Tectonic Shift Series

The Battle for the IVF Market: 5 Wall Street backed companies vs. private practice

By Griffin Jones

In Venture Capital fertilization

Part 3 of a four part series on the main business challenges facing fertility centers because of the shift from "small clinic" to "entrepreneurial endeavor"

Multi-million dollar private equity firms offer fertility practices an ultimatum: sell part of their practice, or have their market-share siphoned away.

Major firms spend hundreds of millions of dollars nationwide because they are in a race to consolidate as much of the fragmented IVF market as they can. This is only to speak of companies who own and operate networks of fertility clinics. In parallel, in 2017, PitchBook tallied more than $178 million invested into startups developing fertility products. In our series about fertility practices’ tectonic shift from small clinic to entrepreneurial venture, we’ve detailed the challenges that independent fertility practices face that their big new competitors don’t. So who are these new titans, and what are they up to?

 Merger and acquisition pattern of fertility centers

Merger and acquisition pattern of fertility centers

Important disclaimer: Neither I, nor Fertility Bridge have a direct commercial relationship with these companies at time of writing, though we certainly may in the future. We work or have worked with clinics in some of their networks. This profile is not a revelation of insider knowledge. Rather, it is a curated synopsis of public information. My observations and opinions are exactly those, based on information that has been publicly released by these companies or covered in the press.

compete with or join them. just don't pretend they don't exist

deciding to sell fertility practice

I have good friends that work for these companies or have affiliated their practices with them. Some might be very happy with their corporate partners and some might not be. It could be an excellent decision for your practice to sell equity to one of these firms or engage in a different level of strategic partnership with them. For some practice owners, a relationship with one of these firms is the answer to a lot of headaches. The stress of operations is shared with someone else, so providers can focus on practicing medicine.

Other practice principals feel they would lose control over the way they treat patients. They have their own vision for their culture and operations. If you’ve been struggling with this decision, I suggest reading part 2 of our series on vision and strategy, to see where you stand. This might be a long conversation, or several, with your business partner, spouse, clergyman, or bartender. You have to make the decision that’s right for you, your family, and your practice. There’s no right or wrong answer in a vacuum. Whether you decide to fight ‘em or join ‘em, however, we just can’t pretend these major new players don’t exist.

Second important disclaimer: It can be very fashionable to say these companies are more interested in their quarterly profits than the best interest of the patient. There may be cases when business pressures affect personal care. But I would be just as quick to point out that these companies might better serve patients in certain areas because they are better suited to face the challenges that we talked about throughtout this series. Their bankrolls may come from Wall Street, but the people that I know that work for these fertility networks are just as passionate about serving patients as those in private practice. Nevertheless, neither you, nor I, nor they get to pass final judgement on the quality of their output. The patient market decides.

The (Relatively) New Kids on the block

If we covered all newer companies in non-direct competition with fertility practices, this blog post would be longer than Don Quixote. In this article, we profile those networks who directly compete with other fertility centers. We also learn about the private equity firms behind them. Once again we ask ourselves, what is the plan?

Now let’s meet the people who want to buy you out or blow you over.

1). PRELUDE FERTILITY

 Fertility acquisition strategy

Fertility acquisition strategy

Prelude Fertility splashed into reproductive headlines in the fall of 2016 when Forbes magazine reported on The 200 Million Dollar Startup That Wants to Stop the Biological Clock. Where does a startup get $200 million and how have they acquired market-share so quickly? Meet the war chest and strategic acquisitions behind Prelude’s rapid market entry.

  • Lee Equity Partners. If Prelude’s coffers total $200 million, and Lee Equity’s buy-in was in line with their disclosed portfolio, then one might speculate that 25 to 50% of Prelude’s initial funding came from Lee Equity Partners. Massive capital from Lee Equity Partners has allowed Prelude to accelerate their acquisition of existing companies, and have they ever.
     
  • RBA. In October 2016, Prelude reported that it had acquired Reproductive Biology Associates (RBA) of Atlanta. RBA is the largest IVF practice group in the state of Georgia. Perhaps more importantly, RBA came with their sister company, My Egg Bank.
     
  • MyEggBank was created by RBA in 2010. According to their corporate timeline, their affiliate network grew from 22 clinics in 2012 to 109 in 2017. They report that over 4,400 babies have been born from MyEggBank donor eggs.
     
