Reimagining Surrogacy with Dr. Brian Levine of Nodal

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October 6, 2022

On today’s episode I chat with Dr. Brian Levine, the Founder and CEO of Nodal.

Nodal is a marketplace that matches surrogates with families that want to have children. Their mission is to significantly reduce the time and cost required to secure a surrogate by cutting out the middlemen who currently control the market. If they succeed, they will help more families have children.

There’s a lot of nuance in this market. We discuss stigmas, the impact of Roe v Wade being overturned and challenges caused by profiteering in the overall healthcare system. If you’re interested in healthcare, this is a great one for you. Enjoy.

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‍Transcript (this is an automated transcript):

MPD: What's up, Brian? Thanks for being here today.

Dr. Brian Levine: Thanks for having me, Mark. I appreciate it.

MPD: Could you start off by giving us an overview of Nodal?

Dr. Brian Levine: Absolutely. Nodal is an online platform that helps match intended parents, the people who are hoping to grow and start a family with gestational carriers, the people who are doing the heavy lifting. Who are gonna be the surrogates to help a family achieve their goal.

MPD: Why did you start this company? Because it, I know the surrogate business has been there for a while. Why did it need a new player?

Dr. Brian Levine: Great question. As a practicing fertility doctor, one of the toughest conversations I had to have with a patient was to tell them that we need to go down the surrogacy pathway.

Typically I was having a conversation after they'd already had negative embryo transfers, right? They put embryos back inside of themselves and they haven't worked. Sometimes I had to have this conversation because just the biology didn't work. Single man, gay male couple, for example. Or maybe as a woman who didn't have a uterus or she was, she had uterine cancer or she couldn't be pregnant.

Or couldn't stay pregnant, but it was almost regardless of the reason that we were having the conversation. The conversation always started with, we're about to have a terrible. And the reason is that surrogacy has become price prohibitive and time prohibitive. It's actually crazy to think about it this way, but over the last five years, the cost of surrogacy has outpaced any of the average Americans being able to afford it.

Surrogacy used to be around $75,000 five years ago. That was a cost of having someone help manage your case and whatnot. Now we're hearing practice from patients. 1 50, 200. Two 50. So the costs are high, the supply is pretty constant, the demand is pretty high, and I thought that was right for technology to help disrupt this broken system.

MPD: What's driving that cost? Is it the money being paid to the surrogate mother or some other entity?

Dr. Brian Levine: So I wish we were talking about how well surrogates are paid, right? And the guy who wish this entire conversation was about the people who are. Putting themselves at risk, their families at risk being paid so well, and that's driving the cost, but it's not, In fact, much of the cost associated with surrogacy is going to the agency or the broker or the middle.

The person helps make the match, the person who helps you find that surrogate. And it's unfortunate because five years ago, surrogates were getting around 40 to 45,000 a year, or sorry, 40 to $45,000 for doing a journey of surrogacy, and now they're getting an between 45 and 50,000. So the cost has gone up dramatically.

But the compensation stayed pretty much relevant to Cola, right? The cost of living adjustments. And that system's just not right.

MPD: So all the money was going to the

Dr. Brian Levine: agency in the middle. Yeah, it's unfortunate. What does the

MPD: broker, Yeah, what does the broker do? Why is the broker a value in this?

Why can't you just post on LinkedIn or Facebook and find a surrogate?

Dr. Brian Levine: So I'll ask you a question, which is how much do you think about the broker who sold you your house or your apartment? Do you really value them that much? Not right? Like people go through brokerage experiences all the time, and if you found out that your broker was getting this crazy commission on your house, you would try to figure out a way to work around it.

But the thing is difference between buying a house is that we're talking about starting a family, right? We're talking about something that is so important that people put such a premium. That these brokerages have now essentially in started using Fear Moning and supply and demand economics have taken hold.

So when they say that the resources are finite, there's only a certain number of surrogates that are available. When they say that their resources are finite, right? They can only handle so many cases a year. Cost goes up because demand keeps growing. It's unfortunate to say that the brokers who really aren't the ones who are taking any of the risk reliability, Are the ones who are taking the lion share of the money, which is what's making it so hard for so many people to start a family or just grow a family.

MPD: Now the comparing this to a real estate broker, and we can have that debate too, but that's apples and oranges, right? They're getting five, I don't know what it is, maybe 10% of a transaction. You're talking about close to 80. In the extreme, 80% going to the broker in a surrogacy market. That's bananas.

It's totally, it's.

Dr. Brian Levine: It's absolutely nuts. And the truth is, you're right, it is apples to oranges. Your broker who sells you, your house or apartment, sells you a room. Brokers who are helping you find a surrogate are helping you find a womb. That's the only similarities that we can find. The truth is the cost of the brokerage that is out there today is being masked or even masqueraded around customer service.

