What is leverage? How is it used in Physician Contract Negotiation?

How can use you use Leverage to get better than the Average Doctor Salary?

Leverage- It’s probably the single most misunderstood term in negotiation. When people think of the term leverage they usually imagine one of two vivid images- someone threating someone else with a lever or crow bar or somebody being squeezed into compliance. The real practice is far less antagonizing, but also much more useful in advancing your career

So where does the concept of “leverage” comes from?          

Well, imagine a playing field with a goal line at either end. And then imagine a large, heavy rock in the middle- Sort of like the superdome with a 2000 pound bowling ball at the 50-yard line. Now, your intent is to move that heavy object to your goal on the far side of the field. Next, imagine you had a giant plank and a fulcrum- together forming a lever– and you can use this lever to move the rock closer to your goal. That’s “leverage”, anything available in a negotiation you can use to “lever” or “move” the agreement closer to your goal.

Now that you know the meaning of leverage, what are the things that can act as leverage?

Time is the most common leverage tool. You need to sell your house by the end of the month. I have no urgent requirement to purchase. I can use your desperation to leverage down the final price. Scarcity is an another leverage point. You are down to the big red “E” in your gas tank and pull off the highway where you find the stations all charge 30 cents per gallon more than the average station. Your need to full the tank immediately is used as leverage to charge you more.

The most well-known negotiation tactic taking advantage of leverage is the “walk-away”.  You give the impression you don’t want that new car after all and you get up and leave. The seller, eager for the sale, will then come back with a much better price to keep the hope of a final agreement alive.

How can you gain more leverage?

A.    Do your legwork. Truly understand your desires, priorities, weaknesses, and strengths. Think about your negotiating partner. What are their concerns and needs? What are their strengths?

  1. For example, you may be joining a practice that is having trouble finding doctors to take call in a hospital on the northern suburb of town. You have no real issues taking call there, but you know that the current partners all live south of the city and it’s a burden for them. You use this knowledge to leverage a higher call reimbursement in agreement to take the majority of your call at this “burdensome location”.  You think even more about the situation and negotiate an extra $60,000 annually to be the medical director at that site.

B. Form Coalitions. Sometimes you are the weaker party and you lack leverage against a more powerful negotiating party. This is where your skill in “Office Politics” comes in (Note: Office Politics is not the bastion of evil portrayed in movies- It’s the ability to use the resources within an organization to effectively achieve your goals.) Find other like-minded people in your sphere of influence and get them on-board. If done properly, a few well-placed calls or recommendations will change the power in the negotiation significantly.

C.  Time is mentioned above and needs to be considered as you plan your negotiation. Make a deal to sign up for a seminar early for a 10% discount. Leverage your willingness to commit to a certain region of the country to obtain a training stipend. Slow down the negotiation when you are aware of pressing needs from your partner. Being willing to speed up agreement for a meaningful concession. Always be aware which party is under the bigger time constraint.

 

There are several factors you should take into account when as you negotiate your Physician contract.

Plan ahead, survey the terrain, and use leverage to obtain the best Doctor Salary. And remember, these skills can be useful in other aspect of your professional and personal life- from buying your first house to managing professional disagreement. Negotiation remains the single most important Medical Professional and Business skill required by all physicians to succeed.

 

Want to earn more than the Average Doctor Salary? Using “potential loss” for leverage

Concession Strategies for Physician Contract Negotiation

In a famous experiment performed by Paul Samuelson, people are asked whether they would be willing to play a game. A coin is flipped- if it lands on heads you receive $200. If it lands on tails, you pay out $100. Would you be willing to play this game? How about if I asked you to do it twice?

If you are like most people, you’d say no. Now, before I go into the math, think about why you or many others chose “no”. Most likely, you had an honest fear of losing $100. Maybe you believe you would feel the loss of $100 much more painfully than the gain of $200. This is a natural and common part of the human psyche- we feel loss much more strongly than we feel gain. It’s part of who we are and it drives many of us to be irrational.

Back to the game- what if I told you that on the two-coin toss game, there is a 25% chance of winning $400, a 50% of winning $100, and only a 25% chance of losing $200. Most people like those odds. The understanding of the payouts makes you a bit more rational and tempers your fear of loss.

You can leverage this exaggerated fear of loss to your advantage while negotiating. When you first enter into the negotiation, your negotiation partner can’t help but imagine what a completed deal would look like. Perhaps you can even help them along by mentioning the things you will bring to the partnership- better call schedule, increased revenue stream, a gain in prestige to the program- you get the idea. Of course, don’t promise things you can’t deliver. But, do realize that you are fulling a need and creating value- that’s why you are being considered for the role. Now that your future boss has envisioned the significant assets you bring to the partnership, there’s a good chance that they would feel the potential of losing you quite strongly. The perceived loss they feel may spill over into the irrational.

