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The journey to conception is a long, difficult road...
What price a miracle?
Having an IN VITRO BABY can be easier than figuring out how to pay the bill
IN 1978 LOUISE BROWN was heralded as the world's first miracle baby, born as a result of in vitro
fertilization (IVF)--the procedure in which a woman's egg is fertilized in a laboratory and the newly
formed embryo transferred to her uterus. Just 20 years later, IVF had become so commonplace that
the world barely blinked in 1999, when more than 30,000 babies miraculously appeared.
"Assisted reproductive technology" has advanced from a highly experimental treatment with little
chance of success to a mass-marketed commodity in a competitive billion-dollar industry. The good
news for the estimated 8% to 12% of couples in the U.S. who suffer from infertility is that IVF
success rates have improved dramatically. A 35-year-old woman's chance of a live birth after one
round of IVF is about 35%--double the success rate of a decade ago. The process has become so
routine that among the nearly 400 infertility clinics around the country, "most are quite successful,''
says Dr. Sam Thatcher, who has 20 years of experience in the field and founded the Center for
Applied Reproductive Science, in Johnson City, Tenn. "There's much less variation in their success
rates than you'd think."
Even as IVF techniques and success rates have improved, the price tag hasn't budged. The average
fee for an IVF cycle, including medication, is about $10,000--hardly changed over the past five years.
If a couple doesn't take home a baby after one cycle, they may try again and again and again, spending
upwards of $40,000.
Health insurance plans usually don't offer explicit coverage for IVE To make the procedure more
affordable and attract new patients, many clinics are offering a package deal, or "shared risk"
approach. Such deals have become almost as controversial as the infertility technique used to be.
Think of shared risk as a three-cycle special. You may be asked to pay $25,000 up front--much more
than the $10,000 you would for a single standard IVF cycle--and in exchange you're promised three
tries. If you become pregnant on the first attempt, you've spent more than you would have otherwise.
If the second attempt is successful, you roughly break even. If you become pregnant on the third
attempt--at this point, your odds have risen to a decent 75% or better--then you've saved money.
Depending on the type of shared-risk plan you purchase, you may be guaranteed a refund of a portion
of your original outlay if you do not deliver a live baby. For a couple who may want to adopt if they're
not successful, the refund option assures them that they won't exhaust all of their resources on futile
IVF attempts.
Yun-Fong and Nancy Loh of Sunnyvale, Cal., had the adoption papers in front of them as they
prepared to undergo the third and final IVF cycle in their shared-risk plan, offered through their clinic
by Advanced Reproductive Care. "We knew we were going to sink a lot of money into this," says
Nancy, and the prospect of getting some of it back was reassuring. As it happened, the third try
worked like a charm, and they now have a 15-month-old daughter, Jenna.
All told, the Lohs paid $40,000, which included three rounds of IVF, drugs and a refund guarantee of
about $19,000. "One thing that helped me get through was knowing that the treatments were already
paid for," says Nancy. Discouraged at the end of round two, she says, "I might not have done the
third cycle if not for the packaged plan. It helped us hang in there."
A stacked deck
THE LOHS and couples like them see shared risk as a win-win proposition: You maximize your
chances of success while placing an upper limit on what you spend. Either you get a baby or you get
some of your money back.
But critics say clinics are the big winners because shared risk results in higher profit margins. For
starters, shared-risk programs accept only those patients with the best chances of IVF success--those
who, based on their age and diagnosis, have a 50% to 60% probability of getting pregnant on the first
try. Women are probably not eligible if they're 39 or older, or if they have poor egg quality, unless
they agree to use donor eggs.
In other words, the clinic stacks the deck in its favor. "I am convinced that with a shared-risk
program, a clinic will at least break even, and will probably make money, even if the patient doesn't
get pregnant at all and the refund kicks in," says Dr. David Grainger, a reproductive endocrinologist in
Wichita, Kan.
