For the Medprenuer, learning the fine art of Physician Vendor Negotiation could mean the difference between remaining automomous or joining a major Hospital system. While many physicians are opting out of private or small practice, others are learning the fine art of business negotiation, enabling them to find more cost-effective ways to maintain their autonomy.
Complicating the issue is the almost visceral aversion many physicians feel as they grapple with vendors and third-party payors. Sandeep Jauhar writing for The Wallstreet Journal cites the business 'side' of medicine as one key factor contributing to the almost epidemic dissatisfaction within the profession.
Here are a few things to keep in mind as you work to balance your passion for medicine with the inevitable business responsibilities as you hone your Physician Vendor Negotiation skills.
Think like a business owner
Business 101 is not taught in medical school. The cultures of medicine and business rarely overlap in real life, and in fact seem at times to be diametrically opposed. According to the American Medical Association, medical schools are beginning to address this issue by incorporating at least minimal business training for their graduates that focus on things like how to successfully negotiate with vendors. If the private or small to mid-size medical provider is to survive in today's economy, it must be by incorporating basic business strategies.
Additionally, we are seeing a significant rise in Physicians turned consultants/business coaches. In Dr Joe Simons new book, The rise of the Medpreneur, Dr Simon outlines these problems in detail and even provides a roadmap for sucess.
Power in numbers
According to a recent article in Medical Economics, using the business principle of networking, physicians and smaller group practices should band together to negotiate better deals with vendors. Perhaps the competitive nature of the field of medicine - and even of doctors themselves - is one of the driving forces that prevent active networking. Yet, the buying power in numbers is worth another look. By forming buying groups, physicians can negotiate better rates for everything from EHR technology, lower per-unit costs for medical devices, and even better payment processing rates.
Robert Pearl, MD, a professor at both Stanford School of Medicine and Stanford Graduate School of Business, makes a case for collaboration across professional lines. "Both doctors and business leaders must work together" if they hope to create viable and sustaining success. The most successful small practice physicians are those who don't hire a professional to "run the business", but who form collaborative relationships with the business community in order to learn from and take advantage of negotiating strategies.
Basic negotiation principles that will save money (and your sanity)
While not all vendors are dishonest or desperate, the world they live in defines a certain method driven by commission sales and cut-throat competition and historically leaves physicians feeling helpless and even angry. Here are a few key ways to protect yourself.
- Research! Never take a vendor's word for what you need, or for the cost of what you know you need. That latest gizmo for your Physical Therapy practice may be absolutely unnecessary, and the cost for implementing EMV may not ever get recovered. Use your finely honed research skills to sleuth out independent information.
- Run the numbers. You rely on evidence-based medicine in your practice; now you need to rely on evidence as you negotiate with vendors. Jay Shorr, a business consultant for a successful medical practice in Florida, explains how it is "critical to know your bottom line before entering into negotiations" with vendors.This is where collaborative business relationships can be invaluable.
- Join an organization that brings you negotiating power. Organizations such as PTPN for rehabilitation professionals in private practice, or the Independent Physician Association of America brings the added benefit of group negotiating power when dealing with insurance companies and reimbursements.
While the medical profession is at its core about service, physicians have frequently felt victimized by a system that seems rigged against them and has progressively attempted to strip the joy from their practice. In a recent Ted Talk, physician Atul Gawande discussed the path doctors need to take in order to reclaim their profession that has been dominated by far too much busy-work and business-work. By stepping outside of your comfort zone, you'll be able to harness the power of networking, collaborative relationships, and organizations that give you much greater negotiating power with vendors. Free up valuable resources and reduce your stress levels, which will ultimately will give you more freedom to do what you do best: provide quality medical care.