The Physician As Negotiator

One of the questions I am routinely asked in an early meeting with a physician group is: who should we have as our physician-negotiators? There are three keys to arriving at an answer.

Key #1. Do you have shareholders with business skills?

Psychologists tell us that the popular elementary-age children are often those with the most refined motor skills. Similarly, I often find that group practices are led by physicians who are recognized for their clinical skills. While peer recognition is important, being a good practice physician-leader does not make one a good physician-negotiator.

This first Key question requires an unblinking self-evaluation. An error in judgment may cost the practice hundreds of thousands or even millions of dollars. If one or more of the physicians are not equally at ease with the practice’s financial statements, key metrics in those statements, and how the practice compares with regional or national benchmarks, the physician(s) should be in a supporting role and not serving as the primary negotiator(s).

Key #2. Who has the relationship with hospital senior management?

I have seen physician leaders who were so close to the hospital CEO that they vacationed, hunted, fished, or regularly played golf together. I also have seen positive professional relationships developed from hospital-medical staff committee meetings to fundraising dinners to building campaigns.

In still other experiences, the atmosphere was poisonous. The two management teams were professionally polite, but the give-and-take necessary for successful negotiations was a struggle because both sides wanted to throttle the other.

The importance of this Key question has to do with the “hidden negotiations.” When most physician groups think about negotiations, they think of each side carving out two hours from their calendar and meeting in a conference room. While these scheduled negotiations are a necessary part of going through the majority of issues, invariably the parties will hit one or two roadblocks that the parties cannot seem to resolve. This is where the “relationship physician” meets with the hospital or system CEO. The posturing is reduced because these individuals have worked together before and certainly will again. This relationship permits less formality, a greater chance for success and helps motivate the physician group to assist the hospital with its plans for changes that are almost always part of the agreement being negotiated.

Key #3. Can each member of the physician negotiating team understand and play their role, be it a primary or supporting role?

Each of us plays different roles at different times. I am a different person when I am talking to my pregnant daughter than when I am talking to a hospital lawyer. One key to successful negotiations is that each member of the negotiating team plays to his/her strength and stay primarily in that role.

However, sometimes there will be a physician (and the occasional administrator) who believes he (it is always a man) simply must be heard on virtually every issue. If this physician is bright, articulate and thoughtful, this can be positive. That is usually not the case.

So who should be on the physician negotiating team? I think the best physician-negotiators have three attributes:

  1. They understand the goal is to determine whether there is a deal available that will be attractive to a majority of the practice;
  2. They understand their role and are willing to prepare in advance to play that role; and
  3. They are opinion-makers inside the practice so that when they collectively advise the group about the negotiations, their influence is often determinative.


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