Cord Blood Banking Further Legitimizes Health & Wellness Platforms

NOV 29

The US Healthcare industry is continually striving for innovative ways to curb rising costs.  According to the Centers for Disease Control and Prevention, healthcare costs for chronic disease treatment account for over 75% of national health expenditures.   More and more statistics are showing the potential cost reductions which could result if advances were made in preventing chronic conditions; consider the following:

  • A one percent reduction in the adult smoking rate could result in 30,000 fewer heart attacks, 16,000 fewer strokes, and save more than $1.5 billion over five years [Circulation, 1997]
  • $96 billion in total annual public and private health care expenditures are attributable to smoking [CDC, 11/18/2008]
  • If just 10 percent of Americans began walking regularly, t he cost of heart disease treatment could be reduced by $5.6 billion [Critical Pathways in Cardiology, 12/2004]
  • Jumping from 9.4 percent to 25 percent of total Medicare spending, obesity among Medicare beneficiaries doubled between 1987 and 2002, but the share of spending dedicated to treating obese beneficiaries tripled [Health Affairs, 2006]

Employers, payers, and providers are adopting preventative health and wellness solutions to curb these escalating costs.  The numbers are convincing and it is evident a cultural shift is underway.  Employers are adopting onsite healthcare clinics, providing incentives for coaching programs, and investing in multiple health and wellness offerings.  Payers are seeking to offer screenings, coaching, and fitness incentives among others, with this week’s news that Humana has offered to acquire Concentra for $790 million proving that prevention continues to be top of mind.

As a subsector of healthcare, health and wellness is thriving in large part because of preventative solutions.  Here is yet another data point on a lesser known (but equally effective) area of preventative care:

More than 4 million babies born in the US each year and more than 70 disorders which can be treated by the stem cells from the blood of umbilical cords thus new industry has evolved; Cord Blood Banking.  To date, cord blood transplants have been used to treat leukemia, lymphoma, blood disorders and some genetic diseases.
  • Today, expecting parents are paying out-of-pocket up to $3,500 by the time a child reaches the age of 21.  Even the US Health Services budget for the past three years totaled more than $36 million to build up the public cord blood stem cell bank.
  • Many of the leading private bank companies have partnered with physician and insurance companies to provide counseling and education on the availability and opportunity at hand.  For example BlueChoice HealthPlan of South Carolina includes in its Medicaid plan for expecting women, cord blood banking counseling and education.   Further some states, like Texas require education and information to be delivered to women during gestation regarding cord blood banking and donation options.
 

As preventative health continues to be top of mind for Centers for Medicare and Medicaid Services (CMS) and current health reform initiatives, TripleTree is closely watching emerging areas like cord blood banking and will include ongoing assessments of these types of treatment platforms in future blogs and research.  Some things to consider:

  • Could payers in the future offer discounts for those parents who choose to store cord blood?
  • Will the health and wellness industry continue to expand and thrive into other “out of box” industries as the way of life in the US shifts?
  • Will preventative care be a solution for the US’s escalating healthcare costs?
  • Is Humana’s acquisition of Concentra an early step toward preventative health for payers?
 

Let us know what you think and have a great week!

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Joanna Roth