Reorganizing the General Clinical Research Center to Improve the Clinical and Translational Research Enterprise

Plan: Spring to Summer 2011

During the Spring of 2011, a leadership team was formed to include the Director of the CCTR, Directors of the former GCRC and the CTO, and the Director of Administration for the CCTR. In the dual roles of Director of CCTR and Associate Vice President for Research, the Director held authority to make decisions for evaluation and planning of the CCTR. Staff of both the GCRC and the CTO participated in the process designed to review and realign the structure and vision of the Center for future opportunities. The first unit of evaluation was the former GCRC. The GCRC was housed in the VCU Health System North Hospital with 10 registered nurses (RN), 11 patient beds, 3 outpatient rooms, a dietitian and staff, full metabolic kitchen, research laboratory, and other support staff. At the time of our analysis, the GCRC was recovering under US$50,000 in study billing from industry-sponsored research per year with an overall budget of 1.5 million dollars. Regulations governing the GCRC mechanism included defined limits on the proportion of clinical research supported by industry. With limited funding granted through the CTSA and the high expectation for rapid growth in other CCTR services, it was clear that if the CCTR was to continue to provide these essential services to the VCU research community, the GCRC component of CRS would need to become more financially self-sustaining. To become more financially self-sustaining, the CRS would need to rely less on the financial support of the CTSA grant and funding from the University and the CRS would need to generate additional financial support through a cost recovery model allowing the CRS to charge for services, such as nursing support and project coordination services.

Along with limited funding opportunities, most federal projects were experiencing reductions in federal awards (Eckelbecker, 2013). This put a high level of stress on the investigators to prioritize their limited funding. One investigator strategy found in our analysis was the escalating use of external laboratory services to preserve funds for personnel or supplies. Our entrepreneurial investigators had discovered that highly efficient private companies were processing samples at a fraction of the cost charged by our institution. It also became clear that investigators needed resources beyond the physical space of the GCRC, and VCU needed to assist research teams where they were located, while maintaining a full service clinical research hospital unit. Finally, the leadership team determined that existing staff would be able to meet current investigator needs. Figure 1 shows the parallel organizational structures of the CTO and GCRC.

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Figure 1.

Initial organizational structure of the CTO and GCRC. CTO = Clinical Trials Office; GCRC = General Clinical Research Center.

The CTO described in Figure 2 also provided needed services to the university. These services included Institutional Review Board (IRB) preparation, budget development and negotiation, and coordinator services, and the CTO acted as a primary point of contact for industry sponsors looking for potential sites for their clinical trials through feasibility assessments as well as identifying potential investigators conducting the studies. However, the CTO had not yet created a self-sustaining model through the use of cost recovery. Likewise tracking of coordinator time allocation to specific trials and tasks was not yet in place.

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Figure 2.

Phase 1 of the CRS organizational structure. CRS = Clinical Research Services.

With a better understanding of the customer base and staff, a tactical business strategy was needed. The initial review indicated that the revenue stream was in considerable flux, with little of the consistency needed for accurate budgeting. In addition, there were no clear procedures for processing invoices, and invoicing was completed on a quarterly basis. This delayed accounting of incoming revenue and in turn delayed financial decisions. Moreover, no revenue or financial reports were being created to track invoicing or cost recovery. As was true for many GCRCs, several computer-based systems were used to manage day-to-day activities. These programs included iCAMP^© to manage study participants, locally created systems for bed scheduling, an Access^© database for tracking incoming participants, and Lawson^©, for billing of patients for standard of care services.

The leadership team reviewed the evaluation of both the CTO and the GCRC noting duplications in services and administration as well as strengths of each system. It was determined that combining the two systems to create a new organizational unit, CRS, would allow: (a) fewer duplicated or conflicting services and (b) decreases in fixed costs of operation through shared leadership and administration. This would enable the VCU CCTR to become a one-stop shop for all services relating to clinical trials. Figure 2 shows Phase 1 of the CRS structure. This phase eliminated one administrative assistant and aligned the reporting structure.

