SAN BRUNO, California (AP) - An increasing number of parents who want to do everything possible for their children's health are paying more than $ 1,300 each to have umbilical cord blood, which is rich in stem cells, stored in freezers.

For-profit cord blood storage companies report record sales of their blood extraction kits, which are marketed as a sort of an insurance policy against diseases that newborns might develop in the future. They also charge annual storage fees between $ 45 and $ 95 to keep the blood frozen at minus 400 degrees Fahrenheit (minus 240 C).

Expecting parents hope the blood may one day be available for tailor-made therapies for their children, banking on the knowledge that a body will be less apt to reject treatments originating in cells it produced while in the womb.

Extracted with a syringe from a baby's detached umbilical cord a few minutes after birth, the blood contains plenty of stem cells, which many scientists believe will one day enable the repair and regeneration of disease-ridden tissue.

In rare circumstances, these stem cells have already proven useful. About 500 people a year - mostly leukemia patients - have received transplants of cord blood-derived stem cells that help regenerate healthy bone marrow.

But some operators of nonprofit cord blood banks say its a sham to charge parents to store this blood, since existing treatments using the blood are quite rare and other therapies based on stem cells are years away.

They insist that public cord banks provide the same service as private banks without cost to parents. Insurance doesn't cover private storage fees, but will pay public banks for cord blood units for transplants.

"This is like taking insurance against a lightning strike," John Fraser, director of the nonprofit UCLA Umbilical Cord Blood Bank, where donated blood can go to any eligible patient. "The odds are extremely remote that your child will ever benefit from cord blood."

The American Academy of Pediatrics also advises against paying private companies to store umbilical cord blood. "No accurate estimate exists of the likelihood of children to need their own stored cells," the academy tells its member doctors.

Indeed, not one of the 20,000 parents who stored cord blood with the for-profit Cryo-Cell International Inc. of Clearwater, Florida have requested the units for transplants. Competitor Cord Blood Registry of San Bruno has shipped just 14 of the 30,000 units it stores to hospitals for transplants. In all, there are about a dozen for-profit cord blood storage companies.

"They are playing into the vulnerability of a pregnant family," Fraser said of the private blood banks' marketing materials, which advertise that newborns' cord blood has the potential to better treat leukemia, sickle cell anemia and other diseases.

Still, for mothers like Melissa Segal of Studio City, the $ 1,295 she paid Cord Blood Registry two years ago to store her son Daniel's cord blood and the $ 95 annual fee she continues to submit buys her peace of mind.

"It's the best money I've ever spent," said Segal, who quit her law practice to care for her son. "I have no regrets."

Segal, who is eight months pregnant, believes Daniel's cord blood could someday help treat her second child, a girl, if she were to develop a rare disease.

"Stem cells have a wonderful potential," Segal said. And potential is exactly what the for-profit companies say they're selling.

"Cord blood looks to be a promising alternative to bone marrow for treating a variety of blood diseases and cancer," said Cord Blood Registry co-founder Stephen Grant. "It's a type of biological insurance."

Dr. Joanne Kurtzberg has conducted about 90 cord-blood transplants using some of the 5,000 units donated to Duke University's public cord bank. She said it remains unclear whether cord blood transplants can be successfully used on a wide variety of diseases.

Still, private banks might have value for families with a predisposition to diseases like leukemia and sickle cell anemia, she said.

"If you have the money, there's definitely no harm in storing cord blood with a private bank," she said. "Maybe something in the future will develop."

There's no national program for cord blood as there is with bone marrow. The private banks are competitors, and share nothing with each other; the public banks operate independently and are constantly running short of funding.

Four million U.S. babies are born a year, and more than 3.9 million umbilical cords are thrown away without banking the blood. Even capturing less than one percent of the potential market, both Cord Blood Registry and Cryo-Cell say they're profitable.

Copyright 2001 The Associated Press. All rights reserved.