Nevertheless, the lure of a money-back guarantee is so irresistible for many patients that they're
willing to put up with a certain amount of price gouging as long as their story has a happy ending.
"We as an industry are making a product that has an inestimable value--a baby--and patients are being
exploited in the process," says Thatcher, whose own clinic charges a relatively low $6,500 per IVF
cycle and does not use the shared-risk approach.
Conflicts of interest
MEDICAL ETHICISTS have also expressed concern about potential conflicts of interest inherent in
shared-risk programs. Do doctors, for example, have an incentive to take inappropriate risks in order
to get patients pregnant faster and improve the clinic's bottom line?
That's of particular concern with clinics that have initiated stand-alone shared-risk programs: Doctors
themselves bear the risk of producing too few babies, and packaged-plan payments may be
commingled with general clinic funds. To protect yourself, choose a clinic that belongs to a
shared-risk network, the largest of which are Advanced Reproductive Care (ARC) and Integramed.
Both sidestep the conflict-of-interest issue by having patients purchase the packaged plan through the
network, rather than through the individual clinic. The network then reimburses the clinic for each
round of IVF, just as an insurance company would do.
"Our physicians get paid for the care they give regardless of whether the patient gets pregnant, so they
aren't biased to change the care inappropriately," says Dr. David Adamson, a reproductive
endocrinologist and surgeon who founded ARC five years ago. "Doctors are trained to do the best that
they can and should be paid for their effort, not the outcome," adds Jay Higham of Integramed.
ARC and Integramed customers are also insulated from the risk that a clinic will go out of business
and be unable to pay a refund. ARC's refund guarantee is backed by the network, which in turn is
reinsured through Lloyd's of London. Integramed is a publicly held company that pays refunds out of
its own reserve fund.
Professional reservations notwithstanding, shared-risk programs are so popular with patients that
many clinics feel compelled to offer them. But "don't be lured just by the package," warns Theresa
Venet Grant, president of the International Council on Infertility Information Dissemination. While
many larger clinics offer shared-risk plans, "a lot of physicians who don't have high-volume practices
might have more personalized service." Two centers that serve an elite clientele don't offer shared-risk
programs: The Institute for Reproductive Medicine and Science of St. Barnabas, in Livingston, N.J.,
and Cornell's Center for Reproductive Medicine and Infertility, in New York City.
Check your coverage
BEFORE YOU commit to a shared-risk arrangement, check your insurance, which may cover more
IVF costs than you realize.
Health plans in 11 states-Arkansas, Hawaii, Illinois, Maryland, Massachusetts, Montana, New Jersey,
New York, Ohio, Rhode Island and West Virginia--are required by law to include infertility coverage.
But there's a huge catch: If your employer has a self-funded insurance plan (as many large companies
do), the plan is regulated by federal law, which doesn't require infertility coverage.
Nevertheless, some employers are finding that paying for IVF is more cost-effective than having
employees seek other treatment through an obstetrician-gynecologist. Such treatment may be covered
by insurance but is less effective and puts patients at a higher risk for expensive multiple births. For
example, Microsoft recently increased its lifetime maximum reimbursement for infertility expenses
from $7,500 to $30,000. Some infertility patients even take temporary second jolts at companies such
as Casual Corner and Walgreens to qualify for IVF coverage (go to "Magazine Links" on the
Kiplinger.com home page for a list of employers that pay for IVF).
Expensive medications account for about one-fourth of the cost of IVE So even if your health
insurance doesn't offer comprehensive infertility coverage, it may pick up some of the cost of drugs.
"I see a half-dozen patients a month who have paid out of pocket in previous cycles but could have
had a $2,500 prescription covered except for a $60 or $70 co-payment," says Tom Madden, a
certified fertility expert at Portland Professional Pharmacy, in Portland, Maine. Sometimes, an
injectable drug that isn't covered under your prescription-drug plan may be covered under your
medical plan, says Madden.
