I’ve described exclusive contract relationships between hospital-based groups and facilities as being Relationship Contracts™, not Transactional Contracts™.
To recap what I mean by those terms, Transactional Contracts™ are ones in which the parties negotiate for a deal which, essentially, terminates as of the closing. For example, think about the purchase of a car or the purchase of a house. The parties trade consideration and part ways.
Conversely, in a Relationship Contract™ situation, the closing of the deal is the start, not the end, of the relationship. And that’s certainly the key element of an exclusive contract: when the contract is signed then the parties begin a continuing contractual relationship.
I’ve come to think that there’s an additional factor that all hospital based medical groups – and as time proceeds, it looks as if more and more of what have traditionally been office-based practices will indeed themselves be hospital-based – must take into account.
That’s the fact that in order to maintain a Relationship Contract™, top level competitors cannot merely be concerned about maintaining a relationship; they must be concerned about delivering a transformational experience to their relationship partner. I call these Transformational Contracts™.
In other words, I’m talking about creating the impact of a multiplier: doing business with your group has to deliver more to the hospital than simply a combination of one plus one.
It has to be situation in which you are delivering one plus one equals 4, 5, 6 or even 10 to the hospital.
And I don’t mean that what you are doing is suffering a deficit in order to fund an accrual of benefits to the hospital.
What I mean is that the transformational relationship you create multiplies the impact – the value — for each of you.
Sure, I know that energy can’t be created, but we’re not talking about energy here. We’re talking about your future.
Comment or contact me if you’d like to discuss this post.
Mark F. Weiss