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1 Both authors: Department of Radiology, University of Southern California, 1510 San Pablo St., Ste. 350, Los Angeles, CA 90033.
Received September 18, 2000;
accepted after revision December 15, 2000.
Supported by the National Science Foundation/Whitaker Foundation award
BCS-9315211 for cost-effective health care technologies.
Abstract
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MATERIALS AND METHODS. Financial data were collected on capital expense and global operating costs through interviews with industry experts, evaluation of prior studies, and review of expenses incurred at the University of Southern California PET center. A data model and cost templates were developed. Expenses were allocated either to the production or purchase of radiopharmaceuticals or to the provision of the PET scan, and the cost per procedure was determined. A sensitivity analysis was performed on the net present value for key parameters.
RESULTS. A cyclotron serving a single scanner is not financially viable. The radiopharmaceutical distribution configurations were financially sound. In these cases, the cost of the radiopharmaceutical was approximately $700 per dose with modest levels of production (12 doses per day). In addition, the average cost of PET scans (technical scan and professional charges) ranged from approximately $900 to $1400. The critical factor for profitability was shown to be throughput.
CONCLUSION. This analysis provides significant insight into the cost of PET and the comparative costs of offering PET through four operating configurations. Reductions in equipment prices, increased availability of radiopharmaceuticals, growth in demand, and improvements in reimbursement have all contributed to the financial viability of this imaging technique.
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Early in its evolution, PET was used primarily at large academic centers that had the scientific infrastructure to support the on-site production of the short-lived radionuclides using a cyclotron. The cost of establishing a PET program was quite high [12, 13]. Published reports on the cost of developing a comprehensive PET center ranged from $5 million to $7 million as an investment for the equipment and facilities, with projected operating expenses ranging from $2 million to $2.5 million per year (adjusted to today's dollars) [14, 15]. The delay in the proliferation of PET was due in part to its financial risk, including substantial up-front capital expenditures, technical complexity leading to significant operational cost, and insufficient offsetting third-party reimbursement. The lack of clarity in the early regulatory environment intensified the perception of business risk because PET drugs were not approved by the Food and Drug Administration (FDA) and a reasonable way to obtain the needed approvals was not forthcoming [12, 16].
Industry and the scientific community endeavored to resolve the concerns surrounding the development and use of clinical PET. Commercial entities developed a business model that centralized the complex cyclotron and radiopharmaceutical production activities so that the cyclotron could serve the needs of multiple PET scanners in a region. Because the capacity of modern-day cyclotrons exceeds the demand of a single facility, this concept provided both the venue to sell the excess production capacity and another source of revenue to offset high operating expenses (Conti PS et al., presented at the Institute for Clinical PET meeting, October 1994). A PET scanning site could purchase patient-specific doses of the cyclotron-produced PET drugs as needed. Upfront funding for satellite scanning sites would be substantially reduced, and ongoing operational costs would vary with utilization, tying costs to potential streams of revenue. The financial risk for a hospital purchasing just a PET scanner is significantly less than for a facility purchasing both a scanner and a cyclotron. Although capital expense and risk remain high for an entity considering distribution of radiopharmaceuticals, revenue potential is increased and diversified. Variations of this model, some involving commercial interests, have been introduced around the country.
During the 1990s, PET camera manufacturers also worked to reduce the costs of developing a PET center. New low-cost scanners were designed. Other manufacturers developed dual-use scanners, often called "coincidence" or "hybrid" devices, to image positron-emitting radiopharmaceuticals and traditional nuclear radiopharmaceuticals. These devices cost less than dedicated PET scanners and provide a more diversified source of revenue for support of the center.
