Employment Employment-Hospital

Creating Transformational Contracts

October 8, 2012

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.

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