As healthcare organizations optimize for value-based care and adapt to changing compliance requirements, interest in contract lifecycle management (CLM) has grown. While payer contracts get much of the attention, improving contracting in the healthcare supply chain offers significant benefits.

One missed auto-renewal can quickly show organizations that supply chain efficiency depends on strong contracting practices.

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Recent supply chain disruptions have made resilience a priority. Many organizations are reevaluating vendor contracts to reduce risk, secure reliable suppliers, and plan for the long term.

Effective CLM is key to reducing risk, capturing economies of scale, and improving price negotiations. Recent advances in artificial intelligence (AI) are further enhancing how healthcare organizations maximize value in every stage of the contract lifecycle.

With rising supply costs, healthcare organizations need better cost control and accuracy. Managing vendor contracts is key to optimizing the supply chain.

Many stakeholders influence procurement decisions, including legal ops, procurement, physicians, and nurses, yet often rely on manual processes or outdated systems.

• Duplicate spending – Decentralized purchasing often results in multiple contracts for the same or similar vendor. Unless physician preference prevents it, organizations can consolidate contracts, standardize purchases, improve negotiations, or gain economies of scale.
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• Auto-renewals – Many contracts renew automatically, locking healthcare organizations into unfavorable terms and causing missed opportunities to renegotiate, end terms, or go to RFP.
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• Rebates – Tracking hospital rebates to meet OIG and Medicare requirements.
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• Reduce waste – Comparing consumption to purchase activity allows organizations to adjust terms, lower inventory levels, or stagger deliveries to prevent product waste.
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• Thorough review – Most supply chain reviews focus on products, but reviewing service and vendor contracts is just as critical—especially with the rise in cloud IT services.
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• Contracting efficiencies – Automated CLM solutions streamline the contracting process by accelerating contract authoring, review, approvals, compliance checks, and milestone tracking.

AI simplifies contract review by extracting key terms and clauses, making it easier to identify new opportunities. Look for a CLM solution that does not require costly data field training so data is actionable from go-live.

Healthcare is a highly regulated industry with constantly evolving requirements that can be difficult to manage. New models, such as value-based contracting with drug companies, add layers of complexity by introducing risk-sharing into procurement.

Manual contract processes are costly and time-consuming, increasing the risk of errors and lost contracts.

Healthcare organizations are turning to CLM for faster authoring, negotiation, and approvals, while also delivering real-time compliance insight.

A CLM that extracts key clauses and data points automatically makes compliance checks quick and effortless.

Ongoing supply chain challenges highlight the need for better contract management. Manual processes slow procurement and increase price risks.

Healthcare organizations relying on manual contract management may struggle to prevent delays, secure alternate suppliers, or negotiate price fluctuations.

While contract management is just one component of a resilient supply chain, better vendor contracting helps healthcare organizations adapt to supply changes and negotiate stronger terms.

Today’s CLM solutions go beyond record keeping to help manage risk and control costs.

Evisort, a Workday company, is the first end-to-end platform that automates contract creation and delivers real-time analysis, empowering legal, supply chain, and contract teams.

Evisort works out-of-the-box, eliminating the need for manual tagging or AI training. It recognizes over 230 contract types.

• Reduce contract review from months to days
• Eliminate data entry
• Extract and search over 50 key data points out-of-the-box
• Track risk, compliance, and obligations
• Customizable alerts to stay ahead of notice periods

Strengthening vendor contracting is a critical step toward a more resilient and cost-effective healthcare supply chain. If you’re ready to streamline contract management and reduce risk, request a demo today.