Top Contract Management Trends Impacting Healthcare
Earlier this year, we discussed some contract management trends that affect company operations and culture. As a new year approaches, how will contract management trends continue and develop, and what do they mean for the healthcare industry?
Managing resources more effectively and reducing waste are essential goals for contract management in any industry. For healthcare, these goals are even more pressing. The U.S. population is aging, which tends to involve an increase in demand for healthcare services. Meanwhile, since healthcare is a frequent subject of political debate, healthcare leaders must stay on top of possible changes to insurance structures and reimbursement plans.
Changes to Medicare and Medicaid, increases in enrollment in high-deductible insurance plans, and more affect revenue flow for healthcare organizations. Monitoring which costs patients are responsible for and which are handled by insurance payers, for example, may signal that a hospital needs to devote attention to preparing financing plans for more patients.
Contract management is an excellent area for financial officers to evaluate cost-saving strategies for the organization. In a large company, it’s surprisingly easy to overlook significant costs. Misplaced, under managed contracts may hide redundant and duplicate accounts, and an organization can end up auto-renewing thousands of dollars in services they might have renegotiated or cut altogether. A sharp look at which contracts still benefit the organization and which should be ended can help an organization reallocate funds for the programs that matter most.
Cloud-Based Data Storage
Both government agencies and private sector companies are embracing cloud-based storage to improve data security and organization. Healthcare organizations that have not yet adopted this standard will likely consider implementing it. Digital security and modern IT solutions are key trends for contract management.
Another benefit of cloud storage is improved accessibility for decision-makers within the organization, and increased opportunities for analytics. Organizations may plan to invest more heavily in IT professionals who can analyze results and trends within the organization. Contracts may offer data that executives can use to inform strategic decisions for the whole company.
Healthcare companies have industry-specific compliance guidelines (such as HIPAA) to follow, so confirm that any new system’s data storage system is compliant with these before making a purchase.
Compliance is a particular focus area for healthcare organizations, which are bound by various state and federal regulations. Organizations making a shift to cloud-based storage will want to ensure they’re compliant with guidelines like the DATA Act, in addition to industry-specific compliance standards. Healthcare organizations would also do well to evaluate vendors and suppliers closely.
Small companies may have a harder time handling the costs involved in meeting all compliance standards, especially if future changes to employee healthcare coverage or other changes add costs to the bottom line. If a vendor’s compliance falters, this could lead to consequences for the larger healthcare organization that the vendor services.
Review supplier relationships regularly, especially smaller businesses and new suppliers. Make sure everyone is aware of any upcoming changes to compliance regulations and has a plan to implement any needed updates before the new regulations take effect.
Careers in healthcare are projected to grow faster than average career growth in the U.S. If your organization plans to add physicians and staff in the coming year, consider how you can use contract agreements to drive employee engagement and productivity. Reviewing physician agreements and other employee contracts can help the healthcare organization perform effectively.
Hopefully, healthcare organizations will find themselves able to choose from many highly qualified candidates when filling a new position. Some healthcare organizations may also plan new partnerships with other hospitals or medical providers to complement each other’s services. Contract management can enable the healthcare organization to secure the best fit.
Preparing NDAs, sharing the most recent version of a contract, or requesting electronic signatures can shorten the timeline between seeking an employee or partner organization and finalizing an agreement. Minimizing delays gets everyone working faster to support the healthcare organization, which positively impacts the overall performance.
Executives and upper management may also find it helpful to review physician agreements before conducting a performance review. A refresher on the employee’s and organization’s goals, as outlined in the employee contract, maybe a useful starting point to discuss future plans.
Increased Focus on End-to-End Processes
Contract management software solutions have made it easier for organizations to manage contract actively throughout the entire lifecycle. Instead of falling into “sign it and store it” patterns, contract managers can more easily perform regular reviews and analyses. Staying on top of contracts catches problems earlier and helps organizations capture all promised rewards, so it’s no wonder that investing in processes is a smart move.
Some project management reports suggest aligning project management goals to company strategy improves project performance and reduces “failed” projects by 33%. Employee contracts, partnering providers, supplier contracts, and more impact multiple areas of the healthcare organization. Looking more closely at how contract management processes align with the organization’s broader strategy can lead to a better-integrated system and more efficient performance throughout the organization.