Effective Negotiations
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- Ralph Clark
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1 Why Negotiations? We desire a different situation There are better options available Save money, make more money Business success Because the boss asked us to There is something we want Opportunities for Negotiations Payer contracts Supplier contracts Equipment contracts Conversations with patients, staff, vendors, etc Property (Building) contracts With your 15 year old child.. 1
2 Why Do We Avoid Negotiations? No Patience we want it now Afraid of confrontation Intimidation Fear of hearing No Skills of Negotiation Don t be afraid to ask Be prepared - Have a goal in mind. If you go into a negotiation not knowing what you want, it is hard to negotiate for it. Be aware of what the other parties needs are Find common ground Know your walking price if possible Silence is OK. Don t take the negotiation personally Go In Prepared 2
3 Communication Skills Communication is the process of conveying information, thoughts and feelings between people through speaking, writing or body language. Effective when transmitted and received in the way it was intended. The goals of effective communication include creating a common perception, changing behaviors, and acquiring information Active Listening Active listening Helps you assess more effectively and accurately Allows the speaker to clarify thoughts and feel heard You can learn valuable information 70/30 rule Diffuses emotions that can present road blocks to communicating effectively Effective Communication Non Verbal Communication 7 percent of communication happens in spoken words. 38 percent of communication happens through voice tone. 55 percent of communication happens via general body language. 3
4 Win-Win Negotiations Both parties are satisfied with the outcome Understand what the other party wants or needs Willingness to compromise Focus on the problem not the person Offer different solutions if possible Negotiate for your interest but understand theirs and have a potential range in which you are comfortable moving within. Look for Win - Win Problem Solving Example Scenario: A practice is spending too much on medical supplies and you are tasked with finding reductions in supply cost. 1. Manager meets to request lower prices, sales rep says they can t budge due to market constraints. Manager gets frustrated, emotions flare, and the manager ends the relationship with the supplier. 4
5 Problem Solving Example Scenario: A practice is spending too much on medical supplies and you are tasked with finding reductions in supply cost. 2. Upon hearing supplier can t budge, asks about different manufacturers that might be less expensive, discusses online ordering discounts, if there are GPO s they could participate with, and any other solution to maintain their good relationship and still lower expense. Negotiating Supplies Create a list of all supplies you want to evaluate Ask for a quote from different suppliers Use information to negotiate better pricing Identify benefits of using current vendor(s) Are you willing to consider other options? Negotiating Call Pay Example 1 Asked to negotiate a better payment for taking call Call and arrange for a meeting with hospital CEO Show up simply ready to ask for more call pay. CEO says the current amount is fair CEO says he can t pay any more 5
6 Negotiating Call Pay Example 2 Asked to negotiate a better payment for taking call Verify the minimum amount the physicians are willing to accept Ask if physicians are ready to pull out if they don t get their reservation price Research justification for increased pay Know what is important for the hospital Schedule meeting with the CEO Negotiating Call Pay You start the discussion explaining why an increase in pay is justified and how your docs can help the hospital be successful If the CEO pushes back you know how much you can give in to make the deal. Additional leverage is achieved by the ability to walk away or to reduce the amount of call provided Contract Terms to be Aware Termination Effective Date Amendments Timely Filing State s prompt payment law Current Fee Schedule 6
7 Prioritize Payer Contracts Revenue per visit Quick high level test to review payment value Total collected $ from the payer Total number of patient visits Know your Payer Mix CPT Codes Practice Fee Medicare United %Medicare Cigna %Medicare Humana %Medicare Office or other outpatient visit $ $59.00 $ % $ % $ % Office or other outpatient visit $ $88.00 $ % $ % $ % Office or other outpatient visit $ $ $ % $ % $ % Office or other outpatient visit $ $40.00 $ % $ % $ % Office or other outpatient visit $ $71.00 $ % $ % $ % Office or other outpatient visit $ $95.00 $ % $ % $ % Prolonged physician service $ $ $ % $ % $ % Prolonged physician service $ $ $ % $ % $ % Prolonged physician service $ $ $ % $ % $ % Negotiate with the Payer Know your costs of providing services Be clear on what you offer to the patients that sets you apart Know your rate increase history and compare to other payers Know how much weight you have in the market how important are you to the payer? Ask high (but within reason) and see where it goes Are you prepared to walk away from the contract? Are you talking to the right person? 7
8 Other Negotiations Physician Contracts Compensation Call coverage Work hours Non Compete Clause Exclusivity Partnership Opportunity Buy - Sell Agreement Other Negotiations With Patients Payments Bad experiences Personal Compensation Express your needs Have a range that is acceptable Understand what you bring Understand Employers needs The End DAL 323 THANK YOU! 8
9 9
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