Proton International center at UAB closing, bankrupt

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IonsAreOurFuture

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grenz said:
So what lesson should other single room centers be taking away from this closure?
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There's lots of lessons that keep getting repeated, in my opinion:

1. If you can't afford to pay cash, then a proton center is not for you. The debt payments and overhead are killer.

2. The healthcare enterprise should own the facility, not a 3rd party investment broker.

3. The team involved with this bankruptcy has unfortunately been involved with several other proton center bankruptcies.

4. Rosy projections of patient volumes seldom hold up in the real world, unless you are MD Anderson or Mayo and have patients flying in with boatloads of money.

And many more...
 
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IonsAreOurFuture said:
There's lots of lessons that keep getting repeated

1. If you can't afford to pay cash, then a proton center is not for you. The debt payments and overhead are killer.

2. The healthcare enterprise should own the facility, not a 3rd party investment broker.

3. The team involved with this bankruptcy has been involved with several other proton center bankruptcies.

4. Rosy projections of patient volumes never seem to hold up in the real world, unless you are an MD Anderson or Mayo and have patients flying in with boatloads of money.

And many more
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this is so right...... the debt load is a killer of these places.... basically creating zombie businesses. emory and maryland seem like dead men walking giving the debt loads. if some 3rd party comes knocking to finance / create your proton dreams... RUN....
 
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Well as we all know,
unlike X-Ray radiation, proton radiation does not damage tissues and organs surrounding the tumor . . .
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I guess all of those temporal lobe necrosis cases must have come from background x-ray radiation as proton patients drove by 15+ radiation oncology centers en route to get protons.
 
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IonsAreOurFuture said:
There's lots of lessons that keep getting repeated

1. If you can't afford to pay cash, then a proton center is not for you. The debt payments and overhead are killer.

2. The healthcare enterprise should own the facility, not a 3rd party investment broker.

3. The team involved with this bankruptcy has been involved with several other proton center bankruptcies.

4. Rosy projections of patient volumes never seem to hold up in the real world, unless you are an MD Anderson or Mayo and have patients flying in with boatloads of money.

And many more
Click to expand...

Not sure about #2

A seperate entity going broke on a proton center can declare bankruptcy without affecting the larger healthcare system.

If the proton center is owned by the deep pocket medical center, the potential losses increase dramatically.
 
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DoctwoB said:
Not sure about #2

A seperate entity going broke on a proton center can declare bankruptcy without affecting the larger healthcare system.

If the proton center is owned by the deep pocket medical center, the potential losses increase dramatically.
Click to expand...

I think the point the OP is making is if the institution owns the center, there is usually less or lower debt.
 
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DoctwoB said:
Not sure about #2

A seperate entity going broke on a proton center can declare bankruptcy without affecting the larger healthcare system.

If the proton center is owned by the deep pocket medical center, the potential losses increase dramatically.
Click to expand...

A proton center OWNED by the deep pocket medical center will (most likely) never go bankrupt and close its doors. May re-structure the way UCSD did to theirs but it won't fully close unless it's so outdated (like IU) that nobody wants to treat.

Still a ton of old timey proton centers out there who can't do the basics of CBCT or IMPT - Loma Linda, MGH, MDACC (AFAIK, the new one is not ready yet?), amongst others.

Was UAB single vault? If so, really surprised to see it fail. Kudos to the UAB ROs to not simply treat with protons because they had access to it? Not sure how big of a Peds place UAB is (as opposed to the St. Jude's, MDACCs, MSKCCs, of the world)...

Also, $25 mil cyclotron, but the whole facility cost ANOTHER $25 mil? Someone made out really well there and it wasn't UAB. Debt funding probably hurt it with the rise in interest rates as well.

Cincinatti is the last place I can think of that built a big 4-room vault but haven't heard any rumblings there.
 
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evilbooyaa said:
A proton center OWNED by the deep pocket medical center will (most likely) never go bankrupt and close its doors. May re-structure the way UCSD did to theirs but it won't fully close unless it's so outdated (like IU) that nobody wants to treat.

