Santa Rosa Memorial Hospital and Petaluma Valley Hospital are extending a deadline for blood suppliers to bid on the hospitals' contract.

The two hospitals, which had been expected to announce a contract today, are seeking a less expensive source of blood. They want more time to receive bids from suppliers and have pushed back the deadline to mid-June, said Tom McHugh, director of lab services for the hospitals.

The hospitals notified longtime supplier Blood Bank of the Redwoods in late April that they planned to terminate its contract, effective July 29.

The two hospitals, operated by St. Joseph Health System-Sonoma County, had been attempting to negotiate lower prices since last fall when the blood bank implemented its annual price increase, McHugh said.

While they tried to negotiate, the hospitals refused to accept the rate hike and continued to purchase blood at the old price, he said.

The blood bank said Thursday it is now owed $50,000 by the two hospitals. The hospitals have agreed to pay the bill, McHugh said, "even though we didn't think it was fair."

Blood bank spokesman Kent Curley said its prices are reasonable and fall within the middle of blood bank pricing in Northern California.

"Certainly, it is their obligation to cut costs wherever they can," he said, "but our pricing has such minimal margins and we have such great efficiencies that we can't cut any more."

The nonprofit Santa Rosa blood bank, the only major blood center on the North Coast, has supplied blood to the hospitals on one-year contracts for nearly 60 years, Curley said.

The two hospitals sent a 90-day notice to terminate their contract with the blood bank April 29, and have since sent requests to several other blood suppliers for bids, spokeswoman Katy Hillenmeyer said.

The blood bank is one of the bidders, but St. Joseph Health would not release the number or names of other bidders. The hospitals "don't want to compromise the bidding process," Hillenmeyer said.

Other suppliers are likely to be cheaper because the local blood bank charges higher prices than any of the other suppliers that sell blood to St. Joseph Health's 12 other hospitals, McHugh said. The difference can range from $50,000 to $100,000 a year, he said.

"The blood cost per day is highest in Sonoma County, compared to all our other hospitals," McHugh said. "We're about 20 to 25 percent higher than the average cost at all St. Joseph hospitals per patient."

Memorial and Petaluma Valley hospitals had also been trying to suggest ways the local blood bank could "drive down its internal costs and pass the savings on," he said.

"Everybody is struggling financially," McHugh added, listing problems at St. Joseph hospitals including recent layoffs and unit closures at Memorial.

The contract with St. Joseph Health accounts for 25 percent of the blood bank's annual revenues, said Cathy Bryan, chief executive of the Santa Rosa blood bank.

You can reach Staff Writer Shadi Rahimi at 521-5280 or shadi.rahimi@

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