Producer Price Indexes

Producer Price Index Introduced for Blood and Organ Banks—NAICS 621991

To expand coverage of the service sector in the Producer Price Index (PPI), the Bureau of Labor Statistics (BLS) introduced new price indexes for Blood and Organ Banks—North American Industry Classification System (NAICS) 621991—in January 2007. Data for these indexes, which date back to June 2006, appear in table 5 of the PPI Detailed Report and are available online through the BLS website.

This industry is part of NAICS sector 62, Health Care and Social Assistance, and further classified in the subsector for Ambulatory Health Care Services, NAICS 621. Industries in this subsector provide health services directly or indirectly to ambulatory patients and usually do not provide inpatient services. Health practitioners in this subsector provide outpatient services, with the facilities and equipment usually not being the more significant part of the production process.

NAICS 621991 includes establishments primarily engaged in collecting, storing, and distributing blood and blood products and storing and distributing body organs. The types of establishments covered in this industry include:

Non-profit organizations are responsible for most of the revenue earned by blood banks. Independent blood banks and donations at hospitals make up the rest of the industry.

OPOs are non-profit and operate in service areas designated by the federal government. Service areas may include an entire state, several states, or only part of a state. There are 58 OPOs in the United States.

The services within NAICS 621991 for which indexes are available include:

To measure changes in prices for human blood services, BLS asks companies to report the monthly price received per unit of human red blood and whole blood, human blood plasma, human blood platelet, and other blood services. Other blood services include the provision of white blood cells, the price of which is also measured per unit. The most important price-determining characteristic in the blood bank industry is the type of blood product provided. Included in the fees charged to hospitals are processing charges for the collection, testing, labeling, storing, and shipping of blood. Blood products requiring more extensive testing or processing are more costly, resulting in higher prices.

Blood services begin at the donation site where blood is drawn or apheresis is used. Apheresis (or pheresis or hemapheresis) is a procedure in which blood is drawn from a donor and separated into components, some of which are retained, such as plasma, and the remainder is returned by transfusion to the donor. Extra blood is collected for testing at this point. Blood is tested for ABO group (blood type) and Rh factor (positive or negative). The Food and Drug Administration mandates certain screening tests for blood—including tests for Hepatitis B surface antigen (HBsAg), Hepatitis B core antibody (anti-HBc), Hepatitis C Virus (HCV) antibody (anti-HCV), Human Immunodeficiency Virus (HIV) types 1 and 2 (anti-HIV-1 and anti-HIV-2), Human T-Lymphotropic Virus (HTLV) types I and II (anti-HTLV-I and anti-HTLV-II), serologic test for syphilis, Nucleic Acid Amplification Testing (NAT) for HIV-1 and HCV, and NAT for West Nile Virus.

To measure changes in prices for human organs, BLS asks OPOs to report transaction prices per organ. The most important price-determining characteristic is the type of organ provided. The recovery of organs is a surgical procedure done in an operating room. The recovered organs are then transported to the various hospitals or transplant centers where the recipients are waiting. Organs may be transported by OPOs or tissue banks, or may be shipped by courier. OPO services are usually purchased by health care providers such as transplant centers, hospitals, and physicians, or by individuals.

To measure changes in prices for tissues, BLS asks tissue banks to report transaction prices per tissue. For tissue banks, the quantity and the form of the tissue provided is price determining. The recovery of tissues may be a surgical procedure done in an operating room or minor medical procedure performed at designated medical facilities. The recovered tissues are then transported to the various hospitals or transplant centers where the recipients are waiting. Tissue bank services are usually purchased by health care providers such as hospitals, physicians, dentists, or by individuals.

Blood banks, Organ Procurement Organizations (OPOs), and tissue banks may alter the services they provide at any time. These changes take the form of either additional tests or changes in processes. As these tests become available they may be mandated by trade associations or the government through the Food and Drug Administration (FDA). When mandated by trade associations, member banks would be required to perform the new test or lose membership in the association. When a new test or process is mandated by the FDA, all banks are required to perform the new measure.

For quality adjustment purposes in the PPI, tests and processes will be handled in different ways. Tests provide more information about the blood, organ, or tissue. For example, a new test could be initiated that is a more comprehensive test for HIV. Processes refer to physical changes in a blood, organ, or tissue product (for example, leukoreduced blood is whole blood that has had the white blood cells (leukocytes) reduced to minimize transfusion reactions).

Price changes due to the addition or subtraction of tests—when more or less information is provided about the blood, organ, or tissue product—will not be quality adjusted in the PPI because this does not constitute a change in the purchased product. Any product not passing screening tests is destroyed and it is never purchased.

Price changes due to changes in processes—that is, a physical change in a blood, organ, or tissue product—will be quality adjusted by the PPI. New blood products created due to a change in processing will usually be distinguished by the development of a new HCPCS code. When a new process has sufficiently penetrated the market, the PPI will gather cost data from reporting blood banks so that the quality adjustment can be completed.

Last Modified Date: February 16, 2007

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