Case #$1$ Part C $-$ Negotiation Exercise

For this exercise, you will compete as teams in a negotiation game designed to simulate how the exchange plans referenced in Case $1$B will be built. Your team will be assigned a role, either as one of the hospital systems or one of the payers. The object is to negotiate the lowest cost $($if you$$re the payer$)$ or the highest reimbursement $($if you$$re the hospital$).$ The information below is available to all players. I will send you team$-$specific information. This team$-$specific information should be considered proprietary and not shared with anyone outside your team.

Public Notes $-$ information available to all

$1$ Exchanges will attract enough purchasers to ensure $87,650$ visits

$2$ General Pediatric will get $19,539$ of those visits; University $1,187$

$3$ Hospitals have same cost structure as Year $0-$ consider $100\%$ fixed

$4$ Commercial, Medicare, Medicaid volumes all are as given in previous Case $1$B

$5$ Exchanges rates are negotiable on a $$/$svc basis

$6$ If a payer can't come to terms with either hospital, they won't sell in the exchange

$7$ Likewise, if a hospital can't come to terms, they won't participate in the exchange with that payer $($i$.$e$.$ assume no volume from them$)$

$8$ Hospital winner $=$ most net revenue from exchange business

$9$ Payer winner $=$ lowest overall cost of exchange business

$10$

Payer Scoring $-10$ points for deal completion; $10$ points for lowest cost $($or $10$ points to each if a tie$)$; $5$ extra points if your competitor doesn't complete a deal

$11$ Hospital Scoring $-10$ points for deal completion; $10$ points for highest revenue $($or $10$ points to each if a tie$)$; $5$ extra points if your competitor doesn't complete a deal

$12$ Collusion between teams is forbidden $-$ all points are forfeit and a $10$ pt penalty assessed if you're caught

$13$ Normal negotiations happen between payers and providers in any format acceptable to both

$14$ There are no limits to how many times you can offer$/$counter$.$ Deal is done when you both agree it is

$15$ Each team will turn in to Blackboard a summary of the terms agreed to $$ very simple, $1)$ do we have a contract and $2)$ what are the payment rates per service? Say more if you want, but that$$s the minimum.

$16$ Mr$.$ Brabender will act as referee in the case of any disputes. His decisions will be considered final.