At this same time, the academic community continued to publish studies showing the efficacy of PET. The emergence of a body of peer-reviewed literature yielded some clinical reimbursement by private insurance companies in different areas of the country; however, full regulatory and reimbursement relief was delayed until the late 1990s. Provisions of the FDA Modernization and Accountability Act of 1997 required FDA to develop "appropriate" procedures for approval of PET drugs, as well as "appropriate" current good manufacturing practices for PET radiopharmaceutical production [17]. The FDA conducted safety and efficacy reviews of the published literature on several of the PET compounds in clinical use today to form the basis for their labeled indication for clinical use [18]. They found that FDG is safe and effective in PET imaging for the assessment of abnormal glucose metabolism to assist in the evaluation of malignancy in patients with known or suspected abnormalities found using other testing modalities, or in patients with existing diagnoses of cancer, as well as in patients with coronary artery disease and left ventricular dysfunction, when used, together with myocardial perfusion imaging, to examine myocardial glucose metabolism and to identify myocardium with reversible loss of systolic function. The FDA also found that nitrogen-13 ammonia is safe and effective in PET of the myocardium under rest or pharmacologic stress conditions to evaluate myocardial perfusion in patients with suspected or existing coronary artery disease.
This legislative effort sparked a new Medicare approval process as well. The Health Care Financing Administration (HCFA) agreed that Medicare would begin to cover PET scans for the characterization of solitary pulmonary nodules and initial staging of lung cancer as of January 1, 1998, and that the HCFA would conduct a fast-track review of several other indications for PET. Medicare reimbursement for PET has been expanded twice recently. In July 1999, three new limited indications were added to the coverage policy. In July 2001, coverage will be expanded to broadly include the use of PET in lung cancer, colorectal cancer, melanoma, lymphoma, esophageal cancer, and head and neck cancers. Further limited indications will also be added in epilepsy and coronary artery disease. In this same coverage decision, the HCFA placed certain limitations on the type of equipment that would be covered [19]. Efforts are ongoing by the community to further increase the availability of PET for the Medicare population with respect to both indications and equipment options. Private sector insurance routinely covers FDG PET for these Medicare-approved indications and may cover other indications on a case-by-case basis.
Now that many hurdles to the proliferation of clinical PET have started to fall, it is important to understand the financial implication of initiating a program. Cost analyses are important tools used by business leaders, administrators, and others to do this. PET centers in operation or under development may find that cost studies also provide data that are useful in pricing services and benchmarking operations. Much of what has been published previously on these topics reflects assumptions that are no longer valid.
Two comprehensive cost analyses were assembled by the Institute for Clinical PET [20, 21]. Each described the cost that existing PET centers undertook in providing their services to patients. Data were extrapolated to estimate a generic per-scan cost for the portion of the work that reflected clinical volume. At the time, these studies provided useful descriptions of what had transpired. However, they were not and are not useful for decision makers today. Anecdotal reports have provided information about the cost of equipping and operating specific PET centers but do not provide a cost template that is broadly applicable [14, 22]. Published data have also not addressed the changing assumptions for PET equipment or evaluated whether the host—satellite business model has fairly apportioned costs among the users of radiopharmaceuticals.
Previous work published by our group analyzed the cost of providing PET services, addressing capital and operational expenses across several operational configurations, including a host cyclotron—satellite scanner structure [15]. That analysis, however, focused on determining the operational breakeven of a facility at an assumed rate of reimbursement for PET. Although that analysis is useful and provides target operating volumes, an evaluation of the potential financial return and pricing levels is needed.
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Four configurations were selected for the cost analysis. Option 1 evaluated a dedicated PET scanner and cyclotron in a traditional configuration with a high-end PET scanner and a full-service in-house cyclotron operation. Option 2 evaluated a dedicated PET scanner and cyclotron distribution business that used a high-end PET scanner and included a small-scale, wholly owned distribution business for the sale of excess radiopharmaceuticals produced by the cyclotron. Option 3 also incorporated a dedicated PET scanner and cyclotron distribution business, but used a low-cost PET scanner. This option also included a small-scale, wholly owned distribution business for the sale of excess radiopharmaceuticals produced by the cyclotron. And finally, option 4 evaluated a low-cost dedicated PET scanner in which radiopharmaceuticals were purchased from a distribution center. The analysis did not cover the operation of coincidence devices because these devices will have substantially different operating assumptions.
