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Tactical and Strategic Planning for Small IRBs

Dale Theobald, MD, PhDIRB Chairman

Community Health Network

Parker Nolen, MBA CCRC CIPDirector, Research Compliance and Regulatory Affairs

Community Health Network

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Disclosure: Dale Theobald, MD

I have no relevant personal/professional/financial

relationship(s) with respect to this educational activity

Community Health Network Chairman, IRB

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Disclosure: Parker Nolen MBA

I have no relevant personal/professional/financial

relationship(s) with respect to this educational activity

Community Health Network Director, Research Compliance

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Overview

Part 1: Case StudyPart 2: “The Business”

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A CASE STUDY – “THE COMMUNITY WAY”Part 1

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About CHNw

• 200 sites of care

• 10 acute care and specialty hospitals

• 13 ambulatory pavilions

• 9 surgery and endoscopy centers

• >600 Physicians

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Types of Research

Clinical Trials - Drug

Clinical Trials - Device

Clinical Trials - Other Intervention

Genetic Studies

Clinical Outcomes Research

Basic Research

Qualitative Research

Imaging and Diagnostics

Chart reviews/case reports

Registry or Repository

Training/Education/Quality Improvement

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Internal 73%

External 27%

Users of the Network IRB

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• 3 other large health care providers in region • Indiana CTSI (IU, Purdue, Notre Dame)• All have established research programs• Implementation of the ACA

– New and different economic pressures on providers

– Baseline question: • “Can we survive on Medicare reimbursements

only?”

The Operating Environment

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• Outsource IRB functions completely– Transfer costs – Maintenance costs– Organizational Values

• Partner in a hybrid model– Very few partners available– Cost considerations

• Shut-down research – Teaching hospital – Not an option

• Get lean

Options

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• Meetings lasted 2.5 hours• Used only Full Board review

– Even Expedited- and Exempt-eligible items• Electronic tracking system broken • Board members received 400-600 pages• 26 members on 1 board• Questionable composition

– Unaffiliated meant retired employees– Non-scientific meant not an MD– Diversity meant only gender

• No SOPs• Met 1x Monthly• TAT ≈ >60 days (regardless of item)

October, 2013

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Very Satisfied16%

Satisfied26%

Neither Satisfied nor Unsatisfied

34%

Unsatified24%

Customer Satisfaction 2013

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• Unacceptable TAT• Unacceptable customer satisfaction (< 50%)• Inefficient use of Full Board review• Meetings too long• Membership composition issue• Electronic tracking system inhibiting compliance• No meeting cost had ever been calculated• Meeting Cost per hour ≈ $1000 (prime cost)

Our Analysis

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• More efficient use of Full Board time– What can be handled administratively?– What REALLY requires Full Board review?

• Quicker TAT• Higher user satisfaction• Better compliance• Reduce costs

What did we want?

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• Re-paneled the IRB– Moved from 1 Board to 5 Boards

• Considered multiple Board compositions– Prime cost critical consideration– Personalities also an important consideration

• Increased meeting frequency– 1x month to 1x week

• Staff triage/Pre-Review of submissions• Expedited/Exempt reviews handled by staff*

How did we do it?

* non-scientific and administrative items only

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• Contracted for different electronic system– Translation: we are temporarily a paper-based IRB

• Created new forms to serve as:– submission– documentation of review – written determination

• Drafted and implemented new SOPs• Eliminated submission deadlines• Committed to 72 hour TAT metric

How did we do it?

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• 4 Regular Boards• 1 Emergency Board• Each Panel meets composition requirements set forth in

21 CFR 56.107 and 46 CFR 46.107– At least five (5) members– Varying backgrounds– Sufficient qualification of members– Diversity with regard to race, gender, culture– Professional Competence– At least one (1) nonscientific member– At least one (1) unaffiliated member

• Consultants used for specialty gap• Member commitment is the same – 1x month• Investigators see weekly meetings – 4x month

New Boards

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Panel Assignments

* Board 5 is Emergency Use/Compassionate Use only (not regularly scheduled)

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• Critical variable in transformation• IRB Volunteer ≠ No cost• Focused on identifying the Prime Costs

– Prime costs are the costs directly incurred to create a product or service.

• Prime costs do not include indirect costs, such as allocated overhead.

• Administrative costs are generally not included in the prime cost category.

The Cost of Meeting

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Legacy NewOne (1) Panel Four (4) Panels1x Month 4x Month≈ 2.5 hours per meeting ≈ .25 hours per meeting≈ $1,000 per hour prime cost ≈ $300 per hour prime cost≈ $2,500 meeting cost ≈ $75 meeting cost≈ $30,000 annual prime cost ≈ $3600 annual prime cost

Legacy vs. New

$26,400 reduction in Prime Costs

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Performance Metrics

Source: 2013 AAHRPP Metrics on Human Research Protection Program Performance for Hospitals – Updated August 1, 2014

October 2013

September 2014

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THE BUSINESS – TACTICS AND STRATEGIESPart 2

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Then…

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Now…

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• Those remaining four airlines control 80% of the market

Result of airline consolidation?

"...Data collected by the Airports Council International, a trade group, found that the nation's smallest airports lost 10 to 15 percent of their scheduled flights from June 2006 through this June. Medium-size airports, meanwhile, lost 18 percent of their scheduled flights....

...Nearly 200 airports, most of them tiny and many in remote places, have lost air service entirely since 2008....Airlines have made a deliberate decision to forgo certain markets...Their new business model is leaving communities disenfranchised and disconnected from the global marketplace.

(Mouad, Jad. "Lost Jobs, Lost Flights." New York Times 09 July 2011)

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What business are we really in?

