Wednesday, January 10, 2018
6 Steps to Achieving Best in Class Vendor Management
posted by: Tonia Pondiscio, Solutions Specialist, GHX
Successful supplier and provider relationships are forged by information sharing that allows the provider to secure the data and information it needs for daily business practices and tasks throughout its organization. Legal and contracting documentation, accounts payable (AP) data, purchasing data and compliance documents all need to be vetted, stored and updated on a regular basis.
Many provider organizations struggle with these vendor management tasks today because of disjointed systems and manual processes. The various stakeholders to the vendor management process, such as supply chain, AP, contracting, legal and even clinical teams, typically operate in silos where they lack visibility into each other’s activities. This can result in process gaps and critical information and documentation slipping through the cracks. A provider’s failure to properly vet its vendors, secure required documentation and perform monitoring over time can threatened its compliance standing, accreditation status and revenues, as well as jeopardize patient care and safety.
How do best in class provider organizations manage their vendors? Here are six steps to their success:
- Employ a Holistic Solution: It all starts with having a single platform – a place where the provider organization can store and access all of its vendor information in one place, and manage processes across all key stakeholders. Best in class organizations that employ a holistic vendor management solution are able to engage vendors at the onset of the relationships, perform thorough vetting processes (e.g. verify tax ID information and screen for business associate risk, diversity status, and OIG sanctions), secure the information and documentation they need and share it cross-functionally.
- Automate Processes: Best in class organizations replace manual tasks with automated workflows to improve efficiency, accuracy and completeness. Using electronic forms for data gathering and storing dynamic documentation electronically in a central solution allows an organization to quickly access the information it needs and share it with key stakeholders. An automated and visible approval process allows everyone within the organization to verify that the necessary steps have been completed before they conduct business with a vendor.
- Gain Access to Data: At the onset of engaging a vendor, best in class organizations take the company through a methodical process by which they access the information they need to establish a firm foundation on which to conduct all future interactions. Whether it is AP data, diversity information or insurance documentation, a vendor management solution should allow the provider to get what it needs right off the bat. And by bringing all of these information sources together, stakeholders can make the best business decisions for their organization.
- Improve Visibility: Once a vendor has been approved, or during the vetting process, various stakeholders must have visibility to the specific information they need to accomplish their required tasks. The information gathering process can flow differently for each vendor – sometimes information may need to be available sooner to one group based on their interaction with the vendor (e.g. clinical versus AP team). By using a single solution for vendor management, the provider organization can give cross-functional teams the information they need when they need it, even before other tasks in the workflow are completed.
- Enhance Access and Reporting: To comply with industry regulations healthcare providers are required to produce documentation demonstrating their vendor management procedures. Best in class organizations have the capability to easily access documentation in a centralized location for prompt viewing, downloading and printing. They are also able to share meaningful data and analytics with decision makers through customized reporting on various aspects of vendor relationships (e.g. verification, sanction checks). All activities surrounding communications and data updates should be clearly visible and searchable. Furthermore, a vendor management solution should provide full audit trails to document changes to vendor records.
- Monitor and Evaluate Performance: More and more in today’s healthcare climate we are seeing that industry best practices for vendor management suggest that provider organizations continuously monitor their vendors and evaluate them on a regular basis to ensure they are meeting compliance and contracting standards. Best in class organizations have the ability to set up, assign and administer evaluations to appropriate end users in an automated fashion, as well as manage the evaluation process and report on the scoring. Evaluation data should be shared among various stakeholders and up to key leaders to drive strategic decision-making.
Want more? In the GHX Summit Series webinar, Vendor Management: the Bigger Picture, Tonia Pondiscio dives deeper into the steps provider organizations can take to refocus their vendor management efforts in order to close gaps in supply chain and compliance processes. The webinar recording can be accessed here: https://www.ghx.com/summitseries/past-webinars/