Why Are Healthcare Costs Exploding? See Proton Cancer Therapy

3/18/13Follow @xconomy

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for 20 years after they got standard chemo and radiation often suffer long-term side effects. Almost half (47 percent) of the children suffer from a loss of IQ points, heart toxicity, hearing loss, and the appearance of secondary malignant tumors. In contrast, a longstanding proton therapy site in Switzerland has reported only 7 percent of its patients suffered such long-term side effects from treatment, Laramore says.

That might sound like an intriguing benefit, but it could be misleading for any number of reasons. The gold standard of medical evidence comes from studies in which patients of similar prognosis are randomly assigned to one treatment vs. another and followed over time at multiple clinical sites. The reduced complication rate from Switzerland is the kind of finding that just might persuade a researcher to start such a well-controlled study to ask whether protons are a superior form of treatment for medulloblastoma.

Picking apart one study or another isn’t the real story here. The real problem comes back to the business model, and the financial math required to make this facility pencil out. The Northwest’s new proton center, like many others around the U.S., cost $152 million to build and to operate for its first year, says Annika Andrews, the president of the new center. It has 43 employees, and expects to ramp up to more than 80 at full capacity, Andrews says. When maxed out, the Seattle proton facility should be able to serve 1,400 patients per year, from a five-state regional area, running daily from 7:30 am to 10 pm.

Whenever a private, venture-backed company like ProCure and its lenders pump $152 million into a new facility, you know they have run the numbers on what it will take for this facility to make money. The basic math says it needs a lot of patients, and they each need to pay a lot. While treatment courses vary from tumor type to tumor type, and insurance reimbursement varies by region, proton therapy is typically about 40 percent more expensive than standard treatment, Andrews says. Median Medicare reimbursement for prostate cancer patients on proton therapy is about $32,428, compared with $18,575 per patient for standard radiation, a 75 percent pricing premium, according to a recent article in the Journal of the National Cancer Institute.

Those numbers say a lot about why proton centers are popping up all over the country.

“High reimbursement per case X High throughput X High volume = High profit,” wrote Theodore Lawrence and Mary Feng, a pair of radiation oncologists at the University of Michigan, in the Journal of the National Cancer Institute.

Laramore showed off the new $152 million proton therapy facility in Seattle, during a recent media tour.

Studies that compare proton therapy and standard radiation for prostate cancer are limited, as it’s historically been difficult to run randomized head-to-head studies with only a few active proton therapy facilities. But one study published last April in the Journal of the American Medical Association said that patients on the standard IMRT (intensity-modulated radiation therapy) had fewer gastrointestinal side effects than patients on proton therapy. Lawrence and Feng note that another study said that 6 percent of prostate cancer patients suffered genitourinary side effects six months after getting proton treatment, compared with 10 percent on standard IMRT. But that apparent advantage disappeared after 12 months.

“Proponents of proton therapy may argue that any reduction in toxicity is worthwhile. However, is this small transient difference enough to justify a 70 percent higher cost per patient?” Lawrence and Feng wrote.

OK, so the evidence on prostate cancer at this point—albeit from a limited data set—says you’ll pay more for proton therapy and not necessarily get more. In fact, you might pay more and get less.

Now, let’s come back to the finances. In Seattle, ProCure has been blanketing local media outlets with ads, encouraging cancer patients to consider … Next Page »

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  • DV4SC

    This article appears to be either a total set-up by its author, or, just really crummy journalism! The reality of the situation is that the treatment of cancer, when it comes to proton therapy, has become a competition between the haves and the have-nots. Really, just how objective can Swedish Hospital’s Radiation Oncologists be, when their top competitors, after more than 10 years of researching and years of developmental planning, decides to arm themselves with the most precise and specific radiation tool in the world? By the way, it is well-known that Swedish Hospital had in fact had a lot more serious intentions than they shared with this author in developing a proton project to treat far more cancer cases than just pediatric cases.

    The retrospective study that the author cited in JAMA last April, which was by the way published by the have-nots, really missed the boat as well. For example, it did not even take into account the super important fact that the patient population treated in the proton arm had been significantly dose-escalated (30 – 50%), for improved control responses of the cancer, over the IMRT arm. It was like comparing an apple to an orange. Yet, because there are more have-nots than haves, and a lot of powerful ones, it got published.

