Who's Responsible For Lowering The Cost of IVF? An interview with Dr. Kiltz & Griffin Jones.

Show notes: In this episode, Griffin talks with Dr. Robert Kiltz, the founder and director of the first successful IVF center in Central New York, CNY Fertility Center. Griffin and Dr. Kiltz discuss the topic of who is really responsible for lowering the cost of fertility treatments. They discuss whether the responsibility falls on the insurance companies, pharmaceutical companies, medical device, hardware and software companies, or the providers themselves. They then discuss Dr. Kiltz’s methods of becoming a successful fertility specialist that offers a lower cost treatment plan, creating a new market with new levels of accessibility and affordability.

Griffin: I’m with Robert Kiltz, Dr. Kiltz, he is the founder and CEO of CNY Fertility Center with 4 locations in New York state, and one in Atlanta. Dr. Kiltz completed his fellowship at UCLA and practiced full time REI at Alta Bates IVF program while on the clinical faculty at UCSF. In 1995, he left Southern California, he picked up and relocated to Central New York and upstate New York, and began the area’s first IVF program. He’s a man who is not afraid to take on a challenging case and launch a new model, which we are going to talk about today. I’m really excited to speak with Dr. Kiltz about that. Dr. Kiltz, welcome to the program!

Dr. Kiltz: Griffin, I really appreciate you asking me to come on and have this conversation. This is really important, and what your doing, I must give you excessive and high accolades.

Griffin: So, I’m excited to talk to you about this particular topic which is, “Who is really responsible for lowering the cost of fertility treatments,” and the reason why I thought of you, is because a few years ago you and I were on Capitol Hill, and we were advocating for, among other things, expanded coverage for fertility treatments, and you made a remark to me, that stuck with me. So if I am paraphrasing, go ahead and correct me, but it was something to the effect of,” there’s a lot of people here, and we’re talking about having insurance be mandated to have coverage, but there’s a lot of other ways to lower costs, and there’s a lot of other ways that people could be doing this.” I think you were hinting at providers, and that stuck with me, that you had a different sort of message for lowering the cost of treatment.

Dr. Kiltz: So the question is…

G: The question is, who’s really responsible for lowering costs of IVF, because I feel like, you know, that maybe this speaks to healthcare in general, but it seems that no one feels they are the ones making the money in healthcare, the insurance companies, pharma, but who’s really responsible for lowering the costs of IVF?

K: Well, certainly… years of being a reproductive endocrinologist and fertility specialist over nearly 30 years actually, and, I do recall the experience on Capitol Hill where we were there shouting and asking people, “Do something. Do something. Do something.” I've always had a motto in life and I think I forgot it back then, that there are three people in life, there are the doers, the watchers, and the complainers. And what I realized at the time, there’s only one person that can make it more affordable, and that was me. And each of us individually must take on the things that we think is the most valuable in life. And for me, families, children, is powerful, and it is our foundation, and there’s so much pain and heartache in this world over infertility, and the fact that we as fertility doctors are responsible… I went in to medicine to help people - not that making money wasn’t important, but it wasn’t the reason I went into medicine and fertility. And I learned at the moment that we are asking other people to take the responsibility, but it’s not theirs, it's ours. OR actually, maybe it’s all of ours, but if it doesn’t start with the individual, and I realized, the only way to make it affordable - is to make it affordable. Now, I would say more affordable, as fertility treatment is more expensive than many treatments, but if you look at the cost of medicine in general, its overpriced and inaccessible to so many people.

G: And the argument has often been for the rest of health care has been, well there’s Medicaid here, there is insurance here, if it were more out of pocket, the cost would go down. But with IVF, seems to be a case study where it is mostly out of pocket, it doesn’t seem like the cost has really gone down compared to the cost of other consumer behavior, which is, like a flat screen tv doesn't cost anywhere near what it did a few years ago, a cell phone doesn’t cost anywhere near what it did ten years ago, but the price of IVF keeps going up. Why?

