Physician, heal thyself. How healthy is your contract management process and oversight? Do you understand the long term financial impact of not treating your condition promptly?
Complexity - A Chronic Illness That Can Be Managed
Beset with enormous complexity, from privacy and HIPPA issues, to compliance auditing, to unrecognized chronic underpayments, to contract negotiation lost opportunities, inefficient management of contracts comes down to achieving better operational efficiency and ultimately to reducing healthcare contract management complexity.
Frequently without well-defined end-to-end processes, and with many providers continuing to support the legacy of 20th century business methods and procedures, effective contract management provides the opportunity for healthcare companies of all shapes and sizes to improve operational efficiency, eliminate manual forensic processes that are slow, labor intensive and error-prone and to finally get a real sense of their legal, financial and operating exposure. Properly implemented, the result is improved operating margins.
Buy-side and Sell-side Agreements
Let’s explore one issue that is pretty common within healthcare and across other industries, the instance of buy-side and sell-side agreements. Simply put, buy-side agreements are agreements where you are contractually bound to purchase certain goods and services from a supplier. In sell-side agreements the opposite is true. A supplier, a customer in this instance, purchases goods and services from you. So what happens when you are unable to pay a supplier and a supplier also owes you money? This should be simple to solve, right? With potentially hundreds of suppliers and many thousands of customers, at any point in time, how do you accurately even know where and how many such relationships exist?
Historically, in organizations large and small, buy-side and sell-side contract management and related repositories have been physically and philosophically separate. The tendency is to assume that because purchasing and billing activities are separate, there is no particular advantage to a common repository or an opportunity to mine the data to discover where synergies exist and when disconnects are present. The advent of Cloud-based Contract Life-Cycle Management (CLM) solutions with deep internal document search and reporting, provides a unique opportunity to improve operational efficiency and increase operating margins in ways that up to this point have been difficult, highly error-prone and staffing intensive.
Benefits of Buy/Sell Side Contract Aggregation: Where Opportunity Can Be Found
The benefits of Buy/Sell side agreement aggregation are numerous, but what are they?
Elimination of disparate personal and organizational silos. One silo for everyone. Better control and understanding of overall contracts landscape. Access rights management strictly controls what users can view, what they cannot view and what they can change.
Quickly obtain a clear and accurate understanding of all instances where suppliers are also customers.
Improved understanding of where supplier goods and services transactions are linked to customer deliverables through contracts. Understand instances of where supplier purchased deliverables are refined/integrated into your products and services and resold to your supplier, as a customer. Better understand delivery deficiency impact by your suppliers and how it impacts your customer deliverables.
Better executive decisions through improved awareness of compliance, liability, risk and opportunities for tangible savings. Every contract now visible and reportable enterprise-wide. All contract actions are recorded and auditable. Improved compliance by providing procedural requirements to audit contractual arrangements.
Closer alignment of contracts with corporate strategy. Better decision making through having a “complete picture”, thus balancing both sides of the business.
Automatic event and reminder notification management assures that key events are not missed. Savings through the elimination of unwanted contract renewals.
Enforce strict adherence to corporate standard terms and conditions through the use of templates and approved clause libraries. Use multiple approval templates to assure that agreements of a certain value, type, type of customer or supplier, etc. receive the correct review, oversight and awareness.
Don’t just rely on term sheet data, which may be incomplete. With a deep, internal document “power search” enabled CLM solution, search for any term, language, word, value, etc. across hundreds of thousands of documents in a data set,(including PDF internals), allowing CEOs and CFOs to quickly and accurately understand and react quickly to minimize liability when unexpected contractual problems occur.
Contract Life-cycle Management. The Cure!
If you are a HMO, a Hospital, a Managed Care Organization, a Central Verification Organization, an Insurance Company, a Pharmaceutical Company or Manufacturer or a Medical Claims, Billing or Data Processing Organization and you do not recognize the opportunity to increase operating margins by reducing contract management complexity, now may be a good time to investigate how a well implemented Contract Life-cycle Management (CLM) solution and buy-side/sell side contract repository aggregation can help you to improve your bottom line. Best of all, ROI is fast, real fast.
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