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Attack of the Three-Million-Dollar Tumor Removers

Since the time of its invention more than a decade ago, the gamma knife has been hailed for its ability to remove brain tumors that are considered impossible to reach through conventional surgery. Developed in Sweden, the instrument uses radioactive cobalt to excise tumors with gamma radiation, without incisions or damage to surrounding brain tissue.

The technology is expensive: each knife costs more than three million dollars. Currently only thirteen knives are in use in the United States, the nearest being in Atlanta. Only Los Angeles has more than one knife A until now. Within the next several months, not one but two local hospitals A HealthSouth Doctors' Hospital in Coral Gables and Jackson Memorial Hospital in Miami A will introduce gamma-knife programs.

Incredibly, officials at both hospitals admit this area probably doesn't need more than one gamma knife. But the race to bring the new technology to Miami has not been based on need. Rather, it has amounted to insults, arrogance, and a clash of egos at the highest levels of hospital administration.

As a result, both programs stand a greater risk of failing.
Art Tedesco, the administrator for Doctors' Hospital, says his staff began discussing the acquisition of a gamma knife nearly a year ago. This past September, Tedesco says, after he put down a $900,000 deposit on the new equipment, he learned that Jackson was interested in pursuing a similar project. "We wanted to do this with Jackson," explains Tedesco, noting that the hospital already runs two joint programs with the University of Miami at Jackson. "We tried very hard to work with them, but they refused. And then they announced that they were going to get one on their own. This is the kind of equipment where you only need one in an entire state."

Initially Tedesco set up a meeting last November with Ira Clark, Jackson's president. When the two men met, Tedesco claims, he told Clark he thought it would be a foolish waste of money for both hospitals to purchase gamma knives and he offered to participate in a joint venture. Clark demurred. Tedesco says he then suggested that Jackson purchase the knife Doctors' had ordered and simply reimburse the hospital for the down payment that had already been made. "I told him that if he didn't want to work with us, then fine, he should just buy ours," Tedesco sighs. "We were willing to let them have it."

Although Tedesco followed up the November conversation with telephone calls and two letters, Clark never responded. (Clark also failed to return messages left for him by New Times seeking comment for this story.)

In his last letter to Clark, dated January 20, Tedesco wrote that Doctors' Hospital had no choice but to go ahead with its plans, since to do otherwise would mean losing the $900,000 deposit. (The hospital has hired two specialists, including one doctor who has performed more than 600 procedures with the gamma knife.) "We think that our community would best be served with only one institution providing gamma knife services," Tedesco wrote. "This is precisely why I advised you, prior to [Jackson's] decision to buy a gamma knife, that [Doctors' Hospital] had already purchased this same equipment. At that time we also informed you that we would be willing to support an exclusive gamma knife site at Jackson Memorial Hospital if you would assist us in securing release and/or satisfaction of our obligation relating to the gamma knife service. In spite of our willingness you never responded to our offer.... Regrettably, any options that we may have had have now expired."

Although Clark hasn't spoken directly to Tedesco about the gamma knife since November, he hasn't been completely silent about the matter. During a meeting with members of Jackson's governing board, the Public Health Trust, Clark made a series of disparaging remarks about the smaller, community-based Doctors' Hospital. At one point Jackson's president compared Doctors' purchase of a gamma knife to that of "a four-year-old getting a car," according to published reports in Health Manager News.

"He certainly expressed those sentiments," affirms Mark Cohen, a Jackson spokesman. "Whether he said a four-year-old or a five-year-old, and whether he described it as a car or a rocket ship, I don't remember." Because Jackson is a public institution whose purpose is to serve all segments of the community, as well as to be a teaching and research center, Cohen argues, it is far more appropriate for the gamma knife to be located there.

As for Tedesco's request to Clark that Jackson purchase the knife that Doctors' Hospital had already ordered, Cohen explains, "It's not Ira's job to be a part of their business. We don't consult with them about our business decisions and we don't see why they would expect to be included in ours." It was well known, Cohen adds, that Jackson wanted to buy a gamma knife. In his opinion, Doctors' presented the project to the larger hospital as a fait accompli in order to force its way into a joint program.

Meanwhile, Jackson has not had to look far to secure its own gamma knife. Art Tedesco says that when he sat down with Clark in November, he was introduced to Cal Kovens, who was described to him at the time as "an interested party." Kovens runs Cal Kovens Construction, a large local construction company. He is also the largest shareholder and chairman of the board of American Health Services, which owns Radiosurgery Center Incorporated (RCI), the company that will provide Jackson with its gamma knife.

Kovens is also a member of the Jackson Memorial Foundation, a fundraising arm of the hospital.

After refusing to work with Doctors' Hospital, Clark signed an agreement with Kovens's company whereby RCI would buy a gamma knife and operate it at Jackson. Initially Jackson was to receive a knife that RCI already had in storage in California. "There were some discussions that it would be the one we already had," confirms RCI president Larry Atkins.

This, Art Tedesco theorizes, might explain why Jackson officials were so unwilling to get involved with the knife Doctors' Hospital had already ordered. (Eventually it was decided that RCI would buy a different gamma knife for Jackson. By that time it was too late for Tedesco to abandon his own project, even if Jackson had offered to buy his knife.)

No one involved is willing to predict how much money Kovens's company might make from the venture. The RCI-Jackson contract stipulates that RCI will earn eight percent of all revenues generated by the use of the knife. The rest of the fees will be used for payments on the instrument's three-million-dollar cost, and whatever money that remains will be split evenly between RCI and Jackson. Hospital officials estimate that between 200 and 250 gamma-knife surgeries will be performed each year at the hospital. The bill for each procedure will likely range from $20,000 to $25,000. Based on these figures, the technology could generate more than six million dollars in annual revenue, amounting to several hundred thousand dollars in management fees. The instrument is scheduled to be paid off within five years, whereupon Kovens's company will donate the gamma knife to the hospital, and the contract will expire. RCI also has agreed to provide free care for the poor, which is standard practice at Jackson.

There seems to be some confusion regarding the role Cal Kovens played in landing the management agreement for his company. When he was contacted to comment for this story, Larry Atkins wasn't sure what relationship Kovens had to Jackson Memorial. "It was an arm's-length negotiation," Atkins asserts. "It's hard for me to tell if the people at Jackson felt that Cal Kovens made a difference in their thinking. I would hope that it would be a comfort for the folks at Jackson Memorial Hospital to know that the chairman of our board is a local citizen there in Miami."

Jackson spokesman Mark Cohen gives Kovens a little more credit. "He certainly helped bring the deal to the table," Cohen says. "Certainly everyone around the table [of the Public Health Trust] knows Cal Kovens. Knows him to be a member of the foundation, knows him to be a philanthropist and a supporter of Jackson." Any suggestion that Kovens's ties to the hospital, the Public Health Trust, the Jackson Memorial Foundation, or Ira Clark had anything to do with Kovens's receiving this agreement, Cohen argues, is "absolutely wrong."

Despite several calls to his office, Kovens himself refused to answer any questions regarding his involvement with the gamma knife project. "He does not like talking to reporters," his secretary explained.

Doctors' Hospital, which has spent nearly half a million dollars renovating a portion of its hospital to house the gamma knife, is expected to begin using it this fall. Jackson's new knife won't make its debut until next year. When that happens, the two hospitals will likely begin competing for patients.

"Only time will tell whether it is economically feasible to have two gamma knifes in Miami," says RCI president Larry Atkins. "All I can say is that these things tend to sort themselves out. We'll just have to wait and see.


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