January 31, 2023
Welcome to Perspectives, Leerink Partners’ signature podcast, where we share our insights and interview leaders across the industry to get their perspective on how they’re driving innovation. We’ll also be digging into the backstory to learn more about what has most influenced their success. Be sure to check out all episodes by Leerink Partners.
Jon Swope: Hello, I’m John Swope, your host for this month’s edition of our podcast series Perspectives by Leerink Partners. I’m a senior managing director here and Head of Digital Health at Leerink Partners, the investment banking arm of Silicon Valley Bank. It is my absolute pleasure to be joined today by Gina Bartasi, founder and executive chair of Kindbody. It is so wonderful to be joined by you today. You have earned many accolades and monikers over the years, including the “OG of fertility benefits industry” and perhaps my favorite, the “mother of dragons” of the women’s health sector. I look forward to getting into why Kindbody represents the future for fertility care in women’s health. But first we’re gonna go back a bit further, all the way back, to get to know the person behind the moniker most often to use to describe you, a force. You set out 15 years ago to bring education, access and affordability to people seeking support for what is increasingly often a challenging extended period of life, conceiving a child. From Fertility Authority to Progeny, now a publicly listed company, to Kindbody, you’ve obliterated the stigma surrounding fertility care, revolutionizing how people should feel and what they should expect from their employers and doctors during their fertility journey. At the beginning of the year, you made the significant acquisition of Vios, a step change in your footprint, and then blitz scaled your enterprise strategy with the addition of over 30 new employer customers, including Walmart and Disney. We were delighted at Leerink Partners to have you this fall as a panelist at our flagship private company event, the Digital Health Summit, hosted by our senior research analyst Stephanie Davis and our friends on the Silicon Valley Bank side of the house continue to maintain relationship with you as well.
Gina Bartasi: Thank you John. I really appreciate the introduction. It’s been an incredible career and incredible ride. None of it would’ve been possible without an enormous team of advisors, counselors, mentors, coaches, colleagues. The older you get, I think you get to handpick your investors, your partners, colleagues and I just work with the best. I’m incredibly blessed. I think one of the things throughout my career that can slow a company’s momentum down is not having alignment, alignment with management, alignment with your investors and alignment with your board. The alignment comes with the experience having done this and being in a position to select your partners. But we have enormous alignment. So even in this incredibly, um, challenging year for all digital health companies and arguably all healthcare companies and just all, all companies in general, whether they’re public or private, more than quadruple our growth, year over year, close to 125 million in revenue. Two quarters from EBITDA positive, three quarters from cashflow positive and more than doubling revenue from 2022 to 23, again is a testament to this team.
Jon Swope: It is incredibly impressive and congrats on the momentum and no doubt much ahead. And so, love to hear more about the recent, momentum and, and what lies ahead, particularly in these challenging waters and what still appears to be any day now a, a recession hitting. But there’s been plenty of recessions before. Let’s go back to where and how you started. I think everyone would love to know, we know of you of these last 15 years as a leader and a maven in, in women’s health, going back all the way you grew up in North Carolina. Could you tell me a bit about your childhood, growing up in North Carolina? Your parents had an entrepreneurial spirit. Tell us about them.
Gina Bartasi: Yeah. Um, neither one of my parents went to college. My dad was a home builder and my mother sold the houses that he built. He built them on spec and he would make the money between what it cost to build the house and then what he could sell the house for. So, so we lived in the same town, Hickory, North Carolina, growing up, but we moved and, and we, he did that through, he passed away a couple of years ago, during the covid years, he actually passed away from cancer, not Covid. But what you learn in that is like, I can remember when I was growing up, we didn’t have any money. Like I, I wanted a new prom gown, I wanted a new homecoming gown. And my parents always provided for me, but it was, it was a stretch for them. And I can remember, I went to a public school my entire life. So, there was not this separation of privilege versus not privileged. I remember all the working families having a challenge to be able to make ends meet. What that does is teach you a tremendous amount of grittiness and it also teaches you to be humble. I can remember once I went to Chapel Hill, you went to that other college but, once I went to Chapel Hill, you did really see the separation of haves and have nots. And I can remember, I think a lot of girls who go to college and they start to see this separation of haves and have nots, they think, “Wow, I wish I had that. I wish I would’ve gone to private school. I wish I would’ve grown up in a country club environment.” You think that when you’re young and as you get older, you’re like, “Wow, thank God that I grew up with these enormous values and this system of hard work and not privilege.” I think you know, the hard work, you know when, when you look at the great athletes, whether it’s Michael Jordan or Tiger Woods, or the great investment managers, anybody, fundamentally what ties great, extraordinary leaders and executives and athletes together is hard work. They always say that. You know, Michael Jordan says that “No one’s gonna outwork me.” Tiger Woods, “No one’s gonna outwork me”. I just, no one was ever gonna outwork me. Still today, my colleagues say that, you know, “You work really hard.” I think hopefully I work a little smarter as well as hard. But that hard work came from that grittiness of, of growing up in Hickory, North Carolina, the town was undergoing tremendous change. It was a furniture town. All the furniture was being shipped to, China and was being made in China, low, lower cost. A lot of people lost their jobs. They lost their homes. And so, you know, it just rooted me in this, this upbringing to be humble from the very beginning and to understand that with hard work that, that you could accomplish a lot.
