Tag Archive | "President Trump"

Analyzing Trump’s Health Care Negotiations

Notes on Negotiation
By Marty Latz, Latz Negotiation Institute

President Donald Trump has called himself a “really great negotiator.” Let’s evaluate his first significant presidential negotiation effort – health care reform with the U.S. House of Representatives.

Three quick caveats to start:
• It’s essential to use an objective research-based method to truly evaluate what occurred, rather than the hyper-partisan approach that seems to dominate current political analyses. The Five Golden Rules of Negotiation will serve as our framework.
• While these negotiations were extensively reported, some of what occurred was private and beyond the scope of our knowledge at this time; and
• These negotiations were simply the first step of a multi-step legislative/negotiation process required to change the law. U.S. Senate approval would have been the next step. And had the Senate made changes, the different versions would have required reconciliation and further Congressional approval before a presidential signature.

While the Five Golden Rules provide a comprehensive framework, many of the issues here can be attributed to how Pres. Trump implemented Golden Rule One: Information is Power – So Get It!

As regular readers here know, the first step to effective negotiating is getting sufficient information to set realistic and achievable goals. Then you must design a comprehensive strategy to accomplish them.

Pres. Trump repeatedly stated his healthcare goals on the campaign and after becoming president – repeal and replace Obamacare with better coverage, lower premiums, and no one loses their insurance.

What does this tell us about Pres. Trump’s implementation of Golden Rule One in the first step of this legislative process?

1. Trump Publicly Set Unrealistic and Unachievable Goals
No proposal evaluated by the House even came close to achieving his goals. The Congressional Budget Office, a non-partisan expert body with a Republican-appointed head, estimated the first House proposal would cause 24 million Americans to lose coverage. Subsequent proposals eliminated more and more health care benefits without adding coverage.

Bottom line – Pres. Trump’s repeatedly stated goals were unrealistic and unachievable with the proposals on the table in the House. His overall strategy, which would have required Senate approval, was also unclear and unspecified. How, if at all, did he propose to achieve his goals? No one really knew, including the House members whose votes he needed.

2. Trump Failed to Understand the Interconnected Complexity of Healthcare
Based on Trump’s comment that “[n]obody knew healthcare could be so complicated” and the reporting of his actual negotiations with House Republicans, Pres. Trump does not really have great knowledge and understanding of healthcare policy. Nor does he truly appreciate the complexities of how these elements work together.

Of course, presidents don’t need to be detailed policy experts to negotiate great deals, and regularly delegate policy details to others. But it’s crucial to be able to substantively engage in a back-and-forth discussion about significant issues. An inability to do so even at a high level will be detrimental to achieving negotiation success.

For example, Pres. Trump near the end of the negotiations offered to eliminate “essential health benefits” like requiring insurance to cover pregnancy and doctor’s visits. He did this in an effort to pick up votes from members of the House Republicans’ “Freedom Caucus,” who favored eliminating these benefits.

But offering this without also eliminating the requirement to cover pre-existing conditions could have led to a collapse of the insurance markets. Expert House members knew this. So giving in on the benefits issue actually made it less appealing to some of these members, not more. And by doing this, he also lost the votes of some moderate House Republicans, who liked those provisions.

3. Trump Overlooked Key Players’ Interests and Motivations
Pres. Trump overestimated the loyalty interests of House Freedom Caucus Republicans. He apparently believed that Republican team loyalty and getting anything passed would trump their interests in getting a bill that lowers premiums and taxes, lessens regulation, minimizes governmental involvement in healthcare, etc.

But a cursory review of these Freedom Caucus members’ history of Republican loyalty would have raised serious questions of the efficacy of this strategy. After all, these were the same members who shut down the government several years ago over the objections of most mainstream Republicans.

Former Republican Speaker John Boehner was even forced out by these same members. Loyalty and taking one for the team is not really in their playbook.

4. Trump Failed to Build Coalitions
Pres. Trump might have been able to get sufficient House Republican votes if he had built up public support for the bill’s major provisions and built coalitions among the involved Republican interest groups.

This could have led those Freedom Caucus members to believe that their constituents in safe Republican districts would have been better off with the final bill and/or would have used this issue to vote against them in two years. This would have directly addressed what many believe to be the most crucial interest of any politician – survival interest in re-election.

But the bill and its provisions, according to polling, only had a 17% approval rating from the public. And almost every major interest group, from the conservative Koch brothers to doctors to every liberal group, opposed it with many spending millions on ads trashing it.

Latz’s Lesson: Information is power. Pres. Trump did not have it or get it.

