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Boston IVF, one of the largest IVF centers in the nation and one of the first free-standing clinics in the country. What started as an independent clinic grew into one with a well-respected academic affiliation, and now has partnered with a worldwide hospital group. Through it all, their mission remained the same: bring state of the art technology to a patient-centered outpatient clinic. On this episode of Inside Reproductive Health, I talk to one of the founders of Boston IVF, Dr. Michael Alper. Dr. Alper shares the history of Boston IVF, but more importantly how they grew into what they are today. His story teaches important lessons to any doctor-owned clinic curious about academic affiliations or partnering with outside groups.
Our discussion includes:
The benefits of academic affiliation;
Navigating fertility clinic acquisitions; and,
Relationships between fertility doctors and administrative teams.
Learn about Dr. Alper and his team at Boston IVF.
Other episodes mentioned:
Episode 36, Dr. Michael Levy
Episode 14, Dr. Serena Chen
To get started on a marketing plan for your company, complete the Goal and Competitive Diagnostic at FertilityBridge.com.
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Welcome to Inside Reproductive Health, the shoptalk of the fertility field. Here, you'll hear authentic and unscripted conversations about practice management, patient relations, and business development from the most forward-thinking experts in our field.
Wall Street and Silicon Valley both want your patients, but there is a plan if you're willing to take action. Visit fertilitybridge.com to learn about the first piece of building a Fertility Marketing System--The Goal and Competitive Diagnostic. Now, here's the founder of Fertility Bridge and the host of Inside Reproductive Health, Griffin Jones.
GRIFFIN JONES 0:51
IVF technology was in its very early stages in 1986 when Dr. Michael Alper--who's my guest on Inside Reproductive Health today--co-founded Boston IVF, now one of the nation's largest IVF centers and one of the nation's first freestanding IVF centers. The goal was to transform state of the art technologies into a patient-centered outpatient setting. Dr. Alper has led Boston IVF as its Medical Director for over 20 years and remains instrumental in helping make it one of the most well-respected academically-affiliated IVF centers in the world. We're going to talk about that academic affiliation, the different stages of growth, Dr. Alper, Michael, welcome to Inside Reproductive Health.
MICHAEL ALPER 1:30
Hey, Griffin, thanks for having me. A pleasure to be here.
JONES 1:33
I'm interested in exploring the trajectory of your practice group because I've had other guests on the show--Dr. Michael Levy was one we talked about Shady Grove and asked him did you set out to make something that big? And you know, when I'm starting building my own company, I'm thinking of the growth ahead of time and sometimes it isn't that way. So for you, did you set out to create one of the largest groups in the country? At what point did that growth start? And I guess, what was the ambition from the outset?
ALPER 2:08
I never believed really that we'd end up being one of the largest in the United States and obviously feel very fortunate to have participated in our growth. But you know, our beginning was really interesting, and I'm sure it has a lot of analogies with Dr. Levy's experience and others. So we started back in 1986 and if you remember IVF was just coming into the United States in the early 80s. So in 1986, most IVF was done in a hospital setting, not in a private setting. So I was finishing my fellowship in 1986 and two of the doctors at the hospital, the fertility specialists, came to the realization that it's not as easy to do IVF in a hospital setting compared to an outpatient setting. So your patients would have to run to one department, have their ultrasound and another department have their blood test, see the doctor in the clinic somewhere else. Not very patient-friendly. So back then in 1986, there were very few, if any, outpatient IVF centers, they were all done in hospitals. Of course, that's where research is often started. So I was a fellow, part of the division, and we decided to leave the hospital. Well, I'll tell you that I got my first dose of, I'll call it, ‘medical politics.’ We were the bad boys. And we were called all kinds of nasty things back then, you know, entrepreneurs and whatever--just nasty things. So that went on for about two years. And then what happened is that the Chairman of the Department at the hospital basically came back and talked to us said, “You know, maybe you're not as bad as we thought. Why don't you become the Division of Reproductive Endocrinology at Harvard Medical School, Beth Israel Hospital?” And the reason for that is all the patients were coming to see us, number one, and number two, our core values and our DNA really is academics and research. We love doing that. So, you know, fast forward to today for the last 25 years or so, we've been a private practice, but yet we run the academic arm of the division within the hospital. So we do teaching all the residents. Our fellowship is really housed at Boston IVF, so that's where our fellows are trained, our offices are with us. So we feel very fortunate because we have the best of both worlds. We have the autonomy of a private practice, yet, the fun of teaching and doing research.
