Now, let's grab a seat at the negotiation table, and we'll start the next talk. Again, I have no financial relationships to disclose. Negotiation occurs in every aspect of life, not just in business. There's more to it than rationality and intellect. One way to think about negotiation is communication with results. Who do we negotiate with? We negotiate with many different parties on a regular basis in our practices. Of course, payers, possibly hospitals or hospital systems, potentially local PCP networks, of course, various vendors, landlords, sometimes our providers, etc. There's many different parties we'll negotiate with at any given time. It's important that we develop skills to do it well. The first polling question. Are you engaged in one of these negotiations right now? Yes or no? Oh, all right. Good. So 77%. Excellent. Next polling question. Do you have negotiations pending or needed to pursue? Something you may not be currently involved in, but you're considering the need to do so. OK. So a lot of ongoing negotiations and some pending. So that's perfect for our talk today. Well, let's focus on the basics. There's hundreds of books on negotiation, right? And today, I'd like to offer some tips and general principles that I hope will be useful and useful for us. There's no way to cover negotiation tactics fully in 20 minutes. So we'll do the best we can here on some important concepts. I think it's really important that you try and get better by proactively applying what has been shown to work, getting experience, keep doing what works for you, right? So learn to adapt based on particular issues at hand, the parties, the circumstances. And let's get started. It's good to have a starting framework. I think some type of starting framework before you start a negotiation is really good to methodically work through to help you understand how you might approach the negotiation. And this is one example. And there may be other questions that you may want to ask. What business outcomes do we seek? Time is really important. I think defining the time early is key. How much time do we need? Is there a time period involved? When should you start the negotiations? It depends who you're negotiating with, and you may not have a time frame. But it's important to plan based on that. What information do we need going in and along the way? So who cares about, besides you, who cares about these outcomes? And then who can do something to bring about those outcomes? Not necessarily the same person. Who has interest? Who has influence that may be the same person? And how best can we engage those that share some of our interests in achieving the outcomes? Upfront, it is important to do your homework. We need to be prepared. And we'll talk about this in a separate slide. But it's important to negotiate with the right people, the people that have interest and have influence, and someone you can develop shared interests with in order to come to a deal, and whatever that deal may be. It's important to have the information you need going in. And that will vary depending on the type of negotiations. It should be up-to-date, relevant, accessible. And remember, it may be fluid. I think one important point about negotiation is that it's also information gathering, right? You need to look for new information along the way, be willing to modify your outcomes and update your information. You may not know everything you need to know at the beginning. I'm going to give a few examples of information that would be helpful for a couple of common negotiations. And obviously, a payer negotiation is very, very common. On the first level, who are you negotiating with? And there are hierarchies and layers of authority. And I think we've all experienced this. And it can be a challenge, right? Especially up front, there might be someone that is, their sole purpose is to lowball you, be more of a brick wall, and really not respond or show interest. And that just could be the initial barrier to get you frustrated, right? In Denver, we have something called, it's not just Denver, it's the greater metro area in the front range. We have something called annual payer day. Where all the payer, the key people from the various payers participate, our CEO goes and networks purposely with various people, gets to know them. And to put a personality and a face to a name can really matter. So if you have a relationship with someone, it can make a difference. We talked about this in one of the earlier lectures. For payers, you should have a payer database, right? So you can compare any particular payer to another, understand what your other contracts and terms are that are relevant. What's the impact? What percent of your mix is this payer? Are there any site limitations relative to where patients can be cared for? Try to understand market rates and do investigation if you can. What can you do to find out what's been billed in any particular place or an HOPD? It helps you understand, obviously, your positioning. And pair a specific portfolio. This is just one example of information that might be helpful for this type of negotiation. You may be negotiating with the hospital for a contract. And again, I would say relationships and personalities do have impact. So if you know the CEO and the COO, if you cultivate that relationship unrelated to any particular negotiation, get to know them, it may or may not help, but it certainly is better than meeting them when you're starting a negotiation. And something that's good to do in this type of scenario is to calculate your opportunity cost. So we know that we're in the hospital. We have opportunity costs, right? And it's different on the ASC versus the office side. It could be mixed, but understand what that is, right? And there is downstream and upstream revenue for the hospital and the hospital system, depending on what service you're providing. And think about what other options they have. What do you have that they need? What happens if they don't have you available to provide the services? And what would that cost them, right? So you may have leverage based on these types of assessments. And that's just another example of things to know or think about before you actually go into the negotiation. There are a few books I'll mention. There's a classic book called Getting to Yes by Fisher and Urey. It was originally published back in 1981. It's been updated. And it's a very commonly referred to book. It has, I think, a lot of really good basic concepts of negotiation. And it's something to consider reading if you have it. It's not a long book. But I would also say there is no perfect negotiation book out there. So every book has things that I think that are helpful and things that you may consider not quite as useful. But there's a couple of