How to negotiate your EHR deal

Having negotiated numerous EHR contracts on behalf a group practices over the last few years, I can tell you with certainty that everybody loves a good deal. The problem is that too many times vendors convince groups that they’re getting the best deal possible and there is no wiggle room. But in a competitive situation, if you are important to the vendor, then all bets are off.

It does take work and persistence to make sure that you’re getting the best deal possible. I was in the situation with one large group where they initially hired me to negotiate their contract, but I also looked at the pricing the vendor had extended to them with the goal of getting a larger discount on some of the items. After two or three meetings with the vendor I was able to get my clients a better deal. The main reason was that I knew the market well, and I knew who the competitors were. So I made the case for additional discounts based on knowledge of the market and what would be usual and customary discounts in this case.

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I understand that many times, and depending on the vendor you’re dealing with, this process can feel daunting. The goal is to establish a win-win situation so that you are getting a great price and the vendor is getting something in return for working with you. For example, a vendor that has little visibility in a client’s geographic region or specific specialty could benefit from relationships that a client might have with other similar groups.

Don’t necessarily fall for imaginary deadlines that vendors give you to push the situation. Unless there is a valid reason for getting your deal booked by a certain deadline, such as with a publicly traded company that wants to show more sales by the end of a quarter or fiscal year, don’t be intimidated by statements such as, “I’ll give you another 5 percent if you sign on the dotted line right now.” If you deserve an additional discount and the vendor values you as a customer, whether you do the deal now or five days from now shouldn’t make a difference.

With the present revolution in the dental software industry, and vendors needing to be more competitive than ever,  sometimes a vendor is looking for a customer who’s willing to work with them on enhanced features and functionality for their products. If this is the case, there is a good chance that you can negotiate a good deal with aggressive discounts because you are essentially acting as a beta partner for the vendor. Try to find out if this is a situation that a vendor is looking for. This might also get you better service in the long run.

As a past chairperson of a national EHR contracts standardizing initiative, I can tell you that vendor proposals can be very confusing and incorporate a lot of smoke and mirrors. The thing to remember about vendor proposals is that they don’t just encompass one thing and when you negotiate your deal it’s important to make sure that you are not getting some good pricing in one area while sacrificing others-and perhaps being overcharged. In addition to the software itself, be aware that vendor proposals also include other critical line items such as conversions, training, implementation, interfaces, maintenance and support.

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I’ve been involved with many deals in which there was a decent discount on the software itself-but when I looked at the cost of implementation on hourly rate basis, the cost was two or three times what it should be. Or, if we weren’t alert enough to include the cost of future interfaces in the proposal as an option, we would have probably been overcharged when it came time to add these interfaces.

Finally, look closely at maintenance and support, which typically is charged as a percent of software costs. Or, in the case of a cloud deal, is buried in the monthly charge and can be substantial over a period of time. So make sure that you’re getting pricing on this, which is at the very least usual and customary, and preferably, includes some discounts. The more you understand the market pricing for each line item presented, the better off you’ll be in the long run. Remember, once your contract is signed it’s a lot more difficult to go back to the vendor and ask for additional discounts.

The bottom line is that you will do yourself a disservice by not trying to negotiate getting your group the best deal you can on your dental electronic health records system. Be persistent, and know what you want and what’s fair. Also, trying to get a win-win situation with your vendor partner regarding discounts and what they get out of it can be beneficial in the long run. Finally, the more you understand about market pricing regarding line items on your proposal, the more leverage you have when making an argument why you should get discounts.