SOCIETY OF RESEARCH ADMINISTRATORS ORLANDO FLORIDA OCTOBER 2018

Transcription

1 SOCIETY OF RESEARCH ADMINISTRATORS ORLANDO FLORIDA OCTOBER 2018

2 CLINICAL TRIALS FINANCIAL MANAGEMENT ADMINISTRATIVE CHALLENGES & CONSIDERATIONS

3 Agenda 1. Introduction 2. Challenges in Clinical Trial Financial Management 3. Elements of Organizational Success 4. Financial Management Strategy 5. Measuring Financial Performance and Metrics 6. Closing Remarks and Questions. 3

4 1 INTRODUCTION

5 Presenter Introductions Disclaimer The information provided is based on the presenter s experience and is not necessarily representative of the viewpoints of Huron Consulting Group. 5

6 About the Speaker Rob Smith Rob is a Director with Huron Consulting Group in the Research Enterprise Solutions practice. He s based in New York City and travels extensively to work with clients all around the US. Rob has over 15 years of experience in healthcare and clinical research management, and his advisory work is focused on assisting academic medical centers and community healthcare organizations with the administrative, operational, and financial management of the clinical research enterprise. He has experience providing clients with strategic planning support, financial analysis, providing recommendations for improvement to research business processes, and delivering change management support during large scale transformations. Prior to joining Huron, Rob was a Research Manager for the New York University School of Medicine in the Office of Clinical Trials, an office which administratively supported clinical research conducted across the institution. 6 6

7 IF YOU CAN T MEASURE IT, YOU CAN T MANAGE IT. ATTRIBUTED TO PETER DRUCKER YOU CANNOT CHANGE WHAT YOU CANNOT MEASURE. - W. EDWARDS DEMING 7

8 2 CHALLENGES TO CLINICAL TRIAL FINANCIAL MANAGEMENT

9 Clinical Trials Financial Management Setting the Stage for Change Research is a significant and important source of revenue and expense for many institutions Research revenues rarely cover the expenses incurred, often falling short by 10% - 20% or more. - This revenue shortage could represent an institutional subsidy It is important to clearly understand and actively manage clinical the research enterprise by: - Evaluating and quantifying baseline metrics to measure progress; - Monitoring ongoing financial performance against that baseline; - Employing key performance indicators to drive accountability 9 9

10 What is Driving Change External Pressures Prior to 2014, funding from NIH and Pharma / Med Device companies was relatively flat for the previous decade. That trend is slowly starting to change, but challenges remain. Billions of Dollars Industry sponsors are beginning to reinvest in US research (R&D expenditures) Negligible increases to NIH Budget continue NIH PhRMA member companies R&D expenditures (US only) PhRMA member companies R&D expenditures (total) Clinical trials continue to move outside of the US Source: NIH Reporter; Statista, 2018 annual phrma annual membership survey 10

11 What is Driving Change External Pressures Some of the operational challenges driving the need for change at research sites include: Fluctuations in traditional sources of research funding; - Tighter clinical margins and pharma requirements, globalization of clinical trials - Decreasing NIH dollars, federal budget deficits - Increase in formation of co-operative groups, other sub-award funding Evolution of Technology; - CTMS - Financial systems (PeopleSoft, Oracle, Lawson, SAP) - Social media - Time/effort tracking systems Globalization of the research market and pharmaceutical outsourcing - Increased local, national, and international competition 11

12 What is Driving Change External Pressures Increased complexity of research design; individualized bio-medicine Regulatory complexity and reporting requirements; and importance of research compliance programs Consolidation into larger, more complex research networks 12

13 What is Driving Change Economic and Operational Challenges Some of the current economic and operational trends impacting how a clinical research portfolio is managed include: - Broader external economic and regulatory pressures; which may fluctuate with changes in administrations - Internal pressures, including: - Unclear strategic plan or vision for research; - Unclear leadership or research governance structure; - Disparate technology systems / tools; - Insufficient education/training/resources; - Insufficient adoption of policies and procedures 13

