🔒Despite delay, hospitals affirm commitment to $75M proton therapy cancer treatment center

Connecticut’s two largest healthcare systems say they are committed to opening a $75 million proton therapy center, though it is taking longer than they originally anticipated.

In April 2022, Yale New Haven Health, Hartford HealthCare and Proton International announced they had secured final approval to open the Connecticut Proton Therapy Center, which will provide an advanced form of cancer radiation treatment.

There are just over 40 proton therapy centers in the U.S., but none in Connecticut. The closest centers are in New York and Massachusetts.

The partners, which plan to build the 25,000-square-foot center at 932 Northrop Road in Wallingford, initially indicated the facility would open in 2025.

Dana Marnane, a spokeswoman for Yale New Haven Health, said the project has experienced delays due to the COVID-19 pandemic.

Under the latest timeline, officials expect to break ground next year, with the facility ready for patients around March 2026.

The partners are preparing to issue $30 million in privately placed bonds to help finance construction, a key indicator the project is moving forward.

“We remain fully committed to the Connecticut Proton Therapy Center,” the health systems said in a joint statement to the Hartford Business Journal. “We are proud and excited to bring this innovative and life-changing therapy to the state, creating a destination for state-of-the-art cancer care.”

The partners said they have already “invested significantly” in the project, including acquiring the land and paying for design and engineering work.

Yale New Haven Health and Hartford HealthCare are principals of Connecticut Proton Therapy Center LLC, which originally formed in 2019. The LLC purchased the vacant 12 acres on Northrop Road in July 2021 for $1.8 million, according to the Wallingford assessor’s office.

Targeted treatment

Proton therapy uses a high energy beam of protons to irradiate cancer. With proton beams, there is less entry, exit, and scattered radiation.

Physicians, therefore, can deliver higher doses of radiation to tumors, with less impact on healthy tissue and fewer side effects compared to other radiation therapies, according to the health systems.

Proton therapy can be used against solid cancer tumors, such as tumors of the brain, central nervous system, eye, gastrointestinal tract, head and neck, liver, lung, prostate, spine and breast.

The American Cancer Society estimates Connecticut will tally 23,480 new cancer cases this year.

Currently, Connecticut residents have to travel to New York City or Boston to get proton treatment.

Florida-based Proton International will serve as project manager and operator for the planned Wallingford facility. It will assist with technology selection, financing, construction, management and operation.

Once the facility is open, it will be staffed with physicians and others from both Yale New Haven Health and Hartford HealthCare. The health systems also anticipate making additional hires.

Project financing

The Connecticut Health and Educational Facilities Authority (CHEFA), a quasi-public state agency that provides access to tax-free financing for nonprofit hospitals, colleges and other organizations, in recent weeks has been discussing a bond issuance in connection with the Connecticut Proton Therapy Center.

In a Nov. 2 report to CHEFA’s board of directors, staff members Dan Kurowski, manager of program development, and Michael F. Morris, managing director, provided a preliminary financing summary for the project.

The total cost of the new Wallingford facility, including equipment, is approximately $75.1 million, according to the report.

Connecticut Proton Therapy Center LLC intends to issue approximately $30 million of fixed-rate, privately placed bonds to finance the project. The issuance would consist of two series of bonds, including a $25 million tax-exempt and $5 million taxable issue, according to the report.

In addition to bond proceeds, Yale and Hartford HealthCare will loan funds to the Connecticut Proton Therapy Center LLC toward the project cost, documents show.

Bond proceeds will finance a portion of construction and provide working capital during the facility’s startup phase.

CHEFA staff, in a September memorandum, noted some existing proton therapy centers have faced financial struggles. At least 10 proton therapy centers in the United States have been financed through the issuance of tax-exempt debt.

Of the 10 known transactions, nine have been in technical or actual payment default, and three of the centers filed for bankruptcy, with insufficient patient revenue a primary factor, the memorandum states.

CHEFA’s board is expected to consider the financing in early 2024.

The state Office of Health Strategy (OHS), which regulates the healthcare industry, originally approved the project in April 2022, with a certificate of need (CON) valid through April 7, 2024.

In September, Yale and Hartford HealthCare asked for an extension of time to complete the project. They want the CON expiration date to be extended to April 7, 2026.

Tina Kumar-Hyde, director of communications for OHS, said in November the request is under review.

The applicants can’t proceed with financing until the expiration deadline is extended. This is needed to give potential bond purchasers assurance that the project will be completed and the center will open as planned, documents show.

Potential competition

Meantime, an unrelated proposal for a competing proton treatment center in Danbury is pending.

Danbury Proton LLC on Nov. 6 filed a new certificate of need application with OHS to establish an estimated $90 million proton therapy center at 85 Wooster Heights Road in Danbury.

OHS previously denied Danbury Proton’s plan, citing factors such as the financial feasibility of the project.

Drew Crandall, a spokesperson for Danbury Proton, said communication between it and OHS has been “significantly enhanced” since Dr. Deidre Gifford took over as executive director. He said Danbury Proton will work with OHS staff to develop a proposal it can support.

Crandall said there is high enough demand in Connecticut for both the Danbury and Wallingford centers. The closest existing facilities in Boston and New York City have had to turn away patients because of the level of demand and need for proton therapy, Crandall said.

Kumar-Hyde said Danbury Proton’s latest application is now undergoing preliminary review.