Managing an Effective Site Business: Financial and KPI Management
Al Peters; Lori Rich
A staggering number of research sites report that they do not track their receivables or reconcile grant payments. This fact should be of concern to research sites and sponsors alike. Sites need to know what they are spending, what they are earning, and what net profit they have left at the end in order to run a smooth and effective business. Without a clear understanding of total outstanding receivables, there is really no way a site can grasp their true financial potential. It is very important that sites tracking their earnings on an accrual basis have a full understanding of when outstanding receivables will be paid.
In order to effectively minimize collection days, research sites must call the sponsor/CRO monthly for the specific clinical trial they are conducting. This will allow sites to tangibly benefit from maintaining a close relationship with the sponsor/CRO by getting prioritization for payment inquiries. With the receipt of every grant payment, the site should be reconciling to verify the accuracy. Despite the best intentions of all parties, human errors can be made, resulting in a negative financial impact on the site.
Throughout the duration of a clinical trial, research sites should closely monitor screen failure ratios, visit amounts, and any unforeseen non-reimbursable time and efforts. The payment terms for these items can and should be renegotiated with the sponsor/CRO. It is imperative that sites always provide clear justification for their requests and reference any ongoing study averages or common clinical trial pain points. A lack of self-advocacy will only cause more of a site’s work to go uncompensated.
Every research site should be entering and tracking all of their visits and data in a CTMS system at the beginning of each study to allow for the financials to be automatically tracked by the system. Screen failure reimbursement should also be entered and tracked in a CTMS. The individual at the site entering the data in the CTMS can denote which screening visits were screen failures, thus avoiding confusion and inaccuracies in accruals. If a CTMS system is not available to your research site, manual tracking in Excel will suffice. In fact, it is often better to manually enter screen failure data as there are so many variable ratios and structures involved.
Pass through expenses also need to be tracked and invoiced from the very beginning of the trial. Communication between finance professional(s) and clinical research coordinator(s) is critical. Monthly communication should take place to verify all pass-through occurrences are captured and invoiced. This process allows for any non-reimbursed pass through items to be identified and re-negotiated.
Pass through financial tracking can also be automated in a CTMS and allows for streamlined monthly invoicing.
‘Study close out’ invoices should also be closely tracked and monitored. Sites should follow up
with their sponsor/CRO on a monthly basis to review these invoices. It is the site’s responsibility
to reconcile all payments, identify errors and rectify them.
In addition to having a thorough understanding of all receivables, research sites aiming for success should also be consistently tracking key performance indicators, commonly referred to as “KPIs.” KPIs provide sites with a benchmark against which to measure their overall performance. They are helpful for site owners, clinical research coordinators, and all other site personnel as they identify expectations and allow the team to prioritize their time based on understanding how they are being measured.
For sites to be successful in the clinical trials industry, it is critical to have a strong understanding and knowledge of financial management, receivables, cash flow, and measuring performance through KPIs.
This article brief covers the “The Art of Negotiation” webinar presented by Al Peters, President
and Lori Rich, VP, Financial Operations; BTC Network
Authored by Maggie Kilgallon, Marketing Coordinator; Melissa Daley, Marketing Content Specialist
Post by Al Peters -
Al Peters has over 20 years of experience in the clinical research field. He is one of the founders of Beacon Clinical Research, LLC, a multi-specialty phase I-IV research facility in Massachusetts and is currently the acting Director of Clinical Operations of BTC of New Bedford. His expertise is very useful when undergoing business development plans, site growth, marketing campaigns, handling, and study contract and budget negotiations. Al currently resides in Massachusetts with his wife and two young daughters.