Still a ton of old timey proton centers out there who can't do the basics of CBCT or IMPT - Loma Linda, MGH, MDACC (AFAIK, the new one is not ready yet?), amongst others.

Was UAB single vault? If so, really surprised to see it fail. Kudos to the UAB ROs to not simply treat with protons because they had access to it? Not sure how big of a Peds place UAB is (as opposed to the St. Jude's, MDACCs, MSKCCs, of the world)...

Also, $25 mil cyclotron, but the whole facility cost ANOTHER $25 mil? Someone made out really well there and it wasn't UAB. Debt funding probably hurt it with the rise in interest rates as well.

Cincinatti is the last place I can think of that built a big 4-room vault but haven't heard any rumblings there.
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One of the best children's hospitals in the country iirc, they probably have enough real business to keep it going
 
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evilbooyaa said:
Kudos to the UAB ROs to not simply treat with protons because they had access to it
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Yes.

I deeply appreciate this, 'Bama.

Today was OTV day for me. At least once a week, usually during OTV day, a prostate or breast patient/family member will demand to know why I'm "not treating with protons".

This triggers a 10 minute rant from me about the dangerous abuse of protons in America, and the blatant profiteering which drives the fact that advertisements have prompted them to ask me this question.

The rant is now 11 minutes, with the final 60 seconds consisting of a Socratic "if protons are better, why have so many centers closed due to bankruptcy, especially when associated with otherwise stellar academic institutions"?

And, as always, I deeply believe in protons when appropriate. I spent two weeks recently convincing one of my potential re-irradiation head and neck patients to at least go have a chat with my friends in Boston.

Nuance! The enemy of modern medicine.
 
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IonsAreOurFuture said:
The next failed proton center?

www.castlepinesconnection.com

Cutting-edge cancer treatment center coming to Castle Pines | The Castle Pines Connection

The City of Castle Pines is poised to become the home of a 20,000-square-foot specialized medical facility
www.castlepinesconnection.com
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My future local center!

This is geographically pretty far from me and will be the only one in the state.

I’m very curious how it goes for them. I could see it working out but a lot of the ROs I’ve talked to are pretty cold on it.

It is a highly competitive city with a super strong urorads, good luck with breast and prostate.
 
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Been watching this a bit, hadnt read that article yet. Hilarious figure there at the end.

It’s kind of interesting how much of the writing on this center is focused on economic development and job creation, investments, etc.

Very little discussion of medicine despite it will be the only center in the state and we have children’s hospitals.

Same with their website.

Sometimes the world serves you heavy handed satire.
 
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NotMattSpraker said:
My future local center!

This is geographically pretty far from me and will be the only one in the state.

I’m very curious how it goes for them. I could see it working out but a lot of the ROs I’ve talked to are pretty cold on it.

It is a highly competitive city with a super strong urorads, good luck with breast and prostate.
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I personally think they have already made a lot of errors on this one

90 million for a Mevion unit is insanely overpriced, even with recent inflation. The University of Utah got their half gantry proton room for 30 million. Keep in mind, that's just the vault and machine, not a whole new center with parking, sim, office space etc, but still.

It shouldn't take 30 highly paid professionals to run a single vault. If this were a linac, you could run the dept with 7 people. Salary is the single biggest ticket item in a proton center budget, even for a 4-5 room center like Maryland.

It also appears they have no friendly partners in the state as a referral source and they are trying to straddle two major metro areas by not being located in either.

It feels like procure and provision all over again, i.e., big greenfield projects in the middle of nowhere, financed by debt with no skin in the game.
 
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IonsAreOurFuture said:
I personally think they have already made a lot of errors on this one

90 million for a Mevion unit is insanely overpriced, even with recent inflation. The University of Utah got their half gantry proton room for 30 million. Keep in mind, that's just the vault and machine, not a whole new center with parking, sim, office space etc, but still.

It shouldn't take 30 highly paid professionals to run a single vault. If this were a linac, you could run the dept with 7 people. Salary is the single biggest ticket item in a proton center budget, even for a 4-5 room center like Maryland.

