CTMS Can Provide Business Intelligence for Sites


Applied Clinical Trials

Applied Clinical TrialsApplied Clinical Trials-07-01-2010
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Clinical trial management systems seamlessly support enhanced financial productivity for sites.

The worldwide financial crisis is affecting all sectors of our economy. Along with the rest of the nation, clinical research sites across the country continue to grapple with managing their economic future. Recent data indicates that many hard working clinical research sites are not operating on a financial break-even basis.1 Trials are becoming more complicated, patient recruitment is difficult, and study budgets are under increasing scrutiny. The environment for clinical research investigators is more complex than ever.

The challenging research environment is exacerbated by the migration of research studies from academic medical centers to private practice and independent sites. Today, only one-third of all industry funded clinical trials are placed within academic clinical trial offices.2 Private practice and independent sites have the ability to conduct top-quality clinical research; unfortunately, many do not have an economic foundation to support negative financial returns on their clinical research efforts for a prolonged period of time. Without the support of a much larger institution, these organizations may be forced to terminate their clinical research programs. Following steady growth through the 1990s, the number of principal investigators conducting industry sponsored clinical studies in the United States has declined 11% since 2001.3 The total number of principal investigators declined by 6% from 2001 to 2004.4 In order to survive, clinical research sites need to become more efficient, productive, and cost effective.

Intelligent business

The clinical research process is time and human resource intensive. The research pathway for investigative sites involves managing a network of administrative and clinical activities. From the moment the investigator first considers a new study, until the trial is transferred to the archive, the clinical research site must complete an intricate series of tasks. All of these tasks require the investment of a scarce and important site resource–time. The allocation of time from site research professionals is an everyday challenge.

Health care institutions are not economically immune from these recessionary times. In fact, many health care institutions are laying off staff members and reducing their salary burden. The popular news reports massive layoffs in local health care institutions on a regular basis; this includes experienced clinical staff. Layoffs are expected to continue, and hiring new positions is out of the question. Clinical research sites are not able to create additional human resource time by hiring; sites need to increase the productivity of their current research professionals. The old axiom, "work smarter, not harder" has never been more relevant.

Over the past decade there has been an increase in the availability of Clinical Trial Management Systems (CTMS) designed specifically for research sites. The need for these software systems has never been greater. For instance, data published last year by the U.S. Department of Labor has shown a slowdown in productivity, which suggests that perhaps the low hanging fruit of the IT investment excesses of the late 1990s has been picked, and therefore, businesses need to find new ways to increase productivity if they hope to remain competitive.5

The implementation of new research specific software can support significant gains in productivity at research sites.6 The information technology industry is continually producing new tools for productivity enhancement; these applications are generally referred to as Business Intelligence (BI) applications.

Research has shown that organizations derive two primary benefits from implementing business intelligence projects: productivity gains and business process enhancements.5 These benefits are reported by site managers that implement CTMS systems. The productivity gains are recognized by the automation of decisions that are recurring or repeatable. One example of an automated process includes invoicing sponsor companies for completed work. Business process enhancements are the result of investigative site best-practice business logic that is built into some CTMS packages. CTMS vendors spend a considerable amount of time researching the site business process needs and imbed best practice concepts into the technology they develop.

CTMS products support many types of productivity gains and business process enhancements for clinical research sites. While CTMS systems include productivity tools for administrating the regulatory process, patient identification, trial recruitment, scheduling, and staff management needs, immediate productivity gains for sites are recognized in the area of financial management. Clinical research sites need to spend a significant amount of time and energy managing their financial information. Unfortunately, this may be the least interesting activity for many investigators and coordinators. CTMS products are designed to automate the most important financial decisions and tasks.

The remainder of this article will include a real world account of a site that has implemented the IntelliTRIAL CTMS product. This case study will include a description of productivity gains and business process enhancements related to the study feasibility consideration, revenue cycle management, and controlling the cash flow process.

Study feasibility

Investigators and clinical research site professionals consistently voice their concern about the trial budget development process. Many of these physicians, nurses, and other research professionals may not have received any formal education in financial analysis techniques that are required to properly analyze a sponsor proposed study budget. It is difficult to learn and implement best practice trial budget analysis and negotiation tools. Issues in clinical trial budgeting include identifying activities that should be included in a budget, managing hidden costs, and determining how to handle overhead and one-time fees.7 Additionally, sites struggle with challenges related to the sponsor negotiation process.

The goal of the clinical trial budgeting process for research sites and sponsors is mutual: to reach a financial conclusion that meets the needs of both parties. The process should be quick and easy, and both participants should feel that the negotiation is transparent, objective, and fair. Due to important legal restrictions, sponsors are required to justify and validate their research study budgets for investigators. Sponsors are legally required by federal regulation and industry trade association policy to develop clear and defendable study budgets.8 Investigative sites that are interested in negotiating the study budget should be prepared to create a quantitative analysis, based on fair market value, of their expected study costs. Fortunately, CTMS products understand this paradigm and are prepared to assist investigators.