14 External Economic & Regulatory Pressure Challenges External Environment External forces in the economy and the clinical research industry are introducing challenges to sites. Some of these external factors include: - Uncertain coverage research items/services; - Research billing compliance; - Updates to research conflict of interest regulations; - Increase in reporting requirements (CMS, NIH, NCI); - Research market globalization and pharmaceutical outsourcing; - Local and national competition 14

15 Internal Challenges in the Research Enterprise Challenges Internal Dynamics Internal dynamics are also causing challenges to the conduct and financial management of clinical research studies. Some of these include: - Moving towards shared service models - Centralizing administrative service operations for research - Managing and recovering the fixed costs of centralized study coordinators or other clinical staff made available to Investigators - Desire to improve workflow, time to enrollment, and cost recovery - Implementing policies and procedures in response to external challenges, but implementing them with limited communication and training - Technology systems implemented require a level of integration with other systems to deliver desired solutions 15

16 Survey Results: Top Administrative Challenges People, Process, Technology What are the top five administrative challenges or concerns about organizational capabilities at your institution? 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% RANKING OF TOP 5 ADMINISTRATIVE CHALLENGES 16 PROCESS: Institutional Policies and Procedures TECHNOLOGY: Clinical Trial Management System (CTMS) PEOPLE: Staff Recruitment and Retention PEOPLE: Training and Education for Researchers PROCESS: Turn-around times (e.g., budgeting, contracting, TECHNOLOGY: Data Management PEOPLE: Efficiency of Administrative Structure PROCESS: Cooperative Group Consolidation and Monitoring PROCESS: Selection of Protocols PEOPLE: Cost Effectiveness of Administrative Structure PROCESS: ClinicalTrials.gov Submission and Reporting PROCESS: Patient Recruiting TECHNOLOGY: Financial Monitoring and Reporting PEOPLE: Institutional Commitment PROCESS: Data and Safety Monitoring PROCESS: Protocol Development PROCESS: Regulatory Management and Compliance PROCESS: Risk Management PROCESS: Strategic Planning TECHNOLOGY: CTMS Usage/Management 2013 Huron Consulting Group Research Administration Survey

17 3 ELEMENTS OF ORGANIZATIONAL SUCCESS

18 Research Financial Management Success Five Key Elements of an Effective Organization The following five key elements of a successful clinical research operation also represent significant challenges to the financial health of a portfolio. The key elements include: Governance & Organizational Structure: How can organizational structure and leadership positions most optimally support and manage the organization? Business Process: What is the most efficient and effective way to serve process customers or users? People: Do we have the appropriate people to enable business processes? Technology: Is technology appropriately enabling business processes? Performance Measurement: Are we constantly evaluating and improving our performance? ELEMENTS CONTRIBUTING TO OVERALL EFFECTIVENESS AND EFFICIENCY 18 18

19 Financial Management of Clinical Research Governance & Organizational Structure Governance & Organizational Structure: How an institution is governed and structured as an organization has a direct and significant impact on an organizations ability to achieve strategic initiatives. While these larger governance qualifications are important, effectiveness managers rely on more fundamental concepts, including: Authority to initiate change; Culture that embraces change; Balancing a research vision with an understanding of what is realistic to achieve It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change. Charles Darwin 19

20 Financial Management of Clinical Research Business Processes Business Process: When implementing a change to an existing business process, some of the challenges include: New/updated processes are not formalized, and communication and messaging across the institution is often lacking Complex sub-processes can be adopted by decentralized teams without training or awareness of downstream consequences Departments and research teams develop their own processes, often with limited oversight and/or unnecessary complexity 20

21 Financial Management of Clinical Research People People: Clear roles and responsibilities to guide daily operations and emphasize customer service. Sufficient resources to implement initiatives, as well as sufficient timelines to manage with limited resources. Educated & experienced personnel executing their responsibilities and with sufficient training to perform their role. 21