It also appears they have no friendly partners in the state as a referral source and they are trying to straddle two major metro areas by not being located in either.

It feels like procure and provision all over again, i.e., big greenfield projects in the middle of nowhere, financed by debt with no skin in the game.
Click to expand...

Are there recommendations for non clinical staff for proton centers?

I’m guessing you need extra physics and maybe 1 extra therapist compared to a clinic with 1 photon vault?
 
From their website:

There are three basic ways to treat tumor based cancers:

  • Surgery
  • Systemic Therapies (Chemotherapy & Immunotherapy)
  • Radiation
Often times all three of these modalities are used to beat your cancer. Proton therapy offers the best radiation option available.
Click to expand...
 
I have it on good hearsay that the UAB center didn't close due to financial insolvency. There is a dispute between the private equity group and the university, and this closure is part of the fallout.
 
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beamseyeview said:
I have it on good hearsay that the UAB center didn't close due to financial insolvency. There is a dispute between the private equity group and the university, and this closure is part of the fallout.
Click to expand...
The proton center in San Diego has gone bankrupt at least twice as far as I can recall. Both times they re-structured and are still treating at present. The fact that UAB didn't do the same probably lends some credence to this hearsay.
 
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beamseyeview said:
I have it on good hearsay that the UAB center didn't close due to financial insolvency. There is a dispute between the private equity group and the university, and this closure is part of the fallout.
Click to expand...
I am not surprised, I get the feeling there are all kinds of behind the scenes details in how these deals get made.

I don't know if it has any bearing on this particular situation, but I think that one of the major inherent conflicts of interest in many of these partnerships is that the financial group takes on the risk, but the academic partner has all the responsibility as far as who gets put on beam and for what indication, and sometimes do not always perform as expected. Each side having some real skin in the game would probably help. The problem is that clinical partners often don't want to participate financially in some of these endeavors other than to lend their name and get the professional fees, which isn't always enough to secure a steady income for the financial backers, if all they put on treatment are peds and H&N and craniospinl cases.
 
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I think the problem is that we treat emerging medical technologies as opportunities for return on investments, not as services to enhance cancer care outcomes in the US.

Sometimes we should adopt medical technologies even if they lose money because it is the right thing for our society (in theory). Or maybe it makes a little money but then that all goes away at scale.

How do you create skin in the game for investors in that situation?

To me this is our fundamental proton problem and the main difference in our approach versus other countries.

There really should not be any clinical stakeholders arguing for UAB to have a proton center. It is far more cost efficient to send the few patients with significant clinical benefit to one of the multiple nearby centers.
 
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"What do you mean you want to put ANOTHER kid under anesthesia in 4 time slots? We've got lumpectomy cavities to boost!!!"
 
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NotMattSpraker said:
I think the problem is that we treat emerging medical technologies as opportunities for return on investments, not as services to enhance cancer care outcomes in the US.

Sometimes we should adopt medical technologies even if they lose money because it is the right thing for our society (in theory). Or maybe it makes a little money but then that all goes away at scale.

How do you create skin in the game for investors in that situation?

To me this is our fundamental proton problem and the main difference in our approach versus other countries.

There really should not be any clinical stakeholders arguing for UAB to have a proton center. It is far more cost efficient to send the few patients with significant clinical benefit to one of the multiple nearby centers.
Click to expand...
I used to be pretty naive about healthcare having to pay for itself, plus a margin. It never occurred to me that a hospital can literally close or get sold off or forced to merge, and lots of people lose their jobs as a result. I didn't think that happened much, but it still does, and I've seen it hurt people.

So it turns out that just about everything must get billed and paid for in the hospital in one way or another, even the warm blanket they put on you in recovery has a charge capture mechanism.

So it isn't really just emerging technologies that are being looked at to generate revenue, but literally everything a hospital buys. Even the ketchup in the cafeteria is subject to scrutiny. As we learned from GenesisCare and 21C going bankrupt, it isn't really the newness of the product (plain vanilla Linac) that determines financial success or failure, but how well it performs against the business model for which it was purchased.

