September 13, 2010

It is medical society meeting time again across the country, and many of those meetings are going to include presentations on negotiating. Hospital contracts, payer participation agreements, employment status and changes are among the most common negotiation topics at anesthesiology conferences. Practice leaders and managers also enter into contracts with various business vendors, including billing companies and financial consultants.

When was the last time you had a refresher on strategic and tactical negotiating? One way to sharpen your strategy is to start by defining the outcome you want and then choosing the style that will work best for you – hard-nosed, cooperative, alternating between the two, something in between? Choosing and honing your style need not have any whiff of dishonesty. Consider basing your repertoire of tactics on your inner child. One of the more lighthearted yet profound books on negotiations is Bill Adler’s How to Negotiate Like a Child: Unleash the Little Monster Within to Get EVERYTHING You Want (American Management Association, 2006).

Mr. Adler believes that children are great negotiators because “They’re stubborn, determined and manipulative; they can outmaneuver the savviest attorney and they almost always get what they want.” Parents will recognize the following tactics that work so well in the playground as well as in the home:

• Throw a tantrum
• Just cry
• Pretend you don’t hear or understand what the other side is saying
• Take your ball and go home
• Let the other guy think he’s won
• Play one side against the other
• Change the subject
• Keep coming back to the same question

The second bullet item, “just cry,” won’t come easily to individuals who have had the strength and resilience to become successful anesthesiologists and practice administrators. Most of us have had experience with the tantrum-throwing chair or the disruptive professional who gets his or her way through shouting and intimidation, though. It can be hard to resist the need to appease and to be done with the encounter.

“Letting the other guy think he’s won” is a more interesting approach. This can work equally well in a one-time deal and in negotiations that are part of an ongoing relationship. Most anesthesia group negotiations are of the latter variety; think of stipends for medical director services or partnership agreements, or even a compliance audit from an expert whom you may want to engage for a follow-up review.

Trust is essential to the series of successful negotiations that will take place in a long term relationship. “Letting the other guy think he’s won” implies that you have knowledge of facts or a situation not available to the other party. The hospital administrator might not have agreed to provide income support for a certain number of anesthesiologists if she knew what the group chair already knew, that a busy surgeon was taking ten percent of the group’s anesthesiologists with him to a new ambulatory surgery center, for example. A good administrator won’t make that mistake the next time the group negotiates a stipend.

There are many instances, however, where good faith would not require the group’s negotiator to share information. In salary negotiations the applicant or employee probably realizes that she doesn’t know and can’t expect to be told your true upper limit. If you have verified that your midrange offer is somewhat better than that of competing groups, or if the bottom of your range is significantly higher than the applicant’s last salary, you can help her to feel that accepting it will be a victory. In that circumstance you will both have achieved a good outcome and established a basis for a cooperative relationship.

The trick is to use tactics like “letting the other guy think he’s won,” “changing the subject” or “pretending you don’t understand what the other side is saying” consciously and selectively. This is not the proverbial rocket science, but it does require familiarity with the inner-child and other communication tools you might use, and with their likely impact on the person across the negotiating table.

To assess a tactic’s likely impact, you will need to have learned enough about that person – and her Best Alternative To a Negotiated Agreement, or BATNA -- to know whether she will consider you a dolt for not understanding or whether she will instead reevaluate her position. This is one of the major areas in which serious preparation is key.

We borrow another 8-item list to identify general principles of preparing for negotiations, this time from Ron Shapiro, Dare to Prepare: How to Win Before You Begin (Crown Business/Random House, Inc., 2008):

1. Understanding your objectives.

What—simply and clearly—do you want to accomplish? How often have you said to yourself “I’ve got to get this done” without first defining what the endgame should be? It is important to think clearly through what you want to accomplish rather than just following your gut. The long view and clear vision that come with well-defined objectives give you calmness and clarity.

2. Planning with precedents.

Prior transactions, your experiences, or examples of others can influence your outcome or serve as a model. Precedents are found through reading, recording notes on previous experiences, discussing a task with a colleague, or mulling through your mental catalogue of comparables.

3. Knowing your alternatives.

This involves means laying out – and ranking -- the various results you might attain, as well as the outcomes your counterpart might seek to obtain or avoid.

4. Defining the interests of the other party.

Focus on knowing the objectives or motives of the other side. You look beyond their stated positions. What needs do they have that you might be able to address?

5. Setting your strategy.

Establish a plan of action after analyzing the information you have gathered from the first four principles. With this information in hand, you determine the steps you will take and what you will ask or say to your counterpart. With this principle, you also determine the manner, format, or tone with which you will convey your ideas or requests.

6. Creating a timeline.

Write an outline of projected dates aligned with key milestones. Timelines aren’t taskmasters; they are tools to organize and lay out in front of you the steps that form your strategy.

7. Picking your team.

If you will be negotiating as a team, think about whom you will work with and what their roles and responsibilities will be. The key is matching people with their talents and interests. In addition, you look for a good devil’s advocate.

8. Writing your script.

Jot down the message or proposal you want to make and plan the techniques you will use to make it. By sketching the presentation of your message or proposal, practicing it, and sharing it with a team member, you will check its effectiveness and gain confidence

This brief sampling of negotiating concepts has focused on tactics and techniques in an effort to make the information as practical as possible. A more academic article would probably contain more discussion of strategy. The best strategy starts with thorough preparation, and that is why we have included a checklist of preparatory steps. We hope that today’s Alert will be of value in your next negotiations.

Sincerely,

Tony Mira
President and CEO

If you have any questions or would like additional information please call 517-787-6440 x 4113, send an email to info@anesthesiallc.com, or visit our website at www.anesthesiallc.com.