First, relax and take a deep breath!! Any time there is blood in the urine, symptoms of a UTI but no bacteria, bladder cancer needs to be ruled out. Tests for cells in the urine can indicate the presence or absence of bladder cancer, but there are a LOT of false positives and false negatives and they are usually used only in conjunction with other tests. The only was to test for sure is with a TURB (transurethral biopsy of the bladder) which is done under general anesthesia. Cystocopy, where the urologist uses a small camera just to look inside the bladder, is not usually done under anesthesia. I suspect that she is having a TURB.
The urologist will take small samples of the bladder lining and they will be sent to a pathologist who will make the final determination/diagnosis. Believe me, she wouldn't want to do this without anesthesia (although some have done it).
A blood test wouldn't give any information about the presence or absence of bladder cancer.
Rest assured that this is the appropriate procedure in your sister's case. Until the results are back she will not know what the situation is. It is not a major deal at all, and a very good idea.
We will keep our fingers crossed!!
Sara Anne