Is Fertility Financing Ethical?

[Dreadnaught]

Wondering if people think it's ethical to offer to finance something emotional and costly such as in-vitro fertilization.

Arguably, this is a great way that free markets meet a demand. People get into debt for other big things in their lives (homes, cars, businesses, etc). This just also happens to be very emotional. Though the math clearly works for many people.

But, on the flip side, is it ethical to plunge people into high-interest debt so they can spend even more money on a kid? If they can't afford the in vitro, doesn't it seem like they might be stretching to afford the kid?

NOTE: The debt is unsecured. If the parents default, the kids can't be repossessed by the lender. Pity.

FEBRUARY 24, 2012 | In Vitro a Fertile Niche for Lenders

By JESSICA SILVER-GREENBERG

Julie Barth's prayers were answered when a doctor in Crystal Lake, Ill., told her in vitro fertilization might get her pregnant.

But he didn't stop there, referring her to a "fertility finance" company that lent her $5,000 at an interest rate of 7.99% to help cover the $24,000 procedure. Her daughter, Olivia, was born about a year later.

"You can't put a price on a smile like that," says Ms. Barth, 32 years old. She hopes to pay off her loan from Springstone Financial LLC, based in Southborough, Mass., by her daughter's third birthday in 2014.

At a time when many traditional lenders are struggling, companies that join forces with doctors to make loans for in vitro fertilization, egg harvesting and other fertility treatments say their business is thriving.

One reason: Fertility-finance companies are getting a boost from the banking industry's retrenchment. For example, credit has become tight for home-equity loans and credit cards, two ways couples often have paid for fertility treatments that often top $20,000. Mike Gilroy, Springstone's president, says business is robust because "if the time is right" to have a baby, "people want loans even in a sluggish economy."

Amid a struggling economy, companies in the business predict that lending will grow this year as demand swells from couples desperate to have a baby but unable to afford fertility procedures on their own.

Despite the demand from would-be parents, the loans have generated criticism from some doctors, concerned that they take advantage of couples' desire to have a baby at any cost. Some doctors won't offer the loans. Others worry that doctors who invest their own money in fertility-finance companies will push the loans on patients.

The loans typically are unsecured and carry interest rates of as much as 22%, more than the average credit-card rate of around 17%. The rates offered vary based on the lender's evaluation of a patient's credit-worthiness.

Fertility finance is "pretty much a recession-proof business, since the biological clock doesn't stop," says Doug Weiss, senior vice president of IntegraMed America Inc., a fertility-clinic operator based in Purchase, N.Y.

IntegraMed sets up couples with loans through a partnership with Springstone and NBT Bancorp of Norwich, N.Y. The partnership's number of loans jumped 41% in 2011 from a year earlier, and totaled $15.4 million.

"I have never been more confident about the opportunity we have in front of us," Jay Higham, IntegraMed's president and chief executive, told investors after the company reported record quarterly earnings last Thursday.

Regulators don't keep track of the number of fertility-related loans, but firms in the industry say they totaled about $4 billion last year, up slightly from 2010, although there is no independent verification of that amount.

Dozens of companies make these loans. As part of their pitch, the companies tell doctors that loans will increase patient demand. Lenders say the doctors don't get fees or commissions on the loans.

"Offering affordable financing to your patients is a way to GROW your practice," My Medical Funding, a fertility-finance company in Tampa, Fla., says on its website. The company didn't return calls for comment.

The lenders ask doctors to promote the loans to their patients and stock clinics with brochures. Some clinics allow patients to apply for loans directly through their websites.

"We thought it was the best option because we trust our doctor," says Karen Coker, a 27-year-old police-station clerk in New Carrolton, Md. She just received an $18,700 loan from CapexMD with a rate of 12%.


The courtship with doctors is mutual, says David Treisman, chief financial officer of Capex Management Inc., which owns CapexMD, a Scottsdale, Ariz., company specializing in fertility loans. "Clinics contact us because they have a sense of the number of patients they are missing out on if they don't offer financing," he says.

Yet some doctors are uncomfortable getting involved with the loans. "These patients are very vulnerable to predatory lending," says Charles W. Montieth, a Chapel Hill, N.C., doctor who runs a clinic for women who want to get pregnant after reversing a tubal sterilization. The clinic doesn't offer loans.

