Win negotiations

[Complete_newbie]

How does one become a better negotiator? The more I get into the "business" world the more I'm realizing doctors are just too nice. Underselling and taking what we can get. I want to negotiate better (increase rates, income, contract, venture, hot wife ?/girlfriend ...)

Thoughts / recommendations

[The White Coat Investor]

Negotiation is really all about having a better next best alternative than the guy you're negotiating with, i.e. negotiating from a position of strength.

I've read a book on it before, but due to several issues it's always really expensive:

http://astore.amazon.com/whicoainv-20/detail/1892904314

[ENT Doc]

The Truth About Negotiations by Thompson is a cheap, good, quick read.  Covers the basics.  The goal should be to devise a strategy to get the best overall deal.  One method is to rank the things that are important to you - base salary, RVU bonus, partnership, buy-in, non-compete, etc.  Then split 100 points maximum across all those categories.  So if a high base salary is very important you might give it a 50.  Then break each point total into ranges.  For example:

$500k-525 base - 50

475-499k base - 45

etc.

The key is to make it realistic and write out several equivalent point outcomes and make sure you are REALLY ambivalent between them.  For example, on the initial go-around you might think that base salary deserves a 50 and buy-in is a 25.  Is the former REALLY twice as important?  Adjust accordingly.  As you negotiate you want to be willing to use other categories as bargaining chips, lump and split, doing whatever you can in order to maximize your total outcome.  You can even screw with them, signaling disappointment in a 10 point category in order to bundle a 5 point loss there with a 10 point gain in a more important category.  After you're done, make sure that this is a tentative agreement and get it in writing.  Ask if you can come back and revisit it in a day or two to try to increase your outcome.  Many negotiations can be improved this way - for both sides.  Lets you think more creativelively, not on the spot.  They will have their own categories and importance, whether explicitly stated or not.  You need to have a discussion that leads to you understanding what that rank order is, sometimes explicitly asking and offering what your important items are.  This takes practice.

Agree that we're too nice - especially women.  Studies have shown that the wage gap can be closed if women improve their negotiating skills because too often they leave money on the table whereas their male counterparts were more aggressive.  Great subject and/or class if you have the chance to dive into this more.  I'm sure Harvard Business Review has a bunch of articles on this.

[ticker]

I don't have anything comprehensive re: negotiating, but one thought that was helpful during my first contract negotiation:

Realize the stakes.  If you can get another $25k and an extra week of vacation per year on your first contract, and that contract sets the baseline for any future renegotiation, you may have just "earned" an extra $750k and 30 weeks vacation over a career.  For what might take 2-3 hours of "work," this is a better hourly return than you will get from anything else you do in your life.  I'm in a lower paying specialty, and I was able to take my best offer out of several and add over $100k in total compensation and more than 15 weeks of vacation on a 3-year contract.  I just lose it when I hear coworkers who accepted the first offer because they were "uncomfortable" with the idea of negotiating.  I'd let you cut off my foot for the money/time I was able to add for a few hours of negotiating work.  Sure, it's uncomfortable.  That's why you're "getting paid" tens of thousands of dollars per hour to do it.

[G]

Getting to Yes, Fisher and Ury.  The concept of BATNA literally changed my life.

Thinking Fast and Slow, Kahneman.  I'm in the midst of re-reading it.  Somewhat tangential to answering your question, but briefly, it shows that psychology plays a role in framing (and hence sales/contract negotiation).  A somewhat more entertaining version would be in Michael Lewis's new book which summarizes the lives of Kahneman and Tversky; not his best work, but talks about market inefficiencies.

[Zaphod]

Find spots that are mutually beneficial to you, and framing/psychology is so important, same question/request framed one way can be offensive or make the counter party feel like you did them a favor.

Doctors are definitely way too nice overall and assume that everything is going to ************************ in a hand basket the instant they make a request. No one else in the world will be offended by what is considered standard practice. Just read those contract/restrictive covenant threads, they went from deep in a bad place to better than most people.

[SValleyMD]

My two cents echos WCI..

My thinking early in my career is to always have an out.

If you are able and willing to walk at any point you have the leverage.

So that might mean not drooling over your "dream job" or "dream city" . Hold off on building that house. Fight non competes. It also means prepping the spouse to also keep an open mind as well

Obviously at some point either early or late in your career those things might trump your job/contract and then u take your lumps.

But I agree- I think the next step for educating and empowering docs will be how to better collectively and individually negotiate. A lot of blog money for who can figure that out!

[VagabondMD]

Our radiology group is currently renegotiating our contract with the hospital. Our current agreement dates back to the 80's!

The negotiation has become somewhat protracted, but if I were to summarize it in two lines, it would be as follows:

Radiology Group: We would like to change terms A,B, and C to X,Y, and Z.

Hospital: If you do not agree to the terms A,B, and C, we will find another radiology group that will.

