When it comes to the healthcare sector, contract management touches multiple levels and it affects the organisation in a different way to other businesses – because you are dealing with people’s lives.
According to recent report published by Markets and Markets: “The healthcare contract management software market is estimated to be worth USD 1,763 milliion by 2024 from a value of USD 755 million in 2019. The growing need to reduce operational costs (while increasing the operational efficiency of healthcare organizations) and the growing need to maintain compliance with regulatory mandates are key drivers of the market.”
Any healthcare facility that has not moved over to digitising contract management should consider the following thoughts.
Strict compliance rules and ethics for patient safety
Medical organisations work under stringent rules with demanding compliance regulations, and rightly so as a loose-cannon approach to medicine is reckless and illegal, not to mention ethically shady as patients are put at risk.
Sourcing medication and medical devices from unverified dealers can endanger lives, whilst cutting corners to boost the bottom line could result in serious human casualties. Or just being overwhelmed by too many loose threads and sloppy paperwork can cause critical errors. This underlines the utmost importance of having a transparent, vigorous process that helps to mitigate risks.
A good system will also keep track of medical patents and when they expire, which generic brands are becoming available and which drugs are being discontinued or released. Monitoring contracts for equipment maintenance is also just as important.
Above all this, there is a lingering presence of the legal department over every area in a healthcare facility as mistakes and failures can have serious repercussions. A proper Contract Management System will help an organisation stay on the right side of the law.
Medical staff members are involved in procurement/contracts
Medical staff such as doctors and nurses need to be intrinsically involved in the procurement/contract process becuase of the specialist knowledge they bring to the table and they understand what is needed for the job. Medical personnel can interact directly with suppliers and take any concerns to them and learn about new medicines, procedures, etc. and vendors can be pre-approved after a thorough official selection process.
Security and traceability
Medical facilities, especially the larger ones, deal with countless contracts and procurement agreements every year. To keep these all in-order requires more than just a few spreadsheets.
Often, procurement and contracts involve complex supplies and services and employees need to have the latest information built into the system to enforce accuracy and compliance, especially when there is a long chain for approvals.
This is where automated workflow comes into its own. It provides security and traceability and there can be a clear view of who has accessed the system and a detailed order history. This clamps down on fraud and theft of sensitive supplies such as prescription drugs.
Contract Managers must keep tabs of a large range of contracts, from medical agreements and patient transfers to services such as catering and cleaning. This is no small undertaking!
Markets and Markets recent report discusses growth in Contract Management software use in the APAC regions is “driven by the increasing need for complete transparency, rapid return on investment (ROI), and high level of data security…a number of healthcare organizations in Asia are actively moving towards digitisation to streamline their entire workflow and ensure patient care and safety.”
Budget control and working with health insurance providers
Budget is always the big stick that tries to keep things in check, but the pressing needs of a healthcare facility can stretch the budget to its limits and unchecked spending can sink even a well-managed ship. These organisations must have the means to monitor payments and spending.
HIT Infrastructure published a study conducted by Black Book Market Research, manual contract management cost healthcare providers and systems nearly $157 billiion per year.
“The majority of US health systems are struggling with manual contract tasks and fragmented contract processes”, said Doug Brown, Managing Partner of Black Book.
“With the average hospital margin thinning to less than two percent, and the need for accurate, accessible and actionable information on the cost of care delivery for health system survival, boards and senior executives are concluding that understanding and managing contracts is mission critical,” said Brown.
In addition to the daily operating costs, healthcare organisations need to deal with health insurances and reimbursements. A comprehensive and up-to-date system that has all the costs, codes, rules, etc. embedded is indispensable in this department.
Hospital and other healthcare services have mountains of documents such as patient records, claims and insurance payments which can build up into a mess of unstructured data and paperwork if they’re not digitised correctly. All these files need to be streamlined and standardised in a centralised and integrated cross-departmental system.
Contract Management Solutions for the healthcare sector
Seeing that healthcare is a multi-faceted industry, it has its own set of contract management requirements, making a customisable solution preferable as it can be built to the exact needs of each facility.
By Jeannie De Vynck