Secrets to Getting an Increase: Secret No. 2
September 27, 2010
by Josh Kaufmann
Categories
Insurance, Practice Management, Practice Services
In a prior article, Secrets to Getting an Increase: Secret No. 1, I shared with you the first secret to negotiating an increase: As a provider, you have no value to an insurer.
I said, "You can argue all day long with an insurer about how great you are, about how poorly you're reimbursed, about this and this and that and that. And... when the day is over they will simply close out their email inbox and forget you."
In this issue, I'd like to life your spirits a bit and share the second secret to passing along an increase.
Don't negotiate.
You already know the insurer is not interested in negotiating. They have nothing to lose, and frankly, you do.
Hmm... How do I pass along an increase without negotiating then?
Allow me to set this up.
I've pointed out that negotiation over reimbursement is futile because you have no value to the purchaser of services (insurer), and the receiver of services (patient) has no direct control over what you're paid. In order to have a negotiation, you have to have the receiver and purchaser communicating with each other. When they're the same person or entity that's easy. When they're not, it's hard. So what do you do?
Our most successful approach (averaging 30% increases per 3-year contract) is to make the subject of negotiation something other than reimbursement, something where the receiver and purchaser is again the same person. We refer to this as a proxy negotiation. In other words, set up a conversation between the insurer and the patient where the patient says, "I want greater access to care". The insurer has to engage in this conversation because the patient is their customer.
With a little help from you, access to care can be made the subject of a proxy negotiation. Patients pay premiums and receive access -- access being a network of physicians. The insurer sells access. The purchase of access is a transaction between the insurer and patient, but it's one that patients are not particularly skilled in measuring. It is, however, a winnable argument.
Access to care is limited by a number of factors -- staffing, office wait times, scheduling issues, and administrative burdens to name a few. All of these can be addressed with higher reimbursement.
A proxy negotiation between an insurer and patients is not over reimbursement rates per say. It's over "products" a patient is paying an insurer to provide -- access and outcomes. There's an elegance to this, and it's by no means fool-proof. I've seen large hospitals go down this road and have the negotiation blow up in their faces. With that being said, it's not as difficult as it may sound.
Your role in a proxy negotiation is one of Organizer. As Organizer, you are a strategist pulling the right strings at the right time. Those strings are tactics such as the following:
Face-to-face meetings with insurers
Threats of escalation
Letter-writing campaigns
Blast faxes
Press Conferences
It's true that a direct negotiation between you and an insurer may have some of the above elements, such as face-to-face meetings. As such, the difference between a direct negotiation and a proxy one is intent. The former sees a face-to-face meeting as a professional meeting of the minds. A proxy one sees a face-to-face meeting as a show of force.
So, again, the secret is this: Don't negotiate. Instead, identify and build your leverage.
Ask yourself: if the insurer doesn't care about you, about whom do they care? Think patients and, indirectly, employers, community, and media.
When you shift your strategy to one of building leverage, you make different arguments to different people such as:
You say to Patients, "Fair reimbursement will decrease wait times and increase face-time.
You say to Employers, "Competitive reimbursement lowers costs by reducing the pressure to increase throughput."
Imagine a stream of informed patients concerned their most trusted confidante (you) is getting paid less than the nail salon technician down the street (no offense to nail salon technicians). Imagine a dozen human resource directors concerned about employees frustrated with poor access to care.
A leverage strategy works because it returns the discussion to one between a provider (insurer) and receiver of services (patients and employer).
Josh Kaufmann is co-owner of Praesentia Consultation LLC, a Cincinnati-based managed care consulting firm representing providers in their negotiations since 2004. Josh’s opinions and contributions to healthcare and policy reform have been featured in CNBC, MSNBC, BBC, Bangladesh Observer, Tampa Tribune, Atlanta Business Chronicle, Cincinnati Business Courier, Indianapolis Business Journal, Indianapolis Star, and Anchorage Daily News.