JONES 4:32
That started only two years after you had built the outpatient IVF center?
ALPER 4:39
That's correct. Just maybe two, three years afterwards, we began to re-affiliate with the hospital because what had happened, unfortunately, when we left the hospital, the hospital still continued with their IVF program. But over a couple of years, it just didn't do that well, and all the patients were gravitating to us. So it made total sense to sort of combine efforts and create one program.
JONES 5:03
And you said you were still a fellow when you left?
ALPER 5:06
Yes, back then, fellowships were for two years, and I did a fellowship from 1984 to 1986 at the hospital here in Boston. In fact, I actually did two fellowships. I did another two-year fellowship in Canada before then where my roots are. But yeah, so it was right after my fellowship that we set up Boston IVF. It was myself and three other physicians.
JONES 5:26
Was part of that reason so that you could practice more in infertility treatment? Dr. Serena Chen tells me sometimes that around that time period--and it’s hard to imagine now that a lot of REI fellows were completing training and then going back to do obstetrics, they were delivering babies--is part of the reason why you left to build the outpatient center because you wanted to practice more of the I of REI?
ALPER 5:56
Yeah, partly, but mainly was because we really felt that to have a patient-centric center, you really need to have a highly specialized unit, where it's just convenient for patients to show up in one office have their bloods, ultrasound office visit, ultimately, their egg retrieval and transfer in one location. Now it's commonplace, obviously, most IVF centers are freestanding, but back then it wasn't and it was very cumbersome for patients to go through treatment. Obviously, treatment still has its challenges, but it's much friendlier now because everything's centralized. That wasn't the case back in the late 80s.
JONES 6:32
So you leave the REI division, you start your own center, two years later, you're invited back to be the REI division. If I'm not mistaken, Harvard Medical has three partner health systems, but how does that partnership begin? How do you go from where we've left, now we're a private group, and now we're associated with the hospital and what does that partnership entail?
ALPER 6:54
Well, it actually was kind of a natural--sort of a natural evolution I would say. We had relationships with the OB/GYNs in the hospital in the community. And we still had excellent relationships despite the fact that kind of went on our own, if you will. And we always practiced in a way that was straightforward, honest, we just--people liked us and what it came down to and respected our ability to properly take care of patients. So it was a natural process once the chairman of the department had changed and saw that we can have a great partnership. And in fact, back in the 1990s, an article was written for Fertility and Sterility about this very relationship, that kind of bringing academics and private practice together. It makes so much sense. Where you bring skill sets from both sides together, you know, under one roof so to speak. So that way, it was a natural process and all the stakeholders benefited.
JONES 7:52
In a scenario like that where the fellowship is run in concert with a private practice, do you feel that those fellows get more business training or at least some business exposure, or would you say that, you know, it's pretty similar to what they might experience in an entirely academic setting?
ALPER 8:12
Well, I wouldn't say that they get a lot of business exposure, they get a lot of clinical exposure, obviously, because of our size and just the volume of embryo transfers and egg retrievals and surgery that they do really excels. But in terms of the business, the business and the practice are kind of separated. One of the things that we learned very early, is that it's much better to have physicians concentrate on the practice of medicine, and disconnect the finances from their practice. And that's why we have a pretty strong administrative team. We have a CEO, a CFO, a COO. These are really skilled, wonderful people who make sure that business runs properly and allows the physicians to practice medicine. I think what happens very often, as you know, in practices, probably most of the time, especially in moderate-sized practices, you get one physician who becomes the sort of administrative leader in the group, but that’s not very scalable because of that doctor’s practicing medicine and also trying to manage all the day-to-day operations, it can be pretty overwhelming. So we realized early that you need to have a strong administrative team to support the doctors.
JONES 9:29
I'm very interested in how that administrative team works with physician partnership. But let's first talk about how you grew into that. I guess I'm more familiar with Boston IVF, a bit more starting in the late 2000s, but let's stay in the 80s for a second, then I want to see what happened in the 90s. But when you started the program in ‘86, you co-founded it. And so how many of there were you and then what was the next step for growth? I believe Dr. Oskowitz was one of the cofounders?
ALPER 10:00
Yeah. Dr. Berger, Dr. Oskowitz, Dr. Thompson, myself. We were four physicians. I'm the only one sort of--I was the youngest one at the time and the one that’s still standing, I would say.
JONES 10:11
So not a bad play for all the fellows listening thinking of going into that--there can be an upside you might outpace everybody else!
