C: You review staffing and develop more efficient processes to reduce costs and earn those saved expenses as salary. You want the relationship to be a vital part of the outcome. I actually saw this happen to a cardiology group in Illinois. In the same way you may take a loss in one payer if the referral pattern helps elsewhere. The things you do under economic norms would cause a breakdown for social norms. How will my future base salary be determined after the current contract is expired? I have to say that we went in to both negotiations feeling the hospital would not listen, so a few of us were prepared to eventually leave if things didn’t work out. To give employees raises without increased revenue is a bad business decision. That was more valuable to me than the price being offered. There is value in keeping you in the job- you’re a known commodity, there are no hiring/firing costs and hassles the relationship etc. The problem with take it or leave it is the same problem you have as a bully. Now, you can complain that taxes are too high, the federal deficit is driving us to ruin, etc and therefore never can get ahead since the system is “rigged”. What percentage of your portfolio do you reserve for "play money"? agree Thus, the emphasis on step 4; creating mutual benefit or growing value. All of these solutions will require you to generate value which often means more work as physicians typically only bill for the work they actually do themselves. Academic centers have seen this decimate their ranks in some regions over the last 2 years in EM. Obviously, you will need your clinical training and outstanding patient care skills. Why don’t we just do that? If that can’t be reached, you may be better served looking elsewhere. You may get to be in the new office, etc. Successful contract negotiation is key to a successful start to your employment and can play a large role in your ongoing happiness in your new position. You don’t have any problem with that, right?”. … They had already booked the venue with a deposit before finalizing any agreement with me. The Final Hurdle, A Physician’s Guide to Negotiating a Fair Employment Agreement. Hopefully, this introduction raises awareness of the evidence based aspect of negotiation and inspires you to seek further education. If you’re not willing to walk away from the job, you’re unlikely to win the negotiation. Otherwise, I do appreciate the post. The first time you do it, it works great. The same should go for the other party- if they are treating you poorly and souring the relationship then you have a good reason to leave. The Student Doctor Network: Negotiating Your First Contract … I hope that you take my comments with the right tone and don’t view me as naive or patronizing. The same is true for negotiation- there are forces against you. In private practice, we do not have a pot of money that is held back for negotiation purposes. Basically, you need to rely on your “bases of power” including referential, your “interdependence” with the other party, the “YES!, no, yes?” technique, the reliance of objective criteria or market value report, and finally your negotiation skills. I have to agree. Ignore the karass model as your own risk. 1. if you are employed in a practice or hospital, where the revenue is collected in a pool and then distributed, there may be more possibilities for increased compensation. Getting to yes is aan absolute classic. Rather than any one particular technique, the conglomeration of approaches used together in a skillful fashion will work well in pretty much any situation. “The idea of negotiations can stress people out, and a lot of people don’t like to talk about money,” Cleveland said. The pot of money in healthcare is not infinite. What do you think? You get these offers in the mail every day- 450k guaranteed! I’m joking of course, You raise an excellent point- mainly the need to create value in negotiation. It’s rough. I should make it clear that we phrased our desire to improve the salaries of the group so that it would stay intact. Rather than seeing 5 extra patients, serving on committess, and chasing a poorly compensated bonus plan- you become an “average” employee. All concession tactics have a good and bad side. The opponent gets anchored to the higher number. I will touch upon some of the more intricate aspects as an introduction to advanced medical negotiation, but please understand that this cursory overview is just touching the surface. If the problem is that you are already being unfairly under compensated for the amount of work you do, and you come out of the meeting with more money, but also more work, I think you’ve taken a step back, or at least sideways. Not Giving the Notice Required Under a Physician Employment Agreement. On the other hand, if you need a meditation on the reality of power relationship in negotiation, I suggest a return to a classic text: reread the Melian Dialogue from Thucycides “The History of the Peloponnesian War.”. The long answer is that just because something can be negotiated, maybe you shouldn’t. That’s based on your personal goals as well as some reality. Your success as a physician requires your mastery of the professional business skill set. Not All Physician Compensation Should Be Average! Now I know you have to ask to receive, otherwise people assume you are content with the status quo. We then obtained the basic numbers from 4 comparable groups in the area, this was tricky but it was very important due to increased salaries and a very competitive market. Maybe you’ll get lucky and your bosses will accept your plea as reasonable and give you the raise. He is the author of the definitive book on physician contracts "The Final Hurdle - a Physician's Guide to Negotiating a Fair Employment Agreement, and a frequent lecturer on physician employment agreements. What’s more irritating is usual downsides to being an