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WORKING PAPER 20
THE ECONOMICS OF THE IVF PROGRAMME:
A CRITICAL REVIEW
The Centre for Health Program Evaluation (CHPE) is a research and teaching organisationestablished in 1990 to:
• undertake academic and applied research into health programs, health systems and
• develop appropriate evaluation methodologies; and• promote the teaching of health economics and health program evaluation, in order
to increase the supply of trained specialists and to improve the level ofunderstanding in the health community.
The Centre comprises two independent research units, the Health Economics Unit (HEU)which is part of the Faculty of Business and Economics at Monash University, and theProgram Evaluation Unit (PEU) which is part of the Department of Public Health andCommunity Medicine at The University of Melbourne. The two units undertake their ownindividual work programs as well as collaborative research and teaching activities.
The views expressed in Centre publications are those of the author(s) and do notnecessarily reflect the views of the Centre or its sponsors. Readers of publications areencouraged to contact the author(s) with comments, criticisms and suggestions.
A list of the Centre's papers is provided inside the back cover. Further information andcopies of the papers may be obtained by contacting:
+ 61 3 9496 4433/4434 Facsimile
+ 61 3 9496 4424
The Health Economics Unit of the CHPE receives core funding from the National Healthand Medical Research Council and Monash University.
The Program Evaluation Unit of the CHPE is supported by The University of Melbourne.
Both units obtain supplementary funding through national competitive grants and contractresearch.
The research described in this paper is made possible through the support of these bodies.
I would like to thank Jeff Richardson, Colleen Doyle and Julia Shelley for their valuable andconstructive comments to earlier versions of this paper.
This paper reviews recent literature from an economic viewpoint concerning the costs and
benefits of the IVF programme (in-vitro fertilization) in assisting reproduction. The problems
with previous studies are highlighted, and suggestions made as to how these problems can
be surmounted in future economic evaluation of the programme. The first section of the
paper addresses the problem of infertility and the causes of infertility for which IVF has
been offered as a treatment. The second section concerns issues of efficacy. Sections
three and four detail the costs and benefits of the IVF programme, as they ideally should
be presented and as they have been presented in the literature. In the final section of the
paper, a suggested framework for economic evaluation is presented.
In-vitro fertilization has become well established in the Australian health care system as a
recognized procedure for the alleviation of infertility. There exist a number of IVF treatment
centres within every state of Australia.1 Until recently treatment was only available in the
private sector, however a global fee under the medical benefits schedule now covers
services utilized in IVF. Most treatment is still undertaken in the private sector. In spite of
the acceptability of the procedure, remarkably little research has focused on establishing
the efficacy of the treatment administered, particularly in relation to alternative procedures
Assuming the procedure is efficacious, in addition there are problems in quantifying the
costs and benefits of the programme. Studies thus far undertaken in Australia which have
taken an economic viewpoint have tended to present the outcome of treatment only in
terms of the birth of an infant.2-3 Unfortunately however, the birth of a liveborn infant occurs
in only a small minority of cases, and the most likely outcome of the procedure is the failure
to have a child. In order to present an accurate representation of outcomes of treatment,
attention should be given to the psychological and health effects experienced by couples
who participate in the programme (particularly those who are unsuccessful in achieving
conception) as well as the infants. A framework for evaluation is required by which IVF can
be compared, firstly with alternative procedures for the treatment of infertility, and secondly
with other medical procedures offered within the health care setting which compete for the
resources that will be spent on IVF.
Section One: Clinical Background
The Problem of Infertility
Although IVF is often presented as treatment for infertility, it is important to note that
it can not be defined as treatment in the classical sense, since it does not offer the
possibility of cure for infertility. The condition of infertility remains regardless of
IVF treatment, but what IVF does provide is a means by which conception can occur
when it would not otherwise. Infertility itself is defined in a number of ways in the
literature. The most commonly accepted definition within medicine is :
"the inability of a couple to conceive after twelve months of
The World Health Organization extended the time period of the definition to a period
of two years.5 With this latter definition the extent of infertility in Australia is
estimated at approximately 10% of the population.
Once the problem has been identified and a couple are admitted to a reproductive
technology clinic, they must undergo a number of tests and investigations to
ascertain an indication of the cause of infertility. These may include temperature
chart tests, an examination of cervical mucus, endocrine assays, semen analysis,
ultrasound and urine tests. Background information collected from the patient's GP
plus the results of these tests are used to make a clinical decision regarding the
most appropriate form of treatment for each couple. IVF was originally developed
for patients with tubal damage, in whom surgery was considered inappropriate or
where surgery had been unsuccessful.6 In such cases IVF is a treatment of last
resort. However, more recently, successful pregnancies through utilization of IVF
have occurred in patients with different types of infertility (see Table 1 for an
The Causes of Infertility
The causes of infertility for which IVF is an appropriate treatment option are
illustrated in Table 1, (below), together with possible alternative
Clinical Indication for IVF
The National Perinatal Statistics Unit provides estimates, on an annual basis, of the
causes of infertility in couples where pregnancy occurs as a result of In vitro
fertilization (IVF) and Gamete intra fallopian transfer (GIFT) programmes within
Australia. The primary cause of infertility for which IVF is advanced as treatment is
tubal occlusion or distortion (tubal damage). This condition was present in 47% of
women becoming pregnant by IVF and in 6% becoming pregnant by GIFT in 1988.7
By contrast, GIFT pregnancies were highest in the unexplained infertility group.