  • Vivere Health. Why buy one IVF lab at a time when you could acquire several at once? In a parallel running story, Prelude reported acquiring Vivere Health in October 2017. Vivere Health, LLC was founded in 2010 in partnership with Houston Fertility Institute. After an impressive acquisition journey of its own, Vivere Health had owned and operated IVF clinics and labs in
    • Austin
    • Dallas
    • Houston
    • New Orleans
    • Florida
    • Arizona
    • Kentucky

In April 2016, Vivere was listed in Fortune Magazine as one of the fastest growing female-owned companies in the United States.

Prelude says that their strategic goal is national scale. With a few more acquisitions of this pattern and magnitude, they will have achieved that end.

2). IVI RMA Global

If you’re less familiar with European originated IVI , Reproductive Medicine Associates (RMA) might ring a bell.

  • IVI was founded in Valencia, Spain in 1990. They own subsidiaries in genetic testing, IVF lab consulting, research and development, and stem sell banking, to name a few. In 2016, IVI owned and operated 60 clinic locations in 11 countries and treated over 60,000 patients.
     
  • Nova IVI. Major fertility networks aren’t relegated to the United States. They come from all over the globe and their expansion is international. In April 2012, IVI acquired Nova Pulse IVF and now owns and operates one of the largest fertility networks in India. Nova IVI reports over 19,000 IVF pregnancies in India alone.
     
  • RMA. According to their own PR announcement, RMA of New Jersey grew 70% in new patient volume from 2012 to 2017. I am unclear on RMA of New Jersey’s exact relationship with other RMA network clinics in the United States. Clinics under the RMA name operate in
    • New Jersey
    • New York
    • Pennsylvania
    • Florida
    • Connecticut
    • Michigan
    • Texas
    • Florida

In February 2017, IVI announced that their merger with RMA of New Jersey would make them the largest fertility network in the world. In a horridly translated press release, IVI reports that they own 70% of the new company while RMA of New Jersey owns 30%. They mention their combined 2,400 employees, including 200 physicians and 300 research scientists across 70 clinics in 13 countries.

3). INTEGRAMED

Integramed Fertility’s model is different from many fertility networks. Private equity is only one of three relationship models for Integramed. They also sell services for marketing and practice management that do not involve taking equity in the practice.

  • Integramed Fertility is a division of Integramed America and they report to be the largest fertility network in North America. With 2,200 employees and affiliate employees, the network is comprised of 39 centers at 153 locations across 32 states and the District of Columbia.
     
  • Attain Fertility. Integramed owns Attain Fertility, a patient-facing IVF finance program. They offer multi cycle programs, multi cycle programs with refunds, and bundling with additional services such as PGS and third party services. Subsequently, Attain functions as a lead generation company. Patients can search for Attain Fertility member clinics by doctor or by geographic area and Attain funnels those new patient leads to the clinic. Their business model is similar to that of ARC Fertility.
     
  • Sagard Holdings. Similar to how Prelude Fertility acquires practices through the funding of Lee Equity Partners, Integramed’s capital comes from Sagard Holdings. Integramed had been a publicly traded company, but Sagard reportedly took them off of the Stock Market in 2012 for just under $170 million.

4). OVATION FERTILITY

Ovation Fertility was founded in 2015 by physicians at Texas Fertility Center after a “major private equity investment to form a national network of assisted reproductive technology (ART) labratories”. At time of writing, Ovation Fertility owns and operates six IVF labs in five U.S. states.

  • California
  • Texas
  • Louisiana
  • Nevada
  • Tennessee

The private equity manager behind Ovation's capital is MTS Health Services.

 May meritocracy win all in the competition for best serving the patient population.

May meritocracy win all in the competition for best serving the patient population.

5). CCRM

The Colorado Center for Reproductive Medicine, CCRM as you fondly know them, enters new markets by acquisition like everyone else. Perhaps more than the other groups, however, CCRM enters new market areas through De Novo clinics. This means they help develop new labs and clinics in strong markets. In recent years, CCRM has opened or acquired IVF labs and practices in

  • Atlanta
  • Boston
  • Houston
  • Minneapolis
  • New York
  • Northern Virginia
  • Southern California
  • San Francisco Bay Area
  • Toronto

CCRM markets their lab advantages in every one of their markets. Since 2015, the private equity behind CCRM’s expansion comes at least partly from TA Associates in Boston. TA reports having raised over $18 billion in capital across their portfolio.