employee: constant pressure to do more work with already inadequate staffing, conflicting directives (discharge patients faster AND reduce readmission rates! good point. There are power differences, The other side is more experienced and has the power to reward you according to their plan. My advice remains the same in many ways 1. learn how to negotiate. Please realize, that there is no good “standard” for third party payers and the negotiation is based on your payer mix, CPT codes, referral patterns, etc. Who governs the practice? They are usually the rare commodity in their employment negotiations. Some become burned out, some quit, some soldier on, some invest and retire early, etc. As an individual you have a much better position of power if watching you walk out the door becomes something that the practice will then have to deal with. You have to be willing to follow your BATNA. Your first physician contract will influence the rest of your life – not just your professional career. If you can’t beat your best deal elsewhere, you move your business along. Most Physicians require at least 4 practice negotiation … You apparently were not willing to walk away because there were only a “few minor things”, so you lost the negotiation. Will you owe money back with interest on a loan repayment scheme from your current employer? Certainly the sort of thing that leads to stress and physician burnout! Physician income is largely determined by a fee schedule set by Medicare and other large payors. He is the CEO of Negotiation MD LLC, a firm that helps teach doctors negotiation and professional skills. What have you done to improve your soft skills, including negotiation? Your discussion of BATNA seems to define BATNA as your bottom line in the negotiation, by making statements like: “[a] reasonable BATNA here might be that in the next budget cycle you will get a raise of your total compensation package by 2% with a clearly defined plan for future increases. Listen to your partner in negotiation and understand their logic, concerns, fears, and interests. Doctors have a lot more power than they think they do. And they tried all kinds of techniques, including guilt and “splitting the difference.” In the end, it isn’t about the techniques so much as having the power in the negotiation. I am constantly delighted to see my negotiation student bargain an extra 5,000, 25,000, and sometimes more. Instinctively grabbing for the first life-preserver offered is only natural. I have negotiated for myself and my group twice in 4 years to attempt to get reasonable compensation. (I’ve changed everything to keep the details private, but the important points will remain the same.) The first is “econimic norms” and entail paying for goods and services. Great comment. That type of negotiation is simpler- you ask for a fair raise and if you don’t get it, consider other options see 4 patient a week! As a reader of White Coat Investor, you understand the need for financial knowledge. Showing increased value gave us a talking point and we came away with a decent raise. I recently read getting to yes – can’t say it helped me in my annual review with my chairman, but the techniques have helped me quickly resolve issues with nursing and with challenging families. That, in itself, is a win for many physicians. Why do you think doctors don't negotiate, and when they do, suck at it? Physician Practice Specialists offers both hospitals and physicians managed care contract negotiation services that employ proven contracting strategies, years of experience and the most advanced tools … I agree that you must use it subtly and respectfully. You’d fire an under-performing financial adviser. Negotiaion is a skill that is learned and most doctors (in my teaching experience) need about 4 go rounds before they come into their own. You’ll be percieved as a leader, be more effective, and save your social standing in the group. How will future raises be determined? By the way, you are likely to see this tactic used against you at least once during recruitment and negotiation, so just recognize the tactic for what it is and go with the flow when negotiating your first physician contract. Network, keep you skills current and in demand, and know your worth in the market. That is real. We finally focused on being paid ‘fair market value’ as our hospital is a non-profit organization. And best of all, that investment can be minimized by using a team that specializes in physician contract review and … Notify me of followup comments via e-mail. You wouldn’t buy a car just buy looking at the MSRP? This is different. That may end up being more costly in the long run and should factor into the BATNA. the concept of BATNA really deserves it’s own post, something I address on my blog. By the end of our second negotiation we were finally able to get paid at, or slightly above the 50th percentile for our region. You cannot get the best possible deal on a physician contract without negotiating. “Of course not!” you hurriedly exclaim. The difference is about respect, interests, and positions. The goal is to reach ideal terms, or at least a feasible compromise, for both the prospective employer and the physician … I think it is underestimated how many things in medicine can be negotiated. You are being offered a “standard policy” of a “regional norm” as a counterargument. A lot of residents in the physician salary negotiation process may be promised a variety of things. As an independent healthcare attorney, one of Nicastro's recent … I’m not trying to be nihilistic, it’s critical that hospital-based docs w/o a practice base understand their market value compared to other docs in their field. Guess who had the negotiating power in that negotiation? My assumption in the article is that you do your due diligence and actually have another offer on the table or a reasonable assumption that you could make