Budgeting begins in the study preparation phase
Budgeting begins in the study preparation phase
Expert offers advice for capturing all costs
The first step to developing a complete and accurate chargemaster for every study is to determine all of the costs that would be included in a one-time charge, such as the costs needed at the start of looking at a protocol.
These are the costs that can be plugged into any protocol’s chargemaster, depending on the protocol’s risk severity level and other factors.
Also, these start-up costs should be paid up-front and are not refundable, says John P. Rowell, RN, MSN, CCRC, clinical research educator for the department of medicine/division of research at Louisiana State University Health Sciences Center in Shreveport.
He divides the study preparation costs into four categories, including the following:
• Start-up costs: "This is what it takes to get the study up and rolling at your site, before you enroll the first patient," Rowell explains.
Start-up costs include:
— IRB fees;
— IRB preparation;
— IRB presentation;
— protocol review time;
— budget preparation;
— copies;
— equipment (new and upgrades);
— chart reviews;
— database reviews;
— pre-study visits;
— pharmacy setup;
— lab setup;
— administrative;
— regulatory requirements.
• Per-patient cost: "This is what it costs to handle the patient, the direct costs," Rowell explains. These costs are put directly into the chargemaster, which could involve complicated software, or it could be a simple Excel spreadsheet, which is what Rowell uses.
"I put in every cost I can possibly think of for my site, including starting IV dosing, pharmacy, preparing the dose, X-rays, MRIs," he says. "And I find out what the costs are for those, because usually in an academic center, we have to pay someone else to do those things."
Rowell’s chargemaster has five columns, including the charge item, the real cost, the site’s charge, quantity, and total.
Whatever the charge might be, he will add a percentage to it to cover a profit margin. The site’s charge provides insulation against mistakes and miscalls that could run up costs of a clinical trial.
So if an X-ray’s real cost is $100, he enters that amount under that column. Then he might add $25 to that price, to cover overhead costs, and enter the amount of $125 in the column for the site’s charge, Rowell explains.
Sponsors never see the chargemaster during the negotiation process, but having one helps a site determine a bottom line for a budget, he says.
Also, it helps to keep an electronic version of various site costs and charges because sponsors have begun to keep records of their own, Rowell notes.
"These charges should be consistent because most sponsors now keep some record on you," he says. "So if you charge $100 for this study, then they expect you to charge $100 next time, and they know that and will tell you that."
• Variable cost: "These are things that may or may not happen, and I bill sponsors as if they do happen," Rowell says.
Variable costs typically are not captured in the protocol, he adds.
Variable costs include the following:
— serious adverse events (SAEs);
— safety reports;
— extra monitor visits;
— making source documents;
— change of clinical research organizations in the middle of the study;
— change of monitors in the middle of the study;
— protocol amendments;
— need for additional advertisements.
"I try to figure these out by the estimated time involved," Rowell says. "Who will it involve, and how much time does it take, and time is our No. 1 biggest expense anyway."
For example, SAEs take a lot of time in completing paperwork because SAEs must be reported to the sponsor within 24 hours, plus require a follow-up report and a report to the IRB, he says.
Variable costs also might include a visit by the FDA, which could be a strong possibility of a site has the highest enrollment for a study, Rowell adds.
"Normally, when the FDA comes in, it takes three days, and it will tie up your coordinator for three days — so you have to figure the salary for those three days," he notes. "Then you have the principal investigator involved for one to two hours per day, and you take that salary."
The same calculation should be done for the regulations manager, who also would be involved with an FDA visit for one to two hours per day, Rowell adds.
• Closeout cost: "These are all the things that go on at the end of the study, including the pharmacy closeout, the administrative closeout, stored documents, and closeout visits," he says.
The first step to developing a complete and accurate chargemaster for every study is to determine all of the costs that would be included in a one-time charge, such as the costs needed at the start of looking at a protocol.Subscribe Now for Access
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