HONORABLE MENTION

In this article, we’ve only talked about your direct competitors. There are more companies from China and elsewhere that are buying fertility practices at high multiples that I don’t know very much about. There are large practice groups without private equity that acquire other clinics into their group. We didn’t even mention the new competitors that siphon market-share by offering new solutions or focusing on particular services. Here are just a few:

You don’t need to find Indiana and Arizona on a map to see that Boston IVF has interest in expanding beyond the northeast. Boston IVF is the “preferred provider of fertility services” for 15 different major health insurance plans. Boston IVF is the clinical affiliate of the Beth Israel Deaconess Medical Center and Harvard Medical School REI fellowship program. How would you like that advantage for recruiting new physicians? If there is a private equity firm associated with Boston IVF, I didn’t find it.

WHAT DOES IT all MEAN FOR YOU?

What’s a good ol' independently owned fertility practice group to do? Is there an opportunity for you to compete and thrive in this radically different world? You might look at regional banks or craft breweries. A century ago, every city in North America boasted their own local brewery, likely several. Beer became commoditized, and the corporations with the best distribution, market share, and financial leverage acquired or vanquished their competitors. By the 1990s, we were left with Anheuser-Busch, Miller, and Coors. South African Breweries  purchased Miller  and Molson-Coors (another merged mega conglomerate) in 2008 to become SABMiller-Coors, and finally merged with Anheuser-Busch/InBev (another merged mega conglomerate) in 2016 .

The past twenty years should have been a terrible period to start a brewery. Yet, quite to the contrary, independent breweries opened all over the country and took marketshare from the big players, now at 23% . Middle market companies like Sam Adams and Yuengling grew their own sales and grew by acquiring small breweries. The cycle continues. We see the same pattern among regional banks, and I believe we are seeing it in our field as well.

Small practices join together to become mid-size practices, and large companies acquire both small and mid-size groups. Then, physicians leave big practice groups and academic institutions to start the cycle anew. (I’ve got my eye on you, Vios Fertility). I don’t believe that all independent practices will be acquired or wiped out. The current and coming landscapes are just exceedingly difficult for unintentional REI entrepreneurs.

if you can't beat 'em, join 'em

when fertility centers join big practice groups

What will happen if you're unprepared for these competitors when the next economic recession starts? What will you do if 30-40% of the money in the marketplace goes away, seemingly over night? What would that do to your IVF volume? To your new patient visits?

Entrepreneurial competition isn't the only answer. It might make sense to sell equity in your practice or control of your lab. It could be the answer to a lot of your problems. One of the companies profiled in this article might be a great fit for your office. If we want to sell our practice, and want to go into the negotiation with “strong upside”, plenty of options, and not as a “distressed asset”, what is the plan?

if you can't join 'em, beat 'em

Nick Foles superbowl.jpg

On the other hand, the idea of giving up control and direction of your practice might eat you alive. Only you can make that decision. By taking market-share from big competitors now, as opposed to letting them take ours, we can prepare for an economic downturn in which we will not only survive, but thrive. If we are going to defend and grow market share against majorly funded competitors, what is the plan? 

We’ll conclude our series on IVF centers’ tectonic shift from small healthcare practice to entrepreneurial venture with perhaps their greatest challenge of all. Yet, it’s also their greatest opportunity and their chance to beat their giant new competitors where they lag.

In Part 4, we discuss the biggest change ever to occur in human communication and technology.

The one that dwarfs the revolution of the printing press.

The one we're living through right now.

What is the plan?

A New Vision and Different Strategy for IVF Centers to Thrive Beyond 2018

By Griffin Jones

Part 2 of a four part series on the main business challenges facing fertility centers because of the shift from "small clinic" to "entrepreneurial endeavor"

We might criticize REI fellows for not wanting to take over existing IVF practices, but they are making the same decision that current practice owners have made for decades. They are deciding to be doctors and not CEOs. At the time, starting an independent practice didn’t mean launching a commercial enterprise. The difference is that new doctors know they can’t get away with that today.

