Former practicing REI, David Sable, and venture capitalist, Abigail Sirus, deconstruct how democratization will change the face of the IVF field. Sable and Sirus break down the four principles of how this will be accomplished, perhaps sooner than anyone anticipated, on this week’s episode of Inside Reproductive Health, with Griffin Jones.
Listen to hear:
What Sable and Sirus believe will happen when the travel-agent model for IVF care is abandoned and patients are empowered to oversee their own care.
Griffin question what risks this evolution may introduce to both patients and practitioners.
What Sable and Sirus think may happen to incumbent REIs- whether or not they will be phased out entirely.
Why Sable and Sirus believe, one day, patients will pay for IVF if - and only if- they have a baby.
Reference:
Abigail’s info:
LinkedIn: https://www.linkedin.com/in/abigailsirus/
Company: AWM Investment Company Inc.
David’s info:
LinkedIn: https://www.linkedin.com/in/davidsable/
Company: Life Sciences
Transcript
Griffin Jones 00:26
Netflix? Or are you Blockbuster Video? Or are you HBO? Or are you some other analogy that should be applied to the fertility field as we talk about the massive change that is coming from venture capital to the field of reproductive health. My guests today are Dr. David Sable, who needs very little introduction to you all. This is his third time on the show former practicing REIi also teaches at Columbia University for classes on entrepreneurship also manages a fund for Life Sciences. Today, we bring on his colleague, Miss Abigail Sirus, who is a venture capitalist and investment associate for another life sciences Innovation Fund. She had at IBM for another number of years before that, today we talk about the four principles for democratizing IVF. We get so engrossed into these principles and the changes that might be happening in the marketplace and who might be executing upon them that we're going to have a part to where we go through some of the mapping where of the areas of biggest potential disruption for the fertility field, I felt that we needed this conversation to set up the next one, and I don't tire of having Dr. Sable back on the show, and you don't seem to either. So until you do, then these multi part series make sense today enjoy the four principles for democratizing IVF. With Dr. David Sable and Abigail service. Ms. Sirius, Abigail, welcome to Inside Reproductive Health. Dr. Sable. David, welcome back to Inside Reproductive Health.
Abigail Sirus 02:08
Thank you for having us.
Griffin Jones 02:11
I'm always happy to have Dr. Sable. Back on the show Abigail, this is the first time that you and I have met. And I want to talk about an article that David wrote recently based on work that the two of you have done together. But before we get into the article, just give me a little background. How did the two of you link up? Sure,
Abigail Sirus 02:29
I'd be happy to. So Griffin, David and I actually had the pleasure of meeting on a project at while I was at my previous company, IBM, I was a blockchain strategy consultant. And David was actually one of my clients. So we in that instance, we're trying to create a blockchain enabled system called IVF, open to really bring standards to the way that biospecimens are stored and tracked and traced along with chain of custody for in vitro. And I admit, you know, Griffin, I'm actually the product of IVF. So my twin brother and I were born via IVF. And it's it's truly a miracle that, you know, I really wouldn't be here without. And so it's always had a place in my heart and been special to me. But when I got to meet with David and several others across the industry now a few years ago, and do this project together, my eyes were really opened to the industry in a new way. And I'm a process minded person. And when I started to understand the inefficiencies across the space, it really started to inspire me and grow my passion for all of the opportunity that is here. And things that we can can kind of bring to light through innovation, which I know we'll talk about a little bit
Griffin Jones 03:42
later. But what came of IVF open?
Abigail Sirus 03:45
Absolutely. Well, I'll let David answer that question.
David Sable 03:49
Thanks, Griffin. Thanks for having us. having me back. And having Abigail on. Going back to the decision to bring Abigail on I try to endeavor to be the dumbest person in the room. Wherever I am.
Griffin Jones 04:00
It doesn't work when you and I are hanging out.
David Sable 04:04
Well, certainly when she's around, it's today. That happens. But now IVF open was we likened it to building drainage ditches for to let the IVF industry scale try to help you and I might have talked about it briefly trying to have one place that assigned identifiers for frozen eggs and embryos so that nobody ever was stuck someone's eggs and embryos for somebody else's. And nice thing is it kind of got it's been taken up by a lot of the private industry incumbents and made part of their kind of overall strategy. Training Group enforce these kind of rules by a nonprofit is a difficult thing to do. So having kind of the industry say yeah, this is a really good thing to avoid these problems. Let's go ahead and try and see if we can build into our her handling of specimens, a uniformity of labeling. And that'll evolve in a nice way kind of organically. within the industry, what we did is we tried to put all the incumbents together into a single, not a room and single single zoom screen. And, you know, it really it's it was great was that everybody got it. Everybody understood, and left the effort, which hats off actually to Risa Levine, who you know, who's a super patient advocate activist in this field for kind of getting the whole thing off the ground. And the other great thing that came out of it is I got to know Abigail, because IBM was a big partner of ours, in that. And then when I was looking for someone to join me, actually just having us if you know anybody, and she said, Well, how about me? I said, well, they knew you were available, I wouldn't be asking. So I brought her on as soon as I could. And that's been terrific. She's been with us for almost a year. Now.
Griffin Jones 05:57
Let's talk about the article that brings us here today, which is about the four principles for democratizing IVF, the four guiding principles for democratizing IVF. And this was an article that you published just before ASRM David. And there are four principles, I have a feeling that we're going to go into the third one disproportionately today, at least that's where my disproportionate interest lies. But the four principles for democratizing IVF are abandoned the truck travel agent model for IVF patient care, use the gravitational pole, foreign by incumbents making today's highest pregnancy rates, the floor of outcomes for the future. And fourth, using greater certainty uniformly higher outcomes and improve data collection analysis to actually quote, qualified data leading to better risk management, who will talk about the four of those principles? Let's start with the first one. What do you mean by abandoning the travel agent model of IVF? Patient care?
