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| Dear Friend,
Walking away from the deal.
You’re probably familiar, if not personally, then at least conceptually, with the notion of “F.U. money” – having enough money that you can simply walk away.
That concept, whether you have the money or not, applies directly to your negotiation strategy.
Have you ever simply stood up and walked away from the negotiating table, saying to your teammates, “let’s go, we’re done here”?
As I’ve espoused many times before, for example, see here and here (and, by the way, it’s the subject of my upcoming webinar on June 25, 2020, How to Deploy the Secret Sauce of Opportunistic Strategy) negotiation is far, far more than what takes place at a negotiating table.
But the overall ability to walk from a deal requires either the actual ability to walk away from the deal because you don’t actually need it, or the guts, strategic thinking, and the ability to project your power to do the same, even if it’s your only deal, the one that you need to survive as a business.
True power in any negotiation is the ability to project that you do not need the deal, even if that “not needing” is not true.
That power can be developed multiple ways. It can be developed in the sense of “F.U. money,” by the size of your bank account. It can be developed even if you don’t have enough money to make the initial deposit into a bank account by having a high enough “deposit” of confidence that you can project the same power to the opposite party.
You want a concrete example? OK.
I’ve guided clients through a strategic process whereby start-up physician groups have adopted and implemented a position against large healthcare systems that we would negotiate from our documents, from our position, and have achieved tremendous results.
The secret? Besides the proprietary strategy, those clients were coached on having supreme confidence in themselves and on the strategy, and on how to project their power through their demonstrated willingness to walk away.
They had the willingness to invest in themselves by controlling the drafting of the documents – they knew that sitting back, pinching pennies, and waiting for the opposite party’s documents was a fool’s position, one that would have put them at a disadvantage before the first shot was fired.
Develop and project power. |
| | How to Deploy the Secret Sauce of Opportunistic Strategy - Webinar
They say that COVID-19 has changed the world, creating the "new normal." Many of your colleagues and many hospital administrators are running scared.
Others, leaders like you, know that crisis means opportunity.
Let me provide you with the strategic tools and insights that you need in order to seize opportunities, whether they’re in the context of your current business relationships, the expansion of your business activities, or the creation of new ventures.
Join me for a live webinar event on June 25, 2020 at 4pm Central. Only by participating will you learn:
•Defense as a defective default: It’s necessary, but not sufficient.
•Exploiting weakness: Drop the guilt and identify opportunity.
•Flat line negotiation is fatal: Understand its myths and limitations.
•Negotiation reality: Learn to identify and deploy on multiple planes to affect the outcome.
•Maneuver: Harness the power of maneuver, both in overall strategy and in specific negotiation strategy.
Others see a crisis and freeze in fear. Learn how to see the opportunities and obtain the tools to increase your odds of obtaining them.
The price to attend is $479. The cost of not attending is astronomical.
In order to respond to live and emailed questions, attendance is limited.
You'll receive a recording of the webinar if you can't attend live. |
| | | | Business Life in the Time of Coronavirus Mini-Series
The coronavirus crisis caused a short term economic crisis for many medical groups. Our mini-series shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
[If you haven't already seen them, follow this link to watch our entire series.] |
| | Tuesday - Negotiation: Don't Paint Yourself Into a Corner
Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript: |
| Let’s play a little negotiating game, right now. Come one, you've got to play along with me.
Let’s suppose that you know that I’ve really got to sell this car, and that you know that it's highly doubtful that I’ve had any other offers for it. So tell me, when you approach me to purchase this car, what kind of offer are you going to give me? Are you going to give me a high offer? Are you going to give me what Kelly Blue Book might say is a “fair” offer? Or are you going to hard-ball me?
Come on! Tell the truth! You’re going to hard-ball me.
You know I’m in a tough spot. You know that I’ve painted myself into a corner. You know that I don’t have any other option.
So why do so many of you (and by you, I mean “you” generally out there) medical group leaders, allow yourself, your group or your practice, facility, whatever it is, to be painted into a corner in terms of the strategic position you hold and then negotiate from?
We’ve talked about this before in the context of an exclusive contract (you’re an emergency medicine group, a radiology group, an anesthesia group, etc.) You're dependent on a contract with the hospital, and if the hospital knows this is the only place you provide service, and if the hospital knows there are alternatives to replace you, you’ve put yourself in a disadvantaged position when negotiating with that facility. The facility knows that if you don’t make a deal, then the reason for your existence is moot.
Think about strategy in negotiation in a much larger manner than one normally thinks about it.
It’s not the hostage negotiator system, or the win-win system, it’s far greater than that. It's the strategy, the grand strategy, that you’ve adopted for your group and what position it puts you in vis-à-vis any particular situation.
Think strategy in a much greater sense. Don’t paint yourself, your group, and, most importantly, your future, into a corner!
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| | Wednesday - Maneuvering Your Way Out of Crises, Coronavirus and Otherwise
Watch the video here, or just keep reading below for a slightly polished transcript:
Don't think about how hard it is to turn a large ship.
You're the pilot of a jet fighter, moving forward in a straight line significantly faster than the speed of sound. But, in aerial combat, how quickly and how sharply could you turn?
The ability to do just that, to maneuver, is certainly a function of the pilot's training and experience. But unless the aircraft was designed for high maneuverability, as opposed to simply for forward speed, even the best training and the best experience would not be enough to guaranty an advantage.
