FORT MYERS — Radiation Therapy Services posted a $33.2 million net loss on declining revenues from cuts in insurance reimbursements and fewer prostate-cancer treatments.
Radiation Therapy, which operates 95 clinics in the U.S. under the name 21st Century Oncology, says revenues fell 1% to $168.7 million in the fourth quarter ending Dec. 31 compared with the same three months in 2011. The company says it plans to cut costs and increase patient volume this year to offset the declines.
“The fourth quarter of 2012 was challenging, with greater than expected declines in the treatment of prostate cancer,” says Daniel Dosoretz, president and CEO of Radiation Therapy, in a statement. “While we expect these declines to persist through the first half of 2013, we believe the worst is behind us, as we have seen the declines in treatment volumes decelerating in the first two months of 2013.”
Medicare, the federal government's insurance program for older people, has cut reimbursements for cancer treatments, hurting companies such as Radiation Therapy Services. Private insurance firms usually follow Medicare's lead for reimbursements. In addition, recent guidelines for prostate-cancer treatment have changed on the basis of new studies that revealed the limitations of screening and treatment, slowing patient volumes.
In addition to the U.S. clinics, Radiation Therapy operates 31 centers in six Latin American countries. “Our investment pipeline is robust in the rapidly growing Latin American market, which will also help to further diversify our revenue stream and offset rate reductions in the U.S.,” says Dosoretz.