David Sable 07:05
Well, yeah, 30 years ago, if you wanted to take a grand tour of Europe, you call up a travel agent. And they would book your flights for you book, your hotel, book, your tours, make reservation restaurants for you add up the bill, put a big margin on top of it send you one bill, and he'd write one check. And it's a it was a way of getting things done. And it's a nice model, if you a can afford it, be have access to a great travel agent. And see they actually give you what it is that you want. For the IVF world. That's kind of what we have. Now you go to an IVF clinic, you say I'm having difficulty conceiving, and the incumbents in the clinic make all the decisions for you. And they charge you one amount. So your input really comes down to just choosing a clinic. And they make all the decisions for you from there. What the future of IVF as we foresee it, and the way things seem to be evolving, as we disassemble the cycle into different places, into geographies closer to where the patients live. Using our inputs more efficiently, not putting everything into a $2,500 a square foot laboratory is that the patient herself or the family themselves will be able to choose maybe being monitored one place, have their egg retrieval somewhere else, take the rigs store them somewhere else. In initiate contact with the laboratory, once the eggs are frozen, and maybe bring your reproductive endocrinologist into the process later on. Giving the patient the opportunity to choose to stay closer to home do some price comparison shopping. Really the way we purchase just about everything nowadays, there's no reason that IVF cannot evolve into that model, which will result in greater access, more price comparison we have more price choices, and an ability to kind of oversee one's own care the way you can do so many other choices now in the marketplace.
Griffin Jones 09:24
Maybe we'll bring this up a little bit when we get to the third point where we talked about dollars until baby and time until baby in life disruption to baby but is there a risk if you are abandoning the travel agent model the all in one model by choosing your clinic of having death by 1000 cuts like I don't think the airlines have added a lot of value the Spirit Airlines and the Frontier Airlines by having people choose if they want to bring a carry on if they want to pay more for that or if they want to pay more for not having a middle seat and maybe there's something to be said For the Southwest, and the jet blues and the Alaska's that have brought down cost without making people have to nickel and dime on an each individual micro choice. But what about that?
David Sable 10:14
Well, I think that if you're looking at people, yeah, if you're looking at the people who have access to air travel now, without a very, very low close budget airline, we have to pay for your seat choice and pay for each bag you bring on. And there's no food and there's no flight attendants, then it may not be very additive to them. But we have to ask ourselves, and you have to start every conversation the same way, what problem are we solving. And if we're solving for access for the next million, 5 million people per year that need IVF, that have no access to it now, then they may be more than willing to, at a price point in a geographic location that works for them suffer and endure some of those little cuts of inconvenience. Whereas if the choice is they have no access to IVF at all, then were you kind of opening that consumer choice up where it will matter, people don't want to buy an IVF cycle, they want to have a baby. And if I, you know, look at some of the inconvenience and the things that people endure now to go through an IVF cycle, including traveling 1000s of miles, and taking off at 40 hours of work, per cycle, in order to go back and forth to the clinic to be monitored things of that sort, then, you know, I don't want to make consumers and patients decisions for them. I think that as you expand the market, you know, our big goal is to go from 3 million cycles a year to 30 million cycles. We've got to give a lot of different patient experiences, put them into the market, and let the patients slash consumers themselves decide.
Griffin Jones 12:06
You brought up the point of I don't want to make the patient's decisions for them referring to the travel agent model, but I can hear a number of RBIs thinking I make patients decisions for them. That's what my job is. What decisions are patients qualified to make? And maybe perhaps they're not qualified to make? Like, are we talking about picking their own PGT? Provider? Are we talking about picking where they store their gametes and their embryos? Are we picking where they're pharmacy to? What are what are we talking about
David Sable 12:44
all of the above? It's so amazing again, when I met Abigail, who had not yet had another than professional reasons to learn about it. She was incredibly knowledgeable about the process, the science, the medicine, everything there was I remember thinking, what was your healthcare background in college, this is like somebody who's like a pre med that decided to go into data and analytics. Turns out years an accounting major, pretty good accounting major imagine my patients knew so much about what they were undergoing that, why not entrust them with the ability to comparison shop for the best IVF process that works for them. Rather than have us decide for them. You look at the range of pregnancy rates from one cycle from one program to the next. And through the United States and through the world. Here we're doing about 2.6 million cycles per year, worldwide, hitting about half a million babies, tells us that our efficiency is somewhere between 20 to 25% per cycle worldwide. We know we have clinics here in the US that are doing 65% per single embryo transfer, if that embryos genetically normal. So there's an enormous range. So to think that the de facto proper way to navigate your IVF cycle is to put all the decision making in someone else that may turn out to be the case. But why? Why do we assume that's the only case. And again, this is within the context of trying to expand the size of the marketplace, to people who really, really need IVF not to have a baby or to have a healthy baby or to get pregnant at all by a factor of five or 10x. So it's the putting different choices out there. It's we go back to our old metaphor of we have an IVF industry that's the hotel industry with just the four seasons Is the Ritz Carlton. But we got a heck of a lot more people that need a place to sleep. And essentially, their frame of reference may be give me a comfortable bed, and a clean bathroom at a price I can afford. And they'll get the same eight hours of good sleep that you'll get in the Ritz Carlton. If we keep people the same probability of having a baby. And we're transparent enough in the marketplace the same way all other consumer marketplaces are going, then why not interest this the patients, again, because a lot of these people would have choice would have no choice at all, it'd be out of the market. And so I think that the REI is have done a fabulous job of making these choices up to now. It's great, and they should Oh, this should always be a place for them. And high touch high hand holding, kind of decision making for you service is fabulous the same way. There's still great travel agents out there. But it shouldn't be the only choice.
Griffin Jones 16:02
Well, not to defer to anecdotes. But hopefully to give some context, Abigail, during your journey, were there. segments of the journey where you wish that you had decision making authority that you could have opted for the option that you wanted? Or did you choose any options that are now informing how you view this from a business perspective?
