This document discusses strategic and tactical planning considerations for small institutional review boards (IRBs). It begins with a case study of an IRB's transformation at Community Health Network that increased efficiency and customer satisfaction. Key changes included restructuring the IRB into multiple boards that met more frequently, expediting eligible items, implementing new electronic systems and standard operating procedures, and calculating meeting costs. The second part discusses applying business concepts like market forces, SWOT analysis, competitive strategies, value chain, and core competencies to help small IRBs address challenges and leverage strengths in the changing research environment.

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Tactical and Strategic Planning
for Small IRBs
Dale Theobald, MD, PhD
IRB Chairman
Community Health Network
Parker Nolen, MBA CCRC CIP
Director, 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 Study
Part 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 Satisfied
16%
Satisfied
26%
Neither Satisfied
nor Unsatisfied
34%
Unsatified
24%
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 New
One (1) Panel Four (4) Panels
1x 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 STRATEGIES
Part 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
substitutes

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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. Tactic
Strategy
• 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, PhD
Parker Nolen, MBA, CCRC, CIP
IRB@eCommunity.com
(317) 355-5678