Other causes of infertility for which IVF and GIFT were utilized included male
1. Tubal Occlusion or Distortion
Where the clinical indication is tubal occlusion or distortion, tubal surgery is often
presented as the most appropriate form of treatment.6 However, it is important to
note that the success of surgery is highly dependant upon the type of procedure
performed. Salpingostomy (the opening of the fallopian tube) is the least successful
type of tubal surgery. Although the surgeon may be able to open the tube and have
it remain open, anatomic and physiologic damage to the remainder of the tube
rarely supports the numerous normal reproductive processes necessary to achieve
a successful pregnancy. Overall, pregnancy rates following salpingostomy have
been reported to range from 10-40%.7 The most successful primary tubal surgery is
correction of mid-tubal occlusion, resulting from previous tubal sterilization. The
pregnancy rate ranges from 60-80%.8 Where there is irreparable tubal damage or
after unsuccessful tubal repair, IVF is considered an appropriate alternative to
2. Pelvic Endometriosis
Where the clinical indication is pelvic endometriosis, reconstructive surgery can be
undertaken. However, pregnancy rates following surgery are generally higher in
cases of mild rather than severe endometriosis. After unsuccessful surgery or in the
case of severe endometriosis, IVF or ZIFT (zygote intra-fallopian transfer) are
3. Cervical Hostility
Cervical hostility refers to infection or swelling located at the neck of the womb in
the female. Artificial insemination by the husband is the procedure most commonly
used in this case. However where artificial insemination is considered inappropriate
or has failed, IVF may be offered as an alternative procedure.
4. Male Infertility
Male infertility is a broad heading which includes several male reproductive system
problems, which may be presenting in isolation or as confounding factors.
Oligozoospermia is the scarcity of sperm in the semen. Azoospermia is the absence
of sperm in the semen. Other problems include high viscosity of semen and low
sperm mobility. Treatments for male infertility are fewer than for female infertility.
Several different hormonal and other therapies have been used to treat male
infertility. More recently, most male factor infertility problems are being managed by
artificial insemination or by utilization of assisted reproductive technology
5. Idiopathic Infertility
Where infertility is diagnosed as unexplained, assisted reproductive technology
programmes, in particular IVF, GIFT or ZIFT may be used as a treatment of last
Assisted Reproductive Technology Programmes
It is important to recognize that GIFT and ZIFT are both variants of IVF. The clinical
procedures adopted are very similar in each of these techniques. Each procedure is
1. In-vitro Fertilization
Once admitted to the IVF programme, a couple must begin a treatment cycle. The
cycle begins at the commencement of menstruation in the female. The use of
clomid and pergonal drugs in the early stages of the menstrual cycle is common, as
these drugs facilitate the growth of more follicles than the usual one so that more
eggs can be collected from the female. Under the IVF programme the eggs of the
female are removed by the process of laparoscopy approximately mid-way through
the menstrual cycle. A small tube is inserted below the navel into mature ovarian
follicles, or alternatively by ultrasound-guided probe through the back of the vaginal
wall into the follicles. In both cases, the eggs are collected from the follicles by a
very fine aspiration needle. Following this procedure the eggs are incubated. Sperm
is required 2-4 hours after egg collection. The sperm is washed, prepared for
insemination, placed with eggs and then incubated for a period of between 16 and
20 hours. If fertilization has occurred, the embryos are placed in a fresh tube of
growth medium and returned to the incubator for 24 hours. At the end of this period,
the embryos are transferred, via a very fine catheter, through the vagina into the
2. Gamete Intrafallopian Transfer (GIFT)
GIFT as a procedure is very similar to IVF. However GIFT is restricted to those
women whose fallopian tubes are still intact. The same cycle is followed until the
point at which The eggs of the female are collected by laparoscopy. Once collected,
the eggs are placed in a small volume of transport media together with the sperm of
the male and then directly transferred into the fallopian tubes where fertilization
takes place. Fertilization thus takes place within the body of the female, whereas
with IVF and ZIFT (see next section) fertilization takes place outside the body of the
3. Zygote Intrafallopian Transfer (ZIFT)
ZIFT is another variation of IVF. The egg is fertilized in the laboratory in the same
manner as for IVF and exactly the same procedures are followed, except that the
fertilized egg is transferred to the mother's fallopian tubes (instead of the uterus) the
4. Artificial Insemination
This procedure can be of two types. Donor insemination occurs when the woman is
injected with donor semen into the vagina, and is used when the husband has little
or no spermatozoa in his semen. In the second case artificial insemination utilizes
the semen of the husband and is used in cases where the wife's cervical mucus
prevents the passage of semen through the cervix into the uterus.
