paydays

Paydays in a New Decade: Meaningful Change or More of the Same?

Posted by Christine Pierre on Wed, Feb 03, 2010

Let's start this decade with a resolution and a solution: To improve the financial health of clinical research sites through our commitment to negotiate (demand?) monthly payments for services rendered.

It's a reasonable request in the business world, right? But it's not happening in the clinical research site business. Here's why and here's why it has to change....

Until 2003, the topic of finances at the site was considered quite taboo; that still lingers on somewhat today. But in September 2003, Ken Getz of Centerwatch published an article called, "Unveiling ‘Hidden Costs' in Clinical Trials." The article essentially gave sites permission to talk openly about the financial obligations they face daily.

Having started my clinical research career at a teaching hospital, I understand the roots of silence about compensation and cash flow. These research centers 20 years ago were not interested in the financial modeling of industry-sponsored clinical research. In fact few were really interested in conducting industry-sponsored trials at all. Timelines to get anything accomplished were long and enrollment was slow. Their focus was their own basic research and discoveries.

Old Model, New Setting, Not Much Changed

Fast forward a few years and industry migrated to community settings to conduct clinical trials. That shift simply took the existing model that had been used in an academic setting and applied it to the new sites in the private sector. The problem was - and still is - that most of the community-based sites had little experience in budget and contract negotiation. But they were eager to have both the opportunity of participation and the anticipated new revenue. What we see today is that approximately only 30% of industry-sponsored clinical studies are now conducted at academic sites. The remaining 70% are conducted in private settings (practices, freestanding research sites, Site Management Organizations, Investigative Site Networks, etc.).

Sadly, it's now 20 years later and little has changed. At our annual Site Solutions Summit in 2009, an event that brings together quality sites and industry stakeholders to discuss the realities of site management and to jointly set industry standards (www.rxtrialsinc.com/site-solutions-summit), we saw this inertia reflected in real-time. Sites attending the Summit shared metrics and data extracted from actual contracts and budgets completed during the prior year. Sites reported being locked into quarterly payment terms anywhere from 55% to 69% of the time. Many are carrying accounts receivable well over 90 days.

No Cash Flow Without the Cash

How to be paid for services in a timely manner is an issue for every business - clinical research sites included. Sites have monthly payment terms to everyone, from the volunteers that so graciously agree to participate in our studies to the research staff who so skillfully follow and execute each protocol to the utility companies that keep our heat and electric on (to make all those copies of everything from informed consent documents for study volunteers to protocols that are now sent electronically).

So, I've described the background of how the payment system originated and demonstrated how little has changed. Now we look to the future...

Sites should be valued as a strong link in the clinical research partnership chain. Last year's Site Solutions Summit attendees agreed that, with each contract they negotiated, they would request monthly payment terms. They would not accept the usual responses - no other site is asking for this; our system is already set up; this is what we're offering, take it or leave it, etc.

No one should feel embarrassed or apologetic for expecting to be paid for services rendered. Frankly, organizations that take advantages of others by not paying on a timely basis should take a strong look at their own systems and values.

Let's Talk About It

I'll sign off with this question: What have you or your company done or are you thinking of doing to address the issue of getting payments to sites in a timely fashion? I'd like to hear from you.

Here's to working together to make a change that ultimately will positively impact everyone and allow us to deliver tomorrow's cures for diseases of today.

- Christine Pierre, RxTrials

1 Comments Click here to read/write comments Tags: clinical research payment, clinical research finances

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