The late Air Force Col. John Boyd was instrumental in advocating that jet fighters be made maneuverable. At the time, the thinking was that maneuverability was outdated; in favor was a design (eventually the F-15) for a plane that was near twice as fast but also much heavier and, as a result, far less maneuverable.
Over time, Boyd's thinking prevailed and became an important element in future fighter plane design, even if not completely implemented.
The underlying rationale is equally applicable to you as a medical group leader.
Boyd wasn't a technician, an aeronautical engineer. He was a strategist, considered by many to be the second greatest military strategist to have lived, right behind Sun Tzu, the author of The Art of War.
Maneuverability was key to Boyd's strategic thinking, represented most famously by his concept of the OODA loop.
In simplified form, the loop consists of observing, orienting, deciding and acting. (The OODA loop is actually much more complex with various internal feedback mechanisms). The point, however, is that the competitor who can cycle faster through the loop gains a tremendous strategic advantage over its opponent.
The concept is used, well, should be used, in all negotiations and it's certainly used in connection with litigation, at least by those who understand the concept and the tremendous advantage it provides. Let the other guy fly by the seat of his pants and you can beat the pants off of him.
Similarly, unless your business in general is set up to take advantage of faster cycling through the loop, it's a prisoner of its current direction. That necessitates that decisions, quick decisions, be made by one or a very small number of leaders - there's no time to take a vote or seek a consensus.
As we come out of the economic crisis resulting from the pandemic, use the opportunity to redesign your group to take advantage of OODA loop thinking.
Don't, by lethargy, dismissiveness, or delusion, be a jet fighter limited to using speed to combat an enemy, a dragster trying to navigate a Formula 1 course, or, dare I say it, a large cruise ship attempting to avoid an iceberg.
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| | Thursday - Hospital Sues Medical Group. Medical Group Returns the Favor. Both Likely Lose |
| Listen to the podcast here, or just keep reading for the transcript.
At first I couldn’t believe my eyes.
It seemed like a plot from the old Divorce Court TV show. But no, it wasn’t a battle of the spouses over the failure of a marriage, it was a battle of a hospital and a medical group over what appears to be the failure of an exclusive anesthesia contract.
The Marriage
Trinity Health, a not for profit, Catholic healthcare system, operates more than 90 hospitals across more than 20 states.
Anesthesia Associates of Ann Arbor, also known as “A4,” is the largest anesthesia group in Michigan.
Trinity and A4 are parties to an exclusive anesthesia agreement that covers six of Trinity’s Michigan facilities. That contract apparently has provisions barring Trinity from soliciting the employment of A4’s anesthesiologists and CRNAs.
And, A4 apparently has covenants not to compete in its agreements with its anesthesiologists and CRNAs.
The Breakup
Earlier this year, A4 terminated its payer agreements with Blue Cross Blue Shield of Michigan and with Provider Health.
As a result, In July, Trinity sued A4 in federal court alleging that the terms of the exclusive anesthesia contract between them requires A4 to remain in network.
Additionally, Trinity’s lawsuit seeks to enjoin A4 from enforcing covenants not to compete with its anesthesia providers, whom, it appears, Trinity began courting so that it could employ them.
The other aggrieved spouse, I mean, party, A4, then filed suit in state court against Trinity alleging that the hospital system ignored the non-competes in the agreements between A4 and its anesthesiologists and CRNAs as well as non-solicitation provisions in Trinity’s agreement with A4.
Just as in divorce cases when spouses argue over child custody, this fight over who has “custody” of the anesthesiologists and CRNAs has an uncertain ending for the parties. (However, we can be sure that the divorce lawyers, I mean, trial lawyers, are going to come out okay.)
The Judgment
But no matter the ending, we can extract some valuable lessons from the overall dynamic for your benefit, no matter what medical specialty you’re in.
- Covenants not to compete, in jurisdictions in which they are enforceable, remain powerful tools. However, they have their limits. They work best within an overall system of protection.
- Non-solicitation provisions in agreements with hospitals also remain powerful tools. They, too, have their limits. And, they work best within an overall system of protection.
- No contractual provision is perfect and will always be enforced. This is especially the case with restrictive provisions such as covenants not to compete. And, as medical groups grow larger and control more market share, it may be more difficult for them to effectively enforce restrictive covenants. This is either bad news or great news depending on whether you’re doing the restricting or the soliciting.
- Lawsuits aimed at enforcing covenants not to compete are likely most effective when brought against the individuals who agreed to them, not a third party. That’s not to say that separate non-solicitation provisions don’t form the basis for other legal action.
- In light of the Trinity/A4 dispute, agreements to remain in network should be redesigned from another angle. There are at least several others.
- Unless considered during the exclusive contracting process, medical groups can become uncompensated recruitment agencies. There are strategies to prevent this.
- Suing the hospital with which you hope to maintain a relationship will probably be as effective as filing a divorce action to save a marriage. Sure, it might be a wake-up call, but more likely it’s a permanent parting of the ways. The more valuable time for action is in the strategy and negotiation phases as well as in regular and purposeful ongoing communication to keep the love alive.
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| | | Calibrate Your Compass
Read our exclusive RedPaper to guide you through this evolving situation.
The coronavirus crisis caused a short term economic crisis for many medical groups. Our RedPaper shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
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| | Help Us Help You With Helpful Content
What tailored content would you most like to see during this time? How can we focus on solutions to your most pressing strategic concerns?
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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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