How to negotiate with payers, hospitals and patients

The ability to negotiate is an important business skill. In a medical practice, you need it to reach deals with payers, to hire the best-qualified physicians and staff, and sometimes even to get patients to follow your advice.

The toughest negotiators many of us face, however, are ourselves.

When it comes time to make a decision, I often catch myself leaning toward outcomes that protect something I've worked for, whether that something is truly necessary. For instance, a house I once owned had a gas stove I helped install personally. There was no practical argument for swapping it out with the old one and taking it with me when I moved--and I didn't--but the desire to do so was almost primal.

This is a lighthearted metaphor but I can apply it to more serious matters almost perfectly, and I bet many of you can, too. An example that comes up often in FiercePracticeManagement is the idea of practice independence.

I'm not by any means saying that fighting for a business you poured your soul--and perhaps bank account--into is anything like loading a massive kitchen appliance onto a U-Haul based on principle. But in some cases, the burden doctors place on themselves to go it on their own may be similar.

As many practice administrators voiced at last year's Medical Group Management Association conference in San Antonio, practices have options between the extremes of reluctantly boarding a hospital life raft and treading water solo in a choppy sea. One of our top stories this week broke down some of those choices in further detail, making the point that hospital alignment does not have to be an all-or-nothing proposition.

Furthermore, alignment models are not one-size-fits-all. As with all decisions, there are tradeoffs. The two biggies, when it comes to partnering with hospitals or other entities, are autonomy and financial security. Once you determine what is more critical to you as a person, and as an organization that needs to survive, it's easier to see where you might fall on that continuum--as the story from American Medical News pointed out.

Ideally, big decisions are made not out of desperation, but from having the wisdom to look at all the elements one can and can't control clearly. If something does in fact "have to give," what should that something be?

To figure that out, practices and physician leaders need to take a hard look at what exactly they're dealing with. A recent report from AMA Insurance agency, however, revealed most doctors are remiss in keeping on top of their personal finance picture. And when it comes to their businesses, doctors are understandably nervous to see up to a quarter of their neighbors eyeing closure, not to mention anecdotal reports that physician bankruptcy filings on the rise.

But do you really know exactly how close you are to the same fate? As pediatric administrator Brandon Betancourt inquired in a post last week, have you figured out how much cash reserve you'd need to run if reimbursements suddenly came to a halt?

The reality is it's a scary time to be running a medical practice. But you can't hide from the facts, nor should you give up on what's important to you based on a potentially incorrect assumption that you have no choice. Instead of functioning in survival mode by default, take the time to truly determine where you stand and map out how that would be affected by various scenarios. Before you can negotiate with anyone, including yourself, you need to have all the information out on the table.

Even if you're not looking to make big changes immediately, I encourage you to take these steps sooner rather than later.

Have you conducted this type of analysis for your practice? How did it affect your outlook and goals for the future? Deb (@PracticeMgt)

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