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Dear Friend,
Negotiation.
Here’s a great tool for your next negotiation with an entity, say with a hospital or even a healthcare system. Or with any business, for that matter.
It’s motivation. Motivation in the context of negotiation. No, not your motivation, but figuring out the other side’s motivation. But with a different twist, of course.
When you negotiate with an entity on the other side of a deal, of course you have to be concerned about, and do serious investigation into what that entity’s motivations, interests, and payoffs might be.
But also consider this: Because the other side is an entity, it’s always going to be represented in the negotiation by people. Let’s take some negotiation with a hospital as an example. The hospital will be represented by some executive charged with the outcome. Let’s say that it’s the CEO.
Think deeply about the CEO’s motivation in the negotiation, as opposed to the entity’s motivation. What is it?
For example, consider questions like the following: How does the CEO get paid? How does the CEO get evaluated for a promotion? When do evaluations occur? What other pressures is the CEO under?
Do you really understand those factors and what they can mean to you?
Over the course of hundreds of deals, I’ve seen many in which the hospital’s representative, the CEO in our example, took a position or agreed to a position opposed to the hospital’s best interest. You wonder why only for so long – then you realize that the CEO’s motivation wasn’t exactly the same as the hospital’s. For example, she was going to be judged on whether the deal closed, and therefore, a closed deal was better than the best deal, the best deal that would have taken longer to achieve.
Although you must, of course, research and evaluate what the business entity on the other side of the deal seeks in terms of success, it might be even more valuable to understand what success means for the executive representing it. In many cases, it’s entirely possible to deliver a complete win to the individual sitting across the table from you while delivering a complete win to your own organization in terms of the terms of the contract.
I’m not a big believer in the rote concept of “win-win” negotiation because it often results in you leaving too much on the table. But I’m all in favor of helping the other side’s representative “win” while advancing our business interests in the deal.
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| | Tuesday - Success in Motion Video: Are You Penalizing for the “Wrong” Answer to the Wrong Question?
Watch Tuesday's video here, or just keep reading below for a slightly polished transcript: |
| | I recently went to the airport to register for “Clear," the service that gets you through airport security lines even faster because it zips you to the head of the PreCheck line. I like stuff like that!
Wow, I thought as I arrived at the airport, this is going to be great!
But when I went to prove my identity at a Clear station at LAX, besides having to do all the biometric stuff, I was asked a series of identifying questions that someone – who the hell knows, the government, Clear itself, an intermediary that’s hired to assess identity? – posed.
One of the questions showed one of my prior addresses, presented a list of vehicles, and queried which specific one I had registered at that address.
I had never owned any of the listed cars. But "none" was not a choice!
When I told the Clear employee that I had never owned any of those care, she snapped back, “are you sure? Take a look again.”
I didn't need to look again. I told her a second time that I’d never owned any of those cars, so it was impossible that I could have registered one of them at any address.
Her response was, “well, you got one question wrong.”
That made me think. Do we, too, expect people to give us intelligent or valuable answers to the completely wrong question?
The completely wrong question could be in any number of circumstances: It could be on a questionnaire for patients, customers, clients, or whatever you call them. It could be in connection with questions posed during the course of negotiations, questions that not only don’t make sense but are completely inapplicable to the deal.
How often do we really sit down and look at what we’re asking and then question whether those questions are really designed to elicit any truly useful information?
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| | | Wednesday - Medical Group Minute Video: Don't Confuse Strategy with Tactics (or with Garbage)
Watch the video here, or just keep reading below for a slightly polished transcript:
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| I read a review in a magazine for consultants of a new book by an “expert” who advises that since business today moves at the speed of light, the “old” strategic question of “where do you want to be X years from now?” must now be “where do you want to be a few days from now?” What total B.S.!
Perhaps if doing business is limited to posting on Twitter, imagining until next Tuesday is a long term view. But it is sheer lunacy if you are running a real business, especially a medical group or other healthcare business.
Too many physician groups either have no strategic plan and are therefore totally reactive to events, or have a plan of sorts that actually consists of unintegrated tactics. This has contributed in no small part to physicians’ loss of control over healthcare.
Strategy is the map of your intended destination, not simply of each individual stop along a way that is left to chance. Tactics are steps in the implementation of strategy.