that 2% raise with another alternate- another job, Locums work, joining another practice, etc. The need for accurate and useful information makes a market value report an excellent investment. There are very few harvard project on negotiation folks in business. You might be told yes to a request verbally, only to … We are gnats to them. I’m not trying to be difficult here, I just know it is possible that many MDs will encounter the term for the first time in this post. Maybe not. My personal compensation is based on revenue generation and much of this is controlled by third party payers Of course you should do things and more as they will likely reward you with greater compensation, control, flexibility, and or satisfaction in your career. These scenarios tend to be straightforward and elements such as relationships do not come into play. The third party payer limits revenue. Detailed and polite emails don’t get you what you want. You are already savoring the offer that is virtually certain to come. Negotiating your first physician contract can set the stage for the rest of your career. The books you list are very good, but may not be best for physicians who are new to negotiation. You are already a high earner, you have roots and patients that count for a lot of non-monetary value, and you have 10-15 years of relationship between you and your co-workers. My experience in the real world of private practice in the Big City is much different, however. Otherwise you are going to need to generate value to create more compensation. You can’t stumble now! After all, you worked your butt off to get where you are. The candlelight, great food, interesting conversation (and, perhaps, the wine) are giving you a sense of collegiality and belonging. I will be borrowing heavily from Fischer and Ury who helped pioneer this concept. He worked with presidents on some hostage crises. I also wanted to keep the BATNA modest. If this is the start of a bear market—and that’s a big “if”—the decline and subsequent recovery will likely all be over within five years or so. Negotiation is a tool and a skill, just like finances. We look forward to hearing from you. Many people have strong feelings about them, but you can’t deny the profound influence they have in their fields. Agreeing to a change without getting it in writing. Great starter material here. Doctors seem to think that negotiation is something you do between you and your employer, when that isn’t the case at all. This seems like a no-brainer. In small groups it is the partners. Often times, both parties will moderate their requests in deference to the importance of the relationship. I sent a detailed and polite email, the other person at the table (so to speak) responded same day with “you are more than welcome to pursue opportunities at other hospitals.”. However, there is a difference in respectfully explaining that you have a better deal elsewhere versus threatening to leave. I think this defeatist attitude is inappropriately pessimistic. But the key to doing that is having a BATNA. I really appreciate all of the great comments and discussion. I also like to make them aware of the tactics, so you can recognize them and I teach the counter-moves. In general, the relationship in medical negotiation is very valuable and neither side wants to mess it up. Refinance Medical School Loans & Consolidation Guide, BATNA or “best alternative to negotiated agreement. Great point. You have sobering responsibilities, both to yourself and to those you love to make the best possible decisions at this critical juncture. These concepts not only help in contracts, they help with everything in life, like getting my 7 year old to do her homework, etc…getting a patient to accept receiving her dialysis treatment…etc…. Many physicians … Op-Med is a collection of original articles contributed by Doximity members. So I went solo. Lastly, “Pre-Suasion” by Cialdini offers some new evidence based techniques to allow a negotiator to get what she wants. I’m guessing many of you, like myself, got interested in physician finances and WCI through the desire to have some control over our financial futures and to not depend entirely upon the healthcare system for financial stability and hopefully eventual independence. I agree with many above that if you are willing to eventually leave that it gives you a lot more leverage to negotiate a better position. There is a bonus, but the structure is such that it represents no more than 10% of baseline and has not increased either. However, since you are given the opportunity to earn more at the end of the negotiation and value is generated, it’s considered a win-win. Both parties find a solution that increases shared value. Our hospital requires us to have contracts with these big players, or it voids our contract with the hospital. Are you close to your spouse’s family (and he or she is unwilling to move? great work and thanks for sharing your techniques. But, if you threaten to leave, realize this will only work a few times. Maybe they give raises only to senior staff and you’ve not been vested or they question your long-term plans and don’t want to invest in you. I agree with what you say that maintaining a good relationship with those you are negotiating with makes a huge difference. Like wise if you are more senior or financially independent, you have the ability to also pick up and move, Mid-career negotiations are more difficult for the reasons you listed. That’s what happened to me in my mega group. You are crazy to walk into a room without it. Defer greatly to relationship in the beginning. Think through the negotiation and all of the possible arguments that both parties can raise. In private practice medicine, we are constantly swimming upstream. Are Independent Medical Practices Headed for Extinction? What should your BATNA be in this case? [In a bear market, ask yourself this