Since February, when Alabama's Supreme Court declared frozen embryos are legally considered children, fertility clinics around the country have been weighing the implications of a political movement that's suddenly turned hostile toward IVF.
Although Alabama has since passed legislation to protect in vitro fertilization, the ruling seemed to open a new front in the far-right's attacks on reproductive freedom. It could also threaten growth in the booming IVF market, which last year brought in an estimated $8 billion in revenue.
Last month, Progyny, the nation's only publicly traded fertility benefits company, saw its shares sink to a two-year low after it warned that the ruling was scaring off potential customers
IVF also took center stage last week at the Southern Baptist Convention, where church leaders effectively condemned the practice.
Nightcap sat down with Gina Bartasi, who founded Progyny in 2015, to discuss her latest project, Kindbody, a national fertility clinic network she launched in 2018 that now boasts 35 clinics around the country.
The following interview has been edited for length and clarity.
Nightcap: Earlier this month, you came back into the CEO role at Kindbody after two years as chair. Why now?
Bartasi: There's a lot of enthusiasm around our clinics right now — I'm pretty pumped. The company is tracking towards revenue of $225 to $250 million, which is an extraordinary milestone for a company as young as Kindbody — it's only a little over five years old.
The other critical milestone is that we're profitable. We were profitable for consecutive months in March, April and May.
Nightcap: It's also a particularly fraught time for reproductive rights in America. How has the Alabama decision, or even the Southern Baptists' statement last week, affected your work?
Bartasi: We always say, the last person you ever want to make angry is an infertility patient. They will lock arms and really unite, and we're honored to be a part of that community.
I have never seen any religious or government guardrail ever stop fertility patients. I'm a former fertility patient, and no one was going to tell me no — I was going to do whatever it took to have the family I always dreamed about. And 99.9% of our patients support that same philosophy.
I know Progyny reported some softening of utilization, but Kindbody actually saw a close to 22% increase in IVF utilization in the month after the Alabama ruling came out.
Nightcap: Can you explain your business model a little bit? Where's your revenue coming from? And who are you partnering with?
Bartasi: We have three revenue channels. We started in the direct-to-consumer model to really democratize care and build a global brand. Today, one in five couples needs fertility treatment to build their family. That's up significantly from one in eight in just the last decade. So the direct consumer business remains a big part of our business.
Another is self-insured employers — they pay their own medical claims, and as such they want to remove the middleman. And particularly in a high-cost, niche industry like fertility, they want to be able to purchase services directly from a network of high-quality fertility doctors.
Then our third vertical is called MCOs — managed care organizations. We are in-network with United and Aetna and Cigna and many of the Blues.
Nightcap: Kindbody has faced some criticism over its for-profit model. (Editor's note: Last year, a Bloomberg investigation detailed issues such as understaffed clinics, lost and mislabeled embryos, and inconsistent safety protocols. Kindbody has disputed the allegations, saying its average incident rate is comparable to other major US programs.)
Some say that the business model creates perverse incentives for doctors to upsell, and that can be especially complicated when it comes to fertility patients, who, almost by definition are desperate for help. How do you respond to that criticism?
Bartasi: Thank you for allowing us to be on the record about the criticism.
Listen, without the financial support of our growth-stage investors, we would not be able to democratize care. We would not be able to help 3.1 million Americans have fertility treatment that previously could not afford to have treatment.
We are proud and unapologetic. We are as big as any other fertility networks in terms of revenue and size of clinics. But those networks took 25 to 30 years to build.
You can't do it without venture capital, unless your mission is to serve as many patients as possible and in as short a time as possible. And we want to bring down the price. That historically was the challenge with IVF. In the last decade-plus, IVF was reserved for rich, white heterosexual couples on the Upper East Side of Manhattan. And if you weren't dual-income, no kids — good luck.
This is a very mission-based company. And it starts fundamentally with the patient experience, how do we want to treat and serve patients that have historically been left out of the process. You can be mission-oriented and still take in financial sponsors to accelerate your mission.
Nightcap: Speaking of accelerating the mission, what are your IPO plans?
Bartasi: It seems to me that the IPO window is squeaking open, but it's not open yet. Our job is to continue to run a profitable business and serve the patient. And every single investor who's written a check to Kindbody fundamentally agrees with our priorities: Take care of your team; your team will take care of your patients; patients will take care of your profits.
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