You want to be able to implement tactics and to change them as necessary as quickly as possible — on a few days or even a few moments notice. But those tactics are only important if they are aligned with your group’s overall business strategy; they are not a substitute for a strategy. And, if you plan on being in business a few years from now, your strategic view has to be at least that long … or much longer.
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| | Thursday - Podcast: Hospital Divorces Anesthesia Group After Twenty-Four Years of Marriage |
| Listen to the podcast here, or just keep reading for the transcript
We still love you but, hey, we’re in love with someone else who spends less on clothes stipends.
When I was a kid growing up in Los Angeles, there was a television show that I loved to watch: the original Divorce Court. You see, at the time, California required grounds for divorce, and the show proffered up titillating tales of deceit. But just across the border in Nevada, one could quickly obtain “residency” and snip marital ties on a whim.
Just like a 1960’s Reno divorce, last month, Olean (N.Y.) General Hospital announced that it was terminating its 24 year marriage to Southern Tier Anesthesiologists. Apparently, it was the “for richer or for poorer” part of the marital vows that pushed the hospital over the edge.
Yes, after 24 years of marriage, it was time for a change. Will the successor group be a “trophy wife” or bring staffing strife? Only time will tell.
Money talks.
According to a letter obtained by the Olean Times Herald, the hospital stated that Southern Tier’s bid for the renewal contract would have cost it too much: “. . . It is simply not feasible for [Olean General Hospital] to pay millions of dollars more than necessary over the life of the . . . contract.”
Of course, none of us are privy to the inside terms. Southern Tier claims to have done its best to meet any offer. But the hospital says there was a great gap. And, it’s reported that the hospital lost $3 million the previous year. How and why they lost it is anyone’s guess, but it’s unlikely that it was significantly due to Southern Tier’s contract.
The lesson for you: If you hold any hospital contract that pays you anything, you must constantly assess how to increase the value proposition. This is easily seen in the context of a hospital-based medical group stipend. But hospital-employed physicians generally are blind to the fact that the exact same concept applies to them.
We love you, but what have you done for us lately?
Again, we don’t have any specific facts, but query whether it was only an issue of money that led the hospital to take “bids” for Souther Tier’s anesthesia contract after a 24 year relationship.
The lesson for you: Despite all of the rainbows and unicorns talk about “alignment” and “valued partners,” hospitals view physicians, especially (anti-kickback statute alert!!) those who do not refer patients to them, as vendors: Cafeteria – check! Laundry service – check! Hospital-based medical group – check! Or, in the case of Southern Tier, uncheck!
Don’t take for granted that you won’t be unchecked as well.
You’re running a business, not supporting a hospital.
As much as you may love the idea that you’re “supporting the hospital,” take a bit of advice from polygamists: Spread the love around.
You never know when you’re going to be dumped even if you’ve done everything you possibly can to keep the love alive.
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| | | | We all hear, and most of us say, that the pace of change in healthcare is quickening. That means that the pace of required decision-making is increasing, too. Unless, that is, you want to take the “default” route. That’s the one is which you let someone else make the decisions that impact you; you’re just along for the ride. Of course, playing a bit part in scripting your own future isn’t the smart route to stardom. But despite your own best intentions, perhaps it’s your medical group’s governance structure that’s holding you back
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| In fact, it’s very likely that the problem is systemic. The Medical Group Governance Matrix introduces a simple four-quadrant diagnostic tool to help you find out. It then shows you how to use that tool to build your better, more profitable future. Get your free copy here.
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| | | | Whenever you're ready, here are 4 ways I can help you and your business:
1. Download a copy of The Success Prescription. My book, The Success Prescription provides you with a framework for thinking about your success. Download a copy of The Success Prescription here.
2. Be a guest on “Wisdom. Applied. Podcast.” Although most of my podcasts involve me addressing an important point for your success, I’m always looking for guests who’d like to be interviewed about their personal and professional achievements and the lessons learned. Email me if you’re interested in participating.
3. Book me to speak to your group or organization. I’ve spoken at dozens of medical group, healthcare organization, university-sponsored, and private events on many topics such as The Impending Death of Hospitals, the strategic use of OIG Advisory Opinions, medical group governance, and succeeding at negotiations. For more information about a custom presentation for you, drop us a line.
4. If You’re Not Yet a Client, Engage Me to Represent You. If you’re interested in increasing your profit and managing your risk of loss, email me to connect directly. |
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