Financial data were collected on the capital and operating costs—technical and professional—through interviews with industry experts and a review of actual expenses incurred at the University of Southern California PET Imaging Science Center. The University of Southern California facility is equipped with an ECAT 953 whole-body PET scanner (CTI, Knoxville, TN) and an RDS 112 11-MeV cyclotron (CTI). Support laboratories and facilities for the PET Imaging Science Center include an on-campus radiopharmacy for preparation of PET and conventional radiopharmaceuticals. Radiopharmacy operations were managed by a commercial radiopharmacy during the study period. Facilities also include a radiochemistry laboratory for the design and development of new radiopharmaceuticals.
A data model was then developed with key inputs, or critical assumptions, based on standard business and accounting methods as well as the actual expense data collected from the University of Southern California. Modifications to the model were based on the survey of other centers and commercial vendors and on a review of the data from prior published studies. A number of additional assumptions were made to complete the analysis that were not consequential to the practice of PET per se but related solely to business decisions that would need to be made in the financing of a PET center. These assumptions were logically deduced and consistent within and across all models. Estimations of the financial impact of new FDA requirements have also been incorporated. No allowances were made for subsidization of operations. Donations from individuals or foundations, grants and contracts, technology transfers, below-market reductions in equipment price, financing fees below standard rates, and cost-sharing of employees and facilities are all examples of reductions in finances that may be used but were not considered.
The pro forma model was based on 248 operating days per year (260 weekdays less 12 holidays). In the first year, total days available for patient studies are reduced for two maintenance days per month; maintenance days are reduced to 1.5 per month in subsequent years. Clinical volume is increased slowly from three scans per day in year one to eight per day by year 6. Although this volume is conservative given the recent explosion in demand for PET, it allows adequate time for local clinicians and insurance providers to become educated. Average global charges for PET procedures are estimated to be $2850 in the first year, with a 50% write-off to contractual and other discounts. In subsequent years, the procedure fee is increased modestly (3%) to account for inflation. Reductions to revenues are lessened to 35% as local clinical acceptance of PET grows. Equipment is depreciated by the straight-line method for 7 years and 20 years, respectively, for the scanner and cyclotron. The pro forma model allows 80% of the capital investment to be funded by debt (at 10% interest) and 20% by cash, with operational short-falls (if any) to be covered with cash. Debt will be paid back over a 6-year period, with interest-only payments during the first 3 years. The discount rate for the net present value assumptions for this configuration is assumed to be 15%. A service contract on the equipment will be started in year 2 and is estimated at 11% of the initial cost of the equipment, increasing at year 6 to 15%. Other expenses include a fair-share portion of the facilities' linen, insurance, maintenance, rent or over-head, and utility costs.
Once the pro forma model was developed, a template was created in a spreadsheet program. Standard financial methods were used to create output reports, including annual income statements over a 7-year period, a cash flow statement, and a present value analysis. From these reports, an average cost per procedure was determined at a reasonable level of demand. Expenses were directly allocated either to the production or the purchase of the radiopharmaceutical or the provision of the PET scan.
The data were used to compute the costs of various common PET procedures. The cost for each specific procedure is of critical interest to insurance providers and to business managers of PET centers because the price of and payment for each PET scan should reflect its relative cost. Because different types of PET procedures use scanner and cyclotron resources dissimilarly, pricing and payments should vary as well.
