Infertility Treatment Markets: The Effects of Competition and Policy

For the 10%-15% of American married couples who experience reproductive problems, in vitro fertilization (IVF) is the leading technologically advanced treatment procedure. Two important issues are at the center of policy debates regarding IVF markets: 1) expanding access to infertility treatment, and 2) how to encourage IVF clinics and patients to minimize the risk of multiple births, which can be expensive and dangerous for both the mother and children. This paper evaluates the two principle policy proposals — insurance mandates and competition restrictions — for meeting these issues. Insurance mandates, which require that insurers pay for a couple’s initial IVF treatments, succeed in attracting more patients into the market while also reducing multiple birth risks. Competition restrictions have been proposed as a way to reduce risky behavior by clinics and patients, but we find that this reasoning does not apply to the U.S. IVF market. Additional competition can substantially increase the number of patients without increasing the multiple birth rate.