Section Two: Problems of Efficacy
It is possible that the efficacy of IVF may differ according to the cause of infertility. A study
undertaken in the U.S.9 based on observational data of the IVF procedure in one hospital
found that success was highly dependant upon the utilization of good quality semen. The
procedure was much less effective when utilized due to male infertility where the primary
cause was low quality semen. A recent study undertaken in the Netherlands of the costs
and effects of IVF noted that the average success rate (defined as the birth of a live born
infant) was significantly reduced in the case of male factor infertility compared to all other
causes, being 5.9% for male factor infertility versus 11% for all other causes.10
In addition, there is evidence that natural pregnancy occurs quite frequently independently
of treatment for some couples on reproductive technology programmes. In a study of 1214
couples registered as infertile at an infertility clinic in the U.S. the proportion of treatment
independent pregnancies, after a period of two to seven year follow up, was 38% overall.11
Analysis of those couples who experienced treatment independent pregnancy revealed that
in 96% of cases the original diagnosis was cervical factors or idiopathic infertility. The
results of this study suggest that the utilization of reproductive technology programmes for
couples with unexplained causes of infertility is probably not the most effective option.
Greater effort should be channelled into the area of prevention of infertility in the first
Although this study is not a substitute for a properly designed clinical trial as a method for
treatment evaluation, it does provide interesting results which clearly need to be
investigated through the use of randomized control trials of IVF versus alternative
treatments for infertility. As yet, there is no published evidence of such trials having been
When considering the success rate of IVF, it is important to note that success itself can and
is defined in a number of ways in the literature. Often the success rate of IVF is defined as
the number of biochemical pregnancies relating to a treatment cycle. Studies reported in
this manner suggest comparatively high success rates of 33 - 55%.12 However, the risk of
spontaneous abortion, ectopic pregnancy and fetal death following biochemical pregnancy
make these results misleading. Measurement of success is better measured in terms of
the number of live birth pregnancies as a percentage of the number of treatment cycles,
since this is ultimately what IVF seeks to achieve. Defined in these terms success rates are
far more modest. There were 9,191 IVF treatment cycles carried out in Australia and New
Zealand in 1988, and of these only 8.1% resulted in pregnancy in which there was a live
born infant.7 This low success rate is important in assessing the cost effectiveness of IVF.
Looked at from one perspective, the effectiveness of a given expenditure is significantly
reduced because of the low success rate. From another perspective, the low success rate
increases the cost of a successful pregnancy. Consequently, variation in the success rate
could be critical to overall cost effectiveness.
Section Three: Costs and Benefits
Since the IVF programme is now firmly established, the basic question is not whether to
employ the IVF procedure, but rather when to employ it, when to employ alternative
procedures, how often to use it, under what clinical conditions and in what specific
circumstances. To answer these questions requires a full economic analysis of the costs
and benefits of IVF. This, in turn, requires a substantial amount of clinical information.
Ideally an economic evaluation of this procedure should take place in conjunction with or
following the results of randomized control trials to determine the efficacy of the procedure.
Although it is often difficult to ascertain the marginal or incremental costs of the intervention
and the marginal benefits expected, estimates of these figures are of interest since there is
no other basis for determining the optimal level of service provision of IVF and expanding
or contracting the use of IVF to this optimal level.
In order to evaluate the IVF programme from an economic perspective, it is
important to consider all costs and benefits. Cost in economic terms means more
than just monetary expenditures. Economists employ the concept of an opportunity
cost; the true cost of a programme arises from the fact that resources are scarce,
and utilization of resources by that programme means that the opportunity to use
them in another activity is foregone. The economic costs can be categorized into
two groupings, direct and indirect costs:13
1. Direct Costs
These include all of the costs of running the programme from a societal perspective.
This includes both medical and non-medical components, i.e.the cost to the
individual institution concerned and the cost to the individual patients involved.
A cost effectiveness study of the IVF programme should include the following direct
Costs of diagnostic tests; laboratory tests, ultrasound, pathology and urine
Costs of all consumables utilized during the procedure.
Staffing costs; nursing care, physician services, para-medical services.
Overhead costs; heating, power, lighting, laundry, linen, cleaning services,
clerical staff and administration for the infertility unit.
Capital costs; costs of the buildings and equipment utilized in order to
Patient transportation to and from the hospital.
Time taken off work to receive treatment.
Direct costs can be subdivided into fixed and variable costs. Variable costs are
dependent upon the volume of services rendered, whereas fixed costs do not alter
as a result of changes in service volume. Examples of variable costs include the
costs of medications and consumables utilized. Capital costs and overheads
represent fixed costs; they must be incurred regardless of the extent of service
2. In-direct costs
The monetary value of the changes in productivity that a patient experiences
The intangible costs of the psychologically harmful effects of participation in
the programme, e.g. pain, grief and suffering of the patient and the family.
In the case of the IVF programme, it is important to note that the direct costs of
producing a liveborn infant include not only the cost of that particular treatment
cycle but also the cost of the failures. A study recently commissioned by the
Australian Government noted this.14 Given that the cost per treatment cycle was
estimated at $4000 and only about 10% of treatment cycles are successful, then the
true cost of a liveborn infant is in fact $40,000. In addition, observation suggests
that many IVF babies are born prematurely and are of low birth weight.3 As such it
is likely that further demands on the health care system will arise e.g. neo-natal
The indirect costs of treatment can be quite substantial. If the mother of a child
conceived by IVF decides to withdraw from the labour market in order to care for the
child, this represents a cost not only to the family involved but to society.15 Child
care can be distinguished from almost every other household activity with regard to
the inflexibility of its organization. Child care cannot be flexibly organized since the
existence of dependant children makes continuous care or supervision necessary.
