Negotiation between individuals and their employers takes place daily in all industries. In the health care industry negotiation as an important skill is still in its infancy. This article will urge more aggressive negotiation of health care contracts.
Though the medical paradigm has changed, physicians will remain highly compensated employees for the next few years. However, like highly compensated persons in other industries, they must aggressively negotiate for their compensation, benefits and other rights in order to keep up with their non medical peers in the future.
Health Care Negotiation (HCN) as we shall call negotiation in the health industry context, takes place at all stages of employment, not just as a precedent to employment. For example there are employment agreements, termination agreements, mediation agreements, medical disciplinary agreements, medical malpractice settlement agreements, etc. This breadth of HCN is astonishing. In spite of its breadth and general frequency, the aggressive use of HCN is far less than it should be. What I mean to say is that most healthcare actors (particularly physicians) will negotiate a few easy terms, but back off when it comes to negotiating other issues that can have long term effects on their happiness and financial welfare.
What terms are we talking about? In the employment contract context, the benefits, malpractice insurance and restrictive covenants; in the termination agreement context, the duration of severance payments and age discrimination issues; in the disciplinary context, due process and allegations of bias and prejudice; in the malpractice context, early settlement and conflicted legal representation.
Why is HCN not aggressive enough? There are several reasons: The first is that health care actors start off with a pre conceived salary expectation: they often accept all other terms if management meets that salary expectation; second, they are inordinately concerned about legal fees; third, they have a harmful attitude (a professional block) about negotiation; and finally, they are naive about the skills of health system management.
The obstacles to aggressive HCN can be lowered. When faced with negotiating a health care contract, physicians must do the following: (1) Use an attorney; (2) ask the attorney to quantify the implied costs of ignoring certain terms in the agreements; (3) have the attorney provide a reasonable estimate of the legal fee; (4) learn the “how” of negotiating and persist. In a later article, I will discuss the “how” of successful negotiation.