Standard cost accounting methods were used to calculate per-procedure cost; these methods required assumptions of resource utilization and clinical referral mix. Types of studies included in the analysis were brain metabolism (FDG brain), brain perfusion and metabolism (FDG and oxygen-15 water brain), whole-body cancer survey (FDG body), and cardiac viability (13N ammonia rest myocardial perfusion and FDG imaging). For this analysis, a clinical mix of 20% neurology (15% FDG only and 5% FDG and 15O water), 75% whole-body oncology, and 5% cardiology was assumed. A relative method of determining resource use by type of procedure was devised. For determining the cost of radiopharmaceuticals, we selected synthesis time as the factor that establishes the cost of the radiopharmaceutical ("cost driver"). For PET scans, utilization of scanner time was selected as the cost driver. A scale of relative resource units was established for each type of scan. The FDG brain metabolism study was selected as the baseline study (1.0 resource units for scanner and 1.0 for radiopharmaceutical), with other procedures evaluated in terms of resource use compared with the brain scan. The brain metabolism and perfusion was set at 1.25 times the effort of the brain scan for the scanning component and 1.2 times the effort for the radiopharmaceutical production. A rest perfusion and FDG heart scan requires two times the effort for the scan and 1.2 times the effort for the radiopharmaceutical production. Whole-body studies were set at 2.75 times the effort of a brain study with FDG.
A one-way sensitivity analysis was performed to determine how scanner price (capital outlay), patient throughput, distribution sales, and, for satellite scanner sites, dose price, affect net present value. For each of these parameters, the relevant ranges were determined and the boundaries of net present value were calculated. When applicable, the point at which net present value reaches zero was calculated. The following relevant ranges were chosen: scanner price from $750,000 to $2,750,000; patient throughput from an average of 1.9 patients per day to 7.5 patients per day; distribution sales from 0 to an average of 55 doses per day; and dose price in the satellite scanner scenario from $200 to $1300. The results were plotted using a tornado diagram [23].
A study of the capacity of scanner and cyclotron operations was also undertaken (our manuscript is in preparation) as well as an evaluation of the feasibility of the distribution of PET radiopharmaceuticals from a busy clinical and research operation. This information ultimately can be used to manage the proliferation of cyclotrons, ensuring that available capacity does not exceed demand. Pro forma assumptions within the model and sensitivity analysis are within capacity and feasibility limits for each scenario.
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Option 1: Cyclotron and High-End Scanner Purchase, No Distribution of
Excess Radiopharmaceuticals
Capital expenditures are shown in Table
1. Start-up costs are assumed to include part-time support staff,
physician, and radiochemistry support for 6 months, part-time project
management support for 6 months during facility construction, and technologist
training for 3 months before installation. Regulatory compliance in the
start-up phase is anticipated to cover funding for filing the necessary new
drug application and abbreviated new drug application paper-work, developing
standard operating procedures, and so forth, as required by regulations.
Table 2 lists the minor
equipment required.
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Initial staffing includes one full-time technologist, one administrator, one physician, one secretary, one physicist, and two radiochemists or radiopharmacists. As volumes grow over the 6-year period, staffing is increased to add technologist and chemistry technician support. Because this configuration would enable the conduct of basic research, modest outside funding is projected to start in year 2, providing offsets to fixed costs and salaries. Salary requirements might be reduced if more significant cost sharing with other departments or research grants could be obtained. The pro forma model reflects nearly full salary commitments, because funding or suitable working alternatives may be difficult to obtain. Expenses include the purchase of precursor materials for radiopharmaceutical production, medical and patient supplies, sealed sources for scanner attenuation measurements, and office supplies. Licensing fees, estimated to be $1500, are for the radioactive materials license. Staff training and travel are also included, as are funds for program marketing.
The revenues and expenses are summarized in Table 3. With the assumptions we have described, operating in this configuration incurs an accounting statement loss for the first 3 years. On a cash-flow basis, the project has a (negative) net present value of ($236,215). That is, the current value of the cash flows projected over the 7-year time is negative. A more aggressive effort to obtain research funds or additional clinical volume might make this scenario financially viable.
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The cost of each type of PET scan was determined and broken down by the cost of the radiopharmaceutical production and scanning as shown in Table 4. These figures incorporate global costs and a 15% overhead or profit and are based on the volumes projected in year 4 (6.0 patients per day).