Child care competes directly with time in paid activity - normally the two cannot be
undertaken simultaneously. There is some controversy within the economics
discipline as to how such a cost should be calculated. From the point of view of
society, the most appropriate measure is what could be earned in paid employment,
or the opportunity cost of the activity. However from the family's point of view, the
importance lies in the cost of replacing those services through the use of a child
minder or the services of a creche. These costs may well be fundamentally different
from the cost of lost employment. The correct approach depends on the viewpoint
for the analysis. Given that the societal perspective is taken, then the opportunity
cost approach represents the correct form of analysis.
The intangible costs of the IVF programme are more difficult to quantify. A number
of studies have been undertaken which address the psychological effects
experienced as a result of involvement in the programme.16,22 In a recent study
undertaken in Canada it was noted that both males and females exhibited a
significant increase in anxiety levels after failed treatment; particularly noticeable
was the extent to which anxiety was generally higher for childless women compared
to those women in the programme who had previously born a child.16 As a result of
this study, the authors suggested that childless women on the IVF programme may
well benefit from some form of anxiety management training to manage the stress
of IVF, but also to assist in coping with treatment failure. The indications are,
therefore, that the treatment imposes stress on couples involved and especially on
the women receiving treatment and this represents a cost of the procedure.
The economic benefits of a health care programme can be categorized into three
1. Direct Benefits
Are the savings in health care costs since the programme makes people healthier
and, as such, means that they will use fewer health care resources in the future.
2. Indirect Benefits
These are the gains to society which accrue from the birth of an individual
who would not otherwise have been born.
The reduction in pain, grief and suffering of the patient and family due to the
improved health outcome i.e. quality of life.
The direct benefits of the programme are not likely to be substantial, since physical
health is largely unaffected as a result of involvement in the programme. However,
since IVF is often portrayed as a treatment of last resort, there is some evidence to
suggest that demands on infertility services will be reduced after withdrawal from
the programme regardless of the outcome achieved.11 However, in contrast, the
indirect and intangible benefits of the IVF programme are likely to be quite
substantial. Success results in the birth of a healthy and productive individual who
would not otherwise have been born. In addition, there may be psychological
benefits accruing to those couples who do succeed on the programme. For those
couples who do not succeed there is often a feeling of having done everything that
they could to conceive a child. It is possible that in some instances this makes a
Ideally both costs and benefits should be measured in units which enable
comparison of IVF with other treatments and procedures in health care. Current
practice suggests two methods of evaluation which may be employed as a
framework in this instance, cost-benefit and cost-utility analysis:-
Cost-benefit analysis may be defined as an economic analysis of any programme or
technology in which all real costs and benefits of that programme are expressed in
monetary terms. Therefore, the results of a cost-benefit analysis are presented in
terms of a net benefit (where this is defined as benefit minus cost) for each
treatment. This is important, because the net benefits of one treatment may be
compared with the net benefits of another, even though the treatment may be vastly
different and have entirely different clinical outcomes.
In order to undertake a cost-benefit analysis of the IVF programme, therefore, it is
necessary to convert the costs and benefits of treatment into monetary values. Data
on direct hospital costs are already available in dollar values and thus easily
estimatable. However, the psychological costs (sometimes perceived as negative
benefits) of participation in the programme are not easy to quantify, neither are the
direct benefits of the programme. One approach utilized by economists in this type
of situation is the "willingness to pay" approach.
The direct hospital costs of provision of a service would be calculated in the first
instance. Individuals would then be asked how much they would be willing to pay in
order to receive treatment. The costs of participation in the programme would be
traded off with the positive benefits associated with the probability of having a child.
The value that individuals place on the provision of the service is thus ascertained in
Cost Utility Analysis
In cost utility analysis, no attempt is made to measure the benefits of treatment in
monetary terms. Instead, outcomes are measured in terms of quality of life. More
specifically, an attempt is made to adjust the number of years gained through an
intervention in accordance with their quality. This is exactly what economists are
seeking to do when they evaluate QALYs (quality adjusted life years).
There are a number of methods which can be utilized in order to elicit quality of life
values. In the literature, it is quite common to see states of health rated on an
interval scale. This is based on a score of one for a year of life in good health, a
discounted figure for years of life in less than good health, to a figure of zero for
death. Individuals are then asked to rate the likely outcomes of a procedure
according to this scale. The benefits of a procedure can then be estimated
according to the number of QALYs generated.
Another method of eliciting people's preferences between different states of health
is to utilize the time trade off technique.13 The subject whose values are being
sought is asked to make a trade off between the chronic health condition for a
period of x years and good health for a shorter period, y years. The period of good
health is varied until the individual is indifferent between the two states. At the point
of indifference the valuation (h) of the chronic health condition is calculated as
h=y/z. These trade offs are illustrated in tabular form below. Such measures could
then be used in economic appraisal to express the benefits of the interventions in
terms equivalent to years of life gained in full health.