Abigail Sirus 16:26
Yeah, and just to be clear, I do not have an IVF baby. I was born via IVF. So I can't speak directly to the process itself from that intimate of a perspective. Although, you know, who knows, maybe I will, I will one day. And I'll come back. And you know, we can have another discussion. But what I can tell you is just from observing the industry today, as David said, not only about the hotel chain model of making sure that there are the Holiday Inn expresses as well as the Ritz Carlton's, really, for us as well. It's about geographic access, and making sure that, you know, a teacher in Des Moines has just as much of a chance as having the family that she so desperately wants as anyone who's right near our office in New York City. And it's only by increasing that optionality and bringing services to patients through you know, at home monitoring and other innovations that we're seeing that we'll be able to bring those models to bear, which is part of what I'm so excited about coming from IBM, where we were doing consulting projects with innovative technologies, like blockchain, and AI and quantum computing, and starting to see some of those models take shape in this industry as well, is just, it's just the tip of the iceberg.
Griffin Jones 17:35
You talk about that there should be a gravitational pull for incumbents. That's the second principle of democratizing IVF. But is there often an inherent conflict from incumbent, Dr. Harrington sent me a book by Clayton Christensen, who is the author of a theory of disruptive innovation, or at least one of the theories behind disruptive innovation where he charts out the corpse of blockbuster and other incumbents that were simply dis their disincentivized relative to their current model, their expenses, their profits, their current obligations, against someone that's coming into the marketplace that doesn't have nearly as many obligations, they don't need to make as much revenue. They don't have current infrastructure as expenses. So you talk about using a gravitational pole for and comments or at least ideally, there should be one. But isn't there not one very often almost by nature?
David Sable 18:41
The agreement? It's great question and when we mapped out the strategy for reengineering IVF. The second principle really came down to the best what knew in the best circumstances, this will be steered, managed and navigated by the income. It's the people that know it best. You know, the experienced Ori eyes the best embryologists, but recognizing that there is a natural, rational and perfectly reasonable, kind of, you know, inertia towards changing the way you do things like frankly, when I was running a busy IVF program, I was making a good living, I was employing a lot of people. And I was busy as all hell. So if you came to me and say, Okay, it's your job to, you know, open up the world. So that the next million, 5 million 10 million people have access to it. I'd say listen, it's a nice idea. But where am I supposed to fit that into my schedule? So going from anecdote to generalization. You know, Eduardo Harrington is as visionary as any young Rei out there. And you recognize that you can't really rely on incumbents. So To do all the heavy lifting for you. So the way we look at is we can do with them, we can do without them, we can do it with the existing Rei infrastructure. And we try to make it in their best interest by looking at their operational capacity, looking at the limitations of the inputs, where they're bottlenecks are in their process, and trying to come up with solutions that make them able to expand what they do in a less costly manner. And they can decide to triage that input any way they want, they may decide to expand their geographic reach. If we cut the IVF cycle to three parts, retrieval and freezing being one part, storage being a second, and then thaw fertilization, development and transfer. Third, they may decide to have retrieval stations all over the place. And they may take their existing satellite offices and use them there. They may do alliances with large OBGYN groups in rural areas. To do them there, they could do them. alliances with other programs, leveraging the real estate that they have, they can use decision making decision support software to put 10 times the number of people through stimulations. And so the army on duty Rei on duty only needs to look at four or 5% of the results each day because the computer will make the same decisions that they are, you're all different ways that we can facilitate their operations. So in that way, we like to think that the incumbents are going to be served by innovation. But if they choose to keep things the way they are, which is perfectly okay, if some of these programs are doing fabulous patient throughput, terrific care, great results, then we can use these technologies to reach patients that have otherwise no choices by bringing other people into the marketplace as suppliers. In a way that maintains the quality of care, because we're gonna be using a different engineering, different data analysis, and different process optimization, try to arrive at the well, the well run IVF kitchens that exist now. So we can do them with these people without a lot of what we do in IVF is repetitive things that over and over again, a lot of embryology will lend itself to automation, robotics, things of that sort. So that way we can build the kind of bigger parallel industry that can take that next 10 million people in that aren't being served. And the incumbents can choose to participate wherever they want to. We want to make it easy for them to do so without giving them absolute control over who gets to be treated worldwide. Because again, what are we solving for? We're solving for access. And the size of marketplace not being served is a lot bigger than the size of the market currently being served. To the incumbent people. We embrace them, we want them to do a fabulous job. But we don't want to be in a position. And if we're acting as advocates for the unserved we don't want to give them control over who gets to be treated who doesn't.
Griffin Jones 23:32
Incumbents can be served by the innovation or it can be done without them. It sounds like you had a I wasn't at your talk at SRI. But it sounds like you were a little bit more stern with that message at SRI, what are the consequence? What did you say their first second, what are the consequences if they if they choose not to be a part of the innovation?
