Drug vials The benefits of stemcells are hotly debated in the medical community, and federalregulators have warned the public to beware of clinics that peddleunapproved injections as a cure-all. (Photo: Shutterstock)

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A Midwestern grocery chain, Hy-Vee, is taking an unusual — andhighly controversial — approach to reducing health care costs.

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Before employees in certain cities can undergo knee replacement,they first must visit a stem cell provider. Hy-Vee has contractedwith one of the United States' leading stem cell companies —Regenexx, based in Des Moines, Iowa — that claims injections of concentrated bone marrow orplatelets can help patients avoid expensive joint surgery.

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Regenexx has persuaded over 100 employers to include itsservices in their health insurance plans. In a marketing booklet, Regenexx, whose injections range in pricefrom $1,500 to $9,000, notes that its treatments cost a fraction ofmajor surgery. A single knee replacement, for example, ranges from$19,000 to $30,000 in the U.S.

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The benefits of stem cells are hotly debated in the medical community, and federal regulators have warned the public to beware of clinicsthat peddle unapproved injections as a cure-all. Many doctors andethicists say they fear the public is being misled about how wellstem cells work — and whether the procedures save their money orwaste it.

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Related: What to know about Ambrosia, the startup sellingblood to slow aging

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“This definitely is not a high-quality, proven treatment,” saidDr. Freddie Fu, chairman of orthopedic surgery at the University ofPittsburgh Medical Center.

Knee pain and the bottom line

Health insurance typically doesn't cover stem cell injections,with the exception of certain accepted treatments, such as bone-marrow transplants for cancer and aplastic anemia. Aetna, the United States' third-largest healthinsurer, dismisses stemcells and plateletinjections as experimental;Anthem, the country's second-biggest health insurance provider,classifies the injections as “notmedically necessary.” Without insurance coverage, patients areforced to pay out-of-pocket or forgo treatment.

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So instead of dealing with disapproving insurance executives,Regenexx appeals directly to employers large enough to fund theirown health plans. These businesses have the freedom to customizetheir plans, covering services that aren't part of a standardinsurance package. Over half of U.S. workers insured through their jobs belong tosuch plans, according to the Employee Benefit Research Institute, aD.C.-based nonprofit.

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Perhaps Regenexx's best-known corporate client is DesMoines-based Meredith Corp., which owns multipleTV and radio stations, as well as magazines suchas Better Homes & Gardens. (Meredith owned Time magazine untilSeptember 2018.)

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In a statement, Regenexx said its goal is to “replace moreinvasive surgical orthopedics” with nonsurgical options, notingthat recent research has found many joint operations areineffective. On its website,Regenexx claims its procedures “repair and regenerate damaged ordegenerated bone, cartilage, muscle, tendons, and ligaments.” In abone marrow stem cellprocedure, for example, a doctor withdraws bone marrow cellsfrom a patient's hip, concentrates them, then reinjects them into aproblem area, such as an arthritic knee. Doctors target the exactlocation in the joint using ultrasound. For a “platelet-richplasma” treatment, doctors draw blood, concentrate the platelets,then inject them into the target area.

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Regenexx, previously known as Regenerative Sciences, is one ofthe oldest stem cell companies in the U.S. When it opened its doorsin 2005, it had only a handful of competitors. Today, there aremore than 1,000 stem clinics in the U.S., said Leigh Turner, anassociate professor at the University of Minnesota's Center forBioethics, who has published a series of articles describing the stem cell market.

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At times, Regenexx has clashed with the Food and DrugAdministration. In 2010, for example, Regenexx sued the FDA, claiming the agency lacked the authority toregulate its procedures, which involved culturing stem cells beforereinjecting them into patients. Regenexx lost its case and wascountersued by the FDA, which charged that Regenexx was marketingan unapproved drug. In 2014, the U.S. Court of Appeals in Washington sided with the FDA, forcingRegenexx to stop performing the controversial procedures. Today,Regenexx performs this procedure only in the CaymanIslands, where the government allows it. The Cayman Islands,where there is less government regulation of health care, hasbecome known as a medical tourism destination, Turner said.

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Regenexx says that the treatments offered at its U.S. clinicscomply with FDA regulations, which require that cells injected intopatients undergo no more than “minimal manipulation.”

