Chapter 06: Blood as a Commodity
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Description
Dr. Lichtiger first explains how he thinks about blood as a “commodity” that has a fluctuating price. He goes on to talk about the support that MD Anderson presidents Charles LeMaistre and John Mendelsohn showed Transfusion Services, then comments briefly on the new president, Ronald DePinho. He then sketches the relationship between the Blood Bank and the Blood Center, confirming that they are part of the same service.
Identifier
LichtigerB_01_20120611_C06
Publication Date
6-11-2012
City
Houston, Texas
Interview Session
Benjamin Lichtiger, MD , Oral History Interview, June 11, 2012
Topics Covered
The University of Texas MD Anderson Cancer Center - The Business of MD AndersonOverview Overview The Business of MD Anderson Understanding the Institution Institutional Processes
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.
Disciplines
History of Science, Technology, and Medicine | Oncology | Oral History
Transcript
Tacey Ann Rosolowski, PhD :
I wanted to go back just for a moment and ask you about the business wisdom and experience that you have brought to the blood bank, and I was wondering what your philosophy is about how strengthening the service as an enterprise—as a business enterprise—helps patient care. I mean, sometimes people think, “Well, wait a minute, those two things could never go together.”
Benjamin Lichtiger, MD :
No, they go together. Well, because it allows me to go to the institution and say, “Look, I need this equipment. I need this personnel because I’m going to produce this and that, and the return of the investment is going to be that.” When I go to the administrator here, the administrator is not a physician. Dr. DePinho has him there to look over the budget, the return on investment. I show him, “You buy me this equipment, and in six or eight months I’ll pay the equipment and I’m giving you a margin.” That is the most practical way to approach it, and that doesn’t affect academics and doesn’t affect patient care. On the contrary, I can improve patient care by bringing in something that’s going to make the service more dynamic, because if I can produce my blood here it has one price. If I go out and buy blood outside, it’s MSRP, manufacturer suggested retail price. It’s double the price. I’m making money in the producing, and I’m losing in the buying. If I reduce the MSRP, the wholesale is more convenient. So I have to look at it because I’m dealing—crudely speaking—with a commodity. If there is a shortage of blood, I have to go out and buy blood for $200 a unit. When there’s an excess of blood, they charge me $225.
Tacey Ann Rosolowski, PhD :
So the price fluctuates.
Benjamin Lichtiger, MD :
Of course. It depends on the blood group. It depends on the blood group and on the Rh. O negative is very expensive because fifteen percent of the population is O negative. Tacey Ann Rosolowski, PhD What about the Rh? Is that—?
Benjamin Lichtiger, MD :
That’s right, O or Rh negative. If I can—I go to the institution—anything I go—and this may be invisible to some of my colleagues, and I don’t know, maybe it is not. I’m just going to assume. Some people want to have a new instrument for surgery, and it goes up to some manager who does the analysis, and sooner or later the business aspect comes into play. People here in the institution think that the business aspect has no impact. They are dreaming, or they are divorced from reality. I believe—I’m very much a believer in the free market, the competition, and let me show you how that’s better than the other one. You give me the elements, and I’ll give you back your return.
Tacey Ann Rosolowski, PhD :
How much revenue does the blood bank generate?
Benjamin Lichtiger, MD :
It’s quite a lot, yes. I really think that we are close to three-to-one. For every dollar you give us, we’ll give you back three dollars.
Tacey Ann Rosolowski, PhD :
Wow, that’s amazing. And so that profit margin, if you will, does that go back to the blood bank or does that—?
Benjamin Lichtiger, MD :
No, it goes to the general fund, but that’s okay. Still it shows on paper. Tacey Ann Rosolowski, PhD Right, because you’re just—
Benjamin Lichtiger, MD :
Exactly, absolutely.
Tacey Ann Rosolowski, PhD :
You mentioned that both Dr. LeMaistre and Dr. Mendelsohn were very supportive of the blood bank. In what ways did they show their support?
Benjamin Lichtiger, MD :
Well, there were many times attempts from outside to get us to close. When we merged with the other one here and there, they provided us with avenues, opened up doors with companies. They were very supportive and helpful in making sure our operations were not made difficult by obstacles created by other entities. They were quite protective of us.
Tacey Ann Rosolowski, PhD :
What was the pressure for the blood bank to merge? Benjamin Lichtiger, MD Well, because we are strong competition. Imagine we go in and say, “We are MD Anderson.” We are like—what was that company, stock brokers? It talks and everybody listens. When we stand up and say, “We are MD Anderson,” people listen. This president, he already came and visited the blood bank. I’m supposed to take him over to the blood center, and I hear he’s very much innovative in the division, and he understands so I just need to—without being dismissive—just need to educate him because sometimes they take us for granted. I need to show them, but I’ll take care of that with time, opportunity, and I’ll interact with him. It’s not very difficult to interact with smart people.
Tacey Ann Rosolowski, PhD :
How did your working relationship with Dr. LeMaistre evolve?
Benjamin Lichtiger, MD :
He came and he became president, and we had to have our own meeting. He called us up, and we talked, and we told him what we were doing, and he was a very good politician because people were coming from all the angles and talking to him. He came here from Austin. He knew how to handle them, and he used to tell me, “Ben, don’t worry. You just do your job. Don’t worry about it. Let me take care of that.” And I knew he took care of it.
Tacey Ann Rosolowski, PhD :
And Dr. Mendelsohn?
Benjamin Lichtiger, MD :
Mendelsohn too. Mendelsohn was also very good, and he didn’t pay much attention to the outside. He just used to say, “Guys, you’re doing an outstanding job. Continue.”
Tacey Ann Rosolowski, PhD :
Great.
Benjamin Lichtiger, MD :
And that’s enough you need from your president, and you know you have that.
Tacey Ann Rosolowski, PhD :
What’s the difference between the blood bank and the blood center, just so I’m clear on that?
Benjamin Lichtiger, MD :
Our blood center? Here the blood bank is a transfusion service. The blood center is a part of the blood bank that’s in charge of all the outside collections, manufacturing, testing, and providing us with the products. We just—in our mind we think that our—our agency as doing all the outside work and putting the products on the shelf.
Tacey Ann Rosolowski, PhD :
But it’s all part of the same system.
Benjamin Lichtiger, MD :
It’s all one thing because I rotate one week here, one week over there. We rotate it, three doctors.
Tacey Ann Rosolowski, PhD :
Wow, that seems like it would be an advantage too because then you have everybody overseeing the—
Benjamin Lichtiger, MD :
Absolutely, absolutely. There’s no activity here that’s not under the overview/oversight of a physician where it requires intervention. For example, the platelet donors, the white cell donors, it’s all under our overview.
Recommended Citation
Lichtiger, Benjamin MD, PhD and Rosolowski, Tacey A. PhD, "Chapter 06: Blood as a Commodity" (2012). Interview Chapters. 1461.
https://openworks.mdanderson.org/mchv_interviewchapters/1461
Conditions Governing Access
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