How to be Efficient with Vendor Relations

May 25, 2016
Steph Weber

Vendors' products and services directly impact a practice's day-to-day operations. Here's how to be establish efficient vendor relations.

Practices juggle a number of vendor relationships for everything from software to equipment to medical supplies. At the same time, vendors have several clients all vying for time and attention. Getting the most out of each vendor relationship can be challenging for time-strapped physicians.

Here's how to establish efficient vendor relations.  

Pre-contract basics

Good vendor relationships begin in the pre-contract phase. As both parties are getting to know each other, it's the perfect time to lay out expectations.

"The pre-contract vendor selection process gives the practice a chance to define its expectations, and the vendor the chance to explain how it will meet those expectations," said Rebecca Gwilt, a healthcare attorney and consultant at Nixon Law Group, LLC in Richmond, Va. "A physician may want to make a list of questions that reflect their minimum requirements for a vendor and submit that in advance."

Take the time to ask for several references and make sure you understand the amount of training and support that is included in the pricing. The more complex the product or service - like an EHR or practice management system - the more important it is to identify if the vendor has staying power and adequate insurance. This information may keep you from engaging with a fly-by-night vendor.

"The amount of effort a practice should expend on vetting and negotiating terms with a vendor depends on the importance of the task [being outsourced]," said Gwilt. "Small practices don’t have the time to spend doing due diligence on every single vendor." She recommends that each outsourced task is ranked according to whether it proposes a compliance risk or has an effect on operations and revenue collections.

Maximize their time and yours

Both vendors and physicians are extremely busy, each trying to meet the needs of many. In order to maximize everyone's time during meetings, preparation is key.

"Time is finite - it's our currency and how we generate revenue," said Jeffrey Fromowitz, a dermatologist and medical director at Dermatology of Boca in Boca Raton, Fla. "Because of this, we prep in-house before meetings, doing a needs assessment and evaluating our relationship with the vendor."

While some vendors have a tendency to focus on their largest clients, it's imperative that all clients receive the time and attention deserved. If a vendor isn't living up to the predefined expectations, sometimes a simple reminder can bring the relationship back on track.

"We meet with our vendors quarterly to review our pricing and relationships to ensure they are meeting our expectations," said Fromowitz.

If that doesn't yield positive results, it's time to check your contract for information regarding dispute resolution or termination. Gwilt says that sometimes stopping payment can motivate the vendor to resolve the issue, but practices should proceed with caution as this may result in penalties and other negative consequences.

"Make sure you have a direct line to someone to manage your vendor issue for you," said Gwilt. "[Keep] all vendor contracts, contact information, and related documentation in a single repository - whether it’s a paper or electronic file folder." When an issue arises, the pertinent information is easily accessible for quick resolution. 

Key traits

Looking for preferred traits, or on the flipside - red flags - in each vendor early on is wise and can save significant time and hassle down the road.

J. Blake Bolin, a primary-care physician and chair of Genesis Physicians Group board of directors, an independent physician organization headquartered in Dallas, Texas, looks for two traits. "Customer service and integrity are paramount [and] the most important characteristics that I look for in a vendor," he said.  

As for red flags, unreasonable contracts, poor client references or reviews, and delays in communication may mean the vendor isn't the right fit. Thankfully, there are plenty of choices in the marketplace.

"If a vendor does not hold up their end of the relationship or have the characteristics we look for, then we move on and find one that does," said Fromowitz. "Vendor relationships cannot be set-up and ignored. We are constantly reassessing the relationship to ensure our needs are not only met, but in the most effective manner."