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CEO and C Suite

236 Diary of a Fertility Network CFO featuring JT Thompson, CFO, Inception Fertility

Today’s Advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, nor does the Advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the Advertiser.


Why do insurance companies often have a much bigger advantage over fertility clinics? How do fertility clinics close the data gap with insurance companies?

In this week’s episode, JT Thompson, CFO of Inception Fertility, shares his expertise on leveraging business acumen to optimize operations and navigate the complexities of fertility care.

Tune in as JT discusses:

  • Growth opportunities for fertility practices (And how to harness them)

  • Improving the efficiency of doctors' time

  • Negotiating with insurance companies to benefit your practice

  • Making long-term decisions for your practice that may be challenging to quantify

  • Forecasting projections that can waste time and resources

  • The dilemma of investing in quality and scale of care improvements that may not show immediate ROI

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JT Thompson
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Transcript

[00:00:00] JT Thompson: The traditional insurers of the world have been underwriting hospital care forever. And if you're a single hospital provider or something smaller and you show up to a gunfight with a knife, you're in trouble. And so you want to be on an equal playing ground. I think what we, where we do in our business is.

We're educating the payers about fertility space. It's not an area they spend a ton of time in. They don't have a ton of history that's allowed them to create good or bad expectations about it. So it's, that's been a would say a fun if that's the right word to use, a welcome portion of these conversations is that they're very much collegial and cooperative. And not just negotiating over a nickel. 

[00:00:44] Griffin Jones: Patient finance is a big area for dropout at your practice and a big area for your negative online reviews. See how Bundle's multi cycle programs can make that experience seamless for your patients. Visit bundle, B U N D L, fertility. com.

What data and important business intel do you want to make big business decisions about your practice? What would you want if you had a chief financial officer like my guest today? He and I talk about opportunities for growth for practices, what he's looking at with regards to efficiency of doctor's time, talk about negotiating with insurance companies, how insurance companies often outdated practices, how practices can close that gap.

We talk about speculation. How do you make decisions that you think are really necessary for your practice in the long term, but are really hard to quantify in projections on a spreadsheet? Talk about erroneous forecasts, as in how do you avoid BS data that is just making projections for the sake of making projections and is a complete waste of everybody's time?

And then I asked JT, as the CFO of a private equity backed company, how do you think How do you approach this dilemma where there might be things that are really necessary for improving the quality and scale of care over the long term, but doesn't look like it's going to have an ROI within two years? Enjoy my conversation with JT Thompson.

[00:02:03] Announcer: Today's advertiser helped make the production and delivery of this episode possible for free to you, but the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health nor of the advertiser. The advertiser does not have editorial control over the content of this episode and the guest's appearance is not an endorsement of the advertiser.

[00:02:24] Griffin Jones: Mr. Thompson, JT, welcome to the Inside Reproductive Health podcast. Good morning. Thanks for having me. You are the first chief financial officer to be on the show, at least that I can think of, and I'm worried that somebody's going to say, wait a minute, I came on a few years ago. I And If that's the case, I apologize to that person, but I do believe that you are the first CFO on this show and I think that is necessary because one, I know of the three core areas of business, sales and marketing, delivery operations and finance.

The last one is the one that I am weakest in and I think it's the one that many of our audience, certainly not all, we have a lot of MBAs listening and a lot of People with finance backgrounds. But we also have a lot of people that were able to get to a very successful position in life because they're just, they're good at doing something valuable that they can charge for.

And then they were able to keep costs low enough. But it wasn't really any kind of system. And as you and I were talking, one of the things that you mentioned is I'm not a middle of the fairway CFO of, just A traditional accountant, if I'm paraphrasing that correctly, rather you approach it from a business partner lens and and I wanted to know what that meant, but I wanted to hit record before you told me what that means.

Let's start off with what your approach to being a CFO is. Great. Sure. And appreciate the opportunity. And again, CFOs aren't normally trailblazers. So being the first at something is pretty cool. Hopefully I'll set up a low bar for the next guy to cross. Yeah, I am the CFO here at Inception Fertility, and and, in that capacity, I have responsibility for what you would expect to be the traditional finance roles, and we'll talk about those today, I'm sure but my career has been built around, being a strategic partner to talented executive teams and delivering information and support that allows whether it's our, any constituent, whether it's our executives our physician partners our patients, any constituent we have to try to facilitate success through the traditional delivery of what you'd expect in numbers and results and data but really from a strategic standpoint a bit around a number of.

[00:04:40] JT Thompson: A bit of high growth businesses like Inception is and the fertility space is and so bring a set of experiences around successful and efficient growth that I think are fun to deploy here in the fertility space. 

[00:04:52] Griffin Jones: What is unique about the fertility space that you've noticed, or what tends to be the same underlying principles no matter what industry you're in, and then what really is different when you move to a new sector?

[00:05:07] JT Thompson: That's a great question. The my, and I think it's a really I think through that lens around, what I learned in these other industries or other healthcare specialty sectors that you can apply here. And I think your question is really spot on and that there's a lot of things that it doesn't matter what business you're in.

People make the same mistakes. People don't measure the things that matter. People yeah. Don't I would say make a lot of the same mistakes, without the best, certainly with good intentions, but without the best, data and practices. Clearly there's things that, that we're doing here that were, that they were doing before I joined, that we're doing now, that you would do in any business from from a finance and support standpoint in terms of reporting and data and management and utilization of that.

What I like about the facility space relative to some of the other healthcare sectors is just the pure organic growth opportunity. The business is growing at such a tremendous pace. Access to care and access to our services is expanding, exponentially in a way that's exciting.

Not all healthcare, healthcare is obviously a fast growing part of the economy, fastest growing for years, will continue to be. Across all healthcare delivery services this is one that's growing faster than most. It's it's really fun to be part of it. 

[00:06:23] Griffin Jones: You said that some of the common mistakes tend to be universal where people don't measure the things that matter. What are the things that matter to measure? 

[00:06:33] JT Thompson: I think what I found is whether it's partnering with a physician or partnering with a other clinical partner or partnering with other executives, CEOs, COOs, the smart operators will tell you if you give me, This piece of information timely and accurately in a way that I can trust, that I can act on it, and I think that's probably been consistent across all of my experiences is trying to deliver timely, trustworthy data, and people will act.

I think one of the great things about really everybody across our spectrum, and you referenced it, a lot of people have a finance background or a business background, but then they're in a different role. Most everybody in our world in healthcare in general and certainly in the fertility space, whether it's our patient partners, whether it's our executives, all well educated all intelligent all want to succeed all want to perform at a high level and that can be done with data and with the right tools and knowing how to act.

[00:07:35] Griffin Jones: And so when you say getting that timely information, do you mean the operators, the other business leaders getting that from you, the CFO, or you getting certain indicators and metrics from them? 

[00:07:47] JT Thompson: Totally us delivering to the constituents the data that they want to see around the business. Whether again, whether it's an operator whether it's around how's my staffing look today?

 How are my supply expense is trending. How are my, in a position partners, how are my new patient consults? How are my how are these data points giving people, access to data they trust, they can act on? How did they? I typically trust the, whatever industry it's in and that I've been a chance to be a part of, I, I approach it with you tell me what you want to see.

[00:08:19] JT Thompson: You tell me what data you need to feel like you can really manage the business. Yeah, how do you deliver a baby? Better to the patients. It could be the marketing team. What sort of data will help you sort through the right kinds of leads. It could be the operators who need to worry about staffing and metrics around turnover. It could be revenue, revenue source related. How, what data do you need that would help you make decisions in managing the mesos? And we deliver that. That's our, always know 

[00:08:46] Griffin Jones: what they need or do they sometimes need you to tell them what to look for? 

[00:08:51] JT Thompson: I like to think it's a great partnership and we bring, ideas to the table of, hey, what about this?

Did you think about that? Here's some data that we're seeing and here's some trends that we're seeing. Let's interpret this together. Let's decide if that's something we should continue to report on and act on. Again, the best relationships among companies and teams is interactive.

You used a word earlier that's in my core mantra these days is really respecting curiosity. And I think the greatest leaders and the greatest operators are people who are analytically and intellectually curious and willing to listen to and be thoughtful about input even if it wasn't what they came to the table believing.

I think, the greatest, among the greatest things to see is to share data with someone. That tells them a story that's different than what they always believed, and they believe it. They trust it, and they then can act on it. I think people, again, it's human nature to have. An embedded assumption about, a piece of data or the way things are and be grounded in that in a way that you have to really be proven otherwise.

And I think that the great job of support systems that we provide on behalf of all of our clinic partners and company partners, whether it's through finance or HR or IT or any support system. Is that we give 'em data, they believe. 

[00:10:17] Griffin Jones: What are some of those things that clinic directors or practice managers or practice owners are coming to you looking for to get a better understanding of?

[00:10:27] JT Thompson: Sure. I think in this, in, in our space it's, data on how we can, how are we getting patients in the door? How are we can bury them into people who then proceed with us through their journey. It's it's how do we navigate the go forward world of not, this is a business, as you well know, that used to all be cash pay, self pay people.

The fantastic news is that there's a lot more benefit coverage for this service, and that expands into, you Not only traditional insurance but fertility benefit providers and helping our managers and leaders understand how to help patients navigate their own journey and their own access to benefits.

I think there's lots of ways we can help people deliver the best product. I would tell you our principle around all of this. is to allow, experts to focus on what they're experts in. So you want clinicians to be clinicians, you don't want them to be worried about, their paycheck or their expense reports or their administrative tasks that we can do on behalf of people and let people who are trained to be a physician, who are trained to be nurse practitioners, who are trained to be, whatever they're trained to be and whatever is their highest and best use. This is where we want people to spend their time and let us worry about producing support. 

[00:11:45] Griffin Jones: So how do they pull you in for support sometimes? Because clinicians very often do want to be clinicians, but in this world, sometimes they're pulled into many other different things, especially if they had been owning the practice.

But even if they're, managing or operating a practice within a network, they're starting to, Think about things that they may not have had to previously, our state used to be almost 100 percent cash pay and now it's less than half cash pay with all of the employers that are here and now we're noticing that these benefits companies pay us half what they used to and so they want to be They want to be clinicians, but they're finding themselves having to figure out how they're going to operate in a way that's much different than they used to. How do you advise them on those things or how do they approach you? 

[00:12:41] JT Thompson: I think it's a couple of questions in there that are really important and a couple of things. I would say that it needs to be our value proposition to Our partners and future partners, to your point, who used to own the business wholly or solely and spend a lot of time around things that the owner of a business would have to do and not just truly being a clinician.

Our, I think our value proposition and the other folks our peers in the space who are trying to support practices as they affiliate with practices. I think we all have the same. The same goals in mind and similar to other industries is to really allow them, allow the clinician in this case or the REI to be an REI and not worry about being the business person and have to handle all those things.

Being able to convince folks that we're going to deliver these services to them I call it table stakes, like we have to be able to do these things on your behalf so that you don't have to. You have to trust in us to do that. Your question was how do they access it? I find that there will always be some push information and some pull information, right?

We would love to always push data to people in a way that it shows up the way that they would like to see it on a timely basis that they would like to see it. But we're also, very interested in being asked and being asked for to look at something a certain way. So we'll, I want them to pull data from us as well or pull support from us as well.

Remind us where they need support or they'd always had to do something for us to do it for them. It needs to be interactive. So I think the delivery of it. Hopefully we'll always be push and pull but, again, I think our task is to have information at their fingertips.

[00:14:26] Griffin Jones: We're talking about negotiating with insurers, but what about an alternative approach to IVF insurance? Here's the reality. Seventy percent of IVF patients need more than one cycle and costs add up quickly, especially with medications. Bundle changes the game by offering patients a 100 percent refund.

Bundle covers the full cost of IUI or IVF, including optional medication add on packages so patients don't have to worry about unpredictable expenses. With Bundle, patients know their costs up front, giving them a clear path to achieving their dream of having a baby. If you want to learn more about how Bundle can help your patients have peace of mind so they stay with you and are happy with you, instead of just dropping out, visit Bundle, B U N D L, fertility. com.

That's Bundlfertility. com. They bring you in for that support. And when you said that, I thought of the old hockey enforcer. I don't know if you grew up watching much ice hockey, but especially back in the day, and probably still, but certainly back in the nineties, when I was watching a lot of ice hockey, there was a, it.

People's job who their only job was to come in and trounce somebody. And I'm not saying that's a CFO's only job, but there were also other guys that, maybe half of their job was to play the game well. And then the other half of their job was to come in, trounce somebody. And so do you find that sometimes you're in this role of I am here to negotiate that.

You've got different clinicians that have all run, certain practices, Part of our value proposition as an MSO is to be able to get more efficiencies at scale, which means that I'm negotiating on behalf of people. Do you feel in that role sometimes now I am here to negotiate a better deal for you? I'm here to be the pro negotiator. Is that ever the case? 

[00:16:12] JT Thompson: I grew up in and still live in Louisville, Kentucky, where there wasn't a lot of ice hockey. But I understand what you, I understand the the role, and I would tell you that certainly my approach in this capacity is far more carrot than stick.

I don't believe in, in, pounding the table and telling, our partners this is what I'm here to do, I'm here to enforce this or to do that. It has to be much more in a support way, but I do believe that we can deliver That are game changing and allow us to do things we can go be the person to negotiate contracts, whether it's with, payers or suppliers, we can take that lift off of our partners are used to have to do that and they can trust us to do it.

And if they want us to be the heavier business partner deliver of a message, happy to do it. But certainly not a, We'll never be in an environment where we're telling people how to run their business or how to be clinicians or how to do things. Our job is to learn from them, not to teach them.

[00:17:09] Griffin Jones: I know that you can't share specific details of any contract negotiation, but can you share, to the extent that you can share, can you think of a recent example where you employed some of that to get a better deal for the partners in your network?

[00:17:23] JT Thompson: Absolutely. I would say it's almost always because of really good data. It's almost always an education process. I think one of the interesting things about our space and the growing nature of it and the growing nature of companies who want to provide this service on behalf of their employee base and insurers who are responding to that by developing products, it is unique and they are, the, having been in other healthcare verticals, whether it was the hospital business or the long term care business or others where the insurance companies have the ability to outdating you and that's frustrating and doesn't necessarily give you a ton of leverage in our space at the moment we're educating payers, we're educating Thanks companies who want to offer this service around the journey and the outcomes and the possibilities.

And that's fun. And they believe it. And so I think showing up in a meeting with a payer where we're toe to toe with them on having, real data to share has been powerful and has helped us create products alongside of them that are good for everybody. 

[00:18:29] Griffin Jones: They have the ability to out data you, meaning like they have more information on other clinics and other providers, like what other kinds of data do they have?

[00:18:38] JT Thompson: Or even more than, even more about your own business, right? The traditional insurers of the world have been underwriting, hospital care forever. And if you're a single hospital provider or something smaller and you show up, to a gunfight with a knife, you're in trouble.

And so you want to be on equal playing ground. And I think what we, where we do in our business is we're educating the payers about fertility space. It's not an area they spend a ton of time in. They don't have a ton of history. That's allowed them to create good or bad expectations about it.

So that's been a would say a fun if that's the right word to use, a welcome portion of these conversations is that they're very much collegial and cooperative. And not just negotiating over a nickel. 

[00:19:25] Griffin Jones: How do you close the gap between that data powerhouse that they have and like you said, you, you've been able to meet them with a lot of data of your own. How do clinic owners close the gap with big insurance companies? 

[00:19:42] JT Thompson: I do think that's one of the value propositions that we bring as we try to expand our own, our own footprint is that we can do that on behalf of people. It would be very tough for, a single clinic owner or a much smaller business to, to walk into.

So I do think that's one of the things that the larger of us in the industry and one of the things that we do well, and we're doing it well not just on our own behalf, but on behalf of the industry. The really cool thing about this space is the untapped market. 

[00:20:13] Griffin Jones: I wanna ask about that negotiation of scale and get your opinion on a little difference of viewpoints that I've heard people express.

So the first time I had heard one side of the argument was a practice owner, an independent practice owner, and a. Quite a large market, a top 10 U. S. market a decent size practice more, you could count on more than one hand how many REIs they have. And this person's viewpoint was, the network doesn't really matter in terms of negotiation.

It matters how the market share you have in a particular market. Meaning if you've, if you're in LA and you've got just 5 percent of the market there, and then you're in Seattle, and you have 10 percent of the market there, that doesn't matter as much as having 42 percent of the market in Orlando.

And and then I had David Stern of Boston IVF on the show and he said, no, I don't think so because he said, I think even when you have smaller market share across the country. You have relationships with Blue Cross Blue Shield and you also have precedent like case study. And so I can see both sides to, to those viewpoint. Where do you fall on that? 

[00:21:28] JT Thompson: I would say I see both sides as well. To be clear, I think, if you look at our footprint we've certainly attended toward the former, which is, we're the largest provider. and Texas with a large supplier in Florida. There, there are we agree that affords you a seat in the table, whether it's a bigger seat or not.

Certainly it does, but I have to agree with David that across, being able to be in have experience in a number of different markets. helps. I mean learning and again very much appreciate my experience across healthcare service companies and this one's no different is that you know when you're in one market you're in one market.

Even you know Austin's different than San Antonio as close as they are. So you really do need to be tailored to market specific and have those experiences. They could absolutely inform the conversations and as it becomes a national, as we're certainly a national provider and others are as well.

I do think that helps relative to the conversations and just the credibility that we have with these payers and these providers that we do have experience in a number of places that certainly can't hurt. 

[00:22:34] Griffin Jones: Coming from other areas of healthcare, when you got to the fertility space, did you find that the insurance companies were doing things in the fertility space that, that you thought hang on, that's not, that's Fair, or just that's not how you do it in other areas, why are we being held to this standard or they were looking at things maybe more scrutinously or taking things that you were presenting at less of value than in other areas of medicine?

[00:23:01] JT Thompson: I don't think so. I don't think their behavior or method of operation is intentionally different across sectors. I just think this is newer. I think it's a smaller piece of the pie to them. And they don't have as much data to understand it. It's evolving. The way the business has evolved certainly it's a baby in and of itself compared to other industries. No, I don't think there's any intentional 

[00:23:24] Griffin Jones: no, not intentional, but to your point, because it's smaller, they look at it differently. I 

[00:23:28] JT Thompson: think it's, I think it's, I think it's just lack of, I think it's lack of data. I really do. And I think that's, what's been great to be partners with people is to share data and share outcomes and help design products that make sense on behalf of our patients.

[00:23:41] Griffin Jones: What questions do you wish doctors would ask you more frequently? 

[00:23:46] JT Thompson: That's a fair question, and I don't know that I have a great immediate response to it. I really I love the interaction with it. It's, again all of the Opportunities I've had across healthcare have really almost exclusively been about having a great relationship with physicians and physician partners and caregivers and clinicians.

And I think just developing their trust that we bring value to the table that helps them do their job better. If I'm having a conversation with a physician a partner, a physician or a clinician where the questions are about, financials or results or then they were probably missing the point, if we're not delivering stuff that they, that makes sense to them, then we've got to get better at it.

Now what are the fun conversations around how do you help us grow? How do you help us add to our existing practices? How do you help us get more efficient? What aren't we doing that we could be doing? Those are where the conversations are super productive, right? How do we grow together?

Again, I think this space has such enormous growth opportunity within existing footprints, right? Just the untapped market share within existing markets is super exciting and I would hope that our partners see that and get excited about it. I think those are the partners that, that, that match the best with us, are the ones who really wanna grow their practice.

[00:25:13] Griffin Jones: Those growth areas are another area where you're not gonna be able to share the specifics of what Inception's doing, but to the extent that you can share what should people be paying attention to, of here's areas that the average practice owner might not be paying attention to, of ways to grow their business.

[00:25:30] JT Thompson: I think it's probably really about how to be very efficient with their own time and their own schedule, I think what the inceptions of the world and the people like us should to do, and certainly what we think we do in our, and try to get better every day and get better, is delivering in a way for them to create efficiency, and I think what I find in this space versus others, is the ability to create more volume and more productivity with the same hours in the day.

That exist which isn't always the case, and I think demonstrating that we can help grow the patient base and the patient volume without necessarily having to add more clinicians is pretty powerful. Now, there's also, we obviously want to grow the businesses by, by, recruiting new partners into these practices and and growing the footprint that way. But I think the opportunity to grow the business With the existing set of resources, it's pretty powerful. 

[00:26:27] Griffin Jones: You view Net Promoter Score as a tool that the CFO should have in part of their presentation, argument, review of the data, because I have come to really see efficiency as not just, something that is over here in business operations.It really is.

And I think of a friend recently who told me about going to see a clinic that I know and was not pleased with that experience because her words were, it was archaic. She just felt like everything was archaic. inefficient, slow, unresponsive. And and then she went to another clinic in her city, who I also knew her provider and I know that company, and she was much happier.

So I'm giving all of this context because I wonder if when you're portraying things of, here's how you could be spending your time. Here's ways that you could be spending less time on this and more time on this that people might say, yeah, but I'm the doctor. I have to do this. And I wonder if the net promoter score is a tool that CFOs could use in that toolbox to show, okay, not only is it a efficient use of time, but it's clear that what you're perceiving as personalized care might not be.

[00:27:58] JT Thompson: I'm gonna, I'm gonna say, first of all, I'm a 100 percent believer in the net promoter score mostly because ours outweigh everybody else's industry, so we're the best. So I, I think the concept of it 100 percent makes sense. I've been in industries where I don't think it matters as much. To be honest, here, I know we do well.

Our industry does well. We do better than others. But yes, I think demonstrating that the customer feedback and sharing that is real is, again, very powerful. I think showing good scores and having good experiences and being able to report on it in a way that is actionable, I think is fantastic.

I think that's, again, all of our clinician partners want to do good. They want to deliver a great product. Our company is as TJ very well, founded on patient experience. The entire principle around everything that we do here is patient experience, whether it's in the clinics or any other ancillary businesses we have.

That's the fundamental premise of anything that we do each and every day is patient experience. I have to sit in this chair, CFO or otherwise, and tell you that we absolutely believe it matters. And so the net pro score is great. Ours scored very well. There's obviously other ways to measure it.

I think we've got phenomenal efforts from our, our, our marketing and customer experience efforts that we continue to create data and results that are supporting what we do and point to areas we can improve. So absolutely believe that. That not just the company or our corporate executive reading score can act on it, but it's delivering, tangible feedback that needs to be respected.

[00:29:41] Griffin Jones: As JT mentioned, fertility clinics are often at a disadvantage when negotiating with insurers, but there's a way to offer patients more certainty and peace of mind. 70% of IVF patients need more than one cycle, and with costs piling up, especially with medications. Bundle steps in to offer a guarantee.

Patients get coverage from multiple cycles, including optional add ons so they know exactly what their financial commitment is up front. By partnering with Bundle, fertility clinics can offer their patients not just a service but peace of mind. To learn more about how Bundle can help you support your patients with transparent, guaranteed pricing, head over to BundlFertility.com.

That's B U N D L Fertility. com and empower your practice to provide a better financial experience for your patients. patients and a more favorable experience for your clinic. As a CFO, how do you think about accurate forecasting and not forecasting for the sake of putting numbers in? An example that I have outside of this field is my first job out of college, I was radio ad sales, Clear Channel, I think it's called iHeartRadio now, but at the time they were the biggest radio company in the country and 100 percent commission only.

Sales, here's the phone book kid, go close a couple deals as a 21 year old, go figure out how to get this 55 year old business owner to give you some of his money. And that was their model and each radio station had probably 10 sales reps and a cluster in a big market would have five or six radio stations.

And so across the country, you had somebody at the top, Some CFO, JT, decided that we need forecasts for what we're going to sell this year. And in a model like that, it was just BS. It was just saying I have no idea how many deals I'm going to close because I'm knocking on doors.

I'm, column people and sometimes I get a whale and sometimes I don't but it was, it was making these projections so that somebody could present it to somebody in a board and it was all BS. So how do you approach forecasting so that, it's accurate? 

[00:31:53] JT Thompson: I'm going to give you an answer that that may make sense given what you just described. One of the lines that I use each and every time is that the second that I'm or anybody in our role is finished with a forecast or a budget, it's exactly what's not, what not is going to happen, right? It's just by its nature. We're going to be wrong, right? It's not going to be accurate.

That said I think the, it is important to have your pulse on the near and medium term expectations. I think it can absolutely help us manage our businesses efficiently. And I think about forecasting in the way not traditional CFO, here's the budget for next year, here's a five year forecast of our business.

Those are things that, in my role, I have to do for, lenders or boards or other constituents and for ourselves but the reality of a forecast that helps the business run is what's happening over the next month, the next three months, what do we see that's happening, and what does that mean for us?

What does that mean for staffing the business efficiently? Again, we're no different than a lot of healthcare businesses. We need to be really good about knowing who's coming to the door when. Whether it's the hospitality business where you have to staff a hotel based on volume that weekend we need to know, we need to have good visibility into what's, what are these full walls going to look like next week and next month and the next three months and that way we can help our businesses be efficient.

So I do believe strongly in, in the benefit of near and medium term forecasting and I get the traditional, longer range forecasting that we need to do as a business. They're very, very important just used differently I think. 

[00:33:28] Griffin Jones: How do you view the difference between what are actually key performance indicators and metrics?

 because I think people tend to mix things up and think that, any metric is a KPI and. In most departments, at most levels, there's probably not that many, right? There's probably four, five, six key performance indicators that are leading indicators that, that people really need to pay attention to.

And everything else is just a metric that if one of those KPIs is really off, then you dig into the metrics to see why that KPI is off. But really you're. The numbers that you're paying attention to, your scorecard, probably isn't that long of a list. What do you think are the key performance indicators for most providers in our field and what are metrics?

[00:34:19] JT Thompson: You're still in my stump speech. I think the my, my story as I put teams together and join firms like ours and partnerships is, it's not one thing that you need to see, and it's not 10. What are the three things that you really need to see, or the four things that you really need to see?

And you're spot on. There's a handful of things that matter. Volume metrics are important to our business. Obviously what, what does it look like to have, a retrieval or what does it have to ultimately have, A successful, pregnancy, all of these things are true.

I think in our case, we need to understand the types of services that we're doing for any particular patient along the journey because they can be different. And so there's a handful of things that I think are pure, I'll call them volume related that are important to me as a business every single day and delivering that, that information to our operators and our physician partners as regularly and as timely as we can helps understand, what's, how do we manage the business that we have in front of us?

What type of patient is it? For more information visit www. FEMA. gov what services are they looking for? So those are about it, there's a couple of metrics there. To your other point, without getting overly I'm also, while I really love data and I love to report on it and I love to stare at it and see what it's teaching me.

I don't want to look at 20 metrics every week or every month either but there are things that we can then look at a little bit retrospectively to learn from. I would tell you that in my chair and I know I share this with TJ and all of our executive team, you'd much rather be looking through the windshield than the rear view mirror.

I just think that's the way to run a business is to see what's ahead of you, not what was behind you. But you really do need a handful of things looking backwards to learn. We allow our monthly reporting that looks more like traditional, financial reporting with metrics to spot trends, to see things that can help us. But the real KPI activity is about looking at the windshield. 

[00:36:10] Griffin Jones: What do you view as it, it's a resource. Maybe if you can think of one like it, a book that you might recommend to people that are. I'm particularly thinking of young, the younger doctors that might be listening. I'm, I probably should just make this a default question that we send to our guests ahead of time so that I didn't give you a chance to think about it.

But I, when you think back, do you think of a couple of aha moments? That that were either from either mentors or maybe it was something you read or just, lessons that you carry on and go back to fairly frequently. 

[00:36:46] JT Thompson: I would tell you most of this conversation this morning, Griffin, is really bounded on a couple of aha moments early on in my career around measuring what matters being efficient.

I was in some businesses early on that struggled where you really had to batten down the hatches and understand what was important. I don't have a, I don't have a book that I would particularly point to, although I'm a reasonably I wouldn't call it voracious, but I do love to read business books and theory books and management books.

I don't have one that I would, that I hand out to my teams necessarily. I do think it's a, in my case, it's a cumulative set of experiences. But I'll, there are a couple points to your question where and my theme here of KPIs, important KPIs really came from an operating partner I had in a business where we were, we were fighting to make sure the business was going to work and he said, you got to give me, you have to give me these three things.

I have to trust it and you have to give it to me right early. And if you do, we can turn this business around. And we did. What were those three things? And so I just said. And in that case, it was a, it was a hospital business and it was staffing metrics and volume metrics and and how to manage that.

But again, it's a principle around, what is it that, what is it that matters? And I think so those are, there have been aha moments. I was lucky enough to start my career and spend most of my career in businesses that are all up and to the right which is, a finance guy wants to look at a, you want to look at a chart or graph.

Up to the traditional, CFO in the ear, you want everything to be going up and to the right. Growth is good. And I've been blessed to be in, in almost always businesses that are like that. But the couple of times you spend in businesses that are going, not the way you'd hope for whatever the reasons would be, you learn the most about yourself and the people around you when times are tough.

And you build from that. Those are just the, I would say the grounding couple of principles that, that keep me grounded and that I bring to each opportunity I get to be part 

[00:38:38] Griffin Jones: of. How do you think about assessing some things that are at least partly speculative? So I guess I'm I'm viewing as a CFO, you want to remove as much speculation as humanly possible.

I. I believe that there's probably some that you can't remove, and I think of, if we go to this office here, here's what we could project, or if we get time lapse imaging, here's what we could do, but there's always assumptions embedded, and I think Yeah, especially when you think of brand driven companies, especially when it comes to some things with the brand, there's a je that is hard to project. Do you, does any kind of quoi make a CFO's skin crawl? Or how do you think about future value that, maybe can't be 100 percent accurately reflected in projections? 

[00:39:38] JT Thompson: So this is where I'll another area where I'll deviate from the central casting CFO. I'm pretty comfortable in the speculative area. I'm pretty comfortable not, I don't want to use the word risk but I'm okay trusting conclusions that people collectively make that are built around assumptions we all agree on, even if we end up being wrong. And I think you can learn from me at RON. I'm not a so I'm not as, that doesn't scare me. It doesn't give me the shivers as you just described around, no, that's too speculative. We can't do that. I'm, I like to learn from most types of things. So I'm very comfortable in areas that aren't as cut and dried. I'm quite comfortable operating in, in an environment where.A bunch of smart people are making assumptions together and making decisions together based on that. And if we're wrong, we pivot quickly. 

[00:40:24] Griffin Jones: How do you view timeline in terms of when someone's saying, Hey, I think this will be really good for the return on investment, but maybe it's not. It's a little bit longer of a timeline than than makes sense for if you have investor obligations, that it's we've got to increase value, we have to be able to turn this thing around within a certain amount of time and you have people saying we definitely need this for the long term, doesn't, in the, at least in the, maybe 24 month forecast, it's, it doesn't, It's probably not going to work. How do you think about those types of dilemmas? 

[00:41:02] JT Thompson: Sure. I, what I would tell you, and this is probably in the in the vein of investors or partners or folks who are expecting timelines. I view that you make decisions about running and managing a business as if you're going to operate forever, as if you have a long timeline and those always lead to the best decisions.

I don't, I try never to be in a position where I'm We choose not to do something because we think this can take two years and we really need something that's going to work in six months. Now, they both types of projects exist and it's a little bit of nirvana probably for me to describe that, that you'd like to make all of the decisions that way.

But it's certainly where I start and where this team starts is, what's best for the long haul. What's best, this is the business that we're building. For a really long period of time and whether it's, one of the other ancillary service businesses we might get in or whether it's, changes to things that we do to help our practices be better we're not measuring it with it has to produce something in six months or it's a bad idea.

If we think it's, if we think it's the best investment and the best thing to do to build this business for the long haul, then. We're all gonna get behind it. I appreciate the nature of the question, which is, I don't, I, whether I had a a lender or investor or a shareholder who, had a different viewpoint I I wouldn't present everything as well. It's gonna take us 10 years, but let's do it. I think that's a little unrealistic. But I really try to make decisions that are independent of. Some artificial timeline. I 

[00:42:31] Griffin Jones: said I stole half of your stump speech, but I'll the other half is yours to conclude this show with however you'd like.

[00:42:38] JT Thompson: But look, I appreciate the time. As you and I talked about, and I'm happy to be the first in this role, hopefully of many. And I think there's a lot of I'm biased about my specific set of training and those like me who can be great partners to our executive teams and to our our operating partners across in our case a set of brands.

 My role and it's been a blast to play it here alongside of TJ and our great executive team at Inception and had, a handful of experiences like it where I think that's what I consider my toolkit around, businesses that are at this size and with this significant growth opportunity.

How to bring those experiences to bear. I think my favorite philosophy, if you will is experience sharing. I don't think you tell people what to do. I don't think you, you try hard not to. I try hard not to say, this is what we're going to do and this is how we're going to do it. What I like to fall back on is this is, I saw this before, I've seen this challenge before, this opportunity before, and here's how we did it, and it's changed.

I wonder if it'll work here. That's just a philosophy that I try to do, whether it's building the team or whether it's, presenting new opportunities. It's, how do you bring, how do you bring experience to bear? So probably my best partner philosophy I can have is at this stage with the set of experience I've got is how can I best utilize those and help people.

[00:43:55] Griffin Jones: BT Thompson, CFO of Inception Fertility. I look forward to having you back on. Thanks for coming on this time to the Inside Reproductive Health podcast.

[00:44:03] JT Thompson: Griffin, great being with you. Have a great day, man.

[00:44:04] Griffin Jones: Patient finance is a big area for dropout at your practice and a big area for your negative online reviews. See how Bundle's multi cycle programs can make that experience seamless for your patients. Visit Bundle, B U N D L, fertility. com. 

[00:44:21] Announcer: Today's advertiser helped make the production and delivery of this episode possible for free to you. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the advertiser. The advertiser does not have editorial control over the content of this episode, and the guest's appearance is not an endorsement of the advertiser. Thank you for listening to Inside Reproductive Health.

 
 

232 Reduce Costs. Invest in Tech. Scale Care. The IVF Lab Business Approach of Dr. Jason Barritt

Today’s Advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, nor does the Advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the Advertiser.


What do you do if your lab staff sees the value in a new technology, but your business leadership views it as too much of an expense and not enough of an investment?

This is one of the many questions we explore with Dr. Jason Barritt, Chief Scientific Officer of Kindbody. Dr. Barritt provides an inside look at how he leverages innovative ideas to make fertility care more accessible and affordable at scale.

With Dr. Barritt, we dive into:

  • Expense vs. Investment with new technologies (Using time-lapse incubation as an example)

  • Giving lab directors a voice through equity ownership (And how that positively shapes network growth)

  • Moving the subsidization of advancements from cash-pay patients to insurance (The process of how that could work)

  • How scale can drive down costs (What he's doing at Kindbody to reduce cultural media costs by up to 90%)

Dr. Jason Barritt
LinkedIn


[00:00:00] Dr. Jason Barritt: These things are not even discussed if the lab director or an owner or embryologist is not in the room. So you have to get invited in. And I found the best way to get invited in is have a very small piece of that pie. Now it doesn't mean as again, I get to make any of the definitive decisions. But I get to be in the room and or be asked the questions so that they can have the information to make the best decision, whatever that is.

But I also get to know how the decision is made and what the decision ultimately is, and how I'm going to then implement it. 

[00:00:32] Griffin Jones: And later on in the conversation 

[00:00:34] Dr. Jason Barritt: We do a lot of business with the IVF store. They will probably go out and find what you need if they can, additionally. I know this sounds weird to some people, but truthfully, it's very, very valuable for us.

And that is 

[00:00:46] Announcer: Today's advertiser helped make the production and delivery of this episode possible for free to you, but the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the advertiser. The advertiser does not have editorial control over the content of this episode, and the guest's appearance is not an endorsement of the advertiser.

[00:01:11] Griffin Jones: What did Jason and I talk about specifically? When lab staff see the value in something, but business leadership sees it as too much of an expense and not enough of an investment. For that, Dr. Barritt drills into time lapse incubation as a specific example. Let me know if you agree with him. I'm starting to see a pattern among embryologists.

We talk about how equity ownership gives lab directors a voice and gives them a seat at the table in conversations they might otherwise be asked to step out for. This one talks about how advancements might be subsidized by cash pay patients at first, but then we might be able to force insurance's hand to pay for them and how that might work.

It talks about how scale can drive down costs and what he's doing specifically now at Kindbody to test reducing the cost of some of the cultural 90 percent. And then how embryologists Can persuade business leadership to not only put those cost savings into profit, but to use them to pay for investments that continue to grow the top line and improve the standard of care.

Enjoy my conversation with Chief Scientific Officer, Dr. Jason Barritt, Dr. Barritt. Jason, welcome to the Inside Reproductive Health Podcast. Thank you, Griffin. 

[00:02:22] Dr. Jason Barritt: Happy to be here.

[00:02:23] Griffin Jones: I should say welcome back because this is the third podcast interview you and I have done. It's just the only one we've ever recorded online.

The other two have just been conversations between you and I. And initially you were thinking, Well, what would I talk about if I came on the podcast? And I said, Jason, we just talked about it. You have all of these really interesting points of view, deep insights. I wish that I had a microphone. And Now we've, we've got you on the, the show and I'm, I'm happy to do that because you've got a lot of insights into the IVF lab, and I think you also have insights into the business of the IVF Lab because you've owned equity in fertility practices and, and still do.

And so I'd like to just start with, you know, just a general, intro of what your views on IVF lab ownership are and, and lab directors owning equity in either the lab or the clinic. 

[00:03:22] Dr. Jason Barritt: Well, nice broad beginning, and yes glad that we've had our, I'll call it pre conversations. Even though I am of course in Beverly Hills, we don't have cameras following us all the time for reality television and so not all those were recorded, but the good news is we can talk about all these things again now and put it on the record so that you can show other people and we can have good conversation about all these things.

So happy to be here and happy to talk about the the subjects that we'll hit today, including laboratory ownership. So I'll, I'll, I'll go down the first road of saying I really am for lab directors owning interest in the laboratory they run. I fit this category because what it does is it allows that individual to be in the conversation with the other owner or owners and therefore they have a seat at the table.

Now in my case, I'm a very small percentage owner, so I don't actually have any type of controlling interest, so my vote technically would never matter. However, being in the room when things are being discussed actually allows you to be a part. of the product that is then going to be put out. And when I say product, I don't mean it in a negative way, I mean it in a positive way.

Because most of the directors are really dedicated individuals who have come up the ranks, have done it with their own hands, made babies with other people, learned how to manage people, and figured out, basically, how to run a little business. And be successful at it and work with a whole lot of really smart medical doctors who want certain things for their patients.

Also at the same time meeting regulatory requirements in order to make sure that everything's done at least at a minimum at that level, if not so much better. And then you have to manage people at the same time. And oh yeah, you're handling multiple millions of dollars of liability, walking around doing things.

For others. You're there to protect those patients in every way, because they can't do this themselves. You are the surrogate to that. And so the people who are then in the room and directing these have so much experience and knowledge of, I'll call it business management, it just isn't always the business itself.

And therefore, having them in the room and being part of the discussion actually makes the laboratory better. A much better business overall. So I'm strongly in favor of lab directors owning pieces of the lab. 

[00:06:05] Griffin Jones: I asked you, hey, Jason, I'm selling sponsors over here, who do you really like to do business with?

Why the IVF store? What the heck do you like about them? 

[00:06:14] Dr. Jason Barritt: We do a lot of business with the IVF store. Not that we don't do a lot with other ones too, we're a big company. So we, we do get things from many, many places. So I don't want to try to say negatives about anybody. But the key thing is that we, we found that they are extremely.

Easy access to get the supplies that we want both online, by phone, through electronic means. They've coordinated with our hybrid ordering system, so they've made it easy for us to be able to get the supplies that they have. They are definitely a curated set of supplies that are very specific to IVF.

They will probably go out and find what you need, if they can, if you actually ask for that, and that's very, very hands on, wonderful adapting that they do for us on that. Additionally, I know this sounds weird to some people, but truthfully it's very, very valuable for us, and that is that they will respond to the request to minimize the number of lot variations between supplies.

So you say that you get the same dishes, one box is a different lot number than another box, which means then you have to test it and track it. It's actually a pain to do and so they will minimize that. Even on a small order where you're only ordering like three to five boxes, they will try to make sure that it's all the same lot number.

