Haggle With the Hospital
Negotiating support from the hospital where you practice is one of the most critical skills you can learn. I am often asked, “How can our group prove our value to the hospital so we can get the support we need?” The best approach is the same whether you are a practice employed by the hospital or a separate legal entity that contracts with the hospital.
There are many valuable sources of guidance regarding the best way to negotiate any important agreement, including a book I recommend, Getting to Yes. I suggest you read such a book if you want to be a better negotiator. But here I want to highlight some features of negotiations between a hospital medicine practice and a hospital that such sources won’t specifically address.
Clearly this is complicated, and different situations call for different strategies. These are generalizations worth thinking about in any situation.
Know what is important to the hospital. I often hear hospitalists say, “We want to attend to the things that are important to the hospital, but we don’t know what those things are.” If that is really the case, the communication between the hospital and hospitalists must be awfully poor—and there is an opportunity for the hospitalists to improve it. It is worth the time and energy required to know what is on the mind of the hospital’s leadership. It may be as simple as having a person-to-person conversation with one or more hospital leaders about what they see as the institution’s most important goals—and how your practice could help achieve them. You need to be sure and understand the particulars at your hospital, but the topics below are on the mind of most executives.
Propose using additional funding to ensure adequate staffing, not raises for existing doctors. In the current environment of difficult recruiting, hospital executives are usually far more inclined to pay for increased staffing than worry about whether you need a raise just because you deserve it. So it is usually much more effective to tell the hospital, “Our practice needs more money so we can add doctors and more fully meet the demand for our services.” Much less effective is saying, “We [existing hospitalists] are working so hard that if we don’t get more money we’re going to quit.”
While the latter may be true, a hospital executive is much more likely to respond positively to paying for increased manpower so the existing doctors won’t have to continue working at unreasonably high workloads, rather than to providing money to support a raise for doctors already working unreasonably hard.
Propose additional resources to support quality improvement, and consider sharing some financial risk. Most hospital executives care about their hospital’s performance on quality measures and are willing to provide money to improve it. You might win more financial support if it is contingent on your group improving performance on quality measures.
You could propose that the hospital make additional money available to encourage and reward improved performance. You could even put existing financial support at risk and ask the hospital to match it. In other words, you could say you will contribute $5,000 or $10,000 of the money currently provided annually by the hospital per full-time equivalent hospitalist into a pool matched dollar for dollar (or some other ratio) by the hospital. Your group would get less total financial support (i.e., lose the funds put at risk) if quality doesn’t improve, but get more support if performance improved by an agreed-upon amount. A willingness to share financial risk demonstrates your commitment to success and can be compelling to the hospital.
