Sunday, January 10, 2010

Education of a Negotiator

I have been a little thorn in the side of the American Academy of Pediatrics lately, not an uncommon spot for me, over the issue of how they view themselves and their mission, and their conception of what their stances mean.

Here is the essence. There is a division of opinion within the AAP. Historically, they have tended to view themselves as advocates for children rather than looking out for their membership. Other professional societies may have a similar division, but probably none to the extent that the AAP does. Most are more like the surgical societies, that think what's good for them is good for the nation and the patients.

Within our section, the Section on Administration and Practice Management (SOAPM), many voices have been raised on our Listserve and in private counsels - how about standing up for us? If we don't get our margin, there will be no mission. Etc.

Earlier in this decade the AAP had a proposal called Medikids. This was a proposal for universal health insurance for children, and part of the proposal was for pediatricians to be paid at Medicare rates - which suck. In other words, the AAP's proposal would screw its own members - and that was the opening position! I and others excoriated their naivete and indeed, inadvertent malevolence in their self-conception as medical missionaries within our own country.

We just couldn't get rid of this proposal - we would protest, they would say they would change it, and then it would reappear. I'll leave out the AAP internal bureaucratic politics, but that was the result.

Then, last month, a set of articles came out as a supplement to our journal, Pediatrics, evaluating costs of giving vaccines to our patients. The pay rates of insurance companies in paying us for vaccines has been problematic. These articles were commissioned by the AAP to try to give pediatricians some backing in getting paid better. But, just as I had feared when I heard these articles were coming, the articles did a classic pediatrician, AAP preemptive surrender. Instead of viewing these articles as an opportunity to establish a negotiating position, they relied on trying to find an unassailable, reasonable, conservative position. They underestimated the costs - and this is going to be our opening position. Just like Medikids, I thought. They just haven't learned.

Anyway, so I protested on the Listserve, and then I wrote this reminiscence on how I learned to negotiate. Kinda.

Really, I’m just a nice Jewish boy from Philadelphia, sheltered in the suburbs, and put into the college and medical school pipeline. I was brought up to be truthful, fair, and idealistic. I went to medical school, not business school, not law school. How could I be a negotiator?

And in fact, I don’t think I am such a good negotiator. Maybe I’m OK, I don’t know. But my objective is generally just not to be taken advantage of, and not to take too much risk, and not to be stupid. Pretty minimal objectives. Or maybe I’m better than I think. Dunno.

But there I was, right out of internship, a so-called “Two Year Officer” in the US Public Health Service. “Two years,” because that’s what it took to count our time in a uniformed service as service time and avoid Vietnam. (Although I didn’t really have a uniform, although I was issued an instruction booklet on how to dress in one, and how to call on senior officers and leave “my card” with them.) I had always had an interest in administration and politics, and here I had an opportunity, stepping off the clinical treadmill, to participate. I was stationed in Washington, D.C., with a unit that underwent numerous name changes, but the most descriptive might be the Community Health Service. It was deep in the bowels of HEW, under the Health Services and Mental Health Administration, then HHS, etc.

Leadership was at a premium, and somehow in these days of expansion of health services, despite my youth and inexperience, I was given leadership and responsibility for first Neighborhood Health Centers, and then the Migrant Health Program.

(Side note. The NHC’s were started by the Office of Economic Opportunity, and copied by the so-called 314 (e) program of HEW. David Blumenthal, currently HIT czar in the Obama Administration, wrote a summa [I think] Harvard political science thesis on the 314(e) program. He was following the example of his brother, Richard, currently slated to succeed Chris Dodd as Connecticut senator, who wrote his Harvard summa thesis on OEO, which was the primary document for Senator Pat Moynihan’s famous book, Maximum Feasible Misunderstanding. End of side note.)

Anyway, to the point. There I was at a meeting on Migrant Health, which I was taking charge of, and across from me was the lady who had had lobbied for this program to get started, and then had been in charge of it for years and years. The only background I had was college, medical school, and being a nice boy, taught to be reasonable, and not to get caught out by an attending on rounds making stuff up. I forget the exact points that were being made, but I know that I started to make a proposal that sounded reasonable and acceptable to me.

I had just started and someone else was talking, when I felt a tap on my shoulder. The owner of the finger was Tom Uridel, 6’3” 225 lbs., then and now a hero of mine. Tom was a genius. He came from Medford, Oregon, heard jazz on the radio station and was entranced, went to Mexico to have experience and now spoke great Spanish, came back and settled for a while in Alviso, California, down by San Jose, a poor Mexican community. Tom had no health background but he saw the need for community health services, and built one of the first ones in the United States, from scratch. And when I say built, that includes building the building himself with other community people, literally. Plus recruiting doctors and a dentist, and getting some funding, and running it. Building and running it from scratch, with no models to guide him. The man was a genius.