ALPER 10:23
Well, I'll tell you Griffin, I feel very fortunate. I've had one job my whole life for 30 whatever years. And so my CV is actually, from an employment point of view, just a very tiny paragraph. But--
JONES 10:35
Which a podcast hosts appreciates, by the way!
ALPER 10:39
But in terms of sort of the what happened from the late 80s, the 90s. Since we were four physicians, as I said--three have since retired from being partners and myself remaining--one of the challenges of a practice is to attract the best clinicians possible and to retain them. And our philosophy from the very early days is the way to do that is to make them partners where they have--you know, we’ll use a classic expression--skin in the game, so to speak, where they feel emotionally attached to the company and feel part of it. So we have brought on numerous physicians, just like Shady Grove, as you mentioned. I'm sure Mike could elaborate on his experience, but we've created a method to bring talented partners on board. And that sounds easy, but in fact, you know, we learned a lot along the way. And right now we have 14 partners, so everybody feels more part of it. And then, so that's what's happened over the last 20 plus years. One of the great advantages of having a fellowship program is that you work with fellows, and we've hired many of our fellows in our program, so that's been a tremendous advantage for us and they know the way we practice and our systems if you will. So we've grown and expanded and I'm happy to talk to you a bit more on how that happened. But yes, we were in the Boston area and still are in the Boston area, that's where our main facility is, but we've expanded throughout the country to well, basically diversify a little bit. And yeah, so that's been a great experience.
JONES 12:15
I’m interested in that trajectory and how you make those decisions. So you start off with four founding partners. As you're expanding and acquiring talent, the best way that you find to do that is to make people partners. Does that start with hiring a few associate doctors, and then you're hiring them as employees and then bring them on as partners? Is that what happened after four?
ALPER 12:38
Yeah, exactly. Basically, you date and then you get married. And it's the same thing with the partnership. I think the most important thing about a partnership is that it's a good marriage. And I will tell you that I love every one of the physicians as part of our group, not just you know, professionally, but they're fantastic people. We all get along extremely well. And we all have fun and enjoy our work, that's the most important thing. And so you want to make sure that whoever you bring on board as a partner has the same philosophy about practice and is easy to get along with because there's so many practices in any medical field that don't work out so well. So we've done a, I must say, a pretty good job of dating, if you will. And so especially since we've hired many fellows, we know them really well, because they spent three years with us so that's a great advantage. But yeah, attracting the right associates and making them feel part of it is really critical to the success of a program. In my opinion, it's really worked well for us.
JONES 13:43
How do you either enumerate, or quantify, or at the very least, elucidate the criteria of what is a good fit in this dating analogy? That this is ultimately what we're looking for in a partner should we both choose to do this. One of the things I've been writing more about is how buying agreements might need to be referenced more finitely within employment agreements so that at the end of it both parties can say, yes, this is a good fit or it isn't, or these key performance indicators were met, or they weren't objectively. So how do you make it where we both have the same philosophy and the same core values, how do you make that into something that's measurable and tangible?
ALPER 14:33
Right. So I probably break it down into a couple different areas. The first area--and this is number one, number two, and number three--that person has to be a really good doctor. That's the most important thing. And when I mean good doctor, I mean, not just up on knowledge and, and good clinical skills, I mean, good with patients, doesn't mind going to the nth degree to help people, nurses--admired by nurses and other colleagues, that's totally, you know, really critical, just a very good clinician, number one. Number two is they have to meet some productivity baseline and you can set it in different ways whether it's a certain revenue volume or cycle volume or something, but they have to be contributing to the success of the company. And then they have to be employed for a period of time and it varies amongst our partners for a variety of reasons. But in general three to five years. It's kind of a timeline being an associate before you become a partner and some have actually been associates longer. But till there's duration, there's productivity, and above all, you know, skills as a physician, those are the key elements.
JONES 15:50
Some groups want all of their doctors to become partners. It sounds like that might be your philosophy when you say that partnership is part of what you use for attracting and retaining good doctors. Other groups are perfectly content having someone be an employee for the duration of their career. Where do you all stand on that?
ALPER 16:12
Not everybody should or wants to be a partner, I think you know, so in our situation, the decision is fairly easy, because the way we construct it is that we actually lend the money to them to buy their shares, and spread it over time. So we make it financially very tolerable and not financially, too difficult to become a partner. So, but not everybody is interested in becoming a partner or necessarily should become a partner. I think it's very individual. I think most of the time, at least in our program, I haven't met anybody who didn't want to become a partner.
