Current and former employees of the venture-backed company describe understaffed clinics and inconsistent safety protocols that they say contributed to errors. Kindbody says its incident rate is in line with other leading US programs.
(Bloomberg) — In March, a 39-year-old woman and her husband sat in a fertility clinic near Atlanta, and waited. The woman was there to have an embryo implanted in her uterus, the final stage of a grueling in vitro fertilization process involving hormone injections, multiple egg retrievals and more than $30,000 of the couple’s savings.
Three hours passed. Then a doctor emerged with jarring news: The embryo that the clinic had been storing — the couple’s last one — had been mislabeled. Staff couldn’t be sure it was hers. The woman broke down. All this effort, all this money, only to learn it might’ve all been for nothing, thought the woman, who asked not to be identified discussing the private ordeal.
“I went crazy just crying and crying,” she said. “It was our only opportunity.” Her account was corroborated by four employees who were present that day and requested anonymity discussing private information.
The Atlanta-area clinic and 32 others across the country are owned by Kindbody, a five-year-old startup founded by Gina Bartasi. She’s a well-known figure in the fertility world whose reputation and millennial-friendly marketing has attracted hundreds of millions of venture capital dollars to Kindbody, as well as celebrity investors including Gwyneth Paltrow, Chelsea Clinton and Gabrielle Union.
But beneath the firm’s Instagrammable aesthetic lies a bonus-driven business model, a number of understaffed clinics and instances of inconsistent safety protocols that have plagued some operations and contributed to errors like the one in Atlanta, according to three dozen current and former employees and patients interviewed by Bloomberg. The people, many of whom spoke anonymously for fear of retaliation by the company, include doctors, nurse practitioners, medical assistants, laboratory professionals as well as staff in operations, finance and sales.
Examples of embryos being mislabeled, lost or accidentally destroyed occurred in four clinics over the past three years, according to two current employees and a dozen former employees. Staff at six clinics said their labs had faulty heating, ventilation and air conditioning systems, factors that could harm embryo quality, and that the company moved ahead with expansion plans anyway.
As Kindbody has rapidly grown — acquiring a competitor, winning corporate benefits contracts with companies including Walmart Inc. and Tesla Inc., and courting investment banks to prepare for a public listing — many of the former and current employees say the quality of care provided in some clinics has slipped, and described a culture of pushing costly procedures to meet financial targets.
“IVF can be a risky business and accidents happen,” said Mina Alikani, an embryologist and consultant to providers setting up IVF labs. But the frequency of mishaps at the startup, as described to her by Bloomberg, are “concerning,” she said.
A spokeswoman for Kindbody strongly disputed the characterization that the company was understaffed or struggled to staff clinics and labs. She acknowledged the mislabeling in Atlanta, and said “this human error was identified and corrected because of our superior technology.” The company said its average incident rate across all clinics is 0.2%, which it says is similar to other leading US programs as detailed in a 2018 study by Boston IVF. It added that “no Kindbody laboratory has had an incident, accident or other issue that is unusual to what occurs in IVF laboratories generally.”
In a statement provided by Kindbody, Steven Katz — the chief executive officer of REI Protect, a risk management and insurance company for IVF clinics including Kindbody — said that Kindbody’s incident rates are in the lowest quartile of the clinics that he covers. Katz told Bloomberg that his firm covers about half of all fertility doctors and IVF labs in the country.
Booming Industry
The fertility industry worldwide has boomed in recent years, fueled by shifts in social norms, a desire among some people to postpone childbearing and rising rates of infertility among some populations. The number of assisted reproductive technology procedures — mostly IVF — hit 413,776 in 2021, up 78% from 2015, according to the Centers for Disease Control and Prevention. The global fertility market was worth about $35.2 billion last year and is expected to grow to $84 billion by 2028, according to market research firm Imarc.
Kindbody’s challenges underscore the risks facing an industry that, on one hand, focuses on expensive, painstakingly precise biological procedures while at the same time pursuing a growth path funded by investors intent on an eventual return on their money.
No IVF cycle is without risk: Significant incidents, like the mishandling of eggs or embryos that results in the loss or significant compromise of a cycle, occur once every 2,156 cycles, according to the 2018 Boston IVF study, which tracked one of its own laboratories over 12 years. Moderate problems, which might reduce the chance of success for a cycle, happened once every 555 cycles.
