Administrators at hospitals and healthcare organizations who negotiate
contracts with vendors are the frontline in defending against rising
prices. Aimee Jackson, Purchased Services Senior Analyst at TractManager
and a seasoned contract negotiator on both sides of the table, has
created a list of her Top
10 Contract Negotiation Strategies for Healthcare Providers that can
make every contract negotiation more favorable for hospitals and health
systems.
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Aimee Jackson, Purchased Services Senior Analyst at TractManager (Photo: Business Wire)
Today’s healthcare organizations are under increasing financial
constraints due to downward pricing pressures that are attributable to
lower reimbursements and deregulation, and upward cost pressures
including rising pharmaceutical prices, labor costs, and the
proliferation of non-labor spend across hundreds of purchased service
categories. U.S. hospitals and health systems are trying to balance an
impossible triad of managing financial pressures while investing in
technological innovation and improving the quality of care and patient
outcomes.
With expenses rising and revenue growth hard to come by, accurate,
real-time data combined with vendor negotiation skills can significantly
impact the cost curve. Deploying proven contract negotiation strategies
can help hospitals stretch their dollars, increase value, and achieve
desired savings while improving their relationships with vendors.
In one of Jackson’s tips, Bartering for Clauses, she advises that
contract clauses are like negotiating chips: “To negotiate the best deal
for your organization, you need to understand the total cost of your
contract. That entails looking beyond the big-ticket items and zooming
in on what may look initially like small change. Often, these expenses
are buried or only implicit in specific contract clauses.”
Jackson’s favorite tactic, The “Judge Judy” Method, advises that
“ignorance” — real or feigned — can work to your advantage. “I soon
discovered that vendors were disarmed when I openly admitted that I
didn’t know nearly as much as they did, and I would be asking a lot of
‘dumb questions,’” she says. “Once the vendor dropped their guard, they
became an open book. Never underestimate the power of curiosity, and the
dogged pursuit of complete transparency.”
“Success at the negotiating table is key to controlling healthcare
costs,” notes Barry Dyer, Senior Vice President of Consulting at
TractManager. “Aimee’s ability to boil down her vast negotiation
experience into a few easy-to-digest tips will help anyone in this
situation approach such a discussion with a game plan. At TractManager,
we are uniquely positioned to help clients optimize their purchased
services spend. As a large Mid-Atlantic health system client told us:
‘We were frankly surprised at the amount of savings [TractManager]
helped us achieve. [The organization] set a year one goal of negotiating
$10 million in purchased services cost reductions. After only two
projects, we’re halfway there.’”
Healthcare administrators are invited to read more about these proven
techniques, which address not only cost savings, but also ways to
strengthen contracts and shift the conversation at the negotiations
table in their favor.
To read this engaging piece about the serious business of negotiation, Top
10 Contract Negotiation Strategies for Healthcare Providers, visit
the TractManager website. Then listen to our on-demand webinar
to hear Jackson and TractManager colleague Brandon Baca discuss ways to
make your next contract negotiation successful.
ABOUT TRACTMANAGER
TractManager’s
technology-enabled services and solutions serve three out of five U.S.
hospitals, helping transform the business of healthcare by driving down
costs, decreasing risk, and enhancing value and performance across
healthcare organizations. Serving the healthcare industry with integrity
for more than 30 years, we offer a comprehensive suite of evidence-based
research, strategic sourcing, and contract lifecycle management
solutions that deliver full visibility into spending, expense
management, reimbursement, clinical effectiveness, contractual
obligations, and potential liability. We are dedicated to helping our
clients reduce their capital and non-labor costs, and conform their
contract, policy, and procedure management to meet regulatory
requirements.
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