8 questions to ask before you renew a vendor contract

The contract nobody reads is the one that renews itself. Somewhere in most practices there is an electronic health record agreement, a billing service contract or a transcription subscription that rolled over on its own terms, at a higher price, because the cancellation window closed 90 days before anyone thought to look at it.

That drift adds up. Median total operating cost per full-time-equivalent physician at physician-owned multispecialty groups rose 29.3 percent over five years, from $620,098 to $801,938, according to MGMA DataDive Cost and Revenue benchmarks. Technology and IT generally run 2 to 3 percent of revenue for outpatient groups, MGMA reports, and that share keeps climbing as practices stack ambient scribes, patient engagement tools and analytics dashboards on top of the core system.

Vendor agreements are one of the few line items an administrator controls outright, without touching staffing levels or patient care. The leverage is highest in the 60 to 120 days before a term ends, and most of it disappears the moment the agreement renews. Here are eight questions to ask first.