Time Trade Off for a Chronic Health State Preferred to Death
Section Four: The Literature from an Economic Viewpoint
Most of the studies undertaken on the IVF programme from an economic viewpoint have
been concerned mainly to elicit estimates of the costs of the programme. Benefits have
focused mainly on clinical issues.2,3,10 Pure outcome studies on the benefits of neonatal
intensive care, and on infertility services more generally have been undertaken however,
which provide an indication of the techniques which could be utilized to measure the
benefits of treatment from a wider socio-economic perspective.
As highlighted earlier in the paper, one possible approach to measuring the benefits
of the IVF programme, is to use the willingness to pay approach. This type of
analysis was undertaken recently by Maureen Dalton at St James' University
Hospital, Leeds, U.K.17 In a questionnaire survey of the general public and patients
attending an infertility clinic, people were asked what they would be prepared to pay
in terms of financial loss in order to have a child.
When the probability of having a child was 100%, the percentage of a year's income
individuals were prepared to give up was the same in both groups (see Table 2
overleaf). However, when the probability of having a child was reduced to only 50%
predictably, the general population group was more risk averse than the infertility
population group, giving up 29% of a year's income as opposed to 34%. However,
this difference is not substantial and emphasizes the importance that the general
public place on the possibility of having a child.
Her findings refute the suggestion that infertility programmes such as IVF deserve a
low priority in competition for resources. Indeed one can argue that her results
suggest the high value that the general public and infertile people place on having a
child and that this exceeds the value of a few extra years gained at the end of life.
The percentage of income both groups would be prepared to pay to have a child
with either 100% or 50% success is higher than the percentage of income they
would be prepared to pay to have five extra years at the end of life. This result is
important, since it suggests the possibility that resources should be re-directed
towards assisted reproduction programmes.
Unfortunately, however, Dalton's analysis remains incomplete, since no attempt was
made to couple the perceived benefits of treatment with the direct hospital costs
involved. A more complete analysis would require this type of comparison.
Trade Off Values in Infertility
Years off end of life to be pregnant once?
(ref. Dalton, M. and Lilford, R., "Benefits of IVF", letter to the editor, The Lancet, Dec. 1989).
A study undertaken in Canada highlights the possibility of eliciting QALY values as a
method of measuring the benefits of IVF.18 The study was actually a cost-
effectiveness analysis of neonatal services for low weight infants, but the method of
measurement has since been applied to the IVF programme.
A classification of health states was developed to measure the health of survivors
according to their physical function, role function, social and emotional function and
health problems. This classification was then given to a random sample of Canadian
parents who were asked to assign a utility value to each health state ranging from
one (for perfect health) to zero (for death). In fact some chronic dysfunctional states
in children were considered as worse than death and hence given a negative score.
These utilities were then used to adjust life years gained for quality, e.g. a life year
in a state judged to be 0.75 on the utility scale would represent 0.75 quality adjusted
life years. The benefits of neo-natal intensive care were then evaluated according to
the number of QALY's that were generated.
It was discovered that the costs of neo-natal intensive care were higher for infants
of very low birth weight (500-999g) as compared to those of moderately low birth
weight (1000-1499g). Consequently the cost per QALY was higher in the first group
at $9,100 Canadian, than in the second group ($900 Canadian). If a similar type of
methodology is applied to the IVF programme, where the benefit of treatment is
assumed to accrue to the liveborn infants conceived as a result, the benefits are
likely to be quite substantial, since the number of life years gained is large and it is
probable that the quality of those life years will be good.
A recent discussion paper provided an estimate of the number of QALY's which will
accrue to an IVF baby.19 It is assumed that they will live for 50 years on average,
and in a state of reasonably good health. This estimate was then multiplied by the
total number of IVF babies conceived within Australia from 1980-1984. According to
these calculations, the IVF programme yielded a total of 30,900 QALY's over this
four year period. This information was then coupled with the cost estimates of IVF
over the same period reported by Bartels (see section B below), to provide an
estimate of the cost per QALY of $1036. If we compare this figure with other health
care programmes evaluated on this basis, antepartum anti-D therapy costs $1220
per life year gained, neonatal intensive care for infants weighing between 1 and
1.5kg, $4500, thyroid screening $6300, coronary artery by-pass grafting $36,300
and hospital haemodialysis, $54,000. Presented in this manner the author noted
that IVF would seem to provide good value for money.
Economic Assessment Studies
A number of economic assessment studies of the IVF programme have provided
evidence which suggests that the cost of treatment under IVF is directly related, not
only to the level of service provision provided, but also to the organization of the
administration of the service. That is, the evidence suggests that X- inefficiency
may be an important factor in determining cost. The term "X-inefficiency" was
initially developed by Leibenstein to draw attention to the potential importance of
internal organizational relationships and behavioural relationships within the unit as
influences on its technical performance and hence on the costs of running the unit
A recent study undertaken in the Netherlands of the diffusion of IVF concluded that
the monetary costs of providing IVF treatment were highly dependant upon the level
and type of service provision offered.10 The sample utilized for the Netherlands
study was the 1462 couples registering for the IVF procedure between August 1986
and June 1988 in five separate hospitals.
It was found that the costs of the IVF treatment varied according to the following:
the treatment protocol (medication and frequency of monitoring)
the task division between academic and other personnel
the assumptions made concerning the level of physicians' fees.
