Hospitals enter into tons of contracts with individuals, groups, entities, and even government agencies for all sorts of reasons. Managing a portfolio of this size and scope can be quite challenging, especially without the use of a comprehensive contract management solution. Of course, it is highly unlikely that a hospital contract management team relies on spreadsheets alone. But, not all contract management solutions are created equally. It is important to invest in one with robust security standards and features that facilitate oversight, particularly a reporting tool. Here is how custom reports can help with understanding a hospital's contracts:
Type of Contract
The healthcare industry is heavily regulated, and many of the contracts a hospital enters will have to comply with certain rules and regulations. This is true irrespective of the type of contract, as many vendors and business associates are expected to comply with laws such as HIPAA by virtue of their association with an entity that falls under the law's mandates. Of course, there will also be contracts relating to employment matters, supplies, technology, and so many other goods and services, as running a hospital is quite an endeavor. In light of the many types of contracts in the portfolio, having a report generation tool that provides a snapshot based on contract type will be critical to keeping things straight.
Length of Agreement
Contracts come in a range of shapes and sizes with some simply covering a one-off action and others stretching over years and perhaps even decades. The length of a contract obviously has a significant impact on when and how it is managed, and sometimes the intensity of the shorter agreements require adjustments to the management process. Thus, being able to analyze contracts on the basis of their length will be incredibly helpful for the contract management planning process and for making determinations as to how to allocate resources effectively.
Timing of Deliverables
In addition to the length of the contract, many agreements mandate specific deliverables at preset intervals, whether bi-weekly, monthly, quarterly, or annually. For hospitals, ordering supplies will be a huge component of contracting and tangible items will likely be delivered on a daily or even weekly basis. There clearly has to be storage space for these items and personnel to receive and organize it. This is also an area where cost overruns are more likely to occur due to issues with quality, inconsistent inventory practices, and redundant ordering. Therefore, creating reports based on the timing of a deliverable or the actual delivery of supplies will be critical to budgeting.
For most hospitals, contracting no doubt comprises a hefty portion of its annual budget. As mentioned, there will be contracts affecting payroll, taxes, equipment, supplies, and so on. Because of the tremendous effect that a contract will have on the hospital’s operating budget, it is imperative for the team to focus on diligent performance and meticulous compliance. When something goes wrong with a contract, the ensuing fallout can and likely will result in some serious financial consequences, especially if it makes its way to a courtroom. Clearly, all contracts must be managed carefully, but some are going to have more of an impact on the company budget than others. As a result, generating a report that highlights contracts that carry serious financial ramifications will help the team to identify those requiring a bit more oversight. Reporting may also help reveal costly deficiencies during an internal auditing of the portfolio.
Ultimately, a contract management solution with a reporting feature ensures that the team has access to real time information that will influence the manner in which the entire portfolio should be managed.