Contracts are the lifeblood of every business. No matter which field your organization calls home, whether it be finance, government, or healthcare, your relationships with clients and partners are formed via contracts. Not only do they provide details about the exact terms and expectations required on both sides of the agreement, but they also act as a library of information pertaining to your organization and how you conduct business. As we will explore in this article, organizations in the healthcare industry have unique needs when it comes to contracts, especially at a time when risk management and strict adherence to protocols are of utmost importance. Let’s take a look at the ways that a contract lifecycle management (CLM) solution could benefit any healthcare organization, its employees, and its patients.
Why Do Healthcare Organizations Need CLM?
In truth, every business needs CLM. However, there are some unique aspects of the healthcare industry that can make having a fully-integrated CLM solution particularly effective when it comes to better service, business relationships, and risk management.
Whether you are a hospital, doctor’s clinic, nursing home, or dental office, you likely place service and patient care as the highest priority for your organization. There are many moving parts involved in patient care, each requiring its own amount of attention from different members of your staff. One aspect of service that may be overlooked at times is contracts. Contracts that involve patients directly, contracts that are utilized by procurement for supplies – these are all pieces of your organization’s business relationships. Creating a pleasant experience is perhaps more important for healthcare organizations than others, as they are reliant on patient experience. Not to mention, procurement needs to be able to properly manage supplies in order to make sure they are always on hand when needed. Streamlining your contract process to focus on both efficiency and quality can help generate a more pleasant experience for both patients and vendors working with your organization. And CLM solutions provide the perfect gateway to unlocking that efficiency.
Risk management is a key part of healthcare contracts as well. Year after year, compliance requirements only seem to increase in complexity, meaning that your contracts must adapt to fit these ever-changing regulations. With a variety of requirements to keep in mind at both the state and federal level, including HIPAA and JCAHO, along with physician and service agreements, managing your contract process in accordance with every single regulation can feel overwhelming. And, with more complexities comes greater risk of mistakes. Human error is a natural part of life, after all. If contracts are not properly managed, it can be difficult to produce a proper financial trail under an audit, keep track of changes and deadlines, and access data across all your organization’s business relationships. This is again where CLM software comes in handy.
How CLM Helps Your Contracts
Your organization will experience a host of benefits upon incorporating a CLM tool into your business process. Let’s take a closer look at just a few of those potential benefits: storage, automation, AI, standardization, and information access.
CLM software typically offers a cloud-based repository to house all of your organization’s contracts in one convenient place. The existence of this database in cyberspace as opposed to filing cabinets or even a company hard drive greatly increases visibility among different departments. All employees gain the freedom to access documents from any location, helping remote workers stay involved and facilitating better communication between the parties working on an agreement.
Having a secure database takes the hassle out of managing contract versions and gathering analytics as well. In fact, a number of CLM tools offer features that allow you to quickly bring up documents relevant to a keyword search and ensure that the most current version of a contract is always at the forefront. And, the combination of version tracking, backing up documents, and keeping a log of important timestamps or renewal dates generates a trail that managers and CEOs can easily follow to discern changes that need to take place in order to create a more efficient contract lifecycle for your organization.
Automation & AI
The automation and AI aspects of a CLM tool typically build out of the repository it creates. Automation is extremely helpful for increasing efficiency in your contracting process, often by freeing up more time for your employees. Small tasks that do not require any hands-on intervention can be automated and left to your software, allowing your employees to instead focus their attention on patient care, supply procurement, and more. It may also improve your overall contract process and business experience by tracking renewal dates and setting reminders about deadlines.
AI in particular can help with the drafting portion of the contracting process. In the past, the legal team may have been involved with every step of the writing procedure in order to make sure regulations were always met, majorly slowing down the process. AI eliminates the need for this level of in-depth, hands-on writing. If you are able to create a template for your different types of contracts, then your CLM software can compare newly generated documents to the template as well as to previous successful contracts, ensuring that they line up with all the necessary regulations and mitigating potential risks caused by mistakes or missing clauses. With less time spent on the drafting process, the legal team can then devote their attention to more urgent agreements rather than spreading their time thin across many different negotiations.
The ability to standardize your contract language is immensely helpful when it comes to risk management. Thanks to your CLM tool’s contract repository and AI working together, authoring contracts could not be easier. Many solutions offer the ability to work from templates or substitute pre-approved phrases from a contract playbook during the drafting phase and when negotiations are being made. This allows you to quickly manage hang-ups in the negotiation process that would typically slow things down for days or even weeks at a time. And, the use of pre-approved phrases ensures that contracts always utilize the same or very similar language that complies with state or federal regulations as well as the expectations of your organization itself. Essentially, standardization of your contracts leads to greater efficiency, more time for your employees to spend on other pressing matters, and quality assurance for every contract generated.
Learn Your Business
Many organizations may not yet realize the wealth of knowledge locked inside their contracts. With a CLM solution providing you with a safe, secure place to store all past, existing, and future contracts, you have access to more information than ever before pertaining to the unique way your business operates. In fact, all of the features that CLM tools provide work together to increase that knowledge and make it easily accessible for every member of your organization. Search functions allow you to bring up relevant data in a flash, automated authoring makes writing compliant contracts a breeze, alerts help you stay on top of renewals and deadlines, and revenue tracking shows you where improvements could be made. This information is just as valuable to CEOs and stakeholders as it is to sales, legal, and procurement teams. In the modern business world, we would even call it essential.