David Sable 23:58
Oh, it's a it's a competitive marketplace. You know, the right now we've got a small number of suppliers, with a enormous reserve army of new patients that are trying to get in and more and more patients getting coverage as well. Their coverage from employers, state mandates, things of that sort. I guess the the downside to not participating is you're locking yourself into a model that we may or may not be able to replace that you go into, you know, what are the what does a patient look at when they're trying to make a decision to how to navigate their journey? And Abigail and I came up with three key performance indicators. It's using an MBA term, but it seems I just saw the patients silently make these decisions. For the 20 years I saw patients dollars per baby time until they have a baby and the life disrupt Should they have to endure to have a day, every patient is solving for those things. And those are our North Stars in trying to kind of navigate or map out how we reengineer, the IVF worlds. So if the clinic existing now is operating at capacity, and they have full control over the pricing, it's exactly what you want as a supplier in any industry, you want to operate, you want to be as busy as you want to be. And you want to be able to charge what you want to charge. And this is not a value judgment, every economic actor is kind of solving for that. But they're operating within an environment where there's a cost structure, there's an access structure. And if people have no choices, then they're the kind of a, you know, they're at your whim. They, you know, the there, they have to serve under the parameters that you set. Now the markets can change. And if we put out a, whether it's technology, whether it's using AI, whether it's finding alternative practitioners, whether it's opening of centers closer to them, we're suddenly those dollars per baby time to baby in life disruption are much more skewed in the patient's favor. and to hell with it, I'm no longer going to the ball of the ball to buy a bookstore, to buy a book, in a big bookstore, I'm going to do it online, I'm going to download a Kindle file, I'm going to have all these other ways of fulfilling my need for a text file called a book, I'm gonna have all these other ways of fulfilling my needs to build a family. And the incumbents if they don't fund either change their marketing strategy, change the way that they fulfill that or, you know, maybe they maybe they're still doing such a great job, that people that want that higher touch, higher cost, higher travel type IVF experience will continue to come to them, which is great. It's a really it just puts that competition into the marketplace. That, you know, it's all doctors always say, no, we want the free we want free market medicine. Well, this is free market medicine. But it's free market in a way that the patients have access. And the patients themselves have choice. Not were the providers can rely on monopoly power to keep their keep their practices the way that they are now,
Griffin Jones 27:32
Abigail, are there some segments of incumbents that you see more vulnerable as others going back to the blockbuster example, that's the example that's always used in every business course is used in mainstream everyone knows that example. huge corporation in blockbuster, within a few years being totally supplanted by now a titanic Corporation of Netflix. But I think the story that almost no one talks about I don't ever hear anybody talking about is no that was HBO. So HBO live to tell the tale. And as far as I know, they're still doing well, I haven't looked at looked at their performance or their stock prices or anything. But as far as I know, HBO is still doing just fine. But that Netflix space in the market was HBOs to take and somebody came out of nowhere. Netflix and did it. But HBO had the same considerations. They didn't suffer the same consequences as blockbuster but they lost the land grabs, are you seeing some incumbents that might be more vulnerable than others and, and in different ways than just you know, being being supplanted? Entirely?
Abigail Sirus 28:48
Yeah. And it's funny, you bring up the Netflix and blockbuster example, because that's one of the first cases I ever read in college. But I think about it informed two ways, in terms of incumbents first, who are not going to be willing to innovate, and bring in new practices or new processes or see things in a different way, which I think of as blockbuster. They're the ones who are sitting there streaming was coming to a head, we were seeing, you know, it becoming less and less expensive, with the compute power becoming more optimized, and they decided not to change their business. And because of that, they were usurped by Netflix. But then we have also the incumbents who do a specific part of the process or have their specific niche, just like HBO does, and creating their own content and being extremely good at that, and creating a name for themselves in that way, who will continue to have their corner of the market based on what they do well. And so I think that for the incumbents who are choosing not to innovate, they potentially might be at the most risk. Because, you know, I think it's good to see businesses growing and changing and adopting new modalities in ways that might be better than they ever were before. But then there will also be the HBO models who are very good at doing so. specific things, maybe they have a specific capacity where they have a number of genetic counselors on staff, or they can focus on specific, you know, more complicated journeys than others can like an HBO model, and they will be able to survive as well. But generally, you know, I think we keep focusing, you know, we've we've got Thanksgiving coming up this week on kind of this pie. And speaking about these incumbents who have really in the scheme of things, just a small sliver of the pumpkin or pecan pie, but the the pie is quite large. And so I think that there's vast opportunity for incumbents and new players to come into the industry together, and to create innovation that can improve the patient experience and make it more accessible for all.
Griffin Jones 30:39
Let's talk about the third principle then of what needs to happen in your view, in order for that to still be successful. That which is that today's highest pregnancy rates should be the floor of outcomes for the future, that it's not about delivering a lower quality product at a lower cost. It's keeping the main metrics of dollars until baby time until baby and life disruption to baby at the forefront at the forefront, excuse me. But aren't those three principles very often in conflict with one another that if you reduce the time to maybe you might have to increase the cost of AV or vice versa.
David Sable 31:28
One of the things that we learned when we started examining the IVF industry, as an industry that eight years ago, is that it's really characterized by outstanding science and really mediocre engineering. It's, you know, the you look at you in my career that pregnancy rates when I came out were middle single digits by putting back three and four embryos at a time. And we didn't touch the egg. So the idea of sticking a needle into the egg to do insemination with the sperm was just beyond us, much less doing things like genetic analysis. So the progress has been just remarkable. And the fact we have anybody that can have a baby, that can create a baby, more than half the time with one embryo routinely, on average, is that seemed like a million years in the future, back when I started being exposed to this in the 1980s. But that being said, that means that someone has cracked the code to get that high. And what is engineering engineering is just getting everybody on board to these best practices to do is to do things as well as everybody else. And if our goal is which we think it should be that anybody that needs IVF, to have a baby has access to IVF, say to a baby, then we've got to proliferate these best practices. Now, there are some people who are more talented than other people for manual procedures. And if we look elsewhere in cell biology, and we look elsewhere, in manufacturing and engineering, we see that these things can be standardized, to using robotics, using machine learning, two way that everybody can operate at the highest level, we will migrate to that it's unavoidable. Every industry that's tech based does that. And the sheer size, the sheer enormity of the demand for IVF services is going to migrate the best clinics to higher and higher pregnancy rates, they're much higher here in the US than they are in the world average, you're very high in areas of Western Europe and parts of Asia. And that will it's just a matter of time, get up there, we will collapse the pregnancy rates always upward finish. Now that said that means as we engineer and as you do more and more process optimization, those rates will be even higher. And that leads us to probably the biggest innovation, which is really going to disrupt this industry and I also think is inevitable, unavoidable and an unequivocal good. Is that shows you how bad I am at writing articles because I completely buried the lede. But I wrote that because the real big point that I was trying to make is that we're gonna get to a point where the expectation for outcome is very standard, no matter where you go. And is high enough that we can risk manage in a way using very simple principles of finance. And we turn things around and nobody ever pays for an IVF cycle where they don't. That is the ultimate democratization of the process. That's where we really change the way we deliver it. And it's very, very, it's very doable. Just a question of how much time in there indeed We do see a conflict turns real choice as to how you want to run your practice how you want to deliver this. And, you know, in the interim, we will see a splintering, of which clinics do suck, do certain things, well, which ones adopt a more convenient model? Which ones adopt a highest possible pregnancy outcome with a super high price point model. And this is all fine. This is the market working the way the market should, you know, if you notice, we're not talking about forcing the insurance industry to cover things that the basic insurance model doesn't say that they should cover. We're not talking about convincing governments to provide price support, or provide supplementation for patients. This is really trying to go through a free market model. These things may be accelerated by governments getting involved maybe because they're concerned about population shrinkage and things of that sort. But ultimately, the to the individual choices that the existing clinics are not going to stop the movement towards a much bigger marketplace marketplace with lots of choice. And that choice will ultimately include completely shielding, the patients were having to mortgage their houses two or three times in order to do that next cycle, are people draining the life savings, and never ending up with the baby. And you know, what's the big motive, the big driving factor, there is just this enormous, enormous market of people that really want to spend money, want to dedicate their time and effort towards building and all of us your grip, and certainly you included who interact with IVF patients, that you can't underestimate the size of that motivation. This is not consumer discretionary. This is not choosing to buy a book at a bookstore on Amazon or downloading video text file from HBO or Hulu, or going to your closet and having VHS tapes. This is one of the prime motivators in life. So there's this enormous, enormous marketplace out there that's going to find out oh, by people creating we means of fulfilling these needs.