If one's business model is to treat 20 kids in 20 hours and that's enough to break even for a large Children's Hospital with good charity care funding and no overhead debt payments, that model can probably succeed. If the model is to treat 10 kids, 10 H&N, 10 re-irradiation and 10 prostates, and the prostate patients never show up, but 20 kids do with anesthesia do, that model will probably fail, especially if financed by double digit debt. The same would happen at Genesis care down the street if even 5 kids showed up needing anesthesia. (did they even treat any kids? so what's their excuse?) Linacs are not an emerging technology; IMRT is not new. I think people just got greedy and went to town spending other people's money.
 
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NotMattSpraker said:
To me this is our fundamental proton problem and the main difference in our approach versus other countries.

There really should not be any clinical stakeholders arguing for UAB to have a proton center. It is far more cost efficient to send the few patients with significant clinical benefit to one of the multiple nearby centers.
Click to expand...
Canada's plan for years has been to send all their kids to the US who need protons. It turns out that for the number of kids they have sent, they could have built their own center and kept the money and their proton-qualified doctors in-country, instead of sending millions out of their coffers and continuing the brain-drain. They have also under-sent kids; i.e. not nearly as many who need the treatment can make the journey, it's either too far, too long, or one or both parents need to work. Who is going to watch the other kids if mom or dad is gone all the time? Forget it if you're a single parent unless independently wealthy. Food + travel + lodging, etc, is not cheap for 2 months in Boston or Houston or Florida etc. Insurance from the govt doesn't cover those costs usually.

It's now gotten pretty obvious that they need protons, but the cost of real estate in Toronto has gotten so bad that I don't know if it will happen anytime this decade, but I hope I'm wrong. Maybe Montreal will beat them to it, at which point, Toronto would pretty much have to build as a matter of anglo-canadian pride.

The main difference isn't so much who pays for the protons that matters, but the mindset of those involved. In the US, we are more can-do and entrepreneurial by nature, and know that somebody has capital that can be put to work somehow - (sometimes too much capital and too little work)! In a country like Canada, nobody dares build without a congressional guarantee of success, and the govt seems to view healthcare only as an expense instead of an investment in its own economy, (as far as I can tell...hope I'm wrong there too). They have too many patients in general for their infrastructure and not enough capital, even for linacs. Normally a free market would step in, but its "frozen" in fear of non-reimbursement. With 40 million residents, there are more than enough patients to support a proton center, even a private center could undercut the high rates being paid to the US (over 100k a patient) and the jobs and money would stay in the country.

I actually think that UAB has plenty of volume to support a proton center, but I suspect something else is at play as others here have hinted. Sending some of the 5 million Alabamans to Georgia or FL is no better solution than sending some of the 40 million Canadians from Montreal to Boston; if both parents have to work, who will be quitting? Even the next town over can feel terribly far for a kid who is puking from daily anesthesia - do you really want to stay at Motel 6 for 2 months with a pukey kid?
 
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IonsAreOurFuture said:
As we learned from GenesisCare and 21C going bankrupt, it isn't really the newness of the product (plain vanilla Linac) that determines financial success or failure, but how well it performs against the business model for which it was purchased.
Click to expand...
I am not an expert on private equity and have no personal insight into how very high net worth individuals invest, however it is clear to me that for PE (and those entities that partner with PE) ease of bankruptcy is a key feature of their model.

For one, under what circumstance could a major hospital declare bankruptcy for dismal return on proton investment (or other high capital expenditure endeavors)? Probably almost none. Poor return on investment is not going to lead to bankruptcy for an entity as big as UAB. The partnership with PE is in fact a strategy for disseminating risk, with one partner having a mechanism (ease of bankruptcy declaration) for mitigating that risk.

