Vendor negotiations

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Negotiating with Electronic Health (Medical) Record Vendors At its foundation, negotiation is a tool for acquisition. In healthcare, individuals and organizations negotiate for information systems, contracts with suppliers, services, influencing others’ behavior or even modifying a relationship. Clinicians negotiate with patients for compliance. Pharmaceutical companies and representatives negotiate for the best price, best product or inclusion in a limited formulary. Underlying all of these negotiations is the business of caring for those who are ill. With that in mind, negotiations in healthcare should reflect empathy, respect and understanding of others limitations; whether a patient, colleague or coworker. Regardless of the objective, many authors note the importance of careful planning, respect, high ethics and a larger view of the situation to ensure success. (2,4,5,6)

Styles and Approaches

Emotions can run high at the negotiation table. Approaches range from aggressive, angry and manipulative to passive, friendly and meek. While parties in a negotiation can expect their views to oppose one another to some extent, how those opposing views are displayed will have an impact on the final outcome. It’s important to note that caving in to pressure or accepting manipulation is not considered negotiation. This could cause a breakdown or failure in objectives and goals. A stakeholder approach that concedes quickly with many concessions may have ulterior motives and use false humility, stealth or illusion. In negotiation, those parties that hold the most power do not necessarily win at negotiating. Several authors agree that a ‘power’ approach is often ineffective. (1,2,5) Just as individuals have different backgrounds, ethical boundaries, moral standards and personalities, so will each individual approach negotiating in their own style. While parties may feel it’s important to assert and vocalize their needs, taking the time to listen with mind and habitus can be valuable. There are as many perspectives as there are people at the negotiating table. Only after truly listening can a good negotiator narrow and shape the perspectives without having parties think they are relenting. Each member of the team has their own idea of what piece of the pie (whole) they want or deserve. Price and Cybalski note that how determined each player is for their piece of the whole can and does frame their overall perspective of the other players. (1) On the other hand, those that ‘drive a hard bargain’, approach negotiation with a competitive, elusive, even aggressive approach; fearing that revealing anything more than the minimum may reveal an inherent weakness.

Globalization brings in many different cultures and nationalities to the negotiating table. Some will hold true to their culture and beliefs regardless of outcome; others are more flexible, allowing for bending and even breaking of their cultural norm to achieve consensus. (6) The lost art of truly listening rather than waiting for an opportunity to speak may reveal similarities not immediately recognized. While parties may feel it’s important to assert and vocalize their needs, taking the time to listen with mind and habitus can be valuable. There are as many perspectives as there are people at the negotiating table.(5)

Fisher and Ury emphasize the importance of separating the people from the problem and focusing on interests instead of position to make the most of negotiating for success. For example, as fragile humans with varying degrees of emotional maturity, it is important to listen to what the individual is saying more so than how they are saying it. When people feel threatened, they tend to take up a specific position and become identified with that position; this can jeopardize the negotiation and create an impasse (2)

Preparing to Negotiate

As one prepares for any important event, negotiation with healthcare vendors requires preparation. Several authors advocate a careful step-wise process with your negotiating team. (1,2,4,6) Essential to success are the 5 ‘P’s: preparation, patience, principles, position, and practice. Even with careful, step-wise preparation however, it is important to keep in mind that one is dealing with people and cannot completely separate the objectives in negotiation with the emotions brought to the table. (2) Even a carefully planned negotiation can crumble under emotional strain, anger, frustration or fear. In the case of healthcare negotiations, including the important process of negotiating electronic health record systems, the 5 Ps are discussed to aid success.


Preparation is the first and most critical step in the negotiation process. As the great research scientist Louis Pasteur said, “Chance favors the prepared mind.” Negotiation is therefore: a skill-set best learned through preparation that precedes the experience at the table. Gather as much data about stakeholders as possible to arrive well informed and ready to negotiate. Time can be wasted on exchanging facts that can be researched ahead of time. For specific electronic health record vendor negotiation, a ‘strengths, weaknesses, opportunities and threats’ (SWOT) assessment is recommended as part of the preparation process. (7) Examine the vendor and your own facility with an eye for these criteria based on your needs. What strengths do the vendor represent? If weaknesses are identified, should they be negotiated? Can weaknesses be identified in your own team? Do threats exist, such as an imminent takeover of the vendor corporation? Answering as many questions as possible ensures solid preparation and sustainable results. Examining the vendor’s principles and philosophy with your negotiating team will encourage team bonding and ensure best representation for your organization. For example, deciding ahead of time on how the team will handle conflict or emotional outbursts will prevent confusion during the process. What past precedents have the vendor stakeholders set? Do they have a reputation for poor negotiating practices? (6,7) All of these questions are important to research in the preparation process.


A sense of urgency on the part of the vendor should inaugurate the opposite response from your team. Several authors caution against succumbing to this age-old tactic. (1,2,6,7) A strong commitment to patience before negotiations begin will help prevent impulse decisions or the pressure to agree without consensus. As noted by Dr. Lemieux-Charles when discussing collaboration, he believes it most effective when, “issues are critical, a continuing, supportive relationship between peers is important and time is not pressing.” (8) A true spirit of collaboration can occur then, only when the parties have time to contemplate decisions. Unfortunately, in the fast-paced world of medicine, patience and contemplation are often looked upon as detriments of character. Hence the reason this particular tactic is effective in healthcare negotiations.