But that customer service is actually ultimately going back to the. People like me, the doctors who actually take care of patients, are ultimately responsible for approving that surrogate, to be the one to receive the embryo, making sure that she's being treated in an equitable manner, making sure that the embryo transfer is done without incident, making sure that the pregnancy's managed.

So here you are paying this very big premium to have a brokerage firm tell you that they do case management when in reality. But just hooking you and then letting you know that it's a finite resource and the only way to access that resource is through the brokers.

MPD: Okay, I get it. Do the brokers do anything other than matchmaking, and if they just do matchmaking, is there some complexity to that beyond, building a listing, more or less a directory?

Dr. Brian Levine: The brokers and the, we, let's just call them agencies, right? Cause that's the term they prefer to be called. The agencies do more than just making a match. What they're supposed to do is they're supposed to help guide both the intended parent and the surrogate equally to make sure that there're legally represented, to make sure that there are good contractual relationships that are occurring, right?

You need to each have independent lawyers to make sure that the surrogate goes through all of her necessary screen. And to make sure that they go down the pathway that is prescribed to them in a meaningful way. In reality, I've never met a surrogate who's come to this office who's not motivated.

They don't need an agency texting them to say, Did you go to your appointment? Don't forget about your appointment. Sure. It might be nice that someone's booking them a hotel room. It might be nice that someone's booking them travel, but in reality, in this day and age, in this covid environment where we've all learned to work from home and to kinda.

Boots, trap and hack whatever we need to do. The agencies are really just not needed in the same capacity for

MPD: what they're charging. Okay. And so where does Nodal sit in this now? Where, what part of the process do you fit into?

Dr. Brian Levine: The genesis of Nodal was based on my frustration, right? I actually love my job as a fertility doctor.

I love taking care of patients. I really enjoy helping people get pregnant and helping people who have had a lot of struggles get. And I actually enjoy surrogacy journeys with people. But the reason I started Nodal is because people were signing up with an agency giving a deposit, and then being told, Hurry up and wait.

And when they were being given a match or potential surrogate, they were told, Take this or wait. So what we found was that people felt like there was no choice. And the surrogates, when you start talking to 'em, going through the process, they felt like they had no voice and they had no choice. The people doing the heaviest lifting, the people taking the greatest risks, the people who are really helping to bring that reward forward, right?

The reward is that family who being told truth be told, you just gotta work with this family and you gotta work with them. And some examples might be many surrogates don't wanna fly these days, right? They're concerned about covid, there's concerned about. But they're told, Look, you might live in California, but you matched with a family in New York, so you have to go fly to New York to go do your embryo transfer.

And little things like that add up. And when you're asking someone to assume some risks by being pregnant for someone else, you might wanna let that surrogate feel like they have some voice in the process. So what Nodal has done is we've created a platform as Equit. Think of it almost like a dating app in reverse, right?

Almost like Bumble. In a way where what we do is we actually present surrogates with profiles of intended parents. They get to see who they wanna work with. What that does is that puts the onus back onto the intended parents, the people who are looking for a surrogate. It lets them put their best foot forward to describe why they're going on this journey.

To describe why they need to do this. Actually by doing, By building a profile where the surrogates select who they wanna work with, we know helps with buy in. It helps the surrogates feel empowered. And if you're gonna trust this woman to carry your pregnancy, don't you go on her feel empowered to carry your pregnancy.

It also builds a really good relationship. What we allow the surrogates to do is the name, their price, What do you want for your compensation? And we actually let the intended parents say what their budget is. So instead of an agency, which typically gets 20% of the compensation rate, a surrogate might say that she wants $50,000, for example, for her compensation.

So the agency is going charge 60 the intended. Instead, what we say is, The surrogate wants thousand. Let's figure out how to get this. And instead what we find is that the intended parents can say what they feel comfortable paying, but little things like one embryo versus two embryos. Little things like covid vaccination status or not.

Little things like. All add up to be really big things. And what we're hoping to do is to build a platform together, both with intended parents and surrogates, feeling like they're well represented and they're actually well protected by using tech and some pretty cool technology under the hood. Okay,

MPD: that's awesome.

So this is gonna bring down the overall cost of surrogacy for, aspiring parents. Absolutely right. So I, I assume that's gonna increase the overall demand for se Do you see it driving any sort of market imbalance or how do you see the market evolving in kind of a quantity level as you make it more

Dr. Brian Levine: cost effective?