This is, in part, because we are learning that the hospital administration really has little idea what we do and how we do it. We are having to educate them a lot along the way. Their goal is doing as many exams as possible and reporting them as quickly as possible with 100% accuracy, and with as low a cost as possible embedded in the system. I guess it's their version of the Quadruple Aim (volume, speed, quality, low cost). I call it the VagabondMD early retirement plan.

[SValleyMD]

Hey they just want you to practice value-based patient-centric care!!! If you won't, they'll find someone who will!!

[VagabondMD]

SValleyMD wrote:

Hey they just want you to practice value-based patient-centric care!!! If you won’t, they’ll find someone who will!!

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Yes, and that's great, but you should know how a radiology department functions, what a radiologist does and how that can best be executed, before negotiating a contract. Staffing for peak demand 100% of the time, for example, is unrealistic and not an expectation for anywhere else in the hospital (i.e. certainly not the ER), but that is what they demand from us.

[SValleyMD]

Was being facetious.. I'm with you. The disconnect between admin jargon and reality is troubling..

[pulmdoc]

I love Getting to Yes and second the recommendation. Knowing what your negotiating strength/weakness (leverage for/against) is critical, as well as approaching negotiations not with a mindset of screwing the other party, but of reaching a mutually beneficial agreement is important. Knowing ahead of time what are likely to be top priorities (money, coverage, etc) can help reach an agreement. For example, if you can tell your prospective employer has a ton of work waiting to be done, negotiating productivity-based compensation can be a way to make both sides happy; you are incentivized to work hard, they know you will get the work done. On the other hand, if coverage is the primary concern (ED, hospitalist, ICU locums are easy examples of this), then an hourly wage becomes more important because then their needs are satisfied and you aren't put out if it's a slow Saturday night. It's also important to know what things are flexible and what aren't; if you make lots of demands which aren't feasible/legal, the other party will just write off anything you ask for in the future. On the other hand, if there is something you want that they can provide, make the request in the context of something they want. As an example, my employer requested an earlier start date than I originally planned because of coverage needs. I agreed in exchange for a larger signing bonus, which they agreed to because it was less than it would have cost them to find locums and we both knew that.

[DMAL]

Just went through my first attempt at a "real" contract negotiation . I don't think I can really call it a negotiation. I was heavily recruited initially, with daily calls, emails about how much they wanted me to work with them. I verbally accepted the job. Initially I thought I was being the doctor that was too nice. Once I got the contract, there were things I was uncomfortable with so I asked questions and for clarifications. I used Contract Diagnostics, and per their advise, asked for more base salary, more sign on, clarification and possible compromise on the tail coverage (or if not, asked what a mature tail would cost just so I'd know what I'd be on the hook for) but basically got told " you shouldn't worry about that. Its never been an issue because we've never had a doctor leave so we've never had to pay it..." That answer itself made me uneasy.  Also asked for a provision to have some ownership of my intellectual property, instead of the blanket " any money that you earn from anything that you do outside of the hospital belongs to the hospital unless you have specific permission from CEO." Asked for these all in one email, with a reply that basically said "no, we're not changing anything. good luck on your job search"....Maybe I did too much with one email. Actually laughed out loud at their response.

Oh well, on to the next...

[Zaphod]

DMAL wrote:

Just went through my first attempt at a “real” contract negotiation . I don’t think I can really call it a negotiation. I was heavily recruited initially, with daily calls, emails about how much they wanted me to work with them. I verbally accepted the job. Initially I thought I was being the doctor that was too nice. Once I got the contract, there were things I was uncomfortable with so I asked questions and for clarifications. I used Contract Diagnostics, and per their advise, asked for more base salary, more sign on, clarification and possible compromise on the tail coverage (or if not, asked what a mature tail would cost just so I’d know what I’d be on the hook for) but basically got told ” you shouldn’t worry about that. Its never been an issue because we’ve never had a doctor leave so we’ve never had to pay it…” That answer itself made me uneasy.  Also asked for a provision to have some ownership of my intellectual property, instead of the blanket ” any money that you earn from anything that you do outside of the hospital belongs to the hospital unless you have specific permission from CEO.” Asked for these all in one email, with a reply that basically said “no, we’re not changing anything. good luck on your job search”….Maybe I did too much with one email. Actually laughed out loud at their response.

Oh well, on to the next…

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Very interesting. None of those requests sound that serious to me, any reasonable person wouldnt be miffed at that especially if that were truly the case. Maybe you seemed like you would be too difficult to handle. In all likelihood you may have dodged a bullet.

[DMAL]

I guess they were miffed that I dared to ask? I don't know. For relative newbies like me to the game of contract negotiations, its hard to gauge the line between being too nice vs being aggressive and "asking for what we deserve" Even more confusing when your asking was based on advise from apparent expert in contract negotiations , in my case Contract Diagnostics. As I move forward with other contracts, I'm looking at this recent experience and I'll admit struggling to figure out what the lesson is and what, if anything, should I do different in the future. You're right though. Their response does lead me to believe I may have dodged a bullet.