In an interactive session at the Becker's 29th Annual ASC Meeting: The Business and Operations of ASCs, John Hatchell, co-founder and chief executive officer of TYDEi Health, discussed the complexities of vendor contracts in healthcare and how they impact profitability. He highlighted the need for technology to manage these contracts, particularly in relation to medical device implants and disposables.
Mr. Hatchell emphasized the importance of transparency in business relationships and the need for real-time monitoring of contract performance. He also introduced a TYDEi product that digitizes contracts and provides real-time reporting on their performance. This solution also allows for the tracking of complex discounting scenarios, rebate calculations, and joint value contract performance. Mr. Hatchell stressed the importance of data-driven insights in achieving revenue goals and maintaining performance in an increasingly competitive landscape.
Editor's note: Quotes have been edited for length and clarity.
Key takeaways:
1. Vendor contracts are complicated by design, and many leaders admit they don't have a deep understanding of how contracts are serving their organizations.
John Hatchell: "So only 17% of executives in this space today say they have a high level of confidence in even managing vendor contracts. You've got over two-thirds that say they rely exclusively on their vendor's data for calculation of their rebates, their discounts, and even how their joint value contracts are performing."
2. Collecting and understanding data is crucial for optimizing vendor contracts, maximizing opportunities and managing costs.
JH: "This is where we see this data being an incredible tool for empowering you in advancing your negotiations, whether it be through a one-on-one negotiation, or even as broad as an RFP. We can take the stale process of contracts on a share file on a Google Drive … and we can get them in a digital monitoring system that's running this simulation with data for you in action. And then what's that going to do? It's going to ensure that … there's compliance around that between your parties, between you and your business partners. It's going to allow you to control your costs. And then most importantly, it's going to make sure that you're maximizing your opportunity and you're getting the discounts that you're owed and the discounts that you deserve."
3. Leveraging AI can provide valuable insights and transparency into how a vendor's products are performing.
JH: "We're leveraging AI right now to monitor risk around product utilization. We think that can be a really exciting development for folks, especially as we head into the future."
4. The healthcare industry needs to improve its utilization of data.
JH: "Microsoft reported at the HLTH conference last week that the healthcare industry in total uses 3% of the data it has access to — 3%, which is just staggering. ... It is important that you make this part of your initiatives ... it's really important that you do the best you can to find a way to use this data to your advantage."