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Affordable Infertility Treatment

The high cost of infertility treatment may have kept many couples who would otherwise seek the treatment at bay, but now an infertility clinic offers discounted and affordable treatment plans to reach them.

About 3.5 million American couples are considered infertile--do not conceive after a year of trying. About half never seek treatment because of financial reasons. In European countries where national health plans cover it, IVF is about three to ten times more common than in the US. Trained in Canada, Dr. David Adamson is critical of HMOs and prefers the Canadian health model. He thinks that doctors and patients should "make decisions together" about what's best for the patient.

Dr. David Adamson wants to make IVF available to the US mass market. He came up with an idea and began pitching it to his colleagues three years ago: the result is Advanced Reproductive Care (ARC).

There are about 30,000 Obstetrician-Gynecologists in the country. About 10,000 of them say they perform infertility treatment. Only about 700 are reproductive endocrinologists, true fertility doctors in the country, and only one-third, or 220 of them participate in ARC.

Unlike other clinics and doctors who have offered money-back guarantees, ARC doctors get their fee whether or not the patient has a live birth. Therefore, the ARC doctor has no incentive to use riskier methods to ensure a pregnancy at any cost, for example, implanting a high number of embryos. ARC monitors member-doctors' performances through peer review, checking on the numbers of implanted embryos and on success (live birth) rates. "We want to make doctors accountable," says Adamson. "We're going to measure how well our doctors are doing, so we can improve and become cost effective."

Patients who opt for the money-back guarantee must pay an up-front premium. According to Dr. Anderson, it is NOT a marked up fee, but it is the amount of the insurance premium charged by Lloyds of London as the re-insurer. Anderson makes the distinction that ARC is guarantor and Lloyds is insurer.

Successful Example

Parise Manson-Pak, 35, has some reproduction medical problems. She is very familiar with the costs and uncertainties involved with IVF. She and her husband John Pak went through an "assisted insemination" process three years ago with Dr. Adamson. Now they have a two-year-old son Rhys. As her medical condition progresses, she has less chance of conceiving. When Dr. Adamson told them about ARC, they were among the first to sign up for the "three-for two" treatments package. The Paks opted for the financing, but did not go for the money-back guarantee.



Interview with Dr. David Adamson

Dr. David Adamson is the ARfounder & chairman (Advanced Reproductive Care) and the past president of Society for Assisted Reproductive Technology.

Q: Why did you create ARC?

I trained in Toronto, Canada and became familiar with the health system there. I had the idea that if doctors worked together, they could accomplish a lot. When managed care came along in the early 1990s in California, it created lots of problems with patients in terms of relationships. Patient had limited choices of payment because the system did not meet their needs of fertility treatments because they are not often covered by insurance.

Doctors are not happy because the type and quality of care is interfered with. I thought it best to create a health care environment in which everyone involved in the delivery of health care, their interests were aligned. I looked at putting together a program where everyone had health care, and wanted to develop something where doctors would be responsible and accountable fo the care they give.

Finally, it had to be economically a rational system where costs are appropriated. Other payers would have a choice. We developed a company with the simple principle of having high quality doctors and topnotch care. We want to provide services in a quality package of services so patients know exactly what the cost will be. One of the problems now is all the uncertainty--the time and costs involved. It creates anxiety and difficulty for the patients. With ARC, there is a certain number of cycles of IVF, and a certain cost. So a patient knows what she's going to get. We take away questions and reduce uncertainty.

We started about three years ago. Spent about first year putting network together. I flew 1/4 million miles in the past three years putting this together. There are about 700 specialists. I knew the doctors because I'm involved in a large number of national organizations. Met a lot of them and knew a lot of leaders.

Q: How did they react?

Some were incredulous, but I had enough people who knew me for over 20 years. They thought if David thinks it's worth a try, we'll support it. Doctors invested early with some of their own money--about 1/3 of the 700, or 220 doctors are involved. There are only about 65 investors though.

We're not really looking for investor-DOCTORS, we're looking for alliances with a major company or venture capitalist or investment bankers. This is early stage funding at this point, we're open to offers. We're in Silicon Valley; we're talking to venture capital people in New York; we're talking to companies with strategic interests similar to ours. This is still a doctor-owned company. We're really focused on doing the right thing for patients. Before we do anything we ask how will this benefit the patient?