JONES 16:49
So we're in the 90s. We're bringing on partners by first having them work as employees--dating before you're getting married. You're expanding the number of physicians and partners in the practice group, when did you do your first merger acquisition with another group? And how did you judge that opportunity?
ALPER 17:14
So we were, and are, the dominant program in the greater Boston area--had been that way, you know, since the 80s, late 80s. And we maintained a certain market share, I'd say for many, many years. But we found that since we have very good programs in Boston, the competition was quite significant. We weren't seeing, sort of, the double digit growth that we saw in the early days. We've been growing every single year since our inception, but the rate of growth had slowed. So we were looking for, you know, what other opportunities can we take advantage of to continue to grow? So we did a few things. One is we purchased a practice of a prominent REI in the Boston area. And that entity became sort of a subsidiary of Boston IVF. That was one move that was actually terrific.
JONES 18:09
Was that a single doc practice?
ALPER 18:11
A single doctor practice. And then after that we merged with a very large program, Reproductive Science Center of Boston, they were quite large and and one of the prominent reproductive science Integramed centers that decided after their contract was completed with Integramed, that they wanted to sort of go it on their own--that was in 2014. And so it was a, we'll call it a cashless merger, where you had the two entities that were valuated, and we all became new shareholders in a new entity. And that was a very interesting and learning experience for all of us. Kind of tricky, you know, when you have two cultures, two competitors for 20 years, and all of a sudden you’re partners--it takes to adjust! And to be quite frank, the first year or so were just rocky because everybody was sort of set in their ways about how they did things and how things ran. And but fast forward to today, it's been a fantastic experience. We're all together. We all are, you know, we merged all our systems. And you know, everybody feels as one. But yeah, that was a huge merger, I think the largest merger in the industry up until maybe the IVI/RMA merger. But so, so this was certainly the largest local merger between two competitors.
JONES 19:30
So how did you overcome those rocky waters? Because it almost seems like it would be harder in a cashless merger. if it's an acquisition, then you tell the principal, this is what you're earn out says and so therefore, you all are doing this and almost seems like it would be harder. So how do you come to terms and keep the new entity of not just get over it, but making sure that you're doing what you set out to do which is synergistic growth?
ALPER 19:58
Right, right. Excellent question. And I would say that I learned a lot on how to get into people's heads--may sound strange. But when we first decided to merge and went through the process, and we were competitors for all these years, everybody had an impression of the other side, if you will. So Reproductive Science Center physicians think all Boston IVF is like this. And as you know, confirmation bias plays a huge role in how people view the world, right? So there was a lot of, you know, just suspicion I guess, because of being competitors for so long. But then I got to know the individuals and I got to know how everybody's thinking, and it all made sense. Their fears, their anxiety, they're concerned about losing their identity, all these sorts of factors, once you throw them on the table and use talk about them in real human terms, you start to chip away at it, and you start to develop a relationship. So that's what happened. It took, I'd say, a year or two of lots of discussions, lots of meetings, a lot of compromises, a lot of bareness on both sides and it worked out great. But neither of us, both sides, didn't have any experience with this. So we learned along the way,
JONES 21:16
Do you suppose it takes about that long for the dissolution of the individual identities as well? And I think of Mad Men, it was one of my favorite shows, and their group merges with Ted Chaough’s group who, as you mentioned, they had been rivals for years, and always a thorn in the other side, and then they come together. And in the beginning, this is our team, this is our team. This is our way, this is our way. But eventually, those identities just start to dissipate because they're in the building together, working with the same clients working on building the same business. And eventually, you know, while this was my partner and my team, but now I have some rapport with you and and I'm starting to like this way better does it take about that long for the former identities to disappear?
ALPER 22:08
No, Griffin, I think you're absolutely right. It probably takes about a year or two and I'm sure there's an analogy with having to cope with a deceased one in the family or something like that, where there's a grieving process, because one side especially could be losing their identity. And they have to go through a process of first reacting to it, how to deal with it, and then at the end of the day, it comes down to just developing relationships and beginning to trust each other and realize that it's in everybody's interest to make the combined entity successful. But it takes--you have to count on about a year or more to just let that take its course. And now I must say we are so thrilled to be a bigger group, a more dynamic group. We actually learn from each other a lot because, you know, we were two separate entities doing things slightly different, so we had innumerable meetings on looking at data and protocols and combining protocols and just the learning from both sides to do as best as we can. So yeah, absolutely it's--I totally underestimated the length of time and frankly, the amount of energy that goes into making these things happen.