So what we're hoping to do is there's be one little part of the journey and that one little part's called the match. So what we're hoping to do is to help match people. Surrogates and intended parents, and then they can decide how they wanna do that last mile. Do you wanna use a commercial agency to help you do that?

Do you wanna use just a lawyer or whatnot? What we're actually doing is we're using a subscription model for our intended parents. We say that the match is value at five, or sorry, 6,000. And the match itself, it's what is the ultimate like ticket, right? That's the, that's what you're paying for is the match.

And to be on the platform is about $500 a month. So you know that if you're on the platform for six months, what you'll need to do is to pay $3,000 at the end for the match to happen. $6,000 we think is very manageable, especially when many different agencies say that the cost of a match alone is between 15, 20,000.

So yes, we're driving down the cost in the very earliest steps and driving down that cost with complete transparency and helping to do that. You also brought up something that's really interesting. Demand. Demand right now is through the roof, but in fact, if you look at surrogacy today, it feels like a cottage industry.

There's actually only about 5,000 births a year in America from surrogates. Even though it feels every single famous person who's in LA or New York and every single person who might own a space company in Texas is like using a surrogate here and there. In reality, the interest is about 8% of met.

Which means 92% of the people who want to use a surrogate can't even afford to do it or can even start the journey or can't even do in the same call agencies blindly start asking what percent of the people that say that they're interested go through tells how many intended get to through this journey.

We hope to do is to remove one of the obstacles today, and that obstacle is cost. The second obstacle is actually an indirect obstacle. It's why I would say it's access. So many people don't even know where to get started. They don't even know how to do it. And what we hope to do is to be a voice, a place where people can learn about surrogacy, a place where people can actually go to meet other people.

And we, that's why we actually have a community that we're building a previous surrogates.

MPD: That's awesome. Okay, so people go on, let's say they use your system and they match. Great. There's a lot of complexity that happens after that, right? You've got, you mentioned already there's legal contracts. This is a pretty significant legal transaction.

There's all the medical care and everything else associated. How do they go from your platform through the rest of the journey? How do they, What do they do next?

Dr. Brian Levine: Great question. So the first part to know is that the other thing that agencies do quite well, although it's what they tell you is the biggest thing they do, it's collecting medical records.

We have technology under the hood that allows us to collect medical records that already exist. Things such as billing codes and medication history and things like that. So while agencies are pulling paper records, which are then sent to clinics to ultimately be reviewed and approved, what we're doing is we're a composite profile that clinics can ultimately see, so they can understand who they're looking at in front of them as a surrogate by having an up to date medical profile for that potential surro.

What we're able to do is to help limit some of those risks, but more importantly is to help people understand the risk of the legal transaction that's occurring, right? That contractual relationship that will be there. But once they're done with us, they go on to then a lawyer and that's where it all needs to go.

Surrogate and intended. Parents need separate lawyers. The lawyers then ultimately can either be the case workers or you can have someone else, but you have to remember to do all of this, you need a fertility clinic. And so it's all through the fertility clinics. It's a coordinated. And we think it's a triangle, right?

Nodal sits at that top, and then you have the lawyers and the clinics, and we all work together in helping these people achieve their goals.

MPD: And how do people find the lawyers? Do they go from nodal to lawyers or nodal to clinic? What's the next step that kind of gets them in the system? Imagine once you get clinics, the lawyers, you're integrated, right?

Everyone knows each other. So

Dr. Brian Levine: we actually never imagined this part is, So as we've been building out nodal, which launches in mid. What we've been learning very quickly is that lawyers are asking us if they can work with us. We asked two lawyers who then told two people because they right now, like they can't penetrate this market.

There are so many family lawyers who are out there, who are untapped resources. In fact, most family lawyers will tell you that they wanna stop doing divorces and they wanna help more with surrogacy journeys. It's actually probably one of the most enjoyable parts of their jobs. And so what we're helping to do is to give people access to family practice lawyers, to people who really know this law inside and out and are specialists and are willing to actually do this at a fair and balanced price.

MPD: Ok. Awesome. What does your industry need? When you look at this, you're obviously building a big solution here. There's probably other nooks and crannies where there's still some cobwebs. What else would you like people to come out and tweak and fix to make this even more streamlined?

Dr. Brian Levine: So I like people to have an understanding and compassion because I could tell you right now, one of the hardest conversations I have is with people like one of my daughter's teachers, He and his husband have been married for 10 years.

They've been saving every single penny possible tutoring, doing everything they can to collect extra money to just afford to have a child for a single man or a gay male couple to help to have a family of their own with their own biology requires an egg donor, which is very expensive and going through seriously, and I think that quite often we're not very good at talking to people about tough.

