Privatising the blood service

Well, no, they\’re not. But to hear the unions peeps screaming about it you\’d think they were:

Karen Jennings, head of health at the public sector Unison, said: “What is this Government thinking of, is nothing safe? The blood service is world class and doesn’t need interfering with.

“It epitomises how successfully volunteers and the public sector can work together, free from contamination by the profit motive. It is a service people are proud to work in and you cannot put a price on giving blood to save lives.

“We know from all the evidence that fragmenting services, outsourcing and contracting out, damages that ethos and more importantly damages the smooth running of the service.

“How can Cameron and Lansley claim that the NHS is safe in their hands, when they are planning to literally drain its lifeblood.”

What they\’re actually suggesting is:

In common with many public sector organisations, its call centre, catering, security, legal department and some office administration facilities are already run by private companies.

But under the new review led by the Department of Health and disclosed by the Health Service Journal, further functions such as the storage of blood and its delivery around the country – which is already part controlled by the courier firm TNT – could be sold off.

There are indeed very good reasons why we\’d like blood donation to remain a voluntary activity: but that doesn\’t mean that it has to be government owned of course. Just as with everyone\’s favourite examples of lighthouses and lifeboats, it\’s entirely possible, given the way in which we humans are indeed cooperative creatures, for voluntary cooperation to provide these services.

Rootling around for information on the price of blood (in the UK, £125 a unit, in hte US perhaps $200, so not out of line at all) I found this:

The system of blood distribution hasn\’t always relied on volunteer donors. Until the 1970s, a major portion of the nation\’s blood supply came from paid donors. But a government study found that volunteered blood was much less prone to hepatitis contamination. From then on, blood banks had to label their packages \”paid\” or \”volunteer,\” which had the effect of eliminating paid-donor blood from the national supply.

You could read that two ways: that regulation was required to make this possible, or that the reaction was so strong that regulation wasn\’t required: as soon as someone started credibly so labelling there would have been the switch anyway.

But the intriguing thing is that is disproves the idea that markets always lead to a race to the bottom. When actually offered the choice the market (OK, the buyers in that market) chose the higher, not lower, quality item.

And isn\’t that an interesting finding? Markets (can) push up quality, not drive it down……

Yes, yes, of course, we all know that: but it\’s a nice example to be able to use, no?

10 comments on “Privatising the blood service

  1. You need a fairly unusual commodity for it to work though.

    The reason it’s the case for blood is because the perceived social credit to being an unpaid blood donor is fairly high, and the perceived social stigma to being a paid blood donor is also fairly high (so people who do it are more likely to be drug users, prostitutes, etc and therefore have dodgier blood) – i.e. the not-cash parts of the transaction are highly significant and represent a major signal.

    Tim adds: Unusual commodity? Like cars, food, clothes, furniture, planes, restaurants and private schools have all gone down in quality over the years as competition wreaks its excesses?

  2. Sorry, misread your characterisation of what was interesting.

    The interesting thing about the blood market is that free blood is more valuable than paid blood. Which is fun, and drawing a supply/demand curve for that market would be an amusing exercise.

    So it’s not a very good example of the obviously true general point that “people are sometimes willing to pay more for higher quality things”, because the counterintuitive cost structure is something of a distraction…

  3. Just for a comparison: in my country, Finland, the blood service was started up by Boy Scouts in the 1930’s, then it was nationalized when war started, and run by the army who obviously had the immediate need.

    In 1948, it was privatized again by giving it over to the Red Cross, and has been running like that ever since. It has worked very well without being a government service. Last year there was some medium-sized corruption scandal, still being investigated I think, but technically the service has been absolutely safe, with the only political interference being some outside meddling about whether homosexuals are accepted as donors or not.

  4. “There are indeed very good reasons why we’d like blood donation to remain a voluntary activity”

    I should say so, compulsory blood donation is totally unacceptable. Or do you mean that there are very good reasons for everyone to get paid (Drs, nurses, porters, drivers, cleaners) except the people who literally provide the lifeblood of the service. I don’t think those reasons are actually that good, perhaps you’d care to spell them out.

    Tim adds: Because we find that paying for blood deters those who currently give voluntarily…..further, that those who give blood for money tend to be people who don’t have very good blood.

    Vide, above, the way in which the buyers of blood decidedly prefer those who give voluntarily….

  5. As Pekka points out above, there’s nothing special about a nationalised blood service. France has one, and has just concluded a 20 year investigation into contamination.
    If you’re of that turn of mind, you might be worried by the infection potential of MacDos. Each burger, apparently, contains bits from as many as 100 cows. If you get a blood transfusion (and a lot of it is used on maternity wards) you might be getting blood from as many as 1,000 people. Still, people, not cows, so that’s alright then.
    Nice turn of phrase that Unison bod has. I rather like the image of those Tory toffs dressing up as Dracula and sinking their fangs into the NHS.

  6. If the UK blood service is world class, why is it that one of the groups it prohibits from giving blood is those who have received blood from the UK blood service?

  7. Potarto: No, it prohibits people who’ve received blood from *any* blood service, anywhere in the world. I’m not saying it *is* world-class, but that prohibition is perfectly consistent with the suggestion that it is.

  8. You are missing the point.

    People do not *give* blood so that every little toerag and wheeler dealer between them and the recipient can make a fast buck.

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