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STRATEGIES THAT INFLUENCE COST CONTAINMENT IN ANIMAL RESEARCH FACILITIES Introduction The Committee on Cost of and Payment for Animal Research, in the National Research Council's Institute for Laboratory Animal Research (ILAR), was appointed to advise federal funding agencies and grant awardees on two matters: (1) Develop recommendations by which federal auditors and research institutions can establish what cost components of research animal facilities should be charged to institutions' indirect cost pool and what animal research facility cost components should be included in the per diem charges to investigators, and assess the financial and scientific ramifications that these criteria would have among federally funded institutions. The results of this phase of the study were to be released in an interim report within 6 months of receipt of funding. (2) Assess and recommend methods of cost containment for institutions maintaining animals for biomedical research. The first phase of the committee's activities concluded with the publication of the ILAR report Approaches to Cost Recovery for Animal Research: Implications for Science, Animals, Research Competitiveness, and Regulatory Compliance (NRC 1998). In that document, the committee recommended that institutions be allowed to recover facilities and administrative (F&A) costs of animal research facilities from the indirect cost pool to be consistent with the allocation of F&A costs for other research space, to ensure high-quality animal-based research, and to ensure humane care of animals consistent with federal regulations. After publication and public discussion of the committee's report, the Office of Grants and Acquisition Management issued an administrative
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STRATEGIES THAT INFLUENCE COST CONTAINMENT IN ANIMAL RESEARCH FACILITIES clarification of Circulars A-21 and A-122 (Action Transmittal OGAM AT 2000-1, dated November 15, 1999, Appendix A) to authorize the allocation of some costs to the F&A cost pool as suggested by the committee. Specifically, those costs were related to procedure rooms, operating and recovery rooms, isolation rooms, quarantine rooms directly related to research protocols, and rooms that house research animals that are not generally removed from the facility for conducting research. Institutions are still required to document, through space surveys, the particular research projects conducted in research space included in the F&A pool. Given those clarifications, an NIH committee completed work on a year 2000 revision of A Cost Analysis and Rate Setting Manual for Animal Research Facilities (CARS Manual). The manual was originally produced by NIH in 1974 and revised in 1979. It has been widely used for cost analysis and rate setting in animal research facilities. The 2000 revision of the manual will bring it up to date with federal cost policies and the technical evolution in the animal research facilities. The ILAR committee's final objective was to analyze the costs entailed in the care and use of animals in biomedical research and to develop useful indicators for institutions to use in scaling their performance efficiency and evaluating their overall support systems for research animals. The committee was also given the charge of assessing and recommending methods of cost containment for institutions that maintain animals for biomedical research. The committee has drawn on a variety of sources to meet its objectives, including published reports in the literature, personal communications with experts in the field, the opinions of the committee's own members, and two survey documents that were available in whole or in part to the committee. The main survey document used by the committee was the 1999 Animal Resources Survey (1999 ARS), conducted by the Yale University School of Medicine's Section of Comparative Medicine and analyzed by the Division of Biomathematics and Biostatistics in the Columbia University Department of Pediatrics. Of 130 academic institutions contacted (including the top 100 recipients of NIH funds for 1995), 63 responded to the survey, for a nearly 50% response rate. The total research budget was greater than $50 million for 42 institutions, between $10 and $50 million for 15, and less than $10 million for six. The 1999 ARS questionnaire and a tabular summary of the findings are provided in Appendix C. The survey produced a wealth of descriptive information needed to characterize many variables relevant to contemporary animal care and use programs and practices, but it failed to yield detailed and compelling information about the linkage of costs to the quality of animal care in many areas. Also, a summary of the conclusions, but not the underlying data, of a survey conducted by the Ohio State University, Office of Research, for the Committee for Institutional
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STRATEGIES THAT INFLUENCE COST CONTAINMENT IN ANIMAL RESEARCH FACILITIES Cooperation (CIC study) was available to the ILAR committee for review and consideration. The CIC study included 12 institutions—10 midwestern state institutions and 2 private institutions. Although a small study, it was carefully conducted, with each institution completing a questionnaire and then being visited by an accountant to ensure accurate, high-quality data. This qualitative information is provided in Appendix B to provide readers with an overview of the trends and consequences of various provisions for animal care and use practices in different institutional settings. Although the approach chosen by the committee has not resulted in the creation of a menu of validated, cost-effective indicators that could predict program excellence or success, it should serve as a useful starting point for institutions involved in planning and conducting cost analyses of their own programs. Institutional philosophy and needs, such as type of barrier housing for rodents and degree of centralization of the animal holding space, have a large impact on costs. Thus, concepts and suggestions made in this report should be used to explore the cost implications of an institution's arrangements for animal care. It should be noted that although many institutions use the NIH CARS Manual, there remains considerable interinstitutional variation in what is assigned to various cost centers. This variability makes it difficult to compare figures from different institutions and to assess the effectiveness of various cost-saving maneuvers. Furthermore, there is a great reluctance of institutions to share financial data, in that they hold such information to be highly sensitive and confidential. The committee recommends that institutions devote effort to using the newly revised CARS Manual so that the size of various cost centers can be assessed across institutions. A future survey could then collect data on the magnitude of the various cost centers as a function of such variables as species mix, physical plant layout, veterinary services, and personnel mix. It should also be noted that this report emphasizes containing the costs of using mice in research because they are the most common animal used and, in the experience of the committee, account for a sizable portion of the cost of operating an animal research facility. Furthermore, it is the opinion of the committee that opportunities for cost containment occur most frequently in the care and use of mice. In general, most institutions have witnessed a decline in the use of larger animals (such as nonhuman primates, dogs, cats, pigs, small ruminants, and rabbits) as part of their research portfolio, and costs associated with large animals no longer dominate the total cost of most programs. The cost of care per individual animal of these species has long been known to be high, prompting many institutions to identify the most cost-effective approaches that optimize
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STRATEGIES THAT INFLUENCE COST CONTAINMENT IN ANIMAL RESEARCH FACILITIES the care of these species according to the constraints imposed by the institutions' facilities and programs. Several aspects of a modern ARF are discussed in this report. Personnel costs account for 50-65% of the total costs of an ARF. Hence, a major portion of this report is devoted to reviewing methods of containing personnel costs. Then the cost of complying with regulations is discussed, followed by a consideration of the costs of veterinary medical care. Such issues as veterinary staffing levels and appropriate use of well-trained technicians are considered. Management practices are critical to the efficient operation of an ARF. Administrative aspects of facility operation and animal husbandry practices are both discussed. Impact of facility design on the costs of an ARF is discussed, including some ideas about automation of certain routine tasks. Finally, some ideas about future directions in the use of animals in research are presented and the impact of those research needs on facility capacity and design are discussed.
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