For most of these factors, a sensitivity analysis was employed and two alternative
situations were calculated: one providing a low estimate and another a high
estimate. In addition the author highlighted the existence of economies of scale in
the level of service provision offered in the Netherlands. As illustrated in Table 3,
overleaf, for 375 started treatments annually, the average costs per started IVF
treatment were between NLG 2100 and 2700 (where NLG 1 = US$ 0.5). For 750
started treatments annually this figure decreased to NLG 2000 - 2400. For 1250
started treatments the figure was NLG 2000 - 2400. However, it was noted that
these savings could be differentiated with regard to patient groups, hospitals,
number of treatments per couple and size of the IVF programme. A figure of NLG
2500 was assessed as providing the best estimate of an average treatment cost.
Benefits were presented purely in terms of a clinical assessment, i.e. the number of
live born babies as a percentage of the number of treatment cycles. No attempt was
made to measure the benefits of treatment in a form which would enable
comparison of this procedure with others. Defined in these terms, a 10% success
rate was observed,which is in agreement with international experience.
Another study of IVF undertaken in the UK highlighted the differences in costs of
treatment which arise because of differences in the extent and type of treatment
administered.21 The study aimed to provide information on the demand for IVF,
costs and likely outcome of service provision, in order to assist the Trent Regional
Health Authority in deliberations about the funding of IVF. Information was obtained
from three hospitals concerning the running costs of their IVF units. The hospitals
Treatment Costs per Ongoing Pregnancy, Differentiated
The average costs per reached ongoing pregnancy were NLG 25000, but differentiated to
several subgroups, the costs per reached ongoing pregnancy (in NLG) were:
Annual number of IVF treatments per center
(ref. Haan, G. "The Effects and Costs of IVF", Institute of Medical Technology Assessment, 1990).
The three units' running costs were calculated (see Table 4). A number of
assumptions were made in the determination of these costs. With regard to staffing
levels, in the early stages of setting up an IVF unit it was observed that the
consultant is likely to be involved almost full-time, but once the clinic is established
the consultant generally provides managerial supervision and a limited clinical input,
which probably accounts for three or four sessions each week. Therefore only one
third of the consultant's time was costed. The cost for utilization of hospital facilities
was based on half the average costs of an overnight stay per cycle. Most units
attempt to keep inpatient stay to a minimum, but even when no inpatient stay has
occurred the patient still has the use of the facilities and general services of the
hospital. The cost components calculated were staffing levels, drugs and
consumables, inpatient stay, annual equivalent cost of buildings, and the annual
Running Costs of an IVF Unit
Average Annual Cost = £439,739 to treat approximately 400 couples
(ref. Page H. "Economic Appraisal of IVF" Journal of the Royal Society of Medicine, Feb. 1989)
As illustrated in Table 4, the average annual cost in 1989 was estimated at
£439,739 to treat approximately 400 couples, or £366 per cycle of treatment. Again,
no attempt was made to measure benefits in this study. They were presented in
terms of the number of liveborn pregnancies as a percentage of the number of
treatment cycles. Presented in this way results indicated a 10% success rate.
The studies of IVF undertaken in Australia from an economic viewpoint have mainly
been concerned with establishing the overall cost of treatment, and in particular the
Government contribution. Dita Bartels, in her study of the extent of government
financing of the IVF program in Australia during the first five years of the
technology's operation (1980-84), utilized information collected by the
Commonwealth Department of Health concerning the Medicare rebate schedules.2
The costs of an IVF treatment cycle were ascertained through the charging system
of Medicare. In addition to listing the various procedures involved in an IVF
treatment cycle, the costs of each procedure and the direct government contribution
to it were calculated. The typical costs associated with the pre-laparoscopy stage of
IVF were totalled and then added to the typical costs of IVF treatment from
laparoscopy to assessment of pregnancy. On this basis the total cost of a treatment
cycle was estimated at $3738, of which the direct contribution of government was
$2665. Note that, unlike the Netherlands study, no attempt was made to cost on the
basis of differences in treatment scenario, organizational size or structure. Instead
an average scenario of IVF treatment was used and the results were presented in
terms of the number of hormonally defined pregnancies relating to the number of
From information collected at Monash Medical Centre, Bartels concluded that 1775
treatment cycles gave rise to 229 hormonally defined pregnancies, yielding a ratio
of 7.75 to 1 for the average number of treatment cycles per hormonally defined
pregnancy. During the period 1980 -1984 there were 909 hormonally defined
pregnancies recorded. But success at Monash Medical Centre is generally higher
than at other centres, so to take account of this it was assumed that about twice as
many treatment cycles per hormonally defined pregnancy were required at other
centres. This would lead to around 12,000 treatment cycles performed in Australia
in the five year period 1980-84. This implies a cost of $2665 x 12,000 or a figure of
$31.98 million for the direct government expenditure on IVF treatment in Australia
during 1980 -1984. By combining this estimate with information on the number of
live birth pregnancies achieved over the same period, Bartels estimated that direct
Government expenditure was $64,500 per live birth on average.