You can also Buy a bunch at once and ask them to get you a whole pallet of things if you really want it and that way you only have to test and spend the money and or at one place in order to know that is exactly what you want. Something they've definitely done for us is test and actually do the MEA mouse embryo assay testing for us and complete that so that we can buy directly from them and it's all pre done.

It's actually much easier than buying a whole bunch of things. Sending it to, in our case, like 18 or 19 different places and every place testing their own thing. It makes it very cost effective for us that they adapt on that. As I said, they will go out and find what you need if you really can ask for it and if you know what you want, they then make sure there's enough in supply.

COVID affected us all in really, really weird ways with getting stuff. They've done an excellent job in making sure that they have the supplies available when people need them. 

[00:08:10] Griffin Jones: What specific concerns or interests are underrepresented when lab directors don't own a piece of the business, when they don't have a seat at the table?

[00:08:23] Dr. Jason Barritt: That's interesting, because you find that it's actually different with different groups, so I've been lucky enough to work and have Multiple other owners with me, and they have very different beliefs about what really occurs in that special little box that generally has no windows and has low light and everybody's wearing essentially pajamas all day and making babies in their pajamas.

They get up early, they they do their work as early as possible, and then they leave and try to go have a life outside the lab. So, they all wonder what goes on in there. And the truth is, most of the time, the owners, or the medical doctors, if they're the owners, or actual corporate, if they're the corporate owners, almost never actually go inside the laboratory and actually feel what it's like to do the work.

The understanding of what it actually takes to do a retrieval, And I'm not saying it's difficult, but you do have to get very good at it. And what ends up being found is they think it's just, hey, we just hand you a tube and everything's taken care of from that point. But the truth is, there's a whole lot of steps and a whole lot of adaption that's going to go on on the other side of that wall.

And if they don't have that clear understanding of how much is going to go into it, such as the timings, That are on the clock biologically that need to be met in order to optimize success. They don't understand that everybody's not wearing perfumes or certain nail polishes, and you're in an air handling system that filters out certain things and so you're breathing differently.

All sorts of different things go into the success of that room. They don't always know the level of detail that an embryologist will go to and that the lab directors will try to oversee. I'll give you An interesting example I've been asked multiple times by other owners yeah, you guys, you know, quality control the, the equipment and everything else.

And I said, yes, yes, we do. In fact, we monitor that every day, multiple times during the day, in some cases for different pieces of equipment that you're going to use. We do this for the safety and security of the patient's tissues, but to understand the level we go to, We actually, at the last location that I was at, which was one location that I was managing, it was a large one, but it was one, it took over one hour of a person's time every single morning to go through and mark down all the quality control of the equipment.

You think it's just as easy as, Oh, it's operating at body temperature, 37 degrees Celsius, perfect, everything's fine and good to go. Well, there were about 16 surfaces that needed to be done, 12 to 15 microscopes that needed to be verified that they were operating correctly temperature baths, incubator gas lines verification that switchers and backup batteries were working, fridges, freezer temperatures.

It is a lot of work to do this right, and not all ownership groups understand that. When, when I say that I need to afford a laboratory assistant to go around and do a lot of those things so that I optimize the dollar value of an embryologist's time instead on embryology duties, I have to actually justify that.

And so going into that room and having the discussion on why that level of quality control needs to be in place in order to succeed has to be discussed. Because if you're not in the room They don't even pay attention to what that takes. They just expect that something's happening there. The problem is when you expect something, it's not always going on.

[00:12:01] Griffin Jones: So is that really the difference maker? Just being present and having a financial stake in the company allows you to be present for those conversations? Is, is Because I was going to ask, why wouldn't just, you know, someone that is they're, they're the lab director and they're an employee, why wouldn't they also have this share of voice to be able to say, I need to be able to afford a lab assistant, we need to have these quality controls in place.

Is it, is, is the fact that when they have these things A financial interest in the company, that that puts them in meetings and conversations that they just can't or wouldn't be if, if they were only an employee? 

[00:12:46] Dr. Jason Barritt: There's probably a few centers that they would be in the room or they'd be asked in during certain times and then asked out during other discussions because politely when money is discussed and, and I, and I mean this in the best way possible, you actually don't want everybody in the room.

You don't want everybody involved in those things. And some decisions have to be made up based on money. Some have to be made purely on quality and success. And then some are the mix and all sorts of other factors that come in. And unless you're invited into the room, even if you're not an owner, it's not going to happen.

They're not going to talk about which incubator to get. Or whether you need another one, because you don't want to max out the number of spots in one, and you want to distribute things more evenly. Or you want to switch the device that you're using for the freezing method. Or, you may need more storage area, or do you want to ship them out to a long term storage facility, and how that affects It's the business model of, okay, we're billing the patients and we're receiving it for that versus, okay, now there's shipping it out and somebody else is going to take care of that for us.

Those involve business decisions as well as actual physical hands on clinical decisions. Because politely, to ship materials out to a long term storage facility actually takes quite a lot of time and organization. And then you lose the revenue side of that. You also gain the space so you can treat even more patients.

And so these things are not even discussed if the lab director or an owner or embryologist is not in the room. So you have to get invited in, and I found the best way to get invited in is have a very small piece of that pie. Now, it doesn't mean, as again, I get to make any of the definitive decisions.

But I get to be in the room and or be asked the questions so that they can have the information to make the best decision, whatever that is. But I also get to know. How the decision is made and what the decision ultimately is, and how I'm going to then implement it. Because, politely, I will never win every single thing.

I shouldn't. I don't know all the information and I am not the smartest person in the room on many things. Especially business. I didn't go to business school. I didn't go to marketing school of how to sell something either. But I do know how to operate the lab. And so My little piece needs to be understood, but then I need to understand how it's going to work in the bigger picture of the business, and its operations, and its success.

And therefore, what I need to do, or what I'm being asked to do, why, and then can I get it done, can I get it done fiscally responsibly, in a timely fashion, and still maintain, or Even get better with success. 

[00:15:30] Griffin Jones: That was a question that I had too, does it work both ways where, so you have the business making decisions that are more considerate of the lab, but you also have the lab making decisions that are more considerate of the business because it's, I see it all the time, there are business owners that are making decisions not fully understanding how it affects different teams.

Different team leads will make all kinds of decisions because it ain't their money, it's just, it's just magic money that comes from somewhere else. And so Or 

[00:16:04] Dr. Jason Barritt: you never know how much of the money is being spent, you just ask for and, okay, maybe I get, maybe I don't. 

[00:16:10] Griffin Jones: And so how does, how does it work the other way, where the how does it help lab personnel to make better business decisions?

[00:16:20] Dr. Jason Barritt: Okay, so, embryologists can go to these wonderful educational meetings, ASRM, College of Reproductive Biology, AAB other more local meetings you know, Southwest meeting embryologist meeting, or just talking with other embryologists and such. And they learn about, I'll call it, new technologies, new equipment, new ways of doing things.

They can bring those back and have discussions and think about or get vendors in touch and things like that. And so, New things can be brought to the table, but the truth is not everything can be done everywhere, especially all the time. That's an impossibility. No one can afford that. But what they learn is that when they do bring those things to the table, others are going to evaluate them from a different perspective than they had.

Oh, I heard about this great machine that is a time lapse machine and, you know, supposedly it can, you know, lead to more success. And well, here's the data from some studies and, you know, maybe we can get one of these. And then that goes up the chain, and then there's a business discussion as to, well, that's actually a very expensive piece of equipment, it actually costs a lot to maintain.

Oh, wait a second, you say you'd like one, however, I'm not quite sure we can just do that and how would we work that into the system? The embryologist then learns, oh wait, you could market it in a certain way. And use that data that's out there and the physician can then, per se, present that opportunity or that add on in a different way.

And then there's a pricing model. Is there a way to offset the extreme costs of the equipment, but increase the success? And is there a business model that works? They have to learn it's not a money tree that they go to and just happens to be there. It has to be justified. But when they can be a part of that.

And then they can hear it back as to, okay, we can consider doing that. We'd have to believe that we're going to be able to get a hundred patients that are going to choose to do an add on at a certain price point. And then we're going to be able to market to that. That actually costs us something.

However, there's a revenue source that may come with it. Are you sure that the data is there to support this and that this is the right investment? They become a part of that conversation, but now they've understood It isn't just, Hey, please write me a check and get me this beautiful box that I'm going to be able to play with in the lab.

And I'm going to be able to succeed with, although they want that. They actually have to understand the entire other side of it in order to actually use it in the right way, because otherwise you're just getting a toy. And I appreciate toys and I love the science side and doing new things, but the truth is it's not a money tree.

You actually have to run this as a business. 

[00:19:05] Griffin Jones: So, on the scale of the spectrum of toy that is a nice to have, and on the other ha So, you know, I think the end of the spectrum, a must have that is necessary for the quality of operations in the lab and can return the investment. Where do you put time lapse on that spectrum?

[00:19:26] Dr. Jason Barritt: Oh, tough. So I've been, I'll call it, I've been I was lucky in the fact that I was able to have that sort of conversation that I just had with you approximately 12 to 13 years ago with the group of doctors that I was working with at that time. And I was able to convince them to give this a good shot and that we were going to be able to use this in a way to improve success and be able to use it as a marketing tool for us to be able to Per se provide to patients an add-on that would help them achieve pregnancy faster.

And so, they purchased one time-lapse machine for me and the team that I had. We used it, we did some we did some studies of the outcomes of the patients that had been in it. We actually saw better growth and development in the machine while we were using it in the first essentially couple months that we were using it.

And we started talking about more and more of, Hey, this thing even does better incubation, let alone. The success we didn't even know at that point. And we're like, wow, this, this has other advantages. We also learned that we can learn a lot from time lapse. The truth is when you can look at a video development.

of an embryo. You learn a lot more than taking a one slice picture every single day. So we actually found this was an unbelievable training tool and we could actually get much better at our uniform grading and realizing what embryos can do in a period of time and when they are a few hours younger or a few hours older, how different they can be.

So we actually learned a whole bunch of training positive things from making this investment that we never thought we would have learned. By just making the investment. So time lapse ended up being not just a, okay, this is, this is the top 10%. Okay, it's a toy, but it actually has some good things. It's a 10 percent investment to, oh my, we really should be doing this a lot more.

We should be using this technology to learn more, gain more, make better decisions. We ended up doing an abstract and showing that we had a 20 percent higher pregnancy rate from the first embryo transferred. When we used the technology, so it ended up being exactly what we said it was going to be an improvement in our ability to succeed for patients, but it had so many other benefits that now I put time lapse as much more towards the, yeah, you should be doing this.

As it improves the outcome for the patients, and yes, it does cost, but there are so many other benefits that come with it. So, it went from, okay, it was 10 percent of the thing to, I'd really like it to be at least 70 percent of the thing, because in 70 percent of the cases, It will help you pick the right embryo the first time.

That is success for a patient. And at the same time, everything else comes with it. You can rank the other embryos. You can learn and teach and train. You can have more information. And then you and I probably go down the road of AI and how much this can add to that. So it went from being a 10% Per se, need, want type thing to at least 70%.

I might even say in the future, it'll be 90 plus percent. 

[00:22:45] Griffin Jones: Would you ever go back to not having time lapse? 

[00:22:48] Dr. Jason Barritt: So yes, of course, there is a place for it for time lapse and there's a place for not time lapse. What's the place for not? So if somebody is going to be probably not doing genetic testing of the embryos, I'll call it even A at this point for those embryos.

So we're not looking at that. A standard general culture, if they're going to transfer whatever embryos are there, the best ones based on an embryologist's choice, and their intent is to transfer whatever the best embryos are in order, and they are not concerned with getting to pregnancy as quickly, it is more the what tissue I make, I'm going to use and attempt.

They're a perfect candidate for a regular culture, because I'm not going to go to the extremes of anything. I'm not going to biopsy the embryo and do an invasive genetic test to see if it's normal or not. We're just going to transfer it, and if nature is going to decide that was the normal one, it'll work.

If it's not, that's okay too, because I have the next one after that, and the next one after that. If they are willing to accept it, They are going to go with nature, even though IVF is, of course, not quite natural. They are a perfect candidate for the one at a time. And, and if you're not going to do the genetic testing, there's really no deal to need to do the time lapse.

Now, could it be beneficial? Of course. But, they are not the one who need that. Their intent is different than the, I need to get to the baby as quickly as possible with the first attempt being the highest chance of success, with all the knowledge about that embryo itself, its growth and development, and its genetics.

If they're not in that category, they're not a client for it. And it works, and it does work fine. It works actually quite well, but time lapse.

[00:24:39] Griffin Jones: I just sent out an email that said, who's your favorite vendor? So many of the lab people said IVF store, IVF store. Why is that? 

[00:24:49] Dr. Jason Barritt: Well, they have some very, very experienced individuals running the company and some really Unbelievably, what I'll call happy to help you people type things there. They answer the phone, they will spend the time with you to find the thing and they will find what you need, how you need.

They'll look in their things, they'll find out which warehouse it's in and find out to verify that actually their ordering system says they have three. They'll make sure you have three before they tell you, okay, we got you three, and make sure all that's done. They are really good at the hand holding, they are really good with the positive interaction, and they have some unbelievably experienced people in this field.

They have changed the dynamic in the world. Being able to get the things that you need the way you need it when you need it. That's the other amazing thing. I actually ordered one item. I sort of needed it pretty darn quick, like the next day. They were able to accomplish that, of course. Other ones might be able to do that also.

But because I wanted to minimize my cost on it, I ordered 10 of them. They didn't have all 10. Available from that one place at one time, and they were going to have to charge me the double on the shipping and everything else. Thankfully, they worked with me. We found a way to ship them from the two places that we needed to do it at a discounted rate, because the truth is, it was actually going to be one price from one and one price from the other, and it was cheaper than what had originally been done, had I not been ordering as many, but they found a way to do it and do it cost effectively for me, even though I needed it in a rush.

[00:26:23] Griffin Jones: So, I keep hearing this from lab directors, and I'll ask them on the show, you, Jacques Cohen, Alison Campbell, and asking them, you know, do you see time lapse as a must have? And you say there are still scenarios where it's a nice to have, but increasingly, it's more of a must have. It seems to me that, that seems to be like a consensus that is forming, but it's Maybe 20 or 30 percent of the clinics in the U. S. and Canada have time lapse, and so that's a big delta. Is the only thing that's going to close that delta having more lab directors and embryologists own equity in their companies? Because what seems to be happening to me, lab directors and embryologists saying, yeah, we want to have this, and then at the business level, they're saying, Yeah, but on the P& L, it's just, it's not going to return the investment that we need in 18 months.

[00:27:20] Dr. Jason Barritt: Oh, it's not in 18 months. No doubt about that. If you have a, if you have a time window that's 18 months, and I'm going to call that short in the IVF world you're not going to get it back. It's just not going to happen that way. It's got to be a longer term thing than that. So I'll say this. I think it's transitioning.

Thanks That there is a balance between greater success or time to pregnancy. So success is one thing, pregnancy, but there's also time to pregnancy or how quickly you get to that pregnancy. Either first attempt time, or time on the clock, how many months. Both of those are actually important things for patients.

At first, in these discussions, they wouldn't have been so big. You're just going to get whatever treatment, as quickly as we can do it, and the success when it happens. That's not the client who comes in the door all the time anymore. They're on their clock, and it's moving quite quickly, and in fact, the later they come to us, that clock is ticking faster.

Politely, eggs don't get better with age. Wine does, but not eggs. So you don't want to take forever getting there, and you want to know what you have and all the information about it, and timelapse allows that. It allows it in a much faster timeframe. So yes, being in the room helps. Yes, having the knowledge of the expense of it helps, but I'm going to throw a little bit of a wrench in here.

And that is, I'll call it mandated coverage, or insurance based coverage. This is a challenge. When it is a cash pay patient, they can add this on without an issue, as they can make that choice. When it's an insurance based situation, they could be asked to add this on if they wish, or could be that insurance won't cover it, and therefore that's not something they're going to get.

However Is that providing the best thing for that patient, or was the insurance based client just getting access to care? But then the clinic has to make a choice. Let's just do everybody in time lapse so we do everybody the same and we get the greatest success for everybody. And then let's just do the cost averaging across everybody.

And even though insurance isn't going to reimburse for any of it, let's just do it for the reasons that we want to do it better. And we want to succeed more and that's a tough decision to make because it is so much more expensive. The truth is that it probably adds somewhere around 250 to 500 per cycle.

Depending on which machine you have, how much work you do, how much time you spend on it, preventative maintenance, how many you have, all these things. Politely, that's an expense. In an insurance based model, if you've made your contracts and don't have that included, that's a hard one for a clinic to eat, unless you have enough cash pay on the other side.

So when you have a group that is 10 percent cash pay and 90 percent insurance, probably not going to be able to offer this. Or at least not offer it to everybody. Whereas if you have a better mix of 50 50, you might be able to have the cash pay, afford to actually put the machine there, and that everybody else gets the benefit of it.

And that they also get to go in that same incubator. And therefore, they get to succeed and get that benefit because the clinic has decided that this is what we're going to offer for everybody. So it's a really tough thing to do because insurance is not going to cover this type of add on. And often, they won't even cover PGT A, the genetic testing of embryos, for standard screening of chromosomes.

They have to pay for that in order to get the normal one transferred. That's actually an upfront expense to them. Whereas they'd rather pay for a couple rounds of frozen embryo transfers, whether it's known or not to be genetically normal, and because that's cheaper than it is to do the testing. And that's the same thing that's being done with time lapse.

It's great. It will actually increase and get you to a pregnancy faster. But at what cost and are they going to be able to and willing to do that? So mandated coverage, insurance coverage is going to change this drastically into who gets it. Some places are just going to do it for everybody and eat part of the cost.

That's cost of doing business. You want to do the business the best you can and more patients will come to you because of the success. 

[00:31:58] Griffin Jones: Well, if that happens, Jason, is there also a play to then. Get the insurance companies to pay for it, so let's say you are, you know, 50, you're 50 50, you, like you say, you decide to average the cost, do it for everyone, is it, if that brings success rates up sufficiently and or if that allows Patients it reduces time to baby more quickly because you're picking the embryo, right, the, the first time.

Does that then allow the, the network at that level if they're, if they're doing enough to, to approach the insurance companies and say, this is why we're a center of excellence, or this is why this reimbursement rate needs to be higher. So, so initially they're, they, the cash pay patients are the ones shouldering that.

Cost, so to speak. But can they then use that to make, to, to raise the standard of care that the insurance companies have to meet? Or is that, is there's too many obstacles in between that the, that the insurance company would ignore. 

[00:33:01] Dr. Jason Barritt: So they don't ignore it, but they resist. Right now, however, what we seem to understand is they're already.

Basically asking us to do it because they actually want to get down to single embryo transfers of no normals. They actually really want that. It minimizes their overall cost over time and they are mandating, many of them, single embryo transfers. Well, you can do them one at a time, but this way you get to choose it better.

It's actually less length of service, less procedures that need to be done if you do it this way, with this technology up front. They want that. They just don't want to pay for it right now. But they will learn, as you just said, as they find those centers of excellence, the ones that are actually doing it better, succeed more often with the single embryo transfers, are giving the take home baby rate faster.

Those places will be looked at and said, what are you doing differently? And I'll reimburse differently because I know that my client, the patient, will get that service and get to a less expensive overall thing for me by doing that. And so they actually are asking us to use the technology and are asking us to get there.

But they want to. Let us self select. You be the 

[00:34:25] Griffin Jones: guinea pig, you figure it out, and then I'll pay you for it. Well, generally insurance doesn't 

[00:34:31] Dr. Jason Barritt: give you the money unless it's absolutely needed. Right. And that's the business of this. 

[00:34:37] Griffin Jones: Yeah. 

[00:34:37] Dr. Jason Barritt: The truth is, when this was all cash pay, and you were going into your local clinic, and you were getting the best care that you could there, there was no, I'll call it, middle, Person taking whatever percentage, and I, every state is different, every insurer is different at what percentage they take out of the total money involved here.

But the truth is, if you take, this is purely an example, I don't know if this is exactly right, but 10 percent of the money out for the insurance company, that's 10 percent that isn't being spent. At the local level, in the clinic itself. Now I'm not saying that it didn't give access to more people for the care, it did.

When we cost average that in, that is a choice that's being made and people are voting for it and wanting to mandate care and I understand why. Access to care, being able to help more who are in this difficult situation. Totally get it, no problem with it. But we're also Putting a lot of money out of the thing that would have been used for technology advance, or other access to care that would have been provided to those locally.

Not at the insurance level. So this is all a big balance. The polite answer is this isn't just medicine. It's also not just business. We're not making a widget. Right. And it's gotta be balanced. Everybody has to be a piece of this and one can't dictate the other completely. And there's a back and forth and technology as they advance, sometimes they get included.

And that's, what's actually happening with PGT A testing, their genetic screening of embryos. More insurers are realizing it's better for me to pay, and please don't hold me to exact dollar values here, it's better for me to pay 3, 000 for the biopsy and analysis and get the right one, two embryos to be able to be put back.

In a more timely fashion, rather than not paying for that and having three failed transfers or four failed transfers that are costing me more money in the long run. So they are starting to get there. And some are starting to say, okay, we will, we will insure this or cover this. We'll make deals, of course, to reduce the cost, but we'll cover this and we'll especially cover it for those who are, 40 and above, or 38 and above, if female age, I'm sorry is what I'm meaning.

Because it'll actually help us in the long run, less total cycles will need to be done, because we will find out whether we have a normal embryo or not to even transfer. I know that sounds, Tough. But the truth is, if you do an IVF cycle and don't know if you have anything that's genetically normal and you attempt to do, let's just say there's three embryos, three embryo transfers one at a time, there's an expense with all that.

There's also time on the clock. But if I did a genetic testing of those three embryos back in the creation cycle and none of them were genetically normal, I don't do three. Frozen embryo transfers at the cost of those three that probably had very low chances of success. And I don't spend that time on the clock.

I get to the next cycle. There's actually money and time involved there. And those have to be looked at. Insurers are starting to come around to that and get that understanding. It is not going to help them to spend money on a procedure that has extremely low chances of success. So find out. It costs a bit more at the beginning, but find out.

[00:38:08] Griffin Jones: What are those things that are also in that, that realm of time lapse where the embryologists and lab directors generally feel pretty strongly about them, but maybe the business side isn't convinced yet or doesn't see the return on investment yet? Like Electronic witnessing sample management automation, cryo storage, maybe some of the AI tools.

What else is in that, that neighborhood of things that most of the embryologists and most of the lab directors really see the value on but most of the business side doesn't yet see the ROI? Hmm. You nailed a few items there. 

[00:38:46] Dr. Jason Barritt: I'm going to sort of go down the AI one only because I'll call it the newest. There are multiple models out there for AI use in the laboratory. Technically it's actually probably being applied on the clinical side too. But because my experience is on the lab side, I'm going to talk much more about that.

It's technically expensive. However, this is a knowledge game. Best choice made in the most timely fashion. Right now, let's just say adding time lapse to a cycle costs 250. I don't know whether that's an accurate number or not, depending on what technology is being used, how it's being used. It could be double or less, who knows.

But where's your actual ability to sell it? It doesn't exist now. Now you can market and say you're using AI, okay? Maybe you can get more clients in for that, but are you actually going to earn anything for it? No. Probably not. However, it's going to help your team succeed more often for your patients. And actually that has a longer term, better return on investment.

You'll be able to sell that success or that time to baby in a different way. You'll also be able to show even the insurers who won't pay for it, probably at the beginning, you'll be able to show them it actually is worth doing for everybody because they will spend less money in the long run. In order to be able to do it for a small investment up at the beginning.

So AI is definitely that thing that a lot of lab directors are coming around to. Now, there is a lot of resistance on AI in the embryology lab also, and we could probably spend two days on that discussion. However, I'll nail it. I'll nail at least one. They think AI is going to eliminate the jobs of the embryologists.

I will say that it is going to eliminate some of the things embryologists do now that they don't need to spend their time on because AI can do it more accurately, more repeatedly, faster. Such as? Grading an embryo. Therefore the honest answer is an AI system, and there's a few out there, the truth is they will be able to see, in their micro lifetime, a million embryos.

I will probably never see a million embryos in my lifetime, not even close. Maybe a hundred thousand, maybe 200, 000. And my team will see something like that also, but one AI system sees a million and it's learning every single day from every single picture being added to its system. Yes, my embryologists learn every single day when we look too, but we'll never have the same.

Scale to be able to learn it as quickly as an AI can. Additionally, that AI has taken all the information in about that embryo and everything it learned about that embryo and every embryo before that and is going to be after that, and it put it in its bank, and then it uses that in the calculation for determining the next embryo and its grade and success estimates.

Well, a human can do that, and we actually do that in our head without really thinking of it in that way. But the truth is, it actually takes us much longer. And we don't have as much ability to put all that data in our head and extract it in microseconds. It can grade an embryo faster, more accurately, more repeatedly than I will ever be able to.

And it will be better than all of my team members. And it will have no variation between team members because it doesn't have team members. It knows everything. Additionally, a more junior embryologist with less experience And a more senior one may grade things slightly differently. In fact, we all have slight variation that's based on our experience and our knowledge, and that's why we get better with time.

Well, the AI does the same thing. It just does it at an exponential pace of learning compared to what we can. The amazing thing is an AI system can learn to grade embryos probably in two days that I have spent 20 plus years learning. That is a scale beyond anything I'm going to be able to ever do. So instead of thinking it's going to eliminate me or my job, how can I use its ability to do my job better?

And that's where we have to get. Not the, it's going to take somebody's job. No, it's going to do the grading for me. Hey, congratulations. Now I don't actually have to do that. I just have to use the information it now gave me to give best care to the patient. And right now, AIs. technically don't have sets of hands and can't do a retrieval, can't process a sperm, can't put things together in a dish.

If you put things in front of their eyes, per se, microscope in this case, and put data in front of them, that it can translate to 1s and 0s, and it can think about it, it can do that job, and it can probably do it faster and better than I can. But we are still absolutely going to need embryologists because there's a lot of us that need to do things before it can do its thing.

[00:44:26] Griffin Jones: How do you test this now, Jason? Because you were, you were the lab director at SCRC for many years, which is a big practice in Beverly Hills, does a lot of cycles. Now you're chief scientific officer at Kindbody, which has practices the size of SCRC and then many more in many different cities. Yes. So now you're at a place where it's like, well Do I, do I, do I test something at a small level across the whole network?

Do I, do I test something here in this city at this lab? And so how, like, whether it's AI like this that you're describing or any of the other solutions, how do you prove, how do you prove, how do you prove them as you decide if they're something that you want to scale? 

[00:45:12] Dr. Jason Barritt: So, yes, so you mentioned my my new position.

I am very happy to have joined Kindbody because of the scale that it will be able to treat and help. The truth is, Yep, running one center, although a very big one, and a very successful one. I was able to per se touch a whole lot and help a whole lot. This is 20 or more times bigger with, as you said, I think we're running right now 19 embryology labs and 39 endocrinology and, and, and andrology laboratories across the country.

When we make change or when we make a move into something like time lapse or into something like AI use, we'll allow it to help more at a grander scale. Technically, it also allows it to be cost averaged down much quicker. Which actually then allows it to be used more and actually increase care and increase the number who have access to that technology.

So, I've moved up, but that doesn't mean I've reduced the challenges. In fact, it means I've added way more challenges. However, when change occurs, it has a grander scale of success. So, you sort of described the different ways of attacking. How technology gets put into a, I'll call it a a larger scale corporate network of laboratories.

So, usually the corporates have a slightly bigger piggy bank than at single locations. However, That doesn't mean you just go spend it. It does what you just said is you sort of try it out a little bit. Now, some of these technologies are so expensive and so difficult to initially put in place that you really only want to try it at one place and see if it's really working out.

Some, as you said, you want to try a little bit everywhere, but the truth is the cost for implementation, the training, the time, the knowledge, and, and I know this sounds really weird, but When you have 19 different embryology labs, you have 19 other variables than if you controlled it all within one. And there's a lot of variables in the embryology lab.

And the more you can control, the more you can be accurate with what your intervention is actually being successful or not being successful at. So generally you roll these things out at one. So I am very lucky at Kindbody. I have who are on my team, eight regional lab directors below me, who all have great years of experience and knowledge themselves.

And so we can get together, we do a couple times a week, and we discuss technologies, current challenges, Future challenges, how we want to implement these things and what we want to do. And the thing is, now I've got myself included, nine of us in the room, we all meet by, you know, of course, virtual meetings anyway, now we never actually get in the same room but we actually gain more information and more perspective and see more opportunity, and then we can help each other with designing a better experiment, designing it, and then implementing it at one place and then Asking the tough questions and figuring out the solutions at one, instead of one off trying these things all by yourself in a little box, I'm actually using all nine of us.

To evaluate something, one is hands on doing it, but all the rest of us are getting to be a part of that and learn from it. And then when we scale it, it is a grander change that is able to be done. So, on something like AI, technically, Not really being done at Kindbody at this point in the way that we really want to get to in, I'll call it, embryo grading.

However, would it be possible and how much data would be able to be collected, how quickly, on how it could change things? And the truth is, at some of our very large centers, we could These words easily determine its application and its ability very quickly. And a whole lot of our other places who are not so large, they would never make the investment or the time investment in it.

However, they will gain from it. And therefore, if we find it's valuable, Pretty sure we will. They will be able to have it implemented in their thing even though they would never have been able to afford to do it or do it by themselves. So the scale of success will be much quicker because we can do it this way.

I guess it's getting back to the business side of it too. You got to make the investment to get the technology. 

[00:50:02] Griffin Jones: So when you have your, your nine including yourself, I guess, lab directors that are, Reviewing maybe one of their, their trials, you know, one person is, is doing that. Do you start off with that so when, whenever somebody's doing new for the first time, it's letting the other eight know, here's what I'm gonna, here's what I'm gonna start doing and here's what I'm gonna measure?

Because I, I could see if it was retroactive of, here's what I've been doing the last six months or whatever. Here's what I've been doing the last 12 months, that people might be a little bit more resistant to change or more interested in what they're currently doing, but if it starts off as, hey, now I'm going to begin doing this, I'm going to let you know what it's like in June, I'm going to let you know what it's like in October that You might have the other eight get more invested, because I could see that a challenge is not just proving what works, you can do that, but getting everybody else to actually implement it is really difficult, and implement similar things, so how do you approach them getting on the same page?

[00:51:08] Dr. Jason Barritt: I'm gonna recall right back to the beginning of our conversation and say, If you're in the room, you're part of the discussion at the beginning. By being a part of the discussion at the beginning, you are invested. And I don't mean just monetarily, I mean in the chance of success. So you design the experiment, not just yourself.

But with eight other really intelligent people, you actually ask all the other questions that you wouldn't have come up with yourself or how to apply it, and therefore you design it better, or you say, you know what, we need to put that on the side for now, and let's just get at it. A and B. Is A and B different?

Are A and B two different letters? Yes, they are. But wait a second. In Arkansas, A matters. But that really doesn't matter in somewhere else that A is not happening. Therefore, I don't really care whether A and B are different. You have to design the experiment. By having the people in the room, you design a better experiment.

You also get to be a invested in its success. Now, one person's going to go hands on per se do it, but everybody else will help design it. Everybody else will help review it. Now, I admit, the one who actually goes and does it, Absolutely a huge, huge part of the wheel working, but the truth is you need spokes on a wheel, otherwise it'll collapse.

So where the rubber meets the road, sure, great, you can be that, but you need a whole lot of spokes to support the wheel. And the truth is by getting them to buy in with being present in the room and their knowledge being brought to the table, them being listened to and being part of the design and the solution.

You actually get buy in, and buy in, and we haven't really talked about this, is extremely important in large systems. When you're running a one off, you pretty much can get buy in, you know, in an hour, all of you getting in the same room, looking at each other. At this scale, you need a lot more to get that buy in.

And when, as I said, I virtually meet with them every week a couple times, I'm not actually sitting beside them all day. That's a very different way of operating. And it means that I actually need to empower the people. That's the other big part of the networks. Empowering the people to succeed. Giving them the tools to succeed.

And then when they succeed, that It makes you succeed, which then opens the door to the next thing. And so this is a, you know, you got to manage up and down. You got to give the people above you a chance at showing success in something. If you're going to go to them, don't go to them with something that isn't going to provide them with an opportunity for success.

It's going to be a waste of time, or it's not going to work out for them. Why are they making the investment in you? And then managing down and giving them the actual opportunity to succeed, giving them the tools to do it, and making them a part of the solution. They get the buy in, and then they apply it down to the next person, and they apply it down to the next person, and when you get that buy in, everybody's rowing that boat the same way.

In fact, You might have a motor on that boat at that point. 

[00:54:18] Griffin Jones: That's what makes a motor on a boat, is when you do have all of those people rowing in the same direction you're, then you're finally starting to go at a much faster speed, more powerful speed than, than going it alone, where initially it might be going alone makes you go faster, but over time, you'll go much farther.

Yes. Going with, I think there's a proverb about that. 

[00:54:41] Dr. Jason Barritt: Yeah, sure, but that's the fun part of the scale, I'll call it. So I'm driven by wanting to be successful, not only at the patient level, but also at the employee level, because the truth is I've probably in my 20 plus years, helped train or actually trained physically too, well beyond 30 embryologists who are out there working.

Some still work for me. Some worked for me before and now are working for me again. Some don't work for me anymore, but they're off working for others and succeeding. And the truth is, that octopus, that those, that tear, that tree of all these other opportunities and more things that are occurring at a scale like I'm doing now, There are so many more effects that can occur by me and my team working together and affecting more patients in a more positive way in a time frame.

And so I take this as a huge challenge because scale is challenging, however, it also allows me to scale things better and have more of an effect in a smaller time frame. 

[00:55:54] Griffin Jones: Do you involve those eight regional lab directors in, or I should say, do they come to you with the business case for what they are seeing the value in, or are they typically coming with the, the clinical outcomes or the lab outcomes case, and then you have to make the business case to the, to the, to the board or to, you know, to the rest of executive leadership?

[00:56:22] Dr. Jason Barritt: Well, sometimes it's challenges they're having, sometimes it's, hey, here's our, you know, key performance indicators, and it's, it's dipping or it's rising differently than, than it's been before at that location. Sometimes it's, hey, my one location is doing something different than my other location. And then sometimes, and this is where I'm going with your question, they are bringing to the table things that Yeah, I may have had on my back burner or heard about or been, but hey, can we give this a little shot?

I got a tiny little bit of time and I got a couple of these, I want to give it a shot. And the great news is, some of those eight leaders that I have, have already given it the shot on a couple things. And then they bring to the table, the group, not just me. Hey, I'm, I'm going to give this a try. I'm going to try to freeze sperm slightly differently, or I'm going to do a different cooling rate, or I'm going to mix this slightly differently, or I'm going to use this, I'll call it microfluidic sperm separation device that is a different one on the market, and I want to see if it's different to that.

And we can run these tiny little experiments because all of us Can run these things and then they bring it to the group and then I can per se take it up. One, find out whether we need to do more investigation of it. Two, find out if, hey, one place in Texas tried something. Can we also try it in Chicago?

Does it matter what the latitude is or does it not? Does it matter what the sea level is? Can I do it in California and New York also? Or do they have a limitation that doesn't allow it's an only Texas thing? I can have those discussions and I can find those things out so that when I want to sell it. Or purchase it per se, I can sell it up the chain the right way.

And I know this sounds interesting, but the truth is when I go up the chain and ask for money to be spent on some new technology, generally, I'm not asking for a one off, I'm generally asking for a network off, which means it's more money upfront, but it has a bigger scale for success and therefore it has to be sold.

And justified very differently. Then, if you're at a one off type place, and that's the good thing. These eight come to me with things, and each other with things, that they've heard, they want to try. I'll give you the example as the very, very fast, we'll call it lightning thawing, or rapid thawing, or I think Juergen Lieberman is now calling it fast and furious warming.

The technology that allows us to do a procedure in essentially a one off type place, and that's The technology that allows us to do a procedure in essentially a 10 percent of the amount of time before and at 10 percent of the material that we needed to do before the media. Those are huge changes in percentages.

That's a lot of money saved by not having to spend time and to spend it on material. 

[00:59:23] Griffin Jones: That's a different technique or it's a different media or, or something else. 

[00:59:27] Dr. Jason Barritt: It's actually the same media. It's just changing the protocol. And Juergen and his team and others, please, I'm not just trying to say Juergen have given this the shot of the very rapid warming procedure of embryos.

He's actually playing with eggs now too, but let's just talk about embryos for now. He's found that you can do it essentially, you can do it essentially nine times faster with nine times less media used. Well, that is huge, I'll call it time and money saving. If your success is at least equal, if not better, and he's actually showing it might be better, when do you transition to something like that?

And the truth is, if you were a one off little center, you have to basically go all in. But when I have 19 embryology labs that can give things the shot and patients have donated materials to testing. And research on a grand scale like this, I actually have access to be able to run this experiment, run this technology, and figure out whether it's going to work in scale or not at our place much quicker than most would.

And then when I apply it, we haven't quite applied it yet because we're still investigating it, but when I apply it, the significant savings of time and of money will actually allow us to then serve more patients. And be able to treat more patients in a more timely fashion. Because I just didn't spend all that money on something that I don't need to spend it on anymore.

And I can get to that answer much faster by having a huge network to be able to do this in. 

[01:01:09] Griffin Jones: It could be the case that the network says, great, we want to take that money and then lower our bottom line with it and so that we have so that we're increasing profits. But it could also be the case that you can say, Listen, I saved this, we saved this much money, let us try this thing that I think is going to return the investment.

So let us take this and, and we've removed, we, we've cut this expenditure out, but let us use this expenditure as an investment that we think is going to increase the top line. 

[01:01:38] Dr. Jason Barritt: Yes, the business of it, yes. So the amazing thing is when you're not in the room. They'll just say save the money. When you're in the room, now you can say, hey look, technology has advanced, we've learned from it, we actually became more efficient with it, and actually saved money.

Please, let's all not just add it completely to the bottom line, let's please use please. And sometimes this is the right argument, sometimes it's not. Let's use half of that savings and make an investment in AI technology. Because that's the next one that will have a mass scale ability to, I'll call it, affect.

Money, and time. If it can grade every embryo that will be graded in a single day, in a single lab, in under one second, because it does it in microseconds of course, but it's going to take four embryologists two total hours to do all that grading in a morning I'm gonna use the technology pretty quickly.

Because all that time savings can be used on treating more patients. So your first one, I'm going to call it warming technology, uses part of the money to invest in the next thing. And the next thing will also have scale and have ability to save. And then that one will have ability to increase patient care.

And so that's the other one. I'm now in a company that was built on and really is driven by access to care, treating those who weren't going to be able to get it. Or didn't have the access in that place, or it wasn't cost effective for them to be able to get the care. Those barriers caused them not to get the care and not to have the joy of having a child.

And that's just not right. We actually should give them that access to care. So this company is also driven by wanting to be able to make this efficient, cost effective, so we can keep the cost as low as possible. So we can treat as many as possible. Because the truth is. There are way more people not getting the care that they, they need because of the barrier of money.

And the problem is, this is medical care. You didn't generally cause infertility in any way yourself. Therefore, why aren't we treating it as other medical care? We have to work on this. We have to get the insurers to want to pay for it. That means we have to make it cost effective and show them why it would be successful for them to want to make the investment in this and give a good enough reimbursement that we can treat more patients or more are covered.

And therefore we can see more. And then we talk about AI and its ability. to learn and the fact that embryologists are not going to lose their jobs because AI is now grading embryos. In fact, there's going to be twice as many patients in the laboratories coming in and needing the care because now we're not taking the time on the grading anymore, we can actually do more retrievals, we can treat more patients, we can succeed more for more.

So that scale is also amazing. And it will come. So it sort of wraps back to our beginning of that there's a business side to this, and there's the clinical side to this. And as efficient as we can be inside that laboratory will allow the business to grow. It'll allow that access to care and us to concentrate on medicine as the number one thing.

It will operate as a business. It's true, this is a business, but it's going to operate as the best medical care possible for the most people to succeed for those who can get there and can get the access. So reduce those barriers and let more people have this great success of having kids. 