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts’ proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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Trump’s Negotiation Skills – Good or Bad?

Notes on Negotiations
By Marty Latz, Latz Negotiation Institute

President Donald Trump considers himself an expert negotiator. Is he? And if so, does his business negotiation experience necessarily translate to being a great negotiator as president, either with Congress and/or with our international allies and adversaries?

Let me give a great legal answer to both questions – it depends. I recently re-read his book “The Art of the Deal” and have followed Pres. Trump for years. And he has certainly completed a lot of business deals and profited substantially from many of them.

But just getting a deal done – and even profiting greatly from it – doesn’t mean you negotiated a super deal. Nor does it mean you’re an effective negotiator. You might have substantially overpaid for some commercial real estate in 2002, paying well over market value, and still have profited from the strong real estate market going forward.

Likewise, you might negotiate a fantastic partnership deal only to see it fail due to unrelated business issues.

So how can we evaluate Pres. Trump’s negotiation abilities as president on NAFTA, the Iran Nuclear Deal, the Middle East Peace Negotiations, an Obamacare Repeal/Replacement Plan, and the list goes on?

Watch and track these factors, which also apply to how we should evaluate and learn from our own negotiation successes and failures.

1. To what extent did he satisfy his goals and interests?
We have a documented record of Pres. Trump’s promises. Of course, these were campaign promises, so perhaps they included a lot of hyperbole.

Even so, they provide data points on our ability to evaluate his negotiation skills and success.

For example, how much will the Trump healthcare proposal – once unveiled – achieve his stated goals of lower costs and better healthcare while ensuring no one loses insurance? How much of his plan will Congress pass relative to the original core components of his proposal?

What about his plan to negotiate with Mexico to pay $10-$20 billion for a new wall?

Great negotiators also recognize, explore and creatively satisfy parties’ mutual interests, which may be neither stated nor obvious.  Super aggressive negotiators often ignore these “win-win” elements.

Of course, we can’t rely on partisan self-reporting for these answers. There is too much political self-interest involved. But non-partisan expert organizations track these quantifiable facts and interests.

2. How much better is the deal than his alternative/Plan B?
Leverage is largely based on how well your deal (Plan A) stacks up to your best alternative, or Plan B. The better your Plan B, the stronger your leverage. And vice versa.

One mark of expert negotiators is how much better their negotiated deal is than their Plan B. Let’s say Company A’s first offer to buy my company is $25 million and Company B’s several offers have culminated in a “best and final offer” of $26 million.

A good negotiator can get Company A to offer over $26 million.  A great negotiator will get Company A to offer substantially over $26 million. The more over $26 million, the better the negotiator. The bigger the difference between your Plan A and B, the stronger your negotiation abilities.

Another mark of an expert negotiator is the ability to impact your counterpart’s perception of your Plan B (or their Plan B, an equally powerful element of leverage), without losing credibility that can affect your future negotiations.

A great negotiator can sell an average product for a lot to someone who’s not very interested in it.

What should we track here? Will Pres. Trump’s new NAFTA (or elimination of NAFTA) or other trade negotiations, like his recent withdrawal from the Trans-Pacific Partnership deal, provide better economic and employment results than the status quo going forward?

The status quo going forward is our Plan B – and his deals will be Plan A. These deals can and should be measured, again, based on objective data and facts from non-partisan expert organizations.

3. How do his results measure up to objective benchmarks?
Market value. Precedent. Tradition. Experts’ opinions. Cost and profit margins. Professional standards. These independent objective standards should be used to evaluate Pres. Trump’s deals.

How much below the current market can the Trump Administration drive the drug prices Medicare pays pharmaceutical companies by empowering the U.S. to negotiate them (assuming he can negotiate successfully with the Republicans in Congress, who have opposed this for years)?

Pres. Trump has called the Iran Nuclear Deal a horrible deal and says he wants to renegotiate it. One reason he calls it horrible is that it might allow Iran to restart its nuclear weapons program in 10 years. How far can Pres. Trump extend that moratorium, based on this precedent?

What do Bureau of Labor Statistics experts conclude about the number of manufacturing and other jobs created due to his negotiations with corporate titans and threats of tariffs and public shaming?

And how do independent academic negotiation experts evaluate his skills and results? There has been a lot of negotiation research in the last forty years on what works and what doesn’t. Is Pres. Trump employing proven strategies, or not?

Of course, we may not know the answers to these questions for some time. History may be the ultimate judge.

Latz’s Lesson:  Stay tuned – we can all learn from Pres. Trump’s negotiations. They may even determine his success or failure as President.

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Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts’ proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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