After review of the CTO and GCRC, it was clear that an invoicing and financial process/system was needed to manage the CRS and cost recovery for the CCTR. The main areas that needed to be reconciled were: (1) the disparity between a large budget and low cost recovery of the GCRC and (2) a commitment to provide resources to our investigators. To achieve these goals, the CCTR continued to provide the same services as those offered through the GCRC and CTO mechanisms while transitioning that base to a new business model. While it was important to increase the amount that the former GCRC and CTO could recover and to standardize the rates; a reduction in costs, through an increase in revenue, could be obtained through an increase in the number of industry studies using the CRS.

The next area to be addressed was the establishment of a consistent pricing structure and management. Highly productive meetings with representatives from the Vice President of Health Sciences, Vice President of Research, the University Controllers Office, and the affiliated Health System resulted in a common basis and uniform structure upon which budgets could be reliably created. It was determined that costs for ongoing studies would be honored at previously agreed upon rates. A business plan was designed to guide future planning, maintain focus on the long-term goals and mission of the CCTR, and to develop a new system that would enable tracking of all costs and revenues to help in evaluating the success of the CCTR.

Key actions taken during the Plan stage included:

With the primary expectation of the planning stage complete, the leadership team set forth to implement the new strategies through the Do portion of the PDSA model.

Do: August 2011

Because of the long-held organizational identity of the GCRC and a more recent push for name recognition and valued service by the CTO, reorganizing the GCRC and CTO into a new entity was a sensitive endeavor. Both organizations were collapsed into a new enterprise called CRS, to include the Clinical Research Services Unit (CRSU) and the Clinical Research Services Office (CRSO). The former GCRC Director became the CRS Executive Director, with the leaders of the CRSO and the CRSU serving as Senior Managers. The administrative unit of the CTO was absorbed by the CCTR Administration, achieving economies of scale and realized cost savings in the administrative area of over US$50,000. The financial management responsibilities of the CTO were also combined with the CCTR, which created a consistency in reporting for the CCTR. Reorganization allowed the CRS to offer services including clinical trial budget planning and negotiation, IRB and regulatory preparation, coordinator support, full hospital support with a full nursing staff, patient beds, the ability to support clinical trials 24/7, dietary support, laboratory and sample analysis, and study closeout.

While formation of the CRS was taking place, the leadership team began to implement the business model. In order to comply with university regulations, the new enterprise would need to be created as a service center, an organizational unit involved directly in revenue generation and providing support services to other organizational units or subunits. The basic elements of a business model were generated along with the charges and accounting plans for the new enterprise. The service center was placed at the Center (CCTR) level. This permitted the inclusion of additional CCTR core services including Biomedical Informatics.

Based on the activities and the uniqueness of the services provided, five new lines of business were identified: (1) coordination and nursing, (2) laboratory services, (3) research facilities, (4) bio nutrition, (5) and administration for budget development, negotiation, regulatory and IRB services. These five allow for tracking the major activities of the CRS. Later, a sixth line of business was added for the Biomedical Informatics Core for Research Electronic Data Capture database creation and customized tools designed in a new system called the BIC portal.

These new lines of business and billing structure were an important milestone to enable consistent billing across all services and all types of trials. A billing system that would accommodate the budget structure of trials and CRS services would need to be created. This was most apparent in the billing structure of the coordinator pool. For NIH or nonindustry studies, it was important to charge for coordinator services based on effort since most trials were based on a flat dollar amount and a set effort for the coordinators (e.g., 40%). For industry trials, it was important for the coordinators to be charged for activities completed, per visit, per activity. It was not possible to charge a coordinator at a set effort on a trial that was not able to accrue patients. The new structure entailed the creation of a model that had each activity of the coordinator and the budget and negotiation personnel priced at a level of simple, moderate, and complex. Protocol review included a determination of coordinator activity and level of complexity as well as identification of procedures and time. This new pricing structure allowed the CRS to have a standard model for all studies. A CRS billing specialist was hired to help develop and operate a financial system that allowed the CRS to track its activity and cost recovery, including a system to track overall revenues/budget and expenses of the Center. This was accomplished by creating two separate financial reports to account for differing fiscal years (University and NIH) for the purpose of budgeting and reporting. While this report was being created, a separate set of reports was created to track revenue for each of the six lines of business.

