No-Fear Negotiation

May 15, 2002

Tips for negotiating with payers, or anyone else

Does the thought of sitting down to negotiate managed-care contracts make you shudder? Do you, like many physicians, feel that asserting yourself during negotiations is not professional, that you don't have time for negotiations, that it's downright uncomfortable to talk about what you're owed?

Suppose for a moment that the negotiation does not involve your compensation, but your professional reputation: You are about to be interviewed for a television broadcast. Would you make the effort to play the situation to your advantage, or let the TV people control things? Consider these scenarios:

Media representative: Doctor, we would like to interview you for an hour for our TV show on informed consent airing on June 1, 2002. We will come to your office next Monday at 1 p.m., OK?

Doctor #1: Fine. Will a blue shirt and a solid tie be all right?

Doctor #2: This sounds interesting, but I am quite busy. Please fax me the names and phone numbers of the last four doctors you interviewed so I can talk to them. Include notes on how long this taping will take, what preparation I will need to do, how you intend to use the interview, and what my compensation will be. I will call you this week to see if we can reach an agreement.

Clearly, in the second scenario, the doctor identified an opportunity and bought some time to investigate and properly prepare for the negotiation session ahead.

Seize the day

It makes little sense for physicians who negotiate millions of dollars in contracts, employment agreements, purchase and sale of practices, and real estate leases/purchases during their careers to avoid the same opportunity to negotiate.

Over the last 30 years as a negotiator and trainer, I have watched countless physicians lose untold amounts of money because they never learned the finer points of negotiating. It requires specific skills and sufficient practice, but a few key points can get you started on the right path. Consider the following the next time you need to go head-to-head with a payer -- or anyone else -- to get what you deserve.

  • Know where to negotiate. Not in your office; choose a neutral site you are comfortable with.
  • Develop active listening skills. Listen carefully to what is being said -- and what is being omitted.
  • Ask open-ended questions. "How much flexibility do you have on price?" will get you a more advantageous response than "Are you flexible?" or "Is the price firm?"
  • Look for power. Key ways to gain leverage in managed-care negotiations are physician numbers, advantageous geography, lack of competition, high quality, patient volume, and threat of terminating the contract. While walking away from a contract may not be easy, signing one that results in your losing substantial sums of money is worse in the long run.
  • Avoid the ambush. Negotiate when you are prepared and not distracted. The best time is when you least need the deal and your opponent's need is greater.
  • Handle telephone negotiations. It's best when you initiate the call. Prepare completely, have all your documents on hand, and listen carefully for auditory cues.
  • Set your aspirations. Set your goals high and convince yourself with objective information that they are attainable. It will be that much easier to win over your opponent.

With these points in mind, add one more: confrontation is not inherently evil or something to be ashamed of. Recognize that there is nothing wrong with standing up for yourself and your family and trying to obtain a fair deal from payers. Physicians who learn to negotiate earn the respect of their peers -- and opponents -- and are generally more successful than those who do not learn the art of negotiation.

Steve Babitsky is the co-author of The Successful Physician Negotiator: How to Get What Your Deserve. He can be reached at sbabitsky@physicianspractice.com.

This article originally appeared in the May/June 2002 issue of Physicians Practice.