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Appraising Linear Accelerators

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Appraising Linear Accelerators

Authors: Jeffrey Doyle, ASA & Kirsten Hodges | Published: 7/23/2019shutterstock_727279864-1
 
A Linear Accelerator (“Linac”) is a technically advanced medical device/system that is utilized in radiation oncology.  A Linac customizes high energy x-rays/electrons to conform to a tumors shape to destroy cancerous tissue, while preserving the surrounding tissue. Major health systems and cancer centers around the world typically use some type of Linac as a cancer treatment tool.  Other than the normal considerations in an equipment appraisal (i.e., age/life, condition, replacement cost, etc.), there are special considerations that need to be taken into account when appraising a Linac, including vault structure, maintenance history, software, and technology.This article will discuss the history of the linear accelerator and considerations that should be taken when appraising a Linac.

 

Background and History

Linear Accelerators have been providing radiation therapy treatment to cancer patients for over 50 years.  Technology has significantly improved since the first patient was treated at Stanford University Hospital in 1956, and it continues to advance with a smaller footprint, improved treatment process, and faster treatment times.  The current notable Linac manufacturers include Varian (Linac models include: Halcyon, Edge, VitalBeam, TrueBeam, Trilogy, Clinac, Silhouette), Elekta (Versa, Infinity, Axesse, Synergy), and Accuray (Radixact, Tomotherapy, Cyberknife). 
 
Linacs treat cancer using external beam radiation where electrons are accelerated through a wave guide and collide with heavy metal, creating high energy x-rays.  Multi-leaf collimators are used to shape the x-ray beams to conform to the tumor which helps reduce damage to surrounding healthy tissue and organs.  The beam exits typically through a gantry, which, in most Linacs, rotates around the patient.  The exception would be the Accuray Cyberknife which uses a robotic arm versus the gantry.  The patient couch can also move in many directions, thus allowing the Linac to deliver radiation to the tumor from any angle. 
 

Typical Appraisal Considerations

  • Normal Useful Life (“NUL”) - The software upgrades and maintenance of the machine (discussed below) can extend the life, but the typical NUL used in a cost approach appraisal is in the range of 10 to 12 years.
  • Replacement/Reproduction Cost New (“RCN”) – The RCN of a Linac is impacted by many issues, including, make/model, vault structure, and technology. But an average Linac RCN is typically approximately $3,000,000, but can range from $2,000,000 to $4,000,000.

Current Technology

There are many different generations of Linac systems currently in use.  These systems have varying options including image-guided radiation therapy (IGRT), intensity-modulated radiation therapy (IMRT), on-board imaging (OBI), respiratory gating system, and MRI-guided radiation therapy, among others.  The appraisal of these systems is highly dependent on the manufacturer, model number, vintage, and options included with the systems.
 

Vault Structure

The vault in which a Linac is housed is either designed as having a maze or direct shielded door, with each design having its own advantages.  The maze structure has the advantage of a door that will be significantly lighter and less expensive than a direct shielded door vault.  The disadvantage of the maze vault is the vault footprint is larger, typically an extra 300 square feet, and access to the room for therapists takes longer, which for busy cancer centers impacts patient flow.  A direct shielded door is heavy and expensive and typically needs to be controlled by a motor.  The cost of the direct shielded door is typically offset by the decrease in vault size.  Cancer centers will make a decision on vault design based on the specific treatment program needs.
 

Maintenance History

Maintenance programs for Linacs are typically provided by the OEMs.  The majority of cancer centers use these maintenance programs due the complexity of the systems.  These maintenance contracts can be up to $500,000 annually, depending on the level of service. When appraising a Linac, the maintenance history of the machine and maintenance contract should be considered.  The transferability of the maintenance contract should also be considered, specifically if the premise of value is FMV-Installed.
 

Software

The software life for a Linac is typically five years.  The cost of the software upgrades can be up to $900,000, but can be discounted, when purchasing a new Linac.  One of the considerations that needs to be taken into account when appraising or acquiring a Linac is the transferability of the software license.  Certain licenses are non-transferable and can significantly impact the FMV of a Linac in a transaction.  Additionally, owners of Linacs should ensure when entering into a software agreement that the agreement would be transferrable if they were to sell the Linac. Software transferability significantly impacts FMV of a Linac, as the Linac is not useable without the software license. 
 

Conclusion

Linear accelerators are high priced equipment used worldwide in the fight against cancer.  Linac systems have been commercially produced for several years dating back to 1988.  Knowledge of the different generations of technology and the additional options (IMRT, IGRT, OBI, RPM, etc.) is necessary when appraising these machines.  There will be a large difference in value depending on the premise of value in the appraisal of a Linac, due to the high cost of software and installation associated with these machines. That is why it is necessary to have an expert that understands the nuances of these machines when deciding on which appraiser to hire.
 
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