You will see this enhanced sense of loss strategy being used often. Offers on TV that are only good for the next 60 minutes- Call Now! Coupons that have time windows. Famous performing acts on their 12th “farewell” tour charging significantly higher for tickets.

 

How do you use potential loss as a way to improve your starting physician salary?

  1. Be aware-using potential loss is an advanced concession strategy. You must be familiar with Negotiation Science and have hopefully attended a CME approved negotiation and professional skill seminar. At the very least, you have self-studied and have done at least 4 practice or real life negotiations. You have a BATNA or back-up plan. And, you know the market data inside and out.
  2. Be effective in describing your impact in the partnership. Help your future partners “visualize” what the practice will be like when you join. Emphasize the positive impact. Avoid the use of negative words or conditional statements.
  3. Be subtle and cautious in your use of loss as a leverage source. You want your partners to come to the determination on their own that they can’t live without you. Any mention of choosing another practice or going elsewhere could be perceived as a challenge or a threat – this could lead to an irrational response in the opposite direction! Instead, be honest about where you are in the negotiation process with other practices if asked. Avoid reacting emotionally and threatening to go elsewhere. Be cool, compassionate, and rational- “I’d really like to join this practice. If only there was a way to improve the package…”

 

  1. Use time as your most critical leverage tool. Allow time to pass and show little concern about finalizing the contract- after all, you have the choice of plenty of other offers. Let the desire to sign quickly build on the other side as you continue to impress them. This slow-fuse approach can raise perceived value. If things are not moving the way you like, hit them with a shocker- unexpectedly request their best deal by the end of the week. If done properly, you could gain significant concessions when they are suddenly faced with loss.

The use of leverage and negotiation tactics can improve your final agreement. Some techniques are advanced and should not be attempted without experience. However, most physicians make excellent negotiators with the proper training and practice. Using an enhanced sense of loss as a concession technique may just be the secret to getting a better than average physician salary as you negotiate you doctor contract. Remember, with dedication to professional and medical skills development, you can reach your dreams and really succeed.

The Timing of your Doctor Job Search could lead to a financial windfall: Physician Job Interviewing Master Tips

Read the rest of this article at STUDENT DOCTOR NETWORK on August 24th, 2017.  We will post a link when it is published.

 

 

 

 

 

 

Physician Contract Negotiation Training Resources

Negotiation: Your Most Valuable Skill

To really succeed as a doctor, you need three complementary skillsets- Clinical, Financial, and Professional Business Skills. Of the Professional business skills, the most valuable by far is negotiation. You’ll use this skill to set your salary and renegotiate your contract every several years. You’ll need to negotiate your car and home purchase. As you advance in your career and your reputation at the bargaining table becomes well-known, you’ll be asked to negotiate with insurance companies, other practices, real estate developers, and even be asked to help resolve conflicts. There’s no limit to the importance of negotiation in your success. Most physicians negotiate several times every day.

Negotiation is one of those skills you can only really learn from others and through practice. You want a formal and pragmatic introduction using didactic lectures explaining the evidence and theory- Then you’ll want to undergo at least 4 practice sessions to really get to the point where you are ready to use your skills. You’ll want to review every negotiation you participate in and research ways to improve your outcomes.

There are several options for negotiation training.

The best options for most physicians is In-person physician specific seminars

  • The Negotiation and Professional Skill Seminar for Physicians is put on by Physician Advocates LLC. (Disclosure: The author works for this company). We are a little biased here, but believe it’s the strongest entry available. CME is offered, there are several medicine-based practice simulations, including a realistic salary negotiation. Other skills, including interviewing, contracts, office politics, and an introduction to physician finance is included. The conferences begin in late summer and are held several times throughout the job search season. 13.5 hours of CME is offered, so you can you the cost as a tax-deduction or submit the receipt to your education stipend.

There is currently limited eLearning on-line course that go beyond the basics

myCME.com offers an interesting, but somewhat limited online CME course in practice management that includes 2 CME credits for negotiation training. The cost of the online course is nearly the same as the in-person conferences, so may not be the best use of resources unless you are limited by time and travel.

 

DVD’s of live sessions

SEAK, a company that specializes in non-clinical career training for physicians offers a DVD called Negotiating Skills for Physicians. They put on a well-reviewed conference that used to offer negotiation training and may do so in the future.

Non- Physician based Seminars

The Karass Seminars put on a worldwide series of seminars that are quite good. You will be surrounded by business people and there is a strong emphasis on technique over win-win and relationship building- which is essential in medical practice. There are practice sessions and the overall experience is positive. They do not offer CME, so the prices are competitive (CME requires oversight and is expensive). Remember that CME courses are a tax deduction for physicians or may be refundable under your education allowance.