[01:05:42] Griffin Jones: I really look forward to having you back on sometime halfway through end of 2025 to see the scale, to see how you've been able to scale many of these changes, to see what expenditures you've cut, to see what investments you made.

I can't wait to have you back on. This has been a pleasure to finally have a microphone and record the darn thing, Jason, and I think people are really going to enjoy it. Thank you so much for coming on the Inside Reproductive Health Podcast. Thanks for the time. This podcast was brought to you by IVF Store.

I hadn't even heard of them until you lab directors and embryologists told me how much you like them. If you agree with Jason, tell him, tell me, or tell the IVF Store. I'm still learning about these guys. You seem to know a lot about them. We really want to know, if you've had a good experience with the IVF Store, will you let either them or Jason or myself know?

[01:06:34] Dr. Jason Barritt: Thank you for giving me the opportunity to talk about one of the great suppliers. 

[01:06:37] Announcer: Today's advertiser helped make the production and delivery of this episode possible for free to you, but the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the advertiser.

The advertiser does not have editorial control over the content of this episode and the guest's appearance is not an endorsement of the advertiser. Thank you for listening to Inside Reproductive Health.

 
 

231 What You Do With The Data with TJ Farnsworth

Today’s Advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, nor does the Advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the Advertiser.


What are the most important KPIs for your fertility clinics? How do you define them?

We explore that with today's guest, TJ Farnsworth, CEO of Inception Fertility, as he shares his best practices for establishing KPIs to obtain reliable data, and how to use it effectively.

Tune in as TJ provides his perspective on:

  • How a small group text turned into the Fertility Providers Alliance (The field’s first trade organization)

  • The differences between trade organizations and medical societies

  • Can we expect potential FPA guidelines?

  • Leveraging political resources in light of recent legal decisions (Dobbs & the Alabama Supreme Court)

  • Griffin questions if private equity’s timeline is bad for investment in innovation and resources

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[00:00:00] TJ Farnsworth: The data, you know, once you look at it, as long as you know it's consistent, as long as you know it's right, we'll tell you the answer. And I think what we're trying to do with the FPA is then create a platform of communication and collaboration where we can take that information that we're collecting at a At an individual provider level, whether you're a, you know, single clinic or whether you're a, you're a small group of clinics or whether you're a large platform and share them with each other in a way in which we can improve all of us, I guess that's ultimately the goal.

[00:00:28] Kevin Ali: Hi, I'm Kevin Ali, CEO of Organon. And at Organon, we're committed to engaging with leaders across reproductive medicine. So I'm excited to introduce today's guest, TJ Farnsworth, founder and CEO of Inception Fertility. TJ has built Inception into the largest provider of comprehensive fertility clinics and services in North America.

[00:00:52] Sponsor: This episode was brought to you by Organon. Organon is committed to championing care equity in fertility. By elevating education, expanding resources, and investing in innovative solutions, Organon stands with aspiring parents on their unique journeys. Learn more at fertilityjourney.com

Announcer: Today's advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the advertiser. The advertiser does not have editorial control over the content of this episode, nor does the advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the advertiser

[00:01:45] Griffin Jones: Guess who's back on the Inside Reproductive Health Podcast. That's right. Kevin just told you, you might know TJ Farnsworth from being the CEO of Inception Fertility, but he also helped found the Fertility Providers Alliance, the FPA. Have you heard of it before?

Do you know what? This is something that we haven't had in the field. A trade organization, and you might be thinking, we have trade organizations, TJ explains the difference between what a trade organization does versus what a professional or a medical society does. He talks about sharing political resources in light of things like the Dobbs decision and the Alabama Supreme Court decision.

It tells the origin of how a group text with a few other fertility clinic CEOs and founding doctors turned into a conference call of 50 people turned into a trade organization with a charter and governance and a board of directors. I asked TJ if he thinks that the FPA will one day issue operational guidelines.

He said they won't issue clinical guidelines, but this is what he had to say about the shortage of providers. Managed care contract negotiations, sharing protocols, sharing supplies, if we ever see ourselves in a gnarly supply crunch. He talks about best practices for how to, how to establish the right key performance indicators, like what percentage of patients are cash pay versus managed care, what's the average time to treatment, and then how to get consistent, reliable data, and then what to do with that data, and how the FPA might be able to establish accurate, impartial benchmarks for its members.

I think this data problem plays into the chicken and egg problem of a lack of adoption of new technological solutions in the clinic and in the lab, and not just startups, but ones that probably should be blue chip by now. I press TJ on those investment timelines, not just venture capitals, as he points out, but also private equities.

Hear his response and more and enjoy this episode of Inside Reproductive Health with TJ Farnsworth. Mr. Farnsworth, TJ, welcome back to the Inside Reproductive Health podcast yet again, again, again. Good to see you, Griffith. You know your way around here by now. I, do you know how many times that you have been on the show counting this time?

I do because I just went back and counted. I don't know, three times? This is number five. You were five. Alright, cool. You came and since we've done about 30,000 episodes now, it's you, you, and we've been doing this for five years, so you have probably been on an average of once a year. And so first time that was page, that was episode 45.

I went and looked at all of these before our conversation too, so I could try not to ask you questions I've already asked you. So number 45, was that, was you talking about your experience as a. Patient, and then how that brought you into the field, and talking about how you use that to inform giving your team the type of decision making authority so they don't do the same bozo thing of we can only take the credit card this way when you and your wife are in distress.

Episode 166, that was a BUNDL episode, and the, uh, That's where you came on with your team, talked about shared risk and what the type of scale you need in order to be able to share risk and reduce risk for patients and get patients in a paying program that works better for them. Then you came on episode 188, you talked about compensation models for REIs.

You, in that one, you were, I really, I liked you before, I liked you even more after that episode, because I felt like you You opened up a bit about just being like, Hey, these were some mistakes I made in the past. Here's a much better way I think is doing it now based on some hard lessons learned. And I think that people should go back and listen to that episode.

Then there was a live special edition episode where you came on with Dr. Beltzos, with Dr. Alvaro. That was in April, 2020. This is like everything shutting down, I'm soiling myself. I'm so freaking scared of what's happening. The MDA just closed and then that episode was about can clinics support new docs and staff while this is going on.

I thought, you know, private equity money, this is going to dry up. You know, there's going to be, demand's just going to drop for a while. I was wrong. You were more optimistic at that time. And so while I want to talk about a different topic today, I do think it It is interesting, four and a half years later, to go back to that moment and kind of think about why were you optimistic?

I just remember, I didn't even go back and listen to the episode recently, I just remember you saying like, no, I think like, this is where the field's going, we're going to have plenty of demand for docs, we're going to have plenty of demand for staff. Why were you so optimistic? 

[00:06:42] TJ Farnsworth: I think a lot of it is because I look at things from the perspective of a patient, you know, just going back to that very first episode we did together, and you know, when my wife and I were going through this, you know, there was nothing that was going to deter us from having the family we wanted, and yes, I think COVID interrupted a lot of patients journeys, but the patient that wanted a baby in April of 2020, They still wanted a baby in August and, you know, October.

And so, while it might have delayed their journey depending on where in the country they were and where in their journey they were, it didn't change anything about what they wanted. And, frankly, probably long term created a greater degree of patience for us because people were putting off creating families because of a lot of uncertainty, which was unfortunate, but we didn't know what we didn't know back then.

So, yeah, it's easy to be standing here four and a half years later saying who was right and who was wrong. 

[00:07:35] Griffin Jones: Well, you were right, righter than I was. Maybe it's just that, you know, being from Buffalo and the, the sky's always falling type of attitude, but you've got that entrepreneurial spirit and that, that optimism.

And it was around that time that I don't, I think you had started FPA, the Fertility Providers Alliance, a bit before that, but I feel like that's when it caught on. Let's zoom out for a second. I remember when the FPA was just, was an idea that you had, you had texted me about prior to you even starting it, and then you, and then you started it.

What is the Fertility Providers Alliance? What was the idea behind it originally? 

[00:08:20] TJ Farnsworth: Yeah, I mean, we were sort of talking about it before, you know, the COVID, you know, crisis, but I think, you know, uh, any good, any good crisis brings people together in unique ways in which, you know. I've been in other specialties in healthcare before, and like many people have, and, and there are industry trade organizations, you know, for lack of a better term, that exist in other specialties that are, that are maybe a little bit more mature than fertility, and one of the things that I know you've heard me say before is the lack of collaboration and, and, and, you know, sort of coordination and, and shared effort that exists along various different providers within our space.

It's something I've never seen in another healthcare space before and it's, and I think, you know, my goal originally was to say, was to create a platform, a forum for people to be collaborating You know, ASRM was an amazing organization, one which we're not trying to, what FPA is not trying to replicate or replace in any way, try to be complimentary to, it operating as a professional society, but there, there hasn't really been a forum for people to come together on, on, you know, political lobbying, business topics, all kinds of things that I think were necessary just to start a dialogue and, you know, it turns into whatever the membership of it decides to turn it into over time.

But. I just think I always thought there was a, there was a lack of something missing there, which I think I may have even mentioned on that very first podcast we did pre COVID. And I think, you know, what COVID did was it brought a bunch of people together that needed to try and figure out how to solve some problems together.

And I think it was, you know, wasn't until during COVID that we actually technically named the organization and sort of brought everyone together. But Certainly the idea of creating a platform of, of collaboration was, was really what it was all about. Cause it's just, it's better for all of us and it's better for patients if we're working together to better the industry.

[00:10:12] Griffin Jones: You talked a bit about the differences between a professional society and a trade organization. I think those differences might not be immediately obvious for a lot of people listening. You're not replicating ASRM, you're doing something different. In your view, what is the difference between this is what a professional society does versus this is what a trade organization does?

[00:10:35] TJ Farnsworth: Yeah, look, there is always some natural overlap and, you know, we, you know, we, you know, You know, taking my, putting my FBA hat on, FBA talks regularly with ASRM, and Jared and I have a great relationship. He's done a really great job of, of cementing that collaboration between the two organizations. And I think a lot of it is around the idea that look, the professional society has limitations in the fact that it's, it's focused on clinical and which is, which is what, which is really what.

This is actually, frankly, more important. It's the clinical and scientific advancement of the specialty. And, you know, not as important, but still top of mind is, you know, what type of, you know, is there, are there, you know, business operational best practices that we can share with one another? And are there, You know, are there opportunities to collaborate in ways in which we can advance the sort of the operational side of the business operation side of the specialty?

And you know, ASRM has done some of that in the past with the, you know, the Association of Reproductive Managers, which I think is fabulous. It's something that I think is a great aspect of what ASRM does. But I think there's something larger and more, more formalized and not, not just, you know, you know, in terms of collaborating, you know, whether it be COVID or whether it be, you know, post dob situation, you know, we get focused on these crises, but, and we'll, and just to, you know, focus on them for a moment, you know, how do we get the, the, you know, pharmaceutical companies, the device manufacturers, the clinics, everybody in the room together talking about ways in which we can share resources.

So that we can be as efficient as possible with the use of those resources, rather than everyone just sort of reacting in their own way of throwing their own dollars and time and energy and effort at trying to solve a problem. And then in the middle of times, which is, you know, you know, uh, crises are one thing, but, but, you know, there's times between crises, which sometimes it seems like there's not, but, uh, well, there are times between crises where there's opportunities for us to talk about, you know, uh, ways in which we can help each other.

And. You know, I use this analogy a lot. I, you know, as I think back on our prior podcast, I think I may have used this example before, the oncology, the specialty I came from, the specialty as a, as a field felt like, it feels like it's at war with cancer, not with each other. You know, when we, I, I remember the time I opened the cancer center in a new market and the competing clinic down the street came by and brought us cookies and told us if, Hey, if you, if you're.

You got a delay on any of your supplies or something like that, let us know, we'll loan you stuff, you know, that level of, you know, I've opened a lot of fertility clinics and new markets in my career, almost 10 years now in the fertility space and nobody's I just think there's a, there's a, there's a feeling that people don't want to, people don't want to be playing in other sandboxes that I think has really gotten a lot better in the past five or six years.

And it's, it's going to continue to get better as we talk more and create that, that platform for dialogue. 

[00:13:36] Griffin Jones: Times Between Crises. TJ, when you do, when you authorize your end of career, tell all business biography, consider that for a title. That'd be a pretty cool title to see at the airport. So you think it's gotten better in the past couple of years.

I want to ask you about that, but I want to ask about the resources that you saying, like, if we could get the pharmaceutical companies, the device companies, the clinics, et cetera, sharing resources. Now, I was thinking you meant like political lobbying resources. But it sounds like in the example of when you were in oncology and a different system came to you all and said, hey, if you're running low on supplies, we'll lend you some.

You might not just mean political resources. So what types of resources are you envisioning or were you envisioning that could be shared? 

[00:14:23] TJ Farnsworth: Yeah, I think, obviously, I think, you know, political lobbying is a great example in terms of, in terms of, you know, why am I hiring a lobbyist in all of these states, and then Cooper's doing the same thing, and, and, you know, Faring's doing the same thing, and, and, you know, ESRM is doing the same thing, and, Can our dollars be stretched even further by, by collaborating with each other in a way that we weren't before.

But I also think it's things like, you know, I'll just use the COVID scenario as an example, you know, all of us at clinics, we're trying to keep open during a pandemic, which we, you know, we're either closing, reopening, or, um, trying to keep open, um, in some cases, uh, during the pandemic, depending on what each of us individually decided.

And, you know, we were sharing amongst the different clinics, whether you be a, you know, single doc, two doc practice, or whether you're one of the large networks, we were sharing Bye. You know, infectious disease protocols, consent forms, all kinds of things that, you know, from my perspective, why not share them with each other because if we're helping each other survive this, that's better for all of us.

And it's easy to point to these things or these crises, but there's always these opportunities to exist, you know, you know, between crises, as I said. And I think there's always an opportunity for, for us to be consistently, you know, I'm really dissatisfied with the level of work we're doing and ways in which we can improve upon it.

And if I can improve upon, you know, what someone else is doing, if I can learn from what my other large network colleagues are doing, if I can, you know, not every clinic in this country could or should or will be a part of a big organization, but if we can share resources to make them just as successful as the large networks are, or even more, all the better.

You know, the, the, the rising tide lifts all boats. There's a whole lot of capacity for treating fertility patients from an access perspective that we've all been talking about that's necessary for us to unlock. And so if we're collaborating with each other to figure out ways in which we can do that, all the better.

[00:16:16] Griffin Jones: Do you think it could be the case that one group shares supplies with another group or trying to 

[00:16:25] TJ Farnsworth: Absolutely. We've never been in a scenario, at least that I know of, that's happened, but we would do that, no question. Because again, I think, you know, my example in the oncology thing was more of an acute example, but, you know, whether it be, you know, if there was a supply shortage, I mean, you know, of some kind, due to supply chain disruption, if ways in which we can be collaborating, purchasing between clinics in a way that allows us all to operate and meet the needs of our patients, All the better for everybody.

[00:16:55] Griffin Jones: We talk abstractly now, but we are entering this world where the future of global commerce is very much in question of what's going to be possible to be sourced from which countries and which regions, and what further down the line supply chain affects will happen. So what you're talking about is being open to an idea.

There might actually be concrete examples for in the next. 

[00:17:20] TJ Farnsworth: There might be, and it's a great, the great thing about it is, is if you're trying, is, we got to create the platform because, you know, we were trying to build the plane while it was taking off during COVID and trying to create an environment where we can collaborate and work together.

And we need to be building that, that platform community for communication and collaboration long before the next crisis comes along. And, and, and again, there's a lot we can do, you know, to better each other and improve before that crisis comes. I'm not smart enough to predict what that next crisis will be, you know, whether it be, but I mean, just in the past, you know, five years, we've had COVID, we've had the DOMS decision, we've had what happened in Alabama, that whether, whether you're operating in Alabama or not, had an impact to you and your patients, all of these things are things which we, we're going to see something else come, and we'll never predict what that is, but if we have a platform for communication and collaboration amongst all the providers, And the nano organization amongst device manufacturers, pharmaceutical companies, ASRM, SART, otherwise so that we're, so that we're, you know, doing our best to meet the needs of the clinics and therefore our patients, all the better.

[00:18:29] Sponsor: Organon is dedicated to delivering impactful medicines and solutions for a healthier tomorrow. Guided by its mission of being here for her health. Organon proudly recognizes fertility providers around the world focusing on care equity. We believe everyone should have access to fertility education and treatment.

By collaborating with providers, advocates, and communities, Organon is working to elevate fertility awareness, expand resources, and invest in innovative products that help more aspiring parents access the care they deserve. Every journey to parenthood is unique. Organon stands with you. Learn more about Organon's resources at fertilityjourney.com

[00:19:19] Griffin Jones: What was the reception like in the beginning? And so was it, was it in March of 2020 when you started approaching other groups and other founding docs and other CEOs of, Hey, this is what we're trying to do? Or was it, was it prior to then? And what was that like? 

[00:19:36] TJ Farnsworth: It was a little, it was a little funny.

I actually remember we, there was a text stream going between myself and You know, a handful of others, people at, at Shady Grove and, and various other different clinic platforms, you know, that, you know, sort of say, Hey, let's get on a call tonight. This is, you know, right after the MDA shut down, the whole crisis, things have, let's go on a call tonight and, and let's discuss how we, ways in which we can, you know, collaborate and strategize together and help each other.

And, and it became, Hey, I'm going to add this person, I'm going to add this person, and then it would be like, I don't know, 50 people on a conference call and, and, you know, talking about how we're going to create these things, you know, and, you know, we're talking about strategies like, Hey, listen, we need to be going to our landlords and talking about rent abatements and our lenders and talking about, you know, covenant holidays and payment skips and all the things that we needed because I was a big believer of the time.

And I think there's not just me, but this was shared by everyone else that was, you know, sort of leading the charge at the time that nobody should, we wanted no subject to fail because that would be bad for all of us. And, and that sort of sense of, you know, when you're, when you're, when you're being, you know, when you have an external force attacking you, it sort of brings everyone together in a way, in a way in which.

is, uh, is a unique opportunity. And what happened after COVID was y'all wouldn't have been sure went back to say after COVID. It was a long time, but I was all sort of went back to, Operating, and then, you know, the DOMS decision came along, and we're all sitting around the table at ASRM talking about it, and, and, and, you know, several of us said, listen, we can't look for an opportunity to collaborate and work together and communicate only when there's a crisis, because we will not have the institutional framework in place necessary to be as successful as we could be when these crises do come up.

If we're doing this just as a daily, you know, part of our operations of our business, and frankly, that's part of the evolution and maturity of what we do. of the specialty, because, again, you know, I've been in three or four different specialties in my career, and they've all had this, and so we need this as an industry, it'll make us all better, and, and it's not just for large networks, it wasn't until, if it wasn't during COVID that way, and It shouldn't be for the future, it should be about how do we advance this specialty for all of us.

[00:21:53] Griffin Jones: Do you think it would have been possible without COVID for one reason is the unifying force that you mentioned when you've got an external force attacking upon the group, it unifies the group, but also I don't think there's ever been a time in human history where that many ultra busy people have been synchronously available.

[00:22:14] TJ Farnsworth: I'll say that on behalf of my peers in the space, I assure you, none of us were available. We were all figuring out how to, you know, keep our clinics open, furlough workers, preserve our balance sheets. I was working, you know, you know, 10 plus hours a day, 12, 18 hours a day, some days, just trying to, And, you know, just figure out how to keep 

[00:22:32] Griffin Jones: But all on that issue, because I was the same way, too.

There was no There was It was an extremely stressful time. There was no, like, sitting on and watching Netflix, but everybody was thinking about the same thing. 

[00:22:44] TJ Farnsworth: There was, you know, finally some grip on this. I think eventually the specialty would have gotten to a place of having FPA like organization around it, but I don't, it may have taken, it may have been just in its infancy right now.

If our baby first started, we talked about, right, I'd certainly accelerated the timeline around all that extraordinarily. And it looks like it did for a lot of things. I mean, look, we're standing here, In a time in which I don't know what percentage of our new patient consults happen via video, but you know, it was negligible prior to COVID and it's common post COVID.

So COVID accelerated a lot of things and I think this is just, you know, one of those components of it. 

[00:23:23] Griffin Jones: Let's move on to the institutional framework because you said, you know, it can't just Text thread of 50 people or a Zoom of 50 people. You have to have a sort of framework in order to make it an institution and give it life.

How did you set that up? 

[00:23:41] TJ Farnsworth: Well, I think in the beginning it was just about who wanted to step up and take a leadership role or doing this during COVID. It was all just sort of A little bit of chaos. I think as we began to formalize things later, it was really looking at, you know, the, you know, the larger networks that had some institutional capacity to be able to start to set this up.

And right now, even the FBA is still in its early days. I mean, we're, we're really just creating the governance framework that's been created, sort of what the value proposition the FBA would have to any clinic, I think, is still being, is still evolving. It will always evolve. You know, right now, I think.

It's really all about sort of putting the framework together, which the large networks have the, you know, resources and capacity to do that. But ultimately, long term, it has to be for the benefit of everybody within the industry. It can't just be for, if it ends up becoming and evolving into a large network fertility providers organization, that's, that's not, that's not to, it certainly wouldn't be the vision and goal I would have had originally.

[00:24:41] Griffin Jones: So you're working on the governance now. Do you have a charter yet? 

[00:24:44] TJ Farnsworth: Yeah, the charter's in place, you know, the mission statements are in place, all those things are in place. I think, you know, when I think about if I'm a, you know, three or four doctor, independent practice that's going to stay that way, you know, for long term, what is the value proposition for an organization like this to me?

I think, you know, if I'm in Alabama, I was spending all kinds of time and energy and effort, all of a sudden, political lobbying, And, you know, but if I was in California, I might not have paid much of attention. I'm obviously dealing with patients around that, but I certainly wouldn't have thrown resources at it.

And how do you create a scenario where everyone can be feeling like they're at the table with regards to voice being heard and understanding that what happens in Florida or Alabama or Texas or New York or California or Ohio or wherever has an impact On a national level, I think the great thing is the Alabama decision actually helped solidify that.

So I think, I think, you know, we're still collaborating as a group and obviously, you know, the, I would say the current FPA leadership, which is the CEOs of all the major networks, you All have day jobs. And so, you know, it's really right now, it's around, you know, sort of figuring out how to put those pieces together, obviously, political lobbying, especially in today's environment, is on the top of everyone's mind.

But then, you know, once you get that in place, yeah, and doing that in a way, again, the share of resources, because, you know, there's resource limitations in terms of dollars that can be spent. And if we can do it in a way It's efficient and maximizes that spend so that we're advancing, you know, fertility preservation for oncology reasons in states in which that's an opportunity where we are, you know, protecting access to IVF in places where that might be a peril.

That's to everyone's benefit. And then I think you start to get to things like where can we be sharing best practices? Where can we be collaborating on sort of operational processes that drive a greater degree of efficiency and benefit all of us, which. You know, we're, we gotta lay the foundations first though, so that's what we're working on now.

[00:26:48] Griffin Jones: Are we starting to see some sort of consensus on what operational processes need to be made more efficient? Not, not which need to be made more efficient, but really how they need to be made more efficient? Are we starting to see some consensus, or right now you're just hosting the debate? 

[00:27:07] TJ Farnsworth: I think you're always going to have, um, various opinions.

I think everyone can align themselves with the fact that, you know, there's a shortage of providers. You know, we need more nurses, we need more embryologists, we need more physicians. How do you get there? Those are different types of debates. The administrative overhead of providing nurse services. I mean, one of the benefits of a greater degree of insurance coverage is access, which presents a clinical challenge.

How do you meet the needs of those patients in a timely way? And then also all the other components of this is, you know, just like other parts of healthcare, when you have a greater degree of commercial insurance coverage, you're going You've got a greater degree of administrative overhead associated with that in terms of, uh, obtaining prioritizations, you know, managed care contract negotiations, billing collections, all these things that are the sort of complicated sausage making that exists in all of healthcare and, and some clinics have the level of sophistication necessary to meet those challenges, some don't, some are choosing to say to themselves, I don't want to take insurance, so I'm just going to take cash, which is obviously It helps from an administrative perspective and each one of those clinics should do what they think is right for them and for their patient base.

I think it's about creating a platform by which you could say, here's the path I'm going down and the resources for me and the ways which I can share with others that may have gone down this path or may have been down this path or may are going down this path and we can collaborate with each other. I don't think that there's ever going to be an opportunity to sort of, Coalesce everyone around a single opinion, that's actually, I don't think that's a benefit, I think people going down different paths and trying different things and seeing what works, and then sharing what works and what doesn't work, is how you're getting approved, right?

If we're all doing the exact same things and not trying different things, Then, you know, there wouldn't be a whole lot of opportunity to see what was, what could be different and what could be better. 

[00:28:57] Griffin Jones: Does or will the FPA issue guidelines in the way that ASRM will issue guidelines on the clinical or scientific side, does FBA or will they issue guidelines based on, here's what we think are operational best practices?

[00:29:15] TJ Farnsworth: Potentially, I would say that we're, you know, that's something I think, you know, we're going to need broader membership as we, as we get this foundation put into place in order to decide some of those things. I think it's certainly a potential that will, something that will come. But what I can say is that the FPA will not do is issue clinical guidelines.

You know, FPA looks, is not in any way interested in competing against ASRM as a professional society. For physicians, offering advice around, around, around clinical processes and clinical guidelines. It's, it's more really driven around what we can do around creating, you know, business operational best practices on the administrative side.

[00:29:53] Griffin Jones: She said, people are starting to share what's not working, what is working. What is working, TJ? What are the couple operational things, the one to three really specific things that have made a big impact in different groups in the last couple years in terms of operational changes? 

[00:30:10] TJ Farnsworth: I think we're all getting a greater degree of, of handle on our data, and so, you know, it's, it's hard to know what's working and what's not working as you, as you operate and tinker with different operational practices at the clinic level, if you're not tracking KPI data, and so I think all of us, you know, that are running networks are getting, have over the past few years gotten a better and better handle, hands around, You know, the data, like how much, how much of a clinic in a given market is, is, is cash pay versus managed care?

You know, what are we seeing in terms of the time it takes for a new patient to get to treatment? What are those barriers? You identify those barriers and, and remove friction points. I think data is, and, and consistent data and, and, and reliable data is, is one of the critical things that we're all coalescing around and getting better at.

I would also say that, that, that the most of us are, I, all of us are, have really sharpened our pencil and improved our muscle memory around the commercial, commercial insurance side of things. We, you know, you know, 10 years ago, the vast majority of clinics were primarily cash pay. And now, you know, 50 plus percent, depending on the market.

Some of it's 70, 80% even in non-mandated markets have commercial insurance. And so you're seeing a scenario where, you know, where places like Boston, IVF, uh, they, they, they've had this institutional knowledge forever because they've, they've, yeah, forever, but for a long time because of the mandate that's existed in Massachusetts.

But you know, a practice in Florida might not have that knowledge. Yeah, I think everyone is, is sharpening their pencils and improving their muscle memory around everything related to commercial insurance, front to back end, which is the front end being, you know, how do you negotiate with commercial insurers?

How do you, you know, what you should be looking for? How do you deal with prior authorizations and benefits verification all the way through? Then how do you submit claims, adjudicate those claims? And execute on collections. I think that's a knowledge and skill set that a lot of clinics just had to refine over the past few years.

[00:32:20] Griffin Jones: With regard to the data, figuring out these important KPIs, like what percentage is cash pay versus managed care, what's the time to treatment or Uh, and making sure the data is consistent and reliable. How do you get that data just from, just from the EMR or are there other software, other methods that you need to do get that type of data?

[00:32:43] TJ Farnsworth: I mean, the vast majority of it's going to come from either your, a combination of your EMR and your practice management system. And then, you know, whatever you're using from a CRM perspective to manage, you know, the new patient pipeline, those sort of three things together are going to, you know, no matter what you're using, no matter, you know, I think everyone is coalescing around whatever their technology platform they're going to use is, and then how they're going to track that data.

And that, that consistency of data within providers, It's giving those providers an opportunity, all of us, to have insights that we can then share with each other that can make us all better. 

[00:33:22] Griffin Jones: I find that even when people have all, and almost everybody has an EMR at this point, most people have practice management systems, some people have CRMs.

When they have all three, I still often find that it just Don't have the, like, maybe there's some way of them being able to pull those KPIs, but it doesn't, like, live in a place that they regularly use or that they know how to get immediately, which makes me wonder how they're using it. So, in order to get it, you have to, you have to have those three things, but then, do you need to assemble a specific team that gets that information?

Do you need to train the people who are already using it? to get information. How does, how does that work? 

[00:34:06] TJ Farnsworth: The first thing is creating consistency of data. So what I would advise, uh, a clinical provider, whether you're, whether you're a single practice or whether you're a large network, And that's what we're going to be talking about today is creating consistency of data, and that has to be a multidisciplinary approach that's got to be administrative, lab, clinical, physician, let's all agree what we believe this KPI means, because you'd be sort of shocked and surprised to know that a new patient consult means different things at different clinics, right?

And so, and you probably wouldn't be shocked to know that, but, but it's, it's, it's It's wild. And so you, first of all, you need consistency of data. Here's how we're going to track this data. And here's where we stack our hands on what this data means. Because if, if the, if what the definitions of that data changes over time, it really creates a difficult, how do you create your, over your trends?

How do you see, is the, is the change to the data because you change the definition of the data or is it because the data is actually changing? So I think that's foundational before you even get to like, how do I present it? How do I track it? And many, I would tell. You know, there, there are lots of different choices in terms of automating the production of KPIs, uh, for small to medium to large practices, um, and platforms that, you know, you don't want a bunch of your staff, you know, reporting KPIs up the chain.

That's just, uh, that's an administrative headache that they don't want, that they don't want to deal with. You got to figure out when to automate that. But before you even worry about trying to automate it, you got to make sure that the data is right. Otherwise you're just presenting wrong data. 

[00:35:35] Griffin Jones: So you have to get that consistency of the data you wanna automate it be because you don't want people just hunting down data that they're having to pull.

So it's gotta be automated, it's gotta be at the top. It's gotta be consistent. Then what are people supposed to do with it? How are they actually supposed to get their teams to make any sort of meaningful change or informed decision because of it? 

[00:36:03] TJ Farnsworth: Well, I think, I think whether it, you know, whether you've got dedicated professionals who this is what they do is they look at the data and analyze it and then report back on it or whether or not you're going to create a multidisciplinary team of people that looks at the data.

I mean, what do you do with the data is usually told to you by the data, right? So, so, but I think, you know, generally speaking, our healthcare in general tends to be a Made up of a lot of people, whether it be business people or clinical people, who are data driven individuals. And so, if you know that the data is right, you know it's consistent, it's not something you can really argue with.

Now, you can argue about what you, you know, what your reaction might be, but if you're seeing, you know, X, Y, or Z, if you're seeing, you know, one, One embryology lab you have is got a materially better, you know, outcomes rate in some kind than another, there's a best practice to go find there, right? There's an opportunity to learn and, and, you know, what the answer to that would be, the solution that would be, would be way above latte grade, but, you know, that's one side of things on the side, well, it's all the lab side of things.

There is unquestionably the same example to be given for a clinical physician driven data that would come. And then obviously, you know, you already see how long does a patient sit between a new patient consult and a benefits authorization? Okay, what, where are there opportunities for me to automate that or streamline that or reduce friction so that I don't have patients waiting and that's one of the A couple of dozen examples that we can come up with on the sort of, um, you know, administrative operational side of things.

But the data, you know, once you look at it, as long as you know it's consistent, as long as you know it's right, we'll tell you the answer. And I think what we're trying to do with the FPA is then create a platform of communication and collaboration where we can take that information that we're collecting at a personal level.

At an individual provider level, whether you're a, you know, single clinic or whether you're a, you're a small group of clinics or we're not your large platform and share them with each other in a way in which we can improve all of us. I think that's, that's ultimately the goal. 

[00:38:12] Griffin Jones: How do you keep that communication consistent?

One thing that I noticed, so I'd sit on the board for a while. For the Association of Reproductive Managers, which is a subgroup of A SRM, and we've got a forum, and I think the different professional groups also have their online forums. And every once in a while someone will pop on and be like, what do you think of Engage md?

What do you use for this? What's your take on this EMR? Or how do you calculate this metric? And then you'll get people, that answer is just kind of random. Like there isn't, we haven't. Ben, really able to find a way where, you know, consistently we've got people sort of sharing that communication. We have our meetings that are well attended, and we do virtual events that are well attended, and maybe that's the answer, but have you found a way to keep that sort of, that, that communication consistent rather than just when one person has a problem and then, you know, tweets it out in the ether for advice?

[00:39:06] TJ Farnsworth: Yeah. So what we've done so far, again, it's early innings. And so there's a lot of truly you've learned with ARM that we could probably take and adopt, but right now, you know, the FPA board is meeting monthly and then we've created subgroups of the board, you know, one, you know, aimed at different things.

For example, you know, you know, just using an example, we talked earlier, public policy and lobbying efforts and saying, and there's going to be a subgroup that meets more frequently as we advance that. And then the board itself as a whole is going to be monthly. Well, the, the, what the, the, the key evolution of the FPA is gonna have to be is how do you then extend that outside of just that core group?

And as we begin to develop a value proposition to a broader and broader membership, I think that's where the, where the challenge will come. And, you know, the problem is, is that, as you've seen you, I'm sure what these, with these, you know, these forums, you know, we create that internally even within Inception.

So let's, you know, we create a. Yeah, we have a team's channel for all the lab directors, we have a team's channel for all the nurse managers, we've got a team, you know, and, you know, some of them are more active than others, but the problem is everyone's got a, everyone's got a job to do, right, so they get busy, and it's hard to really try and drive that engagement.

I think you're going to have to, you know, the most successful strategies around that are really pulling, right, which is, you know, You know, which again, one of the gifts of COVID is this rare degree of acceptance over virtual meetings and, and everyone gets busy. But if this is a priority, we all agree is important, but it's something we'll make time for.

[00:40:39] Griffin Jones: What you do with the data is usually told to you by the data. It's a good quote, TJ. If I steal it, I'll give you credit for it. Okay. And I think of some of the challenges that companies selling into the fertility field are having is there are people who are really trying to solve the problem of patient wait times, of patient engagement, of time between consult and treatment, time between scheduling and consult, number of Phone calls that the nurses and providers get, adherence to protocol, etc.

And some of these solutions look pretty good. I think one of the things that they're struggling with is a convincing story to be able to show to the patient. People like the members of the FPA of this is exactly how we're going to, our solution reduces these wait times and this is exactly what the wait times are costing you and this is exactly how we're going to reduce the wait times, this is exactly how we're going to save you XX million dollars and we're only charging you Y million dollars.

It seems to me like they often miss that scale of, of data and partly because each different member has their own data, so, so each network, each clinic has their own data, and why would I give it to you startup? You know, you're trying to charge me and you want my data. That seems to be a catch 22 that is preventing the field from scaling faster.

Do you see. Is there any way that the FPA might be able to play a role in this where there's some sort of data that people can use as benchmarks or ways of being able to share and get information so that we can actually see who's providing value and who isn't? 

[00:42:24] TJ Farnsworth: Yeah, I think there's no question there's probably an opportunity for, and we've talked about this, is the creating, you know, Benchmarking data that we could share and that wouldn't be the, you know, U. S. Fertility giving Inception their data. It would be an independent organization that would be able to, we'd all be able to provide our data to you and that could then provide benchmarks for all kinds of various different metrics that would be important to various vendors and to each other to say, Hey, you know, why am I, you know, outside of this, you know, benchmarking norm and where it may be identifying opportunities to improvement that we didn't necessarily see on our own because we're only have around data to work with.

So we've actually, no question, we've talked about that, but I think that strategy of, you know, vendors who take, one of the things I will say is I've, I've found unique some of these sort of, sort of startup, startup startups that are trying to solve some of these problems is. What I've seen in other specialties is a willingness to come in and prove it to companies, and I haven't seen that from most of these new entrances to our specialty yet.

I think that'll come, but I think part of it is, you know, raising money is hard right now, and so the idea of giving something away for free for a period of time to see And prove that it does what it says you gotta do is tough. 

[00:43:35] Griffin Jones: But I think, you know what, so this is what I mean by the, the catch 22, and I wanna stay on this point for a second because I think you hit it on the head.

I do think that they just don't have enough proof. Like they've got some proof of concept. They've done a couple of small case studies, they do see the need, like working really hard. I think they often just lack the like, here's the, like the real proven example. Let us come in and prove it first to your point.

That probably does have to do with fundraising, and I don't know that it's just because capital is a little drier now. Two or three years ago, capital was not dry, and there still wasn't a ton of VC influx into the fertility field. And very often, what these founders are telling me is that the VCs are telling them, field too small.

Opportunity is too small, TAM is too small. And, you know, I think you and I are both on the David Sable train of, we don't think it's too small. We think we could be doing 10 times the volume that we're doing in the United States alone just to catch up to European countries who all, who themselves are probably not doing as much as they're going to need to be doing as It's a very strong, but everybody gets it.

100%. And as society starts to think about demographic collapse, just wait until that's the thing that economists are talking about, demographic collapse, and all of a sudden, IVF gets more important. So, you and I see that picture, but I think what VCs are looking at is, well, all you're doing is 250, 000 cycles, therefore, you know, that's TAM's not big enough, therefore, you're not getting this money, which means that they can't prove it to you, which means that solutions can't be implemented to scale to make that addressable market actually addressed.

How do we, how do we solve for that? 

[00:45:25] TJ Farnsworth: It's a tough one because I think a lot of those professional investors have, you know, a shorter time horizon than, you know, UIF in terms of why we think about this industry. And, and, and so it's, it's important for founders and for CEOs of those smaller businesses to understand that, you know, yes, this may be the size of the market now, here's where I need it to get to.

And, and look, there are going to be some investors that understand that this is a longer term horizon than, than others. And, and You know, whether that's limiting their ability to invest in improving their product or not, I don't know. I don't run those companies, so I don't, I don't have any idea, but I do think, you know, you know, for us, for us, you know, they are taking, uh, you know, for taking my hats on and off here, but, uh, from an Inception hat perspective, You know, someone's willing to come in and prove a product that, you know, I think, I think if I was a CEO of that company, I would want very clear metrics that we're all going to agree on in advance, how we're going to collect that data, how much time we're going to collect that data, and what that means, but what does success mean?

Like what, how are we going to define success? Again, just be able to do a trial and see if it's successful. How does it, how do we define success? And then if it is successful, what does that mean? Does that mean I have a new customer? Because then you just think of it as part of your customer acquisition costs.

And I think that's the challenge for some of these smaller companies. You know, you know, whether it be software companies or product companies or technology businesses that are entering the market to try and solve some of these problems, especially, especially in the cases where they're, they're pretty young and they're pretty new and they don't have a lot of examples that they can point to and say, look what we did for that company.

Cause you know, it doesn't take much to, to, to build a few examples. I mean, EngageD is a great example of that in terms of the fact that look at their market penetration and it's that way because they've proven over the years what the value they proposition they bring to the other clients in the space.

[00:47:16] Griffin Jones: The customer acquisition cost is real high, and that makes it a challenge, but it isn't just the startups, and so, therefore, it seems to me like it isn't just venture capital whose timeline might be too short. I wonder about private equities timeline being too short. Many of the groups in the FPA are, for Our private equity back groups and when you have solutions like, you know, it could be, it could be time lapse imaging.

It could be, it could be cryo safety or cryo storage solutions that aren't really like startups or many of them aren't anymore. They're established. They have proven themselves, but their penetration still seems to be Pretty slow, and it seems to me that that's very often the case because they can't convincingly show this is going to return the investment in 18 months, therefore, that's too short for a private equity three to seven month timeline.

Now, you run a private equity group, the one you're currently running, the one in the past, you work with other folks that are Our private equity group, so like, is this a challenge for having too short of a timeline to be able to implement some of these solutions? 

[00:48:28] TJ Farnsworth: I can't speak to, you know, everyone, private equity partners, like Will City is the most private equity funds have a sort of somewhere between 5 and 10 year time horizon on their investments.