 Organizational leadership is an issue at many fertility practices

Organizational leadership is an issue at many fertility practices

In Part 1 of our series on the contemporary fertility practice’s shift from “small, independent healthcare practice”, to “entrepreneurial venture”, we discussed the traditional model’s outdated business structure. Now, in Part 2, let’s talk about how the leadership atop that structure dramatically affects a fertility center’s ability to do business today, leave alone tomorrow. We’ll discuss eight critical elements of vision and strategy, and we’ll deeply explore those with which IVF centers tend to have the most trouble.

A new vision and different strategy needed for fertility centers

We mentioned that the Practice Director is in charge of an IVF clinic, where the CEO is tasked with the overall responsibility of creating, planning, implementing and integrating the strategic direction of an organization. But what happens when infertility clinics don’t have a clear vision in place? Here are some real life examples:

  • One partner wants to sell his share of the practice to a private equity firm but his partner wants to remain independent.
  • The practice principal wants to increase fertility preservation, bur the rest of her team knows very little about this initiative.
  • Practices jump from one marketing venture to the next, wasting time and money because they aren’t making their advertising work toward their vision.
  • Business development projects are started and abandoned because practices have few benchmarks in place and consequently don’t accurately measure if they’re moving toward their goal.

“Hope is not a strategy,”—Rick Page

Do any of these problems resonate with your practice? We’ve accepted that the head of our company, Principal, Founder, CEO, President, or whatever we choose to call it, has responsibilities that extend far beyond the role of physician and even that of Medical Director and Practice Director. Now visionaries can lead their practices in ways that allow us to super-serve their patients and grow. The leader of a company identifies, articulates, and plans its

  • Core Values
  • Core Focus
  • 10-year target
  • High Level marketing strategy
  • 3-year picture
  • 1-year plan
  • Quarterly Priorities
  • Issues

All of these tenets are essential, with the priority starting at the top of the list. Some we will link to external sources for further reading, because we need to spend more time with the most common principals with which fertility clinics struggle.

1). Core Values

I’ll wager that your values are far more compelling than those of the average business. After all, you’ve devoted a career to helping loving parents create life. But how do you articulate your values to your team, to patients, and to the public? We work in a field that is both being changed by society, and changing society…rapidly. How do we stay true to who we are and what we believe while being able to adapt? When core values are true and defined, leaders make hiring decisions that allow them to unload responsibilities and feel comfortable that their practice is in good hands.

2). Core Focus

Your Why and Your What. Purpose, passion, and cause combined with your niche. The more closely aligned employees are with Core Focus and Core Values, the more prepared they are to make decisions in the best interest of the practice, and the less practice owners need to micromanage.

3). 10 Year Target

Where one wants to be in ten years is the destination from which the rest of the roadmap is drawn. This is where fertility centers frequently fall off track. Do you want to open more offices or labs? Do you want to attract patients from overseas? Do you want to pilot a technological solution? You may notice that we can’t move to the next core tenet of Vision and Planning, the High Level Marketing Strategy, until we have solid long term goals.

 Original fertility marketing consultant, Yogi Berra, on strategic growth

Original fertility marketing consultant, Yogi Berra, on strategic growth

In the same week, I received two calls from two different fertility doctors who had the same question, “how much money should I spend on marketing?”

A million dollars. A couple thousand dollars. My answers to each of them were starkly different.

The first doctor was in his early sixties. He works for a larger practice group and does a little bit of marketing for himself. He’d like to perform seven or eight more egg retrievals per month. He plans to retire in the next two years.

The second physician just completed his REI board certification in the United States. He’s in his early thirties. He wants to move back to Latin America to start a large IVF center that draws patients from the United States, Canada, and Europe.

These are two vastly different long-term targets that dramatically impact who they will hire, how they will build from patient feedback, and how they will market. The 10 Year Target could be the most measurable differentiator between visionary entrepreneurs and independent physicians. Fertility practice groups without a defined long-term target are finding themselves directed by the demands of the day instead of concentrating their resources on becoming who they want to be. Entrepreneurial Operating System (EOS) founder, Gino Wickman, says that the 10 Year Target is not the time to be conservative. Dream big for the best version of yourself and your practice.