Q: How does the money from 65 doctors cover your risk?

It doesn't. Here's how the risk is spread. The patient buys package of clinical services. That risk is orne by the doctor who is given a certain amount of money by ARC, and most of the money goes to the doctors. They bear the risk of ANY number of services for that amount of money. He takes the risk, and he doesn't lose money, but he makes less of a profit if he has to perform extra services.

Secondly, we offer financing. If the patient wants to finance, we outsource through an unsecured lender, "MEDCASH," without any security! And the interest rate is less than 10%.

Q: Why do it?

We asked doctors to help their patients by taking a 10% discount on their fees. If the patients financed the IVF, in essence, the doctor buys down the loan for the patient! This is not available anywhere else. The patient feels good that the doctor is helping; the doctor gets business he would have lost otherwise. It's not like a typical healthcare model where someone wins and someone loses.

A new program will be available nationally in a week or two to three weeks. First Horizon Bank in Tennessee will offer a home equity line of credit well below 10% interest. Again, the doctors will take a 10% discount. So the patient can choose ways to finance.

We offer money back. Our refund guarantee is ONLY if the patient purchases a certain plan, up to three cycles of IVF over 1 year. We can calculate the chances that the patient will have a baby versus pregnancy.

Q: When was ARC launched?

Advanced Reproductive Care was launched about four or five months ago. But already we have some pregnant women. If a patient wants the refund program, she pays an extra amount up front in the package. That money goes to ARC, which guarantees a refund to the patient, not to the doctor.

Q: How does the refund work?

Other practices also do it, but we're different. Others screen the patients, and only take those with good prospects to make them pregnant. We don't turn anyone down. But if their prognoses are poor, their up-front costs othe refund guarantee is higher, there is no free lunch. But at least the patient has a choice. We reinsure with Lloyds of London. So there's no chance the patient or the doctor WON'T get their money.

Q: Is it possible a doctor might implant multiple embryos to avoid giving back money?

The ARC Refund Guarantee is set up so that the amount of money the doctor receives does not depend on whether or not the patient gets pregnant. Therefore, our physicians have no motivation to put back too many embryos to avoid paying the refund. The money does not come from them but from ARC. This unique feature of our plan removes this ethical question that has been raised about other money-back plans.

In addition, our physicians are recognized experts who know the importance of reducing multiple births. They have agreed to share information about their results so that we can do research to reduce multiple births. ARC physicians have also committed to following national standars that will reduce the number of multiple births. And ARC will terminate the membership of physicians if they do not follow these guidelines.

Q: How did you afford Lloyds?

ARC's margin is so low, we just provide the guarantee. We want to make sure we live up to the guarantee. ARC is not the insurer, just a guarantor. I know that's being careful about the distinction. Patient pays us the cost of the insurance from Lloyds, and we don't mark it up.

We hope to make our profit through volume. Nationally there are about 3.5 million infertile couples. Only about half go to doctors for treatment, and only about 1.5 million see a physician and have some care. Only about half of them, or 75,000 get pregnant. And 35,000 have ART, of which probably a little more than half have a baby (not all pregnancies result in live births).

This results in about 20,000 new families each year from ART and about 30,000 babies, because of multiple births, and about 50,000 adopted children. Those are the people who have the money to pay for procedures. Many more don't come in to see doctors because of money. And many who drop out do so because of finances.

We know a huge population can be helped by our plan. Here's a way to reduce their anxiety. You'll know exactly what you get, you'll know exactly what your care will be. We think there are hundreds of thousands of people out there who will find this attractive. We've really put very small margins in because we think we'll do a huge volume of business. We think we can provide something people need and want without charging huge amounts of money.

Q: Do you want to go public?

We haven't had any investors yet for whom going public is an exit strategy. Certainly we'd consider it if we had financing from a venture capital firm who had that interest. So it's a possibility, yes. But is it our objective? No. We hope to set a standard internationally. We are also negotiating with Oxford University in England and in another dozen countries.

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