REI

Why IVF Doctors Leave Their Practice: The Reasons Every REI Fellow and Practice Owner Should Know

By Griffin Jones

Physicians with the letters, REI, after their names don’t come cheap.

“Any Fellows you can introduce us to?” I’m often asked at PCRS and ASRM (the Pacific Coast Reproductive Society and American Society for Reproductive Medicine annual meetings, for those not in the field).

“Third years?” I demur, “Nope, they’re all signed. Second years? What month is it? Nope, they’re signed too. I know some first years. Want to talk to them?”

“Yeah, I guess so,” the hiring physicians usually concede.

Reproductive Endocrinology and Infertility (REI) specialists are in such demand, soon enough, we’ll be recruiting med students. So when you’re fortunate enough to find someone who may be able to purchase equity of your practice, allow you to exit for retirement, or at the very least, meet current or growing patient demand as an employee, you probably want the relationship to be successful.

It seems to me, however, that the trend of practice partnerships who break up and associate docs who leave before becoming partners is on the rise. I say “seems” because our sample size of 1,200 fertility specialists in North America is inherently small. I don’t have any data, but I know eight associate doctors who thought they were on a partnership track AND left their practice in the last eighteen months. I know of three other partners who broke up in the same number of time.

I spoke with four associate fertility specialists who wanted to be in independent, private practice and who wanted to become partners. I de-identified their information and they allowed me to share their stories with you. They were brave in doing so, and did as much for the benefit of younger fertility doctors selecting a potential practice and practice owners recruiting a potential partner.

There are multiple sides to every story which is why I take good care not to name any of the practices nor physicians involved. Having negotiated many business deals in the fertility field, however, it is not difficult for me to picture the scenarios as they were described to me.

Any recent client of Fertility Bridge can tell you that I insist on being explicit and redundant in the early stages of an engagement. I have found, almost without exception, that the more strictly expectations are expressed in the beginning, the less likely they will actually ever need to be enforced. The results of the anecdotes you are about to read thread a common pattern wherein the prospective partners and the practice principals clearly had different expectations. In my estimation, crucial expectations were neither explicitly nor repeatedly agreed upon by both parties before teaming up together.

Perhaps carefully considering the accounts of these four brave REI physicians will give you better insight to prevent a long and costly signing or hiring mistake.

Fertility Doctor #1
left a small independent practice in a small market to join a large practice group in a large market.

When I was looking at the first practice I joined, the initial discussions always started with what they were looking for and what I wanted from them. The contract was then offered, and the details negotiated. My salary was a total low-ball offer and it became tense when I countered, but in the end we agreed to a number. I had been offered a partnership in verbal discussions, but it was apparent there was no plan for this to actually happen. I was quickly aware the promises were shallow. It was mentioned that it would be an option after I proved to the practice I was worthy and there would be a monetary buy-in. The initial discussions leading up to the contract took 2 weeks.

This practice verbally offered me a “sweat equity” ownership where I would be paid less for the first 4 years, then would be given 25% of the practice free of charge. The other non-partner who started 2 years before me was offered the same arrangement and, as of 3 years into their employment, a legal contract was never put together to make them a partner. From the beginning, it seemed fishy and that didn’t reassure me.

The partners never attempted to reassure my feelings. I asked them to draft a contract for the other potential partner, believing if they did, I would be reassured. They ignored my requests.

Within two months of joining, I was suddenly aware that the promises and the culture of the practice were not consistent with my goals. I officially resigned after 8 months.

There were so many red flags that I realize now indicated that it wouldn’t be a good fit. Mostly, the promise of free partnership with no buy-in sounded too good to be true, and I was always skeptical. When I started, the “vibe” was very odd, too. The staff seemed unwilling to accept a new person and there were a lot of “behind closed doors” discussions about how to respond to “new ideas,” aka standards of care that were not being followed, but I suggested we adhere to. It was also made clear early on that my other interests, such as academics and professional committee membership was not supported by the practice.