Books

We love reading about negotiation in the way a chef may enjoy reading recipe books. There is a problem with reading to learn negotiation- you gain no practical utility. You’ll read about how others handled famous negotiations, but it like trying to learn how to ride a bicycle by reading about it. We strongly recommend you go to an in person seminar and get some practical experience in simulated sessions, especially if they are medical-scenario based.

Here are our favorite negotiation books

Bargaining for Advantage by Richard Shell

  • Probably the best introduction to negotiation available in book form

Getting to yes by Roger Fisher, William Ury, and Bruce Patton

  • This classic text explores the win-win negotiation scenario. A good book to read after your in-person seminar conference or as you enter mid-career. Topic is too advanced for beginners to really appreciate, but extremely valuable as your skill level increases
  • Reading “Getting Past No” and “the Power of a Positive No” by the same authors are great for advanced students, physicians who are involved in conflict management, and those who need to learn office politics-especially with difficult colleagues.

Secrets of power negotiating by Roger Dawson

  • This is a fun read as it goes through dozens of different techniques to gain concessions. Most of them are not that useful, but I do find myself secretly delighted when a salesperson or administrator uses one of these techniques and I apply the counter-technique to their dismay

The Business Side of Medicine by Tom Harbin

  • We were very excited to see this book when it came out, but ultimately found it disappointing. It comes from a great idea, teaching business to physicians. Unfortunately, it just doesn’t go far enough, spending just a few sentences or paragraphs on vital skills. It’s worth a look to get an outline of the skills you need. You can read the book, take notes on your relative deficiencies and use that as a template for further study.

Online Forums and Websites

Online forums and websites are a good place to get information about negotiation and other medical professional and business skills. Most of the articles tend to be either fluff pieces, poorly researched, fill of inspirational messages like “have the right attitude”, but are short on actual usable information.

Career Success Central – Of course, we are biased here, but we have done our best to be the source for Physician Professional and Business skills knowledge.

White Coat Investor– A well-known and well researched blog site with the occasional professional skills posts.

KevinMD – A source for interesting discussions on the practice of medicine. Occasional information about professional skills

Student Doctor Network – A community of high quality articles with the medical student and resident in mind. Occasional professional skill articles.

 

The Bottom line: there are several sources of Negotiation training available of varying utility and quality

We strongly recommend an in-person seminar. It’s simply the best investment you can make for your future. A CME course specializing in medical negotiation will serve most physicians and other medical staff the best. If you can’t attend one of these seminars, then a non-physician negotiation conference is your next best choice. Eventually, eLearning will step in here as the next option, but for now there’s a tie between the current eLearning, DVD’s, and Books. None of them are great, the costs vary, and after spending several hours or weeks of self-study you still may not be a better negotiator without practice. Websites and Forums offer some educational opportunities, but may not give you the basic foundations in knowledge to help you really succeed.

What do you think? Where did you learn to negotiate? Let us know in the comment section below.

I am an author and want my book, conference, website, or conference listed (or de-list) here. Contact us.

I’d like to submit an article for publication. Contact us.

 

Medical Professional and Business Skills

How the things you weren’t taught in medical school are holding you back in your career.

Just the other day I was on a fishing trip. Passing time on the ride to the ocean we got into a conversation about work and first contracts. Me and the other Medical Professional in the front seat rambled on about all the mistakes we made and tough lessons learned through the failures we’ve made over the years. The engineer in the back seat listened in disbelief! He couldn’t believe it, some of the most educated professionals on the planet making such rookie. “Didn’t we pay attention in class?”, he asked. “Of course, we paid attention! How else did we learn how to diagnose Tropical Spastic Paraparesis?”, we replied. He shot back, “No, not that class. Negotiation class!

There you have the problem in a nutshell. Physicians spend over a decade learning clinical skills to care for patients, but rarely get a single hour in the Medical and Professional Skills that are needed to succeed and thrive in modern medical practice. Attorneys, Business Administrators and other professionals undergo extensive training in these fields. We as physicians are left at a distinct disadvantage. In many ways, our medical training has failed us and left us shockingly unprepared for actual practice.

What are these skills? Essentially, Medical Professional and Business skills fall into the category of non-clinical expertise that allow you to advance your career. There are based around improving communication, improving your ability to influence others, and the ability to most effectively use and manage the resources and processes that exist in your organization. They are sometimes referred to as “communicative” or “soft” skills. But, make no mistake, they are based on solid evidence-based research and are just as important as your clinical competence in determining your success.

