Research Clinics: You’re Leaving Too Much Money On The Table!Authored by: Dan Sfera
I just wrapped up an hour long interview with Ana Marquez for my clinical trial talk show, “The Clinical Trials Guru”. What we discussed during that interview actually inspired me to delve deeper into the subject of research clinics and their handling of cash flow, invoicing, contract negotiations and the like.
As Ana mentioned in the interview, while we are all very privileged to be able to work in this exciting industry, at the end of the day clinical research is a business and should be treated as such. Unfortunately for many sites, they realize this a little too late and ultimately are forced to close the doors on their business. In fact, according to my chat with Ana, 58% of sites report to be in more debt this year than last, while other sites that were in operation a few years ago are no longer in business today. While this lack of attention towards the financial aspects of clinical trials may certainly be due to many research clinics being primarily run by clinicians or other clinically minded individuals who understandably focus first on clinical operations, ignoring your site’s cash flow and financial performance may put your company and all its stakeholders (patients included) at risk of losing what you’ve worked so hard to build.
Tips when negotiating the Contract and Budget
The first and most important financial-related activity you need to focus more on is the contract and budget negotiation. This is the event at which research clinics can make the biggest impacts to their financial well being. The key to successfully negotiating a lucrative contract is being able to clearly explain why your site requires anywhere from a 20-120% (yes that’s right!) increase in its budget. You may not be able to double your budget in all cases, but it has happened plenty of times from my experiences as well as those of others. Don’t allow the negotiator on the other end to compare your site to other clinics. If you are given such a statement, respond by telling them that you have no idea what other sites are getting, but this is in fact what the procedures will cost you. It is, of course, important to know what you are talking about here and make sure you do your homework on what these procedures will actually cost you (including overhead).
Don’t forget to invoice these items
Another way sites tend to lose money is to forget to invoice for certain items such as: transportation costs for bringing subjects to the clinic, meal reimbursement for subjects, time required for staff members to be retrained on protocol amendments, record storage fees, time required to re-consent subjects, time required to process, document, and report all SAE’s, and much more. Make sure you negotiate for these costs in the budget, and when it comes time to bill the sponsor for doing these activities, make sure that you actually remember to invoice them. Our video interview explains just how to go about invoicing for these and other often-forgotten activities that are necessary for conducting any study these days.
Get paid in a timely manner!
A third concept to gain a better understanding and mastery of is receiving study payments in a timely manner. You should strive for ensuring monthly payments from sponsors. Although some sponsors/CRO’s are really trying to push for quarterly payments, I along with my interviewee, Ana Marquez, feel it is critical that sites receive monthly payments in order to reduce cash flow anxiety. After all, we pay all of our bills on a monthly cycle, why should we wait 3 or even 4 months for a sponsor to pay us? Whenever possible, insist on a monthly pay schedule in your contract. I’ve heard some rumors that sponsors and CRO’s may even begin to have sites invoice for regular patient/study visits. If and when this happens, your site better be very knowledgeable and efficient in terms of getting these invoices processed and sent out to the sponsor for billing.
It is important for research sites to understand how to accomplish and retain profitability in order to continue serving their communities, keeping their employees and support staff focused on actually conducting studies and not worried about whether their next paychecks will arrive. If we all can get better at negotiating budgets and maintaining profitability, then ultimately, we will all do a better job at conducting the actual clinical trials. I’d love to know what you guys think about this. Email me anytime at email@example.com.
About South Coast Clinical Trials:
SCCT was founded in 2001 by Dr. Adonis Sfera, M.D. who has been serving the community in his general and geriatric pyschiatry private practice for more than 15 years, and who continues to do so at our principal trial site in Anaheim. Dr. Sfera created SCCT in hopes of aiding in the discovery of new and more effective treatments for the very challenging disorders and conditions he encountered daily in his practice. He has since assembled a team of highly experienced professionals to assist in bringing these promising treatments to the people who need them.
About Dan Sfera:
Dan Sfera, BS, MBA, is a regulatory and contract specialist, is responsible for business development and is the Anaheim Site Director. In addition, Mr. Sfera is the site liaison for the company and is in charge of obtaining new studies as well as handling all of the necessary study start-up activities for our multiple sites. Dan serves as the liaison between South Coast Clinical Trials and SCCT’s pharmaceutical sponsors or Contract Research Organizations, ensuring that each and every facet of the trials are in full compliance with the Food and Drug Administration and Institutional Review Boards.
To contact Dan, please click here.
Follow Dan’s blog: http://www.TheClinicalTrialsGuru.com