Photo courtesy of Dr Pierce graphic from Getty Images
Photo courtesy of Dr. Pierce; graphic from Getty Images
Q&A | September 20, 2023 | FREE
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Negotiation skills needed more than ever

Financial dealings with hospitals have gotten tougher, but classic strategies can help hospitalists make it through.

No one got into medicine because they love to argue over money, but for many hospitalist leaders, it's a necessity of the job—one that may have become increasingly difficult in recent years, according to the authors of a recent article.

Read Pierce, MD, ACP Member, and colleagues described the current challenges of negotiating over finances with hospitals and offered their advice in a Perspective, “Revisiting Negotiation for Hospitalist Groups: Getting What You Need When the Game Has Changed,” published by the Journal of Hospital Medicine on Aug. 8.

ACP Hospitalist recently spoke to Dr. Pierce, who is chief quality officer for Denver Health, about what has happened to relations between hospitals and hospitalists and what hospitalists can do to make these interactions more fruitful.

Q: What motivated you to write about negotiation?

A: Over the last few years, many of my friends and colleagues who are in leadership roles in the field had been saying things at national meetings like, “It just feels like it's harder to negotiate,” “We're much farther apart than we used to be with our hospital or health system partners,” “The common cause that we used to find together feels like it's somehow gone away.” Then, earlier this year, the Journal of Hospital Medicine editorial team reached out [to ask us to write about this]. I think they were hearing some of the same themes. It seemed like a timely topic.

Q: Why do you think this has become an issue now?

A: One big change is that the field of hospital medicine has gone from being new and an interesting, innovative model that was not so common 20 years ago to something that is very common now. When something is new, and it solves problems that haven't been solved before—which is a pitch that the field made back in 2000—it resonates with a variety of stakeholders, including hospitals and health systems. Now most places have hospitalists and the model is assumed to be part of the system, so there's been a mindset change. Instead of a regular conversation about adopting and growing the new model, it's much more common today to be talking about value: Are we getting enough value from the hospitalists we pay for? Can we spend less and get more clinical effort? Do we really need to grow the program or can we simply increase efficiency of people already here? That's what most parts of the health care system had been up against for decades—laboratory, radiology, the emergency department. In hospital medicine, this can feel somewhat new.

I think a second change is that we've gone from a period of really rapid, financially successful expansion of health care systems in the United States to a time when a lot of health systems are in financial distress. After the Affordable Care Act, generally the response around the country was “hospitals and health systems need to grow.” A lot of mergers happened and that, for many places, generated a lot of cash flow. This allowed hospitalists who were part and parcel of these growing health systems to ask for part of that cash flow to grow. Now we're in a phase where a bunch of health systems and hospitals are under financial stress. That totally changes the conversation.

Another change we referenced in the article is greater separation between hospitalist leaders and financial decision makers. The decision makers who write the checks don't necessarily sit down the hall from hospitalist group members anymore. They may be in a different building on a large campus. They may be in a different state. Early on, hospitalist group leaders often could go down the hall and knock on the CEO's or the CFO's office door and say, “I've got this idea. What if we invest in …?” That's different now.

Q: What's the role of the pandemic in all of this?

A: The main thing the pandemic has done is to put a lot more financial pressure on hospitals while simultaneously increasing hospitalist burnout. I think one of the opportunities that the pandemic has created is that we are going to have to once again figure out how to reinvent our care delivery models to provide better services, better quality and safety, at lower costs over time. Hospitalists have been doing that work since the founding of the field. While it's scary to sit down and negotiate from a position of “Are we cutting costs?” as opposed to “How are we growing my program?,” I think the pandemic has, as a silver lining, created an opportunity for hospitalists to lean into something that they've been really good at for a long time, which is innovation in care delivery models that deliver greater value.

Q: Do hospitalists need to change how they negotiate in this new situation?

A: As we put the article together, we asked ourselves this question: “Is there something fundamentally new in the art and science of negotiation?” Our answer at the end of the day was “Not really.” The article therefore summarizes how to apply sound negotiating principles in today's environment.

Q: Then what's your best classic advice on negotiating?

A: We focused on four approaches that have been well studied and which we sometimes forget when under stress. First, start with finding common interest. Twenty years ago, it was not as hard to get together and say, “Could we get patients out of the hospital faster? I think hospitalists would like to do that. I'm pretty sure hospitals and health systems would like to do that.” Now, it's a little harder because trust is down, strain is up, finances are tough. People say, “My hospitalists are burned out and people are quitting. They need raises and they need fewer shifts per year.” The hospital is saying, “We need your hospitalists to do more for less money; we need fewer people to do more shifts.” It can feel harder to find common ground, but it's still possible if we spend some time really investigating “What do we care about?” I care about good outcomes for patients. I want sustainable hospitalist programs that can deliver those outcomes to patients. Hospitals know turnover is bad and that it's hard to ensure outcomes and value if we can't retain excellent hospitalists. We can still find common ground.