really important concepts that Getting to Yes introduced. One was ZOPA, which is the Zone Potential Agreement. That's where you may be able to compromise or find a solution. And there's another one called BATNA, which is the best possible deal without BATNA. Best Alternative Without a Negotiated Agreement. Sorry about that. BATNA. And that's kind of a fallback. So if you can't come to agreement, what are you willing to take rather than walking away from the table? One of the criticisms of that approach is if you're going into negotiation, you're already thinking about compromise or what happens if I can't get a deal. It is a different mindset than going into negotiation thinking, I'm going to get the best deal possible. I prefer the latter mindset is go into this and get the best possible deal that I can get. Right. And think along those terms. And if you're anchoring, for example, whatever it is, reimbursement, facility fee, you should always anchor high and never anchor low. And this gets back to who you're negotiating with. And really consider this. Make sure you're engaging the right parties that both have interest, have influence. You may need to change that. You may be spinning your wheels and wondering, am I really negotiating with the right person? Maybe not. Right. Maybe this person is there as a roadblock and I'm not going to make any progress. Where you can develop relationships, you know, that does help with negotiations. And I feel like you should try and make it as positive as possible. Right. You don't want a negative negotiation if possible. You know, a deal is a deal. And my experience has been that it can be a little contentious during negotiations. But when the deal is done, it's just a negotiation and you move on. And relationships are often just fine after that. But try and make it positive. There's usually a team on the other side. And you may not know who those people are, but you have to assume there's other people involved and they may be helping make decisions and have influence. If they change negotiators, it's possible they're going to take a harder line and be prepared for that. You know, there's a few concepts that getting DS introduced. And it's really, you know, it's about the interest, you know, not necessarily the people and focus on the interest, not positions. And this is a really important point. Right. You don't want to take a position, defend a position. And you don't want to get too hung up with the people you're negotiating with. You want to always focus on the interest. What are the interests at hand that may or may not be shared interests with the other negotiator. But when you can find a win-win or you might call it pay for when you can align with the other party, you want to find that possibility. Now, one example, this is a very simple example, like it would be a new ASC. And so you build a new ASC and say it's independent. It could be a joint venture, but say it's independent and negotiating the facility fee. Right. And so we know that the facility fee that the payer would have to agree to for a JV would likely be higher and certainly higher if it's HOPD left to right as independent JV, you know, HOPD or hospital. But remember, if you're independent, your practice revenue is 100%, not 49% of a JV. And so even if your facility fee is less than a JV with a JV partner, your revenue may be greater and your market cost is lower. And so this I would consider a win-win in the sense that your facility fee is less than maybe if you didn't do it independently, but your revenue is good. And your market exposure or utilization cost is attractive for the payers. They're paying less than if you were partnering with the hospital system, for example, and their exposure is less. Payers respond to this. This has worked for us. I think they understand that they want GI groups to remain independent. They want ASCs to remain independent. They don't want to do cases in the hospital. We've been able to use this in negotiations and also helping them understand that they don't want us to JV us. If they lowball us, we're more likely, for example, maybe to go ahead and do a JV. That's just one example. How do we start the negotiation? This is not a good way to start the negotiation. You actually want to go into negotiation with some different tactics. These are some tactics that I think are general but very useful to consider. One is active listening. I would say early in negotiation, you want to engage in the art of discovery. You want to extract as much information as possible from the other party. Information gathering is really important. Keep your hand close if you can, but focus on what they have to say. Active listening involves things like paraphrasing. If I understand correctly, X, or inquiring, help me understand Y. Acknowledging, it sounds as if you mean this. Just use phrases or tactics to let them talk, let them communicate. Usually, it's by email initially, and find out what you can. There's actually a whole book written about this. Start with no, and this has been discussed in many different negotiation books. I really agree with this tactic. I think what you don't want to do is try and get an early yes. An early yes usually means you're going to fall short what you could have achieved if you didn't do that. No is never irreversible. It's never the end of a negotiation. It actually does help clarify what both parties want by limiting what each party doesn't want. It's okay to start with no. For example, we can't be expected to do as you're suggesting. That's a great offer, but it's just not going to work for us. We can't do that, et cetera, et cetera. These really work, and it puts the ball in the court of the other party, and they have to answer that. They have to respond to that, and it also helps you clarify that that's just not on the table. Here's another tactics that are really effective. Tactical empathy and labeling. It's based on the premise that people want to be understood and accepted, and labeling is validating someone's emotion, opinion, or stance. You're trying to put yourselves in their shoes and ask questions that helps you extract more information. That's going to be helpful. Generally speaking, what's been shown in research is people don't notice what you're doing when you ask these type of questions. It taps into a bias or heuristic known as law subversion, and it's very interesting that people experience losses much more severely than equivalent gains. That's been shown as one of the biases. If you can tap into law subversion, it's effective. It looks like, it seems like, it sounds like those are good questions to ask. We found these very effective. For example, it looks like you don't see value in what our practice can deliver, and of course, there is value, and let them