Building and Managing A Realistic Budget Plan
A modest device study for a million dollars
It starts with the protocol
Mistake  The first mistake sponsors make is to ask for too much information; information that is unnecessary to investigating the study objective. Don't ask for nice-to-have procedures, lab tests, or information; limit your requests to information that is essential to analyze your primary hypothesis.
Know your investigator's costs
The study overview summarizes the study in a paragraph or two, describes the subject selection criteria, and that includes a list of every task the site must do to fulfill the study requirements. Think in terms of verbs or action items for the site, organized by the site's prestudy, study, and post-study tasks.
Mistake  The Site's Task List is more than just a procedure list for the subjects, it includes every activity the site must perform in order to implement the study. Such tasks as 'review the protocol', 'prepare the IRB application', 'screen patient medical records', 'meet with monitor', 'enter data onto case report forms', and other administrative duties are included in the list. The Site's Task List might look like this:
Site Prestudy Tasks (Study Start-Up):
Mistake  Our human tendency is to under-estimate the time required to perform a task; however long you think it will take, multiply by a correction factor characteristic of you. I usually underestimate the actual time by half. It's hard to get firm numbers because investigative sites don't invoice sponsors by the hour.
Site Study Tasks:
Mistake  Under-estimating the cost of study-procedures; accurate estimations are hard to find. Practice Management Information Corporation (PMIC) reminds us that third party payers rarely disclose their fee databases, and professional medical associations are prevented by Federal antitrust legislation from disclosing fee survey results. You can obtain Medicare fee schedules from the CMS site if you can find them, and a variety of medical fee schedule databases are available for sale. You can use MEDFEES from PMIC or EncoderPro.com from Ingenix, for example.
Site Post-study Tasks:
Mistake  No-one like to pay overhead. My own Clients argue over a 10% overhead. A quick search in Google showed that Vanderbilt charges 29%, Memorial University of Newfoundland charges 30%, the Center for Cancer Care and Research in St. Louis, MO wants 20%, UCLA wants 16% of total direct costs, and NYU wants 30%. Overhead costs are higher if calculated on procedure fees only, lower of based on total direct costs. You should plan on a 25-30% overhead charge against the total site budget.
THE TASK TABLE
Finally, sites like to discuss study costs in terms of costs per subject and some sites have a minimum per subject. Northwestern Memorial Hospital in Chicago considers any study that pays less than ~$2000 per subject as a money-loser and will not participate.
You begin in the same way. Center budgets are built around the protocol, so you'll make a task list of all the activities you need each center to perform in order to fulfill their part of the study.
Mistake  Bring a competent clinical research professional into the project early on. Too many sponsors wait until after they have designed the protocol and contracted with the sites to discuss study issues. CROs can often save you money by suggesting better regulatory strategies, study designs, or sample size calculations.
Once you have a protocol you'll go through it page-by-page, as before, and make a table of tasks you want to sub-contract and which center you want to do the task.
Mistake  Don't chose your center by cost alone. Look at references, experience in the device world, reputation, sub-contractor network, and size. Time and again I see centers hired because their estimates were lowest; and then cost over-runs come in when it is too late to switch vendors.
Mistake  Don't hire a big firm for a small job, or a small firm for a big job. In the first scenario your study will be lost in the daily shuffle; in the latter scenario the center will not have the resources to implement the project.
Then, you estimate a budget for each center. Some centers have fixed fees, such as central IRBs; others charge a fixed fee per subject, such as central laboratories; data management centers charge by the number of data fields; and other centers charge an hourly rate, such as professional consultants. As before, you divide the center's activities up into prestudy, study, and post-study tasks; and then assign a number of hours and hourly rate (or fixed fee) to each task.
Mistake  Don't cut corners by not monitoring poorly performing sites. Clinical studies are market-driven, and there is always a reason for poor performance. If enrollment is slow there is a good chance a competing study is paying more than you per subject, but you won't know until you monitor face-to-face.
As before, you organize the activities that in-house personnel are expected to do by prestudy, study, and post-study tasks. Here I like to include a separate category of data management tasks, because these tasks span the study project in time from before study initiation to after study close-out.
Mistake  Task lists, line items, and budgets are tricky to make. A 'splitter' personality will easily find a couple of hundred things for people to do, a 'lumper' personality may whittle a study down to 30-40 tasks. When splitter personnel work for lumper bosses, or vice versa, sparks fly. Learn the personality preferences of your workmates and accommodate them with sub-lists and super-lists.
Total study budget
Mistake  First-time sponsors are always surprised that as much as 50% of the study budget may be spent before the first subject enters the study. Good budget planning, organized by study timing, prepares top management for what lies ahead and helps keep middle-managers out of the 'you didn't tell me' hot-seat.
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