Secondly, PE may opt for bankruptcy for many reasons other than a given venture losing money, and it is contextualized by the lending environment Bankruptcies among private equity portfolio companies on track for 13-year high. The return on investment may be poor relative to the rest of their portfolio, and the benefits of bankruptcy may outweigh a marginal return in terms of their global investment strategy. Bankruptcy may allow for offloading of pensions and other liabilities and free up capital for likely higher yield projects. I am convinced that PE at times looks to drive certain marginal performers to bankruptcy.

I suspect that the PE model (highly leveraged, ease of bankruptcy, expected return on investment on the order of 10+% for very high net worth individuals) contributes to an inflated market and overvaluing for many companies (including lots of tech).

PE is not a working persons friend. It is the friend of a tech entrepreneur or other entrepreneur wishing to cash in.
 
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IonsAreOurFuture said:
Canada's plan for years has been to send all their kids to the US who need protons. It turns out that for the number of kids they have sent, they could have built their own center and kept the money and their proton-qualified doctors in-country, instead of sending millions out of their coffers and continuing the brain-drain. They have also under-sent kids; i.e. not nearly as many who need the treatment can make the journey, it's either too far, too long, or one or both parents need to work. Who is going to watch the other kids if mom or dad is gone all the time? Forget it if you're a single parent unless independently wealthy. Food + travel + lodging, etc, is not cheap for 2 months in Boston or Houston or Florida etc. Insurance from the govt doesn't cover those costs usually.

It's now gotten pretty obvious that they need protons, but the cost of real estate in Toronto has gotten so bad that I don't know if it will happen anytime this decade, but I hope I'm wrong. Maybe Montreal will beat them to it, at which point, Toronto would pretty much have to build as a matter of anglo-canadian pride.

The main difference isn't so much who pays for the protons that matters, but the mindset of those involved. In the US, we are more can-do and entrepreneurial by nature, and know that somebody has capital that can be put to work somehow - (sometimes too much capital and too little work)! In a country like Canada, nobody dares build without a congressional guarantee of success, and the govt seems to view healthcare only as an expense instead of an investment in its own economy, (as far as I can tell...hope I'm wrong there too). They have too many patients in general for their infrastructure and not enough capital, even for linacs. Normally a free market would step in, but its "frozen" in fear of non-reimbursement. With 40 million residents, there are more than enough patients to support a proton center, even a private center could undercut the high rates being paid to the US (over 100k a patient) and the jobs and money would stay in the country.

I actually think that UAB has plenty of volume to support a proton center, but I suspect something else is at play as others here have hinted. Sending some of the 5 million Alabamans to Georgia or FL is no better solution than sending some of the 40 million Canadians from Montreal to Boston; if both parents have to work, who will be quitting? Even the next town over can feel terribly far for a kid who is puking from daily anesthesia - do you really want to stay at Motel 6 for 2 months with a pukey kid?
Click to expand...

Good post. I don’t want to imply I have the best answer or things couldn’t be worse. I also appreciate some of the upside of our system. I do think it is often overstated though, and then we also lament some of the downsides of our system as if they are immutable laws, not choices we made (FCOI, bankruptcies, disparities in care).

I think you and I differ substantially on how many patients we think gain substantial clinical improvement over high quality IMRT/VMAT. That’s okay. That’s why clinical trials were invented!

We need to be more scientific and consistent in our discussions though.

We have a therapy that is SO great, many patients in every city benefit. Yet trials don’t enroll and “stakeholders” game end points.

It is harmful for patients to travel (I agree many times), but ROCR incentivizes travel. Travel harms our carbons unless you’re driving to a big academic center for extreme fraction reduction… I guess?

There is a proton center a 2 hour drive from UAB. Today my community center treated patient that drove almost 1.5 hours, we are the nearest facility of any kind. Should we build one in their town? No one is calling for that (nor should they).

There is an obvious explanation to all of these policies/proposals that people don’t like to hear. I’m open though, I want to learn. Please make this all make sense, how this is scientifically the ideal way to deliver radiotherapy in the US.

I hope people like you can lead the charge in fixing our discourse and policies around proton therapy.

I really do appreciate your posts.
 
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