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• Affordable Care Act• Consolidation and Globalization among

Commercial IRBs• AAHRPP supporting consolidation and

globalization• University of Minnesota tragedy

– Possible Congressional hearings • Emergence of mHealth• Single IRB Review is here

State of the Clinical Research Industry

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• Will local IRBs have relevance?• Will our field remain “Professional” at the local

level?• Will our institutions have access to Sponsored

research?• Will our patients have access to novel points of

care?

Implications for Small IRBs

Yes! But…

Small IRBs must be strategic in their thinking and creative in approaching their operations and their cost/revenue analysis

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• Market Forces• SWOT Analysis• Market Strategy• Competitive Advantage• Value Chain• Core Competence

Business Concepts

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Five Market Forces

Threat of new

entrants

Bargaining power

of suppliers

Bargaining power

of buyers

Competitive Rivalry

Strategic

Position Threat of substitute

s

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SWOT Analysis

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• Efficiency – – matching or beating AAHRPP Metrics

• Cost Allocation/Overhead• Cost of Operation/Marginal Costs• Specialization

Potential Strengths

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• Bloated Board• Wordsmithing• Long TAT• Board Personalities• Lack of reviewer specialization

Potential Weaknesses

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• Possible partnerships– Academic– Institutional

• Reciprocal reviews– Network/Multi-site review

• Mergers with other IRBs in the area• Minimum necessary allows agility

Potential Opportunities

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• Single IRB Review• Cost pressure/Revenue squeeze• Market Consolidation in for-profit IRBs

Potential Threats

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• Figure out what your IRB wants to be– Porter’s Three Strategies

• Figure out how to do it– Strategy vs. Tactic

• Develop a relationship with Finance• Identify your Core Competency• Identify your Competitive Advantage• Calculate your Net Present Value (NPV)

How do I address the SWOT?

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Porter’s Three Strategies (1980)

Cost Leadership Differentiation

Niche (Focus)

Stuck in the Middle

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• It is exactly what it sounds like.

• The low-cost leader in any market gains competitive advantage from being able to produce the product/service at the lowest price.

• This is a strategy that can be leveraged by institutionally-based IRBs!

Cost Leadership

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• Allows companies to charge high prices and focus on a volume that generates a better margin

• This will incur additional costs in creating a competitive advantage.– Example: Creating an oncology research

specialty

Differentiation

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• Identifiable and unique needs• Sufficient size

• Difficult, but doable!

Focus strategy (Niche strategy)

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• The total amount that buyers are willing to pay for a product/service

• The difference between the total value (or revenue) and the total cost of performing all of the activities provides the Margin

• Value Chain

Value

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• Two categories– Primary Activities (Review, Determination)– Support Activities (HR, Accounting, etc…)

• All activities to design, produce, market, deliver, and support the product/service (Porter, 1980)– IRB Software– Salaries– Space

Value chain

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• Identify capability in which you excel• Focus on opportunities in that area, letting

others go or outsourcing them.• Capability is difficult to duplicate• Involves the skills and coordination of

people across a variety of functional areas or processes used to deliver value to customers.

Core Competency

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• Three building blocks:

a) the external environment, including society, market, customer, and technology;

b) the mission of the organization; and

c) the core competencies needed to accomplish the mission.

• Four criteria:

1. assumptions about the environment, mission, and core competencies must fit reality;

2. the assumptions in all three areas have to fit one another;

3. the theory of the business must be known and understood throughout the organization; and

4. the theory of the business has to be tested constantly.

Competitive Advantage

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• In what area does my IRB excel or specilaze?– Eye institute?– SBH?

• What areas can we outsource/delegate?– Specialty review consultants as opposed to keeping a large

membership roster?

• Who are my customers?– Service orientation is crucial– Educator, not enforcer

• What are my built-in advantages?

So ask yourself…

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• Cost and Overhead Allocations– Departmental allocation only?– Work with finance people to spread costs over

institution/network as a shared service• May not be possible, but if you’re a multi-site IRB, it

is probable.• Not an easy argument – be prepared!

• Marginal costs are low– Allows innovative pricing/revenue models

Built-in Advantages to local IRBs

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Strategy vs. TacticStrategy• Is the “What”?• Defines goals• Larger plan made up of

several tactics

• Examples:– Make our Local IRB

desirable for Sponsors to use by offering multi-site approvals

Tactic• Is the “How”?• Specific actions• Implements the strategy

• Example:– Aligning with another

Local IRB through merger or reciprocal agreement

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Put another way…

Source: http://www.uxmatters.com/mt/archives/2015/02/strategy-versus-tactics.php

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• Calculate Net Present Value (NPV) to your Organization

• Know what your product costs!!!– How much does it cost to run a meeting?– How are our overhead costs allocated in the

organization?• Can they be shared across a wide population/large

number of regions/departments?

• What are we doing that doesn’t need to be done?

Things to immediately understand

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NPV Definition and Formula

 “r” represents the rate of return.  It is determined by industry and usually ranges from 8% – 15%.

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Put another way…

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Develop Geographic Footprint

• Why? – Create a critical mass

of sites– Want to be attractive

to the Sponsors• How?

– IAA?– Reciprocal Reviews?– Merger?– Commercialize?

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AAHRPP

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2015

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201X

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Conclusion

• Keep abreast of industry trends• Know your SWOT• Identify your Core Competencies• Identify your Competitive Advantages• Identify your costs/potential revenue• Build a relationship with Finance• Consider Alternative Models

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Contact Information

Dale Theobald, MD, PhDParker Nolen, MBA, CCRC, CIP

IRB@eCommunity.com

(317) 355-5678