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JONES 25:27
So a couple of decades of adding partners, a single physician/doctor group acquisition, a merger with a very large group to be the largest merger in the field up to that point. And then, at what point do you decide okay, we're in New England, we've got a really big presence here and now there are other markets to serve. Whether it's New York or you know, to a casual observer, Indiana and Arizona seem pretty far from Boston. How do you decide on making those moves?
ALPER 26:05
So, good question, I think, at our root is sort of a certain amount of curiosity and creativity. And as I mentioned, we were continuing to grow every single year and business was good, clinical work was good, but we wanted a challenge and we wanted to prove to ourselves that we can replicate ourselves outside of Massachusetts. So we had our eyes on Maine and make a long story very short, the University up there set up an IVF program, they invited us to join and make it a joint project but at the end of the day, they wanted to make a go at it themselves and it just failed. We took over the space, we placed one of our fellows there to lead the charge, and it just grew great. And we're the only IVF program in Maine and it's been a great success and so that we said hey, that's pretty cool. It's only a you know, a couple hours north of Boston and we have a freestanding IVF center that's providing good service to the community, that made us feel pretty good. And after that we said, okay, we can replicate ourselves outside of Massachusetts. It's actually an unfortunate story. A colleague of mine from Albany, New York called me--it's an REI you speak to them maybe two, three times a year, see him in meetings and talk to him on the phone. He said, Michael, you won't believe this. I'm on my way to Boston, I'm going to the Dana Farber hospital, which is a cancer hospital. And he was a young guy in his 50s. And he said, I just have this mass and we're concerned about it. Make a long story short, he called me told me he had a very serious terminal cancer. He died six months later, and when I spoke to him on the phone, I kept on saying he was a one man REI IVF program, he said, I just worry about my staff. I don't know what's going to happen to them when I die. And I visited him a lot up in Albany and try to help him and his family get through it, but he passes away. And I told him, I said, Listen--this is almost on his deathbed--I said don't worry about anything I will take care of your IVF program. I knew nothing about it. I didn't know if it was successful. I didn't know if it was profitable. I didn't know anything. But I just felt it was obviously the right thing to do. So we purchased the assets after he passed on and we hired a fellow to join the practice, myself, and this is really our model is that we find a young talented physician to be the lead physician in the center and then we have more senior physicians going there frequently to support that person. So I was seeing patients in Albany. Steve Bayer, another colleague of mine, Alan Penzias another colleague, we kept on going to Albany, to work with Sonia, who's our lead physician in Albany to support her so she didn't feel alone. You know, come out of a fellowship, to be the sort of director of a program is pretty scary. So we supported her for a year. The program did extremely well. It's very busy. In fact, we just hired another physician to join this last year. So that worked out really well and wow this is great! That was just totally by chance. It wasn't something that was planned.
JONES 29:07
So how are--as you're acquiring a practice here, you're expanding, you're merging--how are you, the partner physicians, but specifically you, Michael, how are you learning the business knowledge that you need to at this point? Are you just online at night Googling everything you can? Are you calling old college friends? I mean, I'm sure you have advisors, but how are--and consultants that you pay for, but how are you increasing your business knowledge to be able to do all of these things?
ALPER 29:39
Well, so I'm learning along the way and trying to learn from my mistakes and the things I did well, and learning the very basics of business kind of, you know, an MBA very high-level like you know, that book, MBA for Idiots? You know, that book where you have everything concisely written. I read that book, by the way, just to learn the little things and surround myself by good business people. You know, that's the trick and good operations people. And so I looked at myself as sort of helping guide from a philosophical and strategic point of view, where I think the practice should go. But I was fortunate enough to surround myself with skilled business people to help me. That's the short answer. And you know, I think when it comes to business decisions, I've learned over the years that businesses is really just an extension of relationships. You know, when you're doing a business transaction with somebody, it's important that they trust you, they feel you're honest, a lot of psychology to it and relationship building. I think that's one thing that I've tried my best to work at over the years and try to be honest with people and trustworthy and those sort of things develop relationships where people wanted to do business with us. We’re one of the, probably the few IVF programs in the area where we have REI physicians knocking on our door looking to work with us because we're fortunate enough to have a good reputation in the community. But to answer your question is I learned it on the front lines, and I've had the fortune to have smart people around me who can help me and teach me.
JONES 31:15
And you mentioned that you put the structure in place where you have an administrative team, you've got a CEO, a CFO, when did that start? We've talked on the show and I've had a few different guests opine on that, that maybe it happens at at five doctors in, maybe for some it's it's later. But I've worked with mid-sized groups before and when I see them not have that team at probably the five it's probably the five to seven range where I think it starts to really hurt if they don't have that. When was that for you that you started to put the administrative team and and what were the pieces in sequence?
