by Rosemarie Nelson, MS
Everyone is trying to “do more with less” and concerns about the economy add fuel to that fire! But, when done with purpose and thoughtfulness, you can manage vendor relationships so that you’ll deliver successful negotiations that will get the most bang for the buck for any medical practice, small or large, multispecialty or single specialty.
Preparation and setting objectives well before contract discussions begin is the first step.
Know what you want as an end result, and try to set aside preconceptions about how to get that result.
Be prepared; collate all the information that will be helpful to the vendor in preparing a solution for your practice and in preparing a thorough quote. How do you do that? Look at your past purchase history; invite the staff that the purchase will have the most impact on to participate in the solution and vendor exploration.
Consider, too, what the vendor wants; it isn’t always “just” a quick sale.
Vendors can be educators
As a responsible, smart buyer for your medical practice, you need to know what is available and in this very complex and volatile market, it is a challenge to stay in the know. Vendors perform a very necessary role by educating buyers about the possibilities.
Consider how you and your colleagues learn about the new solutions in the pharmaceutical world — more often than not, it’s by seeing a rep in the office. Wouldn’t that type of introduction to a new product or solution for the office be just as helpful to making an informed selection? Ask the vendors of products you’re considering to pay a visit.
They’ll undoubtedly be happy to stop by: Vendors want to establish a relationship with you, and they recognize that delivering quality information and proving to be a reliable resource for you will lead to long-term investment in future sales.
Start things off on the right foot by first helping the vendor understand your practice. Lay out your needs and preferences for a solution to meet your objective. Be open to a dialogue that allows the vendor to ask probing questions and even challenge some of your assumptions.
Transparency in your decision-making can help develop successful relationships. So invest in the time to explain your decision-making time line to the vendor, explain who in your organization is involved, and what the process entails.
Vendors often lead the market with innovative solutions. Allow them to inform you about solutions they have in the pipeline that may play into your time line.
If you’re working closely with a vendor on a key part of your operation, consider inviting that vendor to strategic meetings that involve the solution they work with. Vendors are the experts in that area of your practice and you can tap into that expertise in order to give you a competitive advantage.
Take notes, recap action items, and follow up with the vendor when you need additional information or price quotes.
If you don’t manage the process, the vendors will, and their time frames may not mesh well with yours. Let the vendor know what you expect and ask if your expectations are reasonable based on the vendor’s ability to deliver. Remember, your vendor expects a certain level of commitment from you too.
That doesn’t mean accepting pricing blindly, though; get competitive bids and let vendors know you’ll be doing so.
Clichés to live by
Clichés are clichés because they’ve proven to be true over time. In your negotiations with vendors, remember this one in particular: “There is no free lunch.”
Meaning your best bargaining may prove your undoing.
If you have not come to a win-win agreement, you may actually have put your vendor in a compromising or precarious position that could leave you without that vendor in the future!
It could also mean that the vendor will skimp on some of the deliverables — aspects you’re not likely to notice until it’s too late — leaving you with a product that’s not as good as it should be.
Here’s another cliché — familiar to all clinicians — to keep in mind: “If it wasn’t charted, it wasn’t done.” That applies to the contract you sign.
Contracts are critical documents that are important to both the buyer and the seller. Be sure to take note of important items discussed throughout the sales process and include the specifics in a contract addendum to establish equal understanding and the importance of each of those items.
If you’re using an RFP (request for proposal) in your purchase process, let the vendor know you plan to include their RFP response as a contract addendum, so they prepare a response specific to your needs.
Healthcare may at first glance appear to be a very specialized market, but when it comes to relationships and managing vendors, a medical practice is a business like all other businesses.
So when you’re acting in your “business mode,” get your game plan in place and be prepared to deliver honest and deliberate communications in your quest to obtain the right solution at the right price at the right time from the right vendor for your practice.
The four rights — a modified cliché that will serve you well.
Rosemarie Nelson is a principal with the MGMA Health Care Consulting Group.