Medical Negotiations Gone Wrong: The Wrong Model, at the Wrong Time, with the Wrong Outcome.

Medical Negotiations Gone Wrong: The Wrong Model, at the Wrong Time, with the Wrong Outcome.

Negotiating like a salesperson is a surefire way to ruin the deal, sour the relationship, and irreparably harm your reputation. You’re a physician, negotiate like one! 

Author: Robert A Felberg MD 

Topic: Physician Negotiation 

Keywords: Physician ContractsProfessional DevelopmentComplex medical negotiation 

If your hospital is like mine (and I’ve worked with enough hospitals to bet that it is), you have some derpy phrase on your mousepads, teamwork boosting meeting t-shirts, or website about how quality is “the right thing, at the right time, with the right toppings, the right flavors, with the right size spoon or some other nonsense phraseology. 

If you work at a “wired-in” hospital there are usually a few “#hastags” thrown in for #goodmeasureFTW! They would be better off saying, “Quality- It can’t be defined, but you’ll know it when you see it!”.  Negotiations are a lot more fluid than “quality” health care, but there are times when the wrong approach leads to the wrong outcome.   

Not enough is said about the different models of negotiation. They aren’t usually part of your conscious approach as you develop your negotiation strategy and style. That’s a mistake. Your approach can make a huge difference in outcome.  You wouldn’t approach a marathon like a sprint, right? You’d be out of breath after the first 2 miles.  And approaching a sprint like a marathon is a great way to enjoy a leisurely 100 meter jaunt into last place. 

Editor: In the post we start an ongoing feature- negotiations gone wrong.  We dive into a negotiation, dissect the corpse, and review the pathology.  One of a series of blogs from Negotiation MD.   Dedicated to physician professional development and helping doctors negotiate their best physician contracts and apply these skills to more complex negotiations.  Be sure to sign up for the newsletter. 

There are three commonly taught models of negotiation.  

  • Salesperson model:  closing the deal, shaking hands, and signing the contract is most important. The product and maintenance of the relationship is transferred to another team.  
  • The Administrator (including medical administration) model:  Putting together a multi-factorial model of revenue streams, predictions, cost outlays, and staffing to a develop an agreement that maximizes profit.  Maybe this sound familiar to you. It’s the most common obstacle to working with the “suits” at your practice. 
  • The attorney model: Using conflict to “fight” for every concession. Lawyers are trained to fight, and fight hard, for every possible concession. Since conflict, by definition, involves negative emotions, many people find this model of negotiation unpleasant. 

None of these models work for physicians. It’s the reason why doctors can’t learn negotiation from the typical books and courses that are available. The physician model of negotiation is based on developing, strengthening and maintaining relationships. As a lawyer you may “never split the difference”, but as a doctor, if splitting the difference saves the relationship, it’s the right choice. 

With this in mind, I discuss a recent experience of a failed negotiation. 

 

I was asked by a telepsychiatry company to help negotiate a deal with a hospital. I had developed several successful contracts and roll-outs with this company and was looking forward to working with them again. They had a very well thought out, designed, and successful process and I was proud to have played my role in that design and implementation. 

Usually the addition of telemedicine services is an exciting event. It’s one of the rare win-win-win situations in medicine. The telemedicine company gets to expand, the hospital improves high quality services, and the patients get access to emergency psychiatry services that were previously not available. In the past the negotiations and onboarding were fun- the obstacles were minimal, the attitude friendly, and the comradery infectious. Many long-term and close friendships lasting years were forged. 

There was something different with this negotiation from the start. The tone of the other party wasn’t just the normal “getting to know you” apprehension; it was down-right accusatory! Without ever meeting before, we were being accused of purposefully setting up the other hospital for lawsuits, etc. Thinking they may have heard something from a competitor, I asked them where they had gotten these ideas. Their response was that all telemedicine companies “prey” on emergency departments and that we were bound to be the same.  They could quote no examples of this happening and could name no assurances we could give them that would change their opinion. I knew we were in trouble. 

The second, and more concerning problem was a demand that the model be changed. Instead of only seeing emergent psychiatry patients at need for immediate and possibly involuntary admission or at risk for other or self-harm, every patient with any symptom were to be seem immediately with the same resources as a true psychiatric emergency. This was not the model offered and would essentially have us doing dozens of essentially wasteful consults at this hospital to the delay and care of true emergencies across the system. When I bought up the idea that this is outside of the current scope of services that we could offer within the current contract and pricing, they became hostile. The meeting broke down rapidly, with a poor and defeated feeling. 

