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Catching the Proton Wave
By Charlotte Huff
Hospitals weigh the promise of a breakthrough cancer treatment against the enormous costs
Proton therapy, one of the most intriguing developments in cancer treatment, carries a price tag as intimidating as its size. At a cost of $125 million, and sometimes much more, today’s centers usually fill a city block, with treatment rooms and a phalanx of physicians, therapists and physicists to operate the proton-charged beam that enthusiasts say can treat tumors with astounding precision.
For a dozen years, only two hospitals—Loma Linda University in Southern California and Boston’s Massachusetts General—treated large volumes of patients using proton therapy. If current trends persist, that field will soon become much more crowded, presenting thorny dilemmas for health care administrators.
Last year, the University of Florida and Houston’s M.D. Anderson Cancer Center opened proton facilities, bringing the number of U.S. centers treating large numbers of patients to five, according to the National Association for Proton Therapy. At least five more are in the works. Meanwhile, smaller and less costly models now in development may expand options for administrators wary of today’s hefty price tag.
“Many hospitals are starting to consider proton therapy seriously,” says Joseph McCaffrey, senior oncology researcher at the Advisory Board Co., a nonprofit group in Washington, D.C., which recently completed an analysis of the proton therapy market. “This is a unique branding opportunity for hospitals. It’s an opportunity for hospitals to distinguish themselves on a national if not a worldwide scale.”
But building and equipping a facility carries financial and logistical challenges that dwarf nearly any other capital project.
Even health care systems with deep pockets might not have sufficient land available, particularly in urban areas. The University of Pennsylvania Health System, for example, couldn’t move forward with its construction plans until a nearby civic center was demolished. “This takes about the size of a football field,” says Ralph Muller, the health system’s CEO. Plus, the ongoing equipment maintenance and staffing challenges—given the sophisticated expertise required—are formidable. Some proton therapy centers, says McCaffrey, have already started dialing back their initial projections of the number of patients they could treat daily.
Unlike standard radiation, which uses X-rays to irradiate surrounding tissue, proton beams concentrate most of their supercharged, subatomic particles on the tumor itself, allowing higher doses and reducing damage to surrounding tissue, advocates say. That reduction in radiation exposure, about 70 percent, makes protons particularly beneficial for treating tumors located near vital organs, such as lung cancers, says Stephen Hahn, M.D., chair of the department of radiation oncology at the University of Pennsylvania School of Medicine. The targeted approach also works well for malignancies in children, he says.
“There are risks associated with this—financial risks—no question about it,” says Hahn, regarding the University of Pennsylvania’s proton construction plans. “But I think we have enough faith in what’s been done with the technology to think this will benefit a significant number of cancer patients.”
The University of Pennsylvania, which has already broken ground, likely is the furthest along in a growing field of centers under development, says Leonard Arzt, executive director of the National Association for Proton Therapy. Other players that have publicly committed to moving forward, he says, include Hampton University in Virginia and the Seattle Cancer Care Alliance, a coalition that includes Fred Hutchinson Cancer Research Center and Children’s Hospital & Regional Medical Center.
Arzt says he regularly fields calls from financial analysts and intrigued hospital administrators. “I try to distinguish those who are talking about it from those who are real,” he says. The bottom line is just that, he adds: “It’s all about financing. It’s all about what they can afford, who can pay for it.”
Still, both McCaffrey and a leading proton therapy manufacturer are bullish about the near future. Depending upon the success of smaller models, between 30 and 60 proton centers will be open or under construction within the next five years, McCaffrey says. Stephen Sledge, marketing director of IBA Particle Therapy, predicts that the Belgium-based company will sign eight to 10 proton therapy contracts in the U.S. market this year.
Footing the Bill
Last year, the University of Pennsylvania began construction on its $140 million, 75,000-square-foot center, which is slated to be treating patients by 2009. The not-for-profit facility will be financed with a combination of federal grants, debt, operations cash and private contributions, Muller says. It will be named the Roberts Proton Therapy Center after the Roberts family, who pledged $15 million to the project.
Elsewhere, financing approaches vary. The University of Florida Proton Therapy Institute, a 98,000-square-foot facility affiliated with the Shands Cancer Center, cost $125 million. The not-for-profit center was underwritten with some state funds, a small amount of private donations and nearly $80 million financed through the Jacksonville Economic Development Commission, says Stuart Klein, the institute’s executive director.
n Houston, officials at the University of Texas M.D. Anderson Cancer Center decided to develop a public-private partnership to finance their facility. M.D. Anderson put up the land necessary, valued at $2.5 million, and committed to staffing the $125 million, 94,000-square-foot center, says Mitch Latinkic, division administrator for the division of radiation oncology. Then the center sought out investors, who committed $30.5 million in equity; the lengthy investment list includes investment banking firm Sanders Morris Harris and two Houston pension funds.