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Option 2: Cyclotron and High-End Scanner, Local Distribution of
Radiopharmaceuticals
The second configuration adds the local sale of excess radiopharmaceuticals
made by the cyclotron to the operation, providing additional revenues to the
PET program. The primary assumptions in this option remain unchanged from
those in option 1 except as outlined in the following text. Capital costs are
increased slightly, as shown in Table
1, reflecting the purchase of additional minor equipment. Revenues
are increased to account for the sale of FDG to other scanner sites. External
distribution volume is estimated to begin at 1.5 doses per day in year 1,
increasing to nine doses per day by year 6. Distribution revenues are
estimated to be $700 per dose; however, the cost of providing the dose for
sale exceeds $700 until more than 12 doses are produced per day. Additional
expenses for marketing and delivery and for part-time staff to manage the
distribution and manufacturing paperwork are included. Research operations
could continue unhindered with a distribution effort of this magnitude.
Table 5 summarizes the financial performance of option 2. Accounting statements show an operating loss in the first 2 years as volumes ramp up. Because of the substantial revenues from the sale of radiopharmaceuticals over the 7-year period, the configuration has a positive net present value of $2,259,713.
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The average cost per dose of the radiopharmaceutical is reduced substantially from option 1, as shown in Table 4, reflecting the fact that the total cost of cyclotron operation is now essentially split between in-house and satellite users. The technical and professional costs of providing the scanning remain generally unchanged at just over $1400. The same clinical mix and resource assumptions were used to calculate the cost of each type of procedure.
Option 3: Cyclotron and Low-End Scanner, Local Distribution of
Radiopharmaceuticals
The third configuration also represents an operation that distributes the
excess FDG from the cyclotron facility but reflects the purchase of a less
expensive PET scanner, as shown in Table
1. The low-cost scanners may have limitations with respect to
research but are satisfactory for clinical studies, which is reflected in the
pro forma model. The need for physicist support is reduced, and this salary
item is replaced by consulting services.
Table 6 summarizes the financial performance of option 3. Because of the reduction in initial capital, accounting statements show an operating loss in only the first year of operation. Because of this and the distribution revenues over the 7-year period, the project has a positive net present value of $3,073,920 despite the elimination of cost offsets from research sources.
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The average cost of the radiopharmaceutical remains unchanged from option 2; however, as shown in Table 4, the cost of providing the scanning is reduced and reflects the lower debt service on the scanner.
Option 4: Dedicated PET Scanner with Purchase of Radiopharmaceuticals
from Local Cyclotron
The fourth configuration depicts the purchase of a dedicated clinical PET
scanner as a satellite site. The pro forma model reflects the full, not
incremental, costs of providing a PET service. If the PET scanner were added
to an existing nuclear medicine service, cost sharing of personnel and other
services might reduce operating costs further. In this scenario, capital
requirements—only $1,387,980 as shown in
Table 1—reflect the
reductions in equipment purchased, facility construction, start-up expenses
for regulatory compliance, project management, and training.
Many primary assumptions about scanner operations and clinical revenues remain unchanged. Volumes ramp up a bit more slowly, starting at 1.5 patients per day in year 1 increasing to 7.0 in year 6 because of ease of access to radiopharmaceuticals. Personnel requirements and supplies are less than those for a host cyclotron site. Although the service contract would remain at 11%, it is based only on the purchase of the scanner. Space utilization expenses are reduced, supporting only an estimated 1500 sq ft (140 m2) required for a scanning facility. Insurance, licensing, and maintenance fees are also reduced.
Table 7 summarizes the financial performance of option 4. Because less capital is needed, accounting statements show an operating loss only in the first 2 years. Over the 7-year period, the project his a positive net present value of $1,775,049. Although the value of option 4 is less than the value of option 3, there is less risk associated with option 4 because more of the costs vary with volume and revenues.
