In 2019, the global fertility services industry was estimated to be worth $14.8 billion with demand driven by the significant growth in the median age of first-time mothers, according to a Research & Markets report.
Gina Bartasi, founder and CEO of NYC-based fertility center Kindbody, has pointed to macroeconomic trends responsible for the industry’s consistent growth, such as the increase in single mothers by choice and the fact that “heterosexual couples are waiting to have children and waiting to get married, and more and more same-sex couples are having children, which is relatively new.”
Regardless of the increasing demand, disasters can disrupt fertility services: On March 17, the American Society for Reproductive Medicine directed U.S.-based fertility clinics to avoid initiating new treatments, push back nonemergency surgeries and shift care to telemedicine.
Now reopened, it’s undeniable that COVID-19’s national impact could alter the space as different types of crises have in the past. In looking back, we can find a better understanding of what the future holds.
After the terror attacks on September 11, 2001, a University of Louisville study found that there was “a prompt and significant increase in births and birthrates in the post-9/11 period” in New York City. Relatedly, when Hurricane Katrina hit New Orleans in August 2005 and created the nation’s costliest natural disaster, it was also one of five times since 1987 that frozen embryos were evacuated and protected during a natural disaster.
According to a study done by University of Wisconsin, “following Katrina, displacement contributed to a 30% decline in birth cohort size. Black fertility fell, and remained 4% below expected values through 2010. By contrast, white fertility increased by 5%.” The communities were so ravaged that the area’s Black population has remained substantially smaller.
Pew Research Center’s analysis of 25 states’ fertility and economic data indicates that birth rates began to decline from their highest point in 20 years as a result of the Great Recession of 2008. Interestingly, a Harvard University study found that although typical economic fluctuations were associated with changes in IVF use, the Great Recession did not significantly statistically alter the demand.
The shutdown of fertility services in March due to COVID-19 was met with resistance. “Patients felt like no one was telling fertile people to stop trying to conceive on their own, so why would infertile people be penalized,” said Bartasi. She credits their surge to the American Society for Reproductive Medicine’s initial recommendations for clinics restarting and proceeding to service their patients.
Upon reopening, Kindbody saw a surge of appointments. “Most moms or would-be moms start mapping out, ‘Here’s what I’m going to do for Thanksgiving. Here’s what I’m going to do through the holiday season.’ They start really planning everything out, so most would-be parents don’t want to pause. They want to get back to treatment.”
In addition to establishing physical-distancing standards and their own precautions at Kindbody, Bartasi said mental health becomes an even bigger aspect of client care during a disaster.
“Many of our patients are already understandably upset and depressed because, in their mind, trying to conceive and getting pregnant was something that was so natural and supposed to occur.” She recalls feeling the same way before when she had twin boys via IVF.
“Then you add something like this or like any other crisis — 9/11 or the Great Recession or COVID-19 — and it just exacerbates the stress or anxiety.” As anticipated, Kindbody has seen an increase in requests for coaching, counseling and mental health services. In addition to COVID-19, the civil unrest erupting nationwide after the killing of George Floyd has compounded pandemic-fueled anxiety for expecting parents.
According to the community influence theory, an increase in birthrate in the area directly around the World Trade Center could be partially attributed to the desire to bring children into “a community that is close and compassionate,” as mentioned in the University of Louisville study. This has also been used to understand the birthrate inflation in the metropolitan area closest to the site of the Oklahoma City bombing in 1995.
“During 9/11, and after the Great Recession of 2008 and through 2009, the fertility industry continued to grow, it just grew at a slower rate than in robust economies. So, we have proven and we have seen time and time again that … the industry was actually recession-resistant,” Bartasi said.
It’s clear Kindbody’s investors understand that. “We’re getting ready to announce our Series B raise. We raised it during the pandemic, and we’ll close it during the pandemic. I think that speaks to the trust and confidence our investors have in us, and it also speaks to the opportunity in women’s health and fertility.”
While there are obvious differences in the impact of different types of crises on birth rate as a whole and separately on those leveraging fertility services, it seems fertility clinics experience more of a pause even as the industry continues to see gradual increases.
Plenty of investments are made during a recession, and it’s no secret that smart investors will put money into recession-proof markets. “I think good businesses with really strong experienced management teams can raise money and step up in valuation during a crisis, but that goes back to the maturity of our management team,” said Bartasi. “We’ve all seen recessions before and understand the steady hand that’s required to navigate through this. Our entire management team is accustomed to navigating through them and really coming out stronger on the other side, I would say.”
That’s how you know, she says, that the business will be stronger on the other side of the recession — they’re buying now.
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