K: The reason I think is the supply and demand. In general there’s a shortage of reproductive endocrinologists and reproductive specialists. There was a purposeful reduction of REI who were graduating maybe 15-20 years ago, and there's no rush to train or grow the training programs, and there’s little incentive to train others. I call it like a $100 bottle of wine. Some can afford it, most cant, so it’s limited to who can afford to use it. Get back to the basics, everyone needs fertility services, it doesn’t discriminate against income, or race, or anything or socio-economic status. So, it is really a supply and demand - there aren't a lot of reproductive endocrinologists. The field is really only 40 years young, so I think the market forces are entering the scene a little bit more as we are seeing a sort of consolidation and seeing the profitability, there are going to be others like myself who are saying, listen, I came to this market, to this business, to help people and be busy as a fertility doctor, not just pick and choose the few cases for those that can afford it, but really open our arms to be accessible and affordable while maintaining quality and access. If we can train physician's assistant, NPs, and maybe others in the world of fertility, it might be helpful. I know many are going in to nurse practitioner and physician assistant programs, that may be an area we can grow on and teach them to care for more fertility issues in addition, fertility issues are not just related to IVF, but it seems that is what we are pushing more and more people to, and we are forgetting about the basic approach ,more natural. Reduce inflammation, stress, work on integrative approaches with Eastern and Western medicine, bring more people into that. I think ultimately the answer is supply and demand. We gotta increase access to bring down the price.

G: So, one way to increase the supply is to have more PAs and NPs involved in treatment. Is that a band-aid until we can have more REIs in the field, or do you think that is a long term solution? If more NPs and more PAs support what REIs do and then have REIs guiding them as teams, is is that, or is it having more REIs in the field?

K: Well, if we can train more specialists, but training more specialists is very expensive. So, my sense is that if we can train more NPs, PAs and maybe more OBGYNs, teach them more about general fertility, but a lot of what we've done is to manage to help those couples and individual get some of the care with their primary OBGYNS where they can then be the hub and spoke approach, where the IVF lab is really the more expensive component, but in essence, by increasing the volume, it should reduce the cost in most of this. Now, not to say that you want high volume, low care - you still need to supply really good high quality, but I think we can work on more streamlined ideas, because when it comes to ovulation induction and monitoring, it’s not a difficult as people make it out to be and we sometimes micromanage. I think we could help many more by coming up with some treatment protocols that make it easier for others to train and follow that is ovulation induction or whether it is IUI or IVF, or even helping people with intercourse cycles. We are seeing tremendous success with Ketogenic diet, with anti inflammatory approaches and slowing down.

G: Well wouldn’t some people say that that's sort of circumventing the idea of fellowship training, that if you have different people training OB-GYNs and PAs that it essentially sort of saying well, this as a subspeciality, as a fellowship training is not necessary, because the people that are already trained in this fellowship are able to train the other people - is it circumventing fellowship?

K: Well, I still think the fellowship training is excellent, but I am seeing so many fellows that come out of fellowship with very little idea or infertility experience. Many have not done but handful of retrievals, little to no transfers, and so I think we just need to help do more training at a grassroots level, because really why should IVF be $20-30,000? Very few people can afford that. The $4-5,000 range makes more sense. There's still plenty of room for profitability, but we can help many more. If you look around the world, the costs are lower, the volume is higher, outcomes are about the same in my opinion. So, we just have to begin to think of ways to help more providers learn more about general fertility treatment and how to make IVF lower cost.

G: Why do you think more people don’t try that model - some people do, you're not the only one using this model, I just think you’ve been doing this a long time and added more to it and have been really successful in proving it. There are some other people, but there’s not a lot, why do you think that is?

K: Once you make a lot of money, it's kind of nice. Once you have that model of higher cost and higher price, it's more difficult to shift it down. When I started in Syracuse 20+ years ago, I started at $2,000 for an IVF cycle. I was profitable and we were growing. I just think the mindset is that's what we really want to do, and I think because we are seeing a lot of consolidation, a lot of investment markets have come in to this area, which is maybe keeping the prices higher, but we are going to see more independents going out and saying I want to start my own shop, and in order to do that, I want to come in at this price. If someone comes in across the street and starts doing it? It's the same as all the businesses in America, the natural competitiveness in the marketplace. There's plenty of business. 85% of those with infertility don’t have access or coverage for fertility care. That’s not just IVF, but it may be surgical procedures, it may be IUI, it may be medicines that help reduce inflammation. I’m dealing a lot with this. Maybe it's 3-5 more years, but I am already seeing more saying they are going to lower their prices to make this happen, so as we talk more about it. If you have read about business, and really blue skies - and expense of business number of possibilities and opportunities, but when we think in a very reductive way of thinking, and that's much of medicine, because we are trained to be doctors- we don't know much about the business of medicine. As we all learn to get into the environment of the business of medicine - and I think the fact that most insurance doesn't cover it, it allows us to be more competitive. I Would like to see some of these insurance companies open up to see that there are providers that do it for a lower cost with the same success, such as in New York, but even around the country and around the world, they can open up and make fertility treatment a lot more accessible and affordable to more people.