Jon Swope: You talked in your opening comments about partnership and alignment, right? I would imagine that your parents working together helped with, with that. What, was it like having parents that worked together?
Gina Bartasi: Well, I’m not so sure they worked together that well. They did end up getting divorced my senior year in high school. And I knew early on that the financial wedge and hardship between my parents, I didn’t want to experience, right? I knew that I wanted to make sufficient income as a, a female, I didn’t want, you know, there was a lot of resentment when my parents divorced and my mom had been a housekeeper and had had worked for my dad as a realtor and, and there was some resentment that she didn’t really have a skillset. She had sacrificed that skillset to raise her children. And I think a lot of women in my generation saw that, we’re the product of divorce, more than 50% of our generation grew up in divorce. And a lot of times it was through the financial divide and this disparity between gender, between the husband and the wife. And then you saw this enormous tidal wave of women saying, “I’m gonna have my own career, I’m gonna have my family on my choosing. I’m not gonna be subordinate to my husband. We’re gonna be a team, but we may be a team in our mid to late thirties instead of a team in our early twenties.” And there was this big dramatic cultural shift that instead of marrying your high school sweetheart or your college sweetheart, you had a job. You know, and you paid for your own way of living. And that’s what’s crazy, all these macroeconomic trends is what’s created the propelling Ford of the fertility industry. Listen, investors all ask me all the time, “What could derail the fertility industry” Well, and I tell them, well, I don’t know. Everybody could go back to marrying their high school sweetheart. Fertility was not a thing 30 years ago. It just was not. And the reason it was not a thing is because you married your high school sweetheart, and you had your babies in your early twenties. Today, one in every five, children are born, their first born is for women over the age of 35. And the number one thing that affects your fertility is age. And these are macroeconomic trends. I’m not the only 50 plus year old women that grew up in a divorced home or didn’t grow up. They didn’t get divorced until I was 18. They were fantastic for doing that because I know so many, some generations and kids behind me, their parents divorced younger and there were ramifications related to that. But, anyway, I am grateful for the upbringing. It does kind of, again, it all intertwines to kind of the entrepreneur, the leader, the teammate, the colleague, the mom, the wife I am today. That if you work hard, you learn how to finance a company. If you learn how to finance a company, you’re not challenged. We’re not ever gonna be out of cash at Kindbody. We’re not ever gonna be out of cash at the Bartasi household, but that’s because of those lessons learned early on and you see your parents arguing over money and you’re like, “Hmm. All I wanna do is make a really good living so that that when I want to get married, if I want to get married, if I want to have children, I don’t want there to be this financial undercurrent.”
MUSIC TRANSITION
Jon Swope: You’ve had plenty of fantastic mentors, friends, that have, you know, influenced how, how you think about this topic. What about, before you were 18, did you have a female, that you admired most as a child, someone you know outside the home, whether local or, or, you know, national? To your point on there, there weren’t, there was a different social dynamic then who was the, the woman or, or women you admired most as, as a child, and were they in business?