When it comes to selecting a practice for new REIs, start with knowing where you want to be geographically. Most people either want to live in a city, or they don’t. Then see who is available in the town or city you choose. Check SART stats and ask friends/colleagues about the group. Decide if you want to be in academics or not, but really, this will be dictated a bit by how geographically selective you are.

Be sure your salary, bonus structure, and benefits are very clear. Don’t expect partnership to be set in the original contract.

Be skeptical of overly vague or short contracts—most are very wordy and lengthy. Ask to speak to other group members, especially new ones, to see how their contracts and promises matched up. Partners rarely discuss details of partnership, so don’t be bothered by some secrecy.

Fertility Doctor #2
left a small independent practice in a small market to start their own practice.

I can share with you that you never exactly know how a position is going to go prior to you joining, no matter how good the planning. However, in my position there were signs both subtle and others like a glaring siren that perhaps the practice was not picture perfect after all.

I was embraced by the support staff. However, the physicians were standoffish. In retrospect, I believe that they were all the while looking for an employee and not a partner, despite saying they were looking for a partner constantly.

Ultimately, the practice I believe is/was looking to sell. I learned of that by accident and did not want to be a part of the sale. I decided that my values were not aligned with those that I worked for. I did not believe partnership was ever going to happen because of a sale or potential sale. If my values weren't aligned with my bosses, then I felt the situation would really never improve--I would be out on an island. I felt that I had much more to contribute to my community and I wanted my contribution to resonate with my value system, have a wonderful work culture, and build something that would be impactful for the patients I serve.

It is for that reason, and many others, that I decided to open my own place.

To new REIs, I would say, if possible, visit the practice when they are working to assess the things that don't come out of an interview. Even then, they may be on their best behavior. But if they seem standoffish, defensive, that will probably be what they are like to work with.

Fertility Doctor #3
left a small independent practice in a small market to start their own practice.

I was at a university program and I went to the only independent private practice in the area. There were multiple doctors on the verge of retirement, so I thought it would be easier to become partner by buying out the retiring partners rather than starting my own practice.

The partners wanted to lock me in so they could sell to a private equity firm, so partnership was offered immediately. I hired an experienced medical practice consultant that cost me $15-20,000 over the course of two years. He didn’t believe in 10% growth year over year with multiple doctors who were nearing retirement. He felt that I would lose between $3 and $10 million dollars in selling to private equity over the course of my career. So, instead of immediate partnership, I agreed to work as an employee until partnership was agreed upon or not. A non-compete wasn’t required. This agreement was initially set for a year, and then it was extended once I realized it was going to take longer. It took 6 months to reach that agreement.

In equity deals, older doctors have the upper hand.

The initial appraisal stated that the practice was expected to grow by 12% in EBITDA in my first year as an associate, but it actually decreased by 5%. My consultant determined that the practice may have been overvalued by 50% to 100% and advised me to see what valuation would look like if projections weren’t met. Since the initial projections weren’t met, the contract allowed for a dispute of the appraisal, but the partners refused a second one.

At this practice, the physicians had a reputation for being very business-oriented and trying to get their way in a negotiation. A previous associate physician left practice before buying-in. Three doctors previously had chance to buy-in and did not. Those should have been my first red flags.

I decided to leave when I realized that if I had bought in at the appraised price, I would be bankrupt right now. The partners weren’t willing to reassess the appraisal and practice valuation. My consultant felt that the appraisal process had been hijacked, and the partners did not acknowledge this point of view. So, I decided to start a practice with my own culture.

If you’re a new REI heading into a new practice and partnership is discussed, hire a consultant on day one, before an appraiser even gets involved.  Once the appraiser sets a valuation, they have to save face. Appraisals are not necessarily objective, especially if all parties don’t put their input in from the beginning. Do not wait for the appraisal process—you must have your input from the very beginning. I’m a young physician who knows nothing about the business of medicine. It took me a good year or two to understand how ownership works.

Partnership is going to mean several million dollars over the course of your career, even if that means spending money on a consultant when money is short right out of Fellowship. Try to negotiate against a non-compete if partnership is offered immediately. If partnership is not offered immediately, non-competes are essential because the partner physicians help the associate to build the practice.

