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Considering IVF? You’d Better Have Private Health Insurance

25 November 2013 No Comment

famOf late, more and more media outlets in Australia have commented on the country’s booming in-vitro fertilization (IVF) business. An increasing number of couples is seeking such infertility treatments in order to bring children into the world, while, at the same time, the cost of IVF procedures continues to rise. At the same time, a recent investigation ran in Fairfax has revealed that private equity funds stand to gain a lot from this segment of the market. Since costs are on the rise, couples are turning to loans and re-mortgages, in order to afford IVF procedures. And, of course, the private health insurance industry is also bound to see some effects of this market trend. In the following, we take a look at the costs (and profitability) of having an in-vitro baby in Australia.

How does private health insurance help?

Having private health insurance and being part of a couple that’s trying to conceive a baby through IVF in Australia is probably the best case scenario. According to a poll ran by the University of NSW, most IVF mothers are white women, born in Australia, who are in their mid-30s and can afford a good private health insurance policy. It’s always wise to compare health insurance plans but it seems that if you are considering an in-vitro conception scenario, it’s very important to know the extent to which your health fund will cover the costs. And, after all, even though costs are soaring in Australia, female expats going through the same situation in the United States report that things can be far more dire than they are Down Under. In the U.S., no matter how good your health insurance policy, most IVF clinics won’t give it a single look.

How much does it cost to have a baby in Oz?

According to a feature ran by The Sydney Morning Herald, which includes the story of one couple and their baby-making adventure, the total cost of an IVF treatment runs around $30,000. The couple interviewed for the story borrowed the money and, at the end of the procedures, felt that the treatment they received for it was good. However, they are still unclear as to why it is so costly. Each embryo transfer cost them roughly $3,000, for a procedure similar to a pap smear that lasts for a quarter of an hour, according to the mother. Storage fees for embryos also cost $160 per half a year, says the same source. Another clinic network was asking for $8,640 per fresh IVF cycle in 2012, a staggering increase from the $3,833 it cost on average in 2007. This 18 per cent increase per year, however, was also matched by a 13 per cent rise in embryo transfer costs (from $1,662 in 2007 to about $3,000 with the addition of a $395 hospital fee).

Why the private equity funds are moving in

It’s been seven years since the private equity funds have caught on to the fact that the IVF business is highly lucrative – it is actually expected to double its worth over the coming years, from the current $500 million spent per year. Meanwhile, the fee increase rate amounts to 3-4 times that of inflation in health service costs, which has stood at 5 per cent on average each year, over the past 10 years. The first IVF provider to be partly purchased by an equity fund claimed a deal worth $200 million in 2010. Several mergers and a few years later, the biggest IVF service provider in Australia thus created was listed on the share market in June 2013. It was the first one in the world to be publicly listed and the move has brought it a value increase of up to almost $600 million.

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