G: Do you think that part of the reason why you - even if its not why are are doing it now, or how you are doing it now, but how you started, is given the location? People always ask me, how can he do that? How is he able to do that? Sometimes they wonder about location, you're from upstate NY, it’s cheaper here. Everything's cheaper here. You want that 7 bedroom house? Thats alot cheaper here in upstate that it is in say Austin, Texas or Southern, California or Seattle. Does location have anything to do with the how?

K: How does McDonald exist in Manhattan?

G: More volume.

K: There are plenty of businesses in many locations in different parts of the world, that you and I think, my God, how do they do it. They go and they do work. When you do work, the possibilities are infinite. But when you are automatically thinking it can be done,then that’s what's going to happen. But, I never thought that when I came in to do this, and I realized, because of this technology, and you know people thought that telemedicine,and the opportunities that people are traveling for medical care all day long for many other specialties, I mean 60% of our patients are coming from 5 hour drives, and flying. They come from around the worlds, and come not only for price, that may get them in the door, but realizing that we are much more open to non-traditional - OK, I’m going to say traditional philosophies of massage, acupuncture, herbs, HGH, immunology, surgical approaches, because of that, I think this is how we’ve done it. It's not just me, I have 4 other docs, I have 8 NPs, PAs, I have about 270 staff, so I kind of make it like I do it alone, but there’s no way. I think that when we can be more inspiring to our patients - because in general, medicine, especially infertility, we sometimes tend to be negative nellies. “Oh, that's not going to work, you need to go with donor eggs, or that's too expensive” and we can be very prejudiced against other medical conditions, previous failures, size, and I'm hopeful that we can all begin to change out ways - realize that ultimately, building a family is a basic for everyone, not just for those who can afford it. Because, nature didn’t say, when you can afford to have children, then we will give you children. Life gives us things, and then were meant to go out and do the work, through the challenges and the troubles that naturally happen for all of us. There's not a right time to have a child.

G: One of the things you brought up, part of the things you feel might make fertility treatment more expensive is venture capital, money from other sources, but when I see that you've proven the model - where you've got 60% of your patients coming from a 5 hour drive of more. People can look at the CDC numbers, ans see the volume you're doing, and if they didn't know where you were, they would think you were right in Manhattan given the volume that you are doing. Central NY is not a densely populated place. You have people coming from all over - to me, that's proving the model based on the volume that you have and how long you have done it for. So either have people approached you and said there's obviously a need for this, let's put some private equity into this - or have you thought I should knock on some doors and get some private equity involved and really take this to market?

K: I've looked, and had this conversation. It's a difficult choice and idea, because the most important part is that you want to make sure that whoever's coming into this has the same philosophy and belief. That's the critical part. I don’t know that answer. I’m 62, and feel 22. I'm energized and enjoy this. I can’t imagine going and doing anything other than doing this. There is that possibility that someone will come into the market, or we might partner with someone to make it more accessible and affordable for more, because there's a huge number that could use the help in this country for sure. So, looking at it, and having the conversations, and being open to the possibility for sure.

G: What about the response that if the price is low, that must mean the quality suffers, that must mean the IVF success rate is low as well.

K: I was trained as a physician. My job is quality care, individualising the approach, irrespective of what money comes in. We see people that can't afford to pay right now, need the longer payment plans - when we do 100% that is helpful, but… I think I am losing the question, maybe you could repeat it one more time, I apologize, my brain was going over here..

G: MErcedes is high price, so that must mean high quality, if there's low price, it has to equal low quality, or low success rates would be the criticism people would have.

K: I don’t believe it, and people can say anything they want, but I think that if we’re human beings focus on the quality of care and people in front of us, you're going to get it. You can't skimp when it comes to the IVF lab, and we’re inspected, you know, and we have very decent SART numbers and CDC numbers without cherry picking - we do very little PIGS, so we do alot day 3, day 5 on tested embryos, that’s what people want, but I would say that people may say and think whatever they want, they just need to experience it. I bet and believe that most physicians, providers, nurses, laboratory people, everyone at any end of the process through CNY fertility believes in the affordability can still equal high quality care and outcomes.