22 Financial Management of Clinical Research Technology Technology: Use of shadow systems: Financial systems at many organizations do not provide for project or fund accounting, which require the use of separate manual-systems and/or spreadsheets to monitor and report on the portfolio. - Example: use of individual accounts to manage a clinical trial Lack of system integration: Even when robust systems are utilized, they often lack integration with other systems. Manual financial reporting: Without integrated information systems (CTMS, EMR, GL), financial reporting across a large number of clinical trials often requires a manual approach to summarize the state of the portfolio. 22

23 Financial Management of Clinical Research Performance Measurement Performance Measurement: Lack of system integration that results in manual reporting processes Data extraction and consolidation is frequently managed by multiple roles in the organization; Variable business processes or differing definitions of success often lead to challenges identifying an apples to apples comparison for management decision making. Examples include: - Identifying/agreeing on the scope of the portfolio being measured (number and types of studies) - Outlining the variable work load requirements between a complex clinical trial versus a retrospective chart review - Collecting time/effort on a study-by-study basis and applying the expense to the associated account - Ensuring performance metrics are adopted widely enough to inform meaningful decision-making 23

24 Case Study Portfolio Management: Clinical Trials Subsidy The chart below represents a research portfolio revenue & expense summary over 12 year period. This institution was subsidizing $1.29 for every dollar of research revenue. Office of Research Revenues, Expenes and FTEs (FY ) (in 000's) $600 $500 $400 $300 $200 $100 $0 Revenue Expenses FTE * Fiscal Year FTEs

25 Case Study Portfolio Management: 80/20 Principle Portfolio: 75 active protocols, 35 (46%) had revenue for this FY. Of those 35 protocols with revenue, 7 (20%) protocols accounted for 50% of the total revenue. 45,000 Percentage of Total Revenue by Protocol (For Fiscal Year 2005) Revenue per Protocol 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000-49% of total revenue ($116,000) Protocol ID 25

26 4 FINANCIAL MANAGEMENT STRATEGY

27 Strategies for Financial Management Clinical Research Vision & Goals Before choosing and implementing financial performance measurements, the institution should first consider its strategic and financial goals for engaging in research. Vision Strategic Goals Policy Process Documents Standard Operating Procedures Checklists Templates Forms Execution Tools 27

28 Strategies for Financial Management Governance & Organizational Structure Organizational Structure Create targeted committees and empower them to address institutional issues impact clinical research performance and finance. - Clinical Research Advisory Committee - Clinical Research Feasibility Committee - Clinical Research Information Systems Committee These committees can also develop a set of guiding principles with an accompanying plan to guide strategic initiatives. Work with senior institutional leadership to define the definition of financial success in clinical trial performance. 28

29 Strategies for Financial Management Governance & Organizational Structure Benefits: Clear institutional leadership and oversight Established body able to review results, suggest corrections and guide decisions Improved accountability that engages more than just the Investigator Facilitate communication between researchers and IT/IS offices 29

30 Strategies for Financial Management Cost Reduction & Revenue Enhancement To have a sustained positive impact on a clinical research program s bottom-line, organizations need to control the growth in expenses as well as identify targeted opportunities for cost reduction. To accomplish this an organization needs to address inefficiencies/constraints across all clinical research business processes while also balancing the regulatory requirements. Some strategies include: Monitoring and aggressively managing under-performing research studies Evaluating staffing resources to maximize value and return on research dollars Assessing pre and post-award administrative processes to ensure: - Timely initiation of high revenue generating trials - Reduction in time/effort associated with non-enrollment activities - Increased institutional awareness of financial viability to support the continuity of research activity 30

