Thursday, January 28, 2010

A bloody good idea

You would think the world of medicine and finance don't mix... Well, not until now...

The following is an idea I gave to a market development head of an organisation in the business of stock and commodity exchanges. I got selected for this company based on this idea and many others I gave, but I have declined the offer. If this idea is indeed implemented, I would have at least managed one of my ideas to actually take off and see it in the real world.

Problem: Hospitals need a regular supply of “whole blood” and “packed cells” for giving it to patients. Maintaining a constant supply of these of the right blood type at the crucial life/death scenario is difficult.
Idea/Solution: Trade blood contracts on the exchange.
Buyers: Hospitals
Sellers: Blood banks, NGOs that do Blood donation camps/drives.
·         Helps hospitals get the required quantity and right type of quality tested blood in advance.
·         Helps hospitals save more lives and being more reliable.
In India, during a medical emergency, the onus is on the patient's relatives to arrange for replacement of blood. India has many blood banks, all functioning in a decentralized fashion. In the current system, there is no tool to find number of blood donors of the required blood group in current time and place, there is no interaction between blood banks, no exchange of blood or its components.
“Whole blood” is the blood available in human beings. Whole blood is extracted from the body during blood donations. The human blood has both solid parts (Red blood cells, White blood cells, Platelets, etc) and liquid parts (called serum). The whole blood can be stored upto a period of 15-21 days at 4°C. Whole blood is given to patients in case of major blood loss as in the case of accidents. The cost of a pint (Indian pint = 350ml) of whole blood is approximately Rs.650. This cost is not for the blood, but for the testing, transporting, storage and personnel cost.
Whole blood can also be separated into components and be stored. Certain components of the blood need to be given to patients in certain cases. Whole blood minus the liquid parts is called “packed cells”. Packed cells are given to patients usually in OBG cases. The cost of a pint (Indian pint = 350ml) of packed cells is approximately Rs.650-700 (slightly higher due to separation/sedimentation charges)
5.1 million units of blood are collected every year in India. The demand of blood is very high and there is a deficiency of 30-40 percent of blood as per WHO norms.
There is also a supply demand gap in the different states and areas. The main proposal of this idea is to make the commodity exchange as a marketplace for buyers (hospitals) to buy blood from the sellers. The sellers have expertise in procuring fresh blood, testing for diseases, classification based on blood types and storing them. The buyers can buy the required quantities of the right blood type from the sellers. This will enable hospitals to save more lives and become reliable from a patient’s point of view.
                This idea will enable the suppliers (Blood banks and NGOs) to try to increase their sourcing and increase voluntary blood donations in India. The suppliers will try to have captive donors and contact them for regular donations which will boost the blood supply available in India and close the supply demand gap.
Types of instruments (future/option) and contract specifications are to be decided.
Constraints/Challenges: Hospitals need a license to buy and store blood from the MCI (Medical Council of India).

Market size: There are a total of 2609 blood banks in India as of 30th June 2009 out of which there are 753 private hospitals with blood banks.

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