Also contentious are refund programs that offer money back if in vitro fertilization fails and patients don't take a baby home. One of IntegraMed programs refunds 70% of the $24,000 sticker price for a package of six IVF treatments if they all fail. If the first treatment works, the borrower still owes the entire $24,000, resulting in a larger profit for clinics.

Rafat Abbasi, a reproductive endocrinologist whose Bethesda, Md., fertility clinic doesn't offer the refund programs, worries some doctors will screen for women who will get pregnant on the first round, tipping the scale in the clinics' and lenders' favor.

"It's a valuable program which patients love," IntegraMed's Mr. Weiss says. "The criticism doesn't take into account the need of many patients who very well might not get pregnant on the first round."

The company doesn't disclose how many women in the refund program get pregnant on their first round.

The American Society for Reproductive Medicine, a trade group representing fertility doctors, doesn't have a policy on doctors making the loans. The American Medical Association didn't return calls for comment.

Regulatory oversight varies by lender. Loans made by banks are governed by state and federal banking regulators. In contrast, CapexMD and other firms that get money from private investors—including doctors whose clinics offer the loans—aren't monitored by banking agencies. Doctors aren't required to disclose their investment in the lender to their patients.

The loans emerged about a decade ago but became more popular during the financial crisis, according to fertility-finance companies. Capital One Financial Corp., the fifth-largest bank in the U.S. by deposits, dominated the market until 2009. Some doctors set up kiosks in their offices where patients could apply for the bank's loans.

A Capital One spokeswoman said the decision to stop making loans in 2009 was based on a "variety of factors," including that the business didn't fit with the company's "long-term strategic focus." Since the McLean, Va., company's exit, other lenders have flooded the market.

In December, CapexMD agreed to start making loans to patients buying eggs from the World Egg Bank in Phoenix, which previously offered financing through Capital One. Purchasing eggs from a stranger can cost up to $40,000.

"CapexMD has helped fill the lending void," says Diana Thomas, World Egg Bank's president.

After trying unsuccessfully for five years to get pregnant, Ms. Barth saw in vitro fertilization as her last chance. In August 2010, her doctor said she was an excellent candidate for the procedure. Elated, she was determined to do anything to pay the $24,000 bill.

Her doctor, Laurence Jacobs, says the clinic tells patients about the loans because now "bank loans are so scarce." To make sure patients get a good deal, Dr. Jacobs says he tells them to do their own research.

Fertility-finance companies say the industry will continue to thrive. In January, Dr. Jacobs sat through a PowerPoint presentation by CapexMD aimed at convincing him to invest in the company and offer its loans to patients. "They told us that interest would surge because patients want expensive treatments and banks aren't lending," Dr. Jacobs says. "They pitched it as a gold mine."

http://online.wsj.com/article/SB1000...123249832.html

[GGT]

If you're asking the forum to post about "reproductive rights" you might as well ask deer to post about highway traffic.



In other words, why not ask Brits why they finance IVF in their NHS? Or why certain prison populations are afforded IVF in lieu of conjugal visitation?

Why not explore why Freeee Market philosophy almost always means a business is ready to exploit someone's emotional decisions? Or how entire business models are often premised on "unethical" lending/borrowing?

[CitizenCain]

Why not explore why Freeee Market philosophy almost always means a business is ready to exploit someone's emotional decisions?

It's clearly evil to lend people money so they can buy things they want. The only way to be "good" in this word is to forcibly take money from people and spend it for them, on things they don't want... and thank God we got folks like you to do that for us.

On the other hand, not exactly a surprise that you'd come out in opposition to usury and other completely consensual, mutually-beneficial acts of j00ery.

[GGT]

It's clearly evil to lend people money so they can buy things they want. The only way to be "good" in this word is to forcibly take money from people and spend it for them, on things they don't want... and thank God we got folks like you to do that for us.

On the other hand, not exactly a surprise that you'd come out in opposition to usury and other completely consensual, mutually-beneficial acts of j00ery.

Nothing you said is relevant, but clearly meant to bait and troll. Reported.

[Loki]

I disagree. What he said was fully relevant. You want to ban any practice that helps people just because the help comes under terms you disagree with. You only want money to be given for reasons you support, at rates you support. Needless to say, we'd still be stuck in the Stone Age if people like you were in power.