These things happen. Not every person you date is going to be your soul mate! There’s a reason you negotiate and work out your deal. When negotiations go poorly, it’s a good thing… you just dodged a bullet.  

 

This is where things took an unexpected turn. I went back to the company and told them what happened. I explained to them that they were dealing with a hostile and uncommitted party. I also explained that the services they desired far exceeded what is currently offered. I recommended that they consider a series of trust building interactions before attempting to partner. I also advised that they come up with a new process and contract to supply the services desired by the other party, but at a staffing level and price that was fair. 

The response from the telepsychiatry company surprised me. The company basically stated that they wanted to partner with this company and wanted the contract signed. They weren’t really concerned with the issues raised and that “once the deal was done” the other party would eventually come around and act like everyone else in the system.  

Here was a dramatic mistake- they had decided to use the salesperson model, emphasizing closing the deal at the risk of the relationship. They were willing to “stretch the truth” about what would be offered to get the other party to sign on to a binding contract. I wasn’t interested in this type of negotiation and explained my stance. As was their prerogative, I was no longer involved in this negotiation.  

 

Eventually, they brought in someone else with the reputation for being a “smoother”.   By “smoother”, I mean someone who will say whatever you want to hear to convince you to sign the contract.  The contract was signed and by the first day there were troubles. The number of inappropriate consults was tremendous.  The staff of the telepsychiatry company grew mutinous and angry for being called dozens of times daily for false emergencies like “3 years of panic attacks” or “15 years of schizophrenia and now wants to change medications”.  Other true emergencies at other systems were being delayed and the metrics suffered. Financially, this was rapidly becoming a losing proposition as resources had to shunted away from profitable relationships.  The contracted emergency department became increasingly hostile in response.   After several months, a series of increasingly accusatory letters have been passed back and forth and the entire deal is hanging on a thread. 

Here’s a simple fact regarding physicians negotiation- the relationship is the single most important goal. It is far better to be honest and move on with respect and co-admiration than it is to close a deal that will sour the relationship. Emphasizing the deal, like some kind of used car-salesman, ruined the partnership and irreparably harmed the reputation of the telepsychiatry company. You can nearly guarantee that the dissatisfaction will be broadcast far and wide to any person willing to listen. 

It’s tough to be honest, especially when you believe it could break down a negotiation. But, as a physician, you are best served by keeping any relationship harming issues in the forefront. Typically, any issues that are dealt with directly be well-meaning partners can be solved. But, if after the fact, you are exposed as hiding a potential problem, your relationship is dead in the water.  

Remember, you are not a salesperson, an administrator (at least in your primary role), or attorney. You are a doctor, so negotiate like one. Keep the relationship at the forefront of the agreement and you will always obtain the best deal. 

 

 

 

Cajun Bob’s Bonus Round: As can be seen from testimonials, physicians with the proper training can negotiate their best physician contracts.  Often the amount negotiated is $20,000 to $50,000 more than the initial offer. I’ve had some clients obtain $80,000 to $150,000 more on the total compensation package. Affiliates and friends often tell me I should offer some sort of guarantee, like increase your salary by $10,000 or get your money back.  
 
The truth is, I can never offer a guarantee. Not because I don’t believe you can significantly improve your physician contract with the right future employer. It’s because I can’t guarantee that you have chosen the right employer!  

Negotiations often don’t work out. That doesn’t mean that you negotiated poorly. Negotiation isn’t some game of seduction, that is played perfectly, always leads to a positive outcome. Instead, it’s two parties coming together to come up with a mutually satisfying agreement.  If the other party is unwilling to agree to a fair compensation package, why would you want to work with them? I consider a failed negotiation amongst the most positive outcome. I ask you- Would you rather call off a relationship in the dating phase or go through the pain of divorce?  

If I can teach you to negotiate to deadlock and walk away, rather than accepting an inferior compensation package and a job from hell, that is about the most valuable outcome I can offer. That’s why I can’t offer you a compensation backed guarantee. I can guarantee you will be able to recognize and evaluate a fair offer, negotiate the best compensation package for you at your risk level, and will have the skills to know when to walk away.  

 

 What do you think? It’s a dog eat dog world, right? Let the other party learn the hard way! Worrying about relationships is silly! Have you ever been part of a physician negotiation where you gave a concession to strengthen a relationship? Have you ever been on the receiving end of a doctor who used the wrong model? Share your thoughts in the comment section. 

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