Skip to main content
MJH Life Sciences
  • Login
  • Register
  • Login
  • Register
Home
  • News
  • Industry Analysis
  • Business Strategy
  • Health Management
  • Hospitals/Providers
  • Pharmacy
  • Technology
  • Topics
MJH Life Sciences

SUBSCRIBE: Print / Digital / eNewsletter

3 Contract Negotiation Tips for Healthcare Execs

negotiation
  • Aine Cryts
September 23, 2019
  • Pharma Forecast Report, Business Strategy, News, Pharmacy Best Practices

Margaret Neale, PhD
Margaret Neale, PhD

Margaret Neale’s negotiation advice for provider executives is the same advice she would give to payer executives: Don’t look at your counterpart as the enemy; instead, search for areas where you share common goals.

Margaret Neale, PhD, is professor emerita at Stanford University’s Graduate School of Business and the co-author of “Getting (More of) What You Want: How the Secrets of Economics and Psychology Can Help You Negotiate Anything, in Business and in Life.”

She acknowledges that the payer-provider relationship can be fraught with conflict, but it doesn’t have to be.

Passionate physicians who have devoted their lives to treating patients want to give them access to potentially lifesaving treatments; provider organizations want to support these efforts, while remaining profitable. Payer executives want to provide members with access to innovative treatments.

Thus, her advice to provider and payer executives, alike: “Think about how [you] can be open to conflict, which may open up new avenues of agreement.”

Specifically, if the provider executive wants to secure coverage for a $1.2 million treatment, they should consider creative solutions where the focus of the conversation isn’t the cost of the drug. Rather, the provider executive can seize the opportunity to see the payer executive’s point of view and achieve an outcome “where the value isn’t just about dividing up $1.2 million or maybe ‘the winner gets all,” she says.

Related: ICER’s Leader: How to Assess the Value of Cell and Gene Therapies

For example, with CAR T-cell treatments, provider organizations are learning about ways to care for patients experiencing side effects that can land them in the intensive care unit. This is useful information for payer executives who are trying to manage risk, says Neale, who will present at the Pharmaceutical Care Management Association Annual Meeting, which takes place in Scottsdale, Arizona, on September 23 and 24.

Two additional pieces of advice from Neale include:

1. Determine your end goal for the negotiation. As a protagonist on either side of the negotiation, the healthcare executive “has to enter with the goal of being better off” than they were before entering the conversation, insists Neale.

Each party to the negotiation determines what that means, she adds. For example, a healthcare executive’s goal could be the ability to respond to more patients or to achieve better outcomes for patients.

Here’s how this could work out: The provider organization can’t afford to provide unlimited access to immunotherapy treatments without partnering with payer organizations for reimbursement, while remaining financially sound. Thus, their goal for participating in the negotiation is to increase their ability to provide the treatments to patients by increasing reimbursement from the payer organization.

2. Listen. In order to achieve success, the healthcare executive has to listen to the challenges their counterpart is facing. That allows the executive to frame their proposal as a solution to a problem their counterpart has, says Neale.

If, for example, the payer executive’s overarching goal is to provide treatment to a wide variety of health plan members, how can the provider executive frame a solution that allows the payer executive to do that?

Finding out the problem an executive wants to solve isn’t difficult. “Most people are quite willing to tell you their problems,” says Neale.

Aine Cryts is a writer based in Boston.

Related Articles

Resource Topics rightRail

  • Resource Topics
  • Partner Content
  • Reimbursement
  • AMCP Street Team
  • AMCP
  • Solid Tumors
  • Non-Hodgkin Lymphoma
3 patient experience questions answered: What 1,500 healthcare professionals revealed about shifting cultural mindset + evolving to meet patient needs
A buyer’s guide to alternative payment models
How adopting a virtual business office delivers new efficiencies to one medical group
Unpredictable pairings: A new approach to community health
Addressing the outsized effect social and economic factors have on health

Current Issue

D.MHE December 2019
Dec 12, 2019 Vol 29 No 12
Digital Edition
Connect with Us

  • Column 1
    • Home
    • About Us
    • Contact Us
  • Column 2
    • Editorial Info
    • Editorial Board
  • Column 3
    • Advertising Info
    • Reprints
    • Advertising Terms
  • Column 4
    • Terms of Use
    • Privacy Policy
Modern Medicine Network
© UBM 2019, All rights reserved.
Reproduction in whole or in part is prohibited.

We've noticed that you're using an ad blocker

Our content is brought to you free of charge because of the support of our advertisers. To continue enjoying our content, please turn off your ad blocker.

It's off now Dismiss How do I disable my ad blocker?
❌

How to disable your ad blocker for our site:

Adblock / Adblock Plus
  • Click on the AdBlock / AdBlock Plus icon on the top right of your browser.
  • Click “Don’t run on pages on this domain.” OR “Enabled on this site.”
  • Close this help box and click "It's off now".
Firefox Tracking Prevention
  • If you are Private Browsing in Firefox, "Tracking Protection" may casue the adblock notice to show. It can be temporarily disabled by clicking the "shield" icon in the address bar.
  • Close this help box and click "It's off now".
Ghostery
  • Click the Ghostery icon on your browser.
  • In Ghostery versions < 6.0 click “Whitelist site.” in version 6.0 click “Trust site.”
  • Close this help box and click "It's off now".
uBlock / uBlock Origin
  • Click the uBlock / uBlock Origin icon on your browser.
  • Click the “power” button in the menu that appears to whitelist the current website
  • Close this help box and click "It's off now".