BMC Leases Cancer Center
By Donna Vavala, The News Herald, Panama City, Fla.
Jun. 9–PANAMA CITY — When Panama City Urological Center made the decision to build a new cancer treatment center, Dr. Neal Dunn, out of courtesy, mentioned the plans to Bay Medical Center, its major competitor.
Aware the hospital’s cancer center revenue would suffer if Dunn’s group built its own, CEO Steve Johnson came up with the idea of leasing Bay Medical’s Cancer Center and its equipment to Dunn’s group.
“A full 25 percent of our business, or one-third of our revenue, is in the cancer center in urology,” Johnson said. “We had invested, over the years, a significant amount of money on radiation oncology.”
Johnson sought advice from a law firm, and a lease was drawn up that would unite urology and radiation oncology under one roof in a community hospital, while still complying with laws that prohibit the hospital from profiting from the center.
In the five-year renewable lease, Bay Medical is charging the urology group $30.75 per square foot (utilities are built into the cost) for a 10,000-square-foot space. The imaging and other radiology equipment that belongs to Bay Medical is being leased for about $100,000 in two-hour blocks of time.
The hospital also will collect $7,894.60 per month for equipment maintenance. The urology group is considered an independent contractor in the arrangement, and its records are to be kept separate from those of the hospital.
The Bay Regional Cancer Center opened its doors in May. At the May meeting of the hospital’s board of trustees, Dunn presented the new center’s vision statement and 2010 strategic plan.
The Bay Regional Cancer Center’s goals include improving patient care; acquiring cuttingedge radiation therapy service; becoming accredited by the American College of Radiation Oncology or the American College of Radiology, or both; establishing a center of excellence for prostate and other cancers; and increasing community outreach.
Dunn said he also would like to pursue participation in The Human Cancer Genome Project, which would allow customized, gene-tailored therapy and direct consultation with the nation’s top 10 cancer centers.
“We would be the first community hospital in the country to participate,” Dunn said. “There seems to be an epidemic of prostate cancer in this country. It’s right behind skin cancer. We’re finding it in younger and younger people.”
Dunn’s group recently merged with the practice of Dr. Hasan Murshed, a board-certified radiation oncologist.
“Throughout the country, urology groups are merging,” Dunn told the board. “Absolutely every large urology group in Florida has done this or is doing this. The reason is the natural synergy. Half of all urology revenue is driven by prostate cancer. Last year, we decided to merge our practice with Doctor Murshed (who is the new center’s medical director).
“Two groups that normally would be competing for patients are now aligned,” Dunn said. “With that synergy and the guarantee of patient flow, we can move forward in the kind of cancer treatment and research not possible before.”
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Copyright (c) 2008, The News Herald, Panama City, Fla.
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