Rietscha struggles to keep blood supply flowing

October 18, 2010
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The recession is draining Michigan Blood.

President and CEO Bill Rietscha said the two plasma centers in town, which pay their donors, have diverted a significant number of blood donors away from the nonprofit. The centers are owned by a large pharmaceutical company.

“We have lost a lot of donors to the plasma centers. That jeopardizes the blood supply to the immediate community,” Rietscha said. Blood donations are down about 10 percent compared to the previous fiscal year, he added.

“The issue for us has been with the weak economy — people out of work — and particularly for the younger folks; that’s a source of income for them that we can’t compete with,” he said. “That wasn’t so much of an issue when the economy was strong.”

Manufacturing plants traditionally were a strong source of blood donations, he said. But with the recession reducing jobs and claiming entire plants, those donations are drying up, too.

“Our blood donations from auto-related industries is less than half of what it was 18 months ago,” Reitscha said. “That’s been most catastrophic. Where we used to collect 40 units, we now collect 30, and where we would collect 25, we now collect 15. Plus, people are more reluctant to let us in on company time.”

Michigan Blood serves 30 hospitals in the Lower Peninsula. Demand for blood in hospitals, where the recession has diminished utilization, has slipped by 9 percent, Rietscha said. Still, Michigan Blood has been forced to turn to the other 38 members of the Blood Centers of America to keep up.

“We can actually, through them, broker blood from other blood centers throughout the nation,” Rietscha said. “The positive side of that is that it ensures a supply of blood to our communities so we are able to meet our contractual commitments.

“The downside is it is economically unviable for us to do that. The reason we’re struggling right now financially is we’re struggling to get the blood in the door and we have to import into our state from elsewhere at a price higher than what the standard price is. It’s not very financially viable for us.”

Michigan Blood is one of 77 independent, community-based blood centers, which together provide nearly 60 percent of the blood supply in the U.S.

“We are a Michigan-based organization. All of our employees are Michigan-based. All of the blood is collected in Michigan and used in Michigan,” Rietscha said.

With 750 volunteers and 420 employees, Michigan Blood has reorganized staff and endured layoffs in the past year, even as it added Portage to its roster of donation centers in January. Other centers are in Bay City, Midland, St. Joseph, Saginaw and Traverse City, as well as at the headquarters at 1036 Fuller Ave. NE in Grand Rapids.

The nonprofit is planning for no margin in its $40 million budget in the current fiscal year, Rietscha said. Revenue comes from selling blood products to hospitals and from ancillary services, such as testing. Michigan Blood also operates a stem cell/cord blood bank and a bone marrow program.

Since taking the top post almost two years ago, replacing the retiring Norman L. Felker, Rietscha has rebranded and revamped the nonprofit previously known as Michigan Community Blood Centers.

“Previously, we really behaved and acted like four or five different centers kind of loosely connected,” Rietscha said. “Now we are one organization, one leadership team, one vision, one mission, one set of standards statewide — and that’s really been the key to our change.”

Rietscha instituted cost-cutting measures, such as consolidating telemarketing for donor recruitment and tightening supply usage. That included some layoffs.

“We had to make some very significant changes to cost structure, over the past six months particularly,” he said. “We don’t have much opportunity for revenue increase any more. Our revenue is actually declining because of hospital demand going down and our market is so competitive. So our focus right now is really in controlling our costs.”

At the same time, Michigan Blood has re-organized governance and management. Rietscha has brought in vice presidents from the pharmaceutical, health care and food industries for fresh viewpoints.

Market share has grown from 17 percent to 25 percent, and Rietscha said that is where Michigan Blood’s future market strategy lies.

“If we would have not grown and added those new clients, we would have had a dramatic drop in revenue.”

Michigan Blood also installed new software that has sharpened telemarketing efforts to recruit donors, who now can be pinpointed by whatever blood type may be running low.

“Before, we just kind of tried to get anybody we could through the door,” Rietscha said. “Now our goal is really to get in the exact blood types that we need.”

When donations dipped as much as 15 percent below target over the summer, Michigan Blood launched a campaign that played on the travel industry’s “Pure Michigan” tagline. It collected contributions such as hotel stays and tickets for athletics events to use as incentives for donors.