31 Strategies for Financial Management Cost Reduction & Revenue Enhancement Close underperforming studies: Improve the performance of the research portfolio by eliminating underperforming studies when feasible to do so. Centralize resources to maximize utilization: Quality: Organizations that operate more decentralized often have people that are Jack-of-all-Trades and master of none. Cost: Centralized services can be more efficient as a result of having more experienced individuals performing tasks: 31

32 Strategies for Financial Management Cost Reduction & Revenue Enhancement Standardize and streamline processes to improve financial management and compliance. Centralize regulatory and administrative services, including: - Budgeting - Contracting - Coordinator pools assign to designated research portfolios - Biostatistics and Bioinformatics - Data management - Regulatory review and submission Utilize systems (CTMS) to monitor study enrollment Ultimately, cost reduction and revenue enhancement strategies are looking to eliminate duplication across the enterprise. 32

33 Case Study Cost Reduction: Service Model Cross Section Many research institutions opt for centralization in the management of clinical trials, which has a financial impact. A Huron survey posed the following questions: 1. Did the organization have a central clinical trial office? (79 out of 112 indicated yes) 2. What services were provided by the central office? The chart below summarizes which services were provided and whether they were optional or mandatory. % of Institutions Regulatory Mandatory Operational Optional Source: Huron Life Sciences Clinical Research Management Webinar Series: Results 33 of Huron s Clinical Research Operations Benchmarking Survey, April 20,

34 Strategies for Financial Management Study Level Approaches Pre-Award Considerations Ensure startup fees are sufficient and invoiced immediately upon execution of the contract. Move to focus on financially viable studies - Employ a rigorous study selection process (feasibility) when possible - Seek to maximize study coordinator/data management utilization 34

35 Strategies for Financial Management Study Level Approaches Standardize Budgeting Develop policies & procedures to guide the budget development. Standardized administrative fee schedules, including: - Start-up fees - Invoiceable items - Screen fails - Monitoring visits - Closeout costs - Coordinator time Contracting - Advance payments when possible - Monthly invoicing for receivables management 35

36 Case Study Feasibility Consideration: Enrollment Typical Enrollment Performance (N = 15,965 sites participating in 153 global, Phase II and III clinical trials) Well Exceed Enrollment Targets 14% Fail to Enroll a Single Patient 11% Meet Enrollment Targets 44% Under Enroll 41% 47% of all studies meet their enrollment timelines Less than 10% of all studies meet their original timelines Source: Tufts CSDD,

37 Strategies for Financial Management Research Feasibility Matrix Strategic Priority High Potential? Strong strategic alignment Unknown potential for financial return Dogs Low strategic priority Low potential for financial return Sweet Spot Strong strategic alignment High potential for financial return Cash Cows Low strategic priority High potential for financial return Low Low High Study Profitability 37

38 Strategies for Financial Management Cost Reduction & Revenue Enhancements Post-Award Considerations Develop policies and procedures to guide the post-award financial management processes, including: - Timely and accurate study-start-up invoicing - Regularly scheduled trial invoicing and monitoring of A/R - Time/effort tracking on a study-level - Cash application and transfer procedures to ensure clinical departments see earned revenue based on internal budget agreements - Administrative oversight and actions for underperforming clinical trials - Study closeout procedures, including financial reconciliation of all revenues and expenses Attempt to renegotiate unprofitable/problematic trials Develop an evaluation process at closeout to determine what lessons were learned (report card / outcomes report) 38

39 5 MEASURING FINANCIAL PERFORMANCE & METRICS

40 Measuring Financial Performance Choosing What to Measure What should we measure? Financial data that can provide insight into operations and present that information in a way that informs business decisions Information that represents the current-state of performance and serves as a mode of monitoring financial and other trends visually / numerically Collection of data that can be used to benchmark the institution against itself How do we know what is meaningful? Know the difference between reliable data and the relevance / validity of data when reviewing financial metrics. - Reliable - data that is consistently collected by the same source using the same inputs and outputs, usually easy to collect operational data - Relevant / Valid data that is proven to be meaningful and is able to be reliably collected 40