After Alviso was up and running, Tom was recruited as a consultant for our unit by higher-ups who wanted us to at least to have someone around who knew something. So there he was, sitting just behind me, tapping on my shoulder.

Tom said to me, “Budd, is that what you want, what you are saying?” I nodded yes. Then he said, “Then you had better get out on the wing, so you can compromise to that.” So I made a proposal that an attending physician on rounds would tell me was self-centered and ludicrous, and we compromised to the center, where I had figured it from the start it would be fair to be.

The next year, we had a similar situation, except I was in Tom’s chair, and I was the person tapping on the shoulder of my new Deputy, telling him not to make his “reasonable” proposal, but to get out on the wing, if that is where he wanted to wind up. Many of you probably know my then-Deputy, who was Jim Perrin, now Chief of Pediatrics at Mass General in Boston.

See one, do one, teach one. Except in this case, do one, teach one.

Now let’s leap forward to that misbegotten proposal known as MediKids. Remember that, sports fans? Proposing what – universal childhood health insurance coverage, paying 100% of Medicare? And remember our SOAPM outrage at this proposal that wouldn’t go away? Was it “reasonable?” I would say not, others would say it was marginally so. But it was a proposal that no attending physician would attack as self-centered and outrageous. It was certainly “good for the children.”

And where are we now? The current health reform proposal gives close to universal coverage of children, all the programs considered, in a total program of Medicaid, CHIP, etc. And what is our payment from this? They have compromised down to the “middle,” which is far below what we think is acceptable, which was where we seem to have started from. We will, in short, be screwed.

To be fair, I really doubt that pediatricians had any input at all in health reform; if we did, then it certainly wasn’t to our advantage. If we did, I doubt there was a Tom Uridel, tapping on someone’s shoulder, trying to get to the wing so we could have an acceptable compromise. But if we had any influence, I would say it came from MediKids to start with, where the framers of the legislation noted that pediatricians would be happy with 100% of Medicare, put it in the original House legislation, and whittled it down from that starting point. Where was Tom when we needed him?

So let’s finish up with vaccines. We have a couple of articles that are supposed to support our claims to “fair” payment for vaccines. Like the good little boys and girls we are, not wanting to be called out by our attending physicians for being self-centered or outrageous or God forbid, giving ourselves benefit of any doubt, we go for valid “scientific” data. If there are assumptions to be made, we make them in favor of our opponents in the negotiations – no wastage assumed! Fully efficient practices, such that we can in reality only aspire to! Medical Assistants that only God could really deliver to us, uniformly! Marginal instead of average costs, not asking vaccine payments to bear any of our basic costs of doing business, or to assume pediatricians get more than minimum wage. (OK, I exaggerate – don’t call me out on this, attending sir!)

We assume that our modest figures, already giving the insurance payers all they should fairly want, will simply be accepted. And where will we settle? Where is the middle? We’ll find out.

As I say, I don’t hold myself out as a great negotiator. I would much rather be fair and reasonable. I’m just a nice Jewish boy from Philadelphia. But I would wager that the health insurance companies will not be represented by nice boys or girls. I would wager that they will be real negotiators. I would wager that given our articles, they will try to negotiate us down to a fraction of what we have honestly underestimated as our basic costs. I would wager, in short, that we will be screwed.

Where was Tom when we needed him?

Budd Shenkin


  1. It is a knee-jerk reaction to anything that smacks of selfishness that makes an organization such as aap believe that it must show some altruistic motive to justify its existence. This impulse can be found everywhere but especially in organizations populated by do-gooders. And I mean that will all due respect. As a policy wonk, I am a member of such a group.

    I am sure you have made the point that an organization whose mission it is to advocate for children why restrict its membership to physicians?

    As for negotiating, a little selfishness has its place. I think you have found it.

  2. Fascinating! I knew Tom Uridel, though not well, in high School in Medford. Was absolutely delighted to read of his travels. I too spent a significant part of my professional life negotiating, in my case it was labor agreements, both on the side of labor and management. The key was to make my opposite look good to his boss for giving me what I wanted. Was easier than it sounds.
    That was a great class in Medford. David Frohnmayer, Gladys Beddoe, etc.

    1. My God, reading a 2010 post today? Wow. Uridel was a terrific guy, very smart and very committed. Sorry I lost touch with him.