Principles “Vex not your spirit at the course of things; they heed not your vexation. How ludicrous and outlandish is astonishment at anything that may happen in life.” Marcus Aurelius, 121-180 A.C.E.

There are several fundamental truths that hold in negotiation. First of all, as the ancient Roman leader notes, expect the unexpected. In addition, it is understood that no one at the negotiation table will lash out and physically strike another stakeholder. For the most part, those at the table understand professionalism, tenants of a civilized society and corporate conduct. Fisher and Ury propose the concept of principled negotiation where parties look for mutual gain whenever possible and when conflict does arise, separating the emotion from the conflict to reach a fair standard. (2) When dealing with electronic health record vendors, several authors suggest maintaining high standards on your own team, eliminating negative or contentious approaches and keeping in mind high principles as you work toward the win-win solution. (1,2,5,6,7) Reiterate to the team the inability to control other stakeholder’s actions; maintain your own strong principles if problems arise.

Position Each team member should examine the position from which they arrive at the negotiation table. With careful preparation, this position can represent a unified front open to listening and understanding the other parties approach. Communication between team members that listening and understanding does not imply agreement can present a unified position hard to fragment by the other stakeholders. (2) Some authors advocate a position of ‘agreeing to disagree’, especially on non-essential points in the negotiation process. (2,7,8) In determining your team’s second best position, Gesme and Wiseman use the acronym ‘BATNA’: Best Alternative to a Negotiated Agreement. For healthcare negotiating, an alternative may mean starting anew with a different vendor or company. An important part of deciding ones position is knowing when to walk away. One author recommends negotiating with two vendors simultaneously as insurance against a breakdown or inability to make consensus. (9) Regardless of the position from which you start, the negotiating team, with its different perspectives should present a unified front with one representative that gives voice to the position.


It’s now time to get down to the business of negotiating. In the true spirit of negotiation, one can find similarities of philosophy and interest (1); this holds true in the vendor negotiation as well. Choose an agreed upon location to meet with your team and vendor. This can be a neutral location to avoid discomfort by either party. For example, if your facility has a large conference room with comfortable chairs and the latest in wireless technology, this does not mean the vendor will be comfortable in these surroundings. Pause and analyze the environment from the others’ point of view. Although you may not arrive at the table with intentions of power or superiority, I believe your surroundings may speak louder than words. This holds true for the vendor’s home turf as well. (2,4) Lay a foundation of professionalism and set an example throughout the process, even if the other party attempts manipulation or coercion. Price and Cybulski suggest keeping in mind the different stakeholders on your team and how they might differ in requirements and approach. The IT perspective for example, is different than the requirements of the end user. A balanced team approach with representatives from IT, business, end users and leadership works well if all are in agreement on how information is presented. (1) From authors who advocate taking a break at appropriate times (2,8), I developed and prescribe an approach using the acronym ‘PART’. This approach can help when the atmosphere is contentious, stressful or when the team leader senses it’s time to regroup.

Pause. This alerts the team leader to remember to break, change the surroundings and check in with team members. Articulate. The team spokesperson can confirm team position and even practice what will be said. Reiterate. This involves re-phrasing or repeating your stance to strengthen and confirm position. Truth. This simple concept joins with reiterate. Make certain your team is speaking clearly what is desired and what is unacceptable. The other parties at the table may not hear that same truth.

Other important points to keep in mind include the premise that your team is negotiating not only a contract, but also a relationship. This is especially true when participating in vendor negotiations. The term, ‘everything is negotiable’ holds true in most situations, although can narrow down in healthcare specifically. For example, negotiating for a computerized physician order entry (CPOE) module that is meaningful use (MU) compliant may not be negotiable. Your team should present clear, well-organized data and each team member should know and practice their role in the negotiation. Establish ahead of time the items that are negotiable to avoid confusion during the process. Although some team members may hold positions of power within your own organization, their roles should be clearly delineated within the negotiation team. One author notes that an individual’s perception of their role or place on the team and the expectation of degree of involvement is a source of conflict. (8) Choose a team leader who can articulate needs and wants, has a deep understanding of negotiation objectives and is comfortable in a public forum. This often is not a powerful individual within the organization therefore establishing team roles well in advance of the negotiating work ensures a smooth presentation and united approach.

Negotiation is a skill set. It can be learned, practiced and improved upon. The best outcomes are ones in which each representative feels they used professionalism, high ethics and laid the foundation for a long-term relationship. There can be special satisfaction in negotiating with electronic health record vendors and representing a wide variety of patients and their needs. Keeping this ideal in the forefront can regulate the tone of the negotiation and result in a better outcome. The teams' experience with negotiation will affect the future negotiating styles so taking time to debrief when negotiations are complete can be an effective way to identify styles, errors and future team roles.


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--CORABOSS 14:21, 23 November 2012 (PST)

Submitted by Cora Bosshart