Gina Bartasi: There were not any. Think about this, I graduated high school in ‘87, in college in ‘91. There were no female women in government, you know, Hillary Clinton and Condoleezza Rice and Margaret Thatcher, they all came after, you know, they came in the nineties and early two thousands. But, you know, the folks that I looked up to growing up were all men. I think there are so many extraordinary things we can learn from men, the hard work, the grittiness, that determination, the strength. I happened to be a tomboy. I was always a tomboy. I played little league baseball, you know, I didn’t mind getting my hands dirty. I was the first one to pick up a hammer. So there are a lot that we can learn from men. So, I didn’t have, I have tremendous women role models now, but I didn’t start to see women leaders until my early twenties. Even in college, I went to Chapel Hill and Chapel Hill at the time, today it’s probably two thirds women, a third boys, when I went, it was kind of 50/50. They were just as a public university. They were just starting to bring in diversity and, and gender was diversity, you know, 30 plus years ago. And so, you know, but I had extraordinary male mentors. I mean, not the least of which was, my dad. And you know, growing up in North Carolina, you went to church every Wednesday and Sunday, and so, all of your church leaders were all men as well. So, there wasn’t necessarily any women that you could point to and say, “Wow, I wanna be like them.” There was this immediate gravitation the minute there was. Right? I mean, for the first 15 years of my career, I was the only woman in the boardroom for the last 15 years. I’m not the only woman. More often than not, there’s two and three women in the boardroom. And now my job is to say, “Okay, how can we get more seats in the boardroom?” But I’m also a product of this big transition where there were no women and then there was one woman and there were some women. And today there’s a lot of women in the boardroom, not enough. but I think during that progression, when there was only one seat in the boardroom, this was probably 15 to 20 years ago, women were very competitive early in my career because there was only one seat in the boardroom and the question was who was gonna get it? Today, women will pull out seats for other women. They’ll give up a seat. “I don’t need to be on the board anymore. I’ve served the board for three years or 14 years or whatever.” And they’ll give that seat up to another woman. But that’s very different than when we were all fighting our ways into the boardroom. So, you know, I’ve been fortunate, again to have all these women mentors around me. Most recently in the last 15, maybe 20 years. And now we stand together and it’s extraordinary and we’ve recreated, there was this old boys club, you know, to a large degree there still was, remember my career, a lot of my career spent in Atlanta, with Billy Payne who was at Augusta, and there were no women who could play at Augusta. Like that’s real. Condoleezza was, I think first maybe there’s two women that can play golf in Augusta in the South., and so there’s still a lot of work to, to be done, to have more women entrepreneurs that can create wealth for other women. It goes to, again, providing a, an opportunity for women entrepreneurs and women ownership. One of the things that, that I’m very proud of at Kindbody is, you know, we offered equity to everybody in the very beginning. We, we really looked at Kindbody as a venture backed healthcare, tech enabled business.
Jon Swope: Tell me about that transition from Chapel Hill to Atlanta. In your first business, oftentimes you wouldn’t disclose that you were the owner of the business. You’ve always been fantastic at sales, you are also incredible at running and, and building businesses. But in those early days, as a woman founder, CEO in Atlanta, you didn’t even advertise that. How did you figure out that that was the best approach. I mean, obviously path of least resistance, but more importantly, how did that make you feel? And how did that evolve over time?