You can’t put everything in writing. In my case, we had terms in writing and they were not honored. You have to work with people who you can trust, though you can’t trust people implicitly.

Fertility Doctor #4
left a small independent practice in a large market to join a large fertility network.

I chose to join the small practice in the first place because it was in the city I wanted to be in. I thought there was opportunity for growth, both in my career and financially, and have autonomy.

I wanted to be on partnership track from the beginning and thought I would go on to become one of more eventual partners. The understanding was that I would become an equal partner after two years, after meeting certain benchmarks. The original contract was a standard employment contract and it included one paragraph about opportunity for partnership, but it was vague. I had such little interaction with the practice owner(s).

The benchmarks were set, my buy-in and what I had to bill would each be a certain amount . That’s when the owners’ character really started to come out--in the contract negotiation. Partners can say that they work harder than others to justify a higher base salary for themselves or to retain more control or equity. The contract had a clause in it that stated if/when partners violate the terms of an agreement, you can’t sue them, so partners always had the upper hand.

In the practice itself, things were told to me that they were a certain way and, it turned out, they were not. The practice was inefficient and there was double booking of physicians. I wanted work/life balance, but it never really seemed to get there.

As new REIs, we don’t understand our power. We feel compelled because of our medical training. I felt like nothing was ever up to par and I often made suggestions that went unheard.

After talking to several other potential employer and partners, I finally found a new clinic. The new group I joined supported my initiatives, operational recommendations, and preferences for work-life balance. I wanted a group approach and so did they.

Because of my experience, I was gun-shy about joining a new partnership track, though my new group pushed for it. At this time, I just didn’t want it, so I signed on as an employee.

If you’re new to the field, make sure you have the same goals as the people you are joining, both day-to-day and long term, in financial and patient care. Investigate red flags and warning signs. No one will give you what you want if you don’t ask for it, including scheduling, compensation, vacation, partnership, continuing education. Hire a good lawyer from the beginning--someone who will advocate for you, not just draft a contract. 

——

Keep the plan clear.
It’s a better experience for everyone.

It is very difficulty for REI practice principals to find new doctors and it is equally hard for young fertility specialists to choose their career fertility center. It is tremendously expensive for both to make the wrong decision. It drains your mental and emotional energy.

In episode 9 of Inside Reproductive Health, I speak to Holly Hutchison, co-owner of Reproductive Health Center in Tucson, Arizona. You might listen to Holly’s advice on how to set expectations between reproductive centers and fertility doctors. From the accounts you just read as well as more extensive business development work with IVF centers, here are some of the expectations that you want to clearly define before any partnership track or even employment agreement.

  • What percent of equity will be available for purchase? Minimum? Maximum?

  • Over what time?

  • New Patient Visit Requirements

  • Procedure Volume Requirements

  • Multiple of salary required to be billed to buy in

  • Working hours

  • Vacation policy

  • Management responsibilities

  • Marketing responsibilities

  • Earn out

  • Exit agreement

  • Practice valuation

  • Terms for reassessing practice valuation

To hiring principals and young fertility doctors alike, it is incumbent upon both to agree to these expectations, conceptually, verbally, and then in detail and in a legal contract. They must be repeated ad nauseum.

You may be worried about walking away from a deal. Don’t be. I do it all time. I don’t want happy prospects. I want happy clients. So too is it for you who want a long, healthy, profitable, happy partnership. Better a few uncomfortable conversations and some hours invested, instead of two years, hundreds of thousands of dollars, and your mental and emotional bandwidth.

What other expectations did I not include that you believe are requisite?

We have helped over a dozen fertility practices align their vision among their partners and staff. If you think our methodology would help you, learn more about the Goal and Competitive Diagnostic.

Fertility Company Profile: The New Marketplace for IVF Patient Acquisition

By Griffin Jones

Consolidation.

If you had to reduce the water-cooler talk of our field to one topic, it would be exactly this: the consolidation of IVF centers, fertility pharmacies, brokers, genetics companies and others, purchased with private equity money.