Many employers today are offering fertility benefits. I'm really lucky, right? I live in the state of New York where there's a mandate. If you have a hundred employees or more, you need to have fertility benefits covered. But what happens if the fertility benefits still aren't enough? They don't cover egg donor.

They don't cover surrogacy. In fact, there's one company in America that covers surrogacy at a value of $75,000, and today that $75,000 is not enough for 100% of the agencies that are out. And I think that actually this all comes from a lack of compassion, a lack of understanding, lack of thinking about some of these pleasures that people have, Right?

You and I were talking about our kids just before this. People just forget like these simple pleasures in life and if we learned anything from this pandemic, it's like it's okay to do well and do good at the same time, but don't forget to do good first. And so hopefully the tweak that I hope is cultural and people having a little more compassion, stop thinking about the bottom.

MPD: Okay, so you would say changing laws around healthcare and health insurance policies?

Dr. Brian Levine: Yeah. Cause I think it's actually discriminatory to be a gay man today who has a fertility benefit that afford, that's not covering what they need. In fact, many of the fertility benefits that exist today have definitions in there where infertility is defined by age of the woman, right?

35 or more, trying for six months, 35 or less, trying for a. So what happens to a gay man in that what happens is correct, they never meet the definition of infertility. So they never get covered. They never get the, to even use their fertility benefit. And that's just wrong. And what people do is they hide behind definitions without thinking about the compassion, about how they just want a family.

Now, I feel

MPD: like surrogacy has some stigma around it. Pe I've heard people whisper that they used a surro. Before and I could tell that they were sensitive about it. Yeah. What's causing that stigma in your mindset and what should happen

Dr. Brian Levine: there? So I, I think it's an incredible question you just ask because it's like an iceberg, right?

There's so much under the water that you just, it's hard to unpack it, but, in the spirit of time and to keep everyone still listening to this podcast, I'll just give you the high. Which is people are whispered about it because they don't know how to discuss it. In this country, it feels like surrogacy is something that's done by either rich and famous or the celebrities.

It's felt like it's something that's done cloaked in secrecy because it has to be that way. And it's sometimes it's for people. It's because you're not, strong enough to be pregnant again, or you should have just carried your own. And, people make these off colored comments without even realizing the impact.

In reality surrogacy is actually really complicated, and it's actually a very complex topic that I wish more people talked about because I'm sure that for every person who's listening here, they know of someone or know someone who went through it. In fact, Gabriel Union d Drain, Wade's wife, did an unbelievable job discussing how hard it was for her as a black woman in California to go through Surro.

Everyone looked at her saying, You should have no problem being pregnant. What's the matter with you? Why can't you be pregnant? And it was very hard for her to actually discuss it openly and get support. And she discusses this last year in a great article. But I think it's a lack of understanding. And because we don't talk about this as a mainstream way of reproducing, it gets hued.

Okay.

MPD: So it's the fact that it's not out there enough. I feel like even ivf is a little taboo. Maybe in my pocket and my world and my generation, people are talking about it pretty openly, but I get the sense we're break we're breaking ground in doing that. Yeah. But it I don't hear a lot about surrogacy, and when I do that seems to still be on the taboo side.

What would you any learnings from kind of the evolution of stigma around IVF is embryo transplant for folks who don't know that acronym? Any learning around how to make this less stigmatized and more normal? So

Dr. Brian Levine: one of, one of the things that kind of blows people away is when they actually think about infertility, right?

We spend our whole lives talking about, from high school health to, advertisements or whatnot, that if you have sex, you will be pregnant, and most likely you'll get HIV at the same time. Do not have unprotected sex and make sure you're on. And so what we do is as a culture and as a society, we reinforce this misbelief that it is very easy to get pregnant, and that's why you need to use contraception, religiously and routinely.

It's actually ironic to say contraception and religiously in the same sentence. We tell people to do this and then when people try to get pregnant and they don't, they feel like a failure, right? They feel like this should have been and then when you start peeling back this, the layers of the onion, and you tell people that 40% of the time is due to the woman and 40% of the time is due to the guy, and 20% of the time it's either unknown or combined.

They're like, Wait a second. You need to say that a guy can have millions of sperm, and even though a woman has a finite number of eggs, it could still be the guy with millions of sperm. And the answer is, yeah, like that guy could have sperm that looks like Michael Phelps, but swims like Ryan Loch. And the truth is male factor infertility is probably the big source of why so many people are quiet about ivf.

A lot of guys dunno who to talk to about their sperm counts. They dunno how to talk to, because we in this country liken sperm to sexual performance, which we like them to masculinity. And it's a lot of culture.