The next two steps in the article are really about slowly raising the ante. How do you find external data or standards to lean on? We did a bunch of that in the first decade of the hospitalist movement—sharing numbers on staffing, salary, coverage models. … I think we gotten a little bit out of that rhythm, in part because there is less pressure to look externally for benchmarks when the annual negotiation is mostly about how fast a group can grow in response to local demand. Now that the circumstances have changed, there's a nice opportunity to ask, “What are other people doing?” Let's pull national data related to what I'm negotiating on this year with my hospital or health system. If I can't find good benchmark data, can I at least come with an innovative out-of-the-box solution to a pain point for my health system, whether that is how we use telehealth, whether that is something to do with the payer mix, whether that is something to do with trust with the community? Being back in the innovation mindset is really important.

Fourth, we talked about the idea of thoughtful brinksmanship. We likely didn't have to do that as much when things were booming and everyone was growing. Now we have to be a clearer about the tradeoffs and the consequences of making hard decisions. I remember one of the founders of the field, Bob Wachter [MD, MACP], saying, 18 years ago, he always had this email written to the CEO that listed all the things that hospitalists were immediately going to stop doing if we made this choice that the hospitalists didn't want. People have been thinking about that brinksmanship for a long time.

Q: What are some common errors, things hospitalist negotiators should not do?

A: I'll pick four. One is to start by making a statement about what you will or won't do, what you must have, or what you need. If you do that in the beginning, it entices the other person or the other stakeholders to reciprocate and say, well, here's what I will or won't give you. It makes it really hard to find shared interests.

A second thing, and we referenced this in the article, is not thinking ahead of time about all the pieces of data that your counterparty is going to evaluate to make a decision. If, as a hospitalist group director, you come in and say, “My team is really burned out. I'm worried about turnover. We're not paying people enough,” don't go into that negotiation without knowing what is your turnover rate, how much is it costing the group, what would be the cost to the hospital if you had to use locum tenens? … The data are really important so that you don't get surprised when other people either ask for it or bring their own.

The third thing [not to do] is to let emotions get the better of the negotiation. When we're talking about brinksmanship, that's one of the points that we make in the article. Be thoughtful, be honest, be respectful as part of the back and forth, even if you're feeling strong emotions. The last one we referenced is sometimes important particularly for emotionally charged situations: learning how to take a pause. If you don't pause when things are getting really challenging or emotional, that may be a missed opportunity and, in fact, may lead to statements or decisions that rapidly deplete trust and make every future conversation much harder.

Q: What do you think the future is going to hold in this area? Is the current negotiating environment the new normal?

A: I don't think we're at a new normal yet. I think we are still working through waves of change that have come out of the pandemic. Over the next five-year time horizon, the way that health care is financed in the United States is going to change again. There's going to be stabilization because we're not going to tolerate as a society or as local communities having half or two-thirds of our hospitals at risk of going out of business every year.

The process of adapting to a world in which cash is much tighter … is going to get more comfortable. Woven into the DNA of the field of hospital medicine is this love for innovating, for coming up with new strategies to tackle problems. We're going to go through this period where people start to innovate again around how do we change the care delivery model? That'll be hard in some ways, because … a lot of the assumptions of the model that we live in today are going to get challenged. I think it'll be an invitation to continue to do things that we've been good at, even if change is hard.

Q: What advice would you give hospitalists newly tasked with negotiating for a group?

A: There are great resources out there for anyone who may be a new leader and is in the process of negotiating. Learning to negotiate is not something you're going to pick up from an article. It's really helpful to have a mentor through the Society of Hospital Medicine, through ACP, through the Society of General Internal Medicine, or via connecting with other people who have been doing this work for a long time. One of the things that's great now, which was not necessarily so true 20 years ago, is there are many, many people who've been leaders of hospital medicine groups who can be mentors and guides. Take advantage of those national networks through professional societies to get support, coaching, and guidance around negotiation if it's a new thing for you.

Q: Any other thoughts for hospitalists?

A: We are in one of the most challenging times that our field has encountered in the last couple of decades. In the conversations that I have with friends nationally, people are worried about the future. People are worried about the financial state of health care systems. It feels like a lot of the things we used to rely on aren't there, and people talk in a way that makes us feel like the field has lost its mojo. I don't think that's actually true. I think we're going to be able to work our way through it.