I wrote about these players, and the collective unease about them, in 2018. I have talked about it on the IRH podcast with guests such as doctors John Storment and David Sable. I hear the apprehensions and I share some of them.

Are we capable of betraying our patients’ best interest because of obligations to financial stakeholders?

That’s a very sound concern for the delivery of fertility care. Furthermore, it’s very likely that there are examples wherein this concern is justified.

I own Fertility Bridge outright, 100%. I often make decisions based on what I want for the relationships of our clients and employees. If I had to answer to many different shareholders, we would likely do things very differently.

Conversely, I also see examples where this pressure disrupts the status quo and forces innovation and efficiency when we have to compete to earn patients’ selection. Sometimes, the independent centers with the least competition are the least likely to invest in patient experience and team culture.

Either way, I do not see the consolidation of REI practice groups as the single greatest disruption coming to the field. Not by a long shot. In 2018, I also wrote that technological revolution dwarfs any disruption caused by the sale of IVF practice ownership to private equity.

While others are looking to Wall Street, I have my eye on Silicon Valley.

Consider it this way:

The independent REI practice is the local, 100 room hotel.

 

They’re worried about the Marriott building a 1,200 room, mid-rise on the waterfront.

I’m worried about AirBnB.

One view looks at larger and more dominant competitors in the same marketplace. I’m looking at a whole new marketplace.

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The model for the delivery of healthcare, including fertility care, has become too estranged from the conveniences that patients are used to when researching, considering, receiving, purchasing, and evaluating goods and services as consumers.

Our patients under age 30 have conceivably never called by phone to invite a friend over, break up with a significant other, or even order food. Yet, for virtually every fertility center, there is ultimately no other way to schedule a new patient visit.

Please take my next admonition as commentary on the mechanics of patient relations and not on providers’ devotion to service; I know the depth and sincerity of so many practitioners’ vocations.

We’ve been too slow to adapt and have grown out of touch with our patient demographic. For some, it’s already too late.

I don’t envision large fertility groups or boutique REI practices going away, but another class is emerging to capture the middle, the entry, and everything around.

There is a wide opening to provide the user experience of patient acquisition and patient retention that the current demographic demands. With the right application, and/or scaled acquisition strategy, one or two platforms can become the gateway through which patients enter. Many companies are jockeying for that position. Some of them may win, or the winner may not yet be in the marketplace. The extent to which they’re able to scale is the degree of leverage they have over providers.

Put frankly, someone is building a better mouse trap than you have so they can sell (who would have been) your own patients back to you.

Many have tried and not (yet) succeeded, but it would be hubris to think that others won’t.

Here are some of these players now, and what they’re up to.

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. No information in this article comes from conversations that I have had with the executives of these companies. 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.


CONSUMER APPS:


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GLOW

The tech-forward platform for serves fertility patients and connects them with clinics by providing:

  • Glow- Ovulation and fertility tracker

    - Includes:

    • Fertility Calendar

    • Daily health log

    • Health insights

    • App syncs with partners app

  • Glow Community

  • Glow Nurture - Pregnancy app

  • Glow Baby - Baby Tracker

  • Eve by Glow- period tracker and sex tips

Glow Fertility is segmented into a direct-to-consumer programs and a separate employee benefits program.

  1. Direct-to-consumer programs:
    Glow predicts ovulation patterns and fertility probability based on user data inputs and supports women with services such as egg freezing and IVF. In addition to helping clients navigate the process of getting pregnant, Glow also facilitates access to healthcare providers (with whom the Glow team negotiates discounts to reduce the financial burden of historically expensive fertility treatments).

  2. Employee benefits program:
    On the employer side, the Glow Fertility Program negotiates contracts between employers and fertility care providers.

Millions of women input data on menstrual periods, doctor visits, sleep habits, sexual activity, and birth control (in addition to over 35 additional basal health data points), and Glow has all of that data.

