Physicians: Use Market Data for Negotiations with Hospitals

Posted on
December 27, 2018

If you walk into a negotiation without knowing what the market rates look like for your specialty, you’re missing a huge opportunity.

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Negotiations over contracts with hospitals can be stressful. Whether it’s because you’re non-confrontational, or you are dealing with a difficult situation, there are steps you can take to prepare yourself. One such step is using market data to have a data-driven, powerful argument. If you walk into a negotiation without knowing what the market rates look like for your specialty, you’re missing a huge opportunity.

Here are some quick, yet effective, tips for using benchmarks while negotiating:

  • Know exactly where on the market ranges you’re currently being paid. Understanding where in comparison your rates fall is key. If you are being paid at the median yet you have been practicing for 20+ years and are well-respected on the medical staff, you could create a compelling argument for being paid closer to the 75th percentile.
  • If the sample size is robust, call it out. The bigger the sample, the better the data. If you are working with market data that has contracts from physicians at over 50 hospitals, the more stable (and reputable) the benchmarks are.
  • Regional benchmarks can be helpful, but only to a point. MD Ranger has analyzed tens of thousands of contracts and cannot find a statistically significant difference in rates between the major “regions” of the US (e.g.: Southeast vs. Northeast). If you are able to find a third-party survey of physician payment rates that has a strong sample size, you may be able to use the benchmarks very effectively. However, if the sample size is poor you are much better off using national benchmarks.
  • Use facility demographics to your advantage. Are you taking emergency call at a trauma center? If so, use market data benchmarks taken only from other trauma centers to get the most accurate rates. MD Ranger has found that trauma centers (Levels I and II) generally have a 30% premium for call rates.

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