Gail Batman's discussion paper on IVF estimated the total cost for the provision of
IVF in Australia in one year, 1987.14 The estimates were obtained from information
collected in Commonwealth Government statistics. In a similar exercise to that
previously undertaken by Bartels, the cost of an average treatment cycle was
estimated and was found to be $3574. This figure was then multiplied by the
number of treatment cycles undertaken in that year to obtain an estimate of total
expenditure of $30 million in 1987, with Commonwealth Government outlays being
approximately $17 million. If this estimate is divided by the number of live birth
pregnancies relating to IVF in the same year (National Perinatal Statistics Unit), this
averages out at a total cost of $33,000 per birth with Commonwealth Government
contributions totalling $18,500. This estimate of Government expenditure per live
birth is considerably lower than that quoted three years earlier by Bartels. However,
Batman's estimate of the extent of Government financing as a percentage of total
expenditure was lower than that claimed by Bartels (government contribution of
In spite of this difference, Batman's evidence indicated that the costs of providing
IVF treatment in Australia had lowered quite considerably in the period 1984-1987
The Western Australian Government commissioned a study to monitor and evaluate
the practice of IVF and related procedures such as GIFT in Western Australia.3
Item numbers, rebate types, frequency and costs associated with treatment were all
recorded for a 10% sample of all IVF and GIFT treatment cycles undertaken in
Western Australia between January 1983 and December 1986. Cost calculations
were split into two components: retrospective costs (costs up to delivery) and
prospective costs (costs from delivery to discharge from the hospital of birth).
Following the actual treatment cycle, additional costs were assigned if required, e.g.
a failed pregnancy requiring further treatment. Average costs associated with
normal delivery, early admission of mothers, caesarian section and special care
By 1986, the mean cost of an IVF treatment cycle was $3,893. By far the greatest
contribution to the weighted treatment cycle cost for IVF came from the most likely
outcome, failure of a woman to become pregnant. Government contributions to
these total costs were estimated and at approximately 50% overall were considered
as quite considerable. The mean prospective costs were estimated at $3,750. The
authors pointed out that the true cost of a pregnancy must include not only the cost
of a successful treatment cycle, but also the cost of all failed treatment cycles.
Given a 10% success rate then the true costs of one IVF live birth include the cost
of one treatment cycle divided by the probability of success plus the mean
prospective costs of delivery. Calculated in this manner, the costs of one IVF live
birth were $42,927. The benefits of the IVF programme were presented in terms of
the number of live births as a percentage of the number of treatment cycles.
The comparison of IVF with alternative procedures for the treatment of infertility has
been considered in some cases e.g. in the Western Australian study IVF was
compared with GIFT as a procedure.3 Because of the relatively higher success
rates of GIFT, (approximately a 25% success rate), the total cost of each GIFT new
born was roughly half that of IVF - $21,635. The study concluded with the
recommendation to the Commonwealth Government of the need for randomized
control trials to determine the true effectiveness of IVF. Also called for were long
term follow up studies of the children born under the IVF programme and the
In the study undertaken in the Netherlands by Ger Haan, IVF was compared with
tubal surgery as a treatment option.10 Treatment costs for tubal surgery are
between NLG 5000 - 7000, and additional health care costs are NLG 5500 - 7000.
The success rate in terms of the birth of a live born infant is 30%. On average three
IVF episodes are needed to reach an on going pregnancy chance of 30% . The
average costs per on going pregnancy for the treatment possibility three IVF
episodes are about 7,500 which is approximately equal to that of one tubal
reconstruction operation. It must be noted, however, that between patient groups
there are great differences in results, both for IVF and for tubal surgery. As
suggested earlier in this paper, according to the diagnosis of infertility some patient
groups are better off with IVF and others with tubal surgery. Therefore, it is not
satisfactory to consider tubal surgery and IVF as direct substitutes in the treatment
of infertility for all patient groups. The study authors conceded that this was the
case in fact. On the basis of the findings of this study, the Health Insurance
Executive Board recommended that reimbursement to patients for the cost of
entering an IVF programme should occur. It is interesting to note, however, that an
initial discussion of the financing of the IVF programme eventually turned into a
general discussion of fertility treatments and the level of financial provision which
should be given to this whole area vis-a-vis other unrelated procedures in health
Summary of the Literature Reviewed from an Economic Viewpoint
All couples registering for IVF from August 1986 until June
1988 in five major Dutch Hospitals. Sample consisted of 1462
couples and a total of 3092 treatment cycles.
Survey of two Regional Health Authorities. Sample consisted of
400 couples treated over a period of one year. Average of 3
treatment cycles per couple was assumed.
Survey of medicare rebates offered in the period 1980-1984 for
IVF treatment. Expenditures are calculated in 1987 prices
based on information supplied by the Commonwealth
All couples who began IVF treatment in Western Australia
between January 1983 and June 1987. In total 1,240 couples
were surveyed. A total of 2,982 treatment cycles were
Commonwealth Government statistics of expenditure on IVF
Australia wide in 1987. Also information on IVF birth rates
supplied by the National Perinatal Statistics Unit.
1. Batman utilized afigure of 56% of total
this possible under-representation of the
still suggest a loweringof the costs of IVF overtime.
