Biotech
Monday, November 27th, 2023 3:09 pm EDT
Key Points
- Financial Overview of the American Red Cross: In 2022, the American Red Cross operated with a substantial budget, generating over $3.2 billion in operating revenue and incurring just over $3 billion in expenses, as per its financial statements. Contributions, while significant, only constitute about a third of the organization’s total revenue.
- Biomedical Services as a Major Revenue Source: A substantial portion of the American Red Cross’ revenue, just over $1.8 billion, is derived from “Biomedical services.” This involves the organization collecting blood from donors and selling it to around 2,500 hospitals and medical facilities across the United States. The pricing details for these blood products are proprietary, but the organization clarified that it does not charge for the blood itself; instead, it is reimbursed by hospitals and transfusion centers for the associated costs.
- Operational Expenses and Challenges in Blood Collection: The financial statements reveal that a majority of the American Red Cross’ operating expenses, slightly over $2 billion, are allocated to collecting blood. This expenditure exceeds the revenue generated from selling the blood by approximately $139 million. Michael Thatcher, CEO of Charity Navigator, explains that drawing blood involves medical interventions, certifications, and the preservation of blood, all of which incur costs. The complexities of ensuring the cleanliness and safe transportation of blood contribute to the significant expenses associated with blood collection for the American Red Cross.
The American Red Cross, renowned for its humanitarian services, operates on a substantial budget, with over $3.2 billion in revenue and just over $3 billion in expenses in 2022. While contributions constitute about a third of its revenue, the majority, over $1.8 billion, comes from “Biomedical services.” This involves the organization collecting blood from donors and selling it to approximately 2,500 hospitals and medical facilities nationwide to generate revenue and cover costs.
The American Red Cross, when questioned about pricing details, stated that the prices for blood products are proprietary information and determined by various factors, including purchase volumes by blood type, service levels, and delivery requirements. The organization clarified that it does not charge for the blood itself but is reimbursed by hospitals and transfusion centers for the costs associated with providing blood products.
Interestingly, a significant portion of the American Red Cross’ operating expenses, just over $2 billion, is allocated to the collection of blood, surpassing the revenue generated from selling the blood by approximately $139 million. According to Michael Thatcher, CEO of Charity Navigator, drawing blood involves medical interventions that necessitate certification levels from the individuals involved, as well as the preservation and transportation of the blood, all of which incur costs. The American Red Cross continues to be a prominent charity, often chosen for fundraising efforts by entities ranging from the White House to corporations, the NFL, and Hollywood A-listers in the aftermath of disasters.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/26/why-the-american-red-cross-makes-money-from-donated-blood-.html