G: Our producer Stephanie found this, and maybe it's true and maybe it's not, it said that the average REI takes home $330,000 per year. Now I’m actually an apologist for people being able to make money. I see the same thing, the supply and demand, there's 1100 board certified fertility specialist in the country, it's really hard, 4 years of undergrad, 4 years of medical school, 4 years residency, 3 years fellowships, followed by some of the toughest boards in medicine period, and there is a lot of science and technology behind it that are really expensive - should REIs not be able to make money? I don't think that you are saying that, but I think this is a criticism that people have.

K: There's no guarantee of making money for anyone. Life is not a guarantee that you do this and you are going to make money - this isn't a socialist country, it's a capitalist open market system. Some people make this much money, some people make that much money, Some REIs go bankrupt. Some - what's the saying, you aim for the moon you hit the stars concept . I didn't go into this looking to make a lot of money, if fact I thought if I made $200,000 I would be a happy camper, and money doesn't make you happy anyway. Getting up and enjoying what you do matters. I know REIs that make 10x the amount and those that make less than that, but you know, $333,000 a year, is like the top tier of money in America, for sure. The majority of people don't make anywhere near that. So, I'm not sure why that's not considered a lot of money, but at the end of the day, there are no promises in life, just opportunities for each of us to create what we wish and desire to do. There's going to be a lot of trouble along the way, and the trouble is part of what I call the treasure of creativity - if one thing isn't working, try something else. If you're not a busy fertility doctor, then you want to go out and risk a lot- you know, because this is risky. I owe a lot of money, and everyday I need to go out and keep sharing and creating, because when you get big, the overhead grows, and so the need for the river widens, but we too can easily close it down, and shut it down, or I should say, narrow it, and we would still be doing will. Because really, as healthcare providers, all we need to do is focus on providing great health and wellness advices and treatment modalities. I believe the money in general can and will come, but there are a lot of challenging market forces going on I mean the entry cost of building an IVF lab is huge. I'm working on opening up my IVF lab in Buffalo, so were capitalizing that, growing that, so that's still all stuff we have to look at as entrepreneurs, and so the hat of the entrepreneur and the hat fo the physician come together and so that's stuff I focus on - but I enjoy that stuff. Lots of doctors just want to practice medicine. But I think a lot of doctors that went into this that are very creative and artistic, and they like to do it their way. I think we're going to see some more individual programs and people going out there to do something very similar.

G: To me it seems to be something exactly like what happened with craft breweries and regional banks, right, when it came to breweries, it seemed like 15 years ago, there was only going to be one beer company. You had Coors, Miller, you had Anheuser Busch, Anheuser Busch gets bought out by a global conglomerate, Another company buys Miller, and then they buy Coors, so it seems like you've got two beer companies for everybody, so then Yuengling starts to grow, Sam Adams start to grow, and people are opening up their own microbreweries, and I think we are seeing the same thing in our own field you know, were seeing consolidations. Little guys being bought up by big guys, and then some people are going off and starting their own practices, because exactly what you said, they just want to do it their way.