Since M.D. Anderson’s portion of the investment partnership is 15 percent, it will garner 15 percent of profits after all expenses are paid off, Latinkic says. If it had fronted the cost, the hospital would have recouped 100 percent of the profits. But this way, Latinkic says, “We did not put in a lot of risk.”
Hospitals are not the only ones catching the proton wave. Hampton University, a historically black institution near Norfolk, Va., has committed to building a $207 million proton therapy center, the bulk of which will be financed with tax-exempt bonds, says William Harvey, the university’s president.
The proton therapy center, projected to serve 2,000 patients annually, will have medical school and hospital partners, although Harvey declined in January to provide any names. It will primarily serve the surrounding region, with a particular emphasis on African-Americans, who are considered more vulnerable to some cancers, including prostate, he says.
Balancing Clinical Benefits
The question is not whether proton radiation effectively treats tumors—it does, says Steven A. Leibel, M.D., who chairs the American College of Radiology’s Commission on Radiation Oncology. Rather, it’s still being determined which types of cancers most benefit.
The results for some cancers, such as pediatric malignancies, are encouraging, Leibel says. But more research is needed, particularly for common forms of the disease, such as breast cancer, he says. It also needs to be better understood—for specific malignancies—to what extent protons reduce radiation side effects compared with IMRT, or intensity-modulated radiation therapy, which also targets radiation.
“There is an advantage,” Leibel says. “But is the advantage so dramatic that [a patient] should get protons rather than IMRT?”
For hospital administrators, the dilemma is whether the added benefit is worth an investment that could squeeze out other beneficial technology, says Lisa Bielamowicz, M.D., national imaging practice leader for the Advisory Board. For $30 million—the ballpark cost of some smaller prototypes now being discussed—a hospital or academic medical center could purchase two Gamma Knife systems, two CyberKnifes and a “fleet of linear accelerators,” she says.
Once up and running, proton centers churn out substantial operation costs. The Advisory Board cited one study, which estimated an operations budget of nearly $15 million annually for a $125 million center. Klein, with the University of Florida, cited a higher figure of $25 million for his institute, once all four treatment rooms are fully operational.
Reimbursement, at least at this point, is strong. According to the Advisory Board’s 2006 analysis, Medicare reimburses at roughly $21,500 per case and private payer reimbursements starts at about $36,000.
But proton providers also will have to sustain a substantial volume. A $125 million center must treat 2,000 patients annually, generating more than $50 million in revenue to turn a profit, according to the Advisory Board analysis. M.D. Anderson’s Latinkic, for example, predicts that it could be as long as 10 years before investors start turning a profit.
Some facilities hope to treat 150 to 200 patients daily at full capacity, says McCaffrey, who calls those projections “very aggressive” given some of the logistics of treating patients and maintaining the equipment. “There is downtime associated with these machines,” he says. “They are very complex.”
Staffing, already challenging because of the specialized nature of the work, may become more difficult if centers remain open for double shifts. “Finding those people and getting them to work the hours you want [the proton center] to crank—that’s really an issue,” Bielamowicz says.
The Halo Effect
Patients, though, already seem convinced of the therapy’s clinical benefits. “We have more business than we can handle at this point,” says Klein, the Florida institute’s executive director. As of January, more than 80 patients were on the institute’s waiting list, he says. Two of the institute’s four gantries were up and running and the third was expected to be operational by the spring.
Sixty percent of the institute’s patients travel from outside the immediate 60-mile radius, Klein says. Eighty percent are self-referred. “These are well-educated, well-insured patients who are seeking us out,” he says.
Proton institute administrators also report spillover benefits for other affiliated hospital services. Shands Cancer Center, for example, provides related biopsy, pathology and assorted imaging services for patients receiving proton treatment. At M.D. Anderson, about 25 percent of the patients who call the proton institute don’t prove to be good candidates, but go on to get other cancer treatment at the Houston center, Latinkic says.
Competition Heats Up
It’s still relatively early in the proton race, but competitive positioning is already easily visible. Nearly every press release touts that its institution has—or will have—the largest proton center, or the most treatment rooms, or the closest academic affiliation. An online search for news stories reveals a plethora of personalized accounts of the treatment’s benefits.
Amid the shifting landscape, with more affordable models emerging, the most vulnerable facilities might be those that have committed to a $125 million project, but won’t see it come to fruition for several more years. “If I were them,” Bielamowicz says, “I would have some butterflies in my stomach.”
At some point, though, you have to take that leap, says Hahn, University of Pennsylvania’s chairman of radiation oncology. “We knew that this was the next generation in radiation targeting,” he says. Why, he asks, wait any longer to improve patient care?
—Charlotte Huff is a freelance writer in Fort Worth, Texas.
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