Winning Hospital Contracts: 8 Steps Radiologists Must Take to Win More Hospital Contracts

27 September 2019 - Collaborative Imaging
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Consolidation within the radiology industry continues. More radiologists face the uncertainty of remaining independent practices or joining national firms. For those that choose to continue operating independent practices, winning hospital contracts is key to success. Unfortunately, the national firms devote countless resources to making their services look superior to smaller entities, and it can be difficult at best to secure hospital contracts in this age. However, radiologists that apply a few best practices, as explained by the Radiology Business Journal, can negotiate winning partnerships with hospitals of any size.

1. Include Raw Work Histories and Emphasis on Value-based Care.

Although raw work histories are not enough to secure contracts today, they remain a vital part of the bidding process. However, radiologists must not over-emphasize traditional talking points, such as turnaround time. Instead, the bid should include raw work histories and how those histories translate into improved value-based services. Furthermore, these metrics merely reflect the ability of an organization to provide service, so radiologists must look beyond their service capabilities.

For example, can the radiologist generate custom reports around the clock and it here to traditional service metrics standards? If not, negotiations will likely fall to a standstill.

Using data to support your value remains the biggest and most important aspect of contract negotiations. It builds the foundation for all other benefits of working with your practice and not a national radiology conglomerate.

2. Align Your Organization With the Needs and Wants of the Specific Hospital.

Aligning your organization with the organizational goals of the hospital is another critical step in securing contracts with larger hospitals. Radiologists must demonstrate both quality and value and provide a path forward for the hospital. With the Centers for Medicaid and Medicare Services (CMS) continuing to transform payment models to an outcome-based, value-based standard, hospitals have reevaluated their mission statements. It is no longer enough to simply provide good care; they must provide excellent care with the best outcomes possible. Thus, radiologists must align their practices with the organizational goals of hospitals.

As explained by Radiology Today Magazine, service contracts between radiologists and hospitals break down following the changing reimbursement models. If one part of the negotiation team disagrees with the others commitment to providing high-end service and care, negotiations fail. However, radiologists that proactively consider a hospital’s unique needs and mission statement can craft bids to appeal to the entire administrative team.

3. Focus on Quality Assurance and Cost Savings.

Prior to pitching a bid to a hospital, radiologists must consider how members of the C-suite will view the bid. For example, avoid including unnecessary fees and long lists of added costs within the bed, including:

  • Directors’ fees.
  • Third-party radiology services.
  • Teleradiology capabilities.
  • Equipment rental.
  • Costs to terminate the contract.

Although a thorough bid does contain these items, they appear unappealing to the C-suite executives. Instead of listing every charge that falls as an extra expense, radiologists should focus on the value added to the organization. For instance, does this partnership mean the hospital can take advantage of the nearby facilities to send patients for outpatient needs? Furthermore, does the radiology practice have the resources necessary to accommodate horizontal needs?

4. Emphasize Versatile Communication Capabilities.

Although the administrative team and C-suite are responsible for deciding to select and partner with a given radiology practice, your practice must have the capability to work on both a system level and horizontal level. As consolidation has occurred in radiology, the same process has taken place in hospitals as well. As a result, hospitals may govern operations horizontally, allowing an array of managers and contact points to work with a radiology practice, including the upper echelons of administration. Therefore, radiologists must demonstrate their ability to work with numerous entities under the umbrella of the hospital to secure a contract.

5. Emphasize Integration and Collaboration With Other Members of the Medical Community.

Regardless of industry, people, not contracts, work together. This can be the hardest step in securing a hospital contract. Radiologists must connect with members of the hospital on a personal level, such as the interactions between physicians and administrators that occur away from the day-to-day workflow, notes Advisory Board. Unfortunately, this does not mean spending a meal after hours with the administrators. Instead, it includes participating in the medical community outside of the workplace, such as sponsoring local events, participating in community health initiatives and more.

When referrals occur, document your interactions as well. Obviously, avoid the risk of sharing protected health information, but radiologists should work together with referring physicians to explain why the partnership will provide benefits to all parties involved, including patients.

6. Never Assume Contracts Will Be Renewed.

A common problem occurring during contract renegotiations derives from an assumption that existing contracts will be automatically renewed. In today’s age, information is everything. Hospitals know they can find services at a more affordable rate. Therefore, radiologists must always consider the threat of larger, national firms that will stop at nothing to sweep in and secure your existing contracted partners. However, radiologists that do not make this mistake can ensure a fast, streamlined process when time for renegotiations arises.

7. Continuously Adapt the Business Model.

Speaking of renegotiations, today’s hospitals have the largest bargaining power. they understand their need for service, and this often leads to a repertoire of reasons why a contract may be canceled. unfortunately, early termination of contracts does occur. however, radiologists that continuously adapt their business model and plans for interacting with the hospital can immediately present a refined workflow that continuously serves the needs of the partnership.

During the adaptation process, radiologists must continuously refine how their practice will serve to improve the capabilities of the hospital and provide better service. Specifically, the business model should clearly define how the following factors will affect the partnership:

  • Changes within the health trends of the population served.
  • Economic changes affecting the local area.
  • Forecasted growth in the practices business model and how it will continue to meet the needs of growing communities.

8. Define Which Services Can Be “Contracted out” to Other Radiology Service Providers.

There will be times when a radiologist lacks the equipment or resources to completely fulfill a hospital’s needs. In some cases, a subsequent contracting out of services to another imaging services provider may be necessary. To ensure effective negotiations, radiologists should clearly define which services may be contracted out to other organization. Furthermore, avoid ambiguity in this process, specifying the exact procedures, including their billing codes, that cannot be completed within your practice. This eliminates all uncertainty. Ultimately, radiologists must not concede on their ability to provide a specific service to quickly. Doing so will likely lead to a failure to provide a requested service.

Prepare Your Team to Succeed at the Negotiation’s Table to Secure More Hospital Contracts.

One thing is clear. Consolidation within the health industry will continue to affect all sectors, ranging from diagnostic imaging to medical practices, which according to REV Cycle Intelligence, may rise to rates of nearly 90%. Those that wish to avoid consolidation, must seriously rethink their standards and how they interact with administrators during the RFP process. Most importantly, those that follow the eight tips listed above can prepare their teams to create a winning bid and get executives to sign on the proverbial dotted line.