MPD: Now we've obviously had some pretty significant. Political change is happening recently at the Supreme Court.

We had Roe v Wade overturned. I'm sure there's a lot of things this has implications for in your world. Yeah. But if we could narrow in what does it mean for surrogacy? Does it have any direct line of impact on that?

Dr. Brian Levine: Yeah, so it has two direct impacts, Incy. The first one is, as a physician, I took an oath to do no.

And you have to think about where the surrogate lives and how you're gonna treat her. I think one of the positive impacts of overturning Roe v Wade surrogacy is that doctors are going to push to transfer a single embryo that's genetically tested by transferring a single embryo into a surrogate that's genetically tested.

It's gonna limit the risk of twins and triplets, and it's gonna limit the need to do a termination of a pregnancy for our chromosomal abnormality, down syndrome or other genetic issues that we screen for throughout pregnancy. So I actually think that's an unintended consequence. That's a good thing for surrogacy.

MPD: Has that not been tested before, just to put on that rabbit hole for a second or is not everyone doing the testing and if so, why?

Dr. Brian Levine: Great question. I told you about 5,000 babies are born from surrogacy. A. But there's around 10,000 journeys, which means about a 50% success rate to embryo transfers in my hands.

In my clinic, my transfer success rate is over 70%. For my patients, it's because my denominator is smaller, cause I'm only transferring genetically tested embryos. It is not the standard of care today in America. Many clinics offer genetic testing of embryos, but not everyone does it. And many people, when they're going down the surrogacy pathway.

Or not transferring the best embryos, they're transferring whatever they have left. They've done a bunch of transfers into themselves and they haven't worked, for example, so they're transferring not their best embryo. But what remains, so what I hope is as people recognize that terminations may be an issue they try to reduce the risk or need for any of that, which is dramatically test and embryo on transfer one at a time.

. The second comment about that is though I do think that the states are going to be resh. So we never before in healthcare thought about trigger laws. And I dunno if you're familiar with this concept, but effect when you overturned a federal law, the rules actually went back to the states.

And states had different mandates and controls of how they viewed this. And the trigger means that when this happened, quid pro quo, this then that. And so what happened was you triggered You triggered the law and then ultimately went back to the states and the states say, Hey, we don't allow this.

We don't allow that. So there's a lot of reinterpretation. I think people like me who live in New York, people like you who live on the other river or the other side of the river, people who might live on the other coast are okay. The middle of the country. I think we're gonna see a lot of shifting and moving around to figure out what is this new landscape, but just.

New York itself did not allow surrogacy until February of 2021. Surrogacy was illegal in New York State until February of 2021 when it was included in the budget by Governor Cuomo. Prior to that, I had no experience using a surrogate or transferring a surrogate in New York State.

MPD: Are there other states where it's still illegal?

What's the landscape of legality for surrogacy?

Dr. Brian Levine: Surrogacy principal in 48 states, there are two states that are. Currently, Nebraska and Louisiana are the two places where it is still not permissible, where the contracts will hold. There is also a general cultural climate that people don't like it when a surrogate lives in the state of Michigan.

That's due to some of the laws are a little bit different there about the contracts and how they're viewed. But otherwise, 47 states in America it's open and protected.

MPD: Okay. So this is a national thing now. So New York was a little late to the game from what you're.

Dr. Brian Levine: New York was late to the game.

It was the first of the game. So what happened was that there was Supreme Court case of eighties result, what's called traditional surrogacy. This actually meant it was the same person's egg and person's uterus, insemination, took sperm from it, this woman, and carried a pregnancy. Ultimately, there was a question about if this surrogate could keep the baby or.

And because the law was tested in New York State and the pregnancy originated from New York State, ultimately the New York State legislature decided to ban surrogacy for the entire length of my career until a year ago.

MPD: Got it. Okay. Now, broadly, you're in healthcare, right? And there's, we've had this conversation on this pod before with other folks, and I love getting different perspectives on it.

It feels like our healthcare system's a mess. It just, there's so much of it that as a consumer of it, my mind is blown. I mean my, I talked about this before. My kid got stitches and a hospital of good prestige try to charge us $60,000 for the stitches, something crazy. And they're just anticipating certain number of rejections and they're, It's a negotiating item like being in a flea market.

Which is bizarre, right? When there's so many other things that are list price and the prices are reason. How do you feel about the overall healthcare system in its current state and what's broken?

Dr. Brian Levine: Look, this could many hours, many beers to go level. I, there's issue he, one is we have a fractured consumer oriented healthcare.

And what I mean by that is you go to one doctor for one thing and then someone has an app for another thing, and there's another way to do another thing. And so you keep going to this like consumer le