At Kindbody, the Bryant Park, New York, clinic had three incidents involving embryos in 2021, according to one current and eight former employees. That’s out of 830 total IVF cycles it started that year, according to data provided by Kindbody to the Society for Assisted Reproductive Technology (SART), which tracks cycles and success rates among its member clinics.
In one case, a patient who was scheduled to have an embryo thawed and implanted was told that the wrong embryo — one that she hadn’t been planning to use — had been accidentally defrosted, said Tracy Sosa, a former medical assistant assigned to the case. The patient and her partner were encouraged to move forward with the procedure, but it didn’t result in a successful pregnancy, an outcome that can happen for many reasons. The couple declined to comment about the incident.
“Patients walk in enamored by the look of the place and think they’ll be taken care of,” said Sosa. “To the company, they’re just a number.”
That same year, the Bryant Park clinic accidentally destroyed at least two other embryos, one current and two former employees said. One was dropped on the ground. Another, a patient’s last embryo, was damaged after accidentally being left out at room temperature. The woman was given unlimited free IVF to make up for the mistake, but didn’t conceive and ultimately stopped treatment at Kindbody, according to two senior employees who are still at the company.
In a statement, Kindbody acknowledged the incidents at the Bryant Park clinic but again pointed to the company’s overall 0.2% incident rate, while declining to give individual rates for its clinics. The company noted that Sosa worked in the company’s Princeton, New Jersey, clinic and said it has not had a major incident at any clinic. It strongly disputed the idea that patients are just a number, saying they’re the company’s “north star.”
Kindbody also provided 21 positive comments about the company’s services that, it said, were collected in August from 21 unidentified patients.
Kindbody conducts a root-cause analysis after incidents, including the ones Bloomberg raised, and corrects processes where necessary, the company spokeswoman said. Kindbody said its overall live birth success rate is 63%, compared to a national average of 43% as reported to SART.
Modern, Inclusive
When Bartasi founded Kindbody in 2018, it was her third venture in the industry. She’d previously started FertilityAuthority, an IVF referral network, which went on to become fertility benefits company Progyny. With Kindbody, Bartasi wanted to sell directly to consumers and employers, pitching it as a modern, more-inclusive service.
Some of Kindbody’s first employees said the early days were characteristic of any young company: fast-paced and chaotic, with an ambitious founder. In meetings, potential backers were impressed by Bartasi’s charisma, confidence and track record. “She’s one in a million,” said Stephen Hays, founder of What If Ventures, which backed Kindbody in 2021.
The company got its start offering free hormone tests and consultations in yellow buses across San Francisco, Los Angeles, New York and the Hamptons. When it opened brick-and-mortar clinics, they were outfitted with warm tones, fresh flower arrangements and gallery walls of abstract art depicting the female body. It hired executives from Equinox, OneMedical and Oscar Health.
“Kindbody is different than other players in the space because they have good outcomes without sacrificing the experience,” said Andrew Boyd, a partner at Bramalea Partners who invested in 2021. “You get that spa-like experience versus walking into a four-story medical center that’s next to a hospital with crappy parking.”
That’s part of what attracted Sophia Visanji, a 33-year-old optometrist who’d been contemplating freezing her eggs for years before walking into Kindbody’s clinic in New York City’s Flatiron district. “I had done some consultations at other clinics and Kindbody was very thoughtful and made me feel comfortable. It was millennial, picturesque, instagrammable,” said Visanji, adding that the staff were “really warm.” In total, Visanji said she paid about $9,000 and still stores her eggs with Kindbody.
Kindbody’s mission of making treatment more accessible hinged on making it cheaper for companies to offer it to employees. Once a handful of clinics were up and running, Bartasi started pitching: Early clients included Tesla Inc., Lyft Inc. and Rivian Automotive Inc. In its first three years, Kindbody opened nine clinics and raised more than $123 million, according to data from PitchBook.
Kindbody said that by building and operating its own clinics and labs, it could offer employers fertility services for their staff at 30% cheaper than competitors. But running those labs at the level needed to safely handle embryos has proved difficult in some instances, many of the former and current employees said.
In the months leading up to the Atlanta woman’s experience, that clinic had gone through periods when there was only one embryologist on site, according to four former employees, including Vernita Pearsall, who started as a practice manager in September 2022 and quit in March.
