Learning from the Failed Negotiations to Repeal and Replace Obamacare

In failed negotiations to reform healthcare, President Trump and other Republicans committed key negotiation missteps, most notably a lack of thorough preparation and ill-advised threats.

By — on / Dealmaking

Learning from the Failed Negotiations to Repeal and Replace Obamacare

“It’s going to be so easy,” Donald Trump said this past October, referring to his plan to immediately repeal and replace the Affordable Care Act (ACA) if elected president. But, once in office, President Trump found healthcare reform to be much more difficult than he’d expected.

On March 24, after failing to win over enough votes in the House to replace the ACA with the widely unpopular plan that he’d drafted, Speaker Paul Ryan withdrew the American Health Care Act (AHCA) and declared that Obamacare would remain the “law of the land.”

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Following failed negotiations, it’s important to do a post-mortem to determine what went wrong and how you can do better in the future. In a recent interview with the Washington Post, Harvard Business School professor Deepak Malhotra, author of Negotiating the Impossible, analyzed the failed negotiations and identified some of the critical mistakes that Trump, in particular, made as he attempted to sell the deal.

A Lack of Preparation

Noting that Trump seemed to take a “day-to-day, hour-to-hour” approach to the negotiations, Malhotra told the Post, “That rarely goes right.”

Instead, when heading into complex negotiations involving multiple parties, we need to thoroughly research the parties, their interests and goals, and the various issues at stake. We also must have a strong sense of our own interests and goals.

For an issue as complex as healthcare, Trump and Ryan needed a firm understanding of how various factions, including the conservative House Freedom Caucus and the more moderate Tuesday Group, would react to elements of the draft plan. Instead, Ryan seemed to be guilty of assuming too much—namely, that Republicans would go along with virtually any plan that wasn’t the ACA.

As for Trump, “it was never clear whether [he] was really for [Ryan’s plan] or sort of for it, and it kind of changed over time,” Malhotra told the Post. “There was no grand strategy.”

Failed Ultimatum, Failed Negotiations

As the deadline for a vote to replace the ACA with the AHCA drew near, Trump issued an ultimatum to House members: support the plan on the table, or lose your last chance at repealing Obamacare during his term in office. Despite their vociferous opposition to the ACA, Republicans who were on the fence failed to be moved by the threat.

Because ultimatums and other adversarial bargaining tactics often escalate conflict, Malhotra advises his clients and students only to deliver them as a last resort. In addition, he cautions us that we need to be prepared to follow through with any ultimatums we make.

“Ultimatums are only going to work if you feel that you’re already at a place where the other side, if push came to shove, would say yes rather than no, and you just want to force the decisions,” says Malhotra. By contrast, if people are leaning toward no, they are likely to call your bluff. Power tactics in negotiation, like an ultimatum, could end up boxing you into a corner and leading to failed negotiations.

That warning might not apply to Trump, though, who has frequently changed his mind on policy matters and hasn’t seemed to be concerned about appearing inconsistent. “If a year or two from now he decides to revisit [Obamacare], nobody’s going to be that surprised,” notes Malhotra.

The Downside of Threats

As he attempted to cajole House Republicans to support the AHCA, Trump reportedly threatened to harm their chances of reelection. At a meeting with the Freedom Caucus during the negotiations, for example, he warned caucus leader Mark Meadows that he would “come after” him if he didn’t vote yes.

There are a number of risks of threats such as this, but Malhotra points out a pivotal one. “If you’re having to publicly threaten . . . people in your own party to get in line at that point in the negotiation . . . it makes you look desperate,” he told the Post. Desperation, in turn, licenses those who are undecided to turn against you—making the threat a self-fulfilling prophecy.

Because people most commonly issue threats when they’ve run out of other options, a threat may signal that you are on the path toward failed negotiations, according to Malhotra. “And that in itself can create its own momentum.”

What lessons have you learned from your own past failed negotiations?

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