But I've never once been in a board meeting. Both my own companies and the ones I sit on the boards of with a private equity firm is preventing or resistant to investment in something because it will be outside of their time horizon, because they, they realize that the, you know, you know, the continued momentum of the business is part of what makes it,

[00:49:01] Griffin Jones: I've asked you a bunch about the FPA and so I want to let you have the concluding floor whether it's about the leadership coming up, whether it's about new initiatives that you want to take on, whether it's about what you would like to invite prospective members who are listening to know so that they join up.

The floor is yours, TJ. How would you like to conclude? 

[00:49:22] TJ Farnsworth: Yeah, I would, I would encourage anybody who is a provider in the space to come talk to us, understand what we're trying to build, what we're trying, we have not made a major membership push yet, although that's coming, mostly because we want to solidify the value proposition that we can bring, because it's an organization that has to be a part of, you know, everyone's small, medium, and large clinics.

Not every clinic, some clinics are going to be academic forever, some are going to be independent forever, and that's the right thing for them. The important thing for us to do is to build a platform for collaboration and communication that lets us all be better. And I think if that's something that's of interest to one of your listeners that's a, that's, you know, running a small clinic or medium clinic or larger clinic, reach out to me, reach out to anyone in the membership, the leadership of FPA, reach out to FPA directly.

We do have independent operations of FPA. We asked an executive director that's independent of any one of our networks. It's, it's, it is being stood up as an independent organization. I think it's really important to know that. And I think it's something that, you know, as there's more and more, you know, anxiety within our industry, whether it be from political winds changing from here to there, We're just from the perspective of the fact that we're trying to figure out how to meet the needs and the demands, the growth to your example of being 10 times the size of where we are now over the coming years, we're going to have to do that in a way that, that, that, that is us working together.

And if that's something that resonates with, with someone, they should reach out and see how they can get involved. 

[00:50:51] Griffin Jones: TJ Farnsworth, I look forward to having you back on the program another five times. It's always a good time talking to you. Thanks for coming on the program. 

[00:50:59] TJ Farnsworth: Do I get a jacket like Saturday Night Live?

Like they get like a five timers jacket they used to do on Saturday Night Live? I feel like there should be something. 

[00:51:05] Griffin Jones: It's got to be double digits before you get a track jacket, but you're getting in shape. So we're gonna, we're gonna have to get the right size for you. And, and we might have some cool t shirts coming out for it.

So thanks for coming back on TJ. 

[00:51:18] Sponsor: This episode was brought to you by Organon. Organon is committed to championing care equity in fertility. By elevating education, expanding resources, and investing in innovative solutions, Organon stands with aspiring parents on their unique journeys. Learn more at fertilityjourney.com

Announcer: Today's advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the advertiser. The advertiser does not have editorial control over the content of this episode, nor does the advertiser's sponsorship constitute an endorsement of the guest or their organization.The guest's appearance is not an endorsement of the advertiser. 

Thank you for listening to Inside Reproductive Health.

230 Guess Who's Back. Gina Bartasi's Plans as Return to CEO of Kindbody

Today’s Advertiser helped make the production and delivery of this episode possible, for free, to you! But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, and the guest’s appearance is not an endorsement of the Advertiser.


Back as CEO.

Gina Bartasi, returning CEO of Kindbody, provides a look at the strategies behind Kindbody's recent success and their vision for the future. Gina talks about Kindbody’s announcement of profitability, new initiatives, and lessons learned by the company.

Tune in as Gina Bartasi explores:

  • The strategies behind Kindbody’s profitability last quarter (And what that means moving forward)

  • The introduction of a new celebrity partnership aimed at opening doors for fertility awareness

  • The tension between the volume of care required and maintaining high-quality service

  • Her response to last year’s  Bloomberg articles

  • The delicate balance between business operations and medical practice in the clinical setting

  • Kindbody’s technology investments (Why they’re banking on their own EMR)


[00:00:00] Gina Bartasi: We intentionally built an IVF clinic and a lab in very expensive retail space. That's a mistake to do for a couple of reasons. First of all, retail space is very, very expensive and an IVF lab, your patient is asleep the majority of the time that they're there. The IVF lab is not conducive to a retail office space.

If IVF clinic in a retail space, you're going to have disproportionately more issues. By the way, no four wall business is immune to leaks. Outages related to electricity and they're not immune to it. That's why you have generators. That's why you have other things. All four wall businesses, I don't care if you're Shake Shack or Kindbody or any other fertility clinic network, what you want to do is mitigate those leaks and outages and other things.

[00:00:45] Kevin Ali: Hi, I'm Kevin Ali, CEO of Organon and at Organon, we're committed to engaging with leaders across reproductive medicine. So I'm excited to introduce today's guest. Gina Bartasi, founder and [00:01:00] executive chairman of Kindbody, a New York City based fertility network with a mission to democratize access to healthcare.

[00:01:08] Sponsor: This episode was brought to you by Organon. Organon is committed to championing care equity in fertility. By elevating education, expanding resources, and investing in innovative solutions, Organon stands with aspiring parents on their unique journeys. Learn more at fertilityjourney.com

Announcer: Today's advertiser helped make the production and delivery of this episode possible.But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the advertiser. The advertiser does not have editorial control over the content of this episode, nor does the advertiser sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the [00:02:00] advertiser.

[00:02:01] Griffin Jones: Thank you, Kevin. And actually, we had Kevin record this just before Kindbody's announcement, where Gina is no longer just the chair of Kindbody. She's back as CEO. Ask her why and what she's up to. This is coming after Kindbody reported being profitable last quarter.

This gets us talking about doctors and that hairy line between operations and the practice of medicine that you know I don't think is separable. So I asked Gina how it can be. I ask if Kindbody is going to close locations. Gina talks about the countries and cities they might go to next and the quality of care they're in versus the needs that docs and staff have.

I'd love to know what you think of this conversation. As always, send me an email and enjoy this conversation with Gina Bartasi. Ms. Bartasi, Gina, welcome back to the Inside Reproductive Health podcast yet again. I think this is time number three for you. 

[00:02:51] Gina Bartasi: I think that's right. 

[00:02:52] Griffin Jones: The other episodes were popular, by the way.

I'm pretty sure at least one is in the top five. They might both be in the top [00:03:00] ten of listens. So we'll see how we do with, with number three and, uh, and I look forward to talking to you about highs and lows of the past, more so about the future. Um, but even before we do that, this, this might be old news by the time people listen to this, cause this Recording will probably come out in a couple weeks.

But as of right now, you just this week announced two big things. Um, one has to do with the profitability of Kindbody. The other has to do with, uh, the new CEO who is someone we know. And so let's, let's talk about those things. And, uh, let's talk about you coming back as CEO. Why you? Why now? 

[00:03:49] Gina Bartasi: Now, you mentioned two big announcements, uh, this week.

I thought you were going to mention, um, today we announced a partnership with Sloane Stephens, uh, the tennis star, [00:04:00] uh, and the campaign is called Open the Doors. We want to open the doors and open the dialogue to fertility, to fertility preservation. And so Sloane Stephens, the other thing we believe at Kindbody that's been fundamental since our beginning.

is to ensure that we're creating, uh, diversity and equality for all patients of all ethnicities. So I actually thought that's where you were going to start, Griffin, is with a world renowned tennis pro. Uh, sure, if you want to talk about me, uh, returning to CEO of Kindbody, it's a privilege and an honor.

You know our team, our doctors, they're world class. Um, the company did report, uh, revenue visibility of 225 to 250 million. Uh, which is meaningful. This company is still young. It's only five years old. Uh, we, we opened our first clinic in Midtown Manhattan, actually in Flatiron, Manhattan, uh, less than five years ago.

So to be less than five years and tracking towards anywhere close to a quarter of a billion dollars is meaningful. The other point you [00:05:00] mentioned, which is important to our teammates is, uh, profitability. Uh, people know that are in the venture community, this J curves, you invest, invest, invest, we've invested heavily.

Tens of millions of dollars in our proprietary technology. We have our own kind, uh, electronic medical record, our own patient portal, um, and so we've invested millions of dollars there. We've also invested millions of dollars in new locations. Um, our peers that are listening in know it cost a couple of million dollars to open a new world class state of the art IVF clinic with an IVF lab, and in addition to a couple of million dollars to open a clinic, you have operating losses the first year.

That's no surprise. No one opens a new clinic that's profitable from day one, ever, never, it's never been done. So you carry operating losses and then most forecasts to break even about month 24, better operators are able to get to break even about month 18. Uh, we're able to break even a little earlier than [00:06:00] that, call it anywhere from month 12 to month 15 when we have employer sponsorships, when we have really attractive managed care contracts, uh, when we have a brand.

That's where we always like to start. The reason Kindbody has so much attention is because It's because unlike some of the other networks that are peers where they have very disparate brand names for these clinics, uh, Kindbody is one brand and that's intentional because since the beginning we've talked about the consumerism of healthcare.

So the other thing that creates a faster time to profitability is when we go into a new market and there's already pent up demand from self pay patients because they know this brand Kindbody. And we're grateful again today that, The big announcement to me is not about Kindbody or about me returning as CEO.

It's about how we create more equality to family building care. And that starts with Sloane Stephens. Uh, representing other young, she's 31 years old, uh, athletes, social influencers, and people [00:07:00] of color. 

[00:07:01] Griffin Jones: I think the big announcement is you coming back as CEO because of all of those things. Kindbody is so big and has so many different initiatives that being at the helm is, uh, a pretty hefty responsibility.

And I don't know a ton about CEOs that have come back. I think the only one that I can think of is Steve Jobs. And that's a sort of, you know, that's a sort of, you know, renowned story that people still think of. Uh, because if there was a time when Apple was n Not what it is. And then all of a sudden, iPod, iPad, iPhone.

And, uh, so what does that look like for you? What are you coming back in to see, to see this job done for? Because I have a feeling that Steve Jobs came back to make sure that those things are what came to fruition. Why you at this time? 

[00:07:59] Gina Bartasi: Yeah. [00:08:00] Um, humbly as it sounds, I probably know the business best. I'm probably most qualified to lead the company into the next five to 10 years.

I know the players. I know, uh, I respect, I actually like the player, player, the other players. We don't ever call them competitors. You will never hear us call any of the other large networks. Or even any of the other Fertility Benefit Administration companies, um, competitors, their peers. We talk about and coined this term coopetition.

We believe we're stronger together when we align and partner to create a bigger pie, a bigger, a bigger pie instead of arguing over the same small piece of pie. Um, I think the, you know, my returning is, is just easy. Uh, it's natural. Again, I know. I know the employer market. I know the consumer brand market.

Uh, the managed care is, is, is the beast that we all have to work with. Uh, as CEOs of large networks, [00:09:00] we certainly know the industry has gone more towards managed care. It's changed pretty dramatically. Um, I read and respect, I mean, I was going to say it was you, Griffin, it was actually a banking analyst that had David Keefe.

He was a total rock star at NYU, but he talked about patient demand and how it changed a decade ago. It was primarily self pay, and today, there's some sort of sponsor, whether that's an employer sponsor or a managed care sponsor, and what that means to the economics of the fertility center. A, the reimbursements are lower, and B, the collections Um, you know, I'm, I'm back as CEO, um, because there's a tremendous amount of opportunity in the future.

We're at the very, very early endings of what we think is, uh, continued growth in the market. There are changes and I'm, uh, it's easy for me to adapt and see the changes just given the tenure. I've spent the last 12 years in the industry and again, [00:10:00] I'm honored to work and, and, and And call so many of the other CEOs, uh, again, friends and, and peers of ours and mine.

[00:10:07] Griffin Jones: You were still during, active with the company during that time, but do you feel like that you had some time to reflect on things that you would do differently this go around? Because I've, I've never stepped down as owner of my own company, but I do think of, of, you know, mistakes that I made and, uh, things it's like, okay, I.

know what I would do differently this time around. And I think one of the things One of the hardest things that you can do in business is hire people, lead people, keep them happy, get them what they need to be happy. It's really hard. And There was a time where I know that I didn't do the best by my people.

What I was doing was having them do too much for my good people. I wasn't keeping track of what I was having them being responsible for. So [00:11:00] I kept piling stuff up on their plate without having a map for them for growth, without having enough recognition for them. What then that allowed for was when you have a couple of people that aren't a good fit, come into the organization, then it's really easy to, to sour that bunch because you have good people that aren't, aren't being taken care of the best.

And I was guilty of that. And I was, and I was doing it because, uh, you know, it is, it is effing hard to run. a business. You know, I can't imagine running a company the size of Kindbody. I run a organization, you know, seven figure organization, you know, with a couple dozen people, including the part timers and the independent contractors.

And it's still crazy to me. But I did learn what I needed to change about that. And I didn't have to bust all the way down to the foundation, but kind of had to bust down to the studs and think about what I had to do differently, and that was make sure that there's a seat for every person that is crystal clear with the [00:12:00] outcomes and then have an HR and administrative system that could be really supportive.

Um, and it's a, it's a hard lesson to learn, and I don't feel like I've mastered it yet. When I do, I'll write a New York Times business book that, uh, people can pick up in the airport. Um, But it is a lesson that I've really gotten better at. And it was one that was hard for me. And I have to admit that I didn't do the best job the first go round.

You having the opportunity to still be in the organization, but not be in that top C suite for What was it, two years or something like that? Plus years, yeah. What are you coming back with now saying, I either wish that I had done this differently or this is what I'm going to do differently this time around?

[00:12:44] Gina Bartasi: Yeah, thanks Griffin. Uh, a couple of things before we talk about my mistakes and, uh, if we talked about all of them, I know this is a long form content show, but we would be, uh, well into the evening hours. I'll share just a couple of lessons learned. I also think it's worth noting [00:13:00] I'm a couple of decades older than you, and so you want to do this lifelong learning, and you do, you hope that you are a servant based leader to your team, to your patients, and that you're constantly learning and adapting and working to get better.

I think the folks that don't work at Kindbody, Uh, don't work well are the ones that say, I don't have anything to learn and I'm not trying to get better. Those folks usually don't fit well into Kindbody. Kindbody there's an ethos that we're constantly learning. We're constantly treating each other with kindness and as a partner and as a team.

Um, you, I, I hope, I think you get better the more you do it and the bigger organizations you scale. Kindbody is significantly larger than, Progyny ever was and then is today. Kindbody has 850 full time employees. Uh, when I stepped away from progyny, I think we were 160, 165 employees. I know they're larger today, but I think they're around 250, 300 employees.

But your point is, it is, [00:14:00] it gets easier as you get older because you learn lessons and hopefully when you're progressing, you're like, okay, I'm not going to make that same mistake again. Um, but I have a, the Kindbody is for sure the largest company that I've run. And then what you have to do is be humble and you have to be honest and you have to ask for, you have to hire people smarter than you, people that are more experienced than you.

And you have to say, I need your help. I haven't done this before. I haven't, haven't done X, Y, Z and, and believe it or not, most people want to help each other. Most people do. I just don't. Fundamentally believe that every day when I wake up, most people want to help other people. Most people are humble and most people are trying to do their best and do better every day.

So that's on the people front. On the mistakes front, as I was executive chairman and Annbeth Eschbach, who I adore, she was like, man, it's so much easier sitting up there than down here, down here in the day to day. I was like, I know, I get it. It's lovely. Because, you know, I only have one direct report, it's Annbeth.

I mean, to your point, the hard part is running all the people [00:15:00] functions. And so, when you step back, you know, the mistakes now look like easy and dumb mistakes. They were hard because we ran them. But remember this consumerism of healthcare. We wanted to build these fertility clinics Around where our patients work and play.

So we intentionally built an IVF clinic and a lab in very expensive retail space. Okay, that's a mistake to do Griffin. For a couple of reasons. First of all, retail space is very, very expensive. In an IVF lab, your patient is asleep the majority of the time that they're there. So you need these retail locations to be where the patient's spending the majority of time, which is for monitoring, but not for an IVF lab.

The other thing is, the IVF lab is not conducive to a retail office space. Uh, we should all talk about Bloomberg, uh, and our friends at Bloomberg. They love to call a flood in LA. It's not a flood. It's a leak. If you talk to any of our extraordinary clinicians, we had a leak. You're going, if you try [00:16:00] to repurpose this as a valuable lesson, if you try to build an IVF clinic in a retail space, you're going to have disproportionately more issues.

By the way, no four wall business is immune to leaks, outages related to electricity, Thank you. And they're not immune to it. That's why you have generators. That's why you have other things. All four wall businesses, I don't care if you're Shake Shack or Kindbody or any other fertility clinic network, what you want to do is mitigate that, those things, those, uh, leaks and outages and other things.

So for sure, going forward, one of the things that was easy to do up here is to say, okay, what would we have done different? And for sure, The IVF lab should be in a medical office building that is already built out for an HVAC equipment, already built out and you can put a generator on the roof. There are, like, that just seems, everybody else listening to the show is going to say, yeah, that dummy.

Okay, yes, call me a dummy. Uh, but we really had this intent to, to make this so patient centered [00:17:00] and so consumer focused, but you won't. We are opening two more locations in the summer under that old model. Again, in Miami, it's this big, beautiful retail location with the IVF lab. Same thing in Charlotte.

Going forward, we're opening five new centers next year. You will not see. IVF labs in expensive retail office setting. Um, so that's one major lesson learned. 

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[00:18:11] Griffin Jones: It sounds like a good lesson, but people are able to call you a dummy for that if they do because they're right about that one thing. But when you're trying something new and something different, you're trying a whole new thing.

And it's like, okay, these are the things that are true about the status quo that add value. But We're still right about these other areas and what you're trying to do is create an entirely different type of brand for a much larger scale of patients than what we currently have and so it still is the case and In, in many cases that we want to have this type of brand, we want to have, we want to have this type of retail access at the clinic level, just not at the lab level and, uh, people can say, oh, haha, but [00:19:00] they're, it's, they're not trying for the whole thing.

Trying for the whole thing, you're inevitably going to have a couple of those things where people get to say, I told you so. Um, but. the, the idea is that you're going to have other things that you're going to be able to, to, to get to say, I told you so. Um, you mentioned Bloomberg and I would be a crappy interviewer if I didn't discuss it a little bit.

I'm more interested in talking about the future, but the Bloomberg thing was interesting to me because, and my publication covered Bloomberg's coverage, but there was one thing that we discussed in their coverage that they didn't mention. And there's something I believe, there's a few tenets of journalism that I believe in that I don't watch.

like the cable news or any of this like political informed news one way or the other because I just wanna, I wanna see the news and I believe in that local news standard. A couple of those principles are you don't use words like several or many. What does that mean? There were several people. Does [00:20:00] that mean 40 people?

Does that mean 4,000? You don't use adverbs chillingly, alarmingly. And then you On the other hand, you also try to give some context of, well, where else are these things happening and, uh, and, and some other things. And I'm not saying that there weren't mistakes made at Kindbody, and I'm not saying there weren't bad practices at, at places, but what I am, but a question that was unanswered to me was, well, where else is this happening?

So we might be reporting on the divorce rates of postal workers, and maybe postal workers have high divorce rates, but one thing I want to ask is why postal workers? Why not? grocery clerks and lawyers and dentists. And, uh, and so one thing that we reported on was that, uh, Bloomberg just didn't even mention if they had looked into this with other networks.

And so that coupled with the timing of the article was, it was like, why, the public doesn't [00:21:00] care if it happens right before ASRM, like, and that. is supposed to be Bloomberg's audience. Uh, and again, I'm not saying that there wasn't, like, there wasn't anything legitimate that they report on or anything that, you know, Kindbody might not be proud of that happened.

Some of those things could happen. It just seemed to me like that question wasn't answered and that timing was strangely motivated for an audience. Um, and do you think it's any other reason than your size? Like, you're just so big that this is the first time your mainstream media is going to You know, look at a company.

[00:21:35] Gina Bartasi: Yeah. I mean, you, you bring up all great points, right? The amount of salacious clickbait adverbs, and they also name drop. They always name dropped our largest customers and our celebrity investors. And so it's a shame because, you know, I grew up, I grew up. I grew up in radio and television. I grew up in the media.

I was, I come from, I was a publisher of magazines. We used to pay a dollar a word to writers. [00:22:00] Today, you know, reporters, you know, it's hard. They have, they have to issue clickbait and adverbs and all these catchy adjectives just to get it. You know, and, and, and lead with something negative and salacious just to get reader's attention because readers no longer trust, uh, legacy journalism.

They turn to their friends, okay, they're going to turn to user generated content for a referral of a fertility doctor, a referral of a restaurant, or where to buy a car. Today the media landscape has changed where today's readers value more user generated content. Over legacy content. And what that's done as a former publisher and media executive is put enormous pressure on the value of good journalism.

And that's what's driving. This type of salacious content, because you just didn't see it out of Bloomberg, um, you know, it's, it's a, it's a, it's a very, used to be a highly valuable, uh, news outlet, but [00:23:00] all of them, I'm not picking on Bloomberg, but they intentionally, I, I, I also noticed they never cited any other uh, Uh, fertility clinic, you know, we tried to draw an analysis from some Harvard research papers, uh, a paper Denny did at Boston IVF, an extraordinary program.

And you know, what happened when the, we knew Bloomberg was going to write it because they asked us to verify all this. And I went to, we hired external comms, just like any other company would hire external corp comms. And they said, Gina. You know, welcome to the big league. This happened to Uber, Airbnb, and because you have created this high profile, very valuable, very consumer centric brand, That's why you're a target, you know, if you were one of these disparate programs around the country, that there's not any national brand.

So, you know, just get used to it. It's interesting that, um, the [00:24:00] reporter was, was always negative in tone, too, like they never gave us the benefit of the doubt, even when we provided them. Um, data and facts, they ignored that. And so we're work, we're actually working, we're trying to, we're trying to help Bloomberg understand the industry, understand what's changing.

And so why, what I would say is what's under the bridge is water under the bridge. And our goal right now is to move forward, um, with Bloomberg and help them learn about the industry. And we're going to remain optimistic. Now. You parlay that or you, you, you lay that on the backdrop of, you know, Kindbody's been incredibly fortunate to have a ton of positive press, right?

And that is the intent we set out to do. We wanted to build a brand, a trusted brand so that you, when you went into a new community, when we went into Denver, when we opened in Denver, which is a very competitive market with some really remarkable physicians, Those clinics [00:25:00] there, that's what I tell employers all day long.

I tell employers everybody is equally good at their craft. I say that. Our peers are all extraordinary physicians, they're extraordinary. We go into Denver and because we had a Kindbody brand, we had 55 patients prepared to cycle before we opened the door. Same thing in Newport Beach, we've been waiting for our Newport Beach location to open, which just opened about three weeks ago, the brand opening was last week.

Um, but it's rewarding to us who are working so hard to treat this patient population to go into market and already have demand. And that's what the national brand does, right? We were on the Today Show this morning with Sloane Stephens. We get the responsibility we have as a national brand, you know, and as we talk about the future, we really think about Kindbody in terms of a global brand.

Our employers today are asking us to open locations in Canada. They've mapped it out for us, Canada, London, Dublin, Singapore. Um, so we really think [00:26:00] about how we protect, um, and groom, um, this, this world class brand. And that brand really starts with our physicians. For And it starts with enveloping the patient in kindness and making sure every single day we wake up, how can we serve that patient, um, better, more kind, telling a patient, you're going to have problems having a child and you're going to need expensive medical treatment.

It's a devastating discussion and it is very difficult for anyone to have, even if you've been having it for 25 years or you're 25 days in a recent fellow. And so we just want to make sure that the kindness extends from our front desk teammates to our nurses, to our clinicians, to our revenue cycle management folks, that we envelop this patient population in kindness.

And we've created this brand and it was intentional. So, you know, I think the takeaway is. CORPCOM's team said, you know, you're going to have this kind of scrutiny. Prioritize [00:27:00] patient care, stay on your mission, and, you know, it's, it's just part of, you know, it's just part of creating a national, soon to be global brand.

[00:27:08] Griffin Jones: I want to try to thread the needle between the good press and the bad press because you are going to be a target because of your size, no matter what, whether you're good, bad, or neutral, you're going to be a target for media. You're interesting. There's simply more to report on Walmart than there is on D.

C. Joey's General Store in Tallahassee. There's more to report on. You've got more irons in the fire. And I also was critical of that they just didn't give context of like, did we look in other companies? The question of why Kindbody wasn't answered. That's the question. Why postal workers? X or or A or B, whenever it's a, a, a, a type of, of trend feature.

And I also think having a, it, it, I don't think it was newsworthy enough to merit a a series. Those were my criticisms of it. It doesn't mean that none of the complaints that were levied were were valid. And I [00:28:00] wanna talk about, uh, physicians because this is something that I hear from physicians across the board and I'm on, I have differing opinions based on.

What physicians are telling me and I'm not talking about from kind body I'm talking about from other practice maybe kind body But also every kind of network and even independent practices and academic practices Which is they feel like we're being pushed to do IVF We've got to do this much volume and on one hand I can empathize with I could absolutely see blood sucking capitalists come in and trying to squeeze every penny out and push it to the, to the max.

On the other hand, uh, we have to be doing more cycles than we're doing now. Everybody talks about access to care, but we ain't gonna be doing access to care if docs are doing 150, 180 retrievals a year. We have to make an infrastructure where docs are being able to do a thousand plus retrievals a year.

That requires a ton of technology and support, and it, is really hard [00:29:00] to build that type of system because if docs think a thousand cycles a year, two thousand, whatever it is, they think based on the type of work that they're doing today, not a work where a lot of their work is either automated or some of it's eliminated and the rest is delegated to people.

Lower on the license hierarchy. What type of, you know, so given that this is a concern that docs may have had at Kindbody that they have everywhere, what is, what is your, and I know you've invested in your EMR, tell me about the technology and the support that you need to leverage in order to, to get the productivity from docs that's necessary to scale the care that patients absolutely need with also.

You know, I'm not driving people into the ground. 

[00:29:52] Gina Bartasi: Yeah, no, you've already brought up the point that we try, uh, with our doctors. First of all, it starts with teaching, treating [00:30:00] your doctor, uh, like a teammate and a partner. All of our doctors are equity owners. From the day they walk in the door, they own equity.

We have departed doctors that still own equity and kind body. Um, but we had one of our doctors say, wait a minute, at my last private practice, we were wildly profitable with 180 cases. Why do I have to do 240 cases to be profitable here? And we just, you, you have to take the time, you have to treat with kindness, and you have to educate.

You have to say, remember our mission. So, the first thing is to make care more affordable, and so if you lower the price, you have to increase volume, like you, you just articulated it perfectly, but if you say that to doctors without bringing them along and educating them, there is going to be this discord between your doctors and the institutional money, um, and so you have to, you have to slow down and you have to say, here doctors, and then you have to help educate them and empower them, you have to give them their [00:31:00] own P& L.

You have to say, here's your clinic P&L and let us help you. Like our doctors are starved to learn. When I said at the beginning of the show, you know, it starts with an eagerness of curiosity and wanting to learn and do better every day. I could tell you right now that every single one of our REIs wakes up every single day wanting to do more, wanting to get better at medicine, wanting to get better at business.

Every single one of them wants to be a business owner and they want to learn about, you know, Financial management and being good stewards of their clinic, but if you say you have to do 250 cases and you don't educate them, listen, if we kept the price high They don't have to, they don't have to do any more cases, it's as easy as that, they can do a, that's, that was her point, we, I used to do 180 cases, why can't I just do 180 cases here, I said great, let's just keep prices high, and the pool small, and we'll just sell services to rich, white, dual income families, and she was like, ah, No, we can't do that.

Our mission is to bring [00:32:00] down the cost of care and to create accessibility and, uh, equity amongst all. And I was like, right. And so once they, there's a light bulb and they are in locked step with us because you have to find REIs that are aligned with our mission. That for too long, fertility care has been for a very privileged few.

It's Pride Month. We have pride flags outside of all of our clinics. I hope our peers do my guts as they do. But we are very vocal that the cost of care must come down. And the way you do that is through technology, through APPs, extenders. You've got to have the REIs at the top of their license. You know, when we've talked to other REIs about joining Kindbody, when they say Me or I, me or I, that means they're not going to work well at Kindbody, because this is not a team.

There is no I in team, that old cliche. And the other thing that says they [00:33:00] mean they're not going to work well at Kindbody is when they insist on doing everything. Well, I have to do my own ultrasound scans. I have to call in this script for the patient. And I'm like, you know, guys, the cost of care is coming down.

David Keefe told us that in an analyst report, all physicians. There are physician owners and all CEOs of all other networks know that. Hopefully they've modeled that for their PE sponsors. The cost of care is coming down, it's being driven by managed care, and it's being driven by the employers. And so then the question is, going forward, how do you build a better mousetrap?

How do you bring the cost of care down? But still ensure profitability in the health of your clinics. And again, at our technology, there is no paper. Um, I had a patient reach out to me. Patients still reach out to me, which make my day. And a patient reached out to me, no kidding, yesterday. I don't know how he got, it's a same sex couple.

He texted me. He said, hey, I'm just trying to pay you. But I've been trying to call your call center and I've been on hold. First of all, we don't want patients to be on hold [00:34:00] and I regret that this gentleman was on hold. I said, if you'll send me an email, I'll get you to the right people. He sent me an email.

I said, dear, and his name. I said, have you tried paying your credit card on your patient portal for his surrogate? So within 60 seconds, he wrote back. He was like, all done. That was easy. Like, you know, and so you, you have to, because he's just a patient. He presumes in traditional healthcare, there is not a Easy, convenient, tech forward way to pay your bill online.

So his immediate inclination is to pick up the phone and call us to pay us. Thank you. But our goal is to not have a call center with 200 people trying to take your credit card written down over the phone. We know we want to do everything securely for the patient and the best way to do that is to come into our HIPAA compliant patient portal and you enter your own HIPAA compliant Uh, gender identity, your own partner information, your own insurance information, and your [00:35:00] own credit card information.

It's most secure to do it that way. But it's interesting, the patient population today does not think technology first. And he was like, thank you for building it so easy. Now we have to go back to our team and say, why didn't this guy know that? What can we do when you're in our patient portal to make it easy to say pay here?

So that, because, you know, what I heard from that is he had to wait to get us paid, and so we have to do better about that, but, you know, we're trying to change healthcare from paper and not a lot of workflow process. You know, a lot, historically, doctors got to do their own thing, and they got to do their own, and we want, we want consistency.

The 32 year old PCOS patient, who has the exact same data markers. And assume her partner is heterosexual with the exact same sperm markers, should be treated exactly the same, whether they're in Detroit or Denver or, uh, uh, Miami, Florida. And so there's, and that's [00:36:00] what having systematized technology does.

We want to, you know, this anecdotal decision making, I can remember when I was in treatment, the doctor was like, Let's try this. And I was like, I don't want to try anything. What does your machine algorithm say is the best predictive stimulating cycle for me as a patient? Um, so again, there's, there's a lot to unpack there, but we are unapologetic, uh, unapologetic that the cost of care must come down.

And the way to do that is to utilize more technology and to make it easier and seamless on the patient. 

[00:36:35] Griffin Jones: You're touching on something that I ask every CEO that comes on this program and I probably even talk to you about. It's something that I wrestle with, which is the, the operational needs for expanding access to care and the autonomy of, uh, having, you know, uh, having clinical autonomy.

And because I, I think those things overlap and I, as somebody, as a [00:37:00] business person who wants to see, uh, Access to care expanded like I don't own a clinic and I don't have any shares in any I feel like I could say I would make docs do stuff and that stuff might interfere with the way that they want to practice and recently at Midwest Reproductive Symposium.

There was a talk, so this is public. This isn't me having a private conversation. Uh, I don't want to, uh, say the doctor, so I'll make up a name like Dr. Richard Scott said that these corporately owned networks and business owned networks absolutely Make you practice medicine. And to me, it strikes at what I see as like inseparable things.

Like I would not, uh, if, if I were the owner of a clinic network, I would not let docs do their own ultrasounds. I, because it just, it isn't feasible. I would make them use a certain EMR. I would, uh, you know, there, there's probably a few of those [00:38:00] other types of. of things that they would be doing, you know, they wouldn't be doing IUIs, you know, um, but I'm not a clinician.

I am a D. Biology student, and I think that a lot of the folks running these networks are smarter than I am, but they're also not clinicians. Those tensions, to me, I haven't been able to reconcile. Richard Scott seems to say that they're not. Reconcilable. How do you reconcile them? 

[00:38:27] Gina Bartasi: It starts with the REI and being mission oriented.

When, when, first of all, I've, I've told you historically and it's still true today, none of our corporate teammates make clinical decisions. We just don't. We build technology. Let me, let me give you another example of technology we've built. Um, there's all this documentation and in other EMRs the billers have to go in and read the documentation.

In our technology, the documentation picks up the code that you're supposed to be billing the insurance company and everything is automated. But you know, [00:39:00] we want all of our doctors to use the technology. I will tell you today, about 75%, maybe 80 percent now utilize that documentation and that automated code billing.

And some of them, it's harder to get them to adopt the technology. They just, they're accustomed to doing their own documentation. What that means is, is you have to have more billers, more coders to go in there, read the physician's notes, and then bill on their behalf. You, again, this partnership, and it is a partnership between, um, REIs and institutional money, whether that's venture capital or private equity.

And there are differences, and I'm happy to talk about the differences, but there has to be a partnership, and then there has to be patience, right? Because when you come in, we want you to utilize our technology, but you have to educate, educate, educate. Again, it has to do with when you're taking down the cost of care so that more patients can afford treatment, your cycle volume has to go up.

Then the light bulb [00:40:00] goes up. If you walk them through the hows and the whys, you've built the technology, they're They're notating and charting at the middle of the night and you just want to say, our job with technology is to make your job easier, but you have to have a lot of patience to walk the doctors through why you've built the technology and you shouldn't be building any technology.

We have an application team, they're a product team and our product team sits in between our engineers and our technology team and the doctors. There's not any, just so we're clear, there's not any product and technology people who don't take their directives directly from the REIs. And then, I do think, uh, for sure, instead of 35 different REIs having input, they ha they collaborate.

We have a medical advisory board, so when there's a medical decision to be made, It's not 35 different REIs trying to make a different decision about something medical or about a technology build. It's a medical advisory board, and then we have a technology board that decides what new features, because you [00:41:00] do, you have to bring, and then sometimes the doctors want you to build things that the technology team may say, It's not the best interest, but then you work together back and forth and back and forth.

And Dr. Kristin Bendikson leads those. She's our head of clinical, chief clinical officer. So she leads these discussions in conjunction and in partnership with the technical team To ensure that she's got support and collaboration from her peers on the REI side, and then our technology team understands their job is to serve the REI.

They take their orders from Dr. Bendikson, not the other way around, and I think that's fundamentally important. Um, probably unique to Kindbody's culture, and it goes back to being venture backed instead of private equity backed, and there are pros and cons to both. 

[00:41:47] Griffin Jones: There are pros and cons to both, but I want to see a venture backed venture succeed because I think what we need is a new kind of model.

I think it's going to be really hard to do that with a private equity model, the type of [00:42:00] innovation and scale. In my view, so I would like to see a venture backed group succeed. Whether it's docs or whether it's other types of staff, you talked about servant leadership. What are specific things you do to lead as a servant?

[00:42:14] Gina Bartasi: You have to show up. As executive chairman, I wasn't, as president, I still went to all of our openings. Uh, but if you really want to be motivated, get in front of your clinicians. I went to our Newport Beach Clinic last week, um, that's an extraordinary team. We have extraordinary, I was in Columbus, Ohio for our opening, like, you know, you're, you're working so hard.

As a corporate executive, like every day, the clinician's job is hard, but our corporate team members, our CFO, our COO, everybody is working really, really hard because what we're doing has never been done before, has never been done before. So we're not like looking at anybody else's playbook going, let's do what they did.

You're like, literally every day you're innovating, and that's what makes it hard. Um. But when you really [00:43:00] want a shot in the arm, return to your patients and return to your clinicians. When I went to Newport Beach, because our extraordinary team there had worked in our mobile clinic for the last year while we were opening our lab, we already had kind babies there.

And you have these grateful patients and they're like, Oh my gosh, thank you for creating Kindbody. I felt so, you know, and so if you want to be, you know, A great leader, return to your why, return to your what motivates you, and these are patients. Listen, my twin boys, it's their, oh, their birthday's tomorrow on the 14th.

They turn 13, you know, and it's just, it's not that hard to go back to that heartache and that vulnerability, and you see the, and these patients are screaming ear to ear. What's different between the patients we serve today and, 13 years ago is, again, it was noticeably diverse in Newport Beach. Like, I have a vision of Newport Beach in the OC and I see white, rich, and heterosexual.

That was not who was at our clinic. Yes, there were heterosexual couples because they [00:44:00] make up the majority of the IDF population. But I think we intentionally serve a very disparate patient population and that is very intentional and that is rewarding. And if you want to be jazzed as a CEO, get in front of your patient and your clinician.

We have a nurse practitioner there, she's the bomb. I'm not going to name all of our superstars because they're too easily headhunted. But she jumped up in front of me and she was like, I love Kindbody. I was in Denver with you, I was in San Francisco with you, and I was in LA with you. And I was like, are you an owner of this business?

Cause you talk like an owner. She was talking about all the sacrifices she made and she was driving back and forth between LA and Long Beach, where she lives. So, we're going to grant equity, uh, disproportionately take care of our superstars like that. So, we have a, an embryologist there who left another private practice to join Kindbody.

Kindbody is the group. We want to ensure that Kindbody remains the group, the employer of choice, that when we come into a market and we run ads for an REI or an [00:45:00] embryologist, that people choose Kindbody as their first place of employment. And she was motivational, and hearing why they chose the, all of these people are highly targeted and, and highly compensated, and they have a choice of where they want to go to work every day, and to hear them talk about how and why they chose Kindbody.

And I got back on the plane, it was a long flight back because I missed my flight to Chicago. I was coming to MRSI, but I missed my flight. And then I took four flights to get back to the East Coast. But anyway, um, I was really jazzed as the leader. You're like, man, okay, every day you're like kicking yourself for the mistakes you make or, you know, but as long as the highs outweigh the lows, you're like, I can do this another day.

We're going to make a difference. So I don't know. I was like coming out of there. I was like, this is good. This is really good. 

[00:45:46] Griffin Jones: How about when staff interests and, uh, patients interests aren't aligned? As a leader, you want to align them as much as possible. I remember pressing a doctor about this on the podcast a few years ago and couldn't get him [00:46:00] to say one way or the other if staff matters more than patients, but I was talking to someone also at MRSI, uh, that, uh, had been on the industry side for a while, is now back running a clinic, and said No, I'm seeing a level of demand and a level of expectations from patients that aren't fair and aren't kind.

And I have fired a couple patients in the last few months, and I hadn't really heard somebody say that. Every time I had always heard people talk about firing patients, it was like, oh, it's this one off rare thing. Sounds like this individual has done it a couple times in the last, uh, done it multiple times in the last few months.

And I think that that might be necessary at times. There's times where Um, we, everybody wants everything, right? Like shareholders want the maximum return. Employees want the best benefits, the, the, the best kind of job customers, patients want everything now, and you can't always [00:47:00] align those all the time.

So how do you handle that when those are at odds? 

[00:47:05] Gina Bartasi: It's rare we see that a Kindbody, um, you know, we want to be able to treat all patients, we. Um, we don't, we don't turn away patients for diminished ovarian reserve. We don't turn away patients when they've had failed cycles. 

[00:47:21] Griffin Jones: It's rare you see patients that drive your staff nuts.

[00:47:24] Gina Bartasi: I think what happens at Kindbody is even when that patient drives the staff crazy, instead of losing your cool, what we would teach is can somebody else message and handhold this patient? Because it could be just a personality misfit. It could be that, it could be a number of triggers. And so instead of firing the patient.

And what we want to be able to do is to say, Hey, my colleague, Sarah can help you through this and do a handoff to another colleague. That is one of the things that we are seeing. This is a learn [00:48:00] lesson, um, the advantage of this kind body network and us all being on the same tech stack and us all having workflow process, you can do exactly what I just said.

So even if you don't have all the staff you need in new, if we go back to Newport beach to say, Hey, Talk to my, uh, financial navigation colleague here or minor, then, then you can easily transfer that patient to another teammate in another market who does have capacity. When you're trying to bring down the cost of care, it's about cost of labor and capacity.

In all of these networks and all of these clinics, they have spare capacity. They have spare capacity with nurses, with MAs, with sonographers, with billing people, with doctors. And so at Kindbody, we say, hey, if you're going to batch this week. We have a physician on mat leave, do you mind to go and cover?