4). High Level Marketing Strategy

Do we know who we want to serve and what we mean to them? Is our 10 Year Target defined? Great. Our High Level Marketing Strategy involves doing whatever it takes to get there, within our core values and core focus. It details our

  • Goals (obtained from 10 Year Target, 3 Year Picture, and 1 Year Plan)
  • Benchmarks
  • Unique Marketing Position (obtained from Core Values and Core Focus)
  • Practice Brand
  • Content Strategy
  • Distribution Strategy (advertising)

Benchmarks

Many practices want to jump right into marketing without having reliable benchmarks or key performance indicators (KPI) to plan their strategy. Without them, money and effort may be wasted.  If you’ve ever spent money on advertising and aren’t sure of the results, revisit your KPIs. Do you have access to all or any of these Indispensable Indicators?

  • New Patient to IVF Conversion
  • Phone Call to New Patient Conversion
  • Online Contact Forms to New Patient
  •  Cost Per New Patient
  •  Patient Life Time Value
  • Cost Per Lead

We are data-driven marketers. Results must be measured as accurately as they can be. If you need help calculating your Indispensable Indicators, read Chapter 2 of The Ultimate Guide to Fertility Marketing.

Brand

If you feel like you can’t trust your employees or marketing partners with your message, you may need to document your practice's brand. At the Midwest Reproductive Symposium international (MRSi) in June 2018, I will be giving a branding workshop for fertility centers with branding expert, Mara Lucato. Here’s a glimpse of my thesis.

Brand is being known to the people we serve: how and why we help them with their problems. Logos, color schemes, and slogans, are relevant, or not, in so far as they help us achieve that end.

In our case, we have a community of people that desperately needs our help. In many cases, they don’t know who we are or how we can help them. Our brand and our high level marketing strategy involve providing them with as much value as we can, and then making it as easy as possible for them to do business with us. It includes

  • Connecting them with peer and professional support
  • Educating them
  • Encouraging them
  • Standing up for them

We are charged with making sure that everyone in our region knows that infertility is a common medical issue. That people struggling with infertility are human and their problem is human.
They need to know that we are the ones who will help them. That is a fertility center’s brand.

Content and Advertising Strategy

A fertility practice’s High Level Marketing Strategy activates its brand by delivering its message across the platforms on which patients spend their time and attention. The platforms, and consequently the methods, change. 15 years ago, creating an infertility support blog was a game-changer. 10 years ago, having a Facebook page was a tremendous way to reach new people. Three years ago, Instagram stories and Facebook Live didn’t exist. Today, they are among the best ways to connect with prospective patients. Four years from now, there will be new tactics, and some of our current marketing efforts will be less relevant. A High Level Marketing Strategy allows us to adapt our marketing efforts to the tactics that are relevant to the attention of the people we serve.

5). 3 Year Picture

The 3 year picture and the 1 Year Plan zoom in on the 10 year target. Where are we going to be in three years? What is our revenue? How many IVF cycles are we doing? How many physicians are on staff? In the same way that practices often lack a 10 year target, the three year picture serves the same importance, just getting closer to bridging Vision and Traction.

6). 1 Year Plan

Long term planning for fertility centers

Often fertility centers have annual volume goals, but are they committed before the start of the year? Are they realistic?

7). Quarterly Priorities

Again, fertility practices frequently fall off track here. Do we have three to seven quarterly priorities that must be accomplished this quarter? Are we accomplishing priorities that move our business toward its one year plan, its three year picture, and its ten year target? Or are we drowning in the issues of the day-to-day?

8). Issues

 Just another REI practice manager

Just another REI practice manager

The image of Sisyphus pushing the rock up the hill for all of eternity resonates with many practice managers. Fertility centers’ staffs frequently burn out because they are working on the same issues with no resolution. Care teams spend so much time working on issues that are urgent, they may have precious little time to focus on important, big picture issues. Take a look at the Eisenhower Decision Matrix. 

 The Eisenhower Decision Matrix applied to fertility clinics

The Eisenhower Decision Matrix applied to fertility clinics

As a fertility specialist, or a practice manager, you never have to deal with matters in Quadrant 1, do you? Yeah right. Fertility centers live in Quadrant 1. Employers that make their employees and managers work in quadrant 4 ought to go to jail, (joking…or am I?). Work of little importance and urgency robs human beings of their energy and happiness. Most of the responsibilities in Quadrant 4, by definition, can be eliminated. Let software do the rest.

