Radiation Center Upgrades Ahead

April 7, 2008
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HOLLAND — As Ottawa County’s radiation center prepares for an upgrade, a regional health care planning agency has called for a reduction in charges to pare down the margin and help patients and their insurers.

Additional cancer treatments are expected to be available next year as the Lakeshore Area Radiation Oncology Center in Holland brings new equipment on line.

LAROC, a consortium of four hospitals, will expand to accommodate a new linear accelerator, the machine used to deliver radiation treatments. The equipment demands a specialized room with thick walls and doors to prevent radiation from escaping. A $1.3 million addition will be built, allowing patients to continue receiving treatment on the 17-year-old machine currently in use until the new one is in operation.

Once that occurs in early 2009, the original room will be used for other radiation-related treatments such as high-dose-rate brachytherapy, which places radioactive materials directly into a tumor. That’s not available in the Holland area today.

LAROC, 12642 Riley St., is a joint project established in 1993 by Spectrum Health, Holland Hospital, North Ottawa Community Hospital and Zeeland Community Hospital to offer radiation oncology at the lakeshore.

“With multiple interests, we were able to have the hospitals come together to say we can do that jointly to service everybody, and it was has worked beautifully,” said Lody Zwarensteyn, president of Alliance for Health, the region’s health care planning agency. He said the patient volume is high enough to justify the equipment’s use, and patients at the three smaller hospitals have gained from expertise provided by Spectrum Health.

LAROC provided 7,748 treatments for the 12 months that ended March 31, according to the nonprofit organization’s application for Certificate of Need approval. That approval is still pending.

“Our existing linear accelerator is scheduled for replacement, so we have the opportunity to upgrade equipment and provide more treatment options for patients in the lakeshore area,” Mary Mencarelli, director of radiation oncology at Spectrum Health Hospitals, said in a written statement. “This project allows us to upgrade equipment to meet a growing need, and also allows us to provide the necessary building infrastructure to support this program expansion.”

Radiation treatment also is available in Grand Rapids and Muskegon.

The new equipment will bring two additional treatments to the area: image guided radiation therapy and intensity modulated radiation therapy. Both allow tumors to be targeted more accurately.

LAROC reported revenue of $2.18 million and $1.93 million in expenses for the year ending March 31, according to a tax statement filed with the Internal Revenue Service. About half of its revenue comes from Medicare, but just 2.8 percent from Medicaid.

The number of treatments is expected to grow to 8,111 in 2009, with the average charge per unit of treatment going from $763 to $1,003, according to LAROC’s application.  The organization generates about a 12 percent margin, which is distributed to the member hospitals.

In his analysis for Alliance for Health, Zwarensteyn suggested that LAROC consider lowering its charges because the margin beats its recommendation for 2 percent to 7.5 percent margin range. He attributed the generous margin to low overhead costs.

“The facility has the potential for a reduction in charges to a level that will still generate a ‘healthy’ margin, while more appropriately benefiting patients and their payers,” Alliance for Health’s analysis reads.

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