And that's, we didn't build the model like that. The model was like, okay, every clinic is going to start with 15 employees, and we're going to have multiple backups. Like that was in [00:49:00] 2020, 2021. And then as you get closer to the public markets and you get, Closer to now driving on profitable growth, not just growth at all costs.

Now you get smarter about, and by the way, a lot of our teammates want to travel. Like when this young lady in Newport Beach was like, I started with you in Denver, she was smiling ear to ear. She was like, do you know the experience I've had? I mean, our head of the PAs and MPs of clinical, who's a PA herself, she's traveled all over the country and she enjoys it.

So think about, again, if we go back to this brand of Kindbody. And trying to bring down the cost of care and still have profitability to be able to build out new centers is this ability to turn an unhappy patient into a positive patient by saying, Hey, we're having, we're having some miscommunication.

I'm very sorry. Let me let you talk to my friend, Sarah. Being able to use this infrastructure of other teammates who have capacity, I think is pretty unique to Kindbody. 

[00:49:56] Griffin Jones: You mentioned the profitable growth and that was one of [00:50:00] the announcements that Kindbody has made that's a big deal for a company that's venture backed.

There's a lot of venture backed companies that grow to be very large and don't ever turn a profit. So what does profitable mean? Does it mean The first month of turning a profit, per annum, at some clinic levels, in some divisions of the company, what does that mean? 

[00:50:19] Gina Bartasi: Yeah, no, it's company wide and it's three consecutive months.

Um, we'll see how June looks, but March, April, May, um, so we always message and are prepared for kind of a summer slowdown. I think most clinics see some seasonality in the summer. Um, we will be, we are projecting to be profitable on an annualized basis in 2024, um, but again, we've been investing tens of millions of dollars.

And then that's what we had been talking to our team about. Uh, we had a meeting with all the doctors two years ago. We talked about this magical J curve and you invest, invest, invest, and you come out of it. And then there's this breakeven line, uh, when you break and then you go the J up and to the right.

So [00:51:00] it, you know, it's a point of pride for us. Um, just because everybody now knows, like it's fun. Our team knows about business and finance and they understand the J curve and they under, they're shareholders. So, and so again, there's a fine balance every day. If you return to taking care of the patient and taking care of each other and the team, um, again, the profits are going to come and, and, and we're there now.

Uh, we're going to open a couple of more centers. We'll see. More revenue, we'll see losses with those centers, but some of the other centers are generating, uh, sufficient, not just profit, but cash flow to support those operating losses, so we'll be profitable and cash flow positive by the end of the year.

[00:51:41] Griffin Jones: Might we see parting ways with markets that haven't been able to be profitable? 

[00:51:46] Gina Bartasi: That decision is, has not been made yet. I think what we're thinking about doing is how can we make those markets more profitable? Profitable. Uh, we've got two markets that still struggle with profit. [00:52:00] Um, and we talk about that, Griffin, just like any other CEO, I'm positive.

Other CEOs have a portfolio of clinics and they have your outliers, your middle of the road, and then they have some clinics that are struggling. In the venture world, it's a little different. We have a lot longer, uh, more patient capital to continue. Instead of saying, let's close that clinic, we think about how we can leverage internal resources.

To turn that kind of, the capital's a little bit more patient, now there's a lot more risk and there's a lot more reward for venture than there is private equity, uh, but we're not, we're not talking about, you know, closing or moving away from any markets right now. 

[00:52:36] Griffin Jones: Do you attribute that to anything other than the J curve, other than the amount of time that it takes for that investment to come to fruition?

This is the profitability that I'm referencing. Or was there other practices that you enacted in the last couple quarters that made that happen? 

[00:52:50] Gina Bartasi: Well, for sure, uh, to give you a sense, when we think about profitability, we have 35 clinics, but those are locations, those are satellites and clinics, [00:53:00] um, roughly 32, 32 percent of our total clinics were profitable, only 32%.

86 percent of our clinics were profitable from October to April. It's, it, you know, you just get really, really, um, disciplined about where you're prepared to spend. And you will see us, listen, um, this Sloane Stephens, I keep coming back to it because again, it's a big day for us. We have these ads. They're 30 second spot.

We're going to put them on our own earned media channels, on our social media channels. That doesn't cost us anything. You know, when you said what's changed in profitability, again, let me talk about the capital markets and how that's changed. Um, three years ago, you could raise a lot of money as a venture backed company at a very high valuation, at 10 to 13 times revenue, forward looking revenue.

Those multiples have come down significantly just in the past [00:54:00] two to three years, okay? So the capital markets and how you finance growth changes as well, which means your time to profitability must shorten and you just spend less. So if this were three years ago, you would see Sloane Stephens not only on our Um, our earned media channels and our social media channels and LinkedIn and other places, you would see them running on national networks and on other places, but you just, you just get more rigorous and more disciplined about where you're going to spend money and where you're not going to spend money.

[00:54:30] Griffin Jones: It's long form content, but it's not long enough. There's so many different topics that we could discuss. We could go down more of the technology that you're investing in. We could go down more in how terrifying that J curve is and what that's like to ride that. We could talk about, within the technology scope, more about your EMR, and you were talking about the patient portal benefits to it, but why build an EMR and what that does for you.

There's, there's There's so many [00:55:00] different angles that we could conclude on, but I'm going to let you decide what we conclude on. The floor is yours. 

[00:55:08] Gina Bartasi: Yeah. Thank you, Griffin. Uh, I appreciate, uh, to be with you today. Um, congratulations on all of your growth. I think we met, how long have you had IAR, Inside Reproductive Health, IRH?

Four years? Five years? 

[00:55:22] Griffin Jones: I started Fertility Bridge many years ago, but IRH, the podcast, started early 2019. 

[00:55:29] Gina Bartasi: Yeah, think about that. So, in less than five years, think about how far you've come as well. So, um, my parting thoughts are always to congratulate others who are innovators and pioneers in the industry.

It takes us all. I talked to a new hire candidate today. She said, what you do, Gina, you lead with courage. That was like, tastic, you know, it's just, it's nice to be, because what we're doing is so hard, you're going to be criticized, and the question is what you do with that [00:56:00] criticism, but what you've done, Griffin, to create a platform so that we can collaborate, learn from each other, and Uh, congratulations to you because you've built a pretty phenomenal brand and team in the last five years as well.

Um, certainly I'm grateful for the time with you this afternoon and, and I'm grateful for our extraordinary team at KindBody. So always good to catch up and congratulations again to your growth. It 

[00:56:21] Griffin Jones: is, Gina, and I'm sure you'll be back on a fourth time because KindBody is always doing something and, uh, it's a pleasure talking to you.

Thanks for coming back on the program. 

[00:56:30] Gina Bartasi: Thanks Griffin

[00:56:30] Sponsor: Thank you for listening to Inside Reproductive Health. This episode was brought to you by Organon. Organon is committed to championing care equity in fertility. By elevating education, expanding resources, and investing in innovative solutions, Organon stands with aspiring parents on their unique journeys.

Learn more at fertilityjourney.com.

Announcer: Thank you for listening to Inside Reproductive Health.

227 The Biggest Strategic Issue Facing Pinnacle Fertility with CEO, Beth Zoneraich

Today’s Advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, nor does the Advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the Advertiser.


Growing fertility networks need more staff at almost every level of the organization. But they can’t get enough of them.

Today's guest, Beth Zoneraich, CEO of Pinnacle Fertility, presents her approach to revolutionizing the patient experience and enhancing efficiency in fertility practices.

Tune in as Beth explores:

  • How she’s refining the patient journey for optimal efficiency. (And why it involves the Ritz-Carlton)

  • Market and workforce factors driving the need for more streamlined processes.

  • Pinnacle's automation of EMR steps and improvements in patient intake.

  • Strategies for segmenting and training specialized support staff.

  • Navigating the separation between business and medicine in fertility.

  • The impact of private equity on fertility practices and standards of care.

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Transcript

[00:00:00] Beth Zoneraich: Why is sort of the industry changes in the industry dynamics affecting fertility? And why, why is it making it now the reason why these clinics need to change? And then in changing, we create these new operational methods, which focus on work life balance and. efficiencies because it's the only way we can go from being sort of a mom and pop, you know, fragmented industry to a scaled, able to give more people access to care, but efficient, you know, group of clinics is, is by making these changes.

And, and we need to make the changes in a way that works for sort of where employees want to be. 

[00:00:42] Kevin Ali: Hi, I'm Kevin Ali, CEO of Organon, and at Organon, we're committed to engaging with leaders across reproductive medicine. So I'm excited to introduce today's guest, Beth Zoneraich, CEO of Pinnacle Fertility. 

Sponsor: This episode was brought to you by Organon, Organon is committed to championing care equity in fertility. By elevating education, expanding resources, and investing in innovative solutions, Organon stands with aspiring parents on their unique journeys. Learn more at FertilityJourney.com.

[00:01:04] Griffin Jones: Thank you, Kevin. You made me realize that I may have been mispronouncing Beth's name incorrectly in this interview, and I am correcting myself and I am correcting all of you. Beth Zoneraich. One of the things that fertility networks are supposed to do is to introduce operational efficiencies to the practice of REI.

Beth Zoneraich has been mapping the patient journey for many years, long before she was the chief executive of Pinnacle. So I ask her about what she's doing now to make the patient journey more efficient. And also, what are the market causes that make it necessary to make it more efficient? What are the workforce causes for needing to make it more efficient?

What is Pinnacle doing to automate steps in their EMR? What are they doing at patient intake to anticipate patient needs and desires? How does Pinnacle segment and specialize their support staff? What are they doing to train those staff? I press a bit on the separation between business and medicine.

Doctors say they don't want to be told how to practice medicine. People say they don't want to tell doctors how to practice medicine. I just don't think that business operations and the practice of medicine are completely separable. I asked Beth about that. I also ask about the private equity timeline.

I think there's too much evidence to the contrary that private equity just tanks the standard of care. I don't buy that, not across the board anyway. But I do think it might be the case that private equity backed companies don't make enough necessary investments for the long term because the timeline for the return on investment is too short.

I asked Beth about that too. When we talk about workforce, I think Beth is a little more generous than I am in comparing generational work ethics. But I think the point's the same that the only way you'll get even as much out of the current and incoming workforce as you did from previous workforces, let alone get more out of them is by using technology and systems to make them a lot more efficient.

Let me know what you think. Send me an email and enjoy this conversation with Beth Zoneraich. Ms. Zoneraich, Beth, welcome to the Inside Reproductive Health Podcast. 

[00:02:54] Beth Zoneraich: Griffin Jones. Thank you so much. It's a pleasure to be here. 

[00:02:57] Griffin Jones: I'm I'm happy that you're here. Your fellow upstate New Yorker originally. So we've we've gotten to connect on that.

We also have gotten to connect a little bit recently on on some thoughts on operational efficiency. And, uh, and I do want to get into that and then what that means for the workforce. Um, but maybe we take it from your view of what's happening in the field. And why efficiency in particular efficiencies are necessary at this time.

What's the bird's eye view of, of what's happening that you think this is now necessary. 

[00:03:35] Beth Zoneraich: Thanks, Griffin. I, I love to talk to my own network and outside of the network about what a quickly changing industry, the fertility world is. And we have a lot of these dynamics going on in the industry that are hitting All at the same time.

And sometimes when you're in a clinic as a physician or as an embryologist, you, you feel these industry trends hitting, but, but it's pretty hard to see them in a global context and understand maybe why some things that are changing at the clinic are changing. So when I look out at the industry and look over the past 10 years, you, you really see huge changes.

The first is that within the clinic, delivering care to the patient has become a lot more expensive. Uh, it's become more expensive because we've added a lot to the process. So we've made our success rates and the science has exploded and, and our clinics are much more successful at getting our patients pregnant using things like genetic carrier screening and, you know, biopsying embryos and, and, and doing PGTA or PGTM testing on the embryos.

That's improved our success rates. But if you think about what the clinic needs to do, they're now doing a lot of genetic counseling they've never done before, coordinating that. And they're running more tests, which requires coordination with outside vendors, and then they're spending time in the lab biopsying embryos, and they have to now coordinate two cycles, first the retrieval and then the frozen embryo transfer.

So the amount of work required in the clinic that makes it necessary to get to one cycle is a lot more work and a lot more employee. lab, nursing, and doctoring time than we had had before. Uh, so while that's one big trend that's happening, uh, we also have a shortage of labor, so it's making that labor more expensive.

Um, that's really making caring for each individual patient tougher and more expensive and taking more time. So that's one big industry trend that's happened. A second is, at the same time that that was happening, more and more employers have decided that offering fertility benefits is a needed part of, of what they should offer their employees because everyone should have the right to have a family if they want one.

And so it's a wonderful trend to see more and more employers offering this cure. And with more coverage, more patients are showing up at our door wanting coverage. So it's, it's taking us more time to see them. It's more expensive to see them and service them. And more employers are covering it. But we're actually getting reimbursed a lot less on the back end for each cycle that gets covered.

So when you see all these trends happening, a lot of times what we're seeing is we go in and either acquire clinics or or come in to help clinics manage those industry trends. What you find is long wait lists of patients. It's hard to answer the phone. It's hard to get back to your patients and patients get increasingly frustrated with the clinic because they're not getting the care that, that they really deserve and that they're wanting to have.

And the staff of the clinics get super frustrated because they're working harder than they've ever worked before, trying to provide even better care than they were able to provide in the past, but they're getting yelled at all day by patients that, that are kind of angry with the process. And so what we're finding is a lot of people are either leaving the field or they're getting burned out.

For And they're not sure sort of where the future is going, and they don't realize that these industry trends are really what's causing a lot of this. So when, when we're in clinics, sometimes we'll hear people frustrated with doctors or frustrated with administration. And really what's happening is these industry trends are playing out every day in our clinics and making our employees feel stressed and tired and not sure sort of which patient they should see first and where they should head back.

[00:07:10] Griffin Jones: So one of the things that I wrote down that you mentioned is that things are taking more time now, what specifically is taking more time? 

[00:07:21] Beth Zoneraich: I think if, if we go back 10 years, right, people would come in and they would, Almost entirely be self pay patients. So they sign a contract and they would get started with their testing and their treatment cycle tend to be that treatment cycle would have been one cycle.

They would, they would coordinate that patient to have a retrieval and then X number of days later, they would have a fresh transfer. Now we've got to coordinate genetic carrier screening of, of sometimes one, one of the, um, parts of a couple of pretend both, you know, husband and wife and or, uh, two, two spouses.

Um, or an unintended, you know, partner. So some of the times we're doing the genetic, um, counseling and the genetic carrier screening, then we're coordinating a retrieval cycle. Then we're typically creating embryos, freezing them as we biopsy them and send them off for treatment. We've got to coordinate with an outside vendor and do that internally.

And we've got to get those reports back. So when you 10 years ago, we've added a lot more steps into the process. And we're now trying to coordinate with More outside vendors and and those coordination with outside vendors can mean lots of paperwork to fill out lots of faxes to get in Lots of attaching to charts.

So there's a lot of steps involved in making that journey for the patient work seamlessly now Unless we put a lot of care and thought and time and energy into making it work better 

[00:08:37] Griffin Jones: So how do you get, uh, so how do you introduce inefficiency into this dynamic? Because a lot of these things that have developed have been, I suppose, to increase effectiveness.

You know, now you've got genetic counseling, you've got genetic carrier screening, you have, uh, you've got more options for third party. Um, but everything you introduce, um, might Uh, lead to it's one more step. Um, how do you introduce efficiencies without introducing something that you're trying to make the inefficiency just one more step?

[00:09:16] Beth Zoneraich: That's a great question. We've actually spent years at Pinnacle now time studying and watching and process mapping the flow of the patient journey. And, and lots of people have done this, but we've tried to be really innovative Not just picking a medical record system, but then innovating that medical record system to kind of automate things along the patient journey path that makes it easier for the for our team and our staff to provide really, truly exceptional patient service while not stressing out the team and making their jobs better.

And whether that be helping them with, uh, prep sheets in advance for what patient's coming at eight and at 8. 15, at 8. 30, and maybe a picture of what that person looks like and any consent forms they need to sign and why they're coming to the clinic and any copays or deductibles they may need to have.

And sort of helping the front office with sort of a list of all of the employee, all of the patients coming in and what exactly is needed and getting them ready for that in an easy electronic checklist. It, it may be taking some of our vendors and integrating them into our medical record system so that we're not filling out paperwork anymore, we're just doing click, click, click and that order goes off to one of our, our key partners that we work with.

And making sure when the, when we get test results, they result back into our system and. If we have a euploid embryo, it's going to highlight green in our system on an embryo by embryo braces, or if it's aneuploid, it's going to highlight red and the results are going to be right there at a click of a button.

But that we use automation and technology to take some of the really difficult paperwork steps out of what our, what we're doing. Our employees are doing every day for our patients and automate some of that to make their job easier and more focused on providing the amazing patient care that they love to provide.

[00:11:04] Griffin Jones: You talked about answering the phone and the staff's working hard. Patients are getting angry, wait lists get longer, and then, and people are calling. What's your approach to. Patient intake and answering the phone and what can be automated there? Are we at a stage where we can have chatbots do a lot of things or we can have some sort of a I triage or what's the approach to think about that point of intake now?

[00:11:34] Beth Zoneraich: So we try and study intake from many different avenues. So we study intake first for why is the patient calling to begin with? Did we not anticipate the need of that patient in advance? and touch base with that patient before they needed to call us. So the first is, can we reduce phone calls by better educating our patients and better getting them prepped for their cycle of their appointments proactively so that they don't need to contact us because we've already contacted them and satisfied that need.

So we study our phone calls to see maybe we are getting lots of phone calls, for instance, here's an example from a lab because we had the wrong diagnosis code in and sort of labs that we were sending out were getting rejected. And so we need to go in and fix the diagnosis code. And then all of a sudden those.

Those calls will, will stop coming in. So those, those are easy ones that we try and solve. Then what we try and do is, is we've studied good service models. And so we've gone out and said, you know, outside of healthcare, who do we think of as having really good service models? So for instance, we've brought in the Ritz Carlton to speak to our teams twice now, two years in a row.

And Ritz Carlton defines good services, anticipating. The needs and desires of their customers for us, for our patients. And so beginning to pre think, if I'm a patient and I know the patient journey, or I don't know the patient journey, but we know the patient journey, and anticipating what that patient journey looks like and proactively reaching out in advance.

So if someone needs to be on day three of their, day two or three of their period, and we know their appointment's coming up, can we text them in advance to say, Hey, I'm Did you get your period? Are we still good for our appointment? Your appointment in two days? Or should we push it out a day and being able to really think through that before they show up maybe on the wrong day of their period and then say, Oh, I didn't know or we'll have to reschedule and try again a month later.

So when we can anticipate demand, we reduce those phone calls. And then finally, when, when patients do call us, we should be answering in the first two or three rings. We shouldn't, we shouldn't have them waiting on hold for long periods of time. And we should be able to answer their question in one answer.

We shouldn't have to transfer them five times. We shouldn't have to say, we'll get back to them. We should be able to answer them. intake and have trained staff that can answer their questions. And so our goal and and we're not at this at every clinic and in every place where we're operating, but that is our goal to get to is to be able to meet our patients questions and answers in a very quick format, but really anticipate and ahead of time answer their questions almost before they have them.

Our desire is to delight the patient. 

[00:14:02] Griffin Jones: What's your point of view on centralized call centers? Because my point of view when working with smaller practices was that the roles that front desk staff had weren't specialized enough. They were, they were pulled in too many directions and they had to be because they just didn't have the volume to have these four people are the people that handle new patient scheduling.

And these three people are the people that, you know, welcome new patients. And these Other people are the folks that do the insurance verification. And, uh, and so it's, it seemed to me that they We're kind of stuck in that inefficiency because they didn't have the scale to specialize. But as soon as they got to a certain threshold, I would recommend, okay, now I'll get a dedicated new patient line, make that a different line than your existing patient line, because they have very different questions, very different needs.

And to the extent that you can have people whose job it is, is just to deal with new patients. How do you view that delineation of responsibilities? 

[00:15:08] Beth Zoneraich: Yeah, Griffin, I, I agree a hundred percent. When I have sat at front office before trying to understand the patient flow, the first thing that I notice is the front office person who needs to greet our next patient or check out a patient that's leaving or talk to people in the waiting room.

It's very hard for that person to answer the phone. They, it's sort of like a gamble. When the phone rings, you don't know if it's a quick, I'm going to transfer it to someone. If it's a 30 minute, I'm going to do an intake of a new patient. You don't know who's on the other end of that call. And the front office person, of course, being service focused, wants to be able to greet the next person walking in with a smile and, and get them ready for their appointment.

So they get, they get nervous about answering the phone because they're trying to do an excellent job with the patient in front of them. So separating those roles, uh, quickly becomes really important so that somebody can be focused on in taking the new patient, answering all their questions and, and being able to answer that call within the first ring or two while not trying to be rude or have two conversations at the same time and give both people their full attention.

So we, we always try to have front office only as a backup on answering new patient only calls, but not the main place where new patient phone calls are, are. 

[00:16:20] Griffin Jones: I'll route it to when your network like yours, can that be done from one place across multiple practices in multiple geographic areas? What are the pros and cons of doing it that way?

[00:16:33] Beth Zoneraich: So because pinnacle operates from coast to coast, you know, we often have a three hour time difference. So one new patient call center for the entire country, I think might be difficult for us. It's not something we've gone to at this point. And we also have such a large network that You know, having smaller specialized groups that understand all of the different practices and physicians, there are definitely nuances.

Uh, Pinnacle does try and standardize more rather than less so that we can help with automation and help with technology improvement on the back end. Um, there are definitely still differences between the clinics in scheduling or times or, or some of the clinics are in batching schedules for IVF. Others run continuously based on size.

So we have not tried to centralize into one call center. What we've done is more regionalized. Uh, centers and or centers within a clinic, but just not having it all in the front desk position. 

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[00:17:28] Griffin Jones: You've been the top chief at Pinnacle for a year and a half at the time of this recording. You worked for the company for a bit longer than that.

What do you, uh, Uh, view as what were in, in that time period, what were the efficiencies that you prioritized first and why did you prioritize them that way? 

[00:17:48] Beth Zoneraich: That's a great question. So since I joined the company, uh, I think the main priority was to get everybody on the same technology platform so that we have a base in which we can grow.

So, clinics came to us on paper. They came to us in a variety of different EMR and billing systems, sometimes two or three at a time, and, uh, you know, we've, we've had 12 different, uh, groups join us, and through that, we've done nine different EMR conversions. And as of June of this year, every clinic of ours, uh, will all be on the same tech stack platform.

That's the same copiers, the same voice over IP phones, um, the same Microsoft Office 365 platforms. They will be on the same medical record systems, um, using the same vendors. And we've integrated all of those technologies together. That will give us, and has given us since we're almost there now, this foundation of which to start to build from, and we're just beginning to see what I think will be really exponentially increasing results.

Uh, you know, as, as an outcome from this, as a way of, of doing things to make our patient care and our service levels truly outstanding. 

[00:18:59] Griffin Jones: As you introduce these efficiencies, how do you think about the overlap of business operations with clinical care? Because I've become convinced over the years that you just can't totally separate those two different things and, and the tension between business and clinical over the years has been.

Well, you know, the clinician saying, well, we don't want somebody without an MD telling us how to practice medicine. And the business response has traditionally been, we don't, we don't tell you how to practice business or practice medicine. We, we handle the business things. And I, I just think that. That there's an overlap that can't be fully separated.

And, and I think if, if I was in your seat or Lisa's seat or Derek's seat or TJ's seat, or I think that in, and I'm a business person looking at this, like, I, I feel like I would be telling doctors, like, there's no way in hell you're doing ultrasounds. Like we're going to be doing. We're going to have sonographers do that.

And then you can tell me what safeguards need to take place. And then, and then you can also tell me what safeguards need to be in place for APPs to, to be doing these new pay, to be doing IUIs or OBGYNs to be doing retrievals, like you can tell me, but just looking at where the field is, where it needs to go, it's like, we, you're not, we're not gonna be able to stay in business in a handful of years.

If we can't figure this out. And, uh, and, you know, when you think about the number of, uh, of the percentage of self pay patients decreasing, and those reimbursements are often much lower. And so you've got to figure out the efficiencies there. Plus, we're only serving a fraction of the marketplace that needs our help.

Among other workforce inefficiencies that are coming into the place that, that we'll talk about some more, but I, I, you know, from my view, I would be like, like this, this way of being able to, to see more patients isn't totally divorceable from the way people practice medicine. And yeah, I think that I would have a safeguard of.

or a system for, for saying, okay, you tell me what needs to be in place in order for it to be clinically safe, clinically effective, um, not compromising quality of care at all. But like, this is the direction that we're going at from business. How do you think about that? 

[00:21:24] Beth Zoneraich: So, you know, I think I'm, I'm a little bit blessed in the sense that I'm married to an REI physician and I've been married to that REI physician for, 27, 28 years, and we started a practice together, so it comes very naturally to me to know that while there's always an intersection of business and medicine.

Doctors need to drive medicine 100 percent of the time. It's really critically important. I last had biology in the ninth grade. I don't have a really, uh, intelligent background in sort of telling a doctor how to see a patient and what to do. Um, but what I, what I found really large success at is being able to identify industry trends and analysis, use things that are happening outside of the industry, um, whether it be the Ritz Carlton or.

I mean, honestly, any of the, uh, case studies that you can read in business and studying other industries and bringing those successfully into healthcare, specifically into fertility. And I find that doctors are great problem solvers. So if doctors are presented with, um, this is just my experience, lots of good data and knowledge of the problem, then they're great solvers, um, and helping innovate the solution.

And then once some physicians have innovated, they're pretty good at working with other physicians to help, help people come along. Change, change management is really hard and it's really hard, you know, as the industry has changed so quickly to keep up with it. Um, but through the medical leadership board where, you know, at Pinnacle, we have one doctor from every practice sits on a medical leadership board and they make all of the decisions when it comes to anything medically about the practices across Pinnacle.

Uh, and no one from the business side votes on that, nor, nor should they. Those are medical decisions that should only be voted on by the, by the medical group. They've been really able to guide us quite effectively in, in meeting sort of these demanding, changing times, uh, but, but through a physician, you know, through the physician lens and, and being led by the physicians.

We, we have a similar board on the lab, lab leadership board. They manage all of our lab decisions and equipment purchases and, you know, and then oftentimes together, I will, you know, the groups will get together in person twice a year, they meet monthly. Uh, they make decisions together, like if we're picking a long term storage partner, that would be both a lab and a medical decision.

They would vote collectively. Uh, and then we have a business leadership board and their job is really to roll out and help solidify all the initiatives and And things approved by the, by the medical and lab leadership boards. Um, but while these sometimes conflict in general, uh, you know, it is critical to us that we remain physician led and that we still tackle the industry problems and the dynamics that are happening in the business.

And we're finding a lot of success with that. We have lots of really active, good negotiations and good, uh, good discussions, uh, but, but I, I do believe that the physicians are leading us through this and we're, and we're finding answers to those problems. in in ways that keep our patient care at the forefront of every decision we make.

[00:24:25] Griffin Jones: What about those things that, uh, you know, they might need to, like switch an EMR or they might need to, um, start using a software or something. And this is where I mean, where I just don't feel like we can totally divorce the business operations from what quality of care is, because, uh, I, there, there's someone that.

work with pretty closely and who's gone through IVF as a patient a couple of times and, um, had, uh, listened to, um, a couple of the advertisers on our show that have talked about introducing efficiencies. And she said, I wish that I had that because. Our, we, we felt like we were totally disconnected and, and things just fell off the agenda and, and people didn't follow back up with us and it felt disorganized.

Um, and she said, we almost, we almost quit our IVF cycle. And so it's like, that's a, that's like a business operation, but it. It almost affected the, the, a clinical outcome because it, she almost didn't stick with it. And so how do you, how do you think about that when you've got to get people to buy into something and they might say, well, I, I think.

You know, I'm used to doing it this way, or I think that it's too in my wheelhouse of being a clinician. How do you bridge that gap? 

[00:25:49] Beth Zoneraich: So we use, we use data, uh, to bridge a lot of those gaps. So when we have opinion differences across the network, which you can imagine with 50 REI physicians, we have a lot of opinion differences.

Like there's, there's no, I doubt that not everybody agrees all the time. We, we use the vast amounts of data since we're all on one system and have access to all this outcome data to test theories and hypotheses and opinions and try and put data behind it to try and see, well, does this, you know, specialized DIMM protocol really help or work?

Or does, Something else really a trend look like it's something we need to follow or not follow. And so we try and break down and listen to each to each idea. And then we have the doctors talk to each other. So that's why we have this medical leadership board. And if it's working successfully in seven or eight or nine of the clinics, you know, it'd be unusual for it to not work in the remaining clinics.

And so. Um, we encourage everybody at Pinnacle to travel a lot and visit each other in different clinics. So if we have a clinic struggling with a rollout or doing something, um, that another clinic is already trying, we invite one doctor to fly to that clinic and, and see it with their own eyes and watch how one doctor sees the patient to, to sort of help make the decision of could that work in a, in a different clinic.

We found that to be incredibly successful as a way for physicians and Folks in the front office and folks in our embryology lab to learn from each other. And it's, it's been, it's been very successful to date. And it's also brought the network closer together and made people enjoy working as a team. Um, even if one works on one coast and one works on the other.

[00:27:27] Griffin Jones: You find that it follows that bell curve of the The innovator to laggard bell Curve, where on the, the far left end of the bell curve, you got innovators and you've got your early adapters, and then you've got your late adapters and you've got your laggards. Do you find that, you know, you have a handful of people that are typically the people raising their hands to try anything, and then, and then there's a cohort behind them that, okay, after.

Those nuts have figured it out, then we'll implement it. And then there's a cohort behind them that says, okay, it looks like we're going in this direction and then, and then you've got your last handful that say, all right, we we've got to do this. Do you, do you find that it usually works in that trajectory?

[00:28:10] Beth Zoneraich: I do. And what's so funny is that works, but it's in so many different categories. So in some cases, if it's research, you have someone who's super passionate about research and they leave the network and research, and then they get everybody to come along and participate and do more studies. If it's on technology or innovation or the medical record system, I've got a bunch of early adopters and they will test it out and get together.

And they're actually on a subcommittee of our medical leadership board on on technology, and they'll get it together and then they'll present it. What's really nice, though, is when you have this functioning network, then If we're rolling out, like for instance, in June, when we roll out our last clinic on the medical record system, we will send in 15 plus people.

We'll send in physicians from two different clinics. We'll send in embryologists from a number of clinics. We'll send in front office people. And so as they're converting, they're not stuck with sort of. Somebody, perhaps from the technology platform sitting there training them, they, they get that for sure, but they get the rest of their network that understands how to see patients every day and the role that they're training to sit for a week with those same like minded folks.

And so when the doctors go to chart after their first new patient consult in the new EMR system, they'll be sitting next to another REI doctor showing them the way, uh, so that it, it's an easier transition and it's not as painful as it would have been otherwise so that we're not trying to self discover every time.

or make people go through the same pain points. We've also, as a network, gotten better at this. So our, our last, our last rollout in Seattle with over 400 employees went spectacularly well, went way better than the first rollout we did, um, with our first clinic. 

[00:29:44] Griffin Jones: You talked about the market forces that are are pushing this need for innovation.

Let's talk a little bit about the workforce forces that are pushing this need for innovation. I was just at the arm conference and one person there's one speaker there said That if we do nothing just based on the productivity of the workforce that's coming in versus the one that we've had, if, if we do absolutely nothing in terms of trying to see more patients, but even just to see the, the number of patients that we have, we'll need 30 percent more people in order to be able to do it based on productivity, or we'll have to see 30 percent less patients do 30 percent less cases.

In order to be able to see the same number of patients, do you agree with that assessment? 

[00:30:33] Beth Zoneraich: I do. And when I look at industry trends and data, we, we do see that it's part of the reason we've started our own embryology school. We are actively, um, considering and looking at rolling out sort of a OBGYN training programs.

We are very active in fellow recruiting, uh, and trying to convince, um, you know, other REIs to come join our network. We, we see very much the need to increase all of our specialized workforce and we spend a lot of time on innovative, creative career pathing for lower level, um, entry level employees into fertility clinics all the way up to navigator positions, um, looking at anyone with a bachelor's of science to increase the number of people entering the embryology field and, and just getting more and more people interested in, in servicing and caring for people wanting to start their families.

It's a pretty easy industry to get passionate and excited about. So that, that makes it easy to recruit people, but we see that as the number one strategic issue facing us is not having enough staff. It it's why the idea of using, uh, technology and integration. is so critical so that you reduce the burden on your staff and perhaps need less of them for that reason, even though there's no question we need more than we have now, but, but just making sure we have enough to fill the gap and that our training and culture and our ability to recruit and, you know, teach people, new people to enter into the fertility workspace is so critical to us.

[00:32:01] Griffin Jones: I think this person's point was that you'd need 30 percent more people just to get the same amount of work done, meaning the number of hours that people are willing to work, meaning the number like what they're just able to do. You know, if, um, the, the, the hustle for lack of a more precise term, uh, the, I would be, uh, this, I want, I put this out to any network listening to any EMR listening.

I would be so interested if, if people were to pull, uh, like five year age cells starting at age 35, because REIs finish fellowship at like 33 or something like that. So maybe like 35 to 40, 40 to 45, et cetera, you know, up until maybe 60 retirement age. Do you think If you were to look at that for if you were to pull all of your areas across all of your clinics, do you think that you would see like a gradual drop off from by by those eight cells?

And maybe we would have to like, uh, curve the data so that we were looking at it. Like when that clinician was, was of a certain age, you know, but, but do you think that you would see the younger docs doing less cycles than the older docs and seeing less patients than the older docs? 

[00:33:18] Beth Zoneraich: You know, I never looked at the data that way, Griffin.

So I don't know. Uh, what, what I would tell you is that I think not just with physicians, but But I, I think folks have grown up watching their parents work really hard and are sort of demanding of their employer a, a reasonable work life balance and, and there, there really should be no reason why fellows graduating from fellowship programs right now should not be able to both a, have personal interests like being a parent and being an active parent and engaged with their child and being able to go to their kid's classroom sometimes or make medical appointments and be home for dinner at a reasonable hour.

And be a really active, busy REI physician. Like, we should not be asking our fellows to choose between those two paths, maybe the way older physicians felt like they had to pick. And we shouldn't having to be asking them to work seven days a week and not take vacation days. We've, we've got to innovate the work.

So that these talented fellows can have both because, you know, people, if we're working this hard and passionate about allowing all of our patients having the right to be a parent, we certainly can't tell our own employees that they shouldn't have the right to be a parent and to be an active parent. I think it's a it's a fair request.

And so a good part of the reason why, you know, at Pinnacle we want some level of standardization and some level of a tech platform is to be able to innovate the work to provide a Physicians and lab staff and nursing staff. Uh, a better work life balance and we're finding, uh, we're finding a lot of success with that.

And if you go back to clinics that sort of went through these transformations with us in 21 and early 22, and you go back and, and speak to the wives and the husbands of the doctors. Um, they will tell you they've taken more vacations and had more free time with family than they had ever had before. And it's because we've innovated the work and I, we want to keep innovating that work so that, so that younger doctors want to join us and they want to join us so that they can practice world class medicine.

And be home for dinner with their, with their kids. 

[00:35:28] Griffin Jones: But technology is necessary in order to do that, right? Because otherwise it is an unreasonable request on their point. In my view, you know, for example, if, if they're saying, well, I want to make 500, 000 a year and I want to work 40 hours a week or less, and I want to be able to take six weeks vacation, and I want to have the four day weekend every month, and I want to be off for, uh, to be able to, to do that.

to pop out for those school events. Uh, and I want equity in the company. Uh, you know, previously you would consider those things like a trade off, like, okay, you can work less and, uh, and then you can go pick your, your kids up from school and take a little bit more vacation. You're going to make less. Um, but what's the saying a luxury one sample becomes a necessity.

And that's that's not unique to our eyes. That's true of every generation that's ever lived is that that generation had this. So we expect that less, um, without a whole lot of regard to the input that might have generated the output that, uh, they now set as the expectation. So the only way that it can become reasonable is if.

They are a lot more efficient using technology. 

[00:36:48] Beth Zoneraich: Yes, and I think sometimes when, when we talk to, you know, new doctors that are coming in, right? They're, they're perhaps protecting themselves as they look up and see someone who's worked seven days a week for 20 years and they don't want to sign up for that.

But I don't sense when I have those conversations that those positions aren't interested in working hard. In fact, they want to work very hard. They just want to be able to work hard and also have a life outside, and it's a fair ask. And so they want to be able to work maybe in their own way, or maybe not always from the office, right?

So could they do consults from home and miss like a really busy, crazy commute in, and or be able to take their kids to school and then be doing telemedicine from somewhere, and then maybe be in the office a little bit later and not spend two hours a day in traffic, or maybe they're not driving between three offices.

Or they're able to be home at a normal time to put their kids to bed and then they sign on to do some labs or to do some other things at night, but they don't have to be back in the office. But, but the ability to, to sort of manage the work so it fits into their lives as opposed, I hear that more than I hear, I just don't want to work.

That's not, tends to be the conversation that I hear these doctors asking about and, and I think I, I truly believe it, it should be the standard we're all setting is, you know, Is an ability to have both. I don't think someone should have to pick between a career in REI and, and a work life balance. I do believe there's a, I do believe there's a middle ground where they are able to have both, but I do believe to get there.

You need some technology and standardization to be able to do the work in a way that other people can help. Um, and that we're automating as much of the sort of paperwork as possible. Um, also for safety mechanisms, if we automate more, we make less mistakes or we have less of a chance of, you know, miscoding a name or something like that.

[00:38:40] Griffin Jones: No, as this technology is necessary to achieve that accommodation. What are the things in the pipeline that you're paying attention to that? Okay, if we're going to get there, it means that we're going to have to automate this. It means that we're going to have to be augmented by this. What are what are those couple things that you one, two, three, Think that in order to get to this where, Hey, you still want to make a lot of money, still want to do, see a lot of patients and do right by them.

You just want to do it way more efficiently. And you want to have this time outside of work. What are those efficiencies that we have to achieve? 

[00:39:15] Beth Zoneraich: So I think a lot of the efficiencies are, we have to get the work. Um, if, if we anticipate patient demand in advance, then in fact, they, they ask less questions.

We waste a lot of time in the fertility world. Where someone calls in and leaves a message, and then when they don't hear back, they send a portal message, and then when they don't hear back, they might call again or talk to somebody, but then you have three people, someone trying to answer the phone call, someone trying to answer the portal message, um, and, and however else they've engaged, trying to get back to that patient, and it leads to a lot of confusion and double work and triple work that we can avoid if we anticipate that patient's questions.

So first, we've got to reduce the work to make it more work. Automated and reasonable and, and, and that we're servicing the patient the first time or in advance, um, because that will then give us less to do. Second, we've got to use technology to be to help us. So if we're all on the same platform and we automate a bunch of things on the front end, or we integrate with front end apps and we collect more information online, and then we synthesize that information in a better way, we can make the work easier if we can.

Even innovate and present physicians with, you know, if they spend a lot of time pulling, you know, follow up consults or trying to get ready for a follow up consult, and they pull things from four different places, even if we can automate the pulling of those things to more easily put the information in front of the physician so they're not doing, you know, the work to go to four places to get it, but they're just making the physician call on what to do.

Those are the types of small innovations on the back end that we're actively working on to try and help physicians, uh, do the work that physicians need to do, but not do the work that they don't value. And, uh, so if you look at the types of things we're doing, we're attending AI conferences. We have three or four tests, uh, small innovations that we're doing with AI right now.

Um, we're integrating with, um, apps for intake that, um, will launch and announce here soon. We've announced partnerships with big genetic carrier, uh, screening, testing, and with PGTA and with, um, long term storage that we can integrate all of that into our patient ecosystem. So we've got a lot, we've got a huge data informatics and data team, and they are really spearheading sort of innovating the work, um, and those are the things that, that keep me busy, you know, many days.

