Equipping Small Sites to Manage Trial Finances: Challenges and Solutions
A sponsor chooses a site based on its ability to conduct the research, not on its financial management skills. But poor money management can sink a trial regardless of how well the site conducts the research.
In today’s budget-conscious environment, sponsors often contract with small- to medium-size sites that may not have the resources or expertise to effectively manage finances. And unless they provide their sites with the necessary support up front, chances are good that the sites will be overwhelmed.
“You’re asking someone who is doing a thousand other things [and] who might not have all of the accounting skills necessary, and you’re placing all of that responsibility on them,” says Christina Kahn, Senior Director, Site Alliance Management at Frenova Renal Research. “What happens is that thousands and thousands of dollars go unpaid,” Kahn says.
Most investigators in small- and medium-size sites don’t have the budget they need to hire support staff, including staff with expertise in accounting, points out April Mulroney, Senior Vice President of Accounting and Chief Data Officer at WCG Clinical. “Sites’ strong point is not accounting and finance but the research itself,” Mulroney explains.
Sponsors and CROs don’t always make it easy for sites, she says. “Sponsors don’t always provide the transparency on what payments are for, and sites will receive checks from the sponsor with a lump sum that often doesn’t reference the study or the reference period.”
Additionally, the fact that many sponsors wait 90 days or longer to reimburse sites can place researchers in a bind. “The financial burden this puts on sites is notable, since they’re having to pay their staff, their rent and their electricity all up front,” Mulroney notes. “In a sense, sites are fronting the industry on clinical research. It costs approximately $40,000 just to initiate a site, so if you’re not paying them on time, you’re not enabling them to succeed.” As a result, many sites drop out of clinical trial research.
“Payments to sites from sponsors can be unpredictable depending on the frequency of visits, frequency of source data verification from monitors and terms stipulated in the site’s contract,” says Greg Manning, Business Operations Manager at Suncoast Clinical Research. “If a site’s ability to operate is dependent on predictable revenue, then the site will need to build up a large operating balance in order to navigate through the leaner payment periods,” Manning says.
While a standard “recipe” for managing an organized clinical trial that hits its financial marks may be helpful, clinical trials vary in complexity and budget requirements. Standards must be tailored to the individual trial; however, studies often perform well when a finalized per-patient budget is established.
The per-patient budget, according to Manning, should align with electronic data capture (EDC) to produce payment. “You also need a mechanism to track revenue from visits, items that require invoices, and payments to patients, providers and vendors,” Manning adds. “This mechanism could be the source document or a visit checklist that is provided to accounting personnel.”
Clearing up payment worries also can increase sites’ research effectiveness, Mulroney says.
“Sites would be more focused on research if they didn’t have to spend hours trying to reconcile payments and figure out how much they’re owed,” she says. “They’re diverting their attention and their limited hours on areas that are not actually their sweet spot. Making payments timely is the number-one factor a site will consider when choosing which studies to initiate.”
Accounting technology also may help, Mulroney adds, yet investment in these technologies is tremendously low. “You would be shocked to see how many sponsors and CROs run their accounts payables to sites in an Excel spreadsheet,” she says. “The systems in place don’t talk to each other.” Some of the key systems that need to talk with each other, Mulroney adds, are the EDC, the system that generates the dollar amount that’s been contributed to the site, and a link into the banking system so payments can be made electronically and seamlessly.
Mulroney believes automation of accounts can be helpful, too. “A clinical trial management system should be integrated into [a site’s] activity system so that they’re auto-generating their receivables,” she says. “The whole process needs to be automated in addition to having a member or team that has expertise in accounting.”
According to David Scott, President & CEO of Palm Beach Research, if all sites adhered to strict financial and organizational standards, there would be greater growth of clinical trials because sites would be motivated to continue to pursue research. “Sites would be more equipped to financially survive,” Scott says. “Sites would also recruit more patients at a faster rate, and studies would turn over quicker. Research would only be limited by how quickly new treatment protocols are created by the scientists behind the pharmaceutical companies, not the failures of poorly prepared research organizations.”
“If all sites would efficiently manage their clinical trials by negotiating for fair and stronger budgets,” Manning says, “managing invoices and being transparent, then the industry could move to a more templated system where budgets represent a true fair market value from the beginning.”
“Sites would be reimbursed more efficiently and automatically, which would keep the focus on patient safety and protocol adherence without the need for complicated financial tracking.”