Healthcare procurement leaders and legal executives are discovering that today’s CLM solutions hold the keys to improved agility, resilience, and competitiveness—while ensuring regulatory compliance.
The healthcare industry is experiencing dynamic upheaval. Battling the global pandemic while maintaining daily healthcare operations and navigating ever-changing regulatory requirements creates a challenging and complex environment. Nimble action and close collaboration with external business partners are required to stay the course. The unrelenting need to do more with fewer resources is driving healthcare organizations to accelerate digital transformation—all while continuing to drive superior outcomes.
One technology that stands out for its ability to create significant cost savings, reduce legal risk, and strengthen industry relationships is contract lifecycle management (CLM). Increasingly, healthcare procurement leaders and legal executives are discovering that today’s CLM solutions hold the keys to improved agility, resilience, and competitiveness—while ensuring regulatory compliance.
At its core, CLM is the oversight of an organization’s contracts from initiation through execution, performance, and renewal or expiration. Effective implementation of a CLM solution can drive significant improvements in operational and financial efficiency, as well as reductions in risk exposure.
Contracts are the foundation of a healthcare organization’s vendor relationships and patient experiences. Establishing and growing these essential, complex partnerships represents a key digital transformation opportunity. Tech-forward solutions including automation, artificial intelligence (AI), cloud computing, and blockchain are extending the capabilities of CLM solutions far beyond the basic storage, search, and tracking benefits that are now considered table stakes. Icertis, for example, has developed an intelligent AI-powered platform that turns healthcare contracts from static, paper-based documents into digital, strategic assets by structuring and connecting all the critical contract information that defines how an organization runs. Centralized, transparent, and intelligent repositories leave no stone unturned. No longer siloed or manually managed, legal contracts can now become digitized, visible, and actionable with ties to all the processes throughout the organization that touch them.
At Icertis, we have seen healthcare customers who have moved from 100% paper contracts to the Icertis contract intelligence (ICI) platform experience upwards of 95% compliance with contractual obligations. Insurers and payers drastically reduce error rates by digitizing and centralizing thousands of contracts into a searchable repository, automating verification of business agreements, and using automated rule-driven processes—such as executing bulk amendments on physician agreements in response to regulatory changes.
Here’s how Peggy Kaufman, vice president, sourcing operations at Vizient, Inc. describes her contract management journey. “When I started my career in procurement, I used to joke that our main tools were the four Fs: floppy disks, FedEx, fax machines, and file cabinets. We have come a long way since then, and we saw partnering with Icertis as the next step in Vizient’s journey to increase trust, transparency, and predictability in the healthcare supply chain. The past year has served as a pressing reminder that it takes thousands of products, from bouffant caps to shoe covers to ventilators, to treat patients and keep our frontline healthcare workers safe, and we need the ability to unlock and unleash all the available information in our contracts to turn it into actionable intelligence.”
While various CLM software tools have been available for years, the rise of machine learning has brought about greater holistic benefits for healthcare companies that need to protect their organizations and optimize their workflows. Advanced CLM solutions automate the connection to key processes such as order fulfillment and billing—resulting in far fewer errors, greatly reduced risk, less cost leakage, and more accurate revenue forecasts. Full visibility combined with cutting-edge technology empowers organizations with information and insights that create competitive advantages.
“Vizient has been using e-sourcing and contract management applications for more than 15 years, so we were sold on the value of centralizing and digitizing our procurement practices. What set Icertis apart was the potential to move from contract management to contract intelligence as well as the ability to truly democratize the process of managing data,” Kaufman said. “Since October when we went live, our end users have created more than 3,800 contract records on the Icertis system. This is not a few contract technicians or a handful of lawyers using the new platform—this is our entire sourcing team, able to access and act on information that makes a difference. It’s taking unstructured data—something that in the past that was written on someone’s whiteboard or on a sticky note and stuck to the corner of their computer monitor —and turning it into actionable intelligence.”
The COVID-19 pandemic escalated the timeframe for many healthcare companies to digitally transform their supplier contracts. Contract intelligence has proven invaluable to organizations by providing a repository search for force majeure clauses, identifying, and amending in masse contracts requiring COVID language, and facilitating the distribution of new clauses for to up to 100k third parties with a single click. It has also helped organizations quickly onboard new suppliers, while ensuring compliance with new providers—such as ramping up telehealth programs and sourcing medicines amid supply chain disruptions.
How much time and money can CLM save? Provider and payer billing inconsistencies, price discrepancies, and revenue and savings leakage all cost health systems money. Organizations using a contract intelligence platform cut contract creation from 70 steps to 15, and have realized, on average, 40% reduction in contract administrative costs, along with 70% improvement in overall contracting cycle time. CLM also delivers pre-transaction contract negotiation and governance, visibility into rebates across suppliers, and improved revenue forecasting.
For health systems that are not sure where to begin, know CLM is a journey and Icertis is there with you the whole way. Many implementations begin with projects that provide a quick win to build upon. For example, most focus on digitization and centralization of their contract templates library, making contract creation easier for end users, and building excitement around implementation of advanced workflows and rules automation. The CLM providers investing in bleeding-edge functionality with a purpose—such as AI-powered negotiation tools—can both help teams advance from a crawl-walk-run approach and take full advantage of the technology’s ability to adapt and scale for years to come.
As procurement executives and department heads increasingly turn to intelligent contract lifecycle management as a key component of their digital transformation strategies, they are gaining the ability to respond to the current dynamic environment as well as prepare for the future. Ensuring full compliance in a strict regulatory environment and enabling seamless contract collaboration between insurers, physician groups, and other stakeholders ultimately means less risk, more efficiencies, improved financials, and better patient experiences across the board.
Neal Singh is the chief operating officer at Icertis, the leading CLM company helping customers digitally transform their contracting.