Vendor Contracting Best Practices in Healthcare

Learn how healthcare leaders can:

• Strengthen Supply Chain Resilience
• Unlock Savings Across the Contract Lifecycle
• Cut Costs With Smarter Contracting
• Manage Compliance Risks in Real Time
• Automate Contract Lifecycle Management

As healthcare organizations shift to value-based care and face rising compliance demands, contract lifecycle management (CLM) is becoming a strategic priority. While payer contracts often get the spotlight, vendor contracts in the supply chain offer some of the biggest opportunities for impact. Even one missed auto-renewal can expose gaps—and show just how critical strong vendor contracting is to operational efficiency.

Strengthen Supply Chain Resilience

Recent supply chain disruptions have made resilience a top priority. Many healthcare leaders are reevaluating vendor contracts to reduce risk, secure reliable suppliers, and plan for the long term. Effective CLM helps reduce risk, capture economies of scale, and improve pricing negotiations. Advances in AI are further transforming how healthcare teams drive value at every stage of the contract lifecycle.

Unlock Savings Across the Contract Lifecycle

As supply costs climb, healthcare organizations need tighter cost control and greater accuracy. Vendor contract management plays a key role in optimizing supply chain performance. While procurement decisions involve many stakeholders—legal ops, procurement, physicians, and nurses—many still depend on manual workflows or outdated systems.

Cut Costs With Smarter Contracting

• Duplicate spending: Decentralized purchasing can lead to multiple contracts with the same or similar vendors. Unless physician preference dictates otherwise, organizations can consolidate contracts, standardize purchases, and negotiate better terms.
• Auto-renewals: Automatic renewals can lock organizations into outdated terms and lead to missed renegotiation or RFP opportunities.
• Rebates: Tracking hospital rebates is critical for meeting Office of Inspector General and Medicare requirements.
• Reduce waste: Comparing consumption data with purchase activity enables smarter contract terms, lower inventory, or staggered deliveries to minimize waste.
• Thorough review: While supply chain reviews often focus on products, vendor and service contracts are just as important—especially with the rise of cloud-based IT services.
• Contracting efficiencies: Automated CLM solutions accelerate contract authoring, review, approvals, compliance checks, and milestone tracking. AI enhances this process by extracting key terms and clauses, helping teams spot new opportunities faster. Look for CLM platforms that work out of the box—no costly data field training required—so you can act on insights from day one.

Manage Compliance Risks in Real Time

Healthcare is one of the most regulated industries, and requirements evolve constantly. Emerging models—like value-based drug contracting—introduce new layers of risk sharing and procurement complexity.

Manual contract processes not only slow down operations but also increase the risk of errors and lost contracts—making it harder for healthcare leaders to move quickly and stay compliant.

CLM platforms support faster contract creation, negotiation, and approval while also delivering real-time compliance visibility. When CLM systems automatically extract key clauses and data points, compliance checks become easier and more reliable.

Automate Contract Lifecycle Management

Ongoing supply chain challenges make efficient contract management more essential than ever. Manual workflows slow down procurement and make it harder to respond to price fluctuations or supplier issues.

Organizations using outdated systems may struggle to avoid delays, find alternative vendors, or negotiate stronger terms. Modern CLM solutions do more than store documents—they actively help teams manage risk, reduce costs, and stay compliant.

Workday Contract Management, powered by Evisort AI, is the first end-to-end platform that automates contract creation and provides real-time analytics to empower legal, supply chain, and contract teams. With no need for manual tagging or AI training, Workday Contract Lifecycle Management works out of the box and recognizes more than 230 contract types. Organizations can:

• Reduce contract review from months to days.
• Eliminate manual data entry.
• Extract and search more than 50 key data points automatically.
• Track risk, compliance, and obligations.
• Set custom alerts to stay ahead of notice periods.

Strengthening vendor contracting is a critical step toward building a more resilient, efficient, and cost-effective healthcare supply chain. 

Ready to streamline contract management and reduce risk? Request a demo today.