[00:41:31] Griffin Jones: These innovations, be they small or big, they add up and they are an investment. This is a, a topic that I've, uh, that I've gone back and forth with, with, with different CEOs, with different people in different camps. I am not of the camp that private equity is bad because it, it, It's, it's going to squeeze everything out because another recent example of close, different close friend of mine went to a clinic, uh, that is not private equity owned is independently owned.

And it was again, another chaotic disorganized situation. She was very dissatisfied with that experience, went to another, neither of these are pinnacle clinics by the way. And they're also in totally different parts of the country. Um, but, uh, she went to another clinic and Our own by a bigger group was owned by a private equity group, and she felt that that was much more organized and efficient, had much better experience.

And, uh, I know the providers of both of the groups that she went to, and they're both nice people, but I also have a little bit of. Uh, a preview into their operations because, you know, yeah, I could see how that one is run a lot more efficiently. So, I've never bought that criticism of private equity funded groups in medicine that, you know, the, the, just gonna, Tank the standard of care because there are clear examples to the contrary.

Um, one criticism that I do tend to buy more is that the timeline necessary for returning the investment for limited partners and in a private equity model is Can be too much of a barrier for introducing a lot of innovation. Like if you, if you got a three to seven year timeline and you're looking at ROIs like 18 months, and, and so every CEO says, you know, well, we, we always look at the long term and I'm just a bit incredulous about that.

How do you view it? 

[00:43:33] Beth Zoneraich: So innovation comes in, um, in my mind, less than a Big Bang theory and more in small. Little innovations that add up to exponential results. So, you know, uh, There, there's no question that private equity has, has a timeframe for exit, but I don't find that maybe, maybe I'm lucky and I'm with a really, really good group, but I, I find a Pinnacle Fertility to be probably one of the most innovative organizations I've worked with yet.

And we're making really huge strides in progress. And, uh, You know, we do a lot of technology projects and I have a lot of staff in technology, uh, that, that are really focused on this and I found great support from our private equity group and, and encouraging this. I, I think, I think the good private equity firms and, and certainly ours fully understand that profit is a result of amazing patient outcomes and patient experiences.

That it is, you don't go seek out profit, you seek out amazing patient experiences and outcomes and the result of that is a profitable clinic. And, and so we're really focused very heavily on improving the patient experience and improving patient outcomes and investing in science and technology and research to the benefit of the patient.

Um, and again, I'm confident that profit will follow that, but it can't be the goal. 

[00:44:54] Griffin Jones: The conclusion floor is yours. Beth, you can recap anything that you'd like to talk about with regard to efficiencies and innovation, whether it be from a market need or a workforce need, or if there's might be something important that I forgot to ask you, uh, how would you like to conclude?

[00:45:16] Beth Zoneraich: I guess, Griffin, I would just conclude with a big thank you. I think your platform really brings together Some great leaders and thinkers. And I enjoy listening to sort of the trends in the industry and what other groups are doing and what some of the vendors and apps are doing. So, so I appreciate that.

And I appreciate you giving me the chance to come on and, and talk about sort of our view of what's going on in the industry and sort of Pinnacle's way of. of using technology and innovation to, to address some of those. So, so I, I just wanted to say, thank you. 

[00:45:46] Griffin Jones: That's Beth Zoneraich, CEO of Pinnacle Fertility.

I look forward to having you back on. Thank you for coming on the Inside Reproductive Health podcast. 

Sponsor: Organon is committed to championing care equity in fertility. By elevating education, expanding resources, and investing in innovative solutions, Organon stands with aspiring parents on their unique journeys. Learn more at FertilityJourney.com.

Announcer: Today’s Advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, nor does the Advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the Advertiser.

Thank you for listening to Inside Reproductive Health.

226 How Did Maven Clinic Become a >$1Billion Company? Featuring Kate Ryder, Founder and CEO, Maven Clinic

Today’s Advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, nor does the Advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the Advertiser.


How did Maven turn into a unicorn, a new company with a $1Billion valuation? How did they raise $300M?

Find out with today’s guest, Kate Ryder, Founder & CEO of Maven Clinic, as she reveals the strategies behind Maven’s extraordinary success and how she built a three comma company.

Tune in as Kate takes us behind the scenes of Maven, covering:

  • The secrets to making TTC coaching work within their business model (Even though its failed in so many others)

  • The formation and impact of Maven Managed Benefit (Their carve-out admin program)

  • Her vision for the future of managed care in fertility (And how traditional insurance may adapt)

  • Lessons learned from her time in venture capital that shaped her entrepreneurial journey

  • Her approach to hiring experts and building top-tier leadership


Transcript

[00:00:00] Kate Ryder: They know that, you know, we're very transparent in how we price and how we charge. And so they know that really that we charge on kind of the member experience, the clinical care management. And we, and as a result, you know, it's, it's not just kind of better clinical outcomes, better member experience, but it's a new business model that's more value based in an industry that was tipping very heavily into be for service, which is, you know, a bunch of models that.

Maybe make more money when more people go through IVF, which can lead to unnecessary cycles. And so, so that's something I think that also we challenged about the status quo and, and the market responded well. 

[00:00:41] Kevin Ali: Hi, I'm Kevin Ali, CEO of Organon, and at Organon, we're committed to engaging with leaders across reproductive medicine.

So I'm excited to introduce today's guest, Kate Ryder, founder and CEO of Maven Clinic. As the driving force behind the largest virtual clinic for women's and family health, Kate has revolutionized access to care across fertility, maternity, pediatrics, and menopause. 

[00:01:10] Sponsor: This episode was brought to you by Organon.

Organon is committed to championing care equity in fertility. By elevating education, expanding resources, and investing in innovative solutions, Organon stands with aspiring parents on their unique journeys. Learn more at FertilityJourney.com.

Announcer: Today's advertiser helped make the production and delivery of this episode possible, but the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the advertiser.

The advertiser does not have editorial control over the content of this episode, nor does the advertiser sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the advertiser,

[00:02:07] Griffin Jones: I go into some of Kate's background to help explain how Maven got to where they are. I jump around a bit in terms of timeline because it's such a large venture. It takes. Different angles to understand how it all came together. You know, like I say, in every episode with every company, I don't know how well they are run or what the market will decide about them in the long run.

So just try to ask questions and let my curiosity fascinate me. And hopefully they answered some of the questions that you were wondering about. Like what's this new TTC coaching that Maven offers? How is that different from other offerings in their fertility trend? Why are they able to make that work in their business model when other business models doing TTC coaching failed?

How did their carve out administration program Maven Manage Benefit form? How does Maven work with fertility clinics like yours? in their Maven performance network. How does Maven work with the traditional insurance companies? What does Kate think the traditional insurance companies will do as the fertility field and managed care in the fertility field really begins to expand?

What lessons did she learn as a venture capitalist before she herself became the entrepreneur? And what's her approach to hiring experts to join her leadership team of a company that's now valued over a billion dollars? Enjoy all this and more in my discussion with Kate Ryder. Ms. Ryder, Kate, welcome to the Inside Reproductive Health podcast.

[00:03:22] Kate Ryder: Thank you so much for having me. 

[00:03:23] Griffin Jones: I look forward to getting to know you some more. I look forward to getting to know Maven a little bit more. First, we have some very hard, we have a very hard hitting question that must go on the record, I'm told. When you reach for a bagel, do you reach for the top? 

[00:03:41] Kate Ryder: I typically reach for the top.

[00:03:45] Griffin Jones: So this is a Maven cultural question, I'm told. 

[00:03:48] Kate Ryder: It is. 

[00:03:49] Griffin Jones: But my problem with it, Kate, is why would somebody just go for the top or the bottom? If I'm going for a bagel, I'm, it has to be top and bottom. 

[00:03:59] Kate Ryder: Well, I, I think that, you know, our founding CTO was Zach Zaro of Zaro's Bagels. So this tradition started when he would bring bagels every Friday morning when we were like a small team of 10 people.

And we asked everybody this and I, it's just, people have such strong opinions. Do you eat the whole bagel? Do you eat the kind of, you know, the very bready top? Do you eat the bottom? And so I think it really reveals, reveals a lot. And you still ask the question. We do. Every time we have a board member or somebody kind of coming to an All Maven meeting, we always ask the question.

[00:04:33] Griffin Jones: I like it. I want to talk more about some of the new services that Maven has added in your fertility division, but I think that I might need to paint a little bit more context for the audience because Maven. And then there's other people in my audience that know very little about you all, that it's a name that they've heard.

You've made some big splashes in the tech. and finance newspapers, and there are parts of the sector that I think do a lot of work with Maven and I think there are other parts of the sector that still haven't interacted with you all much. And so, you know, my 60 second explanation to someone would be It started off as a women's and family health services platform, uh, digital clinical services, starting off direct to patient, has expanded to work with clinics in different verticals, has expanded to work with different, now with employers and, and being a benefits provider for employers.

What am I missing or how, what is your elevator? What's the better elevator speech of, of Boone Maven as? 

[00:05:38] Kate Ryder: So Maven’s a virtual clinic for women and families, and what we do is we cover everything from preconception and fertility care, through pregnancy, pediatrics, and menopause. You know, clients, we work with 2, 000 clients today around the world and across 175 countries.

And I think really where clients love working with us is we can be their front door to women's and family health. And so we see a lot of clients really leaned in both on the fertility side for the Benefits Administration as well as the maternity side because, you know, we drive outcomes in that segment.

[00:06:14] Griffin Jones: When you're saying clients in this regard, you're talking about patients? 

[00:06:17] Kate Ryder: No, we're talking about 2, 000 employers and health plans. 

[00:06:21] Griffin Jones: Okay, so clients on that side and then do you call, in clinics are they also called clients or do you just refer to them as clinics? 

[00:06:28] Kate Ryder: Yeah, our Maven performance network. So we work with, you know, hundreds in our Maven performance network, and that's really the contracted network through which we administer the fertility benefit and send our patients when we're administering a benefit for an employer.

[00:06:45] Griffin Jones: I want to go back more into your history. MAVEN, but first we'll start with perhaps what's more recent is adding on some trying to conceive poaching. But you already have a trying to conceive track or a fertility track, so how is this different from those other offerings in the fertility track, like your partnership with the Cleveland Clinic and, you know, there's And other things.

So what's new about this TTC coaching? 

[00:07:13] Kate Ryder: Sure. So it's something we're really excited about because everyone teaches you how not to have a baby. Most people do, at least. But almost none of us learn how to conceive. And then by the time, you know, people are ready to conceive, There's no clear place to turn and I think so if you think about a fertility product there's the administration component and that's that's kind of what a lot of people associate with a benefits product right you you say oh okay I can go to one of these clinics and my my employer or my health plan is going to pay for me and And I'm going to get my drugs shipped through this benefit and I'm going to get all my bills here.

But I think the other big thing is that if you think about the fertility patient, a lot of them, you know, don't yet know what pathway is right for them because of this lack of education that, that I kind of just mentioned. And so really are this trying to conceive coaching product is designed to help every member.

Get the full picture of fertility before they choose their pathway and then get the right pathway for them. And so what that may look like is someone could come in, maybe they're kind of really nervous about their reproductive health based on a TikTok video or things they've heard from their friends and, you know, they realize they have these benefits.

And so instead of just going straight to IVF, you know, they'll be able to talk to a Maven coach who can kind of take a larger step back and say, What are your goals? What's your health history? You know, maybe you don't need IVF. Maybe you need thyroid medication. Maybe you just need to adjust your diet or maybe you need to use ovulation strips.

So there's so many things that people can do to get pregnant naturally that, you know, oftentimes when people are entering that fertility journey, no one is being taught that. It's either you get pregnant naturally and you have no questions or, oh my gosh, do I need IVF? And so what we're trying to do is build that gray space in between.

[00:08:55] Griffin Jones: So is the TTC coaching funneling people to different types of diagnostics in tests? So how does it start? Like, how does a patient go through it? 

[00:09:04] Kate Ryder: Sure. So somebody kind of comes onto the Maven platform, they fill out an assessment, they fill out, you know, a little bit about their medical background, what their goals are, and then they talk to a conception coach.

And so the conception coach is going to assess, okay, do you need, should you go for a full workup? And, you know, do you need some testing? Or Are there just basic things that maybe you could try, like using ovulation strips, you know, that incredibly, it's a very easy thing. And a lot of people miss that step.

And so it's really kind of then becomes a one to one relationship between the conception coach and the member versus this kind of one size fits all model. And so the conception coach will work with the member to figure out what's the best for, for them. And, you know, it could be immediately that they go into IVF.

Because that is the right pathway for them. It could be, you know, get a bunch of tests and, and, and then adjust a few things. It could be trying medication and the conception coach connects them with one of our fertility doctors, reproductive endocrinologist. So there's so many different pathways and that's what we're trying to really drive, which is this kind of very personalized model of care.

[00:10:10] Griffin Jones: And if they do go to IVF to one of those fertility doctors that you connect with them, is that's the, What did you call it? Partnership of Excellence? What was it? The network? Oh, I'm David Performance Network. 

[00:10:20] Kate Ryder: Yes. 

[00:10:21] Griffin Jones: David Performance Network. 

[00:10:23] Kate Ryder: Yeah. It's a closed network of all the best clinics that we work with to send our patients to.

[00:10:28] Griffin Jones: How many fertility clinics are involved in that network now? 

[00:10:33] Kate Ryder: So over 400. It's always growing based on client need or certain geographies, but it's, it's US focused. We have a closed network in the US and an open network globally. 

[00:10:45] Griffin Jones: And so, for those folks that, that are, that are moving through that, that pathway, do you stay, can, do they stay connected with their MAVEN coach, the, throughout that process once they move to the fertility clinic?

[00:11:00] Kate Ryder: Exactly. So, you know, going through an IVF cycle, of course, they'll be working really closely with their doctor, but there's so many questions and so many things that happen, you know, outside the four walls of a clinic, and I think there's also things that, you know, this is, of course, both an art and a science, and so there's lots of questions that patients may have, you know, as they're going through things, maybe they didn't have a So, um, you know, when a patient is, you know, in a successful first cycle, you know, maybe they're hearing conflicting things from, you know, different doctors.

And so, and so our conception coaches are just there to kind of be that quarterback. And when they're actually going, you know, to a clinic to, to be able to connect them as well to, you know, other types of specialists who could be supportive. So, fertility nurses, you know, fertility awareness educators, dietitians, mental health, that, you know, all of these types of providers that support around the experience.

[00:11:50] Griffin Jones: This model of conception coaching prior to needing treatment, in many cases even prior to diagnostic, I think is really needed in the marketplace. I've seen other people attempt it, and I think I've seen other people even provide value. That's the patients that we're using really liked it, and sometimes I would see clinics getting referrals from those platforms.

I remember looking at a couple clinics referrals and seeing sometimes 5 percent of their patients would come from some of these platforms. But they couldn't make it work on a business model for whatever reason. Either it wasn't It wasn't something that the patient was going to pay for, it was something that the clinic might have fought them on an attribution.

The clinic didn't want to pay for it. And I saw this thing, it's like, okay, people are benefiting from this, but for whatever reason, product market fit, it isn't working. What do you think it is about the way Maven is set up that will allow this to work from a business standpoint? 

[00:12:49] Kate Ryder: Yeah, no, it's a great question.

We, you know, it's, it's part of our benefits administration product. So it's not a standalone feature, but it's, it's, it's, it's a really critical component that drives the, the clinical outcomes of an otherwise, you know, administration heavy product. And so we kind of, MMB, Maven Managed Benefit is what we call it.

And we call it kind of a next generation Benadmit fertility benefit because you have the, the design components, that you work with the client with, which is the clinic, you know, the clinic network design. We have the contracted rates with the clinics, you know, the, the, all of the, you know, administration that goes on behind the scenes when you're implementing a benefit.

But what was missing when it was just a payer doing this was, well, let's make sure though that the patient's And so, really, it's that combination of care and coverage that is so unique to Maven and ensures that, you know, this is a business model. Not only that's going to work, but it's, it's actually, you know, really, really outcomes focused, which is unique for, I think, the industry.

[00:13:57] Griffin Jones: So the TTC poaching, that's just for those that have the Maven Managed Benefit? 

[00:14:03] Kate Ryder: Exactly. I mean, that's the, it's wrapped around our, our management, our Maven Managed Benefit. Some, some clients, to be honest, if they, if they do administration through their health plan, they can still kind of bring this on as a wraparound.

So, you know, it still can be a standalone product, but, but mostly we see clients really excited about the integration with the coverage. 

[00:14:25] Griffin Jones: This might be a dumb question, but that's never stopped me from asking questions like that in the past. Are those that have maybe managed benefit, are they only those that get it through their employer?

Can freelancers and self employed people also get it, or is it almost always through employers that are typically, you know, similarly structured, you know, that, that get insurance by the, the normal laws of Affordable Care Act, et cetera? 

[00:14:53] Kate Ryder: Yeah, at this point, it's only through your employer. 

[00:14:56] Griffin Jones: This seems like it was important to add.

Did you see it, like, first as a Is there a benefit necessary for the patient or was it necessary for the, the employers because it's like, well, we have, we have all of these people and, and we might be paying for people that to go through IVF that don't really need it. How did the, what was the impetus behind it?

[00:15:22] Kate Ryder: Yeah, so I think the main impetus was, was that it was this, the patient journey, right? It was the patient experience. So many people just not knowing what to do. And it was our fertility doctors actually saying, I'm seeing all these, these patients and they come in and they don't need IVF, but they're either.

So anxious, they are misinformed and they're now thinking, oh, they have, you know, they took an AMH test and their AMH is low and, you know, that's just one input into someone's fertility profile. And, and therefore, you know, they're asking you to go directly to IVF because they have three cycles or, you know, and they have rich fertility benefits and they're, and they're, and they don't even need to, there are so many other things that they can be doing.

And so, I mean, it was. It was both a combination of the patients and the providers themselves. I know, you know, one of our medical directors, Brian Levine, and, you know, and, and Yael, who, you know, Salem, who's another medical director. And, you know, we were, we were definitely hearing some stories from them too, as well as just some of the fertility doctors who work at the clinics in our network.

And so we went on this listening tour of both the patient side and the provider side to understand like, all What's needed here? Because it feels like there's a major gap, and particularly as Gen Z and Millennials increasingly, and particularly Gen Z, is getting so much of their health information from TikTok, social media, there's, there's just, there was just a lot that kind of needed to be unpacked.

And, and, you know, they're getting all of the, all of these kind of scary stories of infertility that may or may not apply to them. And then they were kind of leaping to conclusions like, well, I need to go freeze my eggs now, or I need to go into IVF. And so this is where we really wanted to make sure we were taking a larger step back when someone was ready to, you know, start their family building journey to say, okay, let's just really give them that personalized support and that That evidence based support with a conception coach as the quarterback, but then also connected to the larger Maven network of fertility nurses, of doctors, of mental health providers to say, okay, let's figure out what's right for you.

And then we design your benefit or we work with the payer who designed your benefit. So we can actually then help you navigate what comes next if it is IVF that's needed. 

[00:17:37] Griffin Jones: Yeah, the younger the patient, typically the more nurturing they need in the process, right? I remember when started off in the field and people would say, you know, patients that come to us from scheduling an online form are more likely to cancel than someone referred by a doctor or someone that, you know, we've spoken to and has come in previously.

And I'd said, well, yes. But it's going to be more of that. You're going to have less people either coming through their OBGYN or less people calling you on the phone, more people that want to kick the tire in some way. And so for a long time, that's been really inefficient because it's not like we have a really good CRM that links to people's EMRs.

And even if you did, there's still a lot of nurturing that has to take place in, in that process. And I can see how you being spread out across the different verticals allows you to do that. Where does the virtual care end and the moving on to the performance network partner begin? 

[00:18:36] Sponsor: Organon is dedicated to delivering impactful medicines and solutions for a healthier tomorrow.

Guided by its mission of being here for her health, Organon proudly recognizes fertility providers around the world focusing on care equity. We believe everyone should have access to fertility education and treatment. By collaborating with providers, advocates, and communities, Organon is working to elevate fertility awareness, expand resources, and invest in innovative products that help more aspiring parents access the care they deserve.

Every journey to parenthood is unique. Organon stands with you. 

Learn more about Organon's resources at FertilityJourney.com.

[00:19:26] Kate Ryder: So, well, the virtual care never ends. We're always kind of in someone's pocket, which is really cool about Maven, but Really it's, you know, if, if they're working with a coach, let's say they're on some plan with the coach and you know, they, they decide six months is the right time that if they try for six months based on adjustments, based on ovulation tracking, based on whatever they need, if they're not pregnant, maybe that's the right time.

Maybe it's three months depending on their age. So again, there's no like one, you know, this is the pathway everyone follows because it is so unique to each patient. And. You know, I, I think, you know, for example, we have a patient who has PCOS, was told, oh, you're going to need IVF, you're not going to get pregnant naturally.

She worked with our, our care team and a coach, you know, for three months, got pregnant naturally. So, you know, her pathway ended at a natural pregnancy. We have another. patient who actually came to speak to our, our growth team a few months ago for, for a growth kickoff event. And she was talking about how she went to this one clinic and, and, and the, and the doctor, you know, did a few cycles.

It wasn't working. They said that, you know, she had unexplained infertility. She was 35. So not, you know, of an age where, you know, it shouldn't work. She had already had a kid at home. And so then she worked with someone on Maven and it was just like, well, maybe you should just try another clinic, you know, so that was an example where it was just going into it with a different doctor and that different doctor kind of said, hey, I think based on the protocols here, you are over medicated on your cycle with this clinic, let's try this new protocol and then sure enough, really successful retrieval, got five embryos, and two of them are her children today.

So, I think that, I think, you know, those are some examples where, again, it's, it's not a one size fits all, unlike, you know, pregnancy, where it's, it's just, it's a much more straightforward population, you know, every month you're gestating a baby. You have a specific profile, you're on a specific risk track.

Fertility, again, it's, it's, it's just, you know, there's ups, there's downs, there's, there's things you can do and everything works out. There's things, you know, you're, you really do need the IVF, but then you need the right clinic. So there's a lot of considerations that go into supporting our patients to get the baby that they need.

[00:21:43] Griffin Jones: Do they do testing when they're with the MAVEN care team prior to being referred to a performance network partner? Like, do you send them out for AMH or FSH testing or anything like that prior to sending them to a clinic? 

[00:21:58] Kate Ryder: Yeah, so we have some partners who we can send them AMH tests and we can, but we also will say, Oh, maybe you should go into one of our clinics and, and, you know, get an entire workup and then they'll, they'll, that clinic is already in our network.

So, you know, we'll then discuss the results of that together. So it really depends again on the patient. Some of them, particularly. The ones that are older who, you know, there's not a ton of time and age related fertility decline, you know, is, is a, is a very real thing that they could be experiencing. You know, that's when you want to kind of do things quickly, you know, for patients that are much younger that are still kind of just figuring it out.

You know, those are the ones that, you know, they might get our, we have an ovulation strips partner as well. They might try that. They might take an AMH test, kind of, you know, discuss, discuss all the results and, and there's a little bit more time, if that makes sense. 

[00:22:46] Griffin Jones: How did you build vertical after vertical?

And, and I'm really curious about this because going back earlier in your career, you were a journalist, which I find to be interesting as somebody who is building a trade media company and who acquires journalists. I think Did one of my journalists ever go build something like this? Yeah. It's pretty unique.

You wrote for the, the Wall Street Journal among some other publications and so I guess maybe to, to see how you, you added one vertical after the other. We have to, we have to start from the beginning. So 2014 begins Maven as this virtual family and women's health platform. What were the first offerings?

[00:23:25] Kate Ryder: The first offering was the, the telemedicine, right? So we started, we knew we were going to be a benefit. I had been very lucky to work in venture capital for the two years between being a journalist and starting Maven. So I had observed a bunch of digital health companies start, try to go consumer and realize that the better market.

was employers. So, so we were headed there, but we knew to have the real consumer DNA of product that we needed to cut our teeth and get that momentum early on from consumers. And we still have, by the way, that product today on the market, just because, you know, our mission is access. So if someone wants to download Maven and pay a little bit of money, you know, out of pocket for an appointment, they can.

So that was where we started. And then our first benefit that that we delivered to employers was a maternity benefit. So at the time this was 2015, 2016, it was really, you know, people just had these nine month phone lines through their health plans where, you know, you could talk to a nurse. The utilization was super low.

And so we brought in postpartum care and return to work support as part of a more holistic offering. And we packaged that up and that was kind of, you know, product number one on our benefits platform. And then fertility, I mean, you know, of course, not surprisingly, you know, and the WHO just said it was one out of six couples suffer from infertility.

So even in our first hundred patients, we started getting demand for fertility services. So we launched this kind of just fertility support wraparound product that had all the access to our specialists in 20, So it was pretty early in our, in our journey. It was very kind of maternity fertility back to back.

And then we expanded into benefits administration late 2019, early 2020 after demand from some of our clients saying, Hey, we'd love to just consolidate all women's and family benefits through, you know, one platform and it should be you. So can you build us this? And so we built. A light touch reimbursement platform called Maven Wallet.

And that was really for smaller clients. And it was also, you know, not just for fertility services, but if someone wanted to reimburse for doulas or backup child care, which was popular during the pandemic, you know, they could use that reimbursement platform for whatever they wanted. A lot of the, you know, sub medical spend.

And then, you know, again, we just kept hearing from clients and members, you know, they, they wanted full soup to nuts, you know, Administration and everything consolidated on one platform. You know, in the meantime, we had launched pediatrics, menopause, and so that's really what led to Maven Manage Benefit, which is our full, you know, fertility carve out platform that we launched, that we built last year and launched earlier this year.

[00:26:07] Griffin Jones: Benefits administration started in 2019, 2020 with this light touch reimbursement. All the even wallets. And you mentioned that some of your clients had brought this up to you. They wanted the N10 solution. Why, why you though? There were, there were some other people in the marketplace and yeah, but also there is the usual suspects of the traditional insurance companies and I suppose some others as well.

Why was it that they were approaching you to do this? 

[00:26:39] Kate Ryder: Yeah, I think two, two reasons. One, we're pretty obsessed with the member. I've had three babies myself on Maven and, you know, we're, we're a real technology company in that regard. So we have tons of engineers and we're constantly kind of following the member and building what he or she does.

And so, we're able to show that through engagement data. It's why, you know, all four National Health Plans also partner with us because, you know, the data that we're showing on the engagement side and the member satisfaction side is strong. And also, I think, unique, like, for example, we have pelvic floor specialists as part of our maternal maternity track.

You know, that's because That women need that. And there's not necessarily kind of like, wow, this, you know, people weren't ringing the bell with that, or at least the buyers weren't, but we knew the members loved that. And we were, you know, we've had those types of providers in our network since 2016. So just being really thoughtful about what members need and where the gaps in the care model are.

And then the second thing is, is the clinical side. So We're, we've always been very focused on clinical outcomes because the way to really partner with the system and ultimately help the patient is, you know, take one of these, this highest cost area of healthcare, which is the kind of fertility and maternity journey and, and drive real outcomes.

So when a lot of our clients and, and our payer, payer partners as well, started to see a lot of our maternity outcomes validated by claims and by third parties, you know, the fact that. We were reducing spend associated with NICU. We were reducing rates of C section and, and well driving, you know, a better and more engaged member experience.

I think it was, you know, and serving the menopause market in a thoughtful way and serving the pediatrics and parenting market in a thoughtful way. You know, we just earned the trust of our partners so that they were like, you know, we want, we want you to really kind of tackle what we're seeing in fertility.

right now at this moment in time, which is, you know, the system's still not totally working for members. The costs are going up every single year. And, and, and so, you know, and the industry is just changing a lot. Like you can't keep up. So can you, you know, is there, can you do something? 

[00:28:47] Griffin Jones: And so members is patients.

[00:28:48] Kate Ryder: Yeah, members is patients. 

[00:28:51] Griffin Jones: Making sure that I'm keeping all my, all my definitions. 

[00:28:54] Kate Ryder: I know to our clinical team, they're patients, to our product team, they're members, but yes, member patients. 

[00:29:00] Griffin Jones: Well, I'm, I'm probably also offending your training as an English major because I'm jumping all over the place and not starting with one thesis, but Maven is an entity.

I think you have to break the elephant from different parts in order to be able to understand it. And so I, I want to go back to what sort of the value thesis that you started with because as you're talking about, you know, sometimes we connect people with a pelvic floor specialist because that's what they need.

And so I originally may have been starting because partly because you have members, patients that have so many different needs and they're often left to their own devices to be able to find all of the different providers and such that they need. So tell me a little bit more about why this isn't just.

Answered by going to an existing health system, wherever it might be, and I go to one specialist, and she or he refers me to another, and then she or he refers me to another, and I'm all in the same network. Why isn't that it? Why isn't that the case? 

[00:30:00] Kate Ryder: Well, I think maybe what, yeah, what you're, what you're kind of getting at is like, why, why do people want something new if like, it's people are kind of doing this already and, you know, referring specialists and whatnot.

But I think the other way to think about it is that we, we have a really unique business model where we are. are incentivized to do what's right by the patient and, and put them on the right pathway, regardless of, you know, whether they go through IVF or not. And so we don't, we don't, with our clinic network, we don't take markups from clinics.

So we're very agnostic. If somebody goes through a cycle versus goes through kind of a natural conception pathway. And so I think that is another, another thing that from the payer and the clients they really like because they know that there's not gonna be hidden fees and hidden markups across drugs spend across cycles.

They know that. You know, we're very transparent in how we price and how we charge. And so they know that really we charge on kind of the member experience, the clinical care management, and we, and as a result, you know, it's, it's not just kind of better clinical outcomes, better member experience, but it's a new business model that's more value based in an industry that was tipping very heavily into B for Service, which is, you know, a bunch of models that, Maybe make more money when more people go through IVF, which can lead to unnecessary cycles.

And so, so that's something I think that also we challenged about the status quo, and, and the market responded well. 

[00:31:34] Griffin Jones: Is it not enough, like I live in Rochester, New York, for example, and it seems like University of Rochester Medical Center owns everything. They, they own the system my wife works for, they own, uh, the primary care provider that I go to, I went and saw an ENT, they own that.

So is it not the case that, that someone can just find all of the specialists that they need in, in one place through a, through a health system? Because it seems like in addition to the employer side that may even also helps with this, this need to, to connect people to the different solutions that they need.

Why isn't that the case in a place like where I live, where it seems like a group owns every, you know, a, a clinic in every specialty that there is? 

[00:32:15] Kate Ryder: Yeah, so I would say what's, what would be unique about that, as obviously it's, you're probably part of an academic medical center, right? And it's, it's one system.

And so I don't know the specifics of the Rochester market. I would assume, are there more, is there more than one fertility clinic in Rochester to go to? 

[00:32:33] Griffin Jones: I think there might be one other lab. There's one lab within the academic system, and then there, there's at least two other offices, but I don't know if those two other offices have labs here in Rochester.

[00:32:47] Kate Ryder: Got it. Okay, well then, I mean, I think in that, in that sense, In that system, patients are going to want second opinions. They're going to want to better understand things. If you're in kind of a one provider system, there's lots of pros in that it's more transparent, it's probably more seamless on the administration side, it's less confusing, but then You know, a member or patient, you know, they might want to have second opinion, something might not be working for them.

And so Maven's network on the telemedicine side is able to give them that, which I think is really important. 

[00:33:23] Griffin Jones: How does Maven interact with the traditional insurance companies, if at all? 

[00:33:29] Kate Ryder: Well, we're partners with all of them, right? Aetna, Cigna, Anthem, United. So we, for Maven Manage Benefit, we would, we always would need to be checking whether, you know, where someone is against their deductible.

So we, so we are integrated with them in that regard. If someone, you know, wants to buy components of our platform and various products, oftentimes they can actually buy them through the health plan because we are partners. So if they wanted to buy Even Maven Managed Benefit is available through some health plans, but if they wanted to buy the maternity product, pediatrics, menopause, our global product, you know, they, they can do that.

So a lot of clients, particularly some of the smaller ones, really like to do that. It's easier from a contracting standpoint, from a security standpoint, you know, it's just one addendum. So, so yeah, so we'll, we'll see a lot of, a lot of people kind of, you know, take that option given the, the partnerships.

[00:34:23] Griffin Jones: I'm going to ask you to speculate, so I know that you're just totally speculating, but for me, from someone that doesn't really know the insurance space well, I just see these large companies like Aetna, United, Blue Cross, etc. losing a potential segment of their business, and maybe it's just too small for them, and that's why the Mavens and the Carrots and the Progenies and the Kindbodies have filled into some of that space, but if David Sable's right, and we do get to be a 200 billion dollar industry in the next decade or so.

Do you think that they will come back? Do you see the Uniteds and the Blue Crosses and the Aetnas, etc., coming back for the fertility benefits that they're not currently getting? We providing? 

[00:35:07] Kate Ryder: Listen, I, I think it's a, it's a great question. We, what we see at least, uh, and from our, from our plan partners is that they, they also follow what the client's asking for and what the member's asking for.

So. You know, we've, there have been so many gaps in women's and family health that it's, there's a lot for the payer to kind of catch up on while they also have all these other priorities that they're working on. So for example, when menopause came up, like no one had a menopause product built out. And with smaller companies like Maven, we can, we can build that product.

faster, we can figure out very quickly, because we're a technology company, we can A B test and figure out very quickly what the member is looking for, how to drive that engagement, how to make the member happy, get them symptom relief, how to make the client happy, get their people supported. And so, so that was an example of, you know, it's not necessarily an example of, you know, fertility, but it's an example of this whole category being so underserved that that's kind of what we do in our specialty.

And so, you know, as we've continued to deepen our partnerships with the health plans, I think there, it really does kind of work on both sides because they come to us and they say, Oh, we have our clients asking for, for this. And, you know, right, right now, for example, doulas, doulas is huge in the market right now.

Everyone wants a doula benefit. Well, we do that. We can do that for our partners. And so. We also help our, our plan partners really be able to provide their clients robust benefits. So whereas maybe there might've been some duplication like on the maternity product, for instance, because, I mean, that product's been in the market for eight years because we were able to demonstrate cost savings and, and member satisfaction, then, you know, Some of the plans and hopefully all of the plans one day, we're able to say, okay, you know what, like this is, you take it, you are our partner for so many other areas of this and you're demonstrating real, you know, validated outcomes and so we're fine you taking it because it is, to your point, it's just a tiny little sliver of a service that they provide and they do at the end of the day, like they also are a client service business, just like we are.

You know, we are. And so, so anyway, so I, I think when it comes to fertility, it just depends, you know, fertility is not a standalone. I think what we're really going to see is fertility is part of a broader women's and family health strategy. And so really it's, you know, you have to, you can't just do fertility.

You have to kind of do it all. 

[00:37:37] Griffin Jones: I was not planning on asking you this, but I just thought of it as you were saying that I've had more geneticists on the show recently, and they are starting to convince me that reproductive medicine and genetics will, are, you know, they're, are no longer going to be siloed in the future, that those two fields of medicine are going to be much more integrated than they are now.

How do you view that? 

[00:37:59] Kate Ryder: Thank you. I would tend to agree with that. I think there, I know there's a lot of discomfort right now a little bit because it's so new and people are wondering are we entering a Gattaca type world, um, but when the technology is there and if you can kind of prove safety and efficacy and ultimately give patients choice, I think that, you know, People will be more comfortable with it over time.

Now, you know, I don't know how people are going to feel about actually manipulate, like, genomics and manipulating, you know, certain traits and attributes. Like, I think that's, is that Gattaca 2? I haven't seen Gattaca in a while, but it's like Is there a Gattaca 2? But, but certainly I think There is increasing, like we're already doing it, right?

If someone has the BRCA gene and they don't want to pass that gene and trade on to their children, like what a, what an amazing thing that they can, they can do. And so I think more and more people are getting comfortable with that. So I think as more and more, there's more and more patient stories and, and it will become more, more mainstream.

[00:39:05] Griffin Jones: You think genetic counseling is an offering that you all might one day offer? 

[00:39:10] Kate Ryder: We do offer genetic counseling. 

[00:39:12] Griffin Jones: So how does that work with the, uh, with the, with the Maven managed benefit, well, I should say with the TTC coaching? 

[00:39:20] Kate Ryder: So part of the TTC coaching is, you know, you have your conception coach who's the quarterback, but then you have this broader Maven virtual care network that you can help your patients get their questions answered from.

So we have over 30 different types of coaches. of specialists in that network. And I met one time, someone was like, there's no way you have 30 different types of specialists. I was like, Oh, I can list that because there are so many, you know, whether it's a surrogacy coach or an egg, you know, an egg donor consultant, well, genetic counselor is one of them.

And so again, like, whether it's for fertility or maternity, quite frankly, because if you have a baby and you might, and, and, and there's, You know, they come and there's, there's some genetic anomaly that they're born with. Like you actually do want to have a genetic counselor who's talking with you in conjunction with maybe some of the other specialty doctors to understand what your options are.

And so, so yeah, so we have a few great genetic counselors through Maven that as patients kind of raise their hand and say, this is what I'm looking for, our, our coaches or our care advocates can, can link them up. 

[00:40:23] Griffin Jones: I've come as a, as a small business owner to be just so impressed by people who build much larger enterprises than my own.

Because I know even building a small business, like, man, this is tough, like there's so much to learn. Drinking from a damn fire hose so often and, uh, you know, learning how much you have to learn of a given thing and you, and there's so many different things that touch your business. You started originally as a journalist in business journalism, then you became a venture capitalist.

Were you, from the beginning of your career, were you viewing those as steps to get to Entrepreneurial executive leadership, or did you, just like everybody else, kind of go to college, maybe think of just like one step ahead of you, and then that one step led you to see more? Which better describes your career trajectory?

[00:41:20] Kate Ryder: Well, I grew up with a dad who was an entrepreneur and my aunt was also an entrepreneur and my mom would help both her, her sister and my dad. So I grew up in a very entrepreneurial family. I've always been pretty, pretty focused and disciplined, but it wasn't necessarily for entrepreneurship. In the very beginning of my career, I wanted to be the Next female Hemingway.

And so I moved to Spain for two years, right after I graduated college. 

[00:41:47] Griffin Jones: And I woke up at six, 

[00:41:50] Kate Ryder: I did go to quite a few and was shocked to see that one of the dishes served in the bars next to a bull rig was like bull testicles. That is a delicacy in Spain, particularly New York. You got to get steered somehow.

I tried it once anyways, but, and so I woke up every morning at six and taught myself. How to write. And it wrote a terrible, terrible piece of fiction during that time. I thought, hey, you know, I think maybe I love to write, but I, I then, you know, was a journalist and pursued a lot of, a lot of journalism for a bit.

And, Really when that industry started changing a lot with the internet, you know, the, a lot of local papers were folding, a lot of things were going digital, a lot of, you know, the ad models suddenly, you know, didn't make as much sense and business models were kind of up in the air. That was when I really kind of thought, okay, maybe, maybe I don't want to sign up for this industry long term.

One of my mentors also was like, you should jump ship now while you're so young in journalism. And so that was, I tried to start my first business off the back of one of the stories that I had written for The Economist out in Southeast Asia. And that moment, it was nothing to do with healthcare, it was a travel business, but that moment, I, it felt really good.

And that was when, you know, my, my father jumped in and said, you'd be a good entrepreneur, but don't, go learn on someone else's dime first. And so then I, that was where I, I did the two years in venture capital and kind of, you know, it was all timing, right? I fell backwards into covering digital health.

And then it was also right around the time that my best, first friends were having kids. I knew I was going to have kids very soon. I started my journey with a miscarriage, which was very unexpected. And so that, you know, MAVEN was really kind of came from that time. 

[00:43:35] Griffin Jones: Learning off of someone else's time and under their tutelage, I think is such valuable advice that I did not take that I wish I did.

And when I think of Doing things differently in hindsight. When I think of going and learning under someone else, I often think of going to the operator and trying to get as much access to them. And so, like, you could have gone and been the chief of staff for some CEO somewhere or, or, or someone to be.

You decided venture cap. You tried. 

[00:44:03] Kate Ryder: I tried. I got rejected for all those jobs. 

[00:44:06] Griffin Jones: Because they wanted more experience? 

[00:44:08] Kate Ryder: Yeah, I was living in London, it was the time of the first Eurozone crisis, and you know in America, it's, it's, it's more normal for people to jump around between careers, but it's not as common in Europe.