Gina Bartasi: Yeah, when I graduated from Chapel Hill in 91, we were in another recession and I took a job as a straight commission, facsimile salesperson. I was like, “This is not any fun.” So, I didn’t last there very long, but then I started selling advertising, straight commission. I loved media, I loved magazines. Selling was natural to me. As long as you were selling a product that you very much believed in. So, I, when my first job, I was straight commission. I had no healthcare benefits, I had no base salary, I had nothing. And I thought it was fantastic. I was like, “This is great.” You eat what you kill and you get paid more money if you sell more advertising and less money if you sell little. So that was like, again, if you look back, my dad not having a safety net when I graduated from college, not having a job with benefits was a, I didn’t have a safety net. I only ever knew how to be an entrepreneur. and in 96 I did, I wanted to move to a bigger city. I was, had spent five years in Raleigh Durham selling advertising. In ‘96 I was like, “This is the business capital.” I had sold advertising for a business magazine. All of the magazines and Raleigh Durham were startups. I didn’t take over a magazine. We were starting them from scratch and I was like, “I can do this in Atlanta.” Atlanta was an incredibly welcoming town. The CEOs of Delta, Leo Mullins, you know, I can remember, um, the Home Depot CEO I mean Bernie, Marcus and Arthur Blank, all of these males. Again, there were not any female CEOs, but the male CEOs really enveloped me and said, “Okay, we’ll help you.” But they did not know I was the owner of the magazine. Right? All I remember is being at this luncheon and there were two women. It was a CEO luncheon, right? And there were probably 300 CEOs in the room. There were two CEOs in the room. There were noticeably female, white and young. And the other one was Sarah Blakely of SPANX. And, and we were like , like we were looking at each other like, “Uh, we ended up in the wrong place. Are in the wrong dining room? How did we get here?” And there was a lot of camaraderie between Sarah and me. Again, we are, we’re now entrepreneurs in our late twenties. early thirties and we’re trying to navigate right this Atlanta, Georgia. to me, I think it was perfect to start the first business for both of us. She’s done enormously well, needless to say. It was still very different. Sarah and I both. we’re single when we started our businesses, and we’re single the majority of the scaling of our career. And you do make enormous sacrifices. You can’t travel all over the world like Sarah was or I was, and, and still date much less have a family when you’re, when you’re traveling and not in the same room as, as your partner. So, I look back on that time I was in Atlanta from ‘96 to ‘04. Noticeably in Atlanta. Again, everybody my age group was married, and they were starting to have children, and I was this anomaly. You know, I was, I can remember I was in my early thirties and people are like, “You’re single, like, what’s wrong with you?” I’m like, “Wow. Just because you’re 31 and single living in Atlanta, something must be wrong with you.” And Atlanta’s changed a lot in the last 20 years for sure. It was a foreign concept for most of the country for people to be single. Again, there’s this big generational changes that are happening in the nineties and two thousands and 2010. Now it’s very common, right?
Jon Swope: I’m sure you were invited to many mixing groups at churches and, and other ways try to, try to get you to settle down otherwise.
Gina Bartasi: I was an entrepreneur, and I had a pretty big publishing firm there and my maiden name was Wright. And so, I asked this date to come. Jane Fonda was hosting. She had been on our women’s, we had a women’s magazine and Jane was on the cover and she was hosting and he said, “I don’t wanna go with you.” And I was like, “Come on, it’ll be fun. It’s Jane Fonda. We don’t have to stay long.” And he was like, “Eh, this is not that fun.” He was like, “You know, I’m your date instead of myself.” Which is, by the way, a lot what a lot of women say when they’re going to be the subordinate or the trophy partner of the male. He was like, “I don’t wanna”, I was like, “Come on, it’ll be fun.” And so, we walk in, and he said, “Oh Gina, welcome, welcome. And you must be Mr. Wright.” And they assumed he was my spouse. Now, his last name didn’t have, I don’t even remember this guy’s last name, but it just goes to show you again some of the things that you struggle with as a female entrepreneur trying to date, trying to make your partner feel confident. And the first thing they do is greet him as your last name. You must have taken his last name. And I’m like, “Whoa, something’s wrong with this.” So, I just, I wanted to be in a bigger city. I wanted to be in New York. So, I started renting a share. I didn’t know anything about timeshares in the Hamptons, but a girlfriend of mine lived in New York and she was doing a timeshare. I was like, “Oh, that sounds fun.” So, I was traveling from Atlanta to New York in ‘04, ‘05, and ‘06, and I met my husband in ‘04 and we got married in ’06.
MUSIC TRANSITION
Jon Swope: So, okay, so you made it to New York, and you’ve been here a while now. What learnings from the, the magazine business ad business, are relevant to your, your next career? What did you, what did you learn there that, that you’ve applied in the, the fertility?
