Health and Allied Services, NEC

SIC 8099

Companies in this industry

Industry report:

This classification comprises establishments primarily engaged in providing health and allied services, not described under other classifications.

Industry Snapshot

This segment of the health services industry includes an array of services and occupations that most often do not involve the provision of direct care. Rather, they provide diagnostic services or facilitate the work of physicians and other health care providers. Despite the extreme diversity of establishments in this classification, all enjoy the economic advantages of offering services that are in great demand regardless of economic conditions. The establishments include blood banks; hearing testing services; childbirth preparation classes; health screening centers, except by physicians; sperm banks; osteoporosis centers; medical illustration; oxygen tent services; and plasmapheresis centers.

The classification contains a notable mix of profit and nonprofit organizations. Blood banks, for example, comprise a multibillion dollar industry in which the purified products, although donated, command a high price if sold. Hearing testing services may be available for free at schools or for a fee at private commercial establishments. Most hearing testing is done in schools and colleges, with 10 percent done in hospitals and the rest in private offices and speech, language, and hearing centers. Similarly, childbirth preparation classes are often available through schools, community groups, and other nonprofit organizations, but they are also available from commercial childbirth preparation centers. Health screenings are done by municipal health departments, as well as independent commercial establishments. Unlike the rest of the activities on this list, medical equipment like oxygen tents are profit-making ventures, while medical art and photography may be provided by independent entrepreneurs contracted by medical textbook publishers or others engaged in medical education.

The state of the nation's health has had a great impact on two of the health services in this group--the collection and production of blood. Combined, this sector, which is the most lucrative in this classification, was much affected by the need to test for hepatitis and AIDS. The same concerns hold true for sperm banks.

Organization and Structure

There is a wide variety of activities within the health and allied services group. Different structures govern each activity. In the early 2010s, one leader of the blood market industry was the American Red Cross, which was responsible for approximately 40 percent of the U.S. blood supply. In 2011 the Red Cross had 39 regional blood centers that collected from more than 4 million donors. These donors contributed 6.5 million units of blood, resulting in 9.5 million units of blood products, including platelets and plasma that were sent to approximately 3,000 hospitals and transfusion centers. More than 70 percent of the non-government organization's $3 billion in operating funds came from products and services, including blood-related products. Twenty-four percent came from donations, and the remainder from investments.

In September 2006, the American Red Cross was fined $4.2 million for violations incurred from 2003 through 2005 related to some 12,000 units of blood, as well as blood products. According to the Food and Drug Administration (FDA), the American Red Cross failed to monitor blood donors exposed to malarial regions of the world, "allowing blood and related products to be distributed without proper testing," according to Margaret Glavin, the FDA's commissioner for regulatory affairs. In 2010 the Red Cross reported that "as a result of Red Cross efforts to continuously improve its blood services, the Red Cross has made great strides in improving our systems and processes, and there has been a steady and dramatic decrease in overall problems since 2006." associated with blood collection since 2006."

America's Blood Centers (ABC), was another nationwide network of independent blood centers in 45 states and Quebec, Canada. The organization's mission included blood diagnostic and therapeutic services. ABC collected half of the blood used in the United States through its network of more than 600 sites in 2011, up from 450 in 1999. After President George W. Bush signed the Pension Protection Act of 2006 (H.R. 4), which went into effect on January 1, 2007, exempting independent community blood centers "from paying the heavy-vehicle use tax and excise taxes on fuel and tires used in the collection and transport of blood and on telephones used in recruitment efforts." The ABC saved approximately $1 million per year following the implementation of the act. In 2011 ABC collected approximately 8 million units of blood in the United States and Quebec.

Industry Divisions.
The miscellaneous services provided in the health and allied services industry can be subsumed into two general groups: services provided to physicians and hospitals and services provided to health care consumers.

The services provided to physicians and hospitals include medical photography and art and blood and blood products from blood and plasmapheresis centers. Medical or biological subjects may be illustrated for teaching purposes through photography, graphics, paintings, and three-dimensional models. Medical art and photography appears in books, films, videotapes, and computer graphics. Blood banks provide whole blood and some derived components that are processed, typed, and stored until needed for transfusion. Blood should be used as soon as possible since the number of red blood cells decline significantly after 14 days. At plasmapheresis centers, blood is removed from the body, centrifuged, and the red cells suspended in a solution. They may be re-injected into the donor or into a patient who requires red cells rather than whole blood.

