It was only after her fourth attempt at in vitro fertilization that Linda S., a 36-year-old Manhattan lawyer, finally delivered a healthy baby. By then, she and her husband, a trader on Wall Street, had spent about $50,000 on infertility treatments. “We’ve sacrificed,” says the wife, who also left her job to focus on the regimen required for treatment. “We live in a one-bedroom rental, and our son sleeps in the dining area. I wonder if we’ll ever have the money to buy a house. There are so many of us who are desperate for the opportunity to have a baby; we’re spending whatever they ask.”
For New York’s conceptionally challenged, a few rounds of reproductive roulette – at $13,000 or more per try – can be an expensive gamble indeed. Like all but thirteen states, New York doesn’t mandate health-insurance coverage for IVF, and only about a third of HMOs and traditional insurers in the Northeast pick up some or all of the tab. Even once-generous insurers such as Aetna U.S. Healthcare have in the past few months announced plans to drop IVF coverage from their basic benefits package.
It seemed clear to Mark Sauer, the new head of Columbia-Presbyterian Medical Center’s division of reproductive endocrinology, that it was only a matter of time before someone started providing high-tech baby-making at discount rates. A respected if somewhat renegade 43-year-old researcher from Southern California – the 63-year-old pregnant woman who made headlines was initially a patient of his – Sauer was only too happy to take on the challenge. “It’s going to shake things up,” he predicts, his boyish face erupting into a mischievous grin. “New York really needs it.”
It’s the way he plans to shake things up that concerns his competitors. Sauer has affiliated his university-based infertility program with a for-profit commercial enterprise. His partner, GynCor, Inc., is a so-called physician-practice-management company that already owns or operates 26 other infertility clinics, known as the Centers for Human Reproduction, in California, Delaware, Florida, Illinois, Indiana, Maryland, New Jersey, and Virginia.
GynCor manages the business. Its employees run the office, handle patient accounts, order supplies and equipment, pay bills, and seek out managed-care contracts – in theory, freeing up more of the doctors’ time for patient care. GynCor also coughed up $1.5 million for the construction of Columbia’s swank interiors on Madison Avenue and 59th Street. In return for this lavish investment, Columbia’s Madison Avenue practice, known as the Medical Offices for Human Reproduction, shares a portion of its revenues with GynCor.
Now Columbia, which performed only 250 IVF cycles last year – compared with New York Hospital’s 1,200 or so – hopes to quadruple its business this year by slashing prices for first-time patients.
The standard IVF cycle at the New York Hospital-Cornell Medical Center or New York University Medical Center runs in the neighborhood of $13,000, including medication, blood work, ultrasound monitoring, egg retrieval, embryo preparation and transfer (to the uterus) cryopreservation (egg freezing), one year’s storage of frozen eggs, semen preparation, and hospital and anesthesia fees.
In contrast, Columbia charges new patients a first-time IVF fee of $4,500. Medications, cryopreservation, and one year’s egg storage bring the total to $8,600, some $4,000 less than the competition. Assisted hatching and ICSI (in which a single sperm is injected into the woman’s egg), if necessary, add another $1,600 each. Subsequent cycles are priced at about $12,600 (an $8,500 IVF fee, plus $3,000 for medications and $1,100 for cryopreservation and egg storage). If couples are strapped for cash, GynCor helps them get a loan for up to $15,000 in services on a two-year installment plan.
But some physicians privately wonder whether Sauer has lowered his medical moral standards – and his success rates – for a quick buck. “They won’t be able to measure up,” says Dr. Zev Rosenwaks, director of the Center for Reproductive Medicine and Infertility at the New York Hospital-Cornell Medical Center. “The reason why it’s cheaper: The care’s not equal. It cannot be equal.”
Not so, says Sauer. “In this field, there’s too much fat. Anybody who says we need three quarters of the tests we normally order knows better.”
Columbia’s affiliation with GynCor may have jabbed New York’s infertility community with the sting of a Pergonal shot, but it’s hardly an unprecedented move in today’s health-care market, where practices regularly form partnerships to negotiate volume discounts. GynCor’s buying power, for instance, has enabled it to reduce the price it pays for catheters by more than 25 percent over the past two years. Apply these savings to the scores of other medical supplies they buy in bulk, and it starts to add up.