[CitizenCain]

Nothing you said is relevant, but clearly meant to bait and troll. Reported.

Seriously, what are you on?

It's exactly on topic. You have a problem with... everything, even when it's completely consensual and mutually beneficial, yet somehow, you like government forcing everyone to do and believe what you "think" is best.

Or is the topic of the conversation you're having with yourself completely unrelated to this thread or what you've said in it? (Again.)

Needless to say, we'd still be stuck in the Stone Age if people like you were in power.

Not even that advanced. Hell, even baboons have been observed participating in barter (meat for sekz), and I somehow can't see GGT suffering that kind of heinous, immoral, flagrantly mutually beneficial arrangement. I dare say that if GGT ran the world, the largest human community in existence would be that family with the 22 kids... well, except that having more than the GGT-approved number of children would also be banned, so not even that.

Not that I'm in favor of vaginal clown-cars or whatever, just saying that it's even worse than being stuck in the Stone Age. Forget technology, even the existence of a functional community is mutually exclusive with GeeGee's way of... thinking.

[GGT]

I disagree. What he said was fully relevant. You want to ban any practice that helps people just because the help comes under terms you disagree with. You only want money to be given for reasons you support, at rates you support. Needless to say, we'd still be stuck in the Stone Age if people like you were in power.

Show me where I've said a ban to anything is a good answer. Seriously, where have I ever advocated an outright BAN of anything?

Usury isn't "completely consensual" or "mutually beneficial" any more than it's related to acts of what Cain calls j00ery.

There's also no reason to say I'm like the spokesperson for the Stone Age. I'm an advocate for public health being funded by the public.

[CitizenCain]

Usury isn't "completely consensual" or "mutually beneficial" any more than it's related to acts of what Cain calls j00ery.

There's also no reason to say I'm like the spokesperson for the Stone Age.

Right, if anything, you're a spokesperson for the Dark Ages, when money lending was banned [usury] and Jews were widely accepted as the single greatest threat to humanity.

On the other hand, the Stone Age didn't have widespread bans of money-lending, and, of course, no Jews for you to hate on either.

[GGT]

Seriously, what are you on?

It's exactly on topic. You have a problem with... everything, even when it's completely consensual and mutually beneficial, yet somehow, you like government forcing everyone to do and believe what you "think" is best.

Or is the topic of the conversation you're having with yourself completely unrelated to this thread or what you've said in it? (Again.)

That's completely bass ackward. If you've paid any attention to state legislatures, you'd know the proposals are NOT completely consensual or mutually beneficial, but are instead government forcing women to undergo tests....as if they're too stupid to know what being pregnant means.

Not even that advanced. Hell, even baboons have been observed participating in barter (meat for sekz), and I somehow can't see GGT suffering that kind of heinous, immoral, flagrantly mutually beneficial arrangement. I dare say that if GGT ran the world, the largest human community in existence would be that family with the 22 kids... well, except that having more than the GGT-approved number of children would also be banned, so not even that.

Not that I'm in favor of vaginal clown-cars or whatever, just saying that it's even worse than being stuck in the Stone Age. Forget technology, even the existence of a functional community is mutually exclusive with GeeGee's way of... thinking.

The vaginal clowns are the Republicans, the ones trying to legislate trans-vaginal ultrasounds, or abdominal ultrasounds, before women can get a safe and legal abortion. Saying women 'deserve the best information before making such an important decision'. Right, because women are so stupid they don't know what being pregnant means

[CitizenCain]

Alright, you enjoy your little conversation with yourself, then.

Let us know when you tire of talking to yourself by bumping your thread with questions about why no one else has anything to add, will ya?

[GGT]

I'll take that to mean you have no opinion on the matter, even though it's being debated on a national scale, with several states trying to limit women's healthcare options.

[Dreadnaught]

Cain, I think you actually have a good point, but the Joobaiting does get a bit much when it's all over the place.

But there is a funny thing here —*credit is indeed all about lending people money for things they want/need/think they need.

Where I'm having some hangups is whether fertility lending may be taking advantage of a biological process to potentially get people into a really unhealthy debt cycle. Then again, come to think of it, why are there speciality niches for all these different types of lending? Why can't I go to my local bank and get a loan for things beyond just a house?

