Expectant parents have a number of big financial decisions to make. Increasingly among them, what to do with baby's cord blood.
Cord blood is a hot commodity. Taken from a newborn's umbilical cord shortly after birth, it's a rich source of stem cells that can be used to treat dozens of disorders, including several forms of leukemia, lymphoma and anemia. Parents have the option to discard it, donate it or store it with a private cord blood bank.
Private cord blood banks store the blood for a fee, in the event that the family might need it in the future. The banks also let families donate the blood for free, where it can be matched with patients in need or used for medical research.
The pitches for cord blood banking, particularly for private banking, are everywhere — hawked at tables at baby fairs, in brochures in doctors' waiting rooms, on pop-ups in pregnancy apps and through ads in parenting magazines. July is even National Cord Blood Awareness Month. But doctors urge caution before signing up for private cord blood storage.
"What I tell parents is, this is a choice — and you should make an informed choice," said Dr. Sergio Giralt, the immediate past president of the American Society for Blood and Marrow Transplantation (ASBMT).
Private cord blood banking can be expensive. Depending on the bank, current promotions and whether you're storing cord blood, cord tissue or both, initial processing fees can run from roughly $500 to $2,500, with annual storage fees of $100 to $300 each year thereafter. That's no small change, considering the USDA estimates middle-class parents already spend $12,940 on baby during the first year, a figure that doesn't include the cost of giving birth or starting a college savings fund.
Let our news meet your inbox. The news and stories that matters, delivered weekday mornings.
Private banks may waive some or all of the fees if clients have a family member who stands to benefit from the banked cells, though the criteria for qualifying — and the savings — vary from bank to bank. Donation to a public bank is free.
Doctors say there's good reason for parents-to-be to consider taking some action on baby's cord blood.
"It's a precious resource," said Dr. William Shearer, a professor of pediatrics and immunology at Baylor College of Medicine in Houston. But much of that resource is wasted. "Ninety percent of cord blood is discarded still today, and this is a life-saving treatment for a lot of people," said Jen Bruursema, senior director of global healthcare communications at Cord Blood Registry, a private bank in San Bruno, California.
The chance of baby later benefiting from his or her own banked cord blood is currently less than 0.04 percent, according to the ASBMT. Not only is that because the diseases currently treatable with cord blood are fairly rare, but with many, the child's cord blood would be unusable because those stem cells contain the same genetic defects, said Shearer, who co-authored the AAP policy statement.
"There are a lot of advertisements and incentives to have a child's cord blood banked on the idea that this will be some kind of biological insurance," he said. "That's totally unrealistic."
For patients, the chances of finding a match among donations is high. A 2014 study in the New England Journal of Medicine found that, depending on a patient's ethnic background, 66 percent to 97 percent can find a suitable match among donated umbilical cord-blood units or live bone-marrow donors in the National Marrow Donor Program's Be the Match Registry.
The best case for private banking is if there's already a family history of one of the diseases currently treatable with cord blood, said Giralt, who is also chief attending physician of the adult bone marrow transplant service at Memorial Sloan Kettering Cancer Center and a professor of medicine at Weill Cornell Medical College. A baby might be a match for an afflicted family member, now or in the future. "The chance of using it, although not high, is within reasonable odds," he said. Talk with your doctor about those possibilities.
Banks say parents should also consider potential future applications. Researchers are assessing whether the stem cells from cord blood could be useful in treating conditions including cerebral palsy and autism, Bruursema said. "What are the possibilities down the road?" she said. "Research is moving at such a fast clip."
Advancements could make banking a better bet down the line but may hold less sway for those currently expecting. "That's a really big promissory note," said Giralt. "Don't bank if you think this is going to be the cure of diabetes or Alzheimer's 20 years down the line."
It's also smart to assess the bank, whether you're donating publicly or storing the blood privately. Samples must be handled properly to remain viable, said Shearer. Ask about procedures for collection, transport and storage, and whether blood is screened for defects before storage. Check to see if the bank is accredited through a group such as the Foundation for the Accreditation of Cellular Therapy at the University of Nebraska Medical Center in Omaha, said Giralt—that means its facilities, personnel and procedures meet high voluntary standards.
Keep in mind that collecting baby's cord blood for either donating or storing isn't always an option. Private banks may require advance notice to send a collection kit, while public banks don't operate in all areas or collect from all hospitals. Birth circumstances can also limit the amount of blood collected, if it can be collected at all, said Giralt. Doctors and nurses may need to focus on the baby. "You don't want your ob/gyn distracted," he said.
Kelli B. Grant, CNBC
Kelli B. Grant is a writer covering personal finance and consumer spending for CNBC.com.
Prior to joining CNBC.com, Grant was the senior consumer reporter for MarketWatch.com and SmartMoney.com. Her work has appeared in The Wall Street Journal, The New York Times, SmartMoney, Kiplinger's Personal Finance, Good Housekeeping, Real Simple and Family Circle, among other publications.