ALPER 31:50
Yeah, no. Good question. I'd say it was about 20 years ago, we realized that we really need strong people to run an organization properly. So we were--yeah, so we actually did when we were four or five physicians, as you pointed out. That seems to be the point where you, you do need sort of just an office manager-type to handle everything is probably inadequate when you're four or five physicians. So you need somebody with experience who can lead the way and then whether you need a full-time CFO or a part-time CFO that individual programs could decide. But certainly at our size, we have very detailed metrics, but everything we do, because, you know, our one of our focuses is quality control, and we're really the only ISO--I believe--the only ISO certified IVF program in North America. And we have very tight systems and we're constantly monitoring things, constantly trying to improve on a business end and also, more importantly, on the clinical and science. And so yeah, I think you have--our CFO who is kind of a Wizkid with Excel and data really helps us enormously in turn expanding our operation.
JONES 33:02
And so how does that executive team work in concert with physician partners, because what I could see going wrong in that transition is, as you mentioned before, the partner physician that tends to be the lead and in a four or five doc practice, they still are, then they hire this executive, but they don't totally give away control or they come in and muddle everything up. So how does now, your physician partners interface with the executive team? And how did that structure build over time?
ALPER 33:36
Yeah. So you know, a common issue that comes up in practices of five, six doctors, and one administrator is that all the shareholder physicians are knocking at the door of the administrator every five minutes to try to either influence a certain decision or make a point or what have you, at some point that gets untenable. It just gets difficult to manage a practice that way. So what I've tried to do is, of course, the door of the CEO is open and my door’s open, of course, but I try to represent the interests of the physicians to the administrative team. So if there's a problem, I prefer them direct it--if a physician has an issue, they can direct it to me, and I’ll of course meet with the CEO of the company. But I think you raise a very important point. I think, also, you know, you may find it surprising, but doctors could have egos. And sometimes it's very difficult.
JONES 34:32
I’m shaking my head in disbelief for those listening on audio.
ALPER 34:34
I know and it's a very weird thing, as I'm sure you understand. But what happens is, sometimes there's a conflict or the lines are not clear between the administrator and sort of the lead physician. So I think, I mean, just my style, I guess, is that nothing gives me more pleasure to see our CEO successful, or our CFO successful because it's a reflection on the company and ourselves. But you raise an issue that I think can be a little tricky and some practices where they have this called strain or stress on that relationship. And I think, especially for doctors who started the practice and were kind of the pioneers and the practice is more known by the doctor, the doctor than the name of the practice, those kind of practices, which are, there's a fair number, right/ That's a situation where you just need to be careful and figure out some job descriptions where everybody knows what they're supposed to do. And that there's work--you need a team and a lead physician, medical director type of person has to interface really well with the administrator. Otherwise, things don't work well. And nobody can do everything.
JONES 35:49
And so it probably begs the response or the question that maybe different groups have different needs from what that administrator is because in some groups, it is a Chief Executive Officer and other groups, it's a Chief Operating Officer. What’s it for you? For me, those definitions might mean visionary in one sense, integrator in the other. What does that Chief Executive need to do?
ALPER 36:19
So at a very high level, the Chief Executive Officer reports to the Board of Directors and the Board of Directors work with the CEO to set the strategy. That's number one--strategy.
JONES 36:30
Are all of the partner-physicians among the board of directors?
ALPER 36:34
On a rotational basis, yes. Over the years, we've rotated--it'll be too cumbersome to have everybody, so we try to rotate. But yeah, I mean, I think setting the strategy is key. And the other role of a Head Administrator or CEO whatever the title may be, is to really be the reference to all the other managers in the company. So Head of Ultrasound, Finance, Accounting, Billing, Nursing, whatever, you need to develop the team. And as you know, and in our field and many other fields, it's easy to become very siloed and just focus on your own little world and the practice and not see the big picture. I think that the CEO really is responsible for that, to make sure that all the different administrators, or key people, have somebody to go to, and it sets the tone, and it sets the culture for the practice, which is key.
JONES 37:29
So you've got the administrative team in place, you've got a Board of Directors, you’ve got 14 partners, you've done acquisition, you've merged with another big group up until this point. Now, how do you collectively make the decisions of you know, let's pursue private equity or let's entertain this offer that PE firm has presented to us and I'm sure you get plenty of those calls. How do you make that decision together?