But one thing that Michigan Blood cannot do is pay them. “It’s actually an FDA (Food and Drug Administration) rule. Blood has to be labeled as to whether it comes from voluntary donors or paid donors. In the U.S., the standard is right now that all hospitals want voluntary donor blood.”

Rietscha grew up with a brother and two sisters, the offspring of Bernard and Genevieve Rietscha, in the small Pennsylvania borough of Carrolltown. “Three out of four of us actually got college degrees. It was unheard of for that area,” Rietscha said. “The goal back then was to get a high school degree and get into the mines.”

Rietscha’s late father was a coal miner who had a huge influence on his son. “He grew up on a farm. He had to bail out of school in the sixth grade because his dad died early, and with 11 kids, he was one of the older ones and basically helped run the farm with his brothers.,” Rietscha recalled.

“He transitioned from that into being a coal miner. Coal mining is a pretty hard job. And he eventually got silicosis — black lung — and that’s what contributed to his death.

“When I was 12 years old, he actually took me into the coal mines during a change of shift so I could see the guys coming out with dust all over their faces and dirty and hacking up chunks of black lung and all that. Then he took me down in the coal mine. I remember him stopping and looking at me, and he said, ‘Is this how you want to spend the rest of your life?’ And at that moment, I knew: I’m doing something else with my life.”

Rietscha considered becoming a doctor, but in another life-shaping experience, he found himself a husband and father at the age of 19. By 22, he had two daughters and soon had a third. Becoming a pharmacist became a more achievable goal.

“When I was going to pharmacy school — carrying 18 pretty hard credits — I was also working 20 to 30 hours a week to support two small kids and a wife, so that gave me a pretty good grounding in life, of what work ethic is.”

He was planning on a retail pharmacy career, but a mentor suggested a graduate degree would open more doors. Rietscha holds a B.S. degree in pharmacy from the University of Pittsburgh and a doctorate in clinical pharmacy from the University of Cincinnati. He later obtained an MBA from Western Michigan University.

He started his career as a clinical pharmacist at Kalamazoo’s Bronson Methodist Hospital, then moved into management roles there. His career blossomed when he joined what was then Blodgett Memorial Medical Center as director of pharmacy.

“That was really a good change for me, because I became associated with some very like-minded, like-valued, like-spirited individuals that really clicked, and I really had a lot of opportunities made available to me — good mentorship,” he said. “I was able to then transition from the pharmacy world, the clinical world, into the administrative world at Blodgett.

“Blodgett was really where I began to thrive. (Blodgett CEO) Terry O’Rourke, (COO) Bruce Hagen and those guys saw something in me and gave me opportunities. They taught me my management mantra: results with heart. You’ve got to get the bottom line and productivity, but they never let me forget that this was about people and for people.”

Rietscha survived the 1997 merger of Blodgett and Butterworth hospitals into Spectrum Health , eventually becoming vice president of facilities. He oversaw planning for the hospital system’s build-out of the Michigan Street hill, a nearly $1 billion investment.

Rietscha left Spectrum in 2008 and then discovered that Michigan Community Blood Centers, where he had been a board member in the 1990s, was seeking a new leader. “It just felt right,” Rietscha said. “Everything that I have learned and done in my career seems to have led up to this moment to enable me to do what I’m doing now. It is an incredible experience. You can’t hardly find a more feel-good mission than what we have: helping people make a life-saving difference.

“This organization, it was at a crossroads. My leadership now is intended to take this organization from being a good organization to transforming it into a great organization.”

If Rietscha is a mild-mannered health care administrator by day, on nights and weekends his daredevil side appears. He is an avid Harley-Davidson rider, restores vintage muscle cars and has dabbled in mountain climbing. “You find out a lot about yourself when you are hanging by your fingertips and toes with 3,000 feet of air underneath you on a rock ledge,” said Rietscha.

“The biggest ‘aha’ for me, being the CEO of this organization, is a recognition and understanding of where that blood comes from,” Rietscha said. “The relationship we have with communities and donors is so, so intimate and so important. To have them willingly give us a part of their body to help a stranger is really an incredible relationship. That’s been one of the most heart-warming and rewarding parts. It’s pretty amazing.”

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