Reaching An Agreement
Chances are you’re handling negotiations every day. Are you making the most of these interactions?
Two men enter a conference room in New York City. They sit on opposite sides of a large table and begin discussing the possible merger of their two companies.
Thousands of miles away in Tanzania, two elders from opposing villages come together to settle a land dispute. Closer to home, a radiologist picks up the phone to discuss a starting salary with a potential employer. These situations are all wildly different, yet each group is working together to negotiate a suitable end for both parties.
Situations that require negotiation are everywhere in radiology. Besides negotiating with staff and colleagues on a daily basis, radiologists may also negotiate with payers, referring physicians, patients, insurance companies, and even each other. You may use negotiation skills to acquire your desired salary or to keep your practice’s contract with a particular hospital. “Radiologists are negotiating all the time, but, in general, we tend to be very poor negotiators,” says Lawrence R. Muroff, MD, FACR, Radiology Leadership Institute® (RLI) faculty member and CEO and president of Imaging Consultants, Inc.
Richard E. Heller III, MD, MBA, author of the article “Negotiating for More: The Multiple Equivalent Simultaneous Offer”1 and chair of radiology at Advocate Children’s Hospital in Oak Lawn, Ill., believes that business skills, particularly negotiation, should be a bigger part of the medical school curriculum. Although some medical schools are thinking more about the relationship between radiology and business, there is still a long way to go. This means that physicians may have some catching up to do when learning business practices.
And it’s important they do, says Sanjay K. Shetty, MD, MBA, RLI faculty member and president of the Steward Health Care Network. In this health care climate, you need to demonstrate your value to others, and that is something we do through negotiation, Shetty adds.
In some cases, negotiating poorly and failing to demonstrate your value to the other party may have some pretty dire consequences. “The ultimate consequence may be that the group gets replaced. Years ago, it was hardly possible to replace a radiology group. Now? It’s fairly easy,” says Muroff.
If you want to make sure that your skills are up to par and that your contract stays intact, here are some negotiation tips to brush up on.
Do Your Homework
Being prepared before you step in is one of the most vital steps to ensuring negotiation success. Without preparation, you won’t have a good sense of what your terms are, which can be disastrous, says Heller. To recognize what your terms are, you need to do research and understand all of your potential options. Look into any political situations or outside factors that may affect the other party’s terms. For instance, if you are negotiating with a small hospital and you have other sources of income, then you can be more firm in your negotiations because you have less to lose, explains Muroff. But if this hospital is your only source of income, you have to consider the fact that you will have to agree to things that are less desirable.
You also need to understand your BATNA, or best alternative to a negotiated agreement. Your BATNA will help you understand at what point no deal is better than the deal that is being offered by the other party, says Heller. This does not necessarily mean that if you receive an offer worse than your BATNA that you should end negotiations, but it does mean that you should keep negotiations going until the other side can counter with something that is as good as your BATNA. Understanding your BATNA also allows you to realize when your opponent’s terms are better than they seem. Even if you feel like walking away, your BATNA can help you see when the consequences of the deal you have are better than the consequences of no deal at all. “One of the biggest mistakes people make in negotiations is hubris. They turn down a deal they think is bad, and then they realize they don’t have a better alternative,” says Heller.
Once you’ve decided what you’re going to say, you need to prepare how you’re going to say it, says Shetty. Decide how your team will present itself, to what degree you are willing to discuss your point of view at the table, and at what point you should break to conference in a side session.
Keep Your Cool
One of the biggest mistakes a radiologist can make is to take the negotiations personally, says Muroff. He adds that frequently, physicians don’t realize negotiations are simply an everyday part of a hospital administrator’s job. Instead, they think they’re being attacked and react emotionally.
And that can lead to a huge disadvantage. If you allow your emotions to get to you, it’s difficult to maintain an atmosphere of mutual respect. Additionally, when you feel you are being attacked, it is hard to consider your options objectively. “I’ve seen radiologists end up in shouting matches with administrators. Those are situations you can rarely win,” Muroff says.
Another important factor to remember in negotiations is the relationship you are developing with the other party. “Even if this is the first negotiation you’ve had with this party, you are probably hoping it is the beginning of a much longer relationship,” says Shetty. And because of that, you want to make sure that you maintain good relations with the other side.
How do you do that? Make sure you appear credible, says Shetty. One of the biggest mistakes he encounters is individuals who jettison their credibility by doing things such as appearing dishonest. Often, he adds, poor negotiators will make promises they cannot always keep. If they then fail to deliver, they are no longer viewed as tenable partners. These individuals may get the terms they want from this particular meeting, says Shetty, but in the future they may not even be invited to the table.
Being honest is key, says Shetty. Don’t answer a question when you don’t know the answer. Doing so can undermine your credibility later on, and you may be agreeing to something your team cannot provide.
Rely on Others
Both Muroff and Shetty suggest getting outside advice on analytics, legal issues, or finances. Make sure support is either available at the time of negotiation or readily available, Shetty adds. Muroff notes it may also be in your interest to consider consulting groups, especially if you are new to the process of negotiations. However, your IT department, practice leaders, or your practice’s legal counsel are also valuable resources.
Getting outside help can also mean relying on your staff or other team members. “You can be a lot more creative in your negotiations if you involve your staff, even if your team just sits down together to talk through your side of the negotiation,” says Shetty. Through discussion, you may be able to determine more options and find better possible outcomes for your group through different viewpoints.
An important part of involving your team is making sure that it’s unified, says Muroff. It’s important everyone is aware of the team’s goals and terms so that if team members are approached separately away from the negotiation table, they will stay firm on the terms that your team has agreed on, rather than conceding to their own separate terms. “If your practice members say things like, ‘I don’t know why we’re asking for this,’ then they completely undermine the position your practice has taken,” says Muroff; the other side may think these are terms you will not stand firm on. To help unify your group, Muroff advises educating your team on what you are asking for, and making sure you all agree before you start negotiating.
By negotiating well — through preparing, maintaining relationships, and unifying your team, you are adhering to the heart of Imaging 3.0™, says Shetty. Heller agrees, adding, “Your practice has already generated value, but now you have to demonstrate that value to others, and that’s where negotiation comes in. Negotiation is not where value is created, but where value is captured.”
Note: click on images below to enlarge.
Looking to learn more negotiation and business skills? Check out the Radiology Leadership Institute®, which offers a variety of courses, webinars, and other ways to boost your leadership skills. Check out http://bit.ly/RLILeaders for more information.
By Meghan Edwards, copywriter for the ACR Bulletin