Griffin Jones 37:37
Does that mean that we should expect one of the factors to to improve before the others? For example, should we expect dollars until baby to reduce before we see time until baby to be reduced? Or both of those to happen before we see life? disruption to baby? Are we? Is it more realistic to expect one of those dropping? And then that setting the standard where the value add becomes in the other two segments? Or are we looking at technologies that could possibly reduce the concern of all three at once?
David Sable 38:15
Yeah, I think it's a Venn diagram where the three circles overlap a lot. It's like dollars to baby if a patient has to travel 25 miles to the clinic every two days to be monitored or needs to travel to another state to have the cycle done needs to stay in that state, then that's a dollars per baby and time to baby and definitely a life disruption to the you know, when we develop new medications that can be given orally instead of by shots. Well, those shots are real life disruption to baby. They're also very, very expensive. And there's only two companies that make those sets of dollars per day. The fourth thing is well, so it's I think that as you as you move one, it tends to drag the other two along. And it's not so much a conscious choice because implicit in these are specific things you're doing. You're moving your retrievals from the big, unbelievably expensive lab to a procedure room, because the engineering system is closed up. So the for the egg never sees the ambient air or light before it's frozen. Or you move the retrieval to your satellite clinics 10s or hundreds or maybe even 1000s of miles away so that you can better leverage the enormous lab that you built. And you can kind of defacto increase the capacity of your laboratory without building out without spending another 2500 for another square foot of space. You may be moving your storage somewhere else. All of these things are going to improve your operational capacity, improve your ability to grow By the service you're giving now, in ways that can turn into translating into offering your patient a better experience that's more affordable, or more risk managed, or closer to where they live. I think it's just kind of a virtuous ecosystem, where you start attacking these things one at a time. And they show up at all of these parameters, both for the clinic themselves, and for the patients, as well as being a motivation for kind of ambitious entrepreneurs outside the fields that say, Hey, you got all these people newly insured, all these people who state mandates, all these people that may be in other countries now need the service. Look, Japan is doing everything they can to make IVF more accessible. Let's build it and they will come because right now they have nowhere else to go. It's kind of it's kind of like virtuous ecosystem, because
Griffin Jones 40:53
it seems like it should be a virtuous ecosystem. But there are clearly challenges to integration. If that's the case. And Abigail, I want to get your experience if you see if you've seen these challenges with integration in other areas, because it seems like there shouldn't be a Venn diagram that someone that can come in and improve the time until baby would also help be helping reduce the costs until baby and, and limiting the life disruption to baby. And there's all kinds of companies at ASRM that are trying to sell into clinics, and I see them struggling selling into clinics or a number of different reasons that can be an a whole podcast episode. And I've probably done one or two, but they are struggling, even though I see the value that they bring they they reduce nursing workflow, they reduce the the legality and other workflow, not all of the workflow much of the workflow involved in third party cycles. They reduce what Texans did ographers and other support staff have to do, I think of these companies, and I see the value that they bring, and there have having a hard time selling in two clinics, partly because of its it's seen as an added expense. But also because it is really hard to integrate given the variability of clinic workflow. So it seems like it should be a virtuous ecosystem. But there's some roadblocks, and I'm wondering what you've seen in other sectors that might be comparable.
Abigail Sirus 42:39
Yeah. And for me, it goes back to my background and emerging technology and how tech gets adopted, really, I mean, when we think about it, I started doing blockchain back in 2016, which feels like a long time and blockchain years are in any emerging tech where, yes, of course, in the beginning, when you're changing the status quo and introducing something new, there is that friction in that hesitancy, especially when the incumbent clinics have a great formula, they know what they're doing, they know how to do it well, and they know how to bring in an optimized value for it. So adding anything to that or changing anything, can be, can be met with a little bit of, of that friction that I mentioned before. But as we see with kind of all the traditional tech curves going into, you know, any business school case, yes, there's that friction in the beginning, and you kind of go up into the curve where over time, as the technology begins to be more widely adopted, it becomes status quo, and it becomes kind of bundled along and become standard of care in this case. And so I think that we're just in kind of the beginning of that cycle of seeing some of these new technologies starting to take shape. And as the value becomes more proven, and as it becomes, you know, these are some of the best educated patients, I think it throughout all of health care. And they know exactly, you know, what's going on and where their money's going. And if they hear that this clinic over here is doing something that might have better outcomes than a clinic down the street, I don't think they'll hesitate to, to make decisions based off of that, and to also encourage that kind of innovation. So I think it's going to happen organically and naturally at first, and then quickly and kind of more all at once once things start to become status quo. But as for integration, integration is always difficult. But what I think is important is, is patterns do start to emerge. And so once some of these early stage startups, you know, I had the pleasure of walking through the SRM booth just like you did, and getting to speak with a lot of them. Once they start becoming adopted, you know, a couple clinics at the time, and start being integrated into their workflow, they'll be that much better positioned to integrate into the next one. And you know, as well as we do in this industry, there is some pretty significant consolidation. So just winning over a couple of those larger chains could mean that a lot of innovation is adopted at a faster rate.
