Drop in demand for blood causes Red Cross deficit

October 30, 1994|By Norris P. West | Norris P. West,Sun Staff Writer

The loss of $832,000 by the area Red Cross Blood Services division over three months was the most severe short-term deficit by any of the agency's nine U.S. regions in recent memory, according to a spokesman for the service's national office.

"I don't know of any other region experiencing as drastic a dip," said Felix Perez, a spokesman at the Red Cross Blood Services' national headquarters in Washington.

Mr. Perez said the loss resulted from reduced demand for blood products from hospitals and increased difficulty in projecting demand.

He said the problem is faced by all the agency's nine regions, but he did not know why the Greater Chesapeake and Potomac Region was hit particularly hard.

Officials say the financial situation has been alleviated after cost-cutting measures were taken. The agency has eliminated leased cars and car phones for managers, laid off five employees and eliminated catered staff functions and consultants.

The agency also has frozen wage increases, reaching agreements with nurses and phlebotomists. It is negotiating with Teamsters Local 311, which includes drivers of mobile units, mobile assistants and warehouse clerks.

Despite the problems, blood services board members praised the management of Executive Director David L. Simms, who took over in 1991 when the agency had a $3 million deficit.

Henry L. Strong, the board's chairman, said he has confidence in the agency's executive staff. He said the expenditures have been "quite reasonable."

"I remember when I came on the board and David Simms took over. It had been a disaster," said Mr. Strong, adding that the financial problems soon were corrected. "It was like the guy was a genius. At least his management team is."

The shortfall came in the first quarter of this fiscal year, which began July 1. The loss largely was generated in July and August, when the agency lost $747,000. The first-quarter loss followed a deficit of $379,000 at the end of the last fiscal year, leaving the agency behind $1.2 million on Sept. 30, when Mr. Simms sent a letter alerting that the region was facing "serious financial difficulties."

Meanwhile, Red Cross Blood Services faces labor trouble. Bryan Griffin, the negotiator for Teamsters Local 311, said a strike of its 50 members at Red Cross is likely if an agreement is not reached before the current contract expires tomorrow.

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