Alaska Blood Bank is shipping excess blood to California, for a fee

The Blood Bank of Alaska warned of shortages here this summer and asked Alaskans to come forward with one of the most personal donations they can make — their own blood. But most of the time, Blood Bank officials say, Alaska had surpluses, and, for a fee, they shipped on average a sixth of what they collected to California.

Blood Bank officials here justify weekly sales under a recent contract to LifeStream, a nonprofit based in Southern California, as a way to ensure surplus Alaska blood will be used before it gets too old, but when supplies were low in Alaska, blood was withheld from shipment, they said. The officials say the money from LifeStream pays for their expenses in processing the blood sent out, though they wouldn't provide specific financial details.

"We have the choice of throwing your blood away or sending it to Los Angeles where it will save a life, what would you recommend? What would you like us to do?" said Blood Bank of Alaska board member Chris Mello in an interview last week.

Though officials acknowledge the Blood Bank is on a shaky financial footing with its recent move to a new $45 million, 57,000-square-foot building in East Anchorage, some of which was financed with a loan, they said the Blood Bank did not enter into the LifeStream contract to pay the debt.

Instead, Robert Scanlon, the Blood Bank CEO, said the facility sought more donors this summer, anticipating a greater need for blood because of factors like the spread of the Zika virus, which infects blood, and new federal regulations that took effect in May.

If those factors shrunk the eligible donor pool nationwide, Alaska would not be able to import blood if faced with a shortage, he said.

"This year we're collecting more blood," Scanlon said. "We're being very, very aggressive about collections and that is very, very purposeful."

The sales to LifeStream, under a contract that started May 1, amount on average to about one-sixth of the blood collected every week in Alaska, according to Scanlon. He declined to provide a copy of the contract or say how much LifeStream pays.

The Blood Bank is a nonprofit that receives millions of dollars in grants and state loans and gets its blood for free through donations from Alaskans. However, Scanlon still said financial details about the LifeStream contract were "proprietary," "very sensitive" and "contractually driven" and wouldn't be made public.

"We do not sell the blood," Scanlon said. "What the hospitals provide to us is compensation for the processing of the blood, so what that means is the recruitment of donors, the management of the donors, the collection of the blood, the testing of the blood, the manufacturing of the blood products and the distribution of the blood. So that's how the price is determined as far as the Blood Bank is concerned."

The contract

The Blood Bank started to increase donor recruitment in April, Scanlon said, about two months after it moved into its new building on a big lot across the street from Alaska Regional Hospital. Between the beginning of May and end of July, the Alaska bank collected 7,102 units of blood, each about a pint, compared to 5,426 units the year before, said Ashere Chait, the Blood Bank's marketing and communications director.

The bank describes itself as the state's only blood bank, serving more than 20 hospitals from Barrow to Bethel to Petersburg. It once competed for donors with the Red Cross, which shipped Alaska blood donations to Oregon before pulling out of Southcentral Alaska business. At the time, in 1999, the Alaska bank and other independent blood banks criticized the national organization for "violating a long dominant industry philosophy that blood should be used in the same community that donates it."

Scanlon said last week the bank never collects blood for export and serves Alaska first. Donors want to see their blood used, and if Alaska doesn't need it, he said he had to find a place that did. He said he knew Dr. Rick Axelrod, president of LifeStream, through America's Blood Centers, a national network of community-based blood centers.

"I was talking to him one day and I was kind of bemoaning the fact that I was having a hard time using all of the blood that I had when I had slowdowns here," Scanlon said. "He agreed to take 100 units because he had a shortfall of blood. It was just advantageous for both parties to do that."

Under the contract, LifeStream buys 100 units of blood from Alaska each week. The contract was supposed to end Sept. 30, but Scanlon said in an email Tuesday that it had been extended through December.

Scanlon said the blood must be about two weeks from its expiration date for it to go to California. Red blood cells, used for transfusions, have a shelf life of about 42 days.

"We serve about six trauma centers so there's an acute need for blood," said Axelrod, the LifeStream president. "The risk of it outdating on our shelves is really, really low."

If the Alaska bank does not have enough blood to adequately supply the state's hospitals, it will not send the full shipment to California, Scanlon said. That has happened "four or five times" this summer, he said, and the Alaska bank sends the missed units when it can.

PLASMA SHIPMENTS

The sales to LifeStream mark the first time in years that the Alaska facility has entered into a contract to export red blood cells. The Blood Bank has long "spot exported" blood — attempting to send away units nearing their expiration dates to a national inventory hub or other blood centers, Scanlon said.

Scanlon said last year, without the contract, the bank used "a lot" of its blood supply, "but there was some that we discarded because we couldn't find a home for it because everyone in the Lower 48 was flush with blood."

Currently, he said, the bank has a contract with LifeStream and also a contract to export plasma to CSL Plasma Inc., a health business headquartered in Florida with an Australian parent company.

Dr. Louis Katz, chief medical officer of Washington, D.C.-based America's Blood Centers, an association of nonprofit blood centers including the Blood Bank of Alaska, said in an interview it's common for blood banks to enter into contracts with one another to share blood. He called it "good business," and said it's the ethical move for blood banks that have more blood than they need.

"Everyone gets shortages at one point or another," he said.

Once a month between May and July, the Alaska bank posted alerts on social media about shortages. In all three, it said it was in critical need of O-negative, the universal blood type, and in two it also asked for O-positive.

Chait, the bank's marketing and communications director, also said in an interview in mid-July the facility was "critical for all blood types" due to an increase in local traumas.

"When we make these outreaches, they are true," Chait said last week. "And when those outreaches happen, we don't send the blood to California because it's being used here."