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As shown in Table 4, the average cost of the radiopharmaceutical is $700, which is the projected price in year 4, and the technical and professional cost of scanning is $902. Oxygen-15 water would not be available for brain studies, so the clinical mix in this scenario was modified to 17 FDG brain, 77% whole-body cancer survey, and 6% cardiac viability. All other resource utilization assumptions remained the same for the calculation of the cost per type of procedure.
Sensitivity Analysis
A tornado diagram showing the results of the sensitivity analysis is shown
as Figure 1. Throughput was the
most critical parameter for net present value, with the widest potential
variability. Breakeven throughput, assuming the 15% cost of capital of the net
present value calculation ranged from 3.45 to 6.75 procedures per day,
depending on the operational configuration. Capital outlay, specifically
scanner price, had little impact on net present value. In option 1, net
present value became positive as soon as the scanner price was reduced to
approximately $2,000,000 (total capital outlay <$6,073,294). In option 4,
scanner prices greater than $2,640,000 result in a negative net present value.
From the perspective of the financial model, selling doses had little negative
impact on net present value. At the higher levels of distribution, given the
model's other parameters, the cost per dose was reduced to $170. The
sensitivity analysis of this parameter adjusts the sales price to that level.
For satellite scanner operations, cost per dose had to be raised substantially
(>$1132 per dose) for net present value to become negative.
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Financial comparison of alternatives can be made in several ways. A net present value analysis is commonly used if the timing of cash flow varies between alternatives. Cash-flow timing affects the total "value" of the project, because inflows can be used for other projects and reinvested, and outflows cannot be used to fund other potentially profitable projects. Net present value translates the future net cash flows into today's dollars so timing is no longer a factor among courses of action. Tables 3, 5, 6, and 7 also depict the cash flow and net present value for each of the four operating scenarios. Although the total cash flow is positive over a 7-year period for all the configurations, the first option (cyclotron serving single PET scanner) has a negative net present value based on a discount rate of 15%. Sharing operating resources between PET and other services in the hospital, developing below-market leasing rates, and securing endowment funds to cover part of the operation are some of many ways to reduce costs. Developing the clinical demand for more than one scanner is another way to expand revenues; however, time will be required to build clinician interest and support. Option 1 is not fiscally sound and does not compare favorably with the other options. The three remaining options each have a positive net present value, ranging from nearly $1.8 million to just more than $3.0 million.
Another important comparison is the cost per procedure. Given that reimbursement levels in the public sector are fixed, it is critical to understand the net margin per study at a level of demand. Table 4 tabulates the cost per study for options 2-4 as an average and specifically for common types of PET procedures. For these calculations, expenses were directly allocated to either scanner operations or the production or acquisition of the radiopharmaceuticals. Costs reflect a 15% profit. As expected, the more expensive PET scanner yields more costly PET imaging at a fixed demand. This pro forma model does not address potential differences in assumptions between the two scanners that could be justified. Issues such as throughput and scope of procedures that can be performed may be factors that would influence pro forma assumptions and refine the cost differences between low- and high-cost scanner configurations.
The impact of the concept of radiopharmaceutical distribution is best depicted by the difference in radiopharmaceutical cost per patient between the first and subsequent options. Table 4 shows that when the cost of operating the cyclotron is borne by only one site, the per-patient radiopharmaceutical cost is nearly double what is shown for each of the other configurations. The average cost of a dose of FDG can be reduced to just over $700 with a moderate production volume of 12.0 doses per day. Using a selling price at or near $700 and moderate outside sales, we found that the cost of radiopharmaceutical production is reasonably split among the sites. As commercial distribution reaches a larger scale, one would hypothesize that the cost of the radiopharmaceutical could be driven down further. Because there would be economies and diseconomies of scale along with staffing adjustments, this model cannot be used to describe a large-scale distribution effort. Simultaneous to this analysis, we undertook a study of the capacity of scanner and cyclotron operations (manuscript in preparation) that describes in more detail the impact of cyclotron capacity on costs.