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On its website, Regenexx lists more than two dozenstudies led by its doctors. For example, its chief medicalofficer, Dr. Chris Centeno, published a small study last year that found patients with knee arthritiswho received bone marrow and platelets fared better than thoserandomly assigned to exercise therapy. Regenexx says it tries to betransparent about its results, noting that it posts data onpatient results. In a statement, the company said most patientsit treats for knee pain have good functioning five years later.

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A Regenexx marketing booklet says 70% of orthopedic surgeries “can be completely avoided with aRegenexx procedure” — a claim Fu called “silly.”

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“There is zero evidence that you can replace 70% of surgerieswith stem cells,” he said.

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Recent research suggests stem cells and plateletsmay work no better than placebos, Fu added. In a recent analysis,over 80% of patients with knee arthritis experienced a noticeableimprovement in pain after receiving simple saltwater injections,writes Dr. Benjamin Rothrauff, a postdoctoral fellow who works withFu at the University of Pittsburgh.

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There's also no definitive evidence stem cells and platelets canregrow lost cartilage, Fu said. A 2018 review concluded plateletshave “marginal effectiveness,” and experts note that mostpublished studies are so small or poorly designed that theirresultsaren't reliable.

Is Regenexx actually saving employers money?

If Regenexx treatments worked as well as the company claims,insurance companies would rush to cover them, Turner said. But thenotion that Regenexx will save employers money hasn't been provenand is “a boastful claim with no clinical merit,” said HenryGarlich, director of health care value solutions and enhancedclinical programs at Blue Shield of California, who has reviewedRegenexx's publications.

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“The problem is that we don't have enough data. When a companydoes not have this type of evidence, then they will go direct tothe consumer market,” Garlich said. “Some vulnerable individuals,including companies that want to reduce their health care costs,may buy what they're selling.” If Regenexx procedures don't work,Garlich said, an employer could end up paying twice — once for stemcells and once for knee replacement.

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Some employers are, in fact, skeptical. The Des Moines PublicSchools has opted not to add Regenexx to its employee health plan,said Catherine McKay, director of employee services for the schoolsystem. She said a salesman for a local stem cell clinic, which hassince merged with Regenexx, told her the treatments could save theschool system lots of money. McKay wasn't sold.

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“My experience with them has not been great, in terms ofmarketing and sales. They're very, very pushy,” McKay said. “Theyclaim they can get people back to work earlier” than surgery. “Butif I still need knee surgery a year down the road, that doesn't cutmy costs.”

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The Des Moines school system has agreed to consider coveringRegenexx procedures as part of its workers' compensation program ona case-by-case basis, McKay said. The school system has not signeda contract with Regenexx, however, and hasn't included Regenexx inits health plan.

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McKay said she knows of two school employees who have triedRegenexx. While one employee was satisfied with the results, McKaysaid, another “went through a couple procedures and ended upneeding surgery anyway.”

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Corporate executives have become some of Regenexx's biggestboosters. Hy-Vee's former chairman and CEO, Ric Jurgens, appears in a Regenexx marketing brochure and says that he turned to Regenexx becauseof heel pain. The brochure, which was removed from a Regenexx website after Kaiser HealthNews began reporting this story, quotes Jurgens as saying, “I knewthat giving our employees the chance to explore options besidessurgery was in their best interest.”

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Hy-Vee did not make Jurgens or other employees available tointerview.

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Steve Lacy, Meredith's former CEO and current board chairman,said he underwent a Regenexx procedure two years after his companybegan covering stem cell treatments. He had been facing kneesurgery and thought stem cells were worth a try. The procedure gothim back to doing everything he wants to do, Lacy said, evenrunning several days a week. He also has done daily physicaltherapy for over two years. “The rehab and recovery is far lessonerous” with the Regenexx procedure than with surgery, Lacy said.“If the procedure doesn't work for an individual, there's noharm.”

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Meredith has spent about $400,000 in four years on 85 employeeswho have had Regenexx treatments, or about $4,700 a patient, saidMeredith spokesman Art Slusark. That's a small share of the roughly$75 million a year that Meredith spends on its medical plan, hesaid.

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At its headquarters, Meredith has promoted Regenexx proceduresthrough email, posters and “lunch-and-learn” sessions in theoffice, said Jenny McCoy, Meredith's corporate communicationsdirector.

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McCoy herself has become a poster child for Regenexx's benefits.She and two other Meredith employees appear with Lacy in a marketing video on the Regenexxsite. Although McCoy had begun to experience knee and hip painduring exercise, she said in an interview that her pain was notsevere enough to need surgery. McCoy underwent platelet injectionstwo years ago and is pain-free today, she said.

