Landmark Medical Center in Woonsocket is partnering with a private company to offer radiation therapy starting in the spring, after financial woes forced the hospital to shelve those plans for three years.
The hospital plans to break ground today (November 18) on a $6.1 million, 12,000-square-foot expansion that will house the radiation unit – the final, crucial component of its cancer program and a service that is sorely lacking in northern Rhode Island, said Landmark President Gary J. Gaube.
“This will be the only (radiation-therapy) site between Providence and Worcester,” Gaube said. “That’s a huge, huge market, and the center will fill a giant access void.”
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Cancer patients in the northern part of the state – a population with a cancer rate 29 percent higher than the national average – now must travel to Boston, Providence or Worcester for radiation treatments. The lack of access is especially problematic given the area’s large elderly and low-income population, who often lack transportation to get to and from treatments.
The center is a joint venture between Landmark and Florida-based Radiation Therapy Services, a for-profit company, along with the Lahey Clinic in Burlington, Mass. Gaube said the partnership is a way to bring radiation-therapy services to Landmark’s campus without sticking its own neck out, financially. It is the latest example of a trend among hospitals in Rhode Island toward allying with private companies to offer expensive medical treatments on site.
Landmark will take a 38 percent stake in the venture while providing land for the project, and RTS will build, equip and staff the facility and assume the remaining 62 percent of ownership. Radiation oncologists from Lahey will provide clinical oversight, offering treatment protocols from Lahey’s own cancer program.
“In the past year-and-a-half we’ve seen more joint ventures, where a for-profit puts up most or all of the funding in order to provide a specific service,” said John X. Donahue, director of health services regulation for the state Department of Health.
Last summer, for example, the Health Department approved a plan for six hospitals to partner with a private firm to provide a mobile PET scanner, an expensive technology that uses radioactive tracers to detect a variety of diseases. And Rhode Island Hospital last year hired a Massachusetts firm to handle some outpatient MRI procedures.
Donahue said the Health Department will review a private company’s track record in other states before approving plans with hospitals here.
For cash-strapped Landmark, the joint venture was a logical move, Gaube said. The hospital originally had been granted the go-ahead by the state in 1999 to provide radiation services, but it eventually scrapped those plans because it was in financial turmoil after years of merger negotiations with a large for-profit chain proved fruitless.
“There would have been no way to do the cancer center without a private partner, because of the financing situation,” said Gaube, who was impressed by a similar joint venture RTS had with a community hospital in Utica, N.Y. “We got what we wanted without really having to use any of our own assets,” he added.
Although it appears to be an emerging trend for Rhode Island, it is common for community hospitals to turn to the private sector as a source of capital, according to Martin Arrick, a director at Standard & Poor’s and manager of the rating company’s not-for-profit health-care group.
“In many cases small- and mid-sized community hospitals lack the capital to provide a certain specialty service, so they’ll partner with an outside party to bring that capital in,” Arrick said.
Another common practice for nonprofit hospitals nationally, Arrick said, is to import clinical expertise from hospitals in nearby states – something hospitals in Rhode Island have been doing with increasing frequency.
Landmark, for example, forged a partnership with Boston’s Beth Israel Deaconess Medical Center in 2000 to provide cardiac care. Landmark began offering diagnostic cardiac catheterization services last year and expects to begin open-heart surgery and an interventional cardiac program next year.
Westerly Hospital is in a similar alliance with Yale New Haven Hospital to provide cardiac catheterization services, and Southcoast Health System in Massachusetts started an open-heart surgery program last spring by teaming with Boston’s New England Medical Center.
“It becomes a make-it-or-buy-it kind of question,” Arrick said. “Do you grow those services on your own, through capital expenditures and recruitment, or is it simpler and easier to partner with someone who has the required experience?”
Gaube says Landmark’s partnerships with prestigious Massachusetts hospitals will raise the small hospital’s stature while improving patient care. For instance, Landmark will join Rhode Island Hospital and Roger Williams Medical Center as the only hospitals in the state providing radiation therapy.
And revenues from the higher-margin cardiac and cancer-care services will help bolster Landmark’s bottom line, Gaube said. Already, the new catheterization lab has played a role in the hospital’s brightening financial picture: After losing a combined $17 million in 2000 and 2001, Gaube said the hospital lost just $1.4 million in fiscal 2002 (ended Sept. 30).
Landmark’s new cancer center and cardiac program will help draw more patients from nearby communities in Massachusetts, Gaube said, citing the town of Franklin, which is one of the Bay State’s fastest-growing communities.
“We feel we can attract the market north of us,” Gaube said. “Why not go nine miles down the road and see doctors of the same pedigree that they would get by driving to Worcester or Boston?”