Gina Bartasi: Well, it was fun because you learn about margins, you learn about capital raising. So, in the magazine business, neither Sarah Blakely or I had raised any money. The businesses scaled on good old fashioned bootstrapping. Again, Sarah’s from Clearwater, which is like neighboring, not neighboring, but very similar to Hickory and you just don’t have access. That’s what we’re trying to do. Both Sarah and I are trying to give back to our colleges to teach women how to fundraise and take into institutional capital earlier, because bootstrapping a business is really, really hard and it is much slower to get to scale when you’re bootstrapping. So, bootstrap the magazine business, started to learn about angel investing and fundraising, so raised a little bit of money for Fertility Authority. Um, the other thing you learn in the advertising business, the reason you could bootstrap and it could cash flow is the gross margins in the magazine business 30 years ago are like 78 to 80%. So, when you’re working with a gross margin that high, your net margins can be 25 to 30%. Like it’s a cash cow, like you look at all. Look at S.I. Newhouse. You look at all the wealth creation, the Murdoch’s, it started in the media business and it comes down to margin profile. And with those margins you don’t even have to raise a lot of money because the business cash flows so very, very quickly. So, Fertility Authority was an advertising business. We were selling advertising to fertility clinics. What you learn is there’s not enough fertility clinics to get the business to sizeable scale. And we were really good at new patient acquisition. And so, what we started to do at Fertility Authority was to say, “Okay Doctor, I’m gonna convert the patients for you. I have the patient flow, but I’m gonna take a margin in between what the consumer pays me at Fertility authority and what I pay you as the doctor. Okay? And the more patients I bring to you, the bigger volume discounts I get.” So, what I learned is that’s an insurance company. When you make a margin to sit between the patient and the doctor, that’s how insurance companies are paid. When we were at Fertility Authority, the money we could make sitting in between was about 35%. A very low gross margin compared to 78% in the magazine business, but still a reasonable gross margin of about 35%. It’s not until Fertility Authority was acquired by Kleiner Perkins and TPG, and then you had margin pressure from the employers. I mean, the employers are very early on said “I’m not gonna pay you more than 15%.” And most people don’t know Progeny unless you read the S-1, but it was a, a medical device business, oxygen and EVA that was burning a ton of cash. And so very quickly, once you get professional money and you have the teachings from TPG and Kleiner Perkins who’ve been at this say, very long time, your learning curve is accelerated. That’s what we want to do. Again, I go back to Sarah, other people like me, we want to give young women who don’t have the same access. We’re trying to accelerate the learning curve. It took Sarah and me 25 to 30 years to understand how financial markets work. Imagine that the next Gina Wright Bartasi in Chapel Hill had the same access that I had 25 years later. But once you get there, then you learn very, very quickly about access to capital, how important those early lessons are around gross margin and net margin and profitability. That means when you find yourself in a recession like we are in 2022, people are talking about a recession coming. We’re in one now, we believe. It’s not hard to think about how to get the business cash flow positive. You just return to the fundamentals of any business, which is about gross margin, net income, and cash flow, and, and if you built your first business, it’s easier for Sarah and I who never had access to millions and millions of venture capital to get there very quickly. You can just turn and pivot lots faster than you can if you know, arguably you’ve never seen a recession and you’ve only ever relied on venture capital, it, it’s harder because those entrepreneurs probably think, well, there’s more venture capital coming. There probably is, but it’s probably gonna be a down round. And at terms that are gonna make you have a lot of indigestion.
Jon Swope: You have clearly brought your learned experiences and and passion to, to this industry over the last 15 years and, you know, simply put right, there’s, it, it feels from the outside that, that there’s two parts of your career, kind of before fertility and women’s health and, and since then. Naturally there was a, an impetus for that, your own personal fertility journey. Can you share a bit about that and what prompted you to start Fertility Authority and, and this path that you’ve been on for the last 15 years?
Gina Bartasi: Yeah. Again, it when I was, you know, we got married when I was 37, started trying to conceive at 38. We see patients today that look just like me. There is a presumption that because I’m in my late thirties, but I’m healthy, I eat well, I exercise, my mom didn’t have any problem having kids. There’s a presumption that I’m gonna be fertile. That is a false presumption. We teach young girls how not to get pregnant, but there’s still not education 30 years later how to get pregnant. First of all, you have to have an intercourse when the woman’s ovulating. Most people think you can get pregnant any day of the month. That’s just not factual and so, you know, we, we don’t educate women how to get profitable, how to get, we don’t teach them how to get profitable and we don’t teach them how to get pregnant. so I was under this false presumption that it was gonna be easy. And then I was under this false presumption, I did have friends that had gone through IVF. One of my great counselors and mentors had gone through IVF and had two children. I was like, “Well, she did it. All I have to do is have enough income to be able to pay cash, $25,000 in New York City to go through IVF and woo, that’s how your family’s built.” At Kindbody it’s definitely a mission of ours to educate women about their fertility. The biological clock is very real. Your fertility starts to decline at your early thirties. It precipitously declines after 35 and every month and every year. After the age of 35, it gets precipitously worse. And so, the great news is, I think today more and more women are freezing their eggs. So, they all want to maintain this optionality. None of them want to go through, you know, years of heartbreak and years of financial burden of trying to build the family of their dreams. So, they are going through egg freezing to kind of think through some optionality so that they just have more choice.
Jon Swope: And when you think about the, the landscape today, you know, versus 15 years ago in New York, but importantly 15 years ago in America, or internationally, What was taboo then that isn’t now and what’s still taboo that frustrates you?
