Limitations of Manual Contract Management

Most people wouldn’t dream of using a card catalog to access a library book.

Those index cards were replaced long ago by digital, searchable catalogs that make it much quicker and easier to locate a book across multiple library branches. And, in this digital age, many people read electronic books instead of lugging around heavy hardcover books. Yet, many healthcare organizations still have paper contracts stored in filing cabinets to manage their business relationships. 

Is your healthcare organization still using an Excel spreadsheet to track thousands of paper contracts with multiple providers, vendors, and managed care organizations? If so, you’re not alone. “The majority of US health systems are struggling with manual contract tasks and fragmented contract processes,” said Doug Brown, managing partner of Black Book, in an article in RevCycleIntelligence. Black Book projects that manual contract management costs health systems and providers nearly $157 billion collectively each year.

Manual healthcare contract management has several limitations:

Decentralized contracts are difficult to locate—let alone manage. In addition to the contract owner, different departments (e.g., legal, finance) need to access contracts periodically. Or, The Joint Commission may request a particular vendor contract during a site visit. Would you be able to quickly produce that contract? When paper contracts are stored in filing cabinets spread throughout your health system, finding a particular contract is like searching for a needle in a haystack.

Keeping track of auto-renewal dates, termination requirements, and other important contract terms and conditions is also challenging when contracts aren’t centralized. If you miss important critical dates you may unintentionally auto-renew a contract with unfavorable terms for one or more services you no longer use. It is also extremely hard to know whether you have duplicative contracts covering the same services.

Workflow inefficiencies can lead to contract variability and difficulties with collaboration. In a large healthcare organization, many people, across multiple departments, are involved in a contract’s journey from its initial request and creation, through review/revision, to final approval. Ensuring appropriate contract access isn’t easy when you’re managing contracts manually. 

Contract variability can increase financial and compliance risk. Legal teams carefully create contract clauses to minimize risk. When contracting is done manually, there is less control over the authoring/editing processes and use of approved language. It’s easy for authors or reviewers to omit those approved clauses or modify them too much—either intentionally or accidentally—putting your organization at risk. 

Bottlenecks delay contracting processes. Paper contracts often get stuck on someone’s desk, waiting for review or final approval. Furthermore, manual contracting processes make it difficult to track the location/status of a contract and identify backlogs and bottlenecks. To improve your contracting processes and workflow, you need to be able to identify which departments are taking too long with drafts and edits, and how long approved contracts have been waiting for final signature. Paper contracts are difficult to monitor and track. 

Important contract information is practically invisible with manual processes and paper contracts. Answering these key questions is difficult, if not impossible:

  • Which contracts are about to auto-renew?
  • What is the stage and status of all the contracts with this vendor?
  • Does this contract include the latest approved language and terms?
  • What contracts are missing Business Associate Agreements?
  • What financial and compliance risks are we taking on during this merger?
  • Is there another contract covering this same service with more favorable terms?

Contract lifecycle management software solves these problems by automating, centralizing, standardizing, and optimizing your contract processes. TractManager’s Contract Lifecycle Management solution combines a centralized, digital contract library with configurable workflows and AI-enabled contract analytics to standardize and optimize the entire contract management process. MediTract CLM streamlines contracting processes, increasing efficiency, facilitating collaboration, and reducing compliance risk. Learn more about TractManager’s MediTract CLM.


Manual Healthcare Contract Management Costs Providers $157B A Year


Kimberly Hartsfield

Chief Data Officer

Kimberly Hartsfield became Chief Data Officer for TractManager in June 2017.


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