Participation in a clinical trial should be reviewed as a project. As taught in the academic field of project management, each site should publish an activity-based cost analysis for every clinical research project. The process of developing a full budget review will identify all of the site's costs associated with implementing the research project; as such, this information can be used as the basis for the budget negotiation. An advanced CTMS product can assist the research site with developing a quantitative resource analysis by assessing the actual tasks and associated costs to the institution for implementing the protocol. After the CTMS applies a fair market rate to all trial activities, the site will truly understand the financial ramifications of accepting the sponsor's budget proposal. This quantitative cost analysis can be shared with the sponsor and assist both parties in developing a budget that is fair, transparent, justified, and defendable.

An example of this process includes a recent study that was submitted to a research site. Using a saved template that includes the cost for all standard clinical and trial support activities, the site was able to complete a full cost analysis for the research trial in approximately 12 minutes. This investment of time resulted in a five page cost analysis that was sent to the sponsor. The financial results summary projected a financial loss of 20% (or $589.81 per patient). A four page detailed analysis was electronically sent to the sponsor for consideration. This CTMS generated analysis included financial justification for every penny of the budget request. The sponsor's study manager and legal counsel conducted a careful regulatory and financial review. Once the sponsor understood the site's costs, the sponsor's representative agreed that the requested budget increase was acceptable and defendable. The CTMS provided a fair assessment of the site's costs, representing a negotiating foundation for both the sponsor and the site.

The traditional methods of budget negotiation utilized by sites range from blind acceptance of the sponsor's proposal to laborious manipulations of customized spreadsheets.9 These traditional methods commonly produce ineffective or incomplete analyses and are time consuming to create. Even self-professed Excel spreadsheet jockeys report spending hours, or days, developing a detailed budget report. The CTMS is imbedded with the latest business processes and automates the budget review practice. Any research site can develop a comprehensive budget review and negotiation tool report within minutes using CTMS technologies.

Revenue cycle management

Investigative site professionals continue to learn more about the importance of negotiating a fair study budget. Site managers, coordinators, and investigators attend educational workshops across the country with the goal of sharpening their budget review and negotiation skills. An increase in conference breakout sessions, online seminars, and new national workshops validate the budget and financial concerns of research sites.10 Once the clinical site has reached an agreement on the study budget, many research professionals feel that their financial tasks have been completed. Unfortunately, the execution of an appropriate research budget is only the first stage of the revenue management cycle.

The revenue management cycle begins with determining an acceptable budget and concludes with the receipt of payment for services rendered. In between, the revenue management cycle includes many important fiscal activities. These essential business tasks include recognizing revenue upon accrual, assessing earnings, reconciling one-time study fees, reviewing accounts receivable, and reporting these results to clinic or hospital management. Recent data indicates that sites do not have the tools to comprehensively manage their revenue cycle. Only 35% of research sites are capable of reporting their revenue or determining how much they are owed in relation to their clinical research efforts.1

Clinical research programs, as any business, need to understand and control their revenue cycle. This process commences with implementing a real time revenue recognition process. All research sites will benefit from accounting for their work and understanding how much they have earned. Intuitive site-based CTMS products make this process simple, easy, and automated. Once the CTMS understands the budget parameters (as defined during the budget negotiation), the revenue accounting work is completed automatically by the software. The research professionals simply indicate that a visit was completed, and the CTMS will accrue the revenue, post any associated expenses, and populate this economic data into a series of financial reports. These reports describe the site's financial picture on a real time basis and serve as the catalysis for future action. This information will support positive communication between the investigator and corporate management.

Using the CTMS reports and tools, the site is able to begin reviewing important economic information. Any site professional can generate revenue, accounts receivable, and cash flow reports on a regular basis. Using this data the site can determine how much income was earned, the value of any visit expenses, and how these activities affect the site's cash flow. Figure 1 includes a brief example of a revenue and cash flow report. In this site example, during the second quarter of 2009 this study has earnings of $3720 and receipts of $1420 in study payments from the sponsor. The site also owes $2081.34 in payments and has already paid $444.92. The net cash flow in this brief study example is $975.08. Sites should consider running similar financial reports as supported by the research software on a monthly basis. The CTMS automates the process and provides easy access and accurate answers to difficult financial questions.

Figure 1. By running these reports, sites can more easily manage their finances.