Your insurance plan is also likely to pick up some of the costs of monitoring and blood work
associated with IVF if there's a medical diagnosis for the infertility. Ask your IVF center for the name
of a pharmacy such as Madden's that specializes in fertility care and can help you sort through your
insurance options. Organon, which makes some of the leading infertility drugs, operates an insurance
hotline (800-483-7257).
The best way to pay for some out-of-pocket IVF expenses is through an employer-sponsored flexible
spending account for health care. You divert part of your pretax salary into the account, which you
can tap to pay qualified expenses. Say, for example, that you divert $5,000 to a flex account, and
federal and state taxes consume 40% of your remaining wages. Your take-home pay shrinks by just
$3,000 (the rest would have gone for taxes), but you have the full $5,000 in your account.
Kathleen Siviter of Falls Church, Va., worked for a small company that didn't offer a flexible spending
account--until she was about to fork over thousands of dollars for IVF and asked her employer to set
one up. The office was too small to have a human-resources director, so Siviter located a plan
administrator and filled out the paperwork for the group. The plan was up and running within a few
weeks. Siviter and her husband contributed $5,000, and saved about $2,000.
You must decide how much to put into the account at the beginning of the year, and you forfeit any
money that's unspent at year-end. But if you had money left over in December and were expecting to
do another round of IVF the following year, you could purchase the medications for the upcoming
cycle in advance to use up the balance in your account.
Be wary of a potential timing snafu if you decide to run payments for a shared-risk plan through a
flexible spending account. One patient set aside money in her flex account during the same year that
she paid up front for three cycles. She became pregnant, and the baby was due the following January.
But the shared-risk program held the money in escrow and didn't take payment until after she
delivered, so she wasn't able to recover her expenditure from the previous year's account balance. It's
best to use the flex account for expenses you know you're going to incur in the year you make your
contribution.
Kiplinger.com More on infertility. Learn about special financing and useful Web sites at
kiplinger.com/links/infertility.
~~~~~~~~
By Melynda Dovel Wilcox and Josephine Rossi, Reporter
Having an IN VITRO BABY can be easier than figuring out how to pay the bill
IN 1978 LOUISE BROWN was heralded as the world's first miracle baby, born as a result of in vitro
fertilization (IVF)--the procedure in which a woman's egg is fertilized in a laboratory and the newly
formed embryo transferred to her uterus. Just 20 years later, IVF had become so commonplace that
the world barely blinked in 1999, when more than 30,000 babies miraculously appeared.
"Assisted reproductive technology" has advanced from a highly experimental treatment with little
chance of success to a mass-marketed commodity in a competitive billion-dollar industry. The good
news for the estimated 8% to 12% of couples in the U.S. who suffer from infertility is that IVF
success rates have improved dramatically. A 35-year-old woman's chance of a live birth after one
round of IVF is about 35%--double the success rate of a decade ago. The process has become so
routine that among the nearly 400 infertility clinics around the country, "most are quite successful,''
says Dr. Sam Thatcher, who has 20 years of experience in the field and founded the Center for
Applied Reproductive Science, in Johnson City, Tenn. "There's much less variation in their success
rates than you'd think."
Even as IVF techniques and success rates have improved, the price tag hasn't budged. The average
fee for an IVF cycle, including medication, is about $10,000--hardly changed over the past five years.
If a couple doesn't take home a baby after one cycle, they may try again and again and again, spending
upwards of $40,000.
Health insurance plans usually don't offer explicit coverage for IVE To make the procedure more
affordable and attract new patients, many clinics are offering a package deal, or "shared risk"
approach. Such deals have become almost as controversial as the infertility technique used to be.
Think of shared risk as a three-cycle special. You may be asked to pay $25,000 up front--much more
than the $10,000 you would for a single standard IVF cycle--and in exchange you're promised three
tries. If you become pregnant on the first attempt, you've spent more than you would have otherwise.
If the second attempt is successful, you roughly break even. If you become pregnant on the third
attempt--at this point, your odds have risen to a decent 75% or better--then you've saved money.