Problems of Analysis from an Economic Viewpoint
The economic assessment studies of IVF so far undertaken have differed in terms of the
viewpoint of the analysis, and the method of cost calculations employed. To a large extent
the different results for the costs of IVF cited above depend upon the viewpoint of the
analysis taken. By contrast, the benefits of IVF treatment are almost always presented in
the same format, the number of live births as a percentage of the total number of treatment
cycles. This figure remains remarkably consistent between studies at approximately 8 -
10%. The economic appraisals so far undertaken can be criticized because they offer only
partial evaluation. Results are presented in terms of the actual resource costs of IVF per
liveborn infant. Presented in this way the results offer little scope for the comparison of IVF
with other treatments and procedures competing for health care dollars, in terms of value
If we accept the World Health Organization's definition of health as 'a state of complete
physical and mental well being' then it must be accepted that there are two sides to health
improvement, physical health improvement and psychological health improvement.5 For
women who participate in the programme, the outcome is predominantly a psychological
effect.17 It is necessarily related to success (or otherwise) in the programme - where
success is defined in terms of a liveborn baby and its health. However, it is a distinct
outcome in itself and should therefore be treated as such for the purposes of evaluation.
Section Five: Suggested Framework for Evaluation of the IVF
It appears that no one in Australia (or indeed overseas) has attempted to undertake a
comprehensive cost-benefit analysis of the IVF programme to date. A correct evaluation
should consider all costs (both direct and indirect) and all benefits of treatment, according
to the criteria established earlier in this paper.
Currently a large research effort is focusing on the desirability of QALYs as a guiding
mechanism for resource allocation decisions within health care. Unfortunately, there are
some obvious problems in using QALYs to evaluate the IVF programme, as it presents us
with some difficult questions which are not easily answered. In particular, there are two
Do we value the maintenance of an existing life in the same way as we value the
creation of a new life? The answer might well be no, and then the question
becomes how can we make meaningful comparisons using cost per QALY data of
IVF with, for example, kidney transplantation which improves the length and quality
The willingness to pay approach can be utilized to gain values from a sample of the
general population as to the relative importance of the provision of IVF versus other
more conventional heallth care programmes. This would also be the case if QALY
measures were utilized using utility values elicited from the general population,
where the benefits of IVF were assumed only to accrue to the couples who go
through the IVF programme, rather than the live born infants conceived.
In theory all benefits of IVF treatment must be included in any economic evaluation.
However,in practice this has not been the case. Both the willingness to pay and
Dalton's analysis quantify only the benefits to parents of the provision of treatment,
whereas the studies measuring the quality adjusted life years of children measure
benefits to children. Each set of studies ignores the other benefit. It can be argued
that each set of benefits is probably independant and therefore should be treated as
such for the purposes of an evaluation.
I propose that a study should be initiated which enables two types of analyses to
take place simultaneously. The first approach is to calculate the cost per quality
adjusted life year, where the benefit is assumed to accrue to the child. The second
approach is to calculate the cost per quality adjusted life year, where the benefits
are assumed to accrue to the couples involved in receiving treatment. A comparison
of results, depending upon the perspective taken for the analysis, would then be
The outcome of interest for the couples involved is primarily a psychological effect
(either positive or negative) and not a physical health effect as such.17 This is not to
deny that involvement in the programme does not have some uncomfortable
physical health side effects. However, what we are interested in primarily is health
outcome, and I would suggest that the psychological outcomes of treatment are
likely to be the predominant ones in this instance. Herein lies a problem for
researchers, since the traditional health status scales, e.g. the Rosser Index, are
inappropriate for the evaluation of IVF, as they are not sensitive to the psychological
effects of treatment. In addition, they do not include such factors as marriage
satisfaction, sexual functioning or reproductive ability. One possibility might be to
develop programme specific descriptions of outcome states following treatment.
These profiles could be built up from information presented in the literature, and/or
by questioning a representative sample of couples who have been through the IVF
programme about their outcome experiences. A random sample of the general
population would then be asked to value each of the possible outcome states on an
interval scale. These values could then be elicited to obtain QALY measures. As
discusssed earlier in the paper, another favoured approach to eliciting QALY
valuations concerning the health state scenario is the time trade off technique.
Individuals would be asked to trade off different outcome states following treatment.
In addition, one could gain an indication of the value individuals place on the
provision of assisted reproduction programmes such as IVF by obtaining
preferences between long term childlessness and other chronic states of ill health.
A cost-utility analysis of the IVF programme would provide useful information, which is
currently not available, concerning the importance that individuals place on infertility and its
treatment. More specifically, individual preferences for expenditure on IVF versus other
more conventional procedures in health care could be assessed. A two pronged analysis,
which measures the benefits of the procedure in relation to a) the couples involved and b)
the live born infants, should also reveal useful information concerning the effect of the
procedure on the majority of couples for whom IVF is not successful, and enable an
interesting comparison of results relating to the perspective taken for the analysis. In
addition, the utilization of a common unit of measurement (the QALY) will allow IVF to be
evaluated in cost per QALY terms, thus providing a basis for inter-programme comparisons
with other procedures in health care.
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De Wit A, Banta D, Haan G. "The diffusion of IVF in the Netherlands and
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Journal of Psychosomatic Research 60 (2006) 253 – 256Pro-anorexics and recovering anorexics differ in theirElizabeth J. Lyonsa,T, Matthias R. Mehlb,T, James W. PennebakercaDepartment of Health Behavior and Health Education, University of North Carolina, NC, United StatesbDepartment of Psychology, University of Arizona, Tucson, AZ, United StatescDepartment of Psychology, University of Te
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