Here is a partial list of the skills that physicians need to master to succeed in their careers

  • Interviewing
  • Public Speaking
  • Media Interviewing
  • Presentation Skills including PowerPoint
  • Persuasion
  • Negotiation
  • Contract Review
  • Office Politics and Networking
  • Social Media Presence for Physicians
  • Marketing including “Inbound Marketing”
  • Medical Business Strategy including “Blue Ocean” Development
  • Conflict Management

If you have ever wondered why some physicians are more successful than others, chances are they have excellent clinical abilities along with strong medical professional and business skills. Possibly they have excellent office political skills and have built a network of colleagues who rely on them for consultation and medical expertise. They may also have negotiated an excellent compensation package and use their business acumen in partnership with the hospital administration to achieve “win-win” solutions, increasing value for all concerned parties. Perhaps they are gifted marketers, leveraging television interviews and social media presence into a thriving practice.  The potential uses of these talents is endless. Unfortunately, without these talents, you’re likely to be hampered in achieving your goals and dreams.

Here’s the good news, just like your clinical skills, you can learn professional and business skills with dedication and effort. You’ve memorized the Krebs cycle- you can certainly excel in learning how to negotiate! And, you won’t need to dedicate $150,000 and take 2 years off from practice to earn an MBA to get there. There has been an explosion of internet resources for physicians, including sites that specialize in medical professional and business skills. Taking advantage of in person CME seminars and eLearning will help you learn the skills you need to get ahead.

Ask yourself a few questions to assess your current professional skills needs:

  • Am I an anxious interviewer? Do I really know how to present the best version of myself and abilities? Have I suspected I’ve “blown” an interview?
  • Do I understand the science and economics of negotiation? Do I understand market value research, BATNA, ZOPA, and Anchor numbers? Do I have trouble getting the deals I feel are fair? Has anyone ever taught me how to negotiate? Have I ever practiced negotiation with an expert?
  • Am I always of the losing side of conflicts and office politics? Why do I have so much trouble influencing others even when my ideas are better than theirs? Do I have the feeling the departmental and hospital administration ignore me and my ideas, even when they are based on best evidence or practice?
  • Are others at my hospital advancing into administrative or leadership positions while I keep falling behind or get overlooked?
  • Why do I have so much trouble attracting patients and consults to my practice?
  • I’m happy with the success I’ve achieved, but I don’t really know how to take it to the next level?
  • Why do I feel like I’ve lost control of my practice? I’m overworked, underpaid, in constant struggles with my colleagues and can’t seem to get the administration to listen to me. They call it physician burn out, but I need a solution beyond “in-the-moment gratitude” training.

If these questions, or any other questions you may have about your career tract, sound familiar to you are not alone! They plague physicians everywhere and are the direct result of a gap in education and training.

Here’s your plan to develop your professional and business skill set

Review the list of skills above and perform an honest assessment of yourself. Perhaps ask a trusted friend or colleague about their honest opinion. Write down the areas where you don’t believe you have achieved true mastery. If you are like most physicians, you feel barely adequate at interviewing and public speaking. Maybe you can put together a decent PowerPoint presentation, but nothing that “wows” an audience. Unless you went to business school, law school, or have an MBA, the rest of the list with skills like negotiation, contract review, conflict management, etc. will seem like a foreign language- you may know a few words, but you aren’t even close to fluent. In all honestly, the concepts baffle you and make you a bit anxious.

Develop an education plan. For public speaking and PowerPoint skills there are several good eLearning courses. Your institution may even offer classes. Groups like Toastmaster can certainly help. To achieve the other skills, you’ll need to pursue an active learning plan. We recommend an in-person physician dedicated program to start your journey. Find one that is physician specific and offers CME credits. Look for eLearning opportunities to round out your education

Become a devoted life-long professional skills development champion.  After obtaining the basic knowledge from attending a seminar, constantly assess your career and outcomes. Adapt and learn as opportunity present themselves. Perhaps you realize you need better marketing skills to grow your practice. Visit physician forums that specialize in medical professional skills and leave a post or contact the site owner for advice. Often, the quality of the responses will be excellent and will guide you towards your goal. Continue this process as you go through your career- reviewing and deepening your knowledge base when you require more advanced skills.

Recognize the tremendous value that these skills offer to yourself, your patients, your practice, your hospital, and the medical community at large.

The pursuit of medical professional skills is simply the best investment you can make in yourself. As you gain this knowledge you will become much more valuable to your practice and the medical community in general. Imagine the value you would bring if you could use your skills to re-negotiate a contract with a third-party payer, interview on television about an imminent public health threat, publicly present to your state legislature about changes in health policy, or help develop an inbound marketing plan to drive new patients into a “blue ocean” business strategy? These are skills that are truly in demand! You are putting in the time and effort, so be certain your CV reflects your expertise. You should participate in CME courses and obtain Graduate Certificates wherever possible. This type of proficiency will make you stand out as a candidate for any administrative or leadership role.

Medical School, residency, and fellowship taught you how to care for patients, but left you under-prepared to care for your medical career. To truly succeed as a physician, you need to development the medical professional and business skills required to thrive in modern medical practice. Learning these skills can be invigorating, enjoyable, profitable, and bring control back to your career. With the right training and education, you can achieve your dreams and focus on those things that really matter to you.