OnSiteClinics.Org

Negotiate! Negotiate! Negotiate!

In creating your narrow networks and establishing contractual relationships with providers like hospitals, we can’t say it enough – negotiate, negotiate, negotiate.  The ice has been broken by those who have gone before you; you do have power and clout. 

A recent Research Brief by the Center for Studying Health System Change proves the point.  The research, which looked at eight different health care markets across the U.S., showed that average inpatient hospital rates could vary widely – from 147% of Medicare in Miami to as much as 210% in San Francisco. 

I have known for nearly all of my professional career that competition in healthcare is a much different “animal” than in the real world.   To quote Paul B. Ginsburg, Ph.D. (the author of the “Brief”) “The variation in hospital prices found in this study is inconsistent with highly competitive markets – at least for markets outside of health care.  Indeed, observers of markets outside of health care would find the degree of price variation stunning.” 

So, do your homework, guys – you really can win in those negotiations.  And don’t forget that price isn’t everything – align incentives and used value-based contracting principles, as well, to truly win long term.