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Originally Posted by 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.
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Perhaps I interpreted what you are saying incorrectly. Maybe the choice of words was not what you really meant.
The quote in the paper by Gary Morse is, "...I committed to finance and construct the building, confident that our residents would come together and raise the money neeeded to buy the equipment....." I don't understand who the "they" are that are expecting to be paid twice for both facility and equipment.
I don't agree with him that our residents need to be alone in raising the equipment monies. As the other poster said, it should have read "area" and not "our".
It sounds like you could lend much to this endeavor with your expertise. It seems that would benefit all, including G. Morse.