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New cancer treatment could boost Sibley income dramatically

Proton-beam therapy for cancer patients would greatly enhance Sibley Memorial Hospital’s financial position if approved by D.C. regulators, generating nearly 80 percent of the entire hospital’s income by its second year of operation, according to financial projections.

The costly new form of cancer treatment would also generate profits for MedStar Georgetown University Hospital, which is seeking permission to build its own center. But Georgetown’s smaller proposal would have a much less significant impact on the facility’s overall status, adding about $9.4 million to a much larger budget in its first full year.

If approved, Sibley’s center would open in 2017. Planners project a $2 million profit from its proton center that year, defraying a projected $15.6 million loss on the overall hospital operations.

But by 2018, with increasing use, Sibley experts project a $9.3 million profit on the proton center — an overwhelming part of the $11.7 million in income projected for the entire hospital, which would post $371.5 million in revenue is projections prove accurate.

One year later, Sibley estimates the proton center will generate a $15.8 million profit while the remainder of the hospital would clear just another $5.5 million more.

All the numbers were made available to the D.C. State Health Planning and Development Agency, which will decide soon whether to grant both hospitals a required “certificate of need.”Sibley and its corporate parent, Johns Hopkins Medicine, had sought unsuccessfully to keep their financial projections out of the public record, claiming they were proprietary.

Sibley wants to spend $129.9 million on four separate vaults, which would treat 808 patients annually at 90 percent utilization. An influential committee rejected their bid for one of the four, a pediatric vault, in a non-binding advisory vote on May 16.

For MedStar Georgetown, its $32 million proposal requires less construction and could open as soon as January 2014. According to MedStar, the facility would generate $9.4 million in its first full fiscal year, from July 2014 to June 2015 — about one sixth of the projected $56.7 million profit on $905.7 million in revenue.

A final decision on whether either system receives a certificate of need is expected by the end of the month.

Both hospitals are nonprofits and are obligated to reinvest excesses in their businesses.

Officials from both hospital systems declined to comment.


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