    Also, it should be noted that Dr. George Laramore is one of the most respected Radiation Oncologists in the entire world and this author comes in and, after his brief interview, tries to make Dr. Laramore sound like some kind of a bumbling nutty professor. Dr. Laramore is world-renowned amongst his peers for his deep research and clinical experience with both x-rays and particle therapy. He clearly knows and can explain all the advantages of protons over x-rays on a case-by-case basis, for those who really want to listen.

    The author forgot to mention that IMRT costs are much more to implement than its predecessor, yet nobody seems too interested in asking for the Phase III randomized studies that were done to warrant those increased costs! Why?
    Because there were none!! Rather than just focusing on the $150 Million cost of developing the center, which by the way is about $5 Million a year, as it has a 30-year life, the author should have spent more time focusing on the actual
    science and then he would have clearly understood why informed patients do not want to go into a blind study where one arm (the x-ray arm) will expose their normal tissues to a 30 – 70% more radiation exposure. If the author wants to make a stance on costs for the treatment of cancer, he should focus on the
    pharmaceutical industry, where their costs of just two chemo-related drugs, at
    several billions of dollars, costs the US healthcare system much more than all
    the radiation programs (which include all proton therapy centers) combined.

    • http://www.facebook.com/louis.memoli Louis Memoli

      I was going to write a rebuttal to this article but DV4SC nailed it. The folks at SCCA are outstanding individuals, both personally and professionally… I know first hand how intensely they’ve researched the potential of proton therapy. SCCA is exactly the type of institution that should have this technology not only to advance patient care, but for the medical research that will be forthcoming. I am especially pleased that DV4SC stood up for Dr. Laramore – one of the finest, apolitical, down-to-earth, physician scientists I’ve ever met. Nice job DV4SC -.I could not have said it better. And Mr. Timmerman, next time, do your homework.

    • omama

      Ahh Houston, we have a problem….DV4SC/Memoli/Lenarzt have all actually missed or conveniently ignored the excellent point that Luke made. That is, healthcare costs are too high and high-tech “innovations” must be forced to deliver VALUE.
      Do protons have value? Yes. Are they worth $100 or $20M? Who knows, but when a standard LINAC can be purchased in $2M range and a fancy modified one can be had for $5M, you better be able to justify the serious multiples.
      I would challenge DVASC/Memoli/Lenarzt to do just that. Ok, so protons are nice for skull base tumors–based on OLD literature I might add– and have real, obvious value for little kids who will hopefully live a long time. They also have value in SIDE EFFECT and COMPLICATION reduction, no doubt. But efficacy or tumor kill? Little, maybe 10%, right DV4SC?
      As for Laramore being a clinical expert, no one argued. But is Laramore an expert on health care costs? Hardly.
      As for Mevion and the $20M jobs–good but not good enough. Too expensive still for real VALUE to seep out to the masses.
      IMRT, you mention. Just makes Luke’s point that much more poignant. As you say, IMRT is expensive and not very justifiably so. Just like using protons in patients who may not have long enough to experience the fun side effects our treatment gives them.
      All the above should not be taken as a decision to say “No” to the purchasing decision or the use of protons. For certain facilities that can squeeze the value out of them, protons may be the best decision ever made (until they see the even higher dollar carbon ions–looking at you CHIBA). But the ProCures of the world selling to the neighborhood rad onc practices–please. Don’t let me decide though—just let the MARKET decide.
      Finally, a “set-up” or “crummy” journalism? Quite the contrary. And, DV4SC, next time pick on people your own size, not a journalist who wrote an excellent piece. If you represent the thinking of the rad onc community, and perhaps you do, therein lies our problem. Perhaps you missed the ASTRO Keynote last year–that’s right, radiation oncology was the #1 biggest specialty identified in the shame of escalating health care costs. Yes, I hate Pharma too and not sure I believe the Keynote, but let’s look in the mirror first.

      • DV4SC

        OMAMA: I strongly suggest you read my comments once more; I think YOU missed the key points. Try to open your mind before reading and try to keep it open throughout the read. Perhaps then you might get my points. I actually displayed the fixed costs of a 4-room facility that will be operating 2-shifts per day, at $5M/year. That is equivalent to 8 Linacs, as most Rad/Onc centers that are only using Linacs simply cannot get enough patient volume to warrant a second shift, unlike protons.
        Your mentioning Rad/Onc being a cost-reduction target is a joke. Every single specialty area, including Ophthalmology, Pathology, Neurosurgery, etc.. are targets!! Perhaps, you did not attend any other specialty conferences beyond Rad/Onc or you would know the real story.
        You defend this journalist, but this journalist IMO did a weak interview with Dr. Laramore, put a heavy weight on competing Rad/Onc that bad-mouthed the technology without fully disclosing that his very own institution was seriously trying to get a proton center of their own, and the Author sites articles that have no real basis for comparison (like comparing apples to oranges) written by Authors who have an axe to grind.