Now we’re left with Quadrants 2 and 3. As the owner or manager of your practice, with your very limited time remaining from Quadrant 1, which do you prioritize between “urgent and non-important” and “important and not urgent”? It’s Quadrant 3, isn’t it? We often worry about issues that are not important but they have to be attended to right away. This isn’t to say that issues in Quadrant 3 don’t need to be addressed, but that’s exactly what we do, address them. By prioritizing issues in Quadrant 2, we solve them. Visionaries that focus their companies in Quadrant 2 make Quadrant 3 less relevant, and Quadrant 1 less overwhelming.

Paint the picture, chart the course

With a clear vision and strategy, fertility centers know exactly what their goals are and how to achieve them. Without them, practices frustrate their team members, exhaust resources, and find themselves losing market share to competitive IVF centers. Whether one wants to be the largest fertility preservation company in the world, or happily perform 150 egg retrievals per year and super-serve their patients, there’s no right or wrong answer. Their Core Values, Core Focus, and 10 year target inform their High Level Marketing Strategy, 3 Year Picture, 1 Year Plan, Quarterly Priorities, and resolution of Issues. When practices follow a strategy to a committed vision, they are prepared for the powerful competitors and challenges that pursue them. And just in the nick of time, because there are plenty. We’ll talk more about them in Part 3 of our series on the tectonic shift from medical clinic to entrepreneurial enterprise.

If you would like help building your practice’s High level Marketing Strategy, learn more about the Fertility Marketing Blueprint below.

Set Up to Fail: Fertility Clinics Not Structured for 2018

By Griffin Jones

Part 1 of a four part series on the main business challenges facing fertility centers because of the shift from "small clinic" to "entrepreneurial endeavor"

“Young doctors aren’t willing to work long hours,”

“Fellows today don’t have entrepreneurial chops,”

“New REIs don’t want to pay their dues.”

 Millennial fertility doctors may sometimes be perceived this way

Millennial fertility doctors may sometimes be perceived this way

Have you ever made any of these comments or heard them said about your peers? It’s common to razz new subspecialists coming out of their Reproductive Endocrinology and Infertility (REI) fellowship. I often hear from recruiting physicians, that new REIs are not entrepreneurial. That they have no desire to take over a retiring doctor’s fertility center and run their own practice. It is said that fellows and new specialists want to work for someone else, clock their hours, and go home.

There may be valid points in this general perspective, but I see a much more comprehensive picture. Would you like to see what I observe from my semi-outsider’s vantage point? The radical statement to follow is the thesis behind the core business challenges with which so many fertility centers battle today.

The Tectonic Shift from "SMALL CLINIC" to "ENTREPRENEURIAL ENDEAVOR"

I don’t believe that many practice owners wanted to be entrepreneurs either. I suppose many physicians wanted to run their own fertility center and practice medicine the way they prefer. Is that unfair? Twenty to twenty five years ago, that may have been a tenable position. At that time, fertility specialists opened and operated small medical practices. Today, whether they like it or not, independent practices are entrepreneurial enterprises. We have sailed away from our calm cottage lakes, and onto the ocean of commercial venture. Here, our competitive threats come not only from other fertility centers, but from Wall Street, Silicon Valley, and a dynamically changing society. Canadian and European friends, this includes you too.

In this series, we’ll identify the main threats and challenges that fertility doctors, now accidental entrepreneurs, face in this new, unforgiving landscape.

  • Practice Business Structure
  • Vision and Strategy
  • Fierce Competition
  • Rapidly Changing Technology and Society

And we will force ourselves to answer the question we can no longer afford to avoid:

What is the plan?

Part 1: PRACTICE BUSINESS STRUCTURE

Independent fertility centers’ competitive challenges begin long before we even begin to think about marketing. Typically, they are inherent to the structure of the practice. If you own an IVF center run by fourteen employees, it may be tempting to ignore corporate structure. On the contrary, it is lack of structure that frequently keeps small practices from competing with large firms. Here we see the first differences between an REI practice, and a commercial endeavor.

