One management task, often overlooked but with significant impact, is the annual review of supplier contracts - and it's something that could help you unlock several benefits for your practice.

As a Practice Manager in the ever-demanding world of UK primary care, your days are likely filled with a multitude of responsibilities. From ensuring smooth daily operations to managing staff and patient needs, it's easy to let some crucial tasks fall by the wayside.

One such task, often overlooked but with significant impact, is the annual review of supplier contracts. But this is something that could help you unlock several benefits for your practice, including cost efficiency, regulatory compliance, optimal service quality, and the ability to adapt to evolving needs.

Why Reassessing Supplier Contracts is Crucial

Cost Management and Savings

In the face of ever-rising healthcare costs, financial prudence becomes paramount. An annual review allows you to reassess the terms of your supplier contracts and ensure they align with your current budget. Remember, suppliers might offer better rates or discounts to loyal customers, but these are often not proactively communicated. By initiating the conversation, you can negotiate more favourable terms, potentially saving your practice significant sums over time. Imagine the positive impact on your bottom line by securing a more competitive rate on medical supplies or laboratory services.

Ensuring Compliance and Risk Management

The healthcare landscape is constantly evolving, with regulations and compliance requirements regularly updated. A proactive approach to supplier contract reviews helps ensure that all agreements adhere to current laws and regulations, including those related to patient privacy (including GDPR), medical waste disposal, and equipment standards. This minimises legal risks and safeguards your practice's reputation by demonstrating your commitment to industry standards.

Assessing Service Quality

The quality of goods and services provided by your suppliers directly impacts patient care and your overall efficiency. An annual review provides a valuable opportunity to evaluate supplier performance against the agreed-upon terms in the contract:

• Are deliveries consistently on time?
• Are the products of a consistently high standard?
• Do they respond promptly and effectively when issues arise?

By measuring performance against these criteria, you can ensure that your practice maintains its high standards and delivers exceptional patient care.

Adaptability to a Changing Landscape

GP Practices are dynamic entities, and their needs will evolve over time. Whether it's integrating new technologies, expanding the scope of services offered, or adjusting to fluctuations in patient volume, your supplier contracts need to reflect these shifts.

Imagine the frustration of being locked into a contract for outdated services just as your practice is expanding its services, going digital, or if your funding has been reduced. An annual review helps you identify any gaps between your current needs and the services provided, allowing you to make adjustments and ensure your practice is well-equipped to handle growth or change.

A Step-by-Step Guide to Effective Annual Supplier Contract Reviews

Now that we've established the importance of annual supplier contract reviews, let's explore how to conduct them effectively:

Gather and Organise Contracts

The first step is to compile all your current supplier contracts. Think about creating a well-organised digital or physical folder where these contracts are easily accessible for future reference.  Ensure each contract is up-to-date and includes any necessary amendments or supplementary documents that you might need to review.

Review Contract Terms and Performance

Meticulously examine each contract, paying close attention to details such as duration, pricing, service levels, and any clauses related to renewal, termination, and potential penalties.  Compare these terms with the supplier's actual performance over the past year. Make sure you document any discrepancies or areas where the supplier has excelled or fallen short of expectations.

Benchmark Against Market Standards

Look at what is currently available so you can benchmark your current supplier terms against industry standards. This will give you a clear picture of whether you're getting a good deal. Explore new suppliers who might offer better services or pricing, and consider these options as leverage during negotiations.

Be Ready to Negotiate

Armed with your findings from the review process,  approach your suppliers to discuss the current contract terms.  Highlight areas for improvement and negotiate better rates or services. Be prepared to present data and specific examples to support your case - most suppliers value long-term relationships and may be willing to negotiate to retain your business.

Update and Document

Once new terms are agreed upon, ensure that all changes are meticulously documented within the contract itself. Update your contracts and records, then notify relevant staff members of any changes that might affect their workflows or daily tasks.

Set a Schedule for Ongoing Reviews

While an annual comprehensive review is essential, consider establishing periodic check-ins throughout the year. The frequency of these check-ins (quarterly or biannually) can be tailored to the nature of the services and the specific contracts involved. High-value contracts with significant financial implications or services that directly impact patient care might warrant quarterly reviews. Conversely, less critical contracts for low-cost, readily available supplies might only require biannual check-ins.

By prioritising annual reviews and implementing a system of ongoing check-ins, you can transform supplier contracts from static documents into dynamic tools that empower your practice to control costs, ensure compliance, optimise service quality, and adapt to the ever-changing healthcare landscape. Remember, taking charge of your supplier relationships is an investment that yields significant returns for your practice, ultimately allowing you to focus on what matters most – delivering exceptional patient care.

Ready to take control of your supplier contracts and unlock significant cost savings for your practice? Our comprehensive course, "Maximise Income, Minimise Costs", equips Practice Managers with the tools and knowledge to conduct effective annual reviews and negotiate favourable terms with suppliers.  Sign up today (https://thornfields.co.uk/workshops/) and set yourself and your practice up for financial success.