Although Glow does not publicly share the full details behind it’s business model, the firm charges businesses for the employee benefits program, and is also able to charge a fee for facilitating access to services from preferred healthcare providers. Glow also offers women personalized consultations through its direct-to-consumer channel, offering one free session before converting to a charge for service model.

History and Funding:

  • Launched in 2013 by Max Levchin (co-founder of Paypal)

  • Glow originally spun out of PayPal Co-Founder and CTO Max Levchin’s business incubator, HVF.

  • According to Crunchbase, Glow has raised over $23 million in venture capital, $17 million of which was raised in a 2014 Series B round that included Founders Fund and Andreessen Horowtiz, reports Vox.


EMPLOYEE BENEFITS:


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CARROT

Carrot is a startup out of Y Combinator working with employers to offer fertility care like egg-freezing and in vitro fertilization (IVF) as a workplace benefit.

Provides affordable options for those struggling with infertility by partnering with employers to add coverage for fertility services. They offer customizable plans to employers to include varying levels of fertility coverage at a sliding, per-employee dollar amount.

Founded by:

  • Tammy Sun, CEO

  • Dr. Asima Ahmad, Medicine

  • Juli Insinger, Growth

  • Arun Venkatesan, Engineering

Funding:

  • Total funding: $15.2 million

  • According to CrunchBase, Carrot has raised $15.2 million over four rounds, one angel, two seeds, and a series A. Their lead investors have been UnCork Capital with 3.6 million and CRV with $11.5 million.


 

NU BUNDLE:

A benefit system employers can add to attract top talent.

Also offers services to help members understand their options, with guidance before, during, and after treatment. Services for members include:

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  • Their family planning concierge, which reports to provide members with caring, live guidance, and support at every stage of the journey.

  • Help for members maximize existing benefits.

  • Access to preferred pricing at top clinics and pharmacies.

  • Access to customized fertility payment options.

Nubundle offers its products as a voluntary employee benefit, limiting the costs to employers. Employers pay a flat annual admin fee.

Founders

  • Chris D'Cruz

  • John Ciasulli

Funding

  • Total funding: $1.5 million

  • In a seed round, NuBundle raised $1.5 million from three investors led by Lightbank.


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STORK CLUB

Family/fertility benefit suites for companies.

In 2018, Stork Club expanded their core offering by introducing a comprehensive suite of Flexible Family Benefits that include both Fertility and Parental programs designed for large enterprises.

Stork Club advertises to be the only enterprise-ready family benefits provider designed for self-funded employers. They process claims and pay providers directly, letting your team focus on more important goals.

They have employee-facing web and mobile apps to help employers on-board, manage, and validate new programs with vetted provider partners.

History

  • Founder, CEO: Jeni Mayorskaya

  • Early Stork Club investors and advisers include key employees from LinkedIn, One Medical, and Facebook .

Funding

  • They appear to be funded by slow ventures, but it is unknown how much money they have raised.


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PROGYNY

Right now, Progyny is the fertility benefits company.

They provide fertility solutions for self-insured employers.

Some may remember, Fertility Authority, the consumer facing company and fertility clinic review platform that negotiated reproductive health benefits. The company changed its name to Progyny in 2015 after acquiring, or being acquired by, Menlo Park-based Auxogyn, the inventor of Eeva. They quickly sprinted ahead to lead the race of fertility benefits broker.

In my opinion, this is a one-horse race at the moment, with their young, new competitors looking to be the person who can disrupt their early lead as Lyft did to Uber.

History:

  • Founded in 2008 as Fertility Authority, became Progyny in 2015

  • CEO: David Schlanger

  • Headquarters are located in New York, New York

Funding:

  • Total funding: $99.5 million in ten rounds from six investors, as documented by CrunchBase,

    • Who led the rounds has not been released.

    • Though we do know they raised $15 million in a new round in 2016.


THE FINANCIERS


Now this group is different. They’re not a new wave of tech companies launched from or by Silicon Valley serial entrepreneurs. However, by default, they do serve as lead generation and another entry point for patient acquisition from which they can bring new patients to fertility centers.

