Recently, I designed and delivered a one-day Effective Negotiation Skills training course for a London borough suffering from high levels of deprivation and social challenges. Social care in the UK has been underfunded for many years. My main goal was to teach the best strategies for negotiation within Adult Social Care and the placement of residents in care homes. This article surrounds good outcomes that can happen for brokers (negotiators) and their clients when they are negotiating adult home care placements. Careful strategies really do matter!
Our course participants were part of the brokerage team responsible for placing adults into residential care, specifically private sector-owned facilities. We framed the course around the World Commerce & Contracting negotiation module and the DPSS 5 P’s of negotiation – planning, preparing, participating, performing and post-evaluation of outcomes. These steps were supported by several key models, including SWOT, BATNA, 10c’s, Risk and Reward matrix and Porters Five Forces. We also used the tools provided by the National Health Service (NHS) including the Capacity Tracker and the B13 report.
In our pre-course discussions, we recognized we needed more time to plan, because it would impact performance in the negotiations. We sensed that our time restrictions plus the often immediate need to provide placement for the client meant that the first offer of the care home was sometimes accepted with little push back or challenge.
Given the limited resources available, we needed to clearly define when to negotiate an added-value outcome as payback. Many placements are routine and transactional arrangements -- based upon agreed terms and frameworks or block contracts. Therefore, the team needed to target those that exceeded these arrangements but could still be deployed within the limited time.
The course enabled the participants to appreciate the need to understand the provider’s business model, including costs, overheads, salaries, marketing, pricing strategies, motivations etc. This is important because a participant needs to be perceived as an “intelligent” customer who gains respect of the providers as people who are less likely to waste time with unsustainable offers and protracted negotiations.
Participants were fully engaged, and I was pleased by the absence of cynicism (commercial negotiation skills will not work here…) that we sometimes experience with public sector participants. The participants were receptive to suggestions and each one kept an open mind about the application of tools and techniques normally associated with private sector organizations.
The brokerage manager and I worked together to ensure that the course content was relevant. I was fully aware of the public sector “ethos” and “contextualized” the delivery accordingly. The team are obviously very committed professionals -- yet still willing to listen and learn.
Cast Study tests effectiveness of training
After we provided the training, we asked the brokers to apply the tools, techniques, and models we discussed during the course to a real-life situation. For the case study, the broker had to negotiate a mental health placement for a local client with challenging behavior. The initial price quoted by care provider and the broker -- which was subsequently negotiated for a lower price -- was £1500 (approximately $2,012 US dollars) per week.
Because the course had emphasized the importance of planning and preparation, the broker analyzed the client’s needs fully, including location, placement type and budget. The broker then established that the Care Quality Commission rating for the care home was “Good” and that there were vacancies available. The Host Borough Rate was £900
(about $1,207 US) which is the rate charged to the UK Council according to where the home is located. In this case, no one was placed from the host borough in the home.
Costs of other placements in similar locations started from £900 to £1200 ($1,207 to $1,609 US dollars) per week, according to data obtained from the NHS Capacity Tracker and the Council’s Mosaic B13 Report. No current clients of the London Borough were placed in the care home.
The next step, in accordance with my course guidelines, was to participant in negotiations with the care provider. The broker called the care home and introduced himself to develop a rapport with the provider. He spoke to care home’s administrator who managed the vacancies and placement costs. The placement capacity was six homes, and three vacancies were available. He carefully explained his client’s needs and determined that those needs could be met.
The broker asked why the price on the capacity tracker was £900 ($1,207 US) and asked why the higher cost was being quoted. The Administrator had no answer for this; was unsure what the capacity tracker meant; and stated that £1500 ($2,012 US dollars) was the price “take it or leave it” The broker then decided to contact the more senior care home manager, who had the authority to negotiate the price. The broker made it clear he wanted to do business with the care home and used that expectation of future business as leverage and incentive.
The broker clarified to the manager that his research had established the price of £900 ($1,207 US dollars) on the capacity tracker and that price should be honored. The broker also stated his “red lines” which included that the Council would not pay more than the price stated on capacity tracker and that cost is in line with the usual cost policy price of £919 ($1233 US dollars) per week for mental health placements. The Care Home Manager agreed with the capacity tracker rate and was happy to accept this client once assessment was finalized. The broker had performed well in these negotiations and secured a reduction of 60%.
Success! The post negotiation evaluation of outcomes showed that the broker was able to place his client in a care home identified by the family who would therefore be allowed to visit the client regularly and no doubt, this would benefit the client’s mental health. This placement was therefore able to accommodate his clients and family needs. The client was discharged from the hospital and freed up a much-needed bed space.
Without the broker’s planning, preparation, and effective participation in these negotiations the Council may have reluctantly accepted the initial fee of £1500 ($2,012 US dollars) and placed the client, with the implications of the ongoing cost of that client’s care. This represents a saving of £30,000 ($40,245 US dollars) per annum for just one of many clients placed by the Council, and, in fact, all Council’s in the UK.
ABOUT THE AUTHOR
Second degree connection and second creator of 10C Model, Author of Practical Contract Management, Dr. Carter has over 30 years’ experience in training and consultancy (both UK and Worldwide) specializing in Contract & Commercial Management, Procurement, Supply Chain & other related subjects. His company, DPSS Consultants, is accredited by CIPS, World Commerce & Contracting (formerly IACCM), APMG & ISO. Currently, he is working on my new Master Classes on my 10C Model and Contract & Commercial Management. During his working career has been fortunate to work with many companies and cultures which has helped him develop successful training courses. See also video about the author.
1. See three related articles published by Dr. Carter:
- Change Management Using Soft Skills Training;
- Effective Commercial Management How to Secure Business and Derive Value for All Parties; and
- Carter’s 10 Cs of Supplier Evaluation – Improving Your Supply Chain Management
2. See also Adult Social Care article
3. See also article titled World Commerce & Contracting Negotiation Master Classes
4. See DPSS – Ray Carter articles
5. Key models:
- SWOT analysis
- BATNA definition
- Carter’s 10 Cs of Supplier Evaluation
- Risk and Reward matrix article
- Porters Five Forces article
6. Capacity Tracker and B13 report: NHS article