Services provided to health consumers include health screening, hearing testing, childbirth preparation classes, sperm banks, and osteoporosis centers.

Health screening centers, whether private or public, typically focus on particular problems like cancer detection; sexually transmitted diseases; or nutrition, diet, and weight control.

Hearing centers diagnose hearing problems and prescribe treatment. An audiologist uses an audiometer and other testing devices to measure the loudest sound at which a person begins to hear. The audiologist also measures the ability to tell the difference between sounds and the extent of any hearing loss. The results of the tests may be correlated with other medical, psychological, and education test results and a course of treatment determined.

Childbirth preparation classes often follow the principles of the French obstetrician Fernand Lamaze, who advocated avoiding highly medicated childbirth. The method, also known as psycho-prophylaxis, stresses the active participation of the mother through muscle control and breathing, with encouragement and massage provided by her husband, who acts his wife's labor coach.

The fact that sperm can be kept alive for long periods of time in cold temperatures has enabled banks of human semen to be maintained for use in artificial insemination. Licensed sperm banks are members of the American Fertility Society. The Society has revised its guidelines for therapeutic donor insemination of sperm several times to improve selection of donors and decrease the potential hazard for transmitting infectious agents.

As in general medical professions, there are controversies within this classification regarding the right of physicians to refer patients to establishments in which they have invested. In 1993, on the basis of antitrust legislation, the Federal Trade Commission challenged two oxygen and oxygen equipment businesses owned by doctors who referred their patients to them. According to the Federal Trade Commission, 60 percent of the lung specialists in two California counties, Contra Costa and Alameda, had invested in the medical equipment companies. The Commission stated that such "self-referrals," exclude competitors from the market in violation of the law since the doctors can control the referral of patients who need these services. Since other home oxygen companies may not be able to get referrals from doctors, they were unable to compete in the market regardless of quality or price. The Commission and the companies agreed on a settlement, stipulating that some of the lung specialists would have to sell their shares in the company so that no more than 25 percent of the lung specialists in the area would have a connection with the company.

The need to protect the blood supply against hepatitis and AIDS has made the work of blood banks and plasmapheresis centers increasingly complex. To screen against the two diseases, blood centers have added five tests since 1985. At the end of the first decade of the 2000s, 14 tests were performed on donated blood, 11 of which were screenings for infectious diseases. Commercial companies and nonprofit blood centers have acquired computer systems to track donors throughout the country. The American Blood Resources Association set up a nationwide donor referral registry, so a blood center can call a toll-free line to learn if the donor has ever tested positive for the AIDS virus or another condition that would rule him or her out as a donor.

Plasma, which has a worldwide market, is the fastest growing sector of the blood products industry. The technology and training for processing plasma requires a significant investment. Obtaining plasma may involve paying donors. Plasma can be separated into albumin, which is necessary to keep blood vessels from collapsing after an injury; factor VIII, an important blood clotting agent; and immune globulins, which can protect against several diseases.

Leaders in the industry were Armour Pharmaceutical Company in Bluebell, Pennsylvania, a subsidiary of Rhone-Pulence Rorer, a French government-owned pharmaceutical company, and Hyland Therapeutics of Glendale, California, a subsidiary of Baxter International Inc. The Red Cross became involved in the commercial market in 1978 when it took donated plasma from its supplies and used Hyland's manufacturing facilities to turn it into its marketable components. As a result, the Red Cross garnered approximately $100 million of tax-exempt revenue in 1990.

The blood and blood products sector is the most highly regulated sector within this classification. The U.S. Food and Drug Administration (FDA) licenses plasmapheresis firms, as well as the firms that ship their products from state to state. The problems uncovered at a Tacoma, Washington, plasmapheresis center illustrate the risks involved when this type of firm does not adhere to regulations. The firm, AVRE Plasma, received a four-month suspension of its establishment and product licenses in 1992 as a result of operating practices that the FDA termed "dangerous." AVRE sells source plasma to pharmaceutical firms for processing into serum albumin, immune globulins, and other medical products.

