Mathematical modeling of the blood flow with a resolved description of biological cells mechanics such as red blood cell (RBC) has been a challenge in the past decades as it involves physical complexities and demands high computational costs. In the present study, we propose an approach for efficient simulation of blood flow with several suspended RBCs. In this approach, we employ our previously proposed reduced-order model for deformable particles (Nair et al. in Comput Part Mech 7:593–601, 2020) to mimic the mechanical behavior of an individual RBC as a cluster of overlapping spheres interconnected by flexible mathematical bonds. This discrete element method-based model is then coupled with a fluid flow solver using the immersed boundary method with continuous forcing in the context of computational fluid dynamics-discrete element method (CFD-DEM) coupling. The present computational method is tested with a couple of validation cases in which the single RBC dynamics, as well as the blood flow with several RBCs, were tested in comparison with existing literature date. First, the RBC deformation index in shear flow at different shear rates is studied with a good accuracy. Then, the blood flow in micro-tubes of different diameters and hematocrits was simulated. The key characteristics of blood flow such as cell-free layer (CFL) thickness, Fahraeus effect and the relative apparent viscosity are used as the validation metrics. The proposed approach can predict the formation of the migration of RBC toward the tube center-line and the CFL thickness in good agreement with previous measurement and simulations. Furthermore, the model is employed to study the CFL enhancement for plasma separation based on channel constriction. The simulation results compute the CFL thickness downstream of the channel constriction in good agreement with the experiments in a wide range of flow rates and constriction lengths. The original contribution of this study lies in proposing an efficient resolved CFD-DEM simulation method for blood flows with many RBCs which can be employed for numerical investigation of bio-microfluidic applications.