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Negotiating and Renegotiating Successful Tactics

Negotiating and Renegotiating Successful Tactics. February 23, 2013 Mike Valentine, MD Centra Medical Group – Stroobant’s Heart Center Cardiovascular Summit Co-Chair. Negotiating 101. Who are we? What arrangements are in place? What are our options? How can we succeed?.

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Negotiating and Renegotiating Successful Tactics

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  1. Negotiating and Renegotiating Successful Tactics February 23, 2013 Mike Valentine, MD Centra Medical Group – Stroobant’s Heart Center Cardiovascular Summit Co-Chair

  2. Negotiating 101 • Who are we? • What arrangements are in place? • What are our options? • How can we succeed?

  3. Know Your Options • Medical Directorships • Cath Lab - Outreach Director • Non-Invasive Lab - CME • Clinical Quality • Co-Management Agreements • Call Coverage – ER / STEMI / Nights • Leadership / Management • Dyad Models

  4. Know Your Options continued… • Hospitalist Service • Recruitment Assistance • Joint Ventures • Horizontal Integration • Vertical Integration • Employment

  5. Negotiating 101 • NEGOTIATION is the means by which an agreement is reached. • You must start with the END IN MIND

  6. Negotiating 101 Success Humility Flexibility Mutual Gain (Win-Win) Failure Arrogance Ignorance Selfishness Do NOT Act Like A Cardiologist!

  7. Negotiating 101 • Key Advice • Know who the dealmakers are • Separate the people from the problem • Focus on interests, not positions • Use objective criteria • Invent options for mutual gain

  8. Negotiating 101 • Negotiation Language • Most Favorable Position/Maximum Plausible Position • Walk Away Position • BATNA (Best Alternative To Negotiated Agreement • Inexpensive Valuable Concession • Time Out

  9. Negotiating 101 • Five Steps in Negotiation • Prepare • Engage • Propose • Bargain • Agree

  10. Negotiating 101 • Successful Negotiation Means Each Side Feels: • Sense of Accomplishment • Other side cared • Other side was fair • Would do it again • Will keep the bargain • Can say thank you and mean it

  11. Negotiating 201 • Tough Love • Keep you friends close, but keep your enemies closer

  12. Negotiating 201 • Maximum Plausible Position • Bracketing • Reluctant Buyer/Seller • Higher Authority • Concessions • Impasses/Stalemates • Closing

  13. Negotiating 201 • Maximum Plausible Position • You go first • Bracketing • They go first • Best if you don’t know them well • Allows equal counter on either side • May get what you want! • Never say yes to first offer

  14. Negotiating 201 • Reluctant Buyer / Seller • Range up front • Walk away price • Feel / Felt / Found – key phrases • State position, then BE QUIET! Silence is Power

  15. Negotiating 201 • Higher Authority • Never be the decision maker • Leave ego at home – Appeal to theirs! • Concessions / Commitments

  16. Negotiating 201 • Impasses • Set them aside • Split the difference • Stalemates • Share risk • Win-Win • Change the teams, Remove the loser • Third party arbitrator • Always save face

  17. Negotiating 201 • Always use an expert • Double agents are invaluable • Verbal, then written • Never have a deadline

  18. Renegotiating 301 • Renegotiation starts the dayyousign a contract • Build and prove – Value and Trust

  19. Renegotiation Rules • Record the victories • Prove your value with Leadership! • Know the “Fair Market Value” • Keep your expert close • Reimbursement models are changing – more is at risk

  20. Renegotiation Assumptions Offensively you have: • Developed a relationship with the hospital • Committed to a common vision • Honed your decision making model • Created value in the system (and can quantify it) • Maintained productivity • CREATED TRUST Defensively you have: • (Unusual) Compensation escalator • Non-Compete Management • Cardiologist recruiting and employing exclusivity • Unwind provision • Medical records access • Understanding of renegotiation parameters at the outset

  21. Key Business Underpinnings • Health Systems attuned to changing reimbursement dynamics • In past, more wRVUs = better • Today, systems want to incentivize patient health management and efficiency • New definitions of productivity • Systems focused on flexibility

  22. Warning Signs • Health system complains about “losing money” on employed physicians • System approaches renegotiation as “take it or leave it” • Renegotiations are conducted on physician-by-physician basis • System discourages physicians of obtaining guidance from third parties

  23. Positive Indicators • System regards physicians as “adding value” • Physicians involved in CVSL management • Physicians have no post-termination non-compete • Or, only a “soft” non-compete, permitting return to independent practice • Renegotiation dialogue is open and respectful

  24. Final Thoughts • Financial discussions are often sensitive • Third party assistance may be helpful buffer with employer • Compensation renegotiations are meritably distracting • No perfect solution available, it is impossible to predict market changes • Set a deadline and stick to it

  25. Questions?

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