The cost of PET compares favorably with reimbursement. For PET whole-body oncology scans, Medicare has assigned 57.54 relative value units for the technical and radiopharmaceutical components and ranges of 2.07-2.63 relative value units for the professional interpretation, giving average payments of $2201 and $83, respectively. Ambulatory Payment Classification (APC) reimbursement of PET scans in hospitals averages $2249.80 around the country for these FDG studies. This rate falls between the low- and high-cost scanner configurations in the distribution environment, showing the potential for financial viability in today's reimbursement environment.
The sensitivity analysis provided additional insights into the costs of the four operational configurations. A perception exists in the market that dose price is the most critical factor to the profitability of a satellite scanner operation. This model suggests that dose price would have to be greater than $1132 to cause net present value to become negative. This price is unrealistic in most potential PET markets. Instead, throughput is indicated as the most critical factor for success. The throughput breakeven data in this study correlate with data previously reported by our group. In that study, breakeven was reported to be from five to seven procedures per day for a host cyclotron site that distributes radiopharmaceuticals, depending on the level of radiopharmaceutical distribution [15]. Cost of the PET scanner itself across the range of available scanner options is not a critical factor. Finally, even at optimal distribution levels, cost per dose is reduced to only $170 because of supply costs and personnel and delivery expenses.
Net present value and per-procedure cost are not the only factors to consider when evaluating options. The financial analyses do not take into account the other facets of business risk that accompany each option. Business risk is generally thought to be a function of several factors, including operating leverage (fixed vs. variable costs), revenue diversification, competition, and market potential [24]. These risks are quantified somewhat by the sensitivity analysis. The capital commitment for the cyclotron and distribution scenarios (options 2 and 3) is greater than that required by option 4. If distribution customers are not found, however, a facility could find itself reverting unintentionally to option 1, with a potential for financial loss. The alternative argument is that the distribution scenarios provide greater and more diverse revenue potential. Option 4 carries the least business risk but also has a smaller potential profit. Because more of the overall expenses are variable and will only be incurred with offsetting revenues, a smaller throughput (3.45 patients per day as compared with 4.1 or 4.4) would be required to break even.
Although many clinical PET sites around the country are showing adequate demand for PET in their market, a comprehensive market analysis that links population statistics, prevalence of disease, and utilization of PET services needs to be done. Throughput is such an important component of the model that competition from other PET and radiopharmaceutical providers must be factored into the decision. A potential short-fall of demand is clearly a key component of a thorough evaluation—lack of demand was the factor that was most often overlooked by sites entering into PET in the early 1990s.
Several other technical analyses should also be done. Mobile PET services and coincidence scanner models, as well as large-scale cyclotron-only distribution centers, should be evaluated for their impact on cost. In addition, configurations using advancements in cyclotron and scanner technology should be evaluated to determine their financial impact on operations.
In conclusion, a financial analysis is only as accurate as its underlying assumptions. Although no model can describe reality perfectly, this analysis provides significant insight into the cost of PET and the comparative costs of offering PET services through four potential operating configurations. The alternatives available to sites considering PET have changed substantially over the last decade. Reductions in equipment prices, the concept of regional radiopharmaceutical distribution centers, the influx of business interests into the field, the growth in overall demand, and the rates of PET reimbursement have all contributed to the financial viability of this growing imaging technique.
The field is rapidly changing, and the role of the PET center in health care today is still evolving. Determination of how many scanners will be needed in geographic regions and the impact of the emerging new technologies, such as combined PET and CT, are facets of future analyses. The growing peer-reviewed data show the emerging acceptance of PET in health care delivery will clarify the role of different devices and will enable more accurate estimations of demand and utilization. Hospital administrators and venture capitalists now recognize that the critical barriers to PET have fallen by the wayside. A PET center, as a part of either a host or a satellite radiopharmaceutical distribution effort, can be a financially sound business enterprise.
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