Red Cross pumps up competition in Las Vegas blood market

The American Red Cross has pumped up the competition in the Las Vegas blood market by unveiling a more aggressive push to recruit collection drive sponsors.

For about five decades, the nonprofit United Blood Services of Scottsdale, Ariz., had a monopoly on blood services for area hospitals. But that cracked two years ago when Red Cross, from its division headquarters in Salt Lake City, won a contract to serve five local hospitals. It added four more last year, all of them for-profits.

In April, Red Cross began organizing donation drives on a limited scale while sourcing most of its local blood supply from Montana, Utah and Idaho. Last week, the Red Cross formally announced it would step up the pace and start tapping veins in Las Vegas.

"The American Red Cross will strive to host mobile blood drives across the Las Vegas area each business day," American Red Cross Blood Services CEO Julia Wulf said in a statement.

United Blood has been trying to regroup since the Red Cross arrived, a process that has included laying off about one-third of the local staff since 2010, said Danny Cervantes, the regional donor recruitment director. He did not give specific numbers.

"We have instituted new processes, new procedures and been reaching out to our partners to see how we can build better relationships," he said. "We are doing what we can to become more efficient as a business."

In addition, he said, United Blood still answers calls from the hospitals where Red Cross has the primary contracts when they need specific types or quantities of blood.

Individual donors might notice the difference in the incentives available, which can range from drawings for movie tickets to vacation packages.

United Blood has retained the county-owned University Medical Center of Southern Nevada and the three nonprofit St. Rose Dominican hospitals as clients

Many metro areas have been covered by more than one blood service for years, said David Jessop, the regional account director for Red Cross.

"Probably, Las Vegas was something of an island," he said of United Blood's former monopoly.

That came to an end in May 2010, when Universal Hospital Services asked Red Cross for bid on the blood services contract and then awarded it for its Summerlin, Centennial Hills, Valley, Desert Springs and Spring Valley hospitals. The next year, HCA did the same for Sunrise, Southern Hills and Mountain View hospital, followed by the separately owned North Vista Hospital.

Jessop said the strength and reputation of Red Cross carried significant weight, but Cervantes said a lower price and the desire of hospital chains to reduce the number of vendors were important. United Blood subsequently overhauled its operation to cut costs and adapt to its shrunken client base.

To fill in the lost business, Cervantes said, United Blood will try to widen its regional reach, particularly in northern Arizona.

Since its start in 1943, United Blood has grown to cover 18 states, all but two of them west of the Mississippi River. In 2010, the most recent numbers available, it recorded $709.3 million in revenues, including $379.9 million from blood fees.
With its national presence, the Red Cross generated $3.6 billion in revenues during the year ended June 30, 2011, including $2.2 billion from biomedical services. Almost all of the biomedical component pertains to blood, according to a Red Cross spokesperson.

Contact reporter Tim O'Reiley at toreiley@review
journal.com or 702-387-5290.