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“I thought, 'If Meredith is covering it, I might as well have itdone early before [the pain] causes me too many problems,'” saidMcCoy, 52. Given the price tag, she said, “I would not have done itotherwise. I wouldn't have even known about it.” In the Regenexxmarketing video, Lacy is shown saying stem cells saved Meredithroughly $700,000 inone year. Lacy said he estimated that number by comparing whatMeredith spent on Regenexx with what it would have spent on hip andknee replacements.

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But Slusark said Meredith hasn't examined employee medicalrecords to determine how many were eligible for surgery or how manyneeded joint surgery after trying Regenexx. “We don't spend a lotof time calculating savings,” Slusark said.

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Without that medical information, Meredith can't accuratelyestimate how much money it saved, if any, Fu said. He noted thatrelatively few people with joint pain undergo surgery, whichdoctors typically view as a last resort for patients who haveexhausted all other treatment options. Although 14 millionAmericans have knee arthritis, the Arthritis Foundation estimates that doctors perform only about757,000 knee replacements each year.

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Before recommending joint replacement, doctors often tellpatients to try exercise, physical therapy, weight loss, supportiveshoe inserts or steroid injections, Garlich said. Physical therapy,in particular, helps many patients, said Fu; it's possible that PT,and not the stem cell injections, should get the credit for Lacy'srecovery.

How the patients feel

Regenexx has posted videointerviews of dozens of satisfied customers on its website,including a refinery worker treated for a non-healing wristfracture, a snowboarder who had stem cell therapy in his knees andan avid weightlifter with multiple shoulder problems. All sayRegenexx helped them.

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Other Regenexx patients say the treatments wasted their time andmoney. Several patients who posted online reviews of the companyagreed to be interviewed for this article.

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One is Amanda Lynch, a 42-year-old Australian trapeze artist wholives in Montreal. Lynch said she spent $7,700 last year to treatan injured ligament at a Regenexx clinic in Colorado. Doctorsadministered a series of injections in her knee over several days,including platelets and her bone marrow, Lynch said. She sharedcopies of the emails she exchanged with the clinic, a bill fromRegenexx and a document in which doctors evaluated her candidacyfor treatment.

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But within a few months, Lynch had to undergo surgery inMontreal for both knees, she said, paying an additional $16,100,according to her medical bill. Because Lynch is Australian, she wasnot eligible for free care in the Canadian health system and had topay out-of-pocket.

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Roland Jersevic, a 67-year-old lawyer living in Saginaw, Mich.,said he needed knee replacement after his stem cell treatmentsfailed to relieve his arthritis. Jersevic said he went to aRegenexx clinic in Toledo, Ohio, in 2015 to get help with severearthritis in his knees, which had caused his legs to bow. “The painwas horrendous all the time,” he said. Jersevic's medical bills,obtained for this article, show that he paid the clinic $7,500out-of-pocket because his insurance wouldn't cover stem celltherapy. “They told me they were going to regrow my cartilage,” hesaid, referring to Regenexx. “I wanted it to work.”

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Although the fat and bone marrow injections may have givenJersevic a “little bit” of temporary relief, his pain soonreturned, he said. Regenexx offered to administer more injections,at an additional cost, Jersevic said. “At that point, I had lostall faith in what they were doing. To spend more money on a booster— what for? It wasn't working.”

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Jersevic had both knees replaced in summer 2016, his medicalrecords show, and his insurance paid most of the bill. His kneepain is gone, and Jersevic said he felt well enough to return totrack-and-field competitions — including hurdles and pole vaulting— in 2017.

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“When your knees are that bad, it's not going to work for you,”Jersevic said. “They should tell you it's not going to work foryou. But they want the cash.”

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In response, Regenexx noted that many patients who undergo kneesurgery are also unhappy with the results. Research suggests that up toone-third of those who have knees replaced continue to experiencechronic pain, while one-fifth report that they are dissatisfiedwith the results of their surgery.

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“We are disappointed to learn of any patients who didn't have apositive outcome,” Regenexx said in a statement. “Our goal atRegenexx is to achieve the best possible clinical efficacy, and weare actively researching to find out why some patients respondbetter than others.”

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Kaiser Health News isa nonprofit news service covering health issues. It is aneditorially independent program of the Kaiser Family Foundation,which is not affiliated with Kaiser Permanente.

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