  • Chuck

    The article raises some good questions, but does have some problems. Personally I think it is good that ProCure is partnering with SCCA. The UW physicians now have IMRT and protons (and neutrons), so they are in a good position to do head-to-head comparisons. And the SCCA is a top research organization, so I think they are the right people to be exploring and developing different treatment modalities.

    One misleading fact is comparing the $150M facility to a $3M linac. The $150M is more than just the treatment equipment in one room. One could also question why if standard radiation equipment only costs 2% of the proton facility, why are the treatments costs 50% of protons? Seems like you could make money even faster with cheaper x-ray equipment even with the lower reimbursement.

  • lenarzt

    No question, DV4SC nailed it and so did Louis Memoli. One wonders what Mr.

    Timmerman was thinking (or his hidden agenda) when he accepted an invitation to tour the new SCCA proton facility. Surely he was aware of the cost, which is no secret and old (journalistic) news. If costs were the same as conventional X-ray treatment, there would be no debate. We can all agree less radiation is always better to spare healthy cells and tissue in reducing recurrence, reducing toxicity, and reducing side effects. When it comes to prostate cancer patients, 99 percent of proton therapy patients treated believe they made the best treatment decision for themselves in a new data analysis of outcomes and satisfaction reported by nearly 2,000 patients. Did he happen to talk with patients themselves? It’s no secret that If all hospitals could afford to have proton therapy, they would all have it. Despite Timmerman’s lame opinion, the future of proton therapy is bright. It will not only be a better option for cancer patients, but also one that is not necessarily more costly than conventional X-ray treatment.

    Leonard Arzt, National Association for Proton Therapy

  • ProtonsRule

    Out of necessity comes invention, Mevion being the perfect example in this case. The author drowns himself in the here-and-now, yet dedicates one short paragraph to the future of Proton Therapy technology? What about the wide-reaching economical benefits of innovation? What about the unwavering drive these innovators demonstrate to improve the technology, reduce costs and complexity, and enable PATIENTS to benefit from the wider deployment (at lower power consumption levels)? Hmmm…if the author interviewed a few patients who got up and walked out of each treatment feeling no worse than they entered…his opinions might change.

  • Whalley

    I agree that healthcare costs are unsustainable and that societal attitudes contribute, but this article’s conclusion that more product testing will improve things is naive, at best. The supply of high-cost medical services exists because the demand is there and, as history shows, extra hurdles on the supply side will likely raise costs across the board. If the root cause is attitudes on the demand side, the solution is education on the demand side.

  • http://www.facebook.com/profile.php?id=100005353481399 David Simpson

    I’ve read the comments in here and with all the arguments taken. I’d say proton therapy is good news and beneficial to many.

    David

    http://www.pharmacyschooling.com

  • http://twitter.com/BiotechStockRsr BiotechStockResearch

    Let us charge whatever we want, don’t mind there are no data, and a pox on anyone who questions our motives.

    Did I summarize the thread here pretty well?

    DV4SC does a nice job shifting the conversation about the JAMA study. OK, let’s say I grant your point about the study, after all (as Luke points out) retrospective data have any number of problems. So, DV4SC, where are your PROSPECTIVE data showing this technology works any better over the LONG TERM?

    Because if we’re going to be paying this much for something, we’d better be talking long term outcomes.

    The SCCA are nice individuals, Louis, but that has nothing to do with anything here does it? I have no doubt they passionately believe from their anecdotal evidence this technology can save lives. The data are probably even there in medulloblastoma. But is anecdotal evidence enough to justify taxpayers paying the cost differential here for prostate, which is a good example because 80% of patients are on Medicare?

    And Leonard from the industry group, you have to be aware the stat you site about patient satisfaction is pretty meaningless. Of COURSE patients are going to say they made the right choice — especially men — because otherwise they have to admit they screwed up their own healthcare choice. Guys are notoriously skewed to having higher opinions of “new” things too. And frankly, we like all sorts of things that may or may not be good for us. Your data produced via a non-scientific sample and analyzed by your paid consultant are certainly interesting enough to be hypothesis-generating, but they are meaningless without a control or at least additional analysis as a check/balance against whether patients’ opinions match their consumption of related healthcare services. Good marketing piece, I’m sure. Unacceptable by any objective standard as the sole basis of justifying the additional cost.