Chait said the alerts don't necessarily mean the blood supply in Alaska has reached zero. Hospitals maintain their own minimum stocking levels, paying the Blood Bank if they use the blood on their shelves. The alerts, Chait said, mean at the building in Anchorage, the inventory of tested blood has gotten low, or is anticipated to be low soon.

On one afternoon last week, there were 232 units of blood, including four O-negative units, on the bank's shelves in Anchorage ready to be released. Others units sat in quarantine, Scanlon said, awaiting testing results to determine if they could be used.

Karen Lakey, Alaska Regional's laboratory department director, said in an interview last month at least once a day the hospital contacts the Alaska bank to notify it of the hospital's projected need. Earlier this summer, O-negative blood was in critical shortage in Alaska and across the country, she said.

"So our blood bank, Blood Bank of Alaska, they were very worried that they weren't going to be able to supply us from the Outside," she said. "When that happens, it's the perfect storm. It's very scary."

Still, Lakey said in her more than 15 years as the lab director she could not remember a time the Alaska bank could not fill the hospital's order. Mikal Canfield, spokesman for the Providence Alaska Medical Center, said in an email Tuesday the local facility has always fully filled the hospital's order this year.

Scanlon and Mello declined to say how much money Alaska's hospitals pay for blood products. A 2014 New York Times article said hospitals may pay between $225 and $240 per unit of blood. Mello said the Alaska bank has not raised its prices in four years and prices were competitive with other states, "if you factor in that Alaska factor."

NEW BUILDING

In February, the Blood Bank moved from its small headquarters on Laurel Street, where desks sat in hallways, to its new 57,000-square-foot building. It promised the building would consolidate its operations, enable it to start donor testing and house a reference laboratory for a wide variety of testing.

By last week, it still did not have a reference lab or the ability to test blood. The Laurel Street building in the U-Med District remained unsold. The Alaska bank also had a multimillion dollar loan to pay off.

"We don't have the cash available. We are making payments. It is tight. It's really hard," said Mello, the board member. "We had a very successful capital campaign. We're going to launch another one. Right now, we have got a brand-new facility and we are in the position to meet the blood banking needs of Alaska today and in the future."

A bulk of the building's funding, about $33 million, came from the state grants over several years. Chait said the original goal was to sell the Laurel Street building for $2.7 million and receive $9.25 million in "philanthropic support" for the new building.

But with the nonprofit behind on its philanthropic goal and its old building unsold and less money in state grants than it planned, it took out an $8.5 million loan from the Alaska Industrial Development and Export Authority, a state low-interest lending agency.

Originally, Chait said, the project was supposed to be debt-free.

Chait said the Blood Bank will continue to pay off the AIDEA loan with pledges that have not yet been received in full. Scanlon said the bank also recently received a $300,000 grant from the M.J. Murdock Charitable Trust to pay down the debt.

Since November 2015, the bank has made monthly interest-only payments to AIDEA of between $15,621 and $40,950, according to Karsten Rodvik, AIDEA external affairs officer.

Scanlon said because the Blood Bank no longer has to lease additional space for supplies and staff as it did before, it can make the monthly payments to AIDEA.

"We can afford the payments, but we would rather not make the payments," he said. "The Blood Bank, as a nonprofit, has always struggled."

In 2014, the bank reported revenues of about $26.3 million, $15.6 million from contributions and grants and about $10.2 million from blood products. It reported its expenses at nearly $10.7 million, according to the nonprofit's most recent publicly available tax return.

Scanlon said last week the bank had 85 employees, down from 120 in 2012. While blood banks nationwide have faced falling revenues in the face of changes in medical guidelines that have decreased the need of blood transfusions, Scanlon said the impact has been less severe at the Alaska bank. He attributed that to the bank's position as the only blood center in a state where hospitals continue to grow.

Scanlon said one of the top priorities for the Blood Bank's new building is to begin donor testing in Alaska, putting donated blood through a battery of tests required by the FDA before it's released.

Testing now costs the bank about $1.3 million a year and also takes time as the expiration clock ticks, Scanlon said. The Blood Bank sends tube samples of donated blood on a plane daily to Minneapolis, where another blood bank tests for Hepatitis, West Nile virus and HIV, among other blood diseases, as mandated by the FDA.

The FDA began requiring stringent blood testing in the wake of the AIDS epidemic, when transfusions became a leading cause of the disease's spread. The Alaska bank did not have the equipment to test the blood at its Laurel Street building so it sent samples to labs in other states. It has done that since, Scanlon said.

It typically takes between 24 and 48 hours for the blood to get to Minneapolis and for the blood center there to send results back to Alaska. But the Alaska facility has faced flight delays, cancellations and even a forgetful courier. In one instance, when the bank sent its samples to Chicago, a dog crate booted the blood shipment off the flight, Mello said.

When Mount Redoubt erupted in 2009, shutting down the Anchorage airport, it also shut down Alaska's ability to send out the blood for testing. "The organization came within 12 hours of running out of strategic product on the shelf," Scanlon said.

Scanlon said it was around that time the bank's board decided on a new building, one that would not rely on another out-of-state blood bank to complete testing — especially critical in the case of an emergency.

But during a tour of the building last week, the donor testing room remained largely empty. Mello said the bank did not yet have the funding to outfit the building with equipment, which would cost between $2 million and $3 million if the facility opted to buy it. It could also lease the equipment, he said.

Scanlon said the Blood Bank will "start the actual kickoff" of the donor testing project in November and it will take up to two years to complete. And once it is completed, the Blood Bank will also have the ability to sell additional services to Alaska's hospitals, Mello said, though he could provide no details.

"It's real difficult to talk about that right now because once we get down to talking turkey and providing those services, it will be proprietary," he said. "It's business."