In-vitro fertilization clinics offering money-back guarantees achieve
better outcomes with less aggressive treatments
More likely to be offered in states without an insurance mandate to cover
IVF treatments

Date:
March 23, 2022
Source:
Rensselaer Polytechnic Institute
Summary:
In-vitro fertilization (IVF) clinics that offer money-back
guarantees (MBGs) for their services achieve a higher live-birth
success rate with less aggressive treatments than clinics that do
not provide money-back guarantees.



FULL STORY ========================================================================== In-vitro fertilization (IVF) clinics that offer money-back guarantees
(MBGs) for their services achieve a higher live-birth success rate with
less aggressive treatments than clinics that do not provide money-back guarantees.


==========================================================================
In research recently published in the Journal of Marketing Research,
Shan Yu, an assistant professor in the Lally School of Management at
Rensselaer Polytechnic Institute, explored the question: Are MBG programs
by IVF clinics marketing gimmicks that take advantage of consumers or
a way for clinics to signal high-quality service? Using a unique data
set compiled from four distinct sources to undertake a systematic,
clinic-level empirical analysis, Dr. Yu found that, on average, even
when they transfer fewer embryos and do not sort patients according to
their fertility, clinics using the marketing tool of MBGs achieve higher success rate and do not impose higher multiple birth risks. These results indicate that clinics that offer MBGs provide higher quality of service
than clinics that do not offer MBGs.

According to Dr. Yu, consumers and policy-makers can use the presence
of this marketing practice as a signal of high-quality care in
the increasingly important field of IVF and other health-care and expert-service markets.

"In medicine, marketing practices are often perceived as a necessary
evil," Dr.

Yu said. "Our study suggests that market-based promotional devices like
money- back guarantees can serve as a necessary good for consumers."
In a typical MBG plan, patients pay a set fee for a certain number of
treatment cycles. If the patient does not deliver a live baby by the end
of the treatment cycles, the patient receives a refund. If the patient
delivers an infant at any point in the treatment plan, the clinic retains
the payment in full.

With this type of expert-service market, the doctor holds far
more knowledge than the patient, a factor known as information
asymmetry. Because of this imbalance of knowledge, many critics argue
that the pressure to return full payment motivates clinics to use MBG
programs to entice less-informed patients and boost their success rate
by using more aggressive treatment protocols or by sorting more fertile patients to their clinics. Both behaviors will decrease consumer welfare
in the long term.

In the study, Dr. Yu accounted for these factors and found the critics'
fears to be unfounded. The data showed that clinics offering MBGs
achieved enhanced quality of care by securing better outcomes despite
taking lower risks and without sorting for the most fertile patients.

"This suggests that MBG programs may not necessarily be marketing
ploys employed to entice less informed and more vulnerable patients,"
Dr. Yu said.

"Through experience, clinics may have developed a repository of skills
and expertise that make them confident in offering MBG programs without undertaking adverse actions." The research further showed that clinics
are more likely to offer MBGs in states without a mandate for insurance companies to cover IVF treatment costs, suggesting that MBGs also serve
as a market-driven insurance device, in particular for lower-fertility patients.

"The results of this study are consistent with signaling theory
predictions that money-back guarantees can serve as signals of
unobservable clinic quality despite the incentives for clinics to engage
in opportunistic behaviors," Dr.

Yu said. "These findings offer policy guidance and improve patient welfare
in a complex expert-service market fraught with information asymmetry."

========================================================================== Story Source: Materials provided by
Rensselaer_Polytechnic_Institute. Original written by Jeanne Hedden
Gallagher. Note: Content may be edited for style and length.


========================================================================== Journal Reference:
1. Shan Yu, Mrinal Ghosh, Madhu Viswanathan. Money-Back Guarantees and
Service Quality: The Marketing of In Vitro Fertilization Services.

Journal of Marketing Research, 2022; 002224372110607 DOI: 10.1177/
00222437211060733 ==========================================================================

Link to news story: https://www.sciencedaily.com/releases/2022/03/220323151707.htm

--- up 3 weeks, 2 days, 10 hours, 51 minutes
* Origin: -=> Castle Rock BBS <=- Now Husky HPT Powered! (1:317/3)