Depending on the type of shared-risk plan you purchase, you may be guaranteed a refund of a portion
of your original outlay if you do not deliver a live baby. For a couple who may want to adopt if they're
not successful, the refund option assures them that they won't exhaust all of their resources on futile
IVF attempts.
Yun-Fong and Nancy Loh of Sunnyvale, Cal., had the adoption papers in front of them as they
prepared to undergo the third and final IVF cycle in their shared-risk plan, offered through their clinic
by Advanced Reproductive Care. "We knew we were going to sink a lot of money into this," says
Nancy, and the prospect of getting some of it back was reassuring. As it happened, the third try
worked like a charm, and they now have a 15-month-old daughter, Jenna.
All told, the Lohs paid $40,000, which included three rounds of IVF, drugs and a refund guarantee of
about $19,000. "One thing that helped me get through was knowing that the treatments were already
paid for," says Nancy. Discouraged at the end of round two, she says, "I might not have done the
third cycle if not for the packaged plan. It helped us hang in there."
A stacked deck
THE LOHS and couples like them see shared risk as a win-win proposition: You maximize your
chances of success while placing an upper limit on what you spend. Either you get a baby or you get
some of your money back.
But critics say clinics are the big winners because shared risk results in higher profit margins. For
starters, shared-risk programs accept only those patients with the best chances of IVF success--those
who, based on their age and diagnosis, have a 50% to 60% probability of getting pregnant on the first
try. Women are probably not eligible if they're 39 or older, or if they have poor egg quality, unless
they agree to use donor eggs.
In other words, the clinic stacks the deck in its favor. "I am convinced that with a shared-risk
program, a clinic will at least break even, and will probably make money, even if the patient doesn't
get pregnant at all and the refund kicks in," says Dr. David Grainger, a reproductive endocrinologist in
Wichita, Kan.
Nevertheless, the lure of a money-back guarantee is so irresistible for many patients that they're
willing to put up with a certain amount of price gouging as long as their story has a happy ending.
"We as an industry are making a product that has an inestimable value--a baby--and patients are being
exploited in the process," says Thatcher, whose own clinic charges a relatively low $6,500 per IVF
cycle and does not use the shared-risk approach.
Conflicts of interest
MEDICAL ETHICISTS have also expressed concern about potential conflicts of interest inherent in
shared-risk programs. Do doctors, for example, have an incentive to take inappropriate risks in order
to get patients pregnant faster and improve the clinic's bottom line?
That's of particular concern with clinics that have initiated stand-alone shared-risk programs: Doctors
themselves bear the risk of producing too few babies, and packaged-plan payments may be
commingled with general clinic funds. To protect yourself, choose a clinic that belongs to a
shared-risk network, the largest of which are Advanced Reproductive Care (ARC) and Integramed.
Both sidestep the conflict-of-interest issue by having patients purchase the packaged plan through the
network, rather than through the individual clinic. The network then reimburses the clinic for each
round of IVF, just as an insurance company would do.
"Our physicians get paid for the care they give regardless of whether the patient gets pregnant, so they
aren't biased to change the care inappropriately," says Dr. David Adamson, a reproductive
endocrinologist and surgeon who founded ARC five years ago. "Doctors are trained to do the best that
they can and should be paid for their effort, not the outcome," adds Jay Higham of Integramed.
ARC and Integramed customers are also insulated from the risk that a clinic will go out of business
and be unable to pay a refund. ARC's refund guarantee is backed by the network, which in turn is
reinsured through Lloyd's of London. Integramed is a publicly held company that pays refunds out of
its own reserve fund.
