© Huron Consulting Services LLC. All rights reserved.

1. Yale School of Medicine Yale Center for Clinical Investigation Regional Clinical Research Management Workshop February 22, 2011 © Huron Consulting Services LLC. All rights reserved.

2. Agenda • CRC Organization Improvement • Cost Recovery Initiative 2

3. Introductions

4. Introductions • Rick Rohrbach, Managing Director • Experience: 18+ years • Focus Area: Strategic planning, and performance improvement for the research mission of academic medical centers and health systems. Lead Huron’s Clinical Research Services team. • Recent Clients: Dartmouth University, University of California at San Francisco, Weill Cornell Medical College, Premier Health Partners, Kansas City Area Life Sciences Institute Kathleen Shaw, Director • Experience: 15+ years • Focus Area: Academic Medical Center strategic planning, operations improvement, financial planning, budgeting, feasibility studies, physician compensation and revenue cycle improvement • Recent Clients: Northwestern University, Duke University, University of California at San Francisco, George Washington University 4

5. Topic 1 CRC Organization Improvement

6. CRC Organization ImprovementEngagement Overview • Phase II • Develop / Deliver • Phase I • Initiate / Discover / Design UCSF CTSI Clinical Research Services - Identify cost reduction and revenue enhancement opportunities

7. UCSF CTSI Clinical Research Services UCSF’s CTSI is among the first of the CTSA awardees and is also one of the largest and most complex • 10 research units at 8 sites • 5 university-owned • 3 affiliate relationships • 250+ investigators • 365 inpatient and outpatient protocols annually • Two-thirds of annual budget provided by CTSA funds 1 8 2 7 3 Sample Processing Labs Core Labs Clinical Coordinators Bionutrition 4 6 Body Composition & Exercise Labs Administrative Managers 5 7

8. Information Review & Analysis Quantitative Qualitative Reflective Requires self-evaluation Provides perspective Facilitates learning Informative Identifies differences Indicates potential improvements Indicative 8

9. Opportunity Prioritization Several tools are used for opportunity prioritization to set the stage for final recommendations and implementation planning. $1 MM $750 K $300 K $400 K $250 K1 $100 K $150 K $500 K $0 $50 K $75 K Higher Opportunity #4 $100 Opportunity #1 $30K Opportunity#2 $50 Opportunity #7 $150K Opportunity #8 $900 K Viability Moderate Opportunity #6 $230K Opportunity #3 $60K Opportunity #5 $140K Lower None/NA Minor Moderate Material Substantial 9

10. Topic 2 Cost Recovery Initiative

11. Cost Recovery • Step 2: Negotiate & Budget • Recharge budget • Step 3: Recharge • Activity / invoicing • Step 1: Cost • Full cost budget for CRS services As part of its CTSA renewal, UCSF CTSI has made a commitment to expand its cost recovery efforts via a more formal and structured recharge process. Charge to Core Programs Recharge Goals Reduce dependence upon core CTSA funding Optimize revenue generation from recharge and institutional support Offsets to expected cuts in institutional and CTSA grant support, given California State budget cuts, and expected decreases in CTSA renewal level Increased ability to support early stage research for young and under-represented faculty Incremental funds to enable continued enhancement of services and infrastructure Cost Recovery Process • Direct costs by core • Facility fees • Administration fees • Indirect costs • Study type • PI experience / level • Total grant budget • Budget flexibility • Monthly utilization or volume by study • Charge master / rate agreements • Single charge against DPA account • Activity report to PI 11

12. Core Base Level of Service vs. Full Cost & Recharge The UCSF CTSI CRS cores have traditionally employed the concept of a base level of service provided “free of charge” to investigators. This concept is changing. Historical: Base Level of Service New Model: Full Cost + Recharge • Historical approach describing base level of services provided for clinical studies at no charge to the PI / study • Constructed around concept of: • Differentiating service by levels of intensity or complexity; • Identifying non-standard activities; • Providing basic level of consultation services to help PIs design studies • Limited relationship with actual costs of providing services • Recharge / recovery on Category “D” studies marginally linked to service costs • Essential business management activity: fully costing all services provided for better assessment, control and management • Acknowledges cost of doing business and concept of “shared” investment in research across PI/CTSI-CRS/mentor/and department/division • Formalizes and standardizes, wherever possible, policies • Clearly differentiates between “cost” and “recovery” 12

13. Costing Approach Using a costing tool, direct protocol activities are identified and costed based on established use rate / activity level rules. Indirect costs and use fees to cover rent, equipment maintenance and general supplies are charged based on space usage. 13

14. Key Recharge Policies While final recharge policies are still being formalized, CRS leadership has agreed upon a set of key principles. • Investigators submitting “new” and/or “renewal” grant applications, and who intend to use CRS to conduct their study, should include full, allowableCRS costs in their grant budgets • All new CRS applications received, where sponsor funding was secured prior to the new cost recovery initiative, will be “grandfathered” in under the old “Core Base Level of Service” policies • Costs are to reflect actual infrastructure differences by study site, e.g., rent variations • CRS will recover full costs on studies funded by industry • Studies funded by NIH and other non-profit entities have some expectation of cost recovery • Studies led by early career investigators will not have recovery expectations • Cost recovery is not a mechanism to generate profits, but an initiative to offset a portion of costs 14

15. Questions?

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