Contract Management Services for the Life Sciences Industry.
Best Practices & Operating Procedures
Management, due to its competitive and legislative nature, is not a subject that
Health Care companies can collaborate on, or even discuss in any detail.
However, as industry experts, Activus Solutions can offer guidelines, policies
and procedures centered around solid and proven business practices.
We all know the phrase, “If it works, don’t fix
it.” But what is the criteria by
which we determine whether a particular process “works” or not. A
process may “work”, but does it operate efficiently? Is its operation based
on sound business principals? Does
it satisfy you, and your customers?
Activus Solutions, its founders and all the
individuals who work for us are experienced Contract Management professionals
with real world experience from many health care companies. This enables us to
start from a position of knowing and understanding the best and most effective
methods of operation. With this knowledge, we can analyze your key processes,
recommend and implement business policy and procedures to considerably enhance
your overall Contract Management operation.
Administrative fees are a typical component on
hospital contracts with the GPO’s. These fees are often calculated as a fixed
percentage off indirect and sometimes direct sales, if applicable. Several
policy decisions need to be made as to how these should be processed. Which
transactions should be included? How should we deal with adjustments that span
the quarter close? What data does your GPO need to reconcile the payments, and
what does the sales force need throughout the year to track effectiveness of the
agreement. Contracts are written with GPO’s to drive sales of your product
portfolio and to increase revenue based on the GPO influence over buying
patterns of their affiliates. The very existence of these agreements and the
nature of GPO’s show that these types of contracts are strategic to your
sales. Are there other ways or incentives that could be utilized to leverage the
relationship to the GPO and its affiliates to alter buying patterns?
Managed care contracts can offer complex incentive
structures to drive sales through the affiliated health plans. The contracts
themselves should be written to define all the rules of trade associated with
the contract including data transfers, formats, date sensitive events as well as
the incentive components themselves. But what is the most effective
configuration of these parameters that will satisfy your trading partner, and
optimize your contract? Once the data is received from your trading partner, how
should it be analyzed? What checks and balances should be initiated and in the
case of adjustments to prior quarters, and how should these be handled from
receipt through payment?
Depending on your product portfolio, your largest
customers are your distribution partners. Policies and procedures around their
direct purchases, chargebacks/distributor rebates, optional additional
incentives, reconciliations and deductions are all key processes, which can be
optimized to work together.
The other primary factor which works hand in hand
with improvements to your processes guided by best practices is that, once
established, they must be followed, indeed enforced, to ensure consistency.
Employees leave, new employees are hired. Without documented operating
procedures on how to handle the entire business process, there is no value to
instituting the process in the first place.
In summary, Best Practices and Operating Procedures govern, guide and enforce effective and efficient business operations based on proven techniques and policies.
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Activus Solutions, LLC | 13 Prince Henry Drive, Suite 1 | Randolph, NJ 07869 | Phone: (800) 471-0522 | Fax: (973) 989-0256