Features
The Rule of Courtship and Other Secrets
Tim, the vice president of a home care company, introduced himself to me at a health care seminar. “I really enjoy your articles and speeches,” complimented Tim. “I especially enjoy your ideas about negotiating contracts with managed care plans and other companies.
“But,” continued Tim, “much of it is ‘pie in the sky’ material for us. Companies just won't negotiate with us. They say, ‘Take it or leave it.’”
Translated, “take it or leave it” could mean any of the following:
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“The company gave us a preprinted contract and stated, ‘This is our deal.’ So, we assumed we could not negotiate.”
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“The company didn't seem receptive to getting into a negotiation discussion.”
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“They didn't want to talk about pricing.”
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“They got tired of talking about pricing before I was finished talking about pricing.”
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“This is too adversarial for me. I'll fix any problems down the line, after I sign.”
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“Negotiation makes me nervous.”
HME owners like Tim often tell me that negotiation is impossible. But contracts — and generally negotiations — are a fundamental and important part of the business for every home health provider. A home care company is foolish to accept bad contracts, or even contracts that aren't as mutually beneficial as they might be, especially when this is due merely to discomfort or lack of expertise with the negotiation process.
To move beyond “take it or leave it,” use the following negotiating “secrets,” which apply to all contract relationships involving home care companies including managed care contracts, vendor contracts, leases, service arrangements, joint ventures and other agreements. It is helpful to organize these secrets by the three discrete phases through which all negotiations progress. Phase I involves activities preceding meaningful dialog between the parties; initial communications between the parties begin in Phase II; and Phase III (to be discussed in a later article) is the actual negotiation dialog. In real life, of course, these time frames intersect and merge.