    The medical spending path we are on is unsustainable. As an analyst for publicly-traded companies, it’s great when a company announces a huge selling price and is able to make that stick because the increased revenues make money for my clients. But it isn’t really about that, is it? In the long run, when it bankrupts our governments (“when” not “if”), all we’ve done is accept short term gain for long-term pain.

    Luke’s point was “Where are the Data?” Nobody here has shown any data proving proton beam therapy is superior (again, with the possible exception of medulloblastoma). If it is only “just as good” then why should taxpayers be paying 70% more for “just as good”?

    It’s not unreasonable to ask that question. It’s not unreasonable to expect an answer. And it makes me wonder that most of you are so defensive that you have to personally attack the author.

    I guess that’s what you’re left with when, in fact, you have no data.

    • DV4SC

      Biotech: We in fact Do have data!!

      We had enough data from mostly two institutions, Harvard & Loma Linda, to have convinced such institutions as MD Anderson, Univ. Of Florida, University of Pennsylvania, The Mayo Clinic, St Jude’s Hospital, University of Maryland, Memorial Sloan Kettering, and countless others to pursue the development of their own centers. In 1997 there was only one hospital-based proton center in the entire world, now there are more than 12 in the states and more than 30 abroad – and growing!! If you think these institutions did not thoroughly vet out this therapy before moving forward to build out these projects – think again!!

      BTW, the data will continue to grow with the addition of new high-quality clinical programs that are exploring higher thresholds, in dose placement accuracy, dose escalation, and reduced toxicity studies, than have ever been attained in conventional radiotherapy.

      The main reason we cannot easily conduct a double blind study between x-ray & proton is that by law we have to fully educate the patient to both arms of the study and let them decide to forgo an industry-wide accepted reduction of at least a 50% integral dose of radiation to their normal tissues – to prove an obvious point.

  • BDJ384

    Mevion and ProNova Health Solutions are not only developing cheaper, $20 million machines; they are improving proton therapy. Read up on hypofractionation which will significantly lower not only treatment time for patients but costs as well.

    The innovative, early adopters are investing in proton because they understand the studies and are looking to the future. Studies have already shown that proton works better, they just haven’t been done with the perfect parameters to where we can say X=Y so proton is worth it. Hospitals and private proton providers are looking 10 years down the road. The exact same argument was made against PET. It took a large effort to get PET approved and moving but look at PET now…and it’s totally worth it. I’m willing to be we could find an article exactly like this one complaining about PET from years ago.

    And this isn’t some American “spend tons of money” thing. Europe and Asia are also investing in proton therapy now and they are doing so largely based on high level governmental analysis of its current value. In the UK they have made the argument that it will save the system as a whole money, despite its current high cost.

    I understand the argument that we should have complete and convincing proof before we invest in something so expensive. My simplified response to that is the people who are in the know in the medical community see its potential and are jumping on board. They see enough proof. For example, studies have shown that increasing the gray that you can treat a tumor with will improve the effectiveness of treatment. Studies have also shown that decreasing the entry dose of radiation to areas of the body that are clean will decrease side effects and recurrences. These studies weren’t done with proton so we can’t say that proton would be more effective; however, proton has a negligible entry dose and can deliver more gray. Therefore, proton can more effectively treat a tumor in a way that traditional radiation will never be able to (re: entry dose). If you throw in studies that will be proving the efficacy down the road (which many believe this is inevitable-clearly) and the improvements to proton to make it cheaper, it is reasonable to expect large patient loads and profitability that come as a result of its proven effectiveness. These folks aren’t investing $200 million + just because they think they can charge a little more. That’s too big of a risk.

    Bottom Line:

    You don’t take a 30+ year risk on something that could be so easily disproved by upcoming studies. You take a 30+ year, $200 million, $2+ million maintenance cost, risk because you see the future potential and have the utmost confidence in it.

    If you want to pick on high health care costs, pick on the government giving drug makers exclusive rights to gouge us on drug costs…or pick on obese people…or pick on cigarettes…or pick on preventative medicine (tort reform-the cost saving benefit of which is incalculable).

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