Healthcare executives understand that intense margin pressures require greater operational efficiency and cost control than most have been able to exercise to date. A powerful enterprise resource planning (ERP) solution is the centerpiece of any spend management response, but it can’t address healthcare’s unique business and regulatory challenges alone.
The nuanced challenges healthcare contracting pose require that you must control your contracts if you have any hope of controlling your costs. However, controlling your contracts across the health system requires a cloud-based repository paired with use-case specific contracting workflows to achieve governance and control. Pairing an ERP solution with a healthcare-specific contract lifecycle management (CLM) solution links contractual and operational data to shine a comprehensive light on problem areas and potential fixes. An integration empowers your organization to achieve tighter control over your costs while maximizing value for both platforms.
The reality of extreme cost pressures and margin pressures persists. Soaring inflation paired with unfavorable reimbursement have made cost containment an uphill, yet necessary battle. A nearly nonstop parade of therapeutic advances, combined with an aging population, drives up costs. In addition, frequent supply chain disruptions and administrative miscues cost organizations millions of dollars, while contributing to provider frustration and impaired workplace productivity. For example, many organizations still suffer from an unbalanced focus on tactical, reactionary tasks due to constant daily fires rather than focusing their energies on important strategic work.
As healthcare executives and supply chain leaders scramble to implement effective cost-control strategies, they are often inhibited by an inability to get a clear and comprehensive view of their organization’s cost drivers, levers, and contracts. There are many factors, but three stand out:
Health system consolidation has led to siloed, incompatible systems that only a handful of people can view or understand. Most IT leaders report their hospitals use 150+ solutions for healthcare operations alone. Yet, many of these systems lack connectivity and fail to provide value to their users.
Many health systems struggle with fragmented contract storage. Documents reside in multiple locations, ranging from legal to supply chain, facilities, finance, or revenue cycle — and even laptops! When contracts are stored in a SharePoint site, a shared network drive, or worst case, in filing cabinets, the resulting fragmentation makes it impossible to be on top of version control and align the right people with the contract assets to support decision–making activities with data and analytics. If systems are not leveraging a connected, cloud-based central contract repository to support efficiency and a single source of truth, cost-control decisions cannot be data-driven.
Many health systems rely on agnostic (non-healthcare-specific) systems for contract management. ERPs contain critical information, including spend data, correct supplier names, and contract types. However, by solely relying on these agnostic systems and ERPs for contract management, health systems experience diminished transparency, workflow capabilities, and compliance safeguards. Healthcare contracting is nuanced, requiring specific workflows that accommodate the enterprise. This, of course, includes supply chain but also extends across departments, which is a critical consideration as health systems look to consolidate vendors and ensure one source of truth across functions.
For instance, outside of supply chain, physician contracts are particularly challenging, as they are governed by a myriad of regulatory requirements that demand healthcare-specific workflows and triggers, nuances that lie outside of an ERP’s focus and capabilities. Lengthy contracting processes or compliance missteps along the way can mean severe financial consequences.
The consequences of these systemic issues ripple throughout the organization, manifesting in a range of operational challenges that directly impact cost control and efficiency for healthcare contracting. Challenges that emerge from partial visibility include:
Healthcare organizations can significantly benefit from integrating their CLM software with their ERP system. This integration addresses several key pain points and offers substantial advantages:
By connecting CLM and ERP systems, healthcare organizations can eliminate data silos and reduce manual data entry, which is a major source of errors and inefficiencies. For example, a newly established supplier contract in the CLM system can automatically update the ERP system with expiration dates, review dates, rebate amounts, and total expected expenditure. This real-time data synchronization enables better financial planning and cost control. Similarly, when a supplier is added or updated in the ERP system, the correct supplier name and contract type are automatically synched with the CLM solution, eliminating the need for duplicate data entry. This integration not only saves time but also ensures data consistency across systems, reducing the risk of errors that could lead to compliance issues or financial discrepancies.
The integration provides a comprehensive view of contract-related information alongside operational and financial data. This visibility allows healthcare organizations to:
The bi-directional nature of the integration ensures that financial processes are more accurate and efficient:
Integrating a healthcare-specific CLM with your ERP is a straightforward process that can take place without heavy lifting for departments leaders or from IT. symplr works closely with organizations to establish key requirements around data transfer and uses a standardized software bridge to create the links. Once the integration is activated, ROI follows quickly. All contracts are on a cloud-based, searchable contract lifecycle management software that provides complete visibility into an organization’s full range of cost-related obligations alongside key ERP data and health-care specific workflows tailored to the diverse needs of health systems.
By bridging the gap between contract lifecycle management and enterprise resource planning, healthcare organizations can achieve tighter control over costs, improve operational efficiency, and manage risk in an increasingly complex healthcare environment.