While the overall industry is highly diversified, some of the largest sectors at the end of the first decade of the 2000s were the medical services organization sector with 4,839 offices, 79,367 medical professionals, and nearly $11.3 billion in revenues. Next was the nutrition services sector with 2,945 offices, 14,681 nutrition specialists, and $613 million in revenues. Other areas within the industry were health-screening services with 1,383 offices, about 17,265 employees, and $860 million in revenues. Physical examination and testing services accounted for 870 locations, 11,404 professionals, and $711 million in revenues. Blood-related health services included 872 medical offices, a workforce of 13,204, and $900 million in revenues, and the blood bank sector included 752 medical facilities, 21,963 employees, and $2.1 billion in revenues. Other significant sectors were physical examination services per insurance, with 482 offices, and hearing and testing services, with 455 offices. Important, small industry counterparts included blood donor stations; blood pressure testing; plasmapherous centers; medical photography and art; osteoporosis centers; sperm, eye, and organ banks; and childbirth preparation clinics.

Blood donation centers were suffering the ill effects of the economic downturn in the late 2000s as the number of donors fell. With unemployment rates reaching over 9 percent in 2009, blood collection agencies were losing people where they most often found them--in the workplace. According to the American Red Cross, about 80 percent of blood donations it receives come from corporate-hosted blood drives. As a result, in some parts of the country, blood use was running as much as 20 percent above supply and donation levels.

At the same time, blood prices, which normally ranged between $100 and $130 per pint, were rising as more and more tests were required to ensure the safety of blood. In addition, collection agencies were performing more screenings on potential donors to be sure that they were free from infectious disease. For example, in the late 2000s, donors were questioned about their travels to Europe to address the issue of the potential of mad cow disease.

A new market emerging in this industry sector at the end of the first decade of the 2000s was the collection and storage of umbilical cord blood. In 2009, moves were being made in Washington, D.C., to advance "responsible stem cell" use that uses stem cells from an infant's preserved umbilical cord rather than the more controversial research based on stem cells from unborn fetuses. Stem cells from cord blood can be used to treat numerous conditions, including sickle cell disease, several types of leukemia, non-Hodgkin's lymphoma, and Hodgkin's disease. Oldsmar, Florida-based Cryo-Cell International was one of the largest and most established family cord blood banks in the United States in the early2010s..

Current Conditions

According to the U.S. Census Bureau, there were 1,389 blood and organ banks in the United States in 2010. Together these establishments employed 75,739 people who earned a total annual payroll of more than $3.1 million. Annual sales for this industry were approximately $9 million, 70 percent of which came from human blood services. Small categories that contributed to revenues included human organ, bone, and tissue bank services; contributions, gifts, and grants; and health examination and testing services. The states with the most blood and organ banks were Florida, California, and Texas, which accounted for a combined 32 percent of establishments in the industry. They also were responsible for about 24 percent of annual revenues. Other top states in terms of revenue were New York, Pennsylvania, Minnesota, and Ohio.

The United States continued to be the number-one nation in the world in blood plasma services in the early 2010s, accounting for approximately 40 percent of global market share, followed by the European Union. According to a 2012 report by Market Research, "The market for blood plasma products has shown continuous growth in the past years, growing at a CAGR of around 10 percent during 2001-10, and is projected to expand steadily in the years to come."

Workforce

The training required to carry out the duties of the health and allied services listed here varies greatly. Medical illustrators generally have a four-year bachelor's degree, usually from one of the six accredited schools in the United States that offer a degree in medical illustration. Audiologists also have four years of training, but with a master's degree they may acquire the Certificate of Clinical Competence offered by the American Speech and Hearing Association. They also must have 300 hours of supervised clinical experience in a nine-month, post-graduate internship and pass an examination. In contrast to the extensive training required by others in this category, phlebotomists can be trained to draw blood in one to three months. However, much more extensive training is required for the technicians who analyze blood to determine if there are abnormalities, so the medical director of a blood bank is often a pathologist with a full medical degree.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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