2. R. David Friday, MSHI

3.  Explain the purpose of a contract and synthesize the key elements that should be included in contract negotiations  Summarize the process for gathering a team to negotiate a contract  Discuss the need for documenting contract goals and objectives

4.  Negotiation team Evaluation team members IT Director User or owner Finance

5.  Negotiation team Evaluation team members IT Director User or owner Finance Usually not the CEO or practice managing partner One-on-one meetings are NOT allowed

6.  Negotiation team  Need for alignment between vendor and your goals

7.  Negotiation team  The vendor is not your friend  All vendors are in last place… as far as they know

8. Game Plan Have to Have Like to Have Can Live Without Budget

9.  Contracts can be changed before signing  Be prepared to walk away

10.  Contracts can be changed  Be prepared to walk away  Dual or Single-Threaded Negotiation Strategy

11.  Two vendors at the same time Already working with second vendor if negotiations with first break down Can be time-consuming and stressful

12.  One vendor at a time Time to focus on details of contract Have to start over if negotiations break down

13.  Contracts can be changed  Be prepared to walk away  Dual or Single-Threaded Negotiation strategy  Be realistic in expectations, but shoot for the moon anyway

14.  Definition of a contract Source:Dictionary.com

15.  Definition of a contract  Agreement between two or more parties Functional owners need to be involved

16.  Definition of a contract  Agreement between two or more parties  “Boiler plate” contracts Standard vendor contracts Favors vendor Must be negotiated by customer  Some organizations develop their own contract to avoid vendor boiler plates

17. Have legal review every contract READ Contracts are not all about legalese EVERY Contracts include business issues CONTRACT

18.  Take time to read EVERY contract Obtain legal counsel if possible Contracts are not all about legalese Contracts include business issues Hardware needed Support options How to get out of contract

19.  Take time to read EVERY contract  Have a finance professional involved in the negotiation Keep financial officer informed Finance should approve contract before signing Will track budget during implementation

20.  Take time to read EVERY contract  Have a finance professional involved in the negotiation  A contract is what everyone falls back on when things go wrong Watch termination clauses Be able to get out of contract

21.  Take time to read EVERY contract  Have a finance professional involved in the negotiation  A contract is what everyone falls back on when things go wrong  If it’s not in writing it does not count

22.  Time and expertise for in-house negotiations?  Risk of contract warrants external firm?  Relationship with vendor? Time & Expertise Risk Vendor Relationship

23.  Time and expertise for in-house negotiations?  Risk of contract warrants external firm?  Relationship with vendor? Large acquisitions can create volatile situation “Good cop” and “bad cop” Consultants play “bad cop”

24.  Organizational goals should be aligned with the IT goals Organizational Goals IT Goals

25.  Organizational goals should be aligned with the IT goals  Evaluation of technology should follow a defined process Step 1Step 2Step 3

26.  Organizational goals should be aligned with the IT goals  Evaluation of technology should follow a defined process  There are numerous tools to be leveraged during the selection process

27.  Organizational goals should be aligned with the IT goals  Evaluation of technology should follow a defined process  There are numerous tools to be leveraged during the selection process  Contracts are the foundation for a long and hopefully successful relationship…so take your time and do it right the first time

28.  Organizational goals should be aligned with the IT goals  Evaluation of technology should follow a defined process  There are numerous tools to be leveraged during the selection process  Contracts are the foundation for a long and hopefully successful relationship…so take your time and do it right the first time  Prior to entering a negotiation an organization should develop a negotiation team and document goals and objectives

29. Some of the material in this lecture also appears in Component 18 of the ONC Health IT Curriculum. Courtesy of The University of Alabama at Birmingham and the ONC Health IT Workforce Curriculum program (Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License).

30.  Dictionary.com [Internet]. Oakland (CA). Available from: http://dictionary.reference.com/browse/contract  Featherly K, Garets D, Davis M, Wise P, Becker, P. Sharpening the case for Returns on Investment from Clinical Information Systems Healthcare Quarterly. 2007; 10(1):101-110.  Friedman, Brent, “Top 10 Strategic Mistakes that Hospitals make in HIT Contracting and how to avoid them” (2007) Available at: http://www.himss.org/content/files/strategic_mistakes061107.pdfhttp://www.himss.org/content/files/strategic_mistakes061107.pdf  Kannry J, Mukani S, Myers K. Using an Evidence-Based Approach for System Selection at a Large Academic Medical Center: Lessons Learned in Selecting an Ambulatory EMR at Mount Sinai Hospital." Journal of Healthcare Information Management. 2006; 20(2): 84-99..  McDowell SW, Wahl R, Michelson J. Herding Cats: The Challenges of EMR Vendor Selection. Journal of Healthcare Information Management. 2003;17(3), 17.  McLaughlin CP, Kaluzny AD. Applying TQM/CQI Principles to Information Systems Selection. HFMA. 1995;49(5):48-52.  Mikulski FA., Supply Chain Management: Complex Procurements. 2nd Edition. Saddle River, NJ:Prentice- Hall,Inc., 2001.  Ury W. Getting Past No. New York: Bantam Books, 1993.  Wager KA, Lee FW, Glaser JP. Health care Information Systems. A Practical Approach for Health Care Management. Chapter 6: System Acquisition. San Francisco, CA: Jossey-Bass, 2009, 143-166. 29