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Is there a role for proton therapy in value-based care?

May 14, 2018

    The number of proton therapy centers operating in the United States has more than doubled in the past three years, from 12 in 2015 to 28 in 2018. The newest of these facilities, built and operated by Medstar Georgetown University Hospital, is just down the street from Advisory Board's M Street offices in Washington, DC.

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    Clearly, there's excitement surrounding proton beam therapy (PBT), a more targeted form of radiation therapy that promises to reduce collateral damage from errant X-rays hitting healthy tissue. Beyond the clinical promise, many academic institutions invest to "future-proof" their radiation therapy technology offerings, participate in research, and build their regional reputation and brand. However, as stressed budgets and shifting reimbursement drive hospitals to become more cost-conscious, will the proton boom continue?

    Before investing in PBT, weigh cost and clinical benefit

    Cost has been a primary concern with proton therapy since the expansion of clinically focused centers in the mid-2000s. A single-room proton therapy machine costs anywhere from $30 million to $50 million, which is about five to ten times the price of an advanced linear accelerator. These high costs can make achieving ROI a challenge: Hampton University's multi-vault proton therapy institute lost $2.99 million in 2017, and IU Health's proton therapy center closed in 2014 after sustaining a $3.5 million operating loss in 2013.

    PBT's higher costs demand higher prices: By analyzing Medicare fee-for-service (FFS) data, we found that proton therapy Medicare payments in the hospital outpatient department (HOPD) setting averaged about $27,000 per patient, compared with $10,000 for intensity-modulated radiation therapy (IMRT) and about $8,500 for stereotactic radiosurgery. While private insurers have long pushed back on the price of proton therapy versus alternatives, we may increasingly see referring providers balk at the cost as more participate in total cost-of-care contracts, such as ACOs and Medicare Advantage networks.

    Moreover, despite the significant cost, the clinical case for protons is unclear. Looking at Medicare FFS data, we found that only a few of the roughly 800 patients who received proton therapy in 2013 had future claims involving common radiation therapy side effects in the three years after their therapy—but side effects among patients treated with IMRT and stereotactic radiosurgery were also rare.

    And when Washington State Health Care Authority, which is often seen as a harbinger for future coverage decisions, completed an exhaustive report studying PBT's efficacy, it recommended limiting coverage to relatively low-incidence pediatric, ocular, and central nervous system tumors. In addition, a recent randomized controlled trial comparing PBT to IMRT in lung cancer found no difference in efficacy or toxicity between the two arms, signaling caution to those banking that future trials will show clear benefit.

    Is PBT investment right for you?

    With 24 additional centers currently under construction, industry leaders think expansion will continue. However, even the most sanguine stakeholders acknowledge that proton therapy is likely only appropriate for large, academic regional medical centers and cancer facilities designated by the National Cancer Institute. If considering an investment in PBT, providers should:

    • Evaluate how PBT fits in with their overall institutional strategy and goals;
    • Take a conservative approach to calculating ROI that accounts for local coverage policies; and
    • Consider the opportunity cost of a proton therapy investment—what other initiatives might the institution be sacrificing?

    After all, there may be more cost-effective alternatives to reaching the goals a proton therapy investment is intended to achieve.


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