Healthcare Contract Management Best Practices: What You Need to Know?
Contract Management – Are you a healthcare practice manager? Or, maybe you are the contracts manager for a large healthcare service provider like a hospital. If so, are you battling to keep track of all of your practice’s contracts?
A paper-based contract management system is not ideal for managing any number of contracts, never mind many documents all with different renewal and expiry dates.
Therefore, the question that begs is, how do you streamline and improve the contract management best practice methodologies?
The concise answer to this question is that you implement a SaaS healthcare contract management software application.
By way of expanding on this answer, let’s first consider a brief definition of the dual concepts: contract and contract management.
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What is a Contract?
At the outset of this definition, it is essential to note that a contract is a legal document. Even though it is not always called a “legal contract,” both terms are the same.
The balancesmb.com defines a legal contract as an “enforceable agreement between two or more parties.”
While most contracts are written agreements, they can also be verbal agreements. But it is essential to note that oral contracts are incredibly challenging to enforce. Therefore, it is not a good idea to enter into a verbal contract with a third-party.
The contract’s basic structure is built upon the premise that an individual or company representative promises to deliver goods or services for a predefined time, exchanging for a reward or benefit. Ergo, one party makes an offer, and the other party accepts it.
The following scenario is a way to demonstrate the contractual relationship between two parties.
Let’s assume that you are the practice manager for a firm of GPs, and one of your roles is to manage the contracts and MOUs (Memorandum of Understandings) between the practice and third-party service providers. One of the areas that require a contract is the collection and disposal of medical or clinical waste, including sharp items like injection needles, between the practice and a contractor that meets the stringent legal requirements to transport the waste.
Succinctly stated, the contract between the GP practice and the contractor will state that the practice will pay the contractor a monthly amount to collect the medical waste regularly. If the GP firm does not pay, the contractor can seek legal remedy and vice versa.
Note: the concept of legal purpose is valid to this discussion.
For example, if you take out a contract with a mercenary or “killer for hire” to assassinate your work colleague, and the mercenary takes your money without fulfilling the contractual agreement, there is nothing you can do because this contract does not fulfil a legal purpose.
What is SaaS Contract Management Software?
The answer to this question can be divided up into the following sub-categories:
1. Software as a Service (SaaS)
Infoworld.com defines Software as a Service as “a software distribution model in which a service provider hosts applications for customers and makes them available to these customers via the internet.”
In other words, the software service provider’s business model is a licensing model where users pay per license. Users do not own the software. It is securely hosted in the cloud, and the user is assigned login details to the instance of the software that houses the company’s data.
2. Contract Management Software
In summary, contract management software is computer software designed to facilitate and improve contract management efficiencies.
It includes aspects such as workflow processes that manage and track the contract’s route it takes from conception to completion, including a stop past the legal department and all of its signatories.
It is far better than the paper-based management system that relies solely on human participation to ensure that the contract is correctly signed off.
For example, let’s revisit the scenario described above.
Let’s assume five doctors are partners in the practice that you manage. And each doctor has to sign off on the contract before being sent to the clinical waste collection company. Before the doctors sign the contract, they have to carefully read the document to ensure they all agree with the terms and conditions. At least two copies must be printed and signed by the five doctors. The time delays will be substantial if the document physically passes from doctor to doctor. When are they going to find the time to read the contract during the busy workdays? What happens if Doctor A is free, but the contract is sitting with Doctor B, who is very busy and won’t look at the contract for the next couple of days?
An electronic or computerized system can only improve on the manual method described here.
Instead of printing out two copies of the contract, the contract is drawn up in the contract management software, and the email workflow process is initiated, allowing the doctors the liberty of logging in to the cloud-based software, reading through, and signing the document electronically when they get a free moment.
The Benefits of Implementing Contract Management Software
As describe above, there are several benefits to the implementation of a SaaS contract management system.
The fundamental reason being the time it saves, the improvement in daily workflow efficiencies, and the increase in office management productivity.
Some of the other important benefits include:
1. A Centralized Repository
A centralized contract storage facility that is online and easily accessible to all parties concerned from anywhere worldwide, via desktop, laptop, or mobile device, is the best way to facilitate contract management best practices. Not only is the storage secure, but the fact that the contracts are stored in a central location off-site is worth a lot.
2. Data Security
There are state, federal, and even international regulations for data security and privacy. Locking paper versions of the contracts in a filing cabinet or even office is not 100% secure. Filing cabinets and offices can be broken into.
In comparison, it is far more challenging to break into a SaaS server where the latest cybersecurity and data protection measures are continually implemented and upgraded.
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