[Number 6]

Today I read in the Daily Sun that the Developer is looking for the residents to pony up $6.4 million to equip the new Cancer Center. I am stunned by that revelation. The reimbursement from the delivery of patient care is expected to cover the cost of the building and equipment. Now they want to be paid twice! Once by the residents, and again by the insurance carriers, mostly Medicare.

Here is how this works. The developer of the center takes out a loan for the building, equipment and working capital. Once they begin seeing patients, they recover the costs and, in this case, make a pretty decent profit. The radiation therapy side of the business is profitable, the medical oncology side, not so much.

When the initial story came out that the Developer was providing the building and was going to run the center independent of the Hospital, I thought it was a pretty good business move. Of course the original cost of $2 million of equipment was laughable. I think at the time I said that you cannot buy a state of the art accelerator for $2 million.

I just cannot believe that they do not have a complete financial feasibility study for this project. They must know what they are doing, though I now have my doubts.