Since the service center was created as a university resource and the funds generated were being credited to VCU, it was important to conform to other university bookkeeping and revenue tracking based on the university fiscal year and to start invoicing on a monthly basis. This provided many advantages, including timeliness of billing and accounting. By moving to monthly invoicing, study teams were able to more immediately match invoices to previous activities, it allowed for more data to see trends in activity and spikes or valleys in usage.

Once the expense and revenue tracking reports were completed, a report was created that matched expenses for each of the fiscal years and the revenues generated. Since the fiscal reports would not match the revenues reported, due to CTSA grant funding cycles or to different fiscal years, it was determined that the best reporting would be to compare recovery to date to expenses to date. Leadership was afforded the opportunity to compare running totals that allow calculations of the percentage of cost recovery to date and to determine the level of cost recovery that will be acceptable and necessary to allow growth with limited university funding.

Finally, a system to inform investigators about resource allocation and costs for a particular study was developed. A detailed letter including all approved resources for the six lines of business and their costs is sent to each investigator with a requirement that they acknowledge and accept the costs and allocation. For nonindustry studies, the costs are reported to the investigator in the letter but are not billed to the investigator, noting support from the CCTR.

Key activities completed during the Do stage include:

The next stage of the PDSA model was to study the changes that had been made to determine the next course of action.

Study: March 2012

In March 2012, the leadership team reviewed studies for which the CRS was providing services without collecting program income. With the exception of documenting the type of studies and services provided, no financial tracking was taking place. It was determined by the leadership team that the CRS should expand fiscal reporting to include studies that were being 100% subsidized. This would be important to document the level of support that the CRS was providing from institutional resources. It was determined that the investigators would receive detailed letters showing the support investigators were receiving. The CRS began to send monthly invoices to all studies, even if the costs were not actually being recovered due to cost sharing. This served two purposes: (1) investigators were able to see the cost of the protocols they were creating and in some cases remove unnecessary procedures and (2) CRS would now have a complete view of the work that was being performed and the costs associated with the work. It was intended that this should (1) lead to more efficient, streamlined protocols, without compromising scientific intent and (2) permit the CRS to review all pricing, to ensure that costs are reasonable.

Act: June 2012

After studying the actions taking place, the leadership team reorganized the management structure of the CRS. Figure 3 shows the Phase 2 organization and reporting structure. By eliminating one of the senior manager positions and having the budget/negotiation and regulatory person, the coordinator manager, and one senior manager reporting directly to the CRS Executive Director, the CRS became one united organization. Cost savings were realized and a more direct reporting structure to the CRS Executive Director was established through the elimination of the medical director position.

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Figure 3.

Phase 2 of the CRS organizational structure. CRS = Clinical Research Services.

The leadership team reviewed staffing and determined that the current staff was adequate but that the high costs of RN are cost prohibitive for some trials. The CRS continued to maintain sufficient numbers of RN to care for research patients which required RN skills, while positions created by turnover were, if possible, replaced by less expensive providers (licensed practical nurses and patient care technicians).

The net of management reorganization and maintaining current RN staff levels was found to be cost neutral and placed the CRS on sound financial footing to move forward as a critical component of the CCTR. Figure 4 shows the timeline for development of the CRS and the cost recovery overtime. The graph is presented in dollars billed compared to time. This shows how the use of the PDSA model, the implementation of reorganization strategies, and a business model affected the revenue generating aspects of the CCTR. As the activities took place, a higher level of funds was recovered and the revenue stream became more consistent and predictable providing projection and regression analysis to be possible.

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Figure 4.

Clinical Research Services timeline and cost recovery.