K: And that's the joy of life, going out and creating and doing it your way. My way isn't the right way, it's just the way we've done it, and so I think, I am practising more and more not to criticize, which is obviously a human challenge,not to criticize, not to judge, but to be open to different ways… “Gee, what are they doing, what are they doing, how can I pick and choose all these little pieces of the puzzle”, and this is how art opens up - and you're right, like coffeehouse, all these little coffeehouses and roasters. If you come to my Rochester office, we have the Fertile Grounds Cafe, I was working on starting to do roasting coffee and I've been working on that so we sell coffee there. We do a lot on diet, so I've been opening up to bringing in ketogenic menus and lifestyle, we have yoga, acupuncture, massage. Were now talking about CBD oil, and it's kind of crazy stuff with whos doing what, where's the studies, you have to have evidence based medicine, and I'm looking at the guys - they're not going to work for Starbucks or Budweiser, they're just saying I want to do something new and different. Look at GE, the shares are dropping, and we've got all these apps now, it's not just Facebook anymore. I think we're going to see the fertility world opening up and being more creative. But, some individuals need to be willing to put up the bank and, whether it's a venture capital company or your own local bank - Ive know plenty of local banks are still working the entrepreneurial world of helping people. We see people from around the globe, and that's the beauty of this environment. We can share on Facetime, Twitter, Instagram, and YouTube, our energy, and 1% of the billion is better than 50% of the 300,000 in Syracuse. As I begin to think outside the local box, I am sort of realizing that there are so many different ways to do this. We do our own financing. Everyone is financed, we don't check credit, everyone is capable. We are going to pharmacies and say OK, here's our prices we want, can you meet it or beat it. It’s like WalMart, they went out to the vendor's and said OK, here's the price we need, we've got all these locations, you want our business, this is what you have to meet. The same thing goes for other vendors, between medicins, hardware, software, all of it. We've got to do much better on going out and just put an offering out there. Here's what we do, here's the numbers. We’ve been growing about 30% every year. My bet is were growing the market. Because the people that cant afford the $30,000 aren't going to those people anyway. So, we are actually incentivizing the local REIs to do the monitoring, even at a rate that they do anyway or lower, they're going to get those clients eventually or they will just help build the market. That hey, I went and got my monitoring with that doctor, they really wonderful at that practices.The more we grow that energy and excitement for helping people, we are going to grow the market.

G: It’s almost, not easier, but it's a clear example when you are an REI that can show ok this is what I've done as an REI, I've proven the model. How do you then also say to pharmaceutical companies or device manufacturers or anyone else involved, listen I lowered my rates, this is what I expect. Are you able to do that? Who else is responsible for lowering the cost?

K: Well, no one is really responsible, in the sense that you need to come to the plate and do this, but there's a responsiveness, because they are seeing the amount of business that's coming to CNY Fertility centers around the country - and by the way we do have a satellite office in Montreal, Canada, also. But because we put it out there, they are coming to us because they know we are growing the marketplace, and like anything else, margins can go down in volumes go up. You know, low volume, high cost. You could buy this expensive bottle of wine, but not many people are buying it. You could go down to a local winery in the finger lakes, get a great value for a lower cost, and make them sell a lot more than that. In essence, supply and demand. We are increasing the supply of the opportunities for fertility treatment because we've created a very efficient team - we have 10-15 embryologist. We have docs at every location doing the retrievals and transfers, plus we have practitioners that are helping and a full nursing I call the global team - where they are talking to clients from around the country and globe, helping them make sure they are getting their testing, so they have the instructions, so they know what they are doing to give them the opportunities to move into IVF or donor eggs or gestational carriers. There's so many ways to do this, so we simply have to - growing the box, but we’ve gotta maybe get into a new box to learn how to do this. I invite clinicians to call me to come visit, we’re holding nothing. I've always been an open door to share the ideas. This isn't proprietary, these ideas are really open and out there. The more I share them, the more amazing things grow for all of us.

G: I think that's the way how most change happens, when they see a successful model, it's easier for them to wrap their heads around, and eventually that model becomes the standard, and I knew you were the guy to interview to talk about that. Dr Kiltz, is there any other thought that you would want to conclude with about being responsible for making fertility treatment more affordable and accessible?

K: I think we’ve spoken a lot of good ideas, and I'm really grateful. I think like anything else, when we realize that all the responsibility falls on ourselves for whatever change we want to see happen, we need to be the ones that are a part of the change first. There was a great story about an entrepreneur having a challenge with his business and needed to write a great speech to inspire his tea, he didn't know how, and his little son was bothering him and he didn't know how to tell his story. So, he took a picture of the world, and tore it up, and gave the picture to the son and told him, here son, go put this back together, thought it would take him some time. Two minutes later the kid came and knocked on the door, he asked son, how - the son replied, well, on the other side, there's a picture of a man, If I put the man together first, the world would be right. So, he was able to put the picture of the man together, since he knew what the man looked like, and turned it over, and viola. So, I think when we work on ourselves in this human amazing journey, that make the world better. I've always been and continue to be inspired by your energy and creativity and I am really grateful that you asked me to be a part of this.

G: We are happy to have you on. Dr Kiltz, thank you so much for coming on the program.

K: Griffin, it was a pleasure, and I look forward to many more to come. God bless you.