Take Your Corners – Hospital Health Plan Negotiation Strategies

Hospital managed care teams need to understand their markets are much more expansive than other hospital competition, advises, a senior exec with a company that provides a range of services to providers.

“Essentially, there are three basic ways of dealing with negotiation differences: domination (only one side gets what it wants), compromise (neither side gets what it wants) and integration (creating a way for both sides to achieve what they really want).

Finding that integration between hospitals and payers is always the hard part, said Gregg Leff, executive vice president of Med Metrix, a technology, services and consulting firm during a recent conference.

Hospitals, he said, need to be proactive to avoid the other flawed negotiation results.

Leff identified four negotiation strategies:

  •         Understand the current and future market dynamics
  •         Analyze your existing situation
  •         Open the lines of communication on both sides
  •          Beware of a “myopic” view of your market

Quotable: “Although the “domination” strategy may look good at face value, hospitals with a lot of leverage have to wonder if they fully analyzed the situation and if the market power is sustainable.”

Leff spoke during Becker’s Hospital Review event.


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