respond to that. It seems like you're not interested in creating more savings. Of course, they are. Sounds like you're not, you're giving up on making this deal. These are good tactics to use, and they're general, but they're effective. Often, you're communicating by email, and these work very well by email. Another tactic is called calibrated open-ended questions, and it's better to use the what and the how. Again, these are useful, and what you're trying to do, a couple goals of your negotiation is to give them the illusion that they're in control. You want your other party to believe they're in control, that they're generating the ideas, but also, you want them to help solve your problems. That's one of the tactics, and one of the goals in negotiating. What about this is important to you? How can we solve this problem? How are we supposed to do that? How would you like us to proceed? What is it that brought us into this situation? What are we trying to accomplish? Again, open-ended questions, they're calibrated, and it creates responses that are very helpful. It also slows things down a little bit and may put them off balance, and it's also a good way to jumpstart things if there's been a pause. Heuristics are at play. A couple of books here I recommend. Getting to Yes is a great book. Chris Voss is a former FBI negotiator, hostage negotiator, wrote a book called Never Split the Difference. I read that a few years ago. Some of those tactics are in this talk. It's a great book. I think it really builds off Getting to Yes. If you're going to read a recent negotiation book, I would read that book. I think it's really useful. That's a quote from Chris, just to point out that we're negotiating with humans that have biases. We're all crazy, irrational, impulsive, emotionally driven animals, all the raw intelligence and mathematical logic in the world. There's little help in the fraught, shifting interplay of two people negotiating. Our negotiations are not always that stark, but it makes the point. Another great book called Thinking Fast and Slow by Dan Kahneman, again, really addresses human biases, the way we think and make decisions. The point is, you should understand what these biases are, and you can use them to your advantage. Loss aversion that I just mentioned is just one of those. It only helps you to understand these and use them when you can, and also understand that you may be falling prey to one of these biases, so be careful. What about leverage? Not on this slide, what would be leverage you have if you have more than one party you're negotiating with? Such as classically vendors. If you have two or more vendors you're negotiating with, you're much likely to get a good deal. You can play one vendor off the other. We all know that, so we're always at advantage if we have buyer power, so to speak, in the sense that we can nudge one or the other vendor to keep giving us better terms in order to get the deal. Leverage can be considered in three main ways. One is positive leverage, meaning you know you have something that they need. You have leverage because you know you're in a position where you know that you have something that they need or they want. Negative leverage would be your ability to withhold what's important to them. This is a little tricky, I think, because it can be a nuclear bomb if you do it, and in a way that you're really trying to hold someone over the barrel. You're threatening. That can really backfire, so you want to do it in a way that you label it, and it creates, again, loss aversion. You want to remind them that you may take this away, and these are the consequences. Normative leverage means you know their religion, or you can point out how they're being inconsistent with whatever their general approach should be. One common one would be we all agree that we're trying to do something to support patient safety and quality of care, right? That's what we're all trying to do together, and you're inhibiting our ability to do that. If this deal doesn't go through, it's not going to have the consequences that we both share that we think that are important. In the end, you really want to convince them they have something real to lose if the deal falls through. If you have that type of leverage, you're much more likely to be successful. Time is really interesting, and as I mentioned, you need to define the time up front as best as possible. So deadlines may be artificial. They may be real. You don't, for example, want to start a negotiation with a hospital in October when their budget is finalized in November. There's no possible way that you're going to negotiate a good deal in that short time frame. You want to start that negotiation probably in the spring. So understand when you may or may not want to start negotiations. Generally speaking, if you're under pressure and it's a deadline that's shorter than you want, it risks your outcomes, right? And so that's just something to remember. Knowing the timeline can help you plan how you methodically want to work through the negotiation as well, right? You want to avoid being reactionary. We have found that delay is really, really effective. If someone emails you a counteroffer, sit on it. Sit on it for a while, even if it feels uncomfortable. It really makes the other party wonder what you're thinking. Maybe they feel like they don't have quite as much leverage. The quicker you respond, the more desperate you appear, right? And so we have found that very effective. But you need to have time, obviously, to implement delay. So some practice pearls. Consider some type of framework up front. So whatever the negotiation is, try to answer those important questions. It'll help you plan and be more efficient with your negotiation. And do your homework, right? Do your homework. Know what you need to know. And remember that this is also the art of discovery. Try and extract information. Be willing to update your information as well as your outcomes. Separate the people from the issues. It's important you know who you're negotiating with. But you're really focusing on the issues here. And focus on issues, not positions. Some key concepts. When you can, have relationships. Engage decision makers positively. And use techniques to help them solve your problems. These are all general techniques that can work to help you in the negotiation and develop solutions. You're negotiating with humans, not robots. So there are heuristics at play. If you can, delay. Especially when there's a counteroffer. Even if it feels uncomfortable. And the more you delay, the more uncomfortable it is. The person you're negotiating with. Always aim for the best possible deal. And good luck. Thanks.

negotiation

importance

skills development

effective negotiations

information gathering

tactics