Griffin Jones 44:53
Well, I see that but I also see a lot of steps back and I see it being I see it also taking several years. So I think of one company that's been around for many years that probably has half of the market share and does very well. And, you know, they and so there's probably okay, we get a few of the early adopters on board that will try anything. And then that provides the case studies for us to increase the market share. And then, and then they've got some rapid growth for a little bit. But then either it just, it just stalls because whoever isn't adopting, still isn't adopting, and and they don't see the improvements as dramatic enough to to make the investment. Maybe they're just incremental, or the consolidation does happen, Abigail, and then they they go back, it regresses because the the new partners coming in are cutting costs and say, you know, what, we just don't see this as dramatic enough. So is, is incremental one year after another possible? If so, it doesn't seem revolutionary, it seems like it's taking a really long time for many of these companies, or does it have to be so dramatic and so obvious to that? This is now the standard. And if that's the case, what's necessary to do that be given the variability of clinic workflows, if something is really going to be that dramatic of an improvement, that means it has to affect a lot of the areas of the clinic and lab, presumably. And in order to do that, there's a lot of things that need to be integrated. So, David, you've said on the show before, that the entrepreneurs job is to solve the chicken and the egg. But what about this challenge of of improving incrementally? When? If, if the adoption, the catalyst for adoption, is seeing dramatic improvement?
David Sable 46:49
You Yeah, well, like, like a lot of things successful only be in retrospect. Yeah, and we're going to look back at one point and find that it's gonna be an awful lot of overnight successes after 15 years work. The kind of cul de sac that everybody drives into intellectually, when they envision, you know, this kind of a sweeping statement, but I often see, when I discuss innovation with an IVF, is it's always done within the context of the existing clinic structure as it is now. And it's always okay, how do we go into these existing clinics convinced them to do something different. And I think that we may find that the innovation really reaches critical mass. And you see those revolutionary steps, when we start building that industry alongside the one that's there now. Now, this may be one of the large consolidated chains, and these are terrific doctors, terrific administrators, they may decide, you know, we've really reached a limit of kind of the limit of growth of what we're doing under brand name of what we've got. So we've got the four seasons there, let's build a nother system for a different marketplace. Let's take a critical mass of these innovations. 4567 have put them together in a way that really adds up to a substantial change in cost of development delivering the service, yet with the same outcome probability, you know, take this, the, the old thought that lower cost or more convenient, has to be a trade off between lower probability of the baby that's unacceptable, you've got to have at least as good a chance of having a child at the end of the whole process. But you know, there is an enormous industry to address that doesn't exist, right. And trying to kind of force feed incremental innovation into the existing infrastructure, the existing clinics as they are, or as they are consolidating. Maybe too difficult a way to get these innovations into play. However, like I've been, I've been talking to founders now going on seven years. And watching them as they evolve their business plans. And it doesn't seem like it's been all that long. We've seen some really great changes the way people look at these things. Like if you're looking at you, and I've talked about AI. And if you're talking engineering in the 21st century, you're talking AI, which What does AI it's math, but it's a digitalization, of which previously were just kind of our teas and all processes. But the all the Ag companies a few years ago had the same business model. We're going to go We ended, we're going to optimize one part of the process one part of the IVF cycle. And we're going to charge $1,000 per click to do, or $2,000, a click to do it. Absolutely unsustainable business, great engineering, great concept, you are making the process work better. But the whole idea of building a business around, when really what we're trying to do is drive costs down, it was very difficult to demonstrate the value proposition. But if you take those same capabilities, and you say, Okay, we're going to talk to intact the entire process. This is just bringing the data collection, feed into the computers have computers tell us those things that really make the process work better, make it work more efficiently, and really feed into dollars per baby time to baby life disruption. And let's reengineer the system itself, let's offer IVF places where it's not available to people that have no access to it that really want it that can afford it at a lower price point. And let's build that places where it doesn't exist. And we're gonna start filling in a lot of the holes around the existing infrastructure around the existing clinics and the clinic networks. After that, we've got the existing clinics looking and suddenly, wow, there's someone else doing this. And it turns out that some of our people, some of our market, maybe want to do that instead, maybe it's closer to where they are, maybe there's they could do the same get, they get the same probability of an outcome. And they're willing to do the trade offs of not having quite the same experience that we've been offering. And that way, that kind of parallel industry is going to flow into the existing industry. This is what I'm not smart enough to be able to predict it. What are you already know, that incrementally looking at people with no access at all. And we're trying to one after another build systems that can deliver that access to them. And actually can do it in a way that we can measure and we can process optimize, iterate in a way that the current kind of artisanal system doesn't let us do that I think you're gonna see in retrospect, that these things had really revolutionary effects. But you just can't map it out. It's going to happen organically. And when you look at the proliferation of technology over the past 100 years, how did airplanes go from the Wright brothers to the first jet for two years later, to what we have now, which essentially the democratization of air travel, including airlines that charge you to pick your seat, and have no food on board, you have to pay for every single bag you bring. These are things that evolve, because the technology was built in let it evolve into that. And turns out there was a market segment, looking for the first eyeglasses were invented in the 1300s took about 300 years before everybody over 40 could see. And, you know, it's it's a very, very long time to put these innovations into a marketplace. it up if you can see it a lot faster. Because there's an extremely fast proliferation of knowledge. Consumers know where to go for the information. And given the information of the the way information travels over the internet, things of that sort. This a very, very savvy group of patients is waiting for access to the waiting for access. And again, we go back to the desire to have a family. He is one of those incredible, you just can't. It's just this is not consumer discretionary. This is not something you could like people give this out.