Also, I speculate a potential scenario in which one or more of these companies are acquired for easier, quicker, and more expansive entry into the fertility field.

Think about it. Many of these companies have an outdated user experience and some of the founders may be ready to cash out of the game rather than reinvest and overhaul. Again, this is Griffin Jones putting his Jim Kramer hat on and being purely speculative.


 

WIN Fertility:

Maybe they belong in the employer benefit group, but a few things set them apart:

They have been in the field for two decades.

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WIN offers benefits through employers and affordable options for treatment through practices for those without insurance or for those who have exhausted their insurance benefits.

WIN integrates with national and regional insurance carriers, as well as the nation’s largest pharmacy benefit managers to procure fertility services. WIN patients are qualified prior to fertility treatment.

Available 24 hours a day, 7 days a week, WIN’s Nurse Care Managers guide patients through every step of their fertility journey.

History

  • Originally founded as an independent women’s health management company

  • Founded in 2000

  • President and CEO: Roger Shedlin


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Attain Fertility

ATTAIN FERTILITY:

Attain makes themselves known for being the original multi-cycle plan provider. They offer bundled IVF cycle plans, called Multi-Cycle Discount Programs, that include multiple IVF cycles for a one-time, discounted fixed fee.

Being owned by IntegraMed they are affiliated with 40 practices, 130 locations, and more than 180 Reproductive Endocrinologists in their US wide network.

How it works:

  • Some patients qualify for their Multi-Cycle Discount Program + REFUND. This offers patients who meet certain criteria the potential of getting a refund if their IVF cycles are unsuccessful.

Estimated revenue:

  • $15.4 million

History

  • Founded by Pam Schuman


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ARC Fertility

ARC says they are the access point to the “nation’s largest network” of fertility professionals and offer innovative financing options.

More specifically, ARC offers fertility treatment packages, refund guarantees, and finance options to people living with infertility.

Value proposition to clinics and/or patients:

  • Largest network

  • Most trusted

  • Doesn’t own/operate clinics -> looking out of patients best interest

ARC’s fertility care packages can be bundled with medication and genetic testing services and bundle the cost of services into one monthly payment.

History:

  • ARC was founded by David Adamson, MD.


THE WILDCARD


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Fertility IQ

The most comprehensive review platform for fertility specialists and fertility clinics.

With FertilityIQ, prospective patients search by location or by a specific doctor or clinic name. Doctor profiles are detailed with aggregated metrics including communication quality, degree of individual attention, responsiveness, and overall recommendation. Patients’ summarize their experiences with doctors and clinics -- from the doctor’s approach to diagnosis and treatment protocols, to the nursing staff’s level of organization, to the competence of the clinic billing department.

History and Funding:

  • The founders of Fertility IQ, Jake and Deborah Anderson-Bialis, say they will never take marketing dollars from clinics. Rather than seek capital from outside investors, the couple decided early on to self-fund FertilityIQ.

  • Founded in 2015, went live in 2016

One of my clients once told me that they were weary of Fertility IQ because they thought they were building a mousetrap and they didn’t know what it was. I’m not weary because I believe Jake and Deborah have built their platform from an authentic ethos and are serving the market in a genuine and desperately needed way. Where the mousetrap will lead, I have no idea but it’s already a darn good one. Fertility IQ offers the best user experience for fertility clinic selection and has some of the best consumer generated data in the field.


Conclusion:

Up to now, I have presented private equity backed consolidation and venture capital backed innovation as two separate phenomena, though they certainly don’t have to be. What will happen when the largest fertility networks, their parent companies, or private equity firms, acquire the largest scale platforms for patient acquisition, financing, distribution etc? Vise versa?

Resilient businesses survive revolution and later thrive because they adapt to capitalize from these disruptive forces rather than be replaced by them. There is more opportunity for the independent REI practice than there has ever been before, but it isn’t coming from doing business the same old way. It requires new strategy, paying close attention to the new players in the market, and using them for their benefit.

If you would like help in adapting to these forces and benefiting from the disruption rather than being pained by it, learn more about how to implement the Fertility Marketing System.