Turning Risks into Opportunities in Contract Management: A Case Study in the Health Care Industry

Abstract

Problem statement: This case study presented students with a situation based in the healthcare industry, highlighting the importance of contract review, clear communications and interestbased negotiations in order to avoid the costly consequences that could be associated with contract related disputes. The case allowed students to understand how clearly written contracts play a deciding role in the success of business partnerships. Students practiced negotiation skills while discussing the performance clauses of the contract and considering effective amendments to that contract with the purpose of extending a business relationship. Approach: The author interviewed a project manager working for a preferred implementation vendor which had a contract with a large hospital provider in Colorado and California. The purpose of the interview and the case study focused on contract law, contract management, enterprise risk management and negotiation skills. The case study is based on class room use with practical, real-life contract management scenarios. Results: The team projects submitted for this case study in case management highlighted the receptivity of students in understanding the benefit of preserving business relationships, avoiding litigation and carefully wording the specifics of complex contracts. The students excelled in practicing interest-based bargaining skills and writing contract amendments that reflected the specifics of the complex contract problem presented. Conclusion/Recommendations: Case studies focused on real business situations resonate well with upper division students in business law classes; the complexities of the situations and of the contract language did not deter students from brainstorming solutions to the problems presented and in writing amendments to the contract such that the business relationship was preserved. The results of the students’ work on this case study problem were presented to the consultant who was surprised at the level of contract management demonstrated by the students.