Atfirst glance, Sauer and Norbert Gleicher, CEO and chairman of GynCor, appear to be strange lab-fellows. Dressed casually, his hair perpetually tousled, Sauer looks like the friendly country doctor he imagined he’d become when he left for college. Gleicher, with his closely cropped hair and trademark three-piece suit, looks every bit the businessman. Sauer is soft-spoken and straightforward. Gleicher, who has an explosive temper – he says it’s mellowed with age – is both revered and disliked. “He’s a brilliant man,” says a former high-level employee. “He’s not a nice person.”
But if the doctors’ personal styles diverge, they both embody the cowboy culture that has invaded medicine. In 1986, as an assistant professor in the department of obstetrics and gynecology at UCLA, Sauer became one of the first reproductive endocrinologists in the country to perform IVF with donated eggs. Unlike many of his peers, he wasn’t afraid to push the age envelope – eventually transferring embryos made with donor eggs to women in their sixties. More recently, Sauer has started a small, controversial clinical trial in which he performs IVF on healthy women with HIV-positive male partners, working off his theory that the virus may well be transmitted via the plasma in semen, not the sperm itself.
The Polish-born Gleicher, meanwhile, began his career researching ways to make medicine more cost-effective. In Chicago in the mid-eighties, he developed a protocol that reduced his hospital’s cesarean-section rate. Next, he turned his attention to infertility. With cost containment the nation’s new medical mantra, he was convinced that clinics would have to band together and lower the cost of doing business to survive.
GynCor attracted managed-care companies by convincing them that it was in their best interests to cover infertility treatments. “The smarter insurance carriers understand that even where there’s no official infertility coverage, they spend a ton of money on fertility services,” explains Gleicher. “You can say you’re doing tubal surgery to treat advanced tubal disease, or a laparoscopy for endometriosis, but everyone understands you’re really doing it for infertility. In effect, insurers are subsidizing highly inefficient care. The patient may have surgery simply because it’s covered but not have a more effective treatment, such as IVF, because it’s not covered.”
This strategy proved remarkably successful in Chicago, where GynCor swallowed up five major infertility practices. “Physicians were initially skeptical and resistant, but many competitors came to the conclusion that it was smarter to join us than fight us,” Gleicher says. Since Illinois law requires most companies to cover infertility services, several large insurers decided that contracting exclusively with GynCor’s Center for Human Reproduction (CHR) could indeed save them money.
In a cost-cutting strategy, doctors perform many surgeries, including egg retrievals and embryo transfers, in the office rather than in the hospital. At most larger CHR centers, about 20 percent of revenue comes from IVF, versus about one third at New York University. The remainder of CHR’s revenue comes from ovulation induction, the use of medications to stimulate the ovaries to release multiple eggs.
At Columbia, Sauer says, he’s trying to further streamline care by reducing the number of pricey blood tests performed during IVF cycles. In a typical IVF procedure at the nation’s top academic centers, a woman has her blood taken seven to ten times during the month to measure levels of such hormones as estradiol and follicle-stimulating hormone, which tell doctors when to harvest eggs. At Columbia, in contrast, the average woman gets three to four blood tests in a cycle. Sauer argues, “There is no objective evidence that you need these tests, you need them daily, and you need all of them in the conglomerate.”
“You can see the patient on day three and go back and see her again on day nine or ten,” agrees Cornell’s Zev Rosenwaks. “For 90 percent of the patients, you get away with it in the sense that they’ll do fine. But what about the 5 or 10 percent that might have a problem because you overstimulated them? This can lead to an extremely rare but potentially dangerous fluid imbalance causing the liver, kidneys, and heart to fail. I don’t think that’s right. I would rather do 100 times the work on 100 people to avoid complications.”