41 Measuring Financial Performance Choosing When To Measure When do we collect and review clinical trial metrics? Metrics are most useful when they can be reliably collected in a timely manner and shared with the audiences on whom the metric reflects. This may include: - weekly, monthly, quarterly, and annual data collections More importantly, metrics that are easily retrievable by those impacted increases the likelihood of the usefulness of the metric being implemented. This increases the availability of information that can be distributed. For example: - Study teams are able to respond to sponsor feasibility requests with timely and accurate reports on past performance. - Management teams able to illustrate revenue trends to support resource requests. - Historical enrollment data across therapeutic areas to evaluate the feasibility of meeting enrollment targets. 41

42 Measuring Financial Performance Implementing Clinical Trial Metrics Considerations for performance metric selection & implementation include: Who is the intended audience to review the data? Does the metric represent an actionable piece of information for that audience? How will the resources reliably collect the data being measured? What access to information would that resource require that he/she may not have? What tool(s) will be required to collect, report, and archive results? 42

43 Strategies for Financial Management Example Metrics Average number of days to review and approve a proposal Average number of days to set-up contracts Clinical Trials Office (Standard) Studies per coordinator Subjects per coordinator Total enrolled subjects per coordinator Clinical Trial Financial Management (Standard) Average number of days to set-up awards Average accounts receivable balance ($) Monthly unbilled balance ($) Amount of accounts receivable over (+90 days) Number of active contracts past end date (+90 days) Accounts receivable aging (30/60/90 days) Number of accounts in overdraft Number of active contracts past end-date (+90 days) Departments or Centers Number of departmental cost transfers 43

44 Strategies for Financial Management Example Metrics Duration of Scientific Review Duration of Coverage Analysis Duration of Budget Review Duration of COI Review Study Activation Components Duration of Patient Population Initial Review Duration of Contract / Legal Review Duration of IRB Initial Review Duration of IRB Annual Review Number of protocols with participant accruals Number of protocols with no participant accruals Number of PIs with active protocols Department Participants on active protocols Total participants in FY 44

45 Strategies for Financial Management Costly Study Activation Timeline Where do the delays occur in your study activation timeline? Below is an illustration of common steps in the study activation timeline. Measuring the duration for each will enable you to identify the areas contributing to your overall study initiation timeline, and possibly to an increase in your activation costs. 45

46 Strategies for Financial Management Example Metrics Study Initiation Timeline Many organizations can take up to 12 months to complete study initiation, including: budgeting, contracting, IRB, and conflict of interest. Time to First Enrollment Time to first enrollment measures from the time of contract execution to the first participant enrolled on the study. The longer it takes to enroll the first patient, the shorter the enrollment window will be. This can lead to less efficient/successful studies. Time to Last Enrollment (Target Enrollment) Time to last enrollment measures from the time of contract execution to the last participant enrolled on the study. Studies may quickly enroll their first participant but if they never reach target enrollment, or never enroll a second participant, it is highly likely that the over study s financial performance will be impacted. 46

47 Strategies for Financial Management Example Metrics Accrual Efficiency Ratio (AER) = Actual Study Accrual Target Study Accrual Accrual Efficiency Ratio is a measure of a studies actual accrual compared to target accrual. The higher the ratio, the better the study is performing. Studies with an AER less than.3 should be monitored to determine if the study has appropriate resources or a viable patient population. 5 Subjects Accrued 10 Subjects Target =.50 AER Program Efficiency Ratio (PER) = Total Portfolio Accrual Target Portfolio Accrual Program Efficiency Ratio is a performance measure of an institution s total clinical trial portfolio. The higher the ratio, the better the overall portfolio of studies is performing. This ratio can be further refined to measure the performance of a single department, PI or even phase of a study (I, II, III, IV). 500 Subjects Accrued 1000 Subjects Target =.50 AER 47

48 QUESTIONS

49 Rob Smith Phone: (312)