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

Agenda I.CRC Organization Improvement II.Cost Recovery Initiative 2

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 Introductions 4

Topic 1 CRC Organization Improvement

CRC Organization Improvement Engagement Overview 6 UCSF CTSI Clinical Research Services - Identify cost reduction and revenue enhancement opportunities Approach & Outputs  Cost value mapping  Process analyses and process mapping  Database of opportunities  Business case development  Risk assessment  Cost savings and resources defined In-Scope Locations  UCSF Medical Center – 12 Moffitt  UCSF Medical Center – 6 Moffitt  SFGH  Mt. Zion  Tenderloin CRC Project Phases Phase I Initiate / Discover / Design Phase II Develop / Deliver Project Objectives  Review of operational efficiency and organizational resources and alignments  CRC resources  Financial management  Research support services  CRC utilization  CRC technology support  Recommendations for design, optimization, priority, resources, and savings to support UCSF researchers in high quality clinical trials, clinical research and services

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 7 10 research units at 8 sites o 5 university-owned o 3 affiliate relationships 250+ investigators 365 inpatient and outpatient protocols annually Two-thirds of annual budget provided by CTSA funds UCSF Clinical & Translational Science Institut e Clinical Research Services SFGH Moffitt Hospital Adult Mount Zion NICCU Moffitt Hospital Pediatrics Tenderloin CHORI Adult CHORI Pediatrics Kaiser SFVA Body Composition & Exercise Labs Sample Processing Labs Clinical Coordinators Bionutrition Administrative Managers

Information Review & Analysis 8 Huron Proprietary Data Database of past opportunities Ratio analysis Key performance metrics Subject matter experts Internal Data Requests Actual financial data – Y3-4, Y5 YTD Budgetary data – Y5 Organizational charts: CTSI and cores Position descriptions Training documents Process maps Public Research Websites Annual reports Organizational charts Process maps Policy inventories Meetings and Interviews CTSI / CRS Leadership interviews One-on-one faculty and staff interviews Medical directors Key PIs Core directors / managers Desk reviews, e.g., Protocol managers Admin directors Huron’s proprietary network of contacts (external) Reflective Informative Indicative Requires self-evaluation Provides perspective Facilitates learning Identifies differences Indicates potential improvements QuantitativeQualitative

Distribution of Implementation Consideration  Opportunities are presented over a range of service impact, risk, and implementation difficulty.  Prioritization weighs these factors along with the potential dollar value of the opportunity. Service Level ImpactRisk to UniversityImplementation Difficulty Opportunity Prioritization Several tools are used for opportunity prioritization to set the stage for final recommendations and implementation planning. 9 Cost Reduction and Revenue Enhancement Opportunities: Viability v. Financial Impact Assessment None/NA Minor Moderate Material Substantial Viability Lower Moderate Higher Opportunity #8 $900 K Opportunity #1 $30K Opportunity #3 $60K Opportunity #4 $100 Opportunity #6 $230K Opportunity #2 $50 $250 K 1 $50 K$75 K $100 K$150 K $1 MM $300 K$400 K $500 K $750 K $0 Opportunity #5 $140K Opportunity #7 $150K

Topic 2 Cost Recovery Initiative

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

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. 12 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” Historical: Base Level of ServiceNew Model: Full Cost + Recharge

Costing Approach 13 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.

Key Recharge Policies 14 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, allowable CRS 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

Questions?

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