Rosenwaks and other reproductive endocrinologists also question whether practices dependent on managed care can deliver top-notch services. But physicians associated with GynCor say that while doctors have to account for their spending, no one from the business side tells them how to practice medicine. “This is something GynCor is very firm about,” says Dr. Vishvanath Karande of CHR-Chicago. “If I have a patient I think needs in vitro fertilization, I don’t have to justify it to GynCor.”
But Sauer admits he’s had some “heated discussions” with Gleicher about GynCor’s fairly prescriptive management style. “I tend to spend a lot of time in my initial consults, up to an hour and a half,” he says. “As a result, there’s a two-to-three-month wait to see me. Norbert’s told me he’d like to see my wait time down to two weeks.” Sauer says the only way to do that is to cut his consults down to 45 minutes.
If Chicago is any example, he may end up spending even less time with patients. “In the egg-donor program, I only saw my doctor at the beginning and for the embryo transfer,” says a nonetheless satisfied 47-year-old CHR patient who is pregnant with triplets. “The nurse was the person who called me every day to talk to me about my medication. She kept me on top of how things were going with the donor and told me when to make my next appointment.”
Last year, after receiving complaints that patients’ calls weren’t being returned, Gleicher implemented a new phone system that embodies the new wave in health care: Now patients call specially designated voice-mail boxes where instructions are left for them on how much medication to take that night. The plan is innovative and efficient – but not exactly the human touch that couples undergoing the emotional roller coaster of fertility treatments might crave.
So far, these complaints don’t appear to apply to Columbia. A 27-year-old trader whose wife is about to give birth to triplets says the couple likes Columbia precisely because of the attentive care. Their doctor, Steve Lindheim, is “compassionate and understanding,” says the husband.”
Perhaps even more important to Columbia patients is whether the program will deliver babies at rates equal or superior to its competitors’. Gleicher says it will: “Data from our Chicago affiliates, with large numbers of transfers similar to Cornell’s, suggests you can get rates very comparable to theirs without doing big workups.”
But a look at the latest published success rates, for assisted reproductive technologies performed in 1995, shows a 17.6 percent live-birth rate per transfer for women under age 35 at CHR-Chicago, versus a national average of 30.6 percent, according to a report by the Centers for Disease Control. Cornell, New York University, and Saint Barnabas, meanwhile, had rates of 54.2 percent, 49.0 percent, and 59.5 percent, respectively.
Sauer’s record is less clear. Asked whether it’s fair to say that his rates have traditionally been lower than his competitors’, he responds, “Yes, it’s fair, but complete the sentence: Who does Mark treat? I just saw a 47-year-old woman who wanted to do IVF with her own eggs. Even though there’s a less than one percent chance that it would work, she really wanted to do this. I treat the poor responders the other programs turn away. That’s the reason our rates are what they are.”
Dr. Richard Scott, director of assisted reproduction at Saint Barnabas Medical Center, responds: “When rates are so much lower, what can you say? ‘My patients are more difficult?’ Programs that get paid x dollars per patient because of managed care and run on volume will cycle everybody. I have very strong ethical concerns about that. If you know a patient’s chance of conceiving is extremely low, it’s not fair to the patient. It holds out false hope.”
A look at egg-donation rates may give a clearer picture of Columbia’s capabilities, because its donors are healthy young women with, presumably, good-quality eggs. According to Sauer, Columbia patients who conceived with donor eggs in 1997 have about a 42 percent pregnancy and delivery rate, not far from NYU’s 48 percent rate.
“There are a lot of reasons to choose an IVF program, such as cost and how they treat you,” Sauer says, a bit testily. “You’re still a person. There shouldn’t be a dismissal of you if you don’t meet strict criteria. I’m not going to be beholden to the holy rate.”
Some of his patients agree. “Before I tried IVF, people suggested I look into Cornell because it had higher success rates. I decided, because of my young age and the fact that I’d had a good experience at Columbia so far, that I didn’t want to make a change based just on success rates,” says 27-year-old Marisa Fyodorov, whose first attempt at IVF was a success. “I felt confident with my doctor’s experience.”
It’s just the response that Sauer hopes to hear. “We are looking to be a major player in New York City,” he says. “We’re here to play hardball.”