IVF Growth and Cost
Infertility affects one-in-eight Americans, more than those affected by diabetes, breast cancer or Alzheimer’s disease. Since the 2008 world financial crisis, demand for IVF services has hit record highs each year, with annual cycle volume growth accelerating four out of the last five years. By our estimates, 2020 cycle volumes should eclipse 400,000 procedures, effectively tripling volumes since the economic downturn.
Cost and Affordability
According to our FertilityIQ data, fully-loaded, per treatment cycle costs are now over $20,050, or nearly double the $12,400 that is popularly reported today. Our data below, presented at October’s American Society of Reproductive Medicine conference, indicates the emergence of two types of patient populations: the “haves” and “have nots”. Today, 80% of patients have either all, or none, of their IVF care paid for by their employer. The average U.S. household earns $51,000 in pre-tax income annually, so the opportunity to receive fertility benefits is a difference-maker for a quickly growing portion of the U.S. workforce.
Given the demand for, and costs of, IVF treatment, companies that subsidize treatment make a meaningful commitment. For instance, in a company of 70,000 employees with reasonable benefit adoption, coverage drives $15 - $30 million of additional annual expenses, or in the case of a company like Nike, one- to- two cents of earnings per share. Thus, the decision to subsidize employee IVF costs are financially material.
Data collected from IVF patients who had their treatment covered reveals that they feel a greater sense of loyalty to their employer, and stay in their jobs longer. Of those employees who ultimately had a successful pregnancy, 72% believe that “working for my employer helped me have my child.” Thus, IVF coverage likely drives meaningful improvements in employee retention, and makes a credible case for return on investment.
This year, Bank of America (finance and investment banking), Boston Consulting Group (consulting), Spotify (technology), Discovery Communications (media), Chanel (fashion and luxury), Conair (Consumer Products), and Johnson & Johnson (Pharmaceuticals) placed first in their respective fields for their fertility benefit offerings.
What distinguishes Spotify, Bank of America, Boston Consulting Group, and Chanel, is the extent to which these companies place no cap on the cost of treatment for an employee who demonstrates an infertility need. Cap flexibility was our number one criteria in ranking each employer. On the other hand, an employee of Bank of America, who happens to be a single-mother-by-choice, or part of a gay or lesbian couple, is not entitled to any of their lifetime benefit until they prove they are “infertile”. This creates a problem for countless employees who could use the benefit to build their families, and who are otherwise unable to do so without the help of costly fertility treatment.
This is where the technology companies shine: the extent to which they allow employees to pursue various types of treatment with no restrictions based upon who they are (e.g. gay couples pursuing surrogacy, single mothers undergoing artificial insemination) or their intentions (e.g. fertility preservation for mostly-unmarried women). Intel, Facebook, Apple and Google are the best examples of such inclusion. Yet, companies like Google and Facebook deny employees the right to choose at which clinic to be treated, ruling out some of the better-regarded institutions in each city. For this reason, these companies fell in this year’s rankings. The same was also true, to a lesser extent, of J.P. Morgan.
While Starbucks finished in the lower decile of this analysis, 85% of its workforce is customer-facing, and earns less than $40,000 per annum. That means Starbucks’s $20,000 Lifetime Maximums (between treatment and medication), equates to more than 50% of an average employee’s annual pre-tax income. For context, that is equivalent to, or better, than what Goldman Sachs provides its employees.
Most Competitive Field:
Employees within the technology field clearly enjoyed more generous fertility benefits than their peers, as six of our top 10 employers hailed from the technology category. Technology companies offered benefits nearly 35% higher than their peers across other categories. Interestingly, a number of smaller, private, or marginally-profitable businesses, like Spotify, Gusto and Wayfair, were as competitive in their offering as bellwethers like Amazon, Facebook, Microsoft and Google. Fields like consulting rose in the rankings for providing employees the freedom to choose how they used (e.g. surrogacy for gay couples) their lifetime maximum dollars, even though the total maximum dollars provided was less than in the past. Also noteworthy was the fashion, luxury and apparel field's second place showing in terms of average lifetime dollars allocated.
Informing Employees of Benefit Offering
Employees at companies that made this year’s list have mixed feelings about how well their company promoted these benefits. As one corporate benefits head, from a U.S. investment bank that made this year’s list, told us: companies are nervous about the degree to which fertility benefits will be widely adopted. Not only are the cost of treatments unwieldy, but they will presumably drive higher rates of maternity and paternity leave.
Criteria For Rankings, In Order of Significance
Lifetime Treatment Maximum: This marks how much money an employer will provide towards fertility treatment for the duration of the patient’s employment. The average of our companies listed here was $20,000, and where Bank of America, Spotify, Boston Consulting Group, and Chanel, made their mark was in providing no cap to their employees.
While lifetime maximums are important, it is also vital to focus on pre-authorization details. This dictates who can access those lifetime maximums, and for many employees (e.g. older patients, gay couples, women who want to freeze their eggs), these restrictions make them ineligible for the benefit. The technology companies are especially broad-minded in this regard, and as a result, witnessed their total scores improve.
Lifetime Medication Maximum:
IVF medication typically costs $3,000 - $7,000, or nearly a third of an IVF cycle’s total costs. Concerningly, many pharmacies will charge patients the equivalent of their lifetime medication maximum on a single course of treatment, thus in many cases, even a generous medication lifetime maximum might only be useful for a single cycle. For that reason, we placed its import below that of pre-authorization.
Many plans will refuse to cover add-on treatments that are quickly becoming de-facto in the field of fertility treatment. Pre-implantation screening, according to our data, is now used in upwards of 35% of IVF treatments, and is poised to be used in upwards of 50% by 2018. The test is meant to help minimize the rate of miscarriage, and since most employers categorically exclude it from coverage, patients are still forced to pay the $3,000 - $7,000 out of pocket.
Many employers will hem in their fertility benefit by requiring treatment to take place at specific clinics. Employees of Google and Facebook must let Google and Facebook Corporate Benefits determine where they will be treated if they want to enjoy the benefits. For instance, a Google employee in New York will not have their treatment covered if they want to be seen at an academic clinic like Cornell. Another approach is employed by J.P. Morgan and Goldman Sachs, which cuts in half employee benefits if they are spent at a clinic not in their “Center of Excellence” rubric. Often these restrictions remove 50% of the available options in any major city, or metropolitan area. Picking a clinic is a very pesonal decision, and we rewarded companies that gave employees this freedom.
Top Companies By Sector:
If you would like to contribute data on the company or institution you work for, please email jake@fertilityIQ.com.
Authors: Jake Anderson-Bialis, Amanda Garcia & Deborah Anderson-Bialis