A fertility clinic is run by a

  • Medical Director
  • Practice Director
  • Lab Director
  • Practice Administrator

Who runs the large corporations that are buying and operating fertility clinics across North America? Did you know that your new competitors are led by a C-Suite? They have a

  • Chief Executive Officer (CEO)
  • Chief Operating Officer (COO)
  • Chief Marketing Officer (CMO)
  • Chief Technology Officer (CTO)
  • Chief Financial Officer (CFO)
  • Chief Information Officer (CIO)
  • Chief Human Resources Officer (CHRO)
 Entrepreneurial Operating System (EOS) Accountability Chart applied to fertility clinics

Entrepreneurial Operating System (EOS) Accountability Chart applied to fertility clinics

This isn’t to suggest that a four physician, twenty five employee IVF clinic needs to have the same corporate structure as their large competitors. They don’t. They need to run their company on a business operating system (BOS) if they want to articulate a vision, agree upon a strategy, and enable their entire team to achieve their collective goals. Fertility Bridge is run on an operating system called the Entrepreneurial Operating System (EOS). To clarify, I am not an EOS consultant, nor do I sell their services at this time. You can find another BOS or you can build your own, though I have no idea why anyone would want to start from scratch.

One of the strongest arguments of EOS is that there are three core functions in any business. In our field, we might split Operations into Medical and Lab, or even Compliance, but the three core functions are

  • Operations
  • Finance
  • Sales and Marketing

In most independent IVF centers, instead of planning for the three core business functions for which someone must execute, they are often bundled into “other” and dropped in the lap of the practice administrator. Is she or he expected to run the operations of the practice, account for the finances, recruit and manage team members and write and execute a complete marketing plan? Is she or he an expert on digital media, law, technology, workforce development, and corporate strategy? Is that fair? Is that realistic?

How many seats are you in?

Rather than hire someone for each of these roles right away, which most fertility centers cannot do, EOS helps with the concept of “one person, one seat”. One person can hold more than one seat, but one seat cannot be occupied by more than one person. This helps small practices flush out capacity related issues and step out of roles as they grow.

Take a look at an example accountability chart below. How many seats are you in? How many seats are unclear as to who is accountable for them?

Example Accountability Chart for fertility clinics.png

As an REI physician, in just one very busy seat, you probably have to perform

  • 150+ egg retrievals,
  • Several dozen intrauterine inseminations (IUI),
  • All other surgeries

Oh, and you still have to spend time with and respond to your patients.

While infertility doctors at corporate-run clinics can devote all of their working time to their "REI seat", you’re the Medical Director or Practice Director of your IVF center and you have many other roles. As the head of an entrepreneurial venture, you now have additional responsibilities to properly delegate or do yourself.

  • Implement the vision of your company
  • Hire and interview every employee
  • Execute the marketing strategy
  • Account for the finances
  • Run the operations of the office
  • Manage every member of every team

Simply delegating each of these responsibilities can be a full time job, let alone sitting in each individual seat. Again, independent practices don’t necessarily need dozens of employees to run the business side. If they want to maintain or grow their practice, they need to eliminate, automate, and delegate. [A wink to those practice principals that are still signing paper checks].

Is "control" hindering your practice's growth?

Something stops fertility centers’ teams from taking ownership of each of these responsibilities and taking them off of the practice owner’s lap. As one writer says, “Want to drive your employees absolutely crazy? Give them responsibility without authority”.

If we hire a Human Resources Manager, but she doesn’t have the authority to choose the payroll company, negotiate salaries, or make the final decision on hires, then the responsibility of Human Resources continues to consume our time and energy.

If we hire a finance officer, but this person isn’t able to choose the bookkeeping software, set pay dates, and decide the terms of Accounts Payable and Accounts Receivable, then we haven’t delegated finance.

If a practice hires a marketing director, but the marketing director doesn’t have creative control and isn’t given a budget and goals for which they are responsible, then the load of marketing remains in our lap.

How does it impact the growth of your practice if you and your partners deal in every facet of the business without clearly defined roles in an operating system? How does it affect the way you practice medicine? How does it weigh on your relationships with your patients, your team members, and your loved ones?

SHIFTING from "practice owner" to "visionary"

If this describes you or your partners, is it because you're reluctant to pass on control? When practice owners feel that that they need to manage every movement in the practice, it may be because there is not a cohesive culture behind a clear vision. By acknowledging the tectonic shift that has happened in the field of reproductive health, that independent fertility practices are in fact commercial enterprises, practice principals can step into the role of visionary. In the next part of our series on the difference between fertility practices and entrepreneurial ventures, we’ll see when a company follows an operating system, practice principals are able to chart a vision and plan that allows them to pass responsibility to their team and adapt their practices to our changing world.