Gina Bartasi: Well, think about this. 15, 20 years ago, things that were taboo were interracial marriage, same sex marriage, everything was taboo. It’s not even that long ago, but there was a lot that was taboo. Again, those two things, interracial marriage and same sex marriage. Women having a child, we call it single women by choice or single men by choice. That wasn’t taboo. That just didn’t exist. Today, women we have a lot of patients who say, “I don’t need a partner” regardless of gender. You know, “I just don’t need a partner. I’m gonna be a mom, or I’m gonna be a dad.” So, there’s still not sufficient support or sufficient subsidy for creating parody and how we think about building families. Again, the other way to solve this problem with how we build families would be to encourage women to go back and have babies in their early twenties. That’s the solution. Absent more financial support, listen, we do not have all these fertility issues if women have babies in their early twenties, you just don’t. This, this age progression and this decline and this need for fertility support is real. So, the answer is everybody. Then what you’re doing is saying, “Okay, women don’t deserve to stay in school. They don’t deserve to get graduate degrees. They don’t deserve a place in the boardroom. They don’t deserve a membership to Augusta.” We certainly have a lot more work to do.
Jon Swope: Part of it is, you know, education, access and support, right? And I’ll go back to what one investor said, and you, being the mother of dragons in the fertility space. How do you feel about being the force behind the, the democratization of access to fertility care in this country?
Gina Bartasi: Well, I’m on those calls when they say that and they smile, right? So, you should smile. They mean it in the most flattering way. They also mean it as, this woman knows what she’s doing. And we’re not gonna apologize. Like it drives me bonkers for women to apologize, women should not apologize. Humility, humility is different than apologizing. Okay? You should apologize for something you did wrong. But being wildly successful in fertility is not anything we’ve done wrong. So, when they say it, you say thank you, and then you say, “Hey, I took that as a compliment. I’m gonna use it. I’ll give you credit for calling me this, but I really appreciate it.” But you know, again, when, when, when I’m, or we’re called names, you know, we’ve talked internally, like, uh, seen the criticism, bring it on. Like if you’ve, if you’ve seen this before, you get comfortable with it. I can remember again, when I was a younger executive, it made me nervous. I was scared, I was unsure. I didn’t like it. Now I’m like, “Thank you. Thank you.”
Jon Swope: Game of Thrones reference notwithstanding, and I, I view that moniker as, as a compliment in the sense that, you know, when I look at the landscape of what is still very, you know, there’s so much to do, in women’s health and, and family health, uh, well beyond, uh, what is going on today. Importantly, there’s a number of fantastic female executives that, that come in, on the heels of your leadership, across the landscape and to an earlier point on, on there being room in boardrooms for more than one. There’s plenty of room, uh, for, for innovators, uh, especially female innovators in in women’s health and and beyond, um, across healthcare and, and other industries. In that vein, while there are plenty of fantastic companies out there, you are now leading Kindbody without necessarily comparing your contrasting versus the others, what makes Kindbody special?
Gina Bartasi: The patient experience and the margin profile, right? So, what I learned at Progeny is you can’t really affect the patient experience when you refer that patient out. You have no ability to control for how long that patient was sitting in the waiting room, whether or not the patient’s phone call was returned, whether or not the doctor transferred 2, or 12 or 1 embryos. Like you have no control over that. And as a former patient, I wanted the company that we were building that was my legacy company, to be able to control for the patient experience and to be able to impact it and improve it. So, when I think about the differences of Kindbody, we can control for patient experience and make it seamless and warm and inviting. If you’re a care navigation firm or if you’re in these other, you know, they call them digital health, but they’re referral businesses. They’re care navigation. When you refer that business, you have no impact. They can say they do, they don’t on how that patient experience happens. You just don’t. So that was really important to me. The other thing that you learn very quickly and the difference between Kindbody and these care navigation firms comes down to the margin profile. and I want all of these women to be wildly successful. By the way, there’s enough RFPs for everybody to win, right now. “You take a quarter, you take a quarter, you take a quarter, I’ll take a quarter and everybody’s gonna win.” We are focused on a path to profitability. We have really attractive, very unusual margins that these other care navigation firms don’t. Progeny needs a public company. They have to state it’s 21%. They can get it to 24%. They’re not gonna get it higher than that because they’re gonna get too much margin pressure from the employers. Remember the employers only had appetite as recently as eight years ago to pay a 15% gross margin. And when you look at industry average comps in the insurance industry, they only make 18% gross margins. So, there is this limited appetite, and if you’re a care navigation firm and your main, your only customer, your only source of income is saying, “I’m gonna cap your gross margin at 18%”, you’re in trouble. Because net income, when your gross margin is 18% is a long way. So, what we’ve said, because I think there are these, we say “virtual first, but not virtual only.” We believe all healthcare should be delivered virtually that can be delivered. It’s better for the patient, it’s better for the physician. The physician can be more productive. The patient can have a better experience by not driving to a clinic and not having to wait. So we agree with that. But we are in reproductive health. You can’t do an ultrasound at home. You can’t do an egg retrieval, but you can’t do an embryo transfer. All of that again, affects, um, the member experience, the patient experience, and it has to do with the margin profile too. So, you know, when I talk to these other care navigation firms, none of them have the revenue scale or the, the ability to be EBITDA positive in two quarters and cashflow positive in three quarters. So, the two things, again, they’re differentiating is, is the patient experience in the margin profile.