The American Society for Reproductive Medicine (ASRM) recommends at least two embryologists be present while eggs and embryos are handled. Kindbody had struggled to staff its labs since the clinic opened in 2021, and shortages meant the protocol wasn’t consistently followed, four former employees said.
Kindbody said that “typically, there are two embryologists present in Atlanta during procedures,” depending on the volume of procedures scheduled. On the day of the March incident when the woman’s embryo was found to be mislabeled, two senior embryologists were present, a spokeswoman said.
Nurses, medical assistants and lab staff also were sometimes too overwhelmed with day-to-day work to write up detailed accounts of any errors, a dozen current and former employees, including Pearsall, said.
In a statement, Kindbody said it made improvements after the March incident, including extra requirements for verifying labels and color-coding dishes. The company also said it reports, investigates and takes corrective action if incidents occur, including in each example that Bloomberg found.
Industry Oversight
There is no regulatory framework requiring fertility clinics to track lost, mishandled or destroyed embryos, though they are required by law to report birth rates to the CDC.
Meanwhile, several government agencies oversee aspects of IVF but don’t enforce standards, leaving a patchwork of state-by-state rules.
The CDC, for example, tracks which labs are certified by the Clinical Laboratory Improvement Amendments, a federal statute that regulates testing. But while tests on blood and semen fall under its remit, embryology testing doesn’t. To fill the gap, nonprofit organizations and industry groups like the College of American Pathologists accredit IVF labs, sending in an inspection team every two years. Kindbody’s labs are listed on CAP’s database of accredited reproductive laboratories.
Unlike most competitors, Kindbody operates its own embryology labs, controlling variables such as temperature, humidity and air flow. Air quality is especially critical because contaminants such as perfume or rubbing alcohol can affect an embryo’s quality, according to Alikani, the embryologist. The ASRM’s practice guidelines recommend “dedicated clean air into the laboratory…to limit particles, volatile organic compounds, and inorganic air pollutants.”
Kindbody’s Bryant Park location struggled with malfunctioning HVAC systems as early as 2020, but the company opened other new clinics before fixing issues at existing ones, according to six former and one current employee. Though clinics in 2021 in Austin and Atlanta passed the necessary inspections to open, problems surfaced quickly, employees said.
In Austin, a sewer pipe that released foul-smelling gasses into the clinic took weeks to fix, three former employees said. In the Atlanta clinic, the ceiling above the nursing station collapsed and unleashed a flood of water from the HVAC system, current and former employees said. The clinic, which had only been open for a few months, was temporarily shut down. The disruption didn’t coincide with the mislabeling incident at the same location.
In a statement, Kindbody acknowledged the disruptions in both of the clinics, saying the company took immediate action and that no patients, tissue or embryos were directly impacted. Regarding the Austin problem, Kindbody said in a statement that “at this time, the pipe is repaired and the odor has subsided in the IVF lab.” It said that “to suggest that Kindbody’s laboratories are substandard and not meeting industry norms is false.”
Doubling Clinics
The momentum of openings helped Kindbody raise another $62 million in 2021. That capital was used to fund the acquisition of a large, established Chicago-based fertility network, Vios Fertility Institute. The deal doubled Kindbody’s physical locations to 26 clinics, and the company quickly renovated the new locations to match its spa-like aesthetic.
Trying to meld the different cultures of the companies was difficult, according to two current and more than a dozen former employees.
The clash contributed to an exodus of employees and took a significant toll on laboratory leadership, according to dozens of current and former employees. At least four of the company’s senior lab directors have quit since 2022, including Chief Scientific Officer Dean Morbeck, a veteran IVF researcher who oversaw laboratory practices. Morbeck didn’t respond to requests for comment.
And in the months after the acquisition, more errors started surfacing.
Last November, a call came into the West Loop clinic in Chicago. The facility was then Kindbody’s largest location, and conducted about 40% of all egg retrievals in the first half of last year, internal documents show.
The patient on the line wanted to have her frozen embryo screened for abnormalities, according to one current and two former employees. There was one problem, they said: It was nowhere to be found. The clinic’s electronic records showed a unique identifier that corresponded to a storage tank and individual cylinder where the embryo was supposed to be. But the vial wasn’t there.
Staff members unfamiliar with some of the systems scrambled to find the embryo, according to the people who were present and spoke on the condition of anonymity due to confidentiality agreements. The misplaced embryo was found later that day, though staff members weren’t given an explanation for why the vial wasn’t in the right place.