So I, I applied for over a hundred jobs at Google and all these small companies, like I'll do whatever, and it was actually, I got very lucky that the only job I got was at this venture capital firm. 

[00:44:34] Griffin Jones: So, it was on your radar to go work for an operator, it just didn't pan out. Oh, very much. 

[00:44:38] Kate Ryder: I tried. 

[00:44:40] Griffin Jones: If you could do it again and you had the ability, do you think you would have been able to see more as working under an operator?

Or did working for a venture capitalist give you more of a view? If we're sticking to that same time frame of you've got two years and no more. 

[00:44:56] Kate Ryder: I would say that I would choose the Venture Capital mainly because I, I made tons of operate operational stakes that I had never hired anyone before starting Maven.

So it would have been amazing to get some of that experience, but fundamentally, you know, as a, as a founder, like your job is to make sure everyone gets paid every two weeks. And so I take that job really seriously. And, and so, you know, maybe one could argue that. I had to learn on the dime of the VCs who funded me in the early days, but I'm a fast learner, so , so you know that, and they's still around, right?

[00:45:32] Griffin Jones: They'll, idea is they're gonna make it back . 

[00:45:36] Kate Ryder: But yes, I, I think it was helpful to learn how to raise capital under, you know, build that network. That was where our friends and family around came from in the early days. So, so that was, I, I would, I would choose that. I think I got very lucky to get that job in bc.

[00:45:51] Griffin Jones: You got that experience with the financiers. Did it also give you experience with different operators? Like, could you, did you interact with their portfolio clients and you could like get to know some of those founders and see what they were doing? 

[00:46:03] Kate Ryder: Yeah, exactly. I got to attend board meetings as an observer.

It was at a time where the, it wasn't as, you know, the index venture is the fund now, you know, they're a big mega firm, but back in the day, you know, it's It was more, you could walk into any meeting you wanted on a Monday and watch any company pitch. And then I got to know a lot of entrepreneurs as well through that, through that time.

Some of them invested in Maven and became angel investors and mentors. So, so that was also very helpful. 

[00:46:33] Griffin Jones: I know you can't give too many details probably, but as specifically as you can be, what were some lessons that you pulled out from there that, you know, lessons that you think of that were very useful to you in starting Maven, either that you wanted to replicate because you saw something worth emulating or things that you That was a mistake that they were never able to re come from, and I want to avoid that like the plague here.

[00:46:57] Kate Ryder: Well, I think it was really clear, even from those Monday meetings, that when I observe entrepreneurs pitching their products, is the best entrepreneurs really cared about their product, and they knew their product, and they were, you know, consumers of their product, often. And so, that's one That was something that I just, I couldn't, I couldn't just go start, you know, a business with a product I'd never use.

And so that was the, you know, I, that was one of the, I think the very early lessons I took. I had to A, really know the product, B, the user of the product, but then also deeply, deeply care about the problem. And you know, as the next journalist, like this is an endlessly complicated story. It's why in the, you know, in the beginning of this podcast, you know, what are the journeys?

It's like, gosh, the journeys are so different patient to patient. And I've. I've spoken to hundreds of them. I can't, you know, maternity is a little bit more linear, but not fertility. And so, so anyway, so I think, and then the business of healthcare is just endlessly complex. And so it's certainly, I think it was that, yeah, that was a, that was a lesson that I took very early, which I think was great.

Clearly the right lesson 10 years later. I mean, you know, I I'm still very energized, but I, I, I, some of my other founder friends are very tired after 10 years. 

[00:48:11] Griffin Jones: Yeah. Well, I, you're going to need that energy given, given, uh, you know, what you've, you know, building the company into a billion dollar valuation to the.

And now how many employees do you all have right now? 600 corporate employees. And then you said, was it 2, 000 clients? 

[00:48:29] Kate Ryder: Yes, we have 2, 000 clients and tens of millions of lives covered. 

[00:48:34] Griffin Jones: So you're going to see that energy for as long as you're at the helm. You have good people helping you. I think the only one at the leadership level that, well, you mentioned, I know Dr.

Levine pretty well, great guy that may have connected us in the first place. I've gotten to know Dr. Shah. And I enjoy corresponding with him. How do you get people like this to come work for you at such an early stage? Because I see it all the time with companies and some. I really struggle to get that talent and they can come in with a boatload of money and they can get some people, but it just doesn't like totally gel together.

And when you have these people, and you mentioned 30 different specialties, you know, you need people that are deep experts in those areas. And why do they want to come work for somebody who's not already a deep expert in that area? That like assembling that team is, is really, really hard. What, how would you describe your strategy in doing that?

[00:49:34] Kate Ryder: Well, I mean, I just feel endlessly grateful. I think there, you know, there's, there's no I in what we're doing. It's all a we. I may be the founder and the face and I, and so is Neil, you know, I'm so happy he shares that burden with me. But, you know, we, we tell the story. So, I think it's a really good story externally, but at the end of the day, I mean, it's our incredible team that's doing everything behind the scenes.

And I think what unites us all, I mean, it comes back to culture and values. Um, you know, I think we all really care about the patient and changing the game for the patient. So, and everyone has a horse in that race, whether they are the patient, whether they're, you know, brother or sister or mother or father or family member or friend was the patient or whether it's just some bad experience they've had in health care and they really want to see things change.

And so I think we are authentically mission driven. I'm very authentically mission driven. And, you know, I just try my hardest and try to hire people that are way smarter and better than me at, in every, every, every regard. 

[00:50:34] Griffin Jones: Well, there's more we could dig into with that, but by the time I have you back on, you will probably have done a whole bunch of other things that have been in the news and that'll be worth unpacking.

I look forward to having you back. In the meantime, as we conclude, my audience is fairly broad in the fertility field. It's a lot of network execs. It's a lot of REIs. It's a lot of lab directors. There are also people that are venture capitalists and private equity folks that are entering the fertility field.

And so, the, the gamut runs pretty wide across those three spheres. It also runs fairly wide from junior to senior. How would you like to conclude to our audience? 

[00:51:16] Kate Ryder: Yeah, listen, I think we're, don't accept the status quo, it's, we're at such an exciting moment in time with so much fertility innovation coming online.

So much coverage and an entire industry that now looks at fertility as part of essential care, which is why so many companies in our space are having so much growth, so much new technology with AI and, you know, and whatnot. And so, so yeah, you don't, you don't have to accept the status quo when there's, there's this much change and this much opportunity that we can really design an industry that gets every patient the outcome that he or she deserves.

[00:51:51] Griffin Jones: Hey Ryder, CEO of Maven. Thank you very much for coming on the Inside Reproductive Health Podcast. 

[00:51:56] Kate Ryder: Thank you so much for having me. 

[00:51:57] Sponsor: This episode was brought to you by Organon. Organon is committed to championing care equity in fertility by elevating education, expanding resources, and investing in innovative solutions.

Organon stands with aspiring parents on their unique journeys. Learn more at FertilityJourney.com

Announcer: Today's advertiser helped make the production and delivery of this episode possible, but the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the advertiser. The advertiser does not have editorial control over the content of this episode, nor does the advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the advertiser.

Thank you for listening to Inside Reproductive Health.

224 The Best of Fertility Network C-Suite

DISCLAIMER: Today’s Advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, nor does the Advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the Advertiser.


Since 2019, Inside Reproductive Health has conducted over 220 interviews, featuring prominent physicians and executives from numerous fertility companies.

Among them, nine CEOs continue to lead their respective Fertility Clinic Networks or chair their network’s board.

Together, their networks have overseen an estimated 1.6 million IVF cycles and other reproductive treatments that have resulted in over 2 million pregnancies,

This is an episode you don’t want to miss as we showcase:

  • Gina Bartasi and the only three things she believes matter in healthcare

  • Dave Burford sharing his battle-tested sales advice

  • TJ Farnsworth’s entrepreneurial journey and his perspective on the necessities of field wide collaboration.

  • Dr. Kshitiz Murdia’s reasoning on why doctors make good CEOs

  • Marc Segal’s perspective on private equity and its place in Fertility’s future

  • Francisco Lobbosco’s first 100 days as CEO and the power of listening

  • David Stern’s steps to finding the right financial partner (Hint: It’s like a marriage)

  • Lisa Van Dolah’s philosophy of transitioning nurses into executive leadership roles

  • Andrew Meikle discussing the power of perspective (Both patient & entrepreneur)


Dave Burford, CARE Fertility
Website

Gina Bartasi, Kindbody
Website | LinkedIn | Facebook | Instagram

Dr. Kshitiz Murdia, Indira IVF
Website | LinkedIn | Facebook | Instagram

TJ Farnsworth, Inception Fertility
Website | LinkedIn | Facebook

Francisco Lobbosco, FutureLife
Website | LinkedIn

Marc Segal, US Fertility
Website | LinkedIn | Instagram

Lisa Van Dolah, Ivy Fertility
Website | LinkedIn

David Stern, Boston IVF
Website | LinkedIn | Facebook | Instagram

Andrew Meikle, Fertility Partners
Website


Transcript

[00:00:00] Griffin Jones: Since 2019, Inside Reproductive Health has conducted roughly 230 interviews and counting featuring prominent physicians and executives from numerous fertility companies across the world. Among them, nine CEOs continue to lead their respective fertility clinic networks or chair their networks board.

Together, their networks have overseen an estimated 1. 6 million IVF cycles and other reproductive treatments that have resulted in over 2 million estimated pregnancies. 

Sponsor: This episode was brought to you by Organon, Organon is committed to championing care equity in fertility. By elevating education, expanding resources, and investing in innovative solutions, Organon stands with aspiring parents on their unique journeys. Learn more at FertilityJourney.com.

Announcer: Today’s Advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, nor does the Advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the Advertiser.

[00:00:28] Kevin Ali: Hi, I'm Kevin Ali, CEO of Organon, and at Organon, we're committed to engaging with leaders across reproductive medicine. I'm proud to help introduce the best of Fertility Network's C Suite.

For the Inside Reproductive Health podcast. 

[00:00:43] Griffin Jones: Thank you, Kevin. Our best of reel begins with the CEO of Inception Fertility and the Prelude Network, TJ Farnsworth's vision emphasizes the power of collaboration among networks and clinics to advance the fertility field. 

[01:00:00]Now you're at the head of one of the largest fertility networks in the Western world, and it didn't exist five years ago, and so talk about that speed. 

[00:01:07] TJ Farnsworth: Yeah, so I think that, you know, we opened our very first practice from scratch. We didn't want to inherit, you know, ideas, not that ideas from established practices are bad. We've got some fantastic practices as part of our network that have been around for 20, 25, 30 plus years that bring a ton to the table.

But we wanted the opportunity to be able to experiment with things and ask the questions of why are things being done the way they are? And the answer being that's just the way they're done is always a bad answer. There may be a lot of great answers, but that's just the way it's always been done is never a good one.

So That allowed us to challenge what we can do and experiment. And then we also have the, we look at it as the best of both worlds. And then we have practices as part of Zora Network that have been around for, you know, with Eastern Fertility Specialists in Houston, which was our first acquisition practice.

They've been around for 25 plus years, you know, to the President's Network with RBA and TSC and NYU, bring a ton to the table. And the idea that we can bring the knowledge base From all of these places, people that are challenging the norm and saying, why can't we do things differently with de novo development from scratch operations to establish practices that have been doing it in such a way that really does work and those work for a really great reason.

And that way we can take the best of all worlds and combine them together. It's sort of been a unique approach. To how we grow the business, it's allowed us to grow into, you pointed out, you know, one of the largest networks in the world, and we're very proud of that. And mostly we're very proud of the fact that the way it came together, because it came together in such a way that lots of different people bring a lot of really great talents, really great experiences and really great processes to the table that we can blend to create the best of all worlds.

I'd love to see a whole lot more collaboration with our industry. You know, I think that coming out of a different specialty, I am surprised at all a return at how the lack of collaboration that exists between all of the big national networks and the independent practices in terms of sharing best practices, what can we be doing to make them successful?

You know, to the extent that the other national networks are successful to the extent that other independent practices are successful. That's good for me. That's good for inception. That's good for all of us as an industry. We want to see people be successful. And you know, we need to focus less on our competition amongst ourselves and more on our customer as our patient.

And that can be done through greater collaboration. 

[00:03:39] Griffin Jones: Rather than dictating from the top, our next guest engaged with staff across all levels, gathering insights to guide future life's growth. Hear how Francisco Lobbosco spent his first 100 days as CEO of FutureLife. 

So that leads you after your 100 days to recommend changes, and you said that they accepted all of the changes you proposed. What were they? 

[00:04:01] Francisco Lobbosco: So listen, so I went on by having, let's say, Um, one strong mandate, which was not imposed by anyone, but I could read it through my first a hundred days. Future life from a medical perspective is very well positioned and our medical outcomes are it. Fantastic. Francisco. Now you know that don't touch that.

Right? So let's, let's make sure that whatever you do, you don't mess up with the medical excellence that we're having in the business because that is what describes us. But then I went on and said, okay, so one of the things I'm asking is why are you here? And I'm getting different, different views, all great views, all great answers.

Um, and especially when I go around clinics, the purpose is there. What I was missing was this little trick on asking the same question around support center and saying, why are you guys here? And perhaps we were missing that, you know, to verbalize the, the purpose, the mission, the vision, the values of importantly, the values of future life.

So I went on and asked, why are we here? And then I went on and asked, what are we, uh, what are we setting ourselves to achieve? I, what our strategy is going to be in the next five years. And then finally, how are we going to. You know, just go through that strategy. So the why, the what, and the how. Um, so quite simply after my 100 days, the first thing I did is to grab, um, collect a number of associates across clinics, different roles, support center, different roles.

And we set ourselves with support of a, um, of an agency to define the future life purpose. Why is future life here? What's our vision of the world? What's our mission? And most importantly, what are our values? Um, and obviously we have clinics, as I said to you, that were quite independent and they are still independent for many years, very successfully.

And some of those clinics have strong statements in place. And my purpose is not to, my mission is not to change those statements. But to have a united voice on future life and why is future life here to, to, to drive that core identity. So we've done that. And actually, I'm not sure when, when this podcast is going to go live, but I'm flying to Barcelona tomorrow to the first global leadership summit, where we're going to introduce those.

Those statements to everyone, to all our leaders in clinics. And then obviously we're going to introduce the strategy. And the strategy, as you can imagine, is something that together with my management team, tapping into the medical advisory board, tapping into some key opinion leaders from country, we developed and we put on a paper.

And that strategy went through my supervisory board, of course, in June, and that was approved. And now we're going to introduce you, introduce a strategy into, into the FutureLife Society again at the end of this week. Um, and that is how we're going to go through that strategy and what is important for us to achieve.

And this question of why do we have a group? What is group going to do different than the clinics we're doing until now independently? That's a very important question that needs answering quite fast. Um, the synergies that we'll have a group. Those roles and responsibilities between, okay, clinics are doing this, fantastic.

How can groups support the clinics on, on being better at that, you know, at that quality of care? How can we help the clinicians in particular, the, the EMTs, the embryologists, the nurses to have more time with patients? Instead of having, you know, non value added activities or non value added time. So that's the purpose of group.

And that's what we're setting here to, to, uh, to achieve through the how. And finally, and with this I finish, um, it's all about, as I said earlier, to keeping that medical excellence in place. And therefore we introduced. Literally two months ago, our medical advisory board to the CEO, uh, which are 10 of our 10 of our great, uh, associates, you know, medical doctors, embryologists.

Um, and we'll get together once a month, um, and they have three different topics in the agenda that they need to help us, um, drive just as a final thought from my end, which is something I said to my team quite often. Um, I know that people like you Griffin, most of your listeners, if not all have been, have been in this sector in this space for, for quite some time.

And you're very familiar with it. Um, but sometimes it's good to have someone external timing, uh, reminding On how powerful it is to work that you guys do on a daily basis. And I'm talking about everyone working in clinics, right? So um, this goes for everyone working in a clinic, MDs, embryologists, nurses, receptionists, coordinators.

It's just fascinating what you guys do on a daily basis. I mean, your job is to put smiles on people's faces. Um, so my last words would be encouraging you to continue going. Um, I think what you're doing helps the sector in particular Griffin, uh, and for everyone else out there, just, just keep going. I think, um, we, or you in particular, uh, are changing the world one baby at a time.

So big thank you from my end. 

[00:09:16] Griffin Jones: Boston IVF says that in order to take good care of patients, you have to have a business model that takes good care of their providers and staff. Listen to David Stern discuss the vital steps to finding the right long term financial partner. 

[00:09:28] David Stern: And you know, one of the important things, it sounds a little corny, um, but the Boston IVF, our model is we want to do what's right for the patient first and foremost.

So we believe, and this is instilled because the physicians founded the practice and I'm not a physician, I'm an MBA, but I can tell you, I don't mess with the lab and I don't mess with the physicians. because those are the two most important assets that we have in our company. And I'm never going to tell an embryologist if they want to use a certain media and they want to use a certain microscope or an incubator because they get better success rates.

It's in my interest as a business person to make sure we get the best success rates that we can because our patients are going to be happy. Our referring physicians are going to be happy. Everybody's going to be happy. So I'm not going to cut corners and say, Hey, I got a great deal on this media. From A, B, C media factory, and it's not the same quality as Irvine or Cooper, but you gotta use it because we're saving money.

Same thing with catheters. We have physicians that choose different catheters. We don't have one catheter. We let the physician who's doing the transfer use the catheter they feel comfortable with. It costs us more, but the physician feels like they're doing a better transfer and they're more comfortable doing it.

So who am I as a business person to tell a physician how to practice or an embryologist how to practice? When you're dating someone, your first date is not about getting married. You have to date someone, see if it's a right fit and then get married. And I think we approach it the same way. We want to date our practices that we're going to partner with, see if it's a good fit, see if the culture is right.

See if we have, you know, commonality and an IVF center that's being approached by anybody, a strategic, a private equity, venture capital, whoever. Should be doing the same kind of due diligence. Is there a cultural fit? Do you agree on what the midterm and long term goals should be? Where do you see yourselves in five years?

And having a very open discussion about what that looks like and, and talking about who makes the decision. Does business trump medicine or does medicine trump business? And those are important discussions to have before, you know, on those dates, um, before you get married. I was, you know, with COVID, we've gone out and it's very important.

We go out and we do site visits. We want to look at the IVF center. We want to talk to the physicians. We sit down with them. I can't tell you the number of deals that we haven't won, where the other party that wins has never set foot in an IVF center that they're buying. They've never met the physician face to face.

It's all been on Zoom and they do a video tour. And if I'm spending that kind of money, Now, granted when private equity is doing it, it's not their money. It's someone else's money, but it's kind of like going in to buy a house and doing it on a Zoom video and never walking in that house. That's kind of scary.

Um, and so if a physician, if I'm a physician selling my practice and I never get to meet the person and they never come to see what my practice looks like, I would think long and hard about, are they the right partner for me?

Sponsor: Organon is dedicated to delivering impactful medicines and solutions for a healthier tomorrow. Guided by its mission of being here for her health, Organon proudly recognizes fertility providers around the world focusing on care equity. 

We believe everyone should have access to fertility education and treatment. By collaborating with providers, advocates, and communities, Organon is working to elevate fertility awareness, expand resources, and invest in innovative products that help more aspiring parents access the care they deserve. 

Every journey to parenthood is unique. Organon stands with you. Learn more about Organon’s resources at FertilityJourney.com

[00:12:39] Griffin Jones: Here, Chairman of U. S. Fertility, Mark Segal, delve into the enduring presence of private equity in the fertility sector, emphasizing the significance of aligning business goals with a genuine passion for solving critical issues in the fertility field.

[00:12:52] Marc Segal: Private equity is no question. Private equity is here to stay, right? It's not going anywhere. Um, and it will, there will [00:13:00] always be this need for capital and equity. Um, and I also, I also believe, you know, These innovative, uh, in physicians want to be something part of something larger than than themselves, right?

Um, and so finding the right fit. Yeah, is is, of course, paramount. Um, I would say that I've seen in my career again, uh, private equity. make very poor decisions and very poor business decisions and in some cases, you know, destroy practices, um, and, and, and the culture that they may have created. Uh, but I've also been very fortunate to be part of a group, be part of groups that I think have driven real value and innovation that's benefited both just both physicians and patients.

I believe, you know, the group that we are affiliated today called Amulet Capital is exactly that. I've been very, very impressed. And as I said, I've been involved with many different private equity groups. Um, I think there's this misconception about, uh, uh, that private equity, you know, what the does is.

drive down, drive costs and it's, uh, and therefore that impacts quality of medicine. I think that's a, that's actually a false. narrative. I think it's a false assumption. 

[00:14:34] Griffin Jones: You think it's false that it drives them up or because they're seeking profits or, or drives them down for efficiency? Which one of those do you think is a fallacy?

I think it's, I think 

[00:14:43] Marc Segal: it's a false narrative that, that driving down costs, driving down costs drives down quality of medicine. Um, Where I think private equity and again, maybe larger groups succeed is in the ability to drive to drive costs in an efficient through efficiency. Right. And, and, uh, and to me, driving down costs, which hopefully at the end of the day implies driving down price to patients or driving or driving access through increased payer contracts, etc.

Leads to better access to patients. And in fact, if you look at the larger groups, you look at, you look at the, you know, pregnancy rate outcomes, it completely validates the point that the larger groups are driving, driving innovation, driving pregnancy rates, doing different things that I think others are taking note of and trying to learn from.

Um, so, um, I, I do think it's, you know, at the end of the day, yes, you should do your homework and you should pick your right partner. Um, because not everyone's the same, not every private equity is the same. Um, but I, I, you know, I am a believer they're here to stay. I'm a believer, I'm a firm believer that they will, That they will continue to add value and make change in a positive way, not a negative way.

What is it that I need to do to kind of grow my, my practice? in order so I can maximize the valuation, uh, or potentially exit that type of thing. And, um, and what I think, and I would say this is actually all businesses in general, this is not specific to physicians or even healthcare, but, but, you know, when you've got, uh, when you've got a founder and entrepreneur that has started a business, it may be a family owned business,

If they are, if they start or have started having the conversation, you know, if they, if they're thinking about, I want to sell my business in a year's time, or even two years time, it's probably too late to have that to start thinking what I need to do. To maximize value, the conversation or the thought process about maximizing value has to occur much earlier on because it's part of a strategy.

It's part of a mindset, you know, of this is what I'm after. This is where I think I can build it. This is what I and so it's really to maximize value. It's a five year process. Now again, here's the calculus. Do I, do I spend, uh, do I spend the next five years building, hopefully, you know, doubling the size, tripling the size of the business that I have today and will valuations remain where they are today, right?

That's the big question. Because no one knows what tomorrow brings. No one knows what, what valuation, what interest rates and valuation and how much it's private equity will want to participate five years from now. Um, and so I think the calculus you have to make in all of this is, I'm either in it for the long term, if I'm only focused on, I want to figure out what the exit and how to maximize value so I can exit at some point, I actually think it's the wrong conversation to be having with yourself, right?

If I'm that entrepreneur, I think you've got to be driven by, you What are you trying? What problem are you trying to solve? What? What motivates you? What gets you to get up? You know, um, out of bed every morning. I want to do the kinds of things that you do. And you've got to love it. You've got to have a passion for it.

I mean, I know that I wouldn't be doing this for 25 years. If I didn't feel excited and passionate about it. 

[00:18:43] Griffin Jones: Our next leader, CEO of Care Fertility, Dave Burford, sheds light on the imperative of enhancing business processes to improve the patient experience. One of the biggest criticisms about so much external finance entering this field of medicine is the that there is a financial pressure and sometimes an oversight on operational quality.

There's operational improvements to be made for days in this field. There's, there's no shortage of those, but there is also the reality that there. It's a way of looking at things where it can be just looked at from a spreadsheet without the consideration of actually making the operational improvements.

And you had to at least experience some of the other sides. So what were a few of the surprises that awaited you? 

[00:19:37] Dave Burford: I think first and foremost, um, finance is very good on spreadsheets. Operations is very bad on PowerPoints and spreadsheets. Operations is about people and it's about process. And you only really can deal with one when you understand the other.

And so if I take us back to cares challenges at the time, it was very much around, um, a business that was geared up to, um, serve the clinic rather than the patients. And that's okay. When you've got a lot of demand and not much supply, but when, when that dynamic changes slightly and you've got more competition in town and you've got other people that are doing things in a more dynamic way, and actually.

The challenge is bringing in, um, supply or patients, then you've got to change your processes to adapt to that. And you've got to be more patient friendly and you've got to be more, um, Uh, adaptive and fluid in the way that you deal with things. And so, yeah, you can only really do that by talking to the people on the ground, talking to the staff, understanding what their challenges are, and then adapting the processes to meet the demands of patients and the needs of staff.

Um, So it was, for me, it was nice to get away from the, the laptop and the, and the, and the, and the PC and to actually talk to people and understand what is it that is the challenge here and that's best supported by a bit of data, if I'm honest as well, because sometimes anecdotal conversations only take you so far and you need to have a bit of skepticism about what you hear and then you need to look at the data and say, well, actually, look, we've got a thousand people calling us at The seven o'clock at night, you're telling me that patients don't have a demand for late night calls.

But why have I got a thousand, why have I got a thousand people ringing me when the lines are closed and it's just tweaking then some of those operational processes to meet those needs. Um, generally not that challenging, but, um, involved, yeah. Sales side device is critical and these advisors do an amazing job, but it's when it's a very fast six week process and highest bid wins kind of thing.

It might be perfect for some sellers, but in my experience, what you'll find is that there's sometimes a misalignment after the sale because you didn't really get chance to talk about what it is that you want and what it is that they want and how can you, it was a very quick, it was a very quick process.

And so this is. Quite often somebody's lifetimes work, right? They spent 20 years building this business. Why not spend a little bit longer just getting to know who it is that you're going to be partnering with after the, after the deal would be my main advice, really, to, to people. And then, as I say, my passion and, and cares passion, having done lots and lots of these acquisitions over the years is to really understand what it is that people want, uh, and then to try and tailor that deal to suit them.

[00:22:38] Griffin Jones: Dr. Kshitiz Murdia, CEO of Indira IVF's CLIPS, revolve around the importance of standardizing protocols across the entire network of doctors, emphasizing the need for consistency and quality. 

[00:22:50] Dr. Kshitiz Murdia: I think that brings me to another important point, Griffin, is around the doctor recruitment, as to how we have done it.

Because. Ours is a B2C brand and patients are coming to Indira IVF and not to a particular doctor. I mean, patients don't come with a mindset that I have to go and meet such and such doctor or get treated by such and such doctor. They just see Indira IVF, they would come to Indira IVF, and then they would get to know who is the doctor treating them.

And every other day we have a roaster, so somebody is consulting today. Their pickup might be done by a separate doctor. Their embryo transfer might be done by a separate doctor. It's as per the schedule or the roster in the clinic. Uh, so it was our responsibility to ensure that we have similar protocols, similar outcomes across all the doctors because that's what we were doing.

One patient could be meeting two or three doctors in the clinic at different points of time during the same cycle and the protocols should not differ. The language that they speak should not differ. And that's why we started this Indira Fertility Academy back in 2016, which is one of the world class setups in training in fertility.

Our training center has been recognized by, recently by British Fertility Society. Our training center is recognized by Merck Foundation in Egypt. They regularly send, uh, uh, African and Indonesian and Malaysian, Vietnam, all the Asia Pacific doctors for training. We run a fellowship program with them for three months.

And 99 percent of the doctors who are working with us, I've been trained through our own fertility academy and same with the embryologist also. And once we got a hang of it, uh, we understood that, you know, IVF is not so difficult. It's not a rocket science. You know, every gynecologist and a life science, uh, a postgraduate could be trained into either being a IVF doctor or an embryologist.

Uh, either ways. Uh, we developed a structured program and we understood that there are 15 or 20 steps during the whole IVF cycle. Once you have an SOP around each and every step, you just hammer in the training that you just need to follow the SOP. Don't bother about the final outcomes. Final outcomes are bound to come.

And we've been very successful. I think the average age of our doctors is 35 or 36 in spite of, you know, a few doctors being with us for almost 10 years now. Uh, so that gave us a very good handle on expansion because. See, expansion, the major limiting factor for any clinical enterprise or an organization to expand rapidly is not funds, it's not infrastructure.

You, everybody has deep pockets, everybody has private equity money. You can fund a hundred centers in one year. You have the infrastructure available. You can buy spaces, you can rent them, you can do. I think the critical bottleneck for any organization could be having skilled manpower, you know, and then there's always shortage of manpower in whichever field you go.

And we decided that we would not struggle with this part. Let us create our own skilled manpower and let us not depend on the market, uh, uh, to get skilled manpower. The idea was to select somebody working with the company for, for, for last few years, because. You know, when DA invested, we were only at 50 center, we were the largest in the country in terms of number of centers, in terms of doctors being trained, in terms of business and, and the overall top line.

I think the idea from DA's side was, uh, nobody has done, uh, good work in the country in India in the IVF suite apart from Indira IVF. Let us have somebody from the group internally, uh, and promote them to the, to be the CEO. And I think because of, uh, uh, some of the diligence is being done on the company before DA invested.

Uh, so there were a couple of private equities, uh, looking at us and in all the big force coming and doing diligence. So I got exposed to many more financial aspects, many more HR and marketing aspects as well. And, uh, so I think, I think it was. Because everybody, all these shareholders thought that I had a very broad based idea about the business and not just the medical function.

Uh, and, and, and obviously we are very strong believers that a medical organization should always be headed by a doctor because that gives you much more leverage. In terms of talking to the doctors, because ultimately all these, uh, businesses are built on the ground in the clinics and not sitting in the corporate office in your air conditioned chambers and working on excels or laptops or you can't build a business.

Their business is actually being done at the clinical level by the clinicians, by the nurses, by the embryologist. So you would need somebody who could have that wavelength of talking to these doctors who the doctors would also respond to and respect. Uh, and it's not just about number, number, number that you need to clock certain revenue.

You need to clock certain number of patients being treated. It's always more to do with the medical outcomes and how do you treat and how do you excel in, in the overall outcome. So I, I, I strongly still feel, uh, that a non medical person, uh, one sounds very commercial to the doctors. Uh, doctors would not give that much of respect because.

Again, they feel the other person has no knowledge about medicine and is just come here and just telling us all the numbers on Excel. And we feel it's not like that. And, you know, Patients are different. The actual clinical life is different. So I think a good balance, uh, uh, between the medical and the financial work is required when you want to control the doctors.

And when I say control, because ours is a very different culture and DNA, it's not doctors independently practicing in their own. world and they have a different protocol and they have a different business mindset. All of us, uh, all the two 50 plus doctors run on a single platform, run on a single protocol.

Everybody, uh, is, is, is in very. Close touch, I would say, and everybody's using the similar protocol.

[00:29:13] Griffin Jones: How many nurses, what percentage that you've worked with over the course of your career, which is a lot, do you think have it in them to be an executive? And do not say a hundred percent, do not say all of them. I don't want it. I want any kind of fluffy millennial feel good answer. I mean, if you work with a ton of people, ballpark, what are the percentage, uh, that you feel like really have it within them that they could be not manager, not director, but top C-suite?

[00:29:47] Lisa Van Dolah: Anybody that sets their mind out to do it can do it, but you have to be willing to, to learn, um, and step out of, uh, Kind of a comfort of a clinical based mindset. And I think, um, many nurses don't want to have anything to do with that. They went into the profession, um, to be a clinical focused expert and they should, that's amazing.

Um, and they should continue to explore that, how they can continue to contribute there. Um, you know, there's only so many individuals that went into nursing originally that then look at organizational, um, Uh, you know, goals and organizational, you know, success as being something that are even interested in, in being responsible for.

So, you know, we all can contribute at every level of nursing, um, to that organization success, whether or not you want to be the one that's. that's thinking about that 100 percent of the time is, you know, it's only an interest of certain, certain individuals. And, you know, but I don't think any nurse should limit themselves, um, to that possibility if that's something they're interested in doing.

If this is a role that you want to learn, we'll be here to support you. And so if it's something that you want As a nurse to step into something that maybe is outside of what you perceive to be your training. I think you need to seek that opportunity, um, and ask for those around you to support you, um, in learning things that maybe you don't have any experience in yet.

Um, and I think nursing, um, has tremendous foundation to offer you the skill set. Uh, in a variety of roles, whether it's administrative management, leadership, um, or, you know, like you said, project management, sales, marketing, business development, all of those things are, are, are ways training, teaching, um, for nurses to, to advance their career.

And so it's not just one path, but I think nursing has tremendous foundational, um, value that, that you can build on if you're interested in. 

[00:31:58] Griffin Jones: The three things that matter in healthcare are patient experience, patient outcome, and cost, according to our next leader, Chair of KindBody, Gina Bartasi. Here, Gina stressed the value of team collaboration and employee well being in delivering exceptional patient care.

[00:32:11] Gina Bartasi: Really? Only three things matter in healthcare? Any kind of health care, but specifically fertility, um, patient experience, patient outcome and cost. It's the only thing that matters to the patient, patient experience, patient outcome and cost. And by the way, it's the only thing that matters to the employer.

And what I have found after building and running the largest care navigation firm as a care navigation or middleman or an insurance company, um, Um, you cannot effectuate change in those three areas. An insurance company or care navigation firm cannot affect member experience. They cannot affect outcomes and they cannot affect costs.

Only the doctor's going to set his reimbursement rate. He's only going to decide how many embryos to transfer. Only he can decide how to give that patient bad news, whether that's, um, uh, diminished ovarian reserve diagnosis or a failed IVF cycle. But in order to really effectuate change. And really change kind of how patients go through the process.

You have to be in the doctor business. So today the employers are issuing RFPs. Um, I think in the beginning, uh, large tech companies on both coasts are really in the Valley kind of started this fertility benefit. But today you see requests coming in from very, very large employers in retail and manufacturing and automotive.

Like again, it's moved from kind of a nice to have to a must have benefit. Employees always come first. They have to because the employees will take care. If you take care of your employees first, they will take care of your customer. They will take care of your patients. And that's when we're talking to doctors, you know, and doctors say, well, I used to do that.

You know, we want the doctors to know that we can train and teach. nurses and front desk managers and practice managers to be just as kind and just as empathetic to that patient that the doctor can. So again, employees always come first as it relates to the lab. 

[00:34:11] Griffin Jones: Talk a bit about how you use the brand for culture.

[00:34:15] Gina Bartasi: Yeah, I think, um, a lot of it starts with humility, right? The brand is humble. It's not anybody's last name. It's not, you know, um, and our culture really starts with this humility, right? So those two things are ingrained. I think, um, it's not just humility to, it's a vulnerability to it. Um, you know, uh, It's also our brand and our culture.

We do embrace risk. You know, we tell our doctors, we're like, embrace risk, do something crazy on TikTok. Can you tell a doctor to, or a scientist embrace risk? They're like, whoa, whoa, whoa, whoa, whoa. I'm a doctor. I don't embrace risk, except that if you teach them, we're not talking about embracing risk when it comes to, a prognosis of an onco patient.

We're talking about taking risk as it relates to the brand, as it relates to culture, allow yourself to have fun, allow yourself to smile, giving devastating news. Another failed pregnancy test is hard. It's hard. And we're so glad you're empathetic to your patient. But outside of that, how can we make you smile?

How can you be cheery and yellow and optimistic? And so we believe that there's a lot of similarities that brand and culture do go together. And I don't think our brand would be as successful if our culture wasn't so strong. And I don't think our culture would be so strong if our brand wasn't so strong.

And there's a, I think the other thing that I would say about culture and brand is team. Right. Um, I think too often, you know, healthcare people and doctors in particular may think solo first, like I'm a doctor and hierarchical and solo. And those are not things that belong in our brand or our culture. We don't do anything singularly.

Not any of us. And, and Dr. Beltsos would say the same thing. And Beth Eschbach, Greg Poulos, none of us do anything by ourselves. And that's intentional. We make group collaborative decisions and same thing with our brand. It's, it's, it's, we invite feedback. We invite constructive feedback, constructive criticism, because we want to get better every day.

And again, that goes back to our brand and our culture. 

[00:36:25] Griffin Jones: Andrew Meikle, Executive Chairman at The Fertility Partners, challenges traditional paradigms as he advocates for financial awareness and entrepreneurship in clinic management. 

[00:36:33] Andrew Meikle: I think that, um, you know, the typical practice owner is not an entrepreneur, and they're not typically very business savvy.

Some are, and they're doing exceptionally well. This space has grown 10 percent compounded forever. And, and, you know, No disrespect, but almost anyone can do well in that sort of a setting, especially when supply is not meeting demand. So everyone's doing well. Um, almost everyone's doing well. I think there's another level.

It's not just about revenue and EBITDA, you know, our mission and, you know, I'm a healthcare provider at heart is to drive clinical outcomes to use science, collaborate with stakeholders and our group to, to drive clinical outcomes, to be more successful for our patients. And as well to improve, dramatically improve the patient experience, the patient journey.

So it's pretty simple. All of our decisions are made, um, You know, based on those two things. And I think there's a tremendous opportunity to professionalize some of the areas in the space. Um, when you look at, at management, for example, I think there are a lot of people doing a lot of great things, but it's, it's sort of doctor first, it's not patient first.

So we're flipping this, um, profession on its head and looking at the management and the operational efficiency and effectiveness of, of clinics. We're looking at Uh, you know, lean processing from a patient perspective. We're looking at, um, sort of value innovation from a customer perspective. It's gotta be driven by, um, by the patient.

We have to serve the patient. Um, and I, and I think it's largely the other way today. So we, we have a completely different lens and I think most groups, um, we're investing for the longterm. Um, we can get into private equity if you want. I am now. Back. We are now backed by private equity. You got to be careful who you choose, who you partner with.

You got to be careful who you marry. You got to spend time. You got to do your diligence. You got to go on dates. Um, and you have to be, um, ruthless in your due diligence because it is a life sentence. I don't know how to turn a physician into an entrepreneur per se. I think you have to have the fortitude for it.

You have to be able to delegate tremendously because you need to see everything from 60, 000 feet and not be too in the weeds. Um, I think an absolutely critical element and some Something that I see as a weakness generally in the space is a lack of, um, financial, um, awareness, a lot, a lack of operating the business, uh, with financial metrics.

Um, people in the space seem to look at it in the rear view mirror rather than in real time. You know, our organization, we provide a full P and L every month. Month by the eighth day of the next month. So our partners can see what they've done in their business and and uh, How it relates to the strap plan that we've worked on them for going forward.

Um, so I think you know We don't have enough time, but I you know, I mean a start would be Definitely start reading some, some books, you know, um, there's a ton of great information on entrepreneurship out there. Gerber has a whole series. Uh, uh, you know, those things are very helpful, but, but you really have to take yourself out of the day to day equation, be able to see it from 60, 000 feet, have the best, most independent.

You know, brightest people you can working for you, um, actually, you know, executing on things. And I think that's a big first step. There are tremendous opportunities out there to, um, to partner with various organizations if it, if it suits you. And I think it's just really important to, you know, Have your house in order before entering into that do your due diligence find the right fit um, and look this this profession right now, is it incredibly, um, is that an inflection point it is changing and If you want to change, you might, you might look to join an organization that, um, aligns with your values and they can help you.

They could support you, um, to implement changes in your clinic, to drive patient flow, to, um, to make your life easier so you can provide the best possible medicine. 

[00:40:56] Kevin Ali: In today's episode, we learned how various leaders are working to evolve the landscape of reproductive medicine. Working together, we can drive innovation to help improve the aspiring parent's experience.

I'm Kevin Ali, CEO of Organon. Thank you for listening to the Inside Reproductive Health podcast. 

Sponsor: This episode was brought to you by Organon, Organon is committed to championing care equity in fertility. By elevating education, expanding resources, and investing in innovative solutions, Organon stands with aspiring parents on their unique journeys. Learn more at FertilityJourney.com.

Announcer: Today’s Advertiser helped make the production and delivery of this episode possible. But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, nor does the Advertiser's sponsorship constitute an endorsement of the guest or their organization. The guest's appearance is not an endorsement of the Advertiser.

