of 42 days and platelets can last for five, there is no reason that blood resources cannot be more efficiently allocated among the nation’s health care providers.
Federal law allows individuals to sell blood plasma, but I believe they cannot actually sell blood (or be compensated for body parts, whether dead or alive). People can only donate blood. If people could be paid for their blood, many more would sell it and the cost would fall tremendously. Supply curves are upward slowing — this explains why blood could cost $210 to $265 a pint. Of course, the firms that make a ton of money from soliciting blood donations and then supplying (i.e. selling) it to hospitals would find their profit margins very thin. That is why organizations that make money off donated organs and donated blood so adamantly oppose any move to reform the market allow compensation for blood or cadaver organs.
Agree.
I used to donate blood often, but stopped a year or two ago because it just became hard to make time for it. If I was paid for my donation I would certainly start donating again.
@Alex, the WHO says otherwise. Generally when market forces are introduced into blood donations, those with altruistic motives donate less and the people who donate for money tend to have lower quality/more diseased blood.
With all of the hype given to blood drives, it seems like the ARC would have produced more innovations.
Good point, Studebaker,