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Future of cancer treatment or a pricey mistake?

Source: ProCure

If you build it, will they pay?

Plans to build a $235 million facility in New York City to treat cancer with proton-beam therapy are still proceeding—as are projects for new proton-beam centers around the country—even as some insurers balk at covering the pricier therapy for prostate cancers because of cost-versus-benefit concerns.

But the New York Proton Center project, which is being backed by a consortium of five leading hospitals in the city, has yet to finalize financing for the Manhattan building, which would use proton-based radiation instead of more traditional treatments.

And it has heard worries voiced by some would-be lenders about the danger of more insurance companies following Aetna's move in August to refuse to cover proton-beam treatment for prostate cancer, which can cost as twice as much as X-ray radiation treatment.

Aetna spokeswoman Tammy Arnold said the insurer's move to drop coverage was "because new evidence came out that showed that it wasn't much more effective than the other forms."

Blue Shield of California is dropping coverage of proton therapy for early-state prostate cancer next month for the same reason, while Cigna, another major insurer, is set to review their current policy of covering proton-beam therapy for prostate cancer in November.

Cigna currently considers proton therapy to be "clinically equivalent, but not clinically superior," to less-expensive "conventional external- beam radiation therapy," according to the company.

Insurers who do cover the treatment can pay out in excess of $200,000 to $300,000 for proton therapy, compared to $50,000 to $60,000 for the conventional treatment, according to an industry source. Medicare covers about $32,000 for proton therapy, compared to $19,000 for traditional radiation.

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"Every time there's a question in the press or the journals, there's a little ripple through the lenders, we see it all the time," said Dr. Simon Powell, chairman of the radiation oncology department at Memorial Sloan-Kettering Cancer Center, and a spokesman for the New York Proton Center consortium.

"You know what banks are like," he said. "It doesn't make much to take them twitchy."

According to Powell, lenders have dropped out of financing negotiations, but he said, "it's not crystal clear that it's a direct link" to their concerns over insurance coverage.

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Either way, he said, the project's backers are "confident" that the proton center will be financially viable, and after financing is finalized, the groundbreaking on a site in Harlem could happen within six months, and open within three years.

When it opens, he said 80 to 100 patients a day would be treated there, being sent there from his hospital, as well as Montefiore Medical Center, the Mount Sinai Medical Center, New York University Langone Medical Center, and Continuum Health Partners.

In the meantime, the consortium on Friday revealed a deal giving its hospitals' patients and doctors access to ProCure Proton Therapy in Somerset, N.J., a facility that opened in 2012, and is only one of 12 such centers in the U.S.

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About 40 patients from the New York consortium hospitals will be treated at ProCure each day, and with the 70 or so other patients being treated there, that will bring ProCure's four treatment rooms to their capacity.

"I certainly think the evidence is there to justify building these centers," said Dr. Oren Cahlon, medical director of ProCure, pointing to more than a dozen others that are in development or already built, including ones at the Mayo Clinic, St. Jude's Children's Hospital and Johns Hopkins.

"We think the medicine will prove itself," Cahlon said.

Source: ProCure

Cahlon and other proton advocates point to the therapy's concentrated form of radiation, which delivers a direct dose to the targeted tumor, with less radiation to surrounding, non-cancerous tissue. Conventional radiation can spill over into non-cancerous tissue, and lead to side effects including secondary cancers.

While proton therapy for treatment of prostate cancers has generated pushback from insurers, the therapy is less disputed for use in treating cancer in children, and tumors of the head and neck, brain and spinal cord.

This week, at the American Society of Radiation Oncologists annual meeting, Dr. Steven Frank of the University of Texas MD Anderson Proton Therapy Center is due to present research showing a 50-percent drop in feeding-tube use among oropharyngeal (back-of-the-neck) cancer patients who underwent proton therapy.

But because some insurers are denying coverage for the therapy in prostate cancer—and the increasing focus by all insurers on getting the best value for medical treatment—the New York Proton Center's planned facility, and its $235 million expense, in some ways represents a big bet that proton therapy will prove itself enough to justify the cost.

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"The NYPC consortium will be working to determine which cancer patients are best suited for this treatment, as it is not appropriate for everyone," said Dr. Shalom Kalnicki, chairman of the radiation oncology department at Montefiore Medical Center in New York City.

"Our clinical focus will be on young adults with brain, head and neck, as well as childhood cancers—all of which are reimbursed by insurers. We have made a conscious effort to consider cost concerns related to this new technology," he said.

Kalnicki added, "We are looking forward to the deployment of the appropriate clinical trials in proton therapy."

By CNBC's Dan Mangan. Follow him on Twitter @_DanMangan.