The incident raised alarm among staff, who grew worried about the impact the acquisition was having on patients. They questioned how the company could continue to expand when, in their view, its busiest clinic was buckling under pressure, six current and former employees said.
Kindbody said that issues can arise when embryos are transferred to Kindbody from another clinic or a patient changes their name.
Fertility experts said that electronic tracking, like a system called RI Witness, can help minimize some human errors. While Kindbody bought the technology as it was opening clinics, some staff said it wasn’t widely installed and they weren’t properly trained on how to operate it, former senior employees said.
A spokeswoman for Kindbody said this was “completely inaccurate,” that RI Witness is now used in 90% of Kindbody labs and that it worked to catch the mislabeled embryo in Atlanta. It will “be fully integrated by the end of this year in our two remaining Kindbody clinics and lab staff has been fully trained to use the technology,” according to a statement. Kindbody said less than a quarter of all fertility labs in the US use RI Witness, a number that was confirmed by a person with knowledge of the technology’s reach. CooperSurgical, which owns the RI Witness system, didn’t respond to requests about how many total clinics use its technology.
Losing Money
In March, Kindbody raised $100 million in debt from one of its biggest backers, Perceptive Advisors, valuing the company at $1.8 billion. Kindbody said it would use the money to open 10 new clinics, make more acquisitions and reach profitability by the end of 2023. The same month, the company had a round of layoffs that eliminated at least 100 jobs, according to four employees.
A $25 million infusion from JPMorgan’s healthcare venture arm, Morgan Health, followed in May.
Kindbody said it cut some duplicate roles after the Vios deal, but that the company hasn’t had widespread layoffs, and had 823 employees in September compared to 826 a year ago. In that same period it opened three new clinics.
Meanwhile, some older clinics, like the one in Atlanta, are still losing money, according to two people familiar with the company’s financial position. A spokeswoman for Kindbody said that rising operational costs and inflation had affected profitability.
Kindbody’s sales culture also encouraged doctors and nurses to push patients into expensive services, according to people familiar with the practice.
A large portion of doctors’ bonuses depend on how many consultations they were able to convert into treatment, one current and two former Kindbody doctors said. While bonuses are not uncommon in the industry, the doctors said the company scrutinized six-month and one-year targets more than other clinics at which they had worked.
Each month, some doctors were given quotas — again, tied to annual bonuses — for the IVF cycles their clinics should do each month, current and former employees said. When numbers were low for the clinic, some were told to increase the number of “dual stimulations,” where a patient has two procedures to retrieve eggs in the same menstrual cycle, according to two former Kindbody doctors.
The procedure is designed for women who produce relatively few eggs or urgently need more on the first retrieval, such as patients starting chemotherapy. It’s relatively uncommon for an otherwise young, healthy patient, and studies have debated its effectiveness.
Kindbody said its compensation model is consistent with models across the fertility industry, and that its “physicians retain independent medical judgment to determine the appropriate treatment plan for their patients and are not required to follow any specific protocol.”
Going Public
As the company continues to grow, Kindbody’s backers expect an initial public offering to be around the corner.
In June, Kindbody hired Scott Bruckner, who led telecommunications company Casa Systems Inc. to its 2017 IPO, as its third CFO in three years. Kindbody has also garnered attention from investment banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co., which have been vying to lead an eventual listing, according to people familiar with the matter, asking not to be identified because the information isn’t public. Representatives for the banks declined to comment.
“They’re on a path to get there,” said Bramalea Partners’ Boyd. Growth helps a lot, he said.
“We want to see more clinics set up, faster,” said Boyd, who acknowledged there’s a cost to building new clinics and it’s not without risk. “If you make a mistake, it’s painful.”
Back in Atlanta, the patient who’d learned her embryo had been mislabeled was devastated. Because of the mix up, it needed to be genetically tested — a process that she had previously opted against and that can occasionally cause damage to an embryo.
The clinic was eventually able to confirm the embryo was the couple’s, but it was deemed abnormal and had to be discarded. While the woman was crushed by the experience, she was still determined to start a family. As restitution for its mistake, she said, Kindbody offered her a free IVF cycle, but it wasn’t successful. She and her partner are now looking into adoption.
–With assistance from Kristen V Brown.
(Adds company comment in 18th paragraph and changes headline to better reflect that errors were made at Kindbody clinics and a flood of water occurred at one clinic.)
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