Cash flow enhancement

Managing the revenue cycle and understanding revenue and expenses is important for all research sites. However, the corporate leadership for many organizations is primarily concerned with converting the site's research endeavors into funding that can be used to reconcile the research program's various expenses. Earned revenue is essential, but "cash is king." All research sites need to be intimately involved in the cash flow and collections activities that are associated with their research trials.

The timing of sponsor study payments has been a problem for sites for many years. CenterWatch conducted a site survey to assess site concerns related to sponsor relationships. CenterWatch reported many interesting findings; however, sites stated that their more pressing concern was related to "slow payments and reimbursements from sponsors."11 A high percentage of research sites indicated that slow payments were a problem. Experienced site managers frequently complain about the poor performance of many sponsors and CROs in the study payment process. Research programs need to manage and control the process; site professionals are responsible for ensuring they are reimbursed for their services.

The process of ensuring timely and accurate reimbursement is called collections. Unfortunately, many sites feel that this is "dirty" work and do not spend enough time planning to properly oversee their collections efforts. Nearly half of all sites report that they do not invoice sponsors for any reason, and very few sites invoice sponsors for study visits on a regular schedule. One of the compounding issues concerns the time and effort required to research and issue an invoice. The issuance of an accurate and complete invoice requires determining which study visits are currently outstanding, understanding the contractual terms, reconciling all one-time payments, and documenting this in a business formatted invoice that is understood by the sponsor. Managing this process manually is time consuming and cumbersome.

Issuing a comprehensive invoice for work completed does not have to be a time intensive or worrisome activity. Figure 2 includes an example of a site-based invoice that is routinely generated by a commercial CTMS application. This invoice can be generated automatically, and the site staff can access this real-time document in two mouse clicks. The site's invoice should include the trial name, sponsor name, and payment remittance information. It is suggested that sites segregate one time project fees (e.g., the IRB) from outstanding subject visit payment requests. Most importantly, the patients should be identified using the appropriate study number and/or blinded initials that are required in the trial documents with respect to required HIPAA compliance regulations. This information will assist the grants administrator in confirming the outstanding visits and issuing payment.

Figure 2. An example of an invoice and the type of information that should be included, such as trial and sponsor name.

Invoicing sponsors in this manner assists the site in managing their collections. An invoice represents an official payment request; additionally, sponsors have demonstrated a positive response to sites that request funding using this invoicing technique. Businesses respond to invoices; clinical trial sponsors will respond to this type of payment request.

A site recently used their CTMS to review any unpaid research work. The CTMS provided a one page accounts receivable summary, and the research professional noticed that eight studies owed the site a fair amount of money. The site manager used the CTMS to electronically issue and send invoices to all eight sponsors. The site manager received a positive electronic reply by three of the sponsors within an hour; three more replied by the end of the business day. By the next day, all eight sponsors communicated with the site that they would review the invoice and issue any appropriate payment. The site received a check from all eight sponsors within the next 35 days.


Clinical research sites are not immune from the current global financial crisis. Research programs need to become more efficient, while additionally learning to better manage their financial processes. New CTMS products are now available to sites that will support site productivity gains and business process enhancements. Implementation of a CTMS site is an investment in time and effort for any site, however, your research program will benefit from these new business intelligence applications.

Andrew Snyder, MBA, FACMPE, PMP, is Director of Research Finance at the St. Paul Heart Clinic, St. Paul, Minnesota, and a faculty member in the Department of Decision Sciences at Metropolitan State University in the Minnesota State College and University System, email: asnyder@stphc.com.


1. A. Snyder, "Clinical Research; Value to the Medical Practice and Identification of Best Practices," American College of Medical Practice Executives–Medical Group Management Association, August 2004.

2. K. Getz, "Industry Trials Poised to Win Back Academia," Applied Clinical Trials, April 2007.

3. Tufts Center for the Study of Drug Development, "Number of Principal Investigators in the U.S. is declining," News & Events, May 2005.

4. N. Goldfarb, "What is Killing Off the Investigators," Journal of Clinical Research Best Practices, 1 (7) July 2005.

5. D. Vessett, "Bridging the IT and Business Needs Gap," InfoWorld, 27 (22) May 2005.

6. M. Durkin, "Improving Site Efficiency and Productivity," Applied Clinical Trials, July 2009.

7. L. Benson, "Developing Clinical Research Budgets," SoCRA Source, 59, February 2009.

8. A. Snyder, "A New Paradigm in Clinical Trial Budgeting," The Monitor, 22 (6) October 2008.

9. A. Snyder, "Clinical Trial Budgeting", SoCRA Source, 60, May 2009.

10. Society of Clinical Research Associates, Advanced Site Management: Finance and Productivity, www.socra.org.

11. D. Borfitz, "Unveiling "Hidden Costs" in Clinical Trials," CenterWatch, 10, September 2003.

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