The Daily Briefing's Hanna Jaquith and Dan Diamond sat down with Technology Insights' Chris Pericak to discuss last week's news that two major insurers will no longer cover proton beam therapy for early-stage prostate cancer—and why for many hospitals, investing in a proton center might still outweigh the risks.
Q: The Wall Street Journal says that proton beam therapy is “under attack”—an eye-catching headline! Can you set the stage here?
Chris Pericak: The Journal [story] definitely hits at how payers are scrutinizing proton therapy, given the high cost and limited clinical data for some controversial uses.
[But] that’s why proton beam therapy has been in the crosshairs for years. Basically, this has been an ongoing issue. And Blue Shield of California and Aetna are not the first insurers to balk at the cost of proton beam therapy compared to its alternatives.
Q: Right. Regence—a Blue Cross Blue Shield insurer in the Northwest—stopped covering the technology three years ago, and Cigna will reconsider its policy later this year. Why the ongoing controversy?
Pericak: Think about the comparison between traditional radiation and proton-based therapy in terms of the costs and the clinical results—or lack thereof.
A traditional radiation therapy bunker might require a $5 million investment. [Now] compare that to a $30 million to $200 million investment for a proton center.
So what payers are saying is, “is the incremental benefit of proton therapy—without clinical data attesting to proton therapy's clinical superiority—worth the initial cost?”
And a persistent challenge is that proton therapy is unable to amass the magnitude of clinical trial data that traditional radiation therapy is able to amass.
Q: And that’s because there just aren’t that many proton patients, all told.
Pericak: Yes, exactly. There are less than a dozen proton-beam facilities currently in operation. It's tough to set up a randomized controlled trial when there are so few sites and many prostate cancer patients do not qualify for the procedure.
- The New Proton Therapy Marketplace: Join Technology Insights' Chris Pericak for an Oct. 17 webconference detailing how key changes in the proton therapy market—including new market entrants, technology innovation, and reimbursement—affect current and prospective proton providers.
Q: What's the significance of the latest news? Basically, what does it mean for hospitals that are considering a proton-beam investment, or have already done so?
Pericak: What's interesting about this particular announcement is that this is a national standard that private insurers are trying to put in place. This will likely be particularly challenging for [hospitals] that have based a large portion of their proton volumes on prostate.
However, a decent proportion of proton centers have diversified their business cases along other tumor sites. Because they aren’t focused solely on increasing prostate volumes, they are less likely to be dissuaded from pursuing such an investment. For many of these tumor sites, there is evidence of the superiority of protons, so we don’t predict its role will diminish.
We’re actually seeing more interest from hospitals around the country, independent of this issue.
Q. So declining reimbursement for the procedure is just one piece of the puzzle?
Pericak: Exactly. Payer reluctance is a significant challenge that hospitals need to be able to address before they invest in a proton center, along with the cost of investment, access to financing, market saturation, and other factors. But the challenges are different for each member, and what we've been seeing with our research is that for a particular group of institutions, the investment still makes sense.
We've seen that the cost of investing in protons is actually decreasing, in some respects. Historically, you'd have to [spend] $200 million for a four-room center that takes up the size of a football field. Now, hospitals can buy a single room system for about $30 million in their current space. So, hospitals actually do feel that this is more on their radar today than it has been in the past, independent of this particular coverage issue.
Q: To circle back to the beginning, the Journal portrays insurers’ shifting decisions as a major blow to proton therapy—specifically, to hospitals’ decisions to invest. But if I boil down what you’re saying, it sounds like it’s much more complex.
Pericak: That’s right. This is a big aspect, but it’s one aspect, and depending on their business strategy, it’s a bar that can be overcome.
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