Effective contract lifecycle management (CLM) is important to any business, but it’s paramount for hospitals. The increasing need to minimize costs while adhering to compliance requirements has accelerated the adoption of contract management solutions by hospitals. According to an online forecast, the healthcare contract management system market is expected to reach USD 1,763 million by 2024, growing at a CAGR of 18.5%.
Unique Contract Needs of Hospitals
Although the primary function of hospitals is to administer patient care, they routinely deal with a high volume of various types of contracts, just like any other business. However, unlike other businesses, hospitals operate in a highly regulatory environment.
Hospitals have to deal with different types of contracts, including agreements with the doctors, contracts with pharmaceutical vendors and medical equipment vendors, IT service agreements, etc. This affects every aspect of their operation. Apart from generating a vast number of contracts, hospitals handle contracts that are extremely sensitive and are highly regulated.
Related reading: 5 SIGNS YOU NEED A NEW APPROACH TO CONTRACT MANAGEMENT
As hospitals have Idiosyncratic contract management requirements, they need a solution that can match it up. Let’s explore why hospitals should be investing in a tailored CLM system rather than an umbrella contract system.
Reasons hospitals need a tailored contract management system
One solution does not fit all
As discussed before, hospitals have a complex network of regulations and contract management requirements. Many solutions available in the market offer an umbrella of features without any scope of customization that adds to the complexities of hospital contract management. Hospitals may invest in solutions that do not meet their industry-specific contract needs or may pay for features that they don’t need in their course of operation.
Reducing contract loss
Often hospitals assume that contract management solutions are costly and manual management of contracts is saving them. However, that’s not the case. Lack of robust healthcare contract management software may cause hospitals to run into compliance issues, and they may have to pay hefty penalties. A hospital, based in Detroit, had to pay a settlement of USD 85.5 million due to non-compliance caused by poor contract management.
With a contract management system designed to meet the industry-specific contract needs, hospitals get a bird’s eye view of their contracts. This helps them to ensure that all their contracts are up-to-date, especially in an environment where the rules are frequently updated, including new terms, timelines, and other guidelines. A contract management system with smart reminders and notification is a must-have feature for hospitals.
Centralized contract storage
Storing all the contracts and supporting them is essential to dispute any allegations. If hospitals have a lax approach to organizing and storing their contracts, finding the right documents at the right time to demonstrate adherence may not be easy. A customized healthcare contract management solution helps you to attain contract storage centralization & security.
Reduce administrative costs
Administrative costs associated with the contract lifecycle management process can consume your profit faster than you think. Manual contract processes bog down working hours and facilities – introducing the opportunity for error that ultimately leads to compliance issues. With an intelligent contract management system, hospitals can automate contract management process minimizing error that reduces personal cost, management cost, and compliance cost. According to online research, implementing a CLM solution reduces administrative costs by 25%-30%.
Lack of a proactive approach to contract reporting can lead to internal compliance issues. Industry law regulators can raise red flags on your operations when adequate systems and processes are not in place. A contract management system that offers customized reporting options helps in tracking huge contract data and schedule relevant reports depending on your specific requirements. This eliminates both internal and external compliance risks.
Workflow and Process Automation
If an important contract is stuck in someone’s inbox or somewhere in spreadsheets, it can easily hamper the whole contract process. This can create delays in the creation, approval, renewal, or termination of contracts affecting relationships and operations. By adopting a contract management solution, hospitals not only automate their contract workflow but also establish accountability for various contract management tasks.
Contract Process Standardization
Multiple contracts are created across various departments of a hospital. Thus, there is a need for a standard process for contract creation, submissions, corrections, approvals, and signatures. An intelligent CLM solution facilitates the standardization of the contract processes through templates and workflows. This helps hassle-free completion of all essential tasks at every step on creating and managing contracts.
Easy renewal & tracking
Contract renewal is a constant challenge for healthcare facilities with a large volume of contracts. While under-performance of CLM affects the operation of your hospital, underpayment it causes takes a hefty bite out of annual revenue. As there are many healthcare institutions that operate at a thinner profit margin, contract lapse or auto-renewal might just not be an option. A CLM system allows hospitals to take control over the control renewal decision. CLM solutions make contract tracking easier by compiling all the contracts in one place. With improved visibility and using reminder settings of the contract management system, hospitals can enhance their contract renewals.
Vuram’s Contract Management System is a fully customizable, configurable, and user-centric solution designed for agile enterprises. An intelligent, plug-and-play, and award-winning solution, it enables enterprises to go live in less than two weeks with almost zero coding.
For implementing a seamless contract management infrastructure or a demo, write to email@example.com.