NEGOTIATING CONTRACTS

1. NEGOTIATING CONTRACTS FOR HOSPITAL BASED EMPLOYMENT SUCCESS BEGINS WITH YOU Alex Turner, Ph.D. Moncrief Cancer Center Fort Worth, Texas

2. Medical Physics Consulting? It is the BUSINESS of providing medical physics services, not the technical nature of the service It is a problem solving BUSINESS tailored to clients needs It is trading medical physics services for money

3. Preparing to be a Consultant Identify your special skills Professional skills Personal skills Marketing skills Business skills Identify the types of hospitals you can reach Identify the needs of these hospitals Identify what you can do to satisfy these needs

4. Preparing to be a Consultant Professional skills � specialization affects appeal Specialist Limits potential clients and competitors Requires specialized experience & knowledge Generalist Broadens potential clients and competitors Requires broad knowledge and experience

5. Preparing to be a Consultant Personal skills Good interpersonal skills Good at listening & hearing Good communicator � written & oral Good analyist, problem definition & problem solver

6. Preparing to be a Consultant Marketing skills Marketing is the pursuit of clients Major steps Identify your services & benefits to clients Identify your potential clients Identify a strategy to reach clients Carry out strategy

7. Preparing to be a Consultant Business skills Accounting & record keeping Cost estimating & pricing Scheduling & time management Financial management

8. Preparing to be a Consultant Identify the types of hospitals you can reach How clients find consultants Recommendations by friends & colleagues Reading about consultants in journals Reading publications by consultants Meeting consultants at conventions Hearing consultants speak at conventions

9. Preparing to be a Consultant Identify the types of hospitals you can reach How consultants find clients Active in local & national societies Attend and speak at conventions Active in community affairs Publish articles Visible on the internet � List Server

10. Preparing to be a Consultant Identify the needs of these hospitals Learn what inspires a client to hire a consultant Understand the clients problem and propose a solution � educate the client Remember that cost, schedule, professional approach and physicist qualifications are important to the client

11. Preparing to be a Consultant Identify what you can do to satisfy these needs Talk value as well as cost � be specific Provide details on your approach to solving the problem � suggest items that may be negotiated Demonstrate that your services are better, not necessarily the low-bidder

12. Types of Consulting Practices Temporary or Locums Tenens Contract for a specific period of time No obligation on hospital beyond financial Can be hired quickly � little paperwork Consultant is responsible for best effort Hospital is responsible for directing results

13. Types of Consulting Practices Long-term or Projects Consultant is responsible for results Contractor manages work Must be project oriented The health care industry is �downsizing�. Advantages are turning to consultants to see hospitals through peak periods and special projects.

14. Negotiating Each party is trying to get the �best deal� Respect a �win-win� strategy � neither party should feel �victimized� Initial proposal - the way you prefer to see it done at a fair price

15. Negotiating Qualifying prospective clients Is the person you are talking with the one who can retain you? Is their need appropriate to my specialty? Questions Who will sign off on this contract? What is the decision making process? Has the project been budgeted?

16. Negotiating Strategy The value of consulting is results, not time Talk value first, then cost Provide details on solving the problem You are in control � tell client what has to be done Offer client options Do not be vague Propose in writing, client has something to study

17. Fees Example for $150,000/yr or ~$575/day income Must be paid $575/day on or off billable time Depending on non-billable time spent on marketing, travel, entertainment, business, etc., billable time may need to be $800/day to average $575/day. Considering a modest cost of benefits to be 25%, billable time must be $1,000/day

18. Fees Be aware Prospective client may try to �milk� you for information without retaining you If prospective client says �That�s to much for a physicist�, say �But you�re hiring me as a problem solver

19. Pricing Make sure project is sold before discussing price It is unwise to reduce price arbitrarily. To do so suggests that you priced high or are in desperate need. It is advisable and adds to creditability to negotiate any price cuts by asking the client to give up something, no matter how small. It invites discussion and questions. The client must be satisfied that they got something

20. Pricing ACMP Code of Ethics A medical physicist shall compete with his or her colleagues only on the basis of services rendered By sharing resources between several hospitals, you should be able to offer a price below that which the hospital could provide the services for inhouse

21. Contractor or Employee Tax Reform Act of 1986 The Act permits the IRS to apply 20 tests to determine the status of a consultant as an independent contractor or employee Employee � economically dependent on hospital Independent Contractor � accomplishes a specific task for a specified price and retains the right to control the manner in which the work is being accomplished

22. Contractor or Employee Employee Has only one client Works entirely on the client�s premises Is obligated only on the basis of hours to be available on the job May be terminated immediately and arbitrarily Takes orders from the client or client�s staff

23. Contractor or Employee Independent Contractor Is incorporated as a business & provides benefits Has several sources of income Keeps formal time, expense and income records Maintains a formal business office Is contracted to deliver a specified end-product Works at least part of the time in own facilities

24. Contracts A contract is an agreement specifying the relationship between parties. It must be executed in �good faith� by both parties to avoid disputes over what was agreed upon. A basic agreement should include: cost, time commitment and the desired results.

25. Contracts Small jobs - avoid excessive legalistic language See example of simple agreement A retainer is good fiscal policy Long term jobs � includes legalistic language Often involves human resources and attorneys See example of complex agreement with more terms and conditions

26. Thank You Remember Good judgement comes from experience, and a lot of that comes from bad judgement Will Rogers