question:] How much cash do you need from your portfolio over the next five years? So the base income flow from billings/reimbursement is declining. Your call may be one in three; it may be one in five. You also state that “[y]our BATNA should be based on an already available option (maybe a private job search) or one that would be reasonably attained with minimal effort. Things that you and your medical practice can partner together to improve both your situations. I would think a 10 year veteran would have a hard job restarting at the same or higher salary, b) We are trained to “not be greedy,” and negotiating for a higher salary can be seen that way. We’ll send you our standard contract, which we all have signed. The second round of negotiations we concentrated on 3 national surveys(mainly MGMA) for our market value including region specific numbers. At my prior job I had not received an adequate raise for a number of years. These small tokens are sometimes directorship roles or committee position. In the end, Karass brought the science of negotiation to the masses and deserves his due recognition here. The food is superb, and fine wine is flowing. If you wish to become a highly skilled negotiator with the best outcomes, focus on interests and growing value. In my last negotiation, I used a well researched market value report to up my salary by 25k and improve my bonus limit as well. The use of interest based negotiation protects relationships and leads to innovative solutions that grow value for all parties concerned. Yes, but you also have the option to go flip burgers in a less-than-sexy location. To be a truly successful physician you need three complementary skill sets. I live in the same world as everyone in medical care. A few possible examples: A: Your bosses need someone to act as director at the new hospital. But AMA is my third favorite disposition behind jail and eloped! If they insist on leadership roles, etc, you will be prepared next time. Negotiation is a skill that can be learned. I think Vagabonds comments are spot on. American Academy of Family Physicians: Employment Contracting. You get the idea. Finally, there are the “professional business skills” that lack an ideal formal name. After a year at my attending job, I prepared to renegotiate. But, we have all learned that there is risk but also great reward through financial strategy. This roughly means, based on our wRVU alone, the value/purchasing power of our base unit work has been degraded by 32% over that particular time span. You have excelled throughout your academic career, and through all the hard years of your residency (and maybe through a fellowship, too). Dentists, dermatologists, and plastic surgeons are in pretty good shape if they want go it alone or start a new business. Most Physicians require at least 4 practice negotiation simulations to get up to speed, so seek seminars that offer medical practice based training seminars. It is vitally important to use every resource available to you to assure the best possible outcome when negotiating your first physician contract. Taking the time to fully negotiate your contract can greatly increase your satisfaction on the job and avoid potential hassles in the future. 3. Required fields are marked *. How Can You Tell If A Physician Contract Is A Good Deal, in Financial terms? No call! This is one complex negotiation! Both negotiations took months to finally arrange a meeting and brutal to sit through, in the end it was worth our time and agony. I would challenge the assumption and look at data first before assuming that asking for a raise is the same as asking for more than your fair share. 85% of our compensation is tied to these three entities, and they hold all of the cards. You can also subscribe without commenting. You do the minimum required to be compensated for the primary job and explore options elsewhere. Physicians as a whole are poor negotiators. In this scenario, you’d likely compare your compensation to regional norms, or salary ranges for number of years in practice to show an average rate of annual salary increase. Part of it was my fault as I did not seek the raise and expected it will come. My advice? I love negotiation and believe it is simply the 3rd most important skill you need as a physician- behind your clinical acumen and financial knowledge. It’s easier to hang out your shingle as a private practitioner / business owner in certain fields and specialties. What do I mean here: there are 2 behavioral norms that tends to explain interactions of groups. I consider them “second round” books to read after you’ve been introduced. This definitely led to burn out. Break the taboo of discussing compensation. In your recipe and chef example, it is like reading a book and then having a lab where you practice your new found skills. In this case, it’s not a matter of just splitting the pie differently. I once had a speaking gig offered to me for a price I viewed as unacceptably low for the time I would spend preparing and giving it (and I’m really not that expensive.) The negotiation outcomes you gave in your example, really don’t make a win-win in my mind. I agree with much of what Vagabound says. Your discussion falls under what is commonly called “power” and is usually addressed in terms of “conflict management”. But frankly, you just may need some seasoning and practice . Your compensation to this point has been slightly above subsistence – probably not as much as you would have been paid if you had worked at minimum wage for all those hours of studying, working, teaching, and covering call. And as pointed out, if you are in a highly sought after specialty, you may even be able to negotiate a package where you claim more from the employing entity than you actually bill, because they will be willing to subsidize you out of other funds. 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