Griffin Jones 53:56
So it could be the case that the disruptive model coming from venture capital becomes not one that says we're gonna create something that sells to all of these people or even sells this to the patients as a as as a direct to consumer base, but rather all of these booths that are ASRM are at SRM trying to sell to the clinics to improve these envision they themselves are now the model we create a model running alongside the the current model. That's how I see the 15 year hard work the 30 year 40 year hard work potentially being an overnight success based on your insight.
Abigail Sirus 54:42
And I mean to me Griffin a great analogy and one that's obviously used quite often now is electric cars like Ford and GM. Chrysler everyone knew electric was coming but decisions were made not to pursue it until they were forced to buy a new entrant coming and doing things differently inspiring change and having customers or in our case, patients demanding that new kind of experience proliferate in other areas. So I think we're seeing this in other places, it will be modeled here, as David said, hopefully faster. And so we can get to more patients as fast as we can. But I think that
Griffin Jones 55:17
that's a good point. That's a, you just made me think of something, Abigail, which is that I suspect that that part of the reason why Tesla was able to come in as the entrant there were is from all of the different vendors and companies trying to sell to GM and Ford and Honda and Toyota over the years to develop certain technologies. And that made it possible for Tesla to come in faster possibly to acquire some of those to, to, to integrate some of those that weren't happening and build a whole new model, which could be the case of venture capital coming into
Abigail Sirus 55:49
exactly. And we're seeing, you know, new clinic models emerging where they're bringing in these technologies, almost as if they're within the clinic's DNA itself, they're getting off the ground while thinking about re engineering processes that still have yet to be optimized that kind of some of the larger the larger chains as well. And so they're starting off on that front foot of the innovation as they go, which I think is going to be really exciting to see how they can grow and progress and continue to innovate, since they're starting in that place already.
David Sable 56:21
In the kind of unspoken on talked about part of this, as well as there's an entire industry of cell biology, feeding into biopharmaceuticals, for example, and all sorts of new types of fluid engineering, that is not operating in a vacuum, like IVF is just one more area of cell biology. And a lot of these technologies are mature, they're in place elsewhere. And we just have to cart them or put them in the lab, plug them in. And it can really radically rattled radically change the way a lot of the IVF cycles performed in ways that can benefit the providers themselves in ways that can provide new founders who want to build different delivery systems of IVF. And all follow them benefit the patients, their mortgage, they're better engineered, so they're easier to scale. Since they're better engineer, they're easy to measure the benefit from these are things that are gonna go into bringing that IVF pregnancy rates higher and higher, towards the towards emerging of kind of the emergence of a best practices, and then give us a springboard to keep iterating to keep reengineering, to keep finding the thing that's working the least. So we can inch that pregnancy rate higher and higher. Then we bring in our actuarial and financial principles, we risk manage the whole thing. And we build an entire different IVF industry, where you pay for baby instead of buying IVF cycles. That's what you want to you want to get people's attention, you start totally risk managing the process. You will see the floodgates. So
Griffin Jones 58:09
that's your fourth, that's your fourth principle that you talk about in your article and talk about burying the lead David, I buried the lead as I read this again, and think oh, this, this will get people's attention. So the fourth principle recaps what you just said greater certainty uniformly higher outcomes and improved data collection and analysis leads to actually actuarial quality data, which leads to better risk management, which leads to pain and getting paid for outcomes, not cycles, you pay when the procedure works, you really believe that that's not only possible but inevitable.
David Sable 58:49
Yep, absolutely. It's too important. It's to the people that are consuming. People are also very yet it's the the optionality right now. It's just unacceptable for most the idea that someone talked to me for that five, six years ago, they say, Well, what's an IVF cycle costs like the cost of a small Toyota. What's the big deal of this? Well, you go into a Toyota dealer with 15 or $17,000, you drive out with a car, you walk into an IVF clinic with 15 or $17,000. And you walk out with a possibility of having a baby or a 35 to 65%, possibly of having nothing other than endured a lot of inconvenience, a lot of heartbreak and set your financial stability back quite a ways. Now, that is a a need in a marketplace that screams for someone to open up that market. So this is something you're talking about with incumbents or without incumbents. This is something that really plays right into the The underwriting insurance playbook. If the traditional insurers want to assume that, so far they have not. So we've seen the emergence of a secondary market, people doing IVF and fertility only underwriting insurance, which I'm thrilled about, we're seeing some of the practitioners start to re explore using risk management. And these kind of risk sharing strategies. This goes back to the late 1990s. But it was done very poorly. And as the numbers get better and better, frankly, it's an easy thing to do. If no one else does it, Griffin Newman, Abigail and I all started our own insurance company. It's just taking actuarial data, crunching the numbers using some very basic insurance principles, sticking the margin on top, making everybody else pay a little bit more. So the nobody pays to get enough. And it's really kind of trying to
Griffin Jones 1:00:59
think of where the precedent is for that, David, I see the actuarial principle. But I think of if we have a tumor removed, and we undergo chemo, if the if the cancer comes back, we'd still pay for that procedure. If we pay a landscaper to install drainage and and level our backyard and the flooding returns, we still pay that landscaper, we might write a bad review. But this happens all of the time, in other segments where people are paying to have a problem solved, but for whatever reason it it still happens. So what makes this possible in IVF? In a way that doesn't seem to have been possible yet. And oncology?