ALPER 38:00
So as you may or may not know, we've partnered with an entity called Eugin, which is a company in Barcelona in Spain. Actually Eugin is one of the largest--next to or in parallel with IVI--the largest company of IVF centers in the world. Eugin clinics in Spain, Italy, Denmark, Sweden, Brazil, South America, and now the US with us. And they're a strategic partner because they're in the field. We've been approached by numerous private equity firms over the last three years, mainly because we're national and obviously large-size, and I must tell you, we didn't have the right fit because as you know, private equity is there to invest for the short term and increase the profitability and then sell in three to five years. And that's not my horizon. And I would venture to believe it's not the horizon of most physicians, although some physicians are interested in exiting, you know, in three to five years and private equity could be the way to do it if that's their personal goal. But we're more longer term players, we have young physicians in our group, we see our field is growing. And we really want to have a partner that was more strategic. So it's an individual choice for anybody who's being approached. But you know, what I tell all my colleagues and ask me these questions, I say, the most important thing about these transactions is what the day is like after the transaction closes? Because, you know, these are the--
JONES 39:31
Which I think the jury's still out on a lot of this right now, because a lot of these deals are only a couple years old at this point. So what the day is like, I think we're finding out right now, in many cases.
ALPER 39:44
I'll tell yo-- and I'm just being totally frank with you, Griffin--is that I'm quite concerned about it. quite concerned about it because when money takes over medicine, it's not in the best interest of patients a lot of the time. And medicine is not, and specifically reproductive endocrinology, is not like dentistry. There are a lot of emotions, it's a complex thing and I worry when a company owns an IVF program, and their focus is on the money, it could be a real problem. Aand then the interest of the major investor and the remaining shareholders start to diverge. And as you know, private equity starts to look at the bottom line and the EBITA and starts to, you know, you can't go to an IVF center and say, reduce your nurses by 30% because you're positioning yourself for a sale. That's not a good thing. So it didn't feel right for us. I'm not saying it's wrong for certain centers. But in terms of the field, I think we need to be really careful. And our strategy was different--it's to partner with somebody in the industry, who's a long-term player. And so our partnership Eugin is very simple, they're using Boston IVF as a vehicle to expand we're in discussions with several centers and we'll have some announcements soon becoming partners with them. So now you have an IVF center, not a private equity firm, being a partner with a particular center in the country. So our model’s different but yeah, we'll see, as you pointed out, we'll see how it all turns out, but think we need to be careful.
JONES 41:24
I'm with you that it's a three to five year thinking that I'm sometimes weary of, but very often it's it's shorter than that--it can be quarterly and that's what I'm weary of. I'll say the other side of that, which is I sometimes see the smaller practices or independent practices that are less likely to invest in patient experience because they feel pretty cozy and the Smithian argument is that if there's capital interests competing with one another, that they have to innovate, that they have to provide added value in order to win in the marketplace, and I think there's some truth to that. I think the danger is when there are those three to five year or quarterly pressures--even shorter term. And so I like the groups that may not be holding to that, you're building for the long term, but also your high enough growth to where if you want to enter new markets, if you want to retain market share and keep some of these other competitors out, you still have to invest in the patient experience and raise the standard of care that way. So speaking of long term, you're the last of the four remaining partners still active within the group. Is that by design, or did you just lucked out that you had three guys that are willing to retire? Is your structure built in such a way that partners have to phase out at a certain age so that you don't get top heavy so that younger docs can buy in?
ALPER 42:57
Yeah, so I mean, there's no right or wrong answer to this. In our partnership agreement, we have an age cutoff where somebody's obliged to sell their shares, they can still work, but they have to sell their shares in a partnership. And, you know, with any of these transactions, private equity or strategic partnerships, they usually have a lockout period where once a transaction occurs, you don't want all the doctors to run out the door, because that makes the investment pretty poor. So there's those parts of it as well. But yeah, I mean, partnership agreements are complex things, but I will tell you that what we thought is--what you don't want it in a partnership is not having an elegant way for a physician who's about to retire to leave. In other words, if there's no package or incentive to leave, they just hang around being less productive because that's what happens with age--it’s a normal process--less productive, they don't want to leave but they don't want to leave because they get nothing that they leave. So they hang around, it just doesn't work out. Well in the long run, you have to have a mechanism of allowing retired physicians to leave with some sort of security and dignity. And in that, believe it or not, it doesn't happen very commonly now.