Jon Swope: You made clear that last mile or last few yards of patient experience is, is so critical. Whether it’s the in-person experience, at your proprietary clinics, but importantly the, the technology experience. You and the team built, proprietary medical record and, and workflow tools for physicians and patients to use. How does the, the tech behind the scenes drive margins and, and experience in, in ways that being a benefits navigator can’t?
Gina Bartasi: Well, again, the healthcare industry is riddled with, with paper and facsimile machines. When you, when you transfer medical records between fertility clinics, it’s most common to do facsimile or truly paper. Those things are archaic. You can’t get data. We’re very data driven and you can’t get data out of paper. And a third, a third of all fertility clinics are not even on an EMR. And even if they allow you to schedule none of them, we are the only fertility clinic in the entire country that allows a patient to schedule online. And if you’re prioritizing member experience, why in the world would you make the patient call? Because they’re gonna call, they’re gonna get your voicemail, they get to call you back, you’re in a board meeting, they’re gonna call you back. Like there’s this wild inefficiency. Imagine you could remove all this inefficiency, replace it with technology, and with the click of a button, you get to book your appointment, you get to move your appointment, you get to pay your copay. Like this is not brain surgery. It’s, it’s been done in other areas of healthcare, certainly in other areas of businesses. So, we do replace, We replace labor with technology, and we reserve our physicians and our clinical team to do things only they’re equipped to do. A negative pregnancy test, a failed IVF cycle, none of that should be moved to technology. That absolutely requires a human element, but most of other healthcare should be moved to automation. And with this automation, you don’t need 150 people in your billing department. You just don’t. You just need to automate your billing and collection and allow the patient to pay their copay online. So, we came at this, before we hired a single doctor or built a single clinic. We raised 6 million in seed capital. We spent a million and a half and we bought an EMR platform. Now we add features and capability. We have a team of 55 engineering and IT executives who are continuing to, to improve and, and build new features again, so that we can have this proprietary, truly differentiated patient experience that prioritizes, again, it’s in the best interest of the patient to not use the telephone to call for their credit card to make their copay.
Jon Swope: It’s clear that, and a number of other elements make up what is, you know, through your learnings, a confluence of factors that, that drive Kindbody’s secret sauce.
Gina Bartasi: Well, the last thing is, you know, again, as a patient, what you don’t know when you’re going through this is the physician knows exactly how you’re gonna stimulate in your chances of success. Okay? And that’s creates this hierarchical nature in healthcare. Your physician knows more than you do as the patient. And once you’re the patient and you understand how the fertility industry works, you’re like, “Why don’t I know just as much as the physician does.” So, our patient portal serves as the front end and the EMR that the physician sees is the back end so that the patient has just as much visibility into their prognosis. So not only is it, we’ve removed everything transactional and automated it, but we want to increase the transparency and the visibility so that the patient feels like they’re on this level footing, that they’re not subordinate to the physician. So, you mentioned it, but there’s a ton of features and a ton of differentiation that our proprietary technology allows us to do today and into the future. That really is unparalleled.
Jon Swope: Yeah, it’s a great point. You’ve highlighted in the past that that servant mentality and, uh, with grit and grace, you exhibit it every day. So, thank you Gina, so much for your, your time today. I really appreciate it.
Gina Bartasi: Bye-Bye.
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