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Negotiating Contract

Negotiating Contract

One of Marcus Welby Hospital ‘s (MWH) competitors established a successful IPA-model HMO two years ago. Fearing loss of patients, MWH is forming the Marcus Welby Managed Care Network (the Network). The objective is to sign up a number of physicians, mainly in primary care but also in common specialties, and then to market this network to these two sources: () large employers who provide health insurance to their workers on a self-insured basis; and 2) large regional or national insurance companies (such as Blue Cross) who then offer the network to their customers.

The Network is approaching each physician group individually and asking them to sign up nonexclusively, leaving them free to sign up with other networks or HMOs. The contract excerpts on pages 493 and following contain some common sticking points in these negotiations. Read each pairing of contract options and determine what is at stake. Then, assume the position of lawyer/negotiator for either (a) the Network or (b) a physician group who wants to sign up but is concerned about the details.

• Write in your paper what you would say in a meeting with a representative from the other side and
• Describe how you would hammer out a deal, either adopting one version or the other, or making any changes you want.
• You must therefore be able to write clearly about what the concerns of the other side would be.
• Cite when appropriate.


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