In any given year, the changing healthcare landscape presents an ever-moving target. To keep up, busy practices may add a new vendor to address each problem they encounter. Further, on average teams with a clear goal may end up managing 3-8 vendors to execute that initiative fully. The result? Teams became numb to the slow shift from managing priority problems to managing a growing list of vendors.
Then 2020 happened. The disruption to clinic operation opened the eyes of many clinic operators and provided a unique moment of clarity. Looking at a laundry list of vendors to pay, teams were asking themselves difficult questions — how many of these relationships are essential? Which of these vendors are actually looking out for my business?
Teams turned the year poised to take more control in 2021. Seeking to reduce the risk that was exposed, clinic leadership has been actively consolidating the number of vendors they now manage. A recent technology industry survey reported more teams, nearly 10% greater than two years earlier, claim to now use up to 20 vendors. Further, fewer teams believe that it is easy to manage multi-vendor environments, down from 26% to 17%, while the number of those who see managing such an environment as “very challenging” has gone up by 8%. The benefits are clear and so the decision to reduce the number of vendors may be an easy one on paper. But the act of consolidating, and thus removing some vendors who may be performing a small task well, forces teams to look critically at the vendors they use today and to identify true strategic partners with which they will align for the future.
A good first step to this process is to create and keep a vendor “score," routinely reviewing a vendor’s performance, grading them on key aspects of your relationship. Another good option is to review all your contract terms and establish a calendar reminder set for before that contract renews. Use those established timelines to investigate options to consolidate a current contract into a vendor who’s already performing well in another area and who may now offer a similar feature/service. As vendors expand their features and services to provide overlapping solutions, the opportunity to strategically consolidate vendors may be easier than you think.
But be mindful of the vendor’s ability to influence this trend. Some smaller clinical teams have shared that they may be facing fees upwards of tens of thousands of dollars to end an existing contract. Larger teams may face multi-million-dollar fees to end a relationship. These high fees can lead to inaction on the part of the clinical team and a lack of engagement with that vendor that has the compounded impact of complacency on the part of the vendor where the “chosen” vendor begins to lose their competitive edge.
When considering reducing the number of vendors you are managing, remember that the right partner should feel like an extension of your team. And any teammate needs to have time invested to fully realize all the benefits from that relationship. An integrated revenue cycle software and services partner like pMD pairs our team of national RCM experts and industry-leading software engineers to deliver control and ownership over revenue cycle metrics to prepare you for whatever the future may bring.
If you are interested in learning more about pMD’s Billing & Revenue Cycle Management Services, please contact us here or give us a call at 800-587-4989 x2. We’d love to hear from you!
To find out more about pMD's suite of products, which includes our charge capture and MIPS registry, billing services, telehealth, secure messaging, and care navigation software and services, please contact pMD.