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The Bargain Baby-maker

He helped bring the world the 63-year-old pregnant woman. Now he wants to bring low-cost fertility treatment to New York -- a plan that's almost as controversial.

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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.


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