[Loki]

Considering how expensive it is to raise a child, you really think taking a loan to get the child is what causes problems?

[CitizenCain]

Cain, I think you actually have a good point, but the Joobaiting does get a bit much when it's all over the place.

Well, maybe if she could go more than a couple posts without blaming all the world's woes on people with money, or telling us that loans are exploitation, I wouldn't be calling her out on it "all over the place."

Could be just me, but when I hear someone say shit like loans are exploitation and borrowing money isn't a mutually beneficial arrangement, that practically begs for the part at the end about evil Jew moneylenders harming the Aryan race and like that there.

But there is a funny thing here —*credit is indeed all about lending people money for things they want/need/think they need.

[...]Then again, come to think of it, why are there speciality niches for all these different types of lending? Why can't I go to my local bank and get a loan for things beyond just a house?

That's pretty much how I feel about it, but you know how banks are - they generally won't loan out a penny without collateral, and a $30,000 artificial insemination thing is a bit much to put on the ol' credit card, hence niche lenders. Personally, I'd like to see this kind of unconventional/non-standard lending expand, and maybe see some real options in borrowing money, other than credit cards or secured loans from banks.

Where I'm having some hangups is whether fertility lending may be taking advantage of a biological process to potentially get people into a really unhealthy debt cycle.

Like Loki pointed out, having a kid at all is a really unhealthy debt cycle. Wanna get yourself a million dollars in debt? Have a kid. An extra 30 grand on the front end doesn't really amount to much when you look at the actual costs of raising any spawn you may have.

[Veldan Rath]

not really commenting on the lending issue, but if you want a kid THAT badly, just adopt. Social Services has tons of kids that need homes.

[GGT]

But there is a funny thing here —*credit is indeed all about lending people money for things they want/need/think they need.

Where I'm having some hangups is whether fertility lending may be taking advantage of a biological process to potentially get people into a really unhealthy debt cycle.

IMO physicians as provider-investor is a big ethical concern, as your article points out.

Others worry that doctors who invest their own money in fertility-finance companies will push the loans on patients.

Regulatory oversight varies by lender. Loans made by banks are governed by state and federal banking regulators. In contrast, CapexMD and other firms that get money from private investors—including doctors whose clinics offer the loans—aren't monitored by banking agencies. Doctors aren't required to disclose their investment in the lender to their patients.

For a $4 Billion industry, based on unsecured loans at highs of 22% interest rates, there's a lot of room for exploitation (of desperate people). A similar thing happened with early outpatient CAT scan technology, when physicians sent patients to their own LLC or investor-owned site. No surprise when demand picked up in our fee-for-service model, and -some- doctors were ordering routine CAT scans and MRIs for everything/everyone. It took some rules and regulations to change that, and evolve with the new technology.

Then again, come to think of it, why are there speciality niches for all these different types of lending? Why can't I go to my local bank and get a loan for things beyond just a house?

You can get a bank loan for practically anything, including private loans for college, but traditional banks need asset collateral in case of default. The article says only those with 'good credit scores' qualify, but if they're not secured loans...default can still land them in trouble with the repo man or bankruptcy court. I wonder how many potential grand-parents are co-signers and liable, too?

[CitizenCain]

not really commenting on the lending issue, but if you want a kid THAT badly, just adopt. Social Services has tons of kids that need homes.

Problem being that it's usually about having a kid who's "yours" (biologically), satisfying that biological clock and all that.

[CitizenCain]

For a $4 Billion industry, based on unsecured loans at highs of 22% interest rates, there's a lot of room for exploitation (of desperate people).

Same reason women shouldn't be allowed to make legally binding decisions. They're too emotional, and that leaves "a lot of room for exploitation."

[GGT]

Same reason women shouldn't be allowed to make legally binding decisions. They're too emotional, and that leaves "a lot of room for exploitation."

You don't have to bait-and-troll your way through every discussion, ya know.

We know you don't believe that lenders could possibly do anything remotely predatory or exploitative. We also know you don't particularly like children, and think it's funny to poke fun at those who do. You'll benefit by living in a population-replacement nation any way you look at it, but only from other peoples' children.

Your insurance plan probably "finances" vasectomies using other peoples' premiums, and bank loans aren't needed. Check your policy, if it covers fertility testing or IVF, you're helping "finance" other peoples' children, too.