JONES 44:16
No, and that's why, you know, when you say there's not a right or wrong way, I don't know, I think there's some wrong ways! There's an example that we're looking at right now and it is really messing things up with this group that--it is making it really hard for two doctors to become partners and it's the balance between productivity and equity with the doctor who has been there for a really long time--the founding partner--is really tilting and making trapping that equity and that's only tangential to the consulting that we do is Well, do you want me to bring this up because it's definitely affecting your business development. So we can have this conversation now! But so I do think that the way that you've described is the right way. I do also see that it's not terribly common. And I think it should be. I really think that people listening should take heed to that and I think it's one of the big issues of why younger docs aren't buying in.
ALPER 45:24
Yeah and here's the other thing that we did a while ago is, you know, so if the Boston IVF makes $1 in profit, then that profit is not distributed just based on equity. The way we constructed this is that--and again, there's certain formulas--but 50% or 50 cents of the dollar are distributed based on equity and 50% is distributed based on productivity. Because we realize human nature in the sense that as you get older, you're less productive as you were when you were younger. If you're financially benefiting more than somebody working really hard, doesn't work very well, it breeds resentment. So we have a blended profit the way we distribute our profits, not just it's not just based on equity.
JONES 46:09
This is a bit tangential to everything we've discussed about, but I've been thinking it since you talked about the synergy between private practice and academic centers and that in corollary with how few fellowship programs there are--40 something right, there's 40 something fellowship programs--we don't have nearly enough fertility specialists coming into the field to meet the demand. Is it even possible for private practice in one area to approach a university system that probably already has a large medical school that might even have a really robust OB/GYN division and say, Hey, let's start this fellowship program together. Is that even possible? How, how would that work?
ALPER 46:56
Sure. I mean, yeah. I mean, there's a process of a ACMG where, you know, to become a proof fellowship program, and there's certain criteria need to be met, you need a certain number of REIs and certain volume, etc, etc. But yeah, you can apply and I think that is the beauty of having a partnership between an academic department and the private practice. Sure that can be done. And that's, that's what we've done! And it really has worked out great for us. As I mentioned earlier, the main reason is that we get to work with the fellows, a lot of them join us and can help grow our practice. So there is some, you know, it does help us quite a bit. We don't do it for financial reasons. There's not a financial advantage to us to be part of the academic department, it’s not like teaching pays or anything like that. It's more just what your DNA is and what makes you feel good day to day.
JONES 47:47
Well, Michael, how would you want to conclude with our audience about where you see Boston IVF going in the next five to 10 years and what you would want for your vision for the field?
ALPER 47:58
Yeah, so, I think we all sort of understand that over time, there’ll be 2, 3, 4 dominant programs in the country. I think they'll be others, of course, as well, but there'll be no less than a handful of major players. And I think that that's a good thing. You know, I think that we'll see how that all evolves. I think from our perspective, we're looking to continue what we're doing. We're not here to take over the world, we may be one of the top two in terms of size in the country, but that's not what makes us really proud. What makes us proud is to continue to have a physician-focused organization that does good work and helps people. It sounds a little corny, I know, but it's really--that's what keeps us going. We all love what we do. It's physician-focused. We're looking to expand throughout the country, you know, maybe three, four, five acquisitions and to become partners with people who are like-minded, who share our philosophy, who realized that if you do the right thing, you'll be financially rewarded. You know, the sort of thing, let the money follow you and don't run after the money. So that's our core value and it's worked for the last 30 plus years. We love what we do, where we have a very happy group of physicians and clinicians and having a good time and being successful. So, yeah, I think my message to everybody is, it's not just about the money, it's about your life, how you feel at the end of the day. And as I said, I've been doing this for 30 plus years, and I enjoy coming to work now as much as I did on day one. And how fortunate can you be to be in that position where, you know, the field is so challenging and, and changing so, so, so quickly that, you know, I don't think there are many physicians or anybody really, who can, who can look back and say, Wow, what a great ride and the future looks great, as long as we don't let the money drive everything, I think we'll be in good shape.
JONES 49:55
We should all be so blessed. Dr. Michael Alper, thank you very much for coming on Inside Reproductive Health.
ALPER 50:01
Hey, my pleasure, Griffin, and take care. Nice to be here.
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You’ve been listening to the Inside Reproductive Health Podcast with Griffin Jones. If you're ready to take action to make sure that your practice drives beyond the revolutionary changes that are happening in our field and in society, visit fertiltybridge.com to begin the first piece of the Fertility Marketing System, the Goal and Competitive Diagnostic. Thank you for listening to Inside Reproductive Health.