[Alexandra Romero, Guest Author] Recently, I had the opportunity to attend one of the largest events related to the Stem Cell and Regenerative Medicine Industry – Phacilitate/World Stem Cell Summit 2018. During the Plenary Super Session, Co-Chair Anthony Davies heavily discussed on a series of “fireside chats” the extremely high cost of some of the new stem cell-based treatments that have been recently approved. These conversations set the tone for one of the most discussed topics throughout the conference that gathered a great number of leaders not only from the medical and research fields, but also from the business sector. The “elephant in the room” seemed to finally be acknowledged, at least to some extent.
On the other hand, at the Cord Blood and Perinatal Stem Cells sessions, the big question on everybody’s mind was whether there is anything remarkably new and promising in the horizon that will allow the industry to stop its slow but steady decline caused by the lack of recent advancements. It was clear to the attendees (cord blood banks, investors, and research scientists), that the market has been experiencing a slow and chronic decline over the past 5 years, and there is a serious need to offer more options in terms of innovative and accessible treatments in order for the industry to remain sustainable in upcoming years. There has been a rapid evolution in the sources to obtain and utilize stem cells, which have been thoroughly addressed by Bioinformant in previous articles.
The bottom line is that thousands of families around the world have made the financial investment, sometimes with personal sacrifice, to have their babies cord blood stem cells stored, in hopes of one day being able to use them in a life-saving treatment. “Hope” is a key word here. We know that cord blood banking can be a high-priced service, especially if that includes long-term storage, genetic testing, and possibly cell expansion as the current trends to diversify cord blood services continue. Unfortunately, only a reduced percentage of these families actually have the means to afford a stem cell transplant with their stored cells and all the additional out of pocket expenses that accompany such major treatment.
In consequence, private and public cord blood banks are experiencing different threats to their current business models, becoming more evident that a significant change needs to take place in order to evolve. Both face similar problems:
1) Utilization rates in some cases can be of less than 1% per stored unit, extremely low for the amount of units stored worldwide.
2) Other available sources of stem cells (dental pulp, placenta, adipose tissue, Car – T cells, etc.).
3) A lack of affordability/accessibility of transplants and treatments, are combining to create a perfect storm.
One could infer that number 1 is a direct consequence of number 3, but where does that leave us standing?
The diversification of the cord blood services seems to be the best way forward. That means, plain and simple, to continue pairing cord blood storage services with other services that will provide added value to families hoping to find in their cord blood stem cells a practical and feasible solution to a difficult situation in the future. One of these perfect complements can now be found in an unexpected place: The Specialized Medical Insurance Market.
For decades, traditional and conservative Insurance Corporations have not considered it a necessity to cover stem cell transplants and therapies within regular health insurance plans. Most clients do not even know they are not covered should they ever need a stem cell transplant, which can be surprising, regardless of the experimental nature of some of these treatments.
The good thing is that a new class of Insurance Provider is emerging, lead by a new generation of experts in the fields of risk management and insurance that believes in technology or Insurtech to deliver an innovative approach to health insurance, changing the expectations, needs, and preferences of the consumers, by focusing on providing a quality service based on technological efficiency to simplify the way in which people purchase insurance services and the type of plans currently available to cover new medical advancements and therapies, including stem cells and regenerative medicine.
The new motto is to think one step ahead, to go hand in hand with new technologies, and make them accessible and affordable to everybody, not just a small elite.
What does this mean for the cord blood banking industry?
The fact that this new class of insurance providers has taken notice of the major gap existing in the health insurance market and responded by developing new insurance products specifically designed to make cord blood stem cells transplants accessible to families will soon become the most reliable option worldwide to increase the utilization rate of cord blood units and provide clients with a newly found peace of mind. These insurance products will ultimately become another “perfect complement” for cord blood banking services, just as genetic testing and cell expansion are now, offering the industry a much needed doorway to transformation and growth.
What are the immediate benefits of cord blood banks partnering with an Insurance Company providing Cord Blood Stem Cell Coverage?
– Offering this alternative would differentiate a cord blood bank from others just limited to processing and storing cells, without worrying about whether or not their clients will actually be able to afford a treatment with those stored stem cells.
– It represents the opportunity to develop a new line of business and revenue, by offering an entirely new product in the market that’s the perfect complement to cord blood banking services. This new stream of revenue, if invested back into the operation would allow the expansion and utilization of new equipment and personnel to grow in other areas related to biobanking and processing services.
– It adds value in return of investment to the stem cell storage service, delivering certainty to current and future clients that they will be able to easily access a stem cell transplant using their stored cells at that bank if needed. Not relaying anymore on hope or the promise of a future possibility.
– It would progressively increase their utilization rates, creating a ripple effect not only on the business front but also on the medical and research side, stimulating the development of new treatments and the motivation to continue investigation.
– For those cord blood banks with an entrepreneurial spirit and investors with a vision, the possibility of partnering with an insurance provider that is willing to listen and cater personalized insurance packages tailored to different cell products and its utilization would also create a complete game changer.
A good example is Smart Stem Plus developed by Smart & Smart, LP, an international insurance policy that covers approved treatments with cord blood stem cells worldwide and can be easily acquired and renewed anywhere in the world, online, from the comfort of your laptop, tablet or smartphone.
Smart Stem Plus offers different plans to cover the needs of each family group, which can be paid yearly or monthly in low installments, depending on the client’s possibilities, helping to make treatments significantly more accessible for all those families that have stored their stem cells or are about to do so, but have no idea how they could afford a transplant.
Who is eligible?
1) Individual: The policy covers the child or children in the case of multiple births, which stored their own stem cells.
2) Family: The policy not only covers the child, but can be extended to biological parents and siblings.
What is covered?
All expenses related to a stem cell transplant, including medical, surgical and hospitalization services, as well as any major diagnostic tests, outpatient services and prescribed medications, up to the insured amount.
How does it work?
In terms of business models, Smart Stem Plus offers simple and flexible commission based models depending on the size and location of the cord blood bank, with no additional operating cost to offer the policy. All purchases are done from a separate and secure online platform, with no hassle for the client or the cord blood bank.
This is just the beginning on a developing pipeline of specialized medical insurance products that will surely revolutionize the industry as we know it and cord blood banks can be at the forefront by providing the necessary bridge between their clients and these newly accessible options.
We know we have challenges to meet head on, but let’s not forget that the focus should be on the clients or future patients first. Cord Blood Banks that want to transform and evolve into a new market reality should not just conform to be a “fridge” or “storage space”, they have the intrinsic responsibility to help make those cord blood units useful to their clients.
Guest Author: Alexandra Romero has led the international department of the New England Cord Blood Bank for over 8 years as VP of International. She knows well the challenges of the cord blood banking industry worldwide. Recently, she took on a new challenge by accepting to be the driving force behind Smart Stem Plus, an innovative insurance product that covers all expenses related to a transplant or therapy with cord blood stem cells.