David Sable 1:01:45
Well, I don't know if we want to trade anecdotes. But why. But I practice that I did surgery, it's like until the problem was solved. You paid your surgical fee, and that was it. You know, follow up problems, things that complications that things have brought you back or part of what you're paying for upfront. Yeah, it's it's certainly there may be, you know, co pays and things of that sort along the way. But we really, you know, we're talking about risk managing in a way to make something affordable and acceptable, can take away the big optionality with whether there's some small, you know, it's like administrative fee that goes into paying for IVF. And certainly, let's say there's a late pregnancy loss in the third trimester, tragically, how does that get, you know, internal internalizing for the system, these are sort of details, what we're talking about is the, you set up a pricing system for your for your based on your outcomes, and you define the outcome, however you want. The same way, you know, it's maybe it's like a warranty. Maybe, as we've mapped out for the disease prevention, part of IVF, which is a enormous another enormous industry, when to be developed. Maybe the pricing marketing structure is essentially a gym membership for the family. You freeze your eggs early, you go on birth control, all of your pregnancies occur, using IVF and PGT. Him. And you have a zero risk of having a baby that dies of sickle cell disease, as 9% of babies born with a do have childhood. That you pay a certain amount for unlimited access to the service. And since we know what the service costs to produce, and we know the likelihood, and we build our business over selling your lifetime of access to disease prevention. Pricing is really just it's just taking the cost of production, looking at the enormous size of the marketplace, bringing some creativity, and a little bit of fearlessness into addressing a new market, rather than trying to just make a little bit of a change with the IBM ecosystem is one that most people are not served with really. We're really trying to build an industry that doesn't exist. And a big part of that is that this whole part of what was offered the possibility of having a child or family to people that don't have access to and making it affordable. And we're not going to make it affordable by just doing what we're doing now. And putting a lower price tag on although that's one one way of doing that. Wherever you address another 1015 or 20 million people worldwide, for a million to 2 million more people who in the US is by tackling price and the patient's own risk. We attack that with engineering, we attack it with certainty and attack it with numbers. And it's a, it's very antithetical to the idea of this produce now. And yeah, this is a big idea. But if you talk to all the people that don't have access to having families, you know, they're very open to big ideas. And there's not a room in this industry, both for the people that are doing such a good job. As well as people are going to cover and address those people in our research.
Griffin Jones 1:05:45
We spend so much time talking about the four principles behind democratizing IVF, that we didn't even really get a chance to go into the map, it could be its own topic. And I would love to have both of you back on the show to talk about how you mapped engineering solutions to IVF success because there is so much in the lab in the clinic. And you really give some of the main problems with labor, with embryology, with medication, with lab space and complexity, that I think it merits its own topic. So I'm inviting you back in front of everyone. David, your invitation is constantly standing. But Abigail, I'm explicitly inviting you back with Dr. Sable. To go over just the map in a sequel part to this episode, if you would oblige us in the new year.
Abigail Sirus 1:06:44
I'd love to absolutely looking forward to
Griffin Jones 1:06:47
it. I'd like to give both of you the floor to conclude and in a way that either summarizes what you talked about today, or what you want people to pay attention to, either within relation to the article or other things that they should be studying up on.
Abigail Sirus 1:07:08
So to summarize, Griffin, my perspective is is simple. We continue to talk about the small slice of the pie and how to cram as much innovation and new thinking and bring integration into that sliver. But I think that there's such a broad opportunity beyond that. And that innovation will come from all areas. And we're going to see different kinds of businesses entering the market, challenging incumbents learning from incumbents. And hopefully our goal is that over time, what it will do is increase access to anyone who needs IVF that they can happen and have the best outcomes of anywhere in the world. So that's how I would conclude.
David Sable 1:07:49
Yeah, just reiterate to what Abigail just, you know, this is a if there's a entrepreneurially healthcare entrepreneurial playground that's more interesting than this one. I haven't found it. You've got an enormous enormous life moving need, with a huge population of people. We've got a confluence of terrific engineering, information technology and great science. That is this this is yet having been the I look back at the last 30 years when we've done it IVF is breathtaking. It's absolutely spectacular. What we can do to scale that is, you know, it's it is just such an opportunity to take fearlessness, creativity, and just a lot of heart, your heart knows brain and is looking looking for comparisons. Don't look at healthcare. Don't look at the IVF industry. Look at what we've done. You know, my first computer, I love putting a picture of it one of my one of my talks, my 1988 Commodore PC 30, which was a fabulous $2,500 computer with 10 megabytes of RAM, and one male, half a megabyte of RAM, 10 megabyte hard drive, and a 286 chip. And it was a great computer wasn't connected to anything else. And to think what that computer does, what you can do with $2,500, the computing world now. That's where we are in IVF. Now where that computer was, which was about 40 years ago. Look at the IT industry, look at the transportation industry, look at communications. That's the kind of growth we're going to see to helping people get pregnant and families which argue is just as important. And the need there'd be the desire to suck that entrepreneurial effort up into an enormous industry is there and that's the opportunity. And that's the kind of growth that you're really looking for in the next 1015 20 years. And I'll leave it at that. In Griffin I will say this again. You are the only person that provides this kind of forum to talk about this. So I always like whenever I'm on your show, I always want to back it up by reinforcing what you're doing. Because this is not a insignificant part of. So, you know, I could stick myself in there and just a plug for what you're doing, which is really, really necessary, really important.
Griffin Jones 1:10:23
I'm grateful for the plug, I hope to be able to provide a lot more coverage in 2023, as inside reproductive health expands its scope. And there's certainly no shortage of material to cover based on what we talked about today based on what else is happening in the field. And I look forward to having both of you back on the show. To explore this more. Thank you both very much for coming on inside reproductive health.
1:10:52
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 thrives beyond the revolutionary changes that are happening in our field and in society. Visit fertility bridge.com To begin the first piece of the fertility marketing system, the goal and competitive diagnostic. Thank you for listening to inside reproductive health