Professional reservations notwithstanding, shared-risk programs are so popular with patients that
many clinics feel compelled to offer them. But "don't be lured just by the package," warns Theresa
Venet Grant, president of the International Council on Infertility Information Dissemination. While
many larger clinics offer shared-risk plans, "a lot of physicians who don't have high-volume practices
might have more personalized service." Two centers that serve an elite clientele don't offer shared-risk
programs: The Institute for Reproductive Medicine and Science of St. Barnabas, in Livingston, N.J.,
and Cornell's Center for Reproductive Medicine and Infertility, in New York City.
Check your coverage
BEFORE YOU commit to a shared-risk arrangement, check your insurance, which may cover more
IVF costs than you realize.
Health plans in 11 states-Arkansas, Hawaii, Illinois, Maryland, Massachusetts, Montana, New Jersey,
New York, Ohio, Rhode Island and West Virginia--are required by law to include infertility coverage.
But there's a huge catch: If your employer has a self-funded insurance plan (as many large companies
do), the plan is regulated by federal law, which doesn't require infertility coverage.
Nevertheless, some employers are finding that paying for IVF is more cost-effective than having
employees seek other treatment through an obstetrician-gynecologist. Such treatment may be covered
by insurance but is less effective and puts patients at a higher risk for expensive multiple births. For
example, Microsoft recently increased its lifetime maximum reimbursement for infertility expenses
from $7,500 to $30,000. Some infertility patients even take temporary second jolts at companies such
as Casual Corner and Walgreens to qualify for IVF coverage (go to "Magazine Links" on the
Kiplinger.com home page for a list of employers that pay for IVF).
Expensive medications account for about one-fourth of the cost of IVE So even if your health
insurance doesn't offer comprehensive infertility coverage, it may pick up some of the cost of drugs.
"I see a half-dozen patients a month who have paid out of pocket in previous cycles but could have
had a $2,500 prescription covered except for a $60 or $70 co-payment," says Tom Madden, a
certified fertility expert at Portland Professional Pharmacy, in Portland, Maine. Sometimes, an
injectable drug that isn't covered under your prescription-drug plan may be covered under your
medical plan, says Madden.
Your insurance plan is also likely to pick up some of the costs of monitoring and blood work
associated with IVF if there's a medical diagnosis for the infertility. Ask your IVF center for the name
of a pharmacy such as Madden's that specializes in fertility care and can help you sort through your
insurance options. Organon, which makes some of the leading infertility drugs, operates an insurance
hotline (800-483-7257).
The best way to pay for some out-of-pocket IVF expenses is through an employer-sponsored flexible
spending account for health care. You divert part of your pretax salary into the account, which you
can tap to pay qualified expenses. Say, for example, that you divert $5,000 to a flex account, and
federal and state taxes consume 40% of your remaining wages. Your take-home pay shrinks by just
$3,000 (the rest would have gone for taxes), but you have the full $5,000 in your account.
Kathleen Siviter of Falls Church, Va., worked for a small company that didn't offer a flexible spending
account--until she was about to fork over thousands of dollars for IVF and asked her employer to set
one up. The office was too small to have a human-resources director, so Siviter located a plan
administrator and filled out the paperwork for the group. The plan was up and running within a few
weeks. Siviter and her husband contributed $5,000, and saved about $2,000.
You must decide how much to put into the account at the beginning of the year, and you forfeit any
money that's unspent at year-end. But if you had money left over in December and were expecting to
do another round of IVF the following year, you could purchase the medications for the upcoming
cycle in advance to use up the balance in your account.
Be wary of a potential timing snafu if you decide to run payments for a shared-risk plan through a
flexible spending account. One patient set aside money in her flex account during the same year that
she paid up front for three cycles. She became pregnant, and the baby was due the following January.
But the shared-risk program held the money in escrow and didn't take payment until after she
delivered, so she wasn't able to recover her expenditure from the previous year's account balance. It's
best to use the flex account for expenses you know you're going to incur in the year you make your
contribution.
Kiplinger.com More on infertility. Learn about special financing and useful Web sites at
kiplinger.com/links/infertility.
~~~~~~~~
By Melynda Dovel Wilcox and Josephine Rossi, Reporter