Thousands of Australians have missed out on assisted reproductive treatment since the federal government changed funding last year, resulting in the loss of 1500 babies that would have otherwise been born.
An analysis of Medicare data by the University of New South Wales found that use of assisted reproductive technology increased about 10 per cent each year between 2004 and 2009, but dropped 13 per cent last year when Canberra capped Medicare reimbursement to patients undergoing procedures.
In vitro fertilisation is the most common assisted reproductive technology in Australia, costing $7000 to $8000 a cycle. Depending on a woman's age and the treatment, there is a 20 per cent chance each cycle will result in a birth.
Georgina Chambers, of the university's perinatal and reproductive epidemiology research unit, said the analysis showed that based on treatment trends before 2010, about 7000 IVF cycles were not undertaken last year because of the policy change. This meant about 1500 babies that would have been conceived through assisted reproductive technologies in 2010 were not born.
The modelling was adjusted to account for a large group of women who brought forward their treatment to the last quarter of 2009 in anticipation of the Medicare changes in 2010.
Under the new policy, patients and doctors said out-of-pocket costs doubled from about $1000 to $2000 a cycle. Patients also had to pay the full cost of each cycle up front, with Medicare reimbursing about half at the end of a 30-day cycle.
Dr Chambers said the modelling showed the government had saved about $54 million in 2010 as a result of the new arrangements, or about $30,000 a baby that would have been born.
But she said the savings figures could be misleading because overseas studies had shown an eightfold return on investment into assisted reproductive technology when future tax revenue from each child was taken into account.
''Assisted reproductive treatment is not only important in terms of creating families, but its value should be considered from a broader societal perspective,'' she said.
IVF mother Liz Leverett, 35, said the increasing cost of the procedure and the demand for up-front payments had created enormous challenges for people wanting treatment. She and her partner had paid $40,000 in out-of-pocket costs over three years to have their first son, Lewis.
Ms Leverett, who created a support group for infertile people through Melbourne IVF, said she knew of couples who had taken out large bank loans and re-mortgaged their homes to continue with treatment while dealing with the emotional toll of not knowing if it would work.
While she would like to have a second baby, Ms Leverett said the costs would force her to return to work, which she did not want to do with an infant.
Dr Chambers said the drop in use of reproductive technology was greatest among women aged 34 to 37 - a group highly likely to achieve pregnancies.
Head of the School of Women's and Children's Health at the University of NSW Michael Chapman said the increasing expense may have also led to more patients having multiple embryos transferred per cycle to increase the chance of twins and triplets.
At IVF Australia, the multiple pregnancy rate went up from 5 per cent in 2009 to 6.5 per cent in 2010, he said. This was worrying because multiple pregnancies raised the risk of complications.
A spokesman for Health Minister Nicola Roxon said she stood by the changes to funding, which were prompted by specialists charging excessive fees.
While the government also lifted some Medicare rebates at the time of the January 2010 changes, doctors and patients said the net result was patients facing a doubling of their out-of-pocket costs.
While Ms Roxon challenged specialists to cut their fees when annoucing changes in 2009, IVF specialists said they could not reduce fees when the technology they used was costing more. Despite higher costs, Professor Chapman said fees had not gone up in the past two years.