Fair budgets lead to better research
Fair budgets lead to better research
Capture every possible penny
The budget chargemaster prepared by the clinical trials office at Louisiana State University (LSU) Health Sciences Center in Shreveport is so detailed and complete, capturing every conceivable research cost, that it’s rare for the site to lose money on a clinical trial.
"Sponsors will say, That’s the highest budget I’ve ever heard,’ and I say, We’re the best site you’ve ever seen,’" says John P. Rowell, RN, MSN, CCRC, clinical research educator for the department of medicine/division of research at LSU Health Sciences Center.
The site handles about 100 studies a year, but may turn away as many protocols because budget negotiations fail or because the protocol doesn’t meet the site’s budget feasibility, he says.
"One of the advantages of being a big site is we turn some down before we get to the budget phase," Rowell adds.
"It’s not unusual for the budget that I’ve worked up to be twice what the sponsor originally sent out to say they would pay," he notes. "But I won’t come down below our costs. We won’t lose money doing research — we can’t afford to."
Rowell speaks at research conferences around the country, converting others to his budget chargemaster and negotiation process. He’s also published the secrets behind his budget process, preferring that the entire clinical trial industry improve the research budgeting process rather than having an edge on competitors.
One of the biggest problems in the research industry is the high turnover rate of investigators, many of whom will work on one clinical trial and then lose money and enthusiasm for the process, Rowell says.
"Most sites accept a budget as is from the sponsor," he notes. "And the latest I’ve heard is 25,000 investigators a year do research once and never do research again because most lose their shirts and can’t make any money at it."
While the quality of research is better with experienced research sites, including sites that invest in strong education and training programs, such as the LSU Health Sciences Center, sponsors sometimes will just go with whoever says they can do it the cheapest, Rowell says.
"My position is a full-time research educator, and most sites don’t have that position," he says. "We put a lot of effort and money into education, so that makes us a better site, but it adds to our costs in the long run."
So the most likely way the budgeting process will improve is if academic and other larger research sites work to more fully capture all research costs in their chargemaster, Rowell explains.
"I keeping hoping that it will happen, that research budgets will get better," Rowell says, adding that at his most recent conference an industry representative walked out on his presentation, saying she thought he was giving sponsors the shaft.
His chargemaster divides the research site budget into six phases, capturing every research cost in each. Here’s how it works:
1. Preparation phase
"The most important phase is the preparation phase, which is what you start before you ever get a protocol in your hand," Rowell says. "You go through your site and determine what things cost at your site."
2. Protocol review phase
"I brag that I can budget a complete study in less than 30 minutes because I’ve learned to read the protocol and am very familiar with my chargemaster," he says. "For the average person, it takes an hour to review the protocol."
Everyone who will be involved with the protocol should review it and let the budget person know where there might be a problem, Rowell advises.
Those reviewing the protocol include the administrator, principal investigator, X-ray room staff, research nurse, research pharmacist, regulatory staff, and others, he says.
The person putting together the chargemaster should then calculate cost by taking the salaries of each of the people involved and multiplying it by the number of hours they spent on reviewing the protocol, Rowell notes.
Some of the commonly overlooked budget items include these, he says:
- screen failure compensation;
- payments for unscheduled procedures, adverse events, visits, tests, screening failures;
- application of overhead to unscheduled visits or adverse events;
- consent process of 45 minutes to one hour;
- increase in operating cost over the course of a long study;
- visits not considered visits by the sponsor because they’re not on the flowsheet or due to adverse events;
- advertising;
- third-party drug dispensing.
3. Budget submission phase
Typically, sponsors will want a budget broken down with some itemization of costs, Rowell points out. They may request the budget to be broken down into per-visit costs and other details.
"So I might say it costs $450 for visit one and $200 for visit two, etc.," he explains. But the important thing to remember is that if some charge is for research purposes, the sponsor has to pay for it. "If there’s even a question at all, then we don’t bill the patient’s insurance," Rowell says.
If a sponsor says the PI can go back and use a past lab result for the study, then there would be no additional lab charge; but if someone on the site has to draw lab work for the study, then the site cannot bill the patient, he adds.
"And you have to have these costs in your budget," Rowell says. "The sponsor may think it’s a standard of care charge, but our site will say, No, it’s only for research.’"
Rowell will include a charge based on time and salary for the process of submitting and negotiating a budget.
4. Budget negotiation phase
When a site fully captures its research-related costs and comes up with budgets that might shock sponsors, then it’s important to have a great deal of enthusiasm and confidence in the quality of your site’s product, he says.
Whoever negotiates the budget needs to be the person who has the power to say "yes" or "no," Rowell adds.
They also need to be familiar with the protocol, and they need to know how to negotiate, he says.
"A lot of people have no idea they can negotiate," Rowell notes. "A lot of budgets from sponsors say they are nonnegotiable, and I negotiate them every time, but an inexperienced PI wouldn’t think to negotiate it and would take it at face value."
The key to negotiating the best price is for the negotiator to know both the budget submitted to the sponsor and the bottom line costs budget included on the chargemaster under "real cost," he says.
Ideally, a site would be paid for the budget submitted, but when that’s unlikely, it’s important to not settle for less than what it realistically will cost to do the study, and that means being willing to walk away when the sponsor simply won’t budge enough, Rowell adds.
5. Review acceptance phase
"This is when the sponsor sends the contract back to you to make sure everything is listed there and the money is all right," he says.
"A lot of times you agree on a budget and get the contract and see that it has a different figure in it," Rowell says. "You may have agreed on including variable costs and then the contract accidentally left it out, so you have to make certain that everything agreed upon is in the contract," he says. "It only takes a few minutes to review the contract."
6. Post-study review phase
"This is where you say, For such and such sponsor I enrolled so many patients — they asked for eight, and I was able to get 12,’" Rowell says.
"And this information is all on the Excel spreadsheet, so if the sponsor comes back to us, I can tell by looking at the Excel sheet how good they were for us and how good we were for them," he says. "That helps with negotiations."
The post-study review process is the time for clinical trial staff to look at why a study that was accepted with high expectations ended up doing badly, Rowell explains.
"Maybe the population wasn’t there that you thought was there, or maybe a new investigator wasn’t as enthusiastic at the end of the study as at the beginning," he adds. "Or maybe the study coordinator quit half-way through the study, or it takes more time with a certain population."
Once the study’s budget results are analyzed, staff are given a post-mortem and everyone who reviewed the study initially begins to talk about the problems or successes of the study, Rowell points out. "Did we make any money or lose money on it? Was one department in the hospital extremely hard to work with or easy to work with?"
The next time the site takes a similar study, the post-mortem answers will assist with the decision-making process.
Rowell suggests asking these questions during the review phase:
- Did the budget reflect the work performed?
- How much money did the site owe?
- How much money did the site earn?
- Have all IRB fees, advertising, etc., been paid?
- Did the site get stung by extra procedures?
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