190 Letter of Intent: How to build the foundation for selling and buying a fertility clinic. Richard Groberg and Jay Stucki

DISCLAIMER: Today’s Advertiser helped make the production and delivery of this episode possible, for free, to you! But the themes expressed by the guests do not necessarily reflect the views of Inside Reproductive Health, nor of the Advertiser. The Advertiser does not have editorial control over the content of this episode, and the guest’s appearance is not an endorsement of the Advertiser.


Gain expert insights and invaluable advice on navigating the sale of your fertility practice with special emphasis on that crucial document - the Letter of Intent. Richard Groberg, a seasoned financial expert and Jay Stucki, an experienced corporate attorney, share insights from the sell side perspective and zoom in on the details that matter most.

  • Discover the major points addressed in the Letter of Intent that serves as the foundation for buying or selling a company.

  • Delve into comprehensive coverage of key elements in the LOI including:

    • Insurance

    • Non-competes

    • Governance

    • Equity

    • Evaluation multiples (based on adjusted EBITDA)

    • Profitability conversion

  • Acquire valuable knowledge into the process and timeline of finalizing the LOI and next steps to completing the transaction.


Jay Stucki:
Stucki Legal, PLLC
LinkedIn

Richard Groberg:
LinkedIn

Transcript

Jay Stucki  00:00

I think one to start with, they don't understand the 30,000 foot view of how important the loi, or the letter of intent can be. That is the roadmap. And unless you know where you're going, and you've been there, is it hard for generic LOI?


Sponsor  00:18

This episode was brought to you by bundle, you may be able to receive a free list of financially qualified IVF patients across the US and Canada. Email Courtney at cbarrett@bundlefertility.com. That's cbarrett@bundlfertility.com. Today's advertiser helped make the production and delivery of this episode possible for free to you. But the themes expressed by the guests do not necessarily reflect the views of inside reproductive health. Nor of the advertiser, the advertiser does not have editorial control over the content of this episode. And the guests appearance is not an endorsement of the advertiser.

Griffin Jones  00:59

Are you serious? Are you serious about buying my fertility practice? We'll find out from the letter of intent. That's the topic that I zoom in with my experts today. Richard Groberg and J. Stucki, Richard, you know, because he's a financial expert who's been on the show multiple times, and he's given plenty of advice on what you need to consider when selling your fertility company. Jay Stucki has also represented fertility companies on both the buy side and the sell side, or at least he's represented companies on both side perhaps fertility was just sell so I didn't get into that specific but today we talk from the sell side perspective. She's a corporate attorney whose careers focused on estate planning, asset protection, real estate transactions acquisitions, in medical and in software for decades. And today with Richard and Jay, I decided to get very specific on the letter of intent. The loi is what they call the roadmap or the foundation for buying or selling and company. They talk about the major points of an LOI, what happens to your malpractice insurance, the noncompetes post closing governance, rollover equity, equity and apparent company working capital like how much cash and accounts receivable you need to leave in the business for how long controlling documents like medical direction assignment of membership interest, joint operating agreements, irrevocable proxies, employment agreements MSA agreements, your valuation multiple based on adjusted EBITDA converting your profitability if it's based on cash, accounting, or cruel accounting, what needs to be talked about in the three to six meetings that happened before signing an LOI? What happens in the very early stages signing your NDA what happens between them and how the letter of intent is finalized? Any one of those subtopics could be its own topic on the show. I'm sure I'll have them back on to discuss because of so many of you are at this stage and you want to get this right. Enjoy this conversation with Richard Groberg and Jay Stucki about constructing your letter of intent. Oh, and I probably have to give you a disclaimer. This is not legal advice. I'm not an attorney, adjacent attorney, but it's not legal advice, simply insights for your informational use only. Mr. Groberg. Richard, Welcome back to Inside Reproductive Health yet again. Mr. Stucki. Jay, welcome to Inside Reproductive Health.



Jay Stucki  00:59

Thank you, glad to be participating today.



Griffin Jones  00:59

Richard, the audience is a little bit familiar with you at this point. You have been on the show a couple of times. And you're also quoted from our journalists when they are doing articles about some of the business dealings happening in the field. Jay, you are a corporate attorney? Are you mostly Is it mostly sell side that you represent? Are you sell side and buy side equally?


Jay Stucki  03:40

No, I wouldn't say equally, probably mostly sell side. But I've been on both sides of the table. So I've got a depth of knowledge level from each perspective. And I've also worked for practice management companies. So I get the physician side, I've had to represent many physicians and getting them out of bad contracts. So I think I kind of bring up a bit of expertise to the layers that most attorneys won't see.



Griffin Jones  04:14

One sub topic that was popular that we covered with Richard was talking about mistakes that Fertility Centers often make when they're selling with regard to accounting, things that are categorized as business expenses that shouldn't be and that impacts their EBITDA. What are some of the common mistakes that you're seeing from a legal perspective when people are going to sell their fertility company?



Jay Stucki  04:38

I think one to start with, they don't understand the 30,000 foot view of how important the LOI or the letter of intent can be. That is the roadmap and unless you know where you're going and you've been there is a bit hard for generic LOI. I you know, I like in the the legal side of things, you know, if you, if you're a couple and you want to get pregnant, you're not going to rely solely on your GP or internal medicine, you're going to want to go to a reproductive endocrinologist, you need that specialty. And it's the same thing in law, you need someone who knows both sides of the table to really hone in, I think Richard could probably give you a couple examples of allies that were vague from the start, because they didn't understand the full process of where this needed to go at the end of the day, how to protect the physicians, and yet make it a deal that works for both the acquiring entity and the seller.



Griffin Jones  05:44

What are a couple of those examples? Richard, do you have any LOIs being too vague from the start?


Richard Groberg  05:52

Yes, I've seen a couple recently that were negotiated by people other than me, when a couple of examples, most of these transactions talk about the fact that the valuation will be a multiple of what's called an adjusted EBITDA, which adds back and subtracts for certain adjustments. But if the language is unclear that that includes converting the sellers profitability from a cash basis accounting to an accrual basis accounting, they can wake up a month or two months down the road. And their adjusted EBITDA is significantly different than what they thought it was. And it can cause problems. The other issue I've seen recently, is where the seller also owns real estate that's used by the practice. And if it's not clarified, that the post closing lease rate will be based on some combination of the current rate and an independent appraisal, then, and that's that final number could affect the EBITDA and the valuation and the purchase price. It can cause problems later on down the road. Jay will talk about other issues in terms of duration of non competes, and the various different non competes. And what happens to rollover equity in the practice or in the corporate group acquiring if a doctor leaves early or is fired for cause. But those kinds of things, especially when Jay and I are working together representing a seller, we work very hard to make sure that the major issues have very clearly negotiated will define so that we don't get down the road and then have problems a month, two months later, when everyone spent a lot of money on accountants and lawyers and other advisers.



Jay Stucki  07:45

And let me just add to that, that, you know, you're you're trying to look at the entire structure, I can't tell you how many LOIs, I've been handed, and it was going to be a stock purchase agreement or an asset purchase agreement. And because of the structure because of rollover and contribution, tax considerations, it ends up getting flipped, and we end up with a completely different structure. So it it's more than just, you know, understanding noncompete or the quality of earnings. It's the LOI really has to look deeper into how the sellers were organized formed tax consequences, how long they've had ownership, short term, capital gains versus long term capital gains, estate planning issues, especially if there's a rollover component.


Griffin Jones  08:38

Why is this those and maybe it'll just enlighten my own ignorance. But to me, that the LOI was simply the the letter that says, you know, we're going to do our due diligence, we're going to explore a deal, but it sounds like more of the terms of the deal need to be established in the loi, where I would have thought, well, you know, if the if the valuation multiple needs to be adjusted in a better based on adjusted EBITDA and that might change, that that would just happen in the deal doesn't necessarily happen. And in the LOI, why does this stuff need to happen in the LOI?



Jay Stucki  09:16

Well, the LOI can't be as detailed as the definitive documents, obviously. And as the saying goes, the devils in the details. And so when you get into negotiations, and you're trying to explain the pros and cons of certain language or certain concepts, it seems to always harken back to well, that's not what we were told when we were being courted. And so it's very helpful that even though the LOI is probably only going to be a few pages long to be able to go back and use that as a tool for refreshing the memory of what was being said during the courting and, and I've watched effect I've used Richard to be able to go back and say, Richard, you were involved in this LOI and negotiating upfront, what was the understanding? And then you get all the parties together. And you walk through, yes, that's what was said, oh, shoot, okay. And just because the buyer said something, it doesn't mean it translated over to the attorneys. So you kind of have to get the attorneys back on track to be in line with what was negotiated under the LOI.



Richard Groberg  10:32

If and if I can amplify that, Griffin. At least in the transactions, I've worked in the sellers, this is a one time thing, they've built their practice, they've operated for a number of years, for various reasons, they're ready to sell it a partner with a PD back group, they vet two or three, or perhaps more potential sellers, they've made a decision, it's like, This is who I'm gonna marry. Because it's not like selling a piece of real estate where you sell and walk away. And when the LOI is signed, both sides start spending a lot of money. It's a time consuming, painful process. And you want to, again, there's a balancing act, if you negotiate every possible thing, you have a 200 page document in the loi, which you can't do, but you want to lock down enough of the major points, some of which are very subtle. I'll give you another example. If one of the buyers has their own malpractice carrier, and everybody has to switch, and they're requiring the seller to have to make the switch and by a tail policy. Well, that affects the economics of the deal. And if one of the sellers is ready for retirement, that could affect the structure. So as much of that, that says very significant could be at least buttoned down enough that when we get down the road, the lawyers could say, hey, Richard, while you were there, what Jay said, what was it that the parties discussed and agreed to? It helps lock in the major points.



Griffin Jones  12:04

Let's talk about those major points. You mentioned malpractice and the potential for needing tail policy. You talked about the valuation multiple and adjusted EBITDA or the potential for converting sellers profitability based on cash basis accounting or accrual based accounting. What are the major points that need to go in to a letter of intent?



Richard Groberg  12:28

I'll give a quick answer. And then Jay will come in too, the noncompetes are very important. post closing governance is important. Not all the groups are the same, and not all the sellers are the same. Some sellers don't need a lot of help from the corporate group, and how much interference there's going to be becomes important issue some need more help. So discussion about governance, to the extent they're getting rollover equity in the practice, what fees the corporate group charges or doesn't charge and how it affects profit participations. To the extent the sellers are getting equity in the parent, how that's viewed and what happens and get what happens if somebody leaves early. How whether working cow working capital is calculated, most of the buyers require the seller to keep enough cash or accounts receivable in the business to cover bills for a period of time. Others allow the seller to keep the accounts receivable wanna J's favorite issues to battle is? Okay, what are the reps and warranties and indemnifications? And what is the seller responsible for post closing but may have occurred? Pre closing? So, Jay, have I missed any major ones?



Jay Stucki  13:47

No, I've just say that there's so many different subsets. So for example, if you're talking about could controlling documents, you're going to have a whole different set of considerations under an employment agreement that you're going to have if there's rollover contribution, and now you become an equity holder in the parent company, versus when restrictions and covenants that you're going to have in the asset purchase or stock purchase agreement. And all of those will carry a whole different slew of requirements. And so it's, you will see some of that addressed as to what the expectations are between the parties in the LOI, but it's not just oh, hey, a traditional non compete because having equity in the parent. And if the parent would say is a limited liability company, you're talking about now coming in as an equity owner, do you have a say, what's your vote? Are you just a financial interest? I'm sure there's going to be power of attorney considerations. So you're going to have contribution tagalong, drag along, right I mean, there's all sorts of things that now come into play is that owner that in the parent, and of course, the parent doesn't want a minority owner controlling. So a lot of times you'll see those levels shake out in the LOI as well. 



Richard Groberg  15:14

There are two transactions recently where the seller selected Jay to represent them. And in both cases, there were issues that came up on some of the things that Jay just talked about, where the buyer said, nobody's ever asked for that before. And why is that an issue. And by the time we got done, the buyers were changing their documents to reflect going forward, things that Jay brought up that no one had addressed. And some of the prior sellers were saying, Why didn't I get that and we need to change our documents. So there really is a level of detail and the interaction between purchase agreements, employment agreements, noncompetes equity, the parent, that if you're not watching careful and won't be synced, that can cause problems later on.


Sponsor  16:05

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Griffin Jones  16:44

Jay, I was gonna have you define controlling documents at risk of me sounding stupid. That's my job as the podcast host. Hopefully there's at least one other person in the audience that was wondering that, but please define controlling documents for us. 

Jay Stucki  17:03

Yeah, absolutely. I mean, first of all, you have to understand the there's the concept of the corporate practice of medicine. And many states have certain laws, summer force, different levels of enforcement. And so everybody kind of approaches buyers, from the corporate side approach things from what if the law changes. So that's kind of always in the backdrop that brings forward management service agreements, because usually there's going to be an management service organization or an MSO involved. You're going to have a medical directors somewhere, sometimes it's the seller, sometimes the management company wants their own medical director. And there's a level of control there. You have different mechanisms, such as succession agreements, assignment of membership interests, the revocable proxies, you can do control through loan agreements, and of course, through your employment agreement. And then there's the whole level of control, if you're going to say, Hey, I'm going to become a member. Now you're talking about, you know, joinder, to an operating agreement, LLC agreements, you know, so those are kind of the core documents, that you have to understand all of them, and know which tool the buyers are going to bring forth. And usually it's a multiple of the tools. For example, I just did a deal where we use irrevocable proxies employment agreements, and an MSA agreement. Another deal that we did back in now, I'm going to say, April, we use an management service agreement, succession agreements, an assignment of membership interests, it all those are all documents that are done on the front end. So for me, it's making sure that the physician understands how they're controlled by these documents. Because when it comes right down to it, right, the physician is responsible for the patient care. And the competing interest or concept here is, how do if I'm a physician, how do I do my job and give the quality of patient care I want if somebody else is controlling the organization, and you get into what is a clinical asset versus a non clinical asset, right, the physician, the Medical Director controls the clinical assets, which is really the patient care patient records. And then you have the non clinical assets which are owned by the company. You get into a situation where it's not a, let's say, a good, a good company, or they have a bad reputation, and I've had to help doctors get out of these situations. They can make your life miserable, right, they're gonna put in there on staff, you just lost somebody that was with you for a long time, but they want their own person there, or they're not going to buy you the equipment that you need or that you feel you need. And so, you know, sure, if you're the doctor, you say, wait a minute, you're affecting my ability to practice. In fact, for those who, whom some of you might already know, this is a big issue in the Northern District of California right now, it's federal court, where the Association of Emergency Medicine anyways, the group brought a lawsuit claiming that all of these controlling ancillary agreements that companies use to effectively control the doctor is being challenged as it is, in fact, the corporate practice of medicine because you've tied the physicians hands. Now, I think there's a delicate balance here that if you have people who understand the industry, such as you know, Richard, myself, then there's, there's a fair trade off being made. To see it another way. If I want to sell my practice, you know, I certainly can't take millions of dollars from my practice, and then expect to still control it and run it and do everything that I want.

Griffin Jones  21:14

Some people still do expect that, whether they realize that that's what their they'll say, they don't expect that, but they're expecting that, you know, when somebody is telling them what supplies they can order after and who what EMR they're going to use and who they can hire. Yeah, that's when they realize it, but when it's happening, they don't seem to, to always realize that,

Jay Stucki  21:37

Right. And my goal is not to try to tell the physician that it's gonna be, you know, this great rosy relationship and the honeymoons gonna go on forever, but rather makes sure that the physician or the sellers, are fully aware of these restrictive covenants of these controlling documents. Because at the end of the day, I assure you, the buyer, the practice management company, is going to control the practice, you know, if you're a physician, you know, gotta do depositions. And the other side always says, you know, almost right out of the gate, okay, Doctor, tell me, you know, what have we done that's affected your ability to treat a patient. And the doctor is not going to sit there and say, Oh, I can't treat my patients, because, of course not, they'd be committing malpractice. So it's, it's really about understanding a balance here, and making sure everybody's aware of what their arrangement is, and what they've negotiated, what they've sold, what they bought, and what their responsibilities are post closing.

Richard Groberg  22:47

And then lawyers like Jay, make sure that the documents accurately reflect what's been agreed to, in addition to the doctors understanding what they're getting into.

Jay Stucki  22:57

Sure. Let me give you an example of that. Thank you, Richard. You have some situations where they want the physicians held accountable for any losses. And my view on that is, if you're going to be held accountable for losses, or it could affect your compensation pool, because most of these agreements have some form of compensation pool, then the physician should have a level of say, in the expenditures under the MSO. If you're not responsible for losses, and it's not going to affect your compensation, then there should be a much less expectation of any say, as it relates to expenditures or how the MSO, you know, allocates costs to the clinic. So you there's that balance, where you really have to read the documents and see how much responsibility versus how much say you have, you know, they play off of each other.

Richard Groberg  23:57

That's a great example where the language in the LOI is important. If a doctor's post closing bonus is based on growth of earnings, then they need more visibility and say, into what's expensive practice. But if their bonus is based on how many retrievals do you do over a threshold, as an example, well, then it's not as important.

Griffin Jones  24:23

Am I correct in understanding Jay that the controlling documents themselves are not going in the LOI? It's simply refers to what controlling documents are going to be negotiated in the deal.

Jay Stucki  24:36

I mean, there's more than likely a reference to the MSA reference to an employment agreement, reference to maybe some of the high level restrictive covenants such as a non compete that you'd expect in the employment agreement. But usually the LOI is not going to get into P back or drag along rights that you would see under say the parent comp any equity ownership? So now it's more of a reference to the MSA and what falls out under the MSA. And I think that's critical where people like Richard come in. Because in the initial stages, the physicians look for someone to be able to say, Hey, can you explain the MSA to me? How does you know? How does the management services organization work? And am I really still going to be able to run my practice? Right? And, and, look, there are situations where the doctor sell their practice, and they run it just as they always did. And there's no or little interference. There's also situations where the doctor say, Oh, hold on, I don't like somebody telling me what to do. And we're going to put a stop to this right now. And the relationship deteriorates. So,

Griffin Jones  25:53

Richard, from your vantage point, does the multiple effect that so in other words, if if someone pays a lower multiple, are they more likely to let the physician Coast then if they pay a higher multiple times, because I'm just thinking if if I pay 15x, for something, I need to make sure that there is something different happening in their operations that or their their marketing that makes more patients come in, and they make more money? Because I need to earn that money back is from your vantage point is there does difference when people buy at a higher lower multiple how involved they are in dictating the operation? 

Richard Groberg  26:37

No pun intended, but that that question is pregnant with with the complexity of reasons why multiples are what they are, you know, multiples are typically higher, if there's a strategic reason for the buyer, or there's there's factors that make the practice, you know, the doctors younger, they're in a new building, they're at a high growth curve for multiple years. multiples are also dependent on, you know, working with one group that got an offer from a group that puts much less cash down upfront, and there's much more equity in the parrot, their trade off is okay, we'll pay a higher multiple, not necessarily paying a higher multiple, because we're going to do more to your practice post closing your different styles, Jay and I have worked with sellers who don't need a lot of help leave me alone. And that's okay. They're probably not a good fit for some buyers, but are for others. We've also worked with a couple of practices, businesses in the fertility industry, that were dynamic businesses growing, but reached a point where they absolutely needed management help. And the seller understood that in one case, it worked very well post closing and another case, the seller couldn't adjust to someone telling them what to do. But that didn't necessarily mean there was a higher multiple, because we're going to be more involved with

Griffin Jones  28:04

I want to go into some of these different major points and and try to find out how detailed they have to be in the LOI, let's go back to malpractice for a second does it have to be established in the LOI of if we're going to have a tail policy on the doctor, if the docs gonna be responsible for their tail, but how much of malpractice needs to be established in the LOI? 

Richard Groberg  28:29

Well, I think things like that. It's it's the eye of the beholder, whether it's material, my view, if it's material in terms of changing the nature of the practice, or an expense to the seller, or changes the essence of the practice. It should not be a surprise later on down the road. I mean, if, for example, if I've got practice with a seller getting ready to retire soon, and the buyer is requiring the change of malpractice carrier to tail, the doctor retiring pre closing, getting a free tail from their existing policy and not having to buy it so he'll say could save hundreds of 1000s of dollars. So were they a bit upset that they didn't find that out until a month before closing? Yes. But again, it's it's hard to know upfront what's material and whatnot material. But when you've got people like Jay, and hopefully myself, we've done a lot of things. We know the questions to ask so that anything that's likely to be material to the seller buyer is brought to the forefront in the LOI and not oh, by the way, somewhere down the road.

Jay Stucki  29:48

Now, let me add to that that Well, typically when you're talking about the traditional things, non non compete covenants or restrictions on territories Tell coverage, those tend to be pretty well understood and easy to negotiate with, as long as you have that expectation upfront, and you know, that it needs to be dealt with. I would say that, you know, we spend more time on, really the contribution and rollover or time as it relates to the role of the physicians when they become partners, how you bring in an associate physician, who participates in the compensation pool, what say you have an expenses, how the MSO is going to interact? Who's going to be the medical director? Those tend to be the more complicated negotiated issues than your traditional Oh, yeah, there's there's an expected now to compete, you know.

Griffin Jones  30:48

What, what level of detail, are you negotiating those things in the LOI?

Jay Stucki  30:54

Only, from the standpoint that it's a concern for either the buyer or the seller. And I think that's where Richard sits down. And he talks with this sellers and says, Okay, you know, let's talk about the warts. Let's talk about the problems, let's talk about your goals. And once you know, those, it's not that you have to necessarily expose them. But it allows you then to know what to work with, and what's important and what needs to go in the LOI and the you, you know, we're also concerned I know, Richard is, and I am, I don't want to start down a process where I know there's a problem. And then at the end, say, oh, save, by the way, no, you address it upfront. And, again, if you know the war, you know how to address it, and you don't catch anybody off guard. It is developing trust in my negotiations with opposing counsel, that we're all on the same page, we're all trying to get to the same goal. So it's not about hiding the ball. It's about vetting this upfront. And if it's important, as Richard says, we then included in the loi, if it doesn't look like it's important, then we back off. But the LOI is usually a compilation of five, six meetings between the parties through these discussions to make sure that everybody understands if there's an issue, let's get it in the LOI. And then, you know, the standard things, like I said, about the non compete, those tend to just be an expectation that everybody already knows how to deal with.

Richard Groberg  32:32

Yeah, Griffin, people who've never been through this before, the expression I use is you don't know what you don't know about the process. And when you've been through this, as many times as I have, as buyer seller, being sold to a group representing private equity, and now representing sellers, and with Jays experience, if we at least are aware of these issues up fraud, talk about it with the seller, make sure that the major ones are addressed, then we avoid the surprises and problems down the road. When people spend a lot of time and money that could blow up deals, create Hill will delay things, it's just it works better to try to address the major issues up front, having awareness having been through it a bunch of times of what the pitfalls could be.

Jay Stucki  33:24

The other thing too, is that you don't want to be I can't tell you how many times opposing counsel so well, that standard language that we use. And if you don't know that and have the level of experience than the variety of different deals that you've done in the fertility industry, you are in a very difficult position to be able to come back and tell them even though they know, be able to tell them why it's not standard language or why you're gonna reject their standard language. So yeah, you really need that detail, because that's a, I think, a tool that opposing counsel uses often. Oh, that's just standard, though it isn't standard.

Griffin Jones  34:07

I want to come back to standard language. It sounds like for your discovery of how material important these different major points for the LOI are, whether it's malpractice, non competes, post closing governance, rollover equity, equity and parent company working capital and controlling documents. It sounds like that is being discovered in a process which, you said Jay, might be five or six meetings. What does the first of those meetings look like? Actually, let's go prior to the first of those meetings. What needs to happen before the first meeting?

Richard Groberg  34:42

Every representative of seller does it differently. But in my scenarios, by the time the seller is ready to move forward and negotiate to conclusion and LOI, they've shared financial information they've had calls, they've discussed the buyer strategy and philosophy. They discussed what the seller is looking for in a partner to transaction, and then the buyer proffers that LOI, which then starts the negotiating process. That process itself a little bit like a marriage prenup helps define whether they're going to be major issues or not major issues and what the working relationships like. You know, again, if you've got a buyer that is more hands on, they're going to push some issues to make sure it's a good partner, the seller does it at the appropriate time, Jay gets involved to make sure that the non-lawyers aren't missing any things and significance. Again, by the time an LOI is ready for signature, as Jay said, besides all the pre LOI processes, there's 3, 4, 5, 6 meetings and discussions and back and forth. That gets hopefully gets everybody comfortable that yes, this is this is a good mutual relationship. And, and we've got enough documented that hopefully, the lawyers won't screw it up.

Jay Stucki  36:11

Now, but there's also an initial kind of, you eyeball a situation, are the sellers really ready to sell? I mean, that's a big question. And a lot of times, it's no guys, you need to get this in order, get this corrected. Or if you sell now, you're going to run into this kind of tax issue. So maybe you want to wait or maybe we get you a high enough multiple, that it's, it's worth that tax issue trade off.

Griffin Jones  36:39

So these 3, 4, 5, 6 meetings are we talking about? These are meetings that happen after we've decided, hey, there's probably a fit here where we're going to move towards proffering an LOI, or these are these meetings are just anything that happens before the LOI is proffered. 

Richard Groberg  37:00

The way I was defining it. There's a bunch of meetings, discussions, probably at least one person before the buyer says, I really want to buy you, I'm going to send you an LOI. They have an understanding of what the seller is looking for. When that LOI comes in there then are a series of calls, Zoom meetings, team meetings, discussions, that hopefully gets to a mutually acceptable ready to sign LOI.

Griffin Jones  37:31

So before we're even at that point of saying, Yeah, we're we're ready to receive an LOI from you. We're ready to proffer you, an LOI there, you that's when you're looking at financial information, talking about the buyers strategy and philosophy. That's that's when that stuff's generally happening. Richard, even before you decide that, yeah, we're, we're ready to move to LOI?

Richard Groberg  37:58

Yes. And every buyer is different in terms of the level of due diligence they do. All of them will visit in person and make sure there's good chemistry that want to see the facilities. They'll look at financial data, operating data, pregnancy statistics, valuate, the lab try to understand the nature of the doctors who's leaving, who's staying who were the driving forces. I mean, it's a big decision for the buyer. It's not just buying for the sake of buying, and who cares what the practice looks like, people want to look good. 

Jay Stucki  38:31

But I mean, you have ownership of the lab, that's a possibility comes into play as well. But the what Richard just covered, but keep in mind, there's a nondisclosure agreement in place. That's the first step.

Griffin Jones  38:47

So the the NDA happens prior to the financial statements being, 

Jay Stucki  38:52

Right out of the chute so that you can exchange information and not have to worry about any improper disclosures.

Griffin Jones  39:00

Okay, so that kind of starts you down the road of the, of where you might be going towards the LOI and Richard, is do sellers ask for buyers financial information as well like, show me Integra Med, how, how overleveraged Are you? Are people doing that? Can they do that?

Richard Groberg  39:21

Yeah, so that's that's an interesting dance. Typically, the buyer will make a presentation and share some financial information about the practices they have and their revenue and their their earnings. Pitch, typically, not until post LOI if the sellers are taking equity in the parent, where they give detailed financial information. Because if I'm the seller, and I'm taking 20 or 30% of my proceeds and stock and the parent, I clearly have to understand the economics of the parent. You know, what's their valuation, what are their earnings, what's their corporate overhead? What are the What are the limitations on just the CEO paying huge salaries? They're not being profitability? How much debt do they have? So, but that level of detail invariably happens post LOI somewhere down the road. Now pre LOI, but especially post Integra Med, all the sellers want to understand, hey, if I'm getting stock in you, I want to understand your story and what your plans are, and what's my stock, going to be worth someday

Jay Stucki  40:30

well, not only what the stock is going to be worse, but is there even a market to sell it, you have yet to remember, these are most likely privately held companies with some kind of VC backing. And it's not like you can just turn around and say, Hey, I'm going to sell my shares to anybody, you're going to have very harsh restrictions on your ability to sell those shares. And that's where we get into the estate planning component, right? If these, if this is a long time hold, or a long time play, I think that a seller needs to the ability to be able to put their equity into some kind of estate plan, you know, trust for their children, whatever, because it's not, like there's a quick turn, we're going to sell my 20%, you know, next year.

Richard Groberg  41:20

Jay does a lot of work with the sellers on that, because the reality is, to the extent they're rolling into the parent, yeah, they're deferring their taxes on that part of the sale proceeds. But they're, they're minority equity in a private company, that hopefully someday, somewhere in the future, will sell to another private equity firm or another one of the roll up groups or maybe go public. And if they go public, you're probably going to be restricted and not get to sell anyway. So people have to understand they're going to take that stock, and they're going to stick it in the drawer somewhere and hope, in the state or trust, and hope that someday, they merge it to somebody else or sell to somebody else.

Griffin Jones  42:03

So we've signed our NDA, we've looked at each other's financial information, we've assessed some culture vet, we maybe have done a visit and well, hopefully we've done a visit by that point. And we have done some a little bit of due diligence enough to say that we want to move forward with an LOI. What is that? Maybe? And maybe there's three meetings after that. Maybe there's six meetings after that. But what is the first or the earliest meetings typically look like? 

Richard Groberg  42:31

Post LOI? 

Griffin Jones  42:32

No, this is pre LOI, but after, after some of that earliest due diligence has been done. So it's after we we've looked at the buyers philosophy, we've heard their pitch, we've, they've seen our financials, we've determined there's a fit, we want to move forward, then when we start to build and negotiate the LOI, what does that first meeting typically look like?

Richard Groberg  42:55

They sent in an LOI typically, either to me or to the sellers and me. And often it's to me first so I could push back on things that I know from the seller's perspective, date to be modified changed, are going to be acceptable, I try to keep the sellers free of getting sucked into what I call the transaction vortex as much as possible. And at the appropriate point, we may have to get back on the phone with the sellers and buyers to discuss sort of issues that can't seem to get resolved. Sometimes it's not necessary. Sometimes it is,

Jay Stucki  43:34

The LOI is a negotiated document between the partners. It's not as if they send it over and say take it or leave it.

Griffin Jones  43:41

And so those we talked a little bit about though, is that often you're not in the, you're not having the buyer, or excuse me, the seller, look at the LOI until you've had a chance to take a look at it yourself. Why keep them out of the transactional vortex?

Richard Groberg  44:05

Well, sometimes they are they do get a copy. Sometimes they don't do my job and other sellers, representatives job is to represent them know what the sellers want, don't want and try, you know, they're seeing patients all day long. They've got their lives. And so to the extent I know what they're going to accept or not accept, I never make decisions without their input, nor does Jay. But my job is to go back to this buyer. And I've never had an LOI that was like, oh, this is perfect, we're accepting it. To go back and say, can you please explain this or we need to tweak this or you've got something from a prior document you forgot to take out or we've got these issues to discuss. It's always with the direction of my sellers, Jay is the same way but what I don't want to do and part of my job is to keep the sellers from getting so caught up in that process, that it distracts them from their, their business, distracts them from patient care and taking care of their staff. And then, I mean, most of my calls with my sellers are very early in the morning or the evening, or weekends, because they're busy with patient care and, and their staff.

Jay Stucki  45:24

Well, and the physicians want to stay busy with their patient care, because they're, you know, the the multiple is going to be used, you don't want that last month to drop off, because I assure you, they are going to make sure that their calculation is a rolling, usually a rolling 12 months. And they're going to take that up to the very last minute, any data they can have. So if there's a drop off at the end, because the physicians taken away from patient care, that's a drop off in revenues, that's going to affect the, what's used in calculating the multiple.

Richard Groberg  46:03

I've seen lots of transactions, Griffin, where sellers in lots of different industries didn't have a lawyer or an advisor working with them. And they got so caught up in the in the business of the transaction that their practice suffered, there started to be staff issues in affected their business, sometimes in hostile negotiations, that's a tactic. And then it affects the ultimate purchase price. Because the buyer comes in and says, hey, the last three months, your business has deteriorated 20%, it's not worth as much.

Griffin Jones  46:43

So you're talking about part of part of it is convenience, part of it is so that the physician is able to remain productive, but is there also a component of it so that they don't get too invested early on it. So if they start to invest so much of their time they start to be in every meeting, if they that they start to become too invested into the sale, and that gives the buyer more leverage. Is that is that it play at all?

Jay Stucki  47:09

I would say no, just from the standpoint that, you know, if if I don't think this is a deal that can be done at the end, I would have be upfront with the physician from the get go. And, you know, good advisors not going to get you to the point of an LOI if he doesn't believe that it's a good fit. And that's not only from the Richard perspective as a consultant, but from the attorney perspective. The last thing we want

Richard Groberg  47:36

 That continues all the way through to the closing

Jay Stucki  47:40

Right, the last thing you want is, you know, legal, your client telling their attorney, you know, what, what the heck did you get me into? And so, you know, I love it at the end of the day, when my clients come back to me and say, Jay, not only did you do a great job, but you benefited all the other physicians are in the group, because you saw things that they didn't it that the MSO recognize, they need to adjust that now benefits the hall. Boy, we wish they could pay your bill. But great job. And that's the goal. That's that satisfaction, what I look for at the end of the day, but that's in the forefront of my mind from the get go.


Richard Groberg  48:21

Yeah, Griffin from from an analogous situation an RE, who runs his practice has people in the practice who do their jobs better than they can that that facilitate or leverage their ability to holistically run the practice. When it comes to these transactions, with the hundreds of hours that Jay and other lawyers invest that I work on. They're trusting the experts to do what they need to do on behalf of the sellers. And but to make sure they never get surprised. You know, Jay Jay, invest hundreds of hours going back and forth with the lawyers. And it's his job to make sure that he knows what the seller will and won't do. And when there were major issues, explain it and make sure the seller knows what they're getting into on all these subtle, subjective issues. But if the seller had to do all that in his or herself, first of all, they might not have the expertise to do it, even if they think they do, but their practice would suffer. 

Griffin Jones  49:23

Jay, it might be unethical to enter into an LOI with more than one buyer. Is it illegal?

Jay Stucki  49:31

No. But typically, you're, you will not see an LOI that doesn't have an exclusivity clause. In other words, nobody wants to, you know, it's very expensive, very time consuming. I mean, you're talking about hundreds of 1000s of dollars on any significant transaction. And nobody wants to say hey, what do you mean? I'm one of three horses in the race. Right? So that's where the importance of the upfront work. comes in to make sure that that's the horse, you want to hitch your wagon to, to make sure. And of course, if you're the buyer, you want the exclusivity because you're not going to go down the road and have the carpet pulled out from under you at the last minute.

Griffin Jones  50:14

From your vantage point, having done a number of these deals, what percentage would you say of LOIs do not result in a deal between that buyer and seller?


Jay Stucki  50:24

I think it depends on the industry. In the fertility industry, I've never had one not go through. But I think that's because I try to team up with people like Richard, who we set the table before, hey, we know what we're getting into. And we're not trying to take somebody down the path of an unknown. And let's hope for the best. Like I said earlier, if I don't think I can get this deal closed, I'm going to tell you that upfront, when I get an LOI that's already been signed, as opposed to draft or, yeah, I study it very closely. I'll call Richard, I'll call the client. And I'll good drill down and go through the questions to make sure that I understand what was behind it. And there are representations that I've declined. So, you know, to the extent maybe that LOI didn't go through, yeah, that's a real possibility. But I wasn't involved at that point, because I never took the assign.


Griffin Jones  51:23

So that wasn't necessarily my understanding. You know, I wasn't in the RMA, New Jersey, Shady Grove deal that didn't happen, what it was, what was it seven years ago, or something like that. But there was almost certainly an LOI in place there. And I don't have specific details I'm inferring a lot. But something didn't happen there. So my understanding was that it was more common. Jay, it seems like it's it's not so common for, for parties once once the LOI is in place for for them not to do the deal

Jay Stucki  51:53

I'm sure there's a lot of LOIs that collapse I, I represent a different group of entities in a different industry that run into the same issues of licensing corporate practice of medicine type analogy. And yeah, there's LOIs there that collapse all the time. So I'm sure they're out there. What I'm trying to distinguish is that, you know, if you can separate the wheat from the chaff, you can pick and choose. And I've been fortunate that I'm able to pick and choose those deals that I believe are workable that will produce that I'm not wasting my clients time. And so I maybe I can't really answer your question globally. But from the standpoint of those deals that I I'm selected for, and that I want to participate in, in the fertility industry, I'm batting nearly 100%.

Griffin Jones  52:51

So we've negotiated the LOI at this point what needs to happen before it's finalized. So, you know, Richard has torn it apart, Jay has torn it apart. Now are all the parties brought back in to review the document together? Are you reviewing it with the seller separately? And then buyer's counsel is reviewing with them separately? How, what how is the how is the LOI finalized before everybody signs it?

Richard Groberg  53:17

Well, I'm in the negotiations go back and forth. And both parties at some point, reach a point where they go, okay, there are no more open issues. And then everyone gets final changes or reviews that make sure that everything that was supposed to be changed, got changed the way it should, and then everybody signs.


Griffin Jones  53:34

Do you all review that together, though? You know, in the same Zoom meeting, or the same boardroom, or that can just happen, as each line

Richard Groberg  53:42

Modern technology, DocuSign, or whatever your poison is.


Jay Stucki  53:46

And let me tell you, there's also an underlying thing that we look for, in these back and forth meetings on the LOI, and that's the sense of cooperation, is everybody looking for the same goal? Because inevitably, there's going to be some clarification that's going to come up under the LOI that needs to be vetted when you get into the due diligence and the definitive documents. And if you don't have that sense of cooperation when you're negotiating the LOI, that's kind of a red flag from the start.


Griffin Jones  54:21

I'm glad we zoomed in on the topic of LOI so today we could have gone a lot broader but I like as I have experts on more frequently to dig deeper in particular topics. And we spent an entire episode talking about the letter of intent, which I think is really useful for folks. And it also gives me about 90 different ideas for follow up episodes that we could have you each back on because any one of those major points for LOI could be its own episode topic, but I will let each of you conclude, what does our audience need to know about letters of intent before they sign one to sell their practice?

Jay Stucki  55:02

I think you have to be upfront with your counsel or your advisor as to what your real goals are, you've got to drop your guard, you know, if you are really wanting to retire sooner than later, that's absolutely critical if you have health issues, and you know, you kind of kept it kind of behind the scenes or private, you need to disclose that. And so, you know, with attorneys, you get attorney client privilege that attaches right away with advisors, they have their own separate agreements. But it really is important to understand the client, and what their goals are, what their concerns are, what the warts are. And if I have that upfront, I can get you a good LOI. Absolutely. And it may not be with the the buyer that you wanted. But take the fertility industry, you know, there's four or five, companies always looking for a good acquisition. And so you're able to shop and see who might be the best bet.

Richard Groberg  56:09

And I think some my perspective, Griffin, like I've said before, it's not the final document, but there should be enough specificity detail based on the buyer and sellers goals, that it's an important governing framework. So all the work that has to be done after, and it needs to be taken very seriously, it's a lot like getting engaged. People are going to spend a lot of time and money soon as that document's signed. And you don't want surprises down the road. You don't want major problems down the road. And as Jay said, hopefully by the time that LOI is fully negotiated, the parties have a good working relationship. There's still going to be issues, there's still going to be some battles fought, hopefully between the lawyers, but it's an important stepping stone to the rest of what will happen. And I'm still seeing problems in some deals that haven't closed yet, because the LOI was unclear on some things.

Griffin Jones  57:13

Jay Stuki, Richard Groberg. Thank you both very much for coming on to the inside reproductive health podcast.

Jay Stucki  57:19

Glad to be here.

Richard Groberg  57:21

Thank you, Griffin. Appreciate what you're doing to the industry.

Sponsor  57:24

This episode was brought to you by bundle, you may be able to receive a free list of financially qualified IVF patients across the US and Canada. Email Courtney cbarrett@bundlfertility.com. That's cbarrett@bundlfertility.com. Today's advertiser helped make the production and delivery of this episode possible for free to you. But the themes expressed by the guests do not necessarily reflect the views of inside reproductive health. Nor of the advertiser, the advertiser does not have editorial control over the content of this episode. And the guests appearance is not an endorsement of the advertiser. You've been listening to the inside reproductive health podcast with Griffin Jones. If you are 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 fertilitybridge.com To begin the first piece of the fertility marketing system, the goal and competitive diagnostic. Thank you for listening to Inside Reproductive Health.