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5figuresIt is true that most people did not get involved in research because of their love of business and accounting.  Unfortunately, it is important as a Manager of a Research Unit to have a handle on the accounts in order to be sustainable.  Whether your research unit is public, private, non-for-profit, academic or other, if you can’t pay your bills, you can’t do research.

This is my top five figures that each Clinical Trial Manager should know in order to have a good handle on their accounts.

1. Average income per participant visit

While it is true that most units charge fixed fees for things such as study start-up, trial maintenance and amendments, these fixed fees by themselves will not cover the cost of running your unit.  The per participant visit fees are where your unit will be generating most of its income.

Each visit will pay a different amount and each trial will be different again.  What you should have is an idea of how much you receive on average.  The easiest way to calculate this is to take the total per participant fee and divide by the number of study visits.  Repeat this for each study and at the end add all the figures together and divide by the number of studies.

2. The true cost of your staff

The cost of your staff is not just the price you pay per hour.  On top of that is annual leave, personal leave, sick leave, leave loading, worker’s compensation insurance, superannuation plus any HR costs you incur if you outsource payroll (or your time if you do your own payroll).

You need to know the total figure that each staff member is costing.  Your HR department can assist with this.  Access CR has a helpful spreadsheet on their website that you may wish to use.

3. Your Break-Even Figure 

The Break-Even Figure is most commonly used in industries that sell a product.  It is the number of items a company needs to sell to cover all their expenses.  For example, a car manufacturer would work out the number of cars it needs to sell each month to cover the cost of production, wages, rent, maintenance etc.

The Break-Even figure in Clinical Trials is the number of participant visits that need to be conducted to cover the running costs of the unit.  To work this out you need to know the total expenses for the unit (which for most units is largely comprised of staffing costs) and the average income per patient visit.  As you should already know these figures (see items 1&2), it is as simple as dividing the total expenses by the average income per patient visit (I find it easiest to work this out as an annual figure and divide the result by 52).

For example, the running costs of our unit are approximately $300,000 per year and our average income is $720. 300,000/720 = 567 participant visits per year.  567/52 = 10.9.  This means we need to conduct an average of 11 participant visits per week to break even.

For most research units, a staff member would need to perform 3-4 participant visits per week to cover expenses.  If this number exceeds 10 participant visits per week, you have some serious problems and need to take a strong look at your expenses.

4. The average number of study visits per month for each study

Because each study varies so much, knowing this number is vital when planning staff caseloads and knowing if you really can take on that new study (see GCP 4.2.2).  So how do you work it out?

You need to know:

  •  The total recruitment time in months.
  • How long each patient will be on-study
  • Total number of patients expected to be recruited.
  • Total number of patient visits

Work out the total number patient visits (number of patients x number of study visits) and divide by the total study duration (recruitment time + on-study time) and .  For example: A study with a recruitment period of 12 months and an on-study time of 6 months.  The study has 7 visits per patient and your site expects to recruit 10-15 patients.  Total study duration is 18 months and the total number of patient visits is 70-105.  The number of visits per month is between 3.8 (70/18) and 5.8 (105/18).

5. Maximum case load for each staff member

Overloading your employees leads to mistakes, poor quality work, burnout and dissatisfaction.   But at the same time, each employee must be generating enough income to sustain their position.  It is a hard balance.  By knowing what the maximum you can expect of each staff member helps manage expectations and accurately measure performance (the minimum is already set out in the employee’s job description).

How you work out staff case load will depend if you allocate work by project, task or other method and on the experience of the staff member.  This case load may be expressed in terms of number of studies, number of participant visits or other metric. Remember to allow time for administrative duties like checking email, filling our time sheets, training, answering the phone, breaks etc.  However, time spent on overheads should not exceed 40%.

Conclusion

Having a handle on the finances in your research unit shouldn’t be hard and with these few metrics, you should be better armed to make strategic decisions and run a successful unit.

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