Beware the binds that tie up your hands

July 1, 2008

Is it time for your radiology group to consider binding arbitration agreements for your patients?

"I think we are almost done here. Just a few more questions, Mr. Jones."

"Done?! Are you crazy? We've been here less than 20 minutes."

"The advantage of binding arbitration is that it is much quicker than traditional justice."

"I'm the victim here."

"Dr. Winchester has already admitted that it was an understandable error."

"He shot me!"

"As I explained earlier, I merely confused the syringe of contrast with my handgun during Mr. Jones' retrograde urethrogram. Simple mistake."

"He shot me because I was seeing his wife."

"Well, we don't know that for a fact. Mr. Jones, did you have a gun with you?"

"No! Of course not."

"Have you read the Constitution and Bill of Rights?"

"What does that have to do with anything?"

"Well, the second amendment gives every citizen the right to bear arms."

"So?"

"I don't think any of us would be here right now if you had had a gun and properly defended yourself. So I am going to have to rule that you are partly at fault. We find Dr. Winchester culpable, but Mr. Jones was 50% at fault, so the award is $50. Case closed."

Is it time for your radiology group to consider binding arbitration agreements for your patients?

Not if we listen to one of my favorite columnists, Randy Cohen, "The Ethicist" for The New York Times Magazine. In his March 30 column, a woman writes that she cannot find a gynecologist who does not require a binding arbitration agreement. Cohen characterizes this as doctor bullying and writes, "Your doctor has instituted a dismal policy that compels patients to surrender a basic legal right in order to receive medical care."

Don't get me wrong. I am not promoting binding arbitration. I think it is deeply flawed, but so is our current malpractice system, much like our political system. Both place us in the position of choosing which option we dislike the least. (Do you want to be shot in the head or the groin? Do you want to vote for Charles Manson or Jeffrey Dahmer?)

Contrary to what Randy Cohen may think, binding arbitration agreements are rapidly becoming ubiquitous. Has anyone ever actually read their credit card, cell phone, auto leasing, real estate, or brokerage account contracts? I think not. You would be surprised to learn that on most of them you have already agreed to binding arbitration, signing on to usurious interest rates and pesky pledges of your firstborn and your immortal soul.

Over the past seven years, the Republicans-who supported tort reform and controlled the House of Representatives, the Senate, the White House, and even the Department of Defense-could not get tort reform legislation enacted. What is the point of having the most powerful military force in the world if we don't use it on the Congress? Traditionally, Democrats have been allied with trial lawyers who have opposed tort reform, so hope that the next Democratic president would do anything seems unlikely.

A recent poll, however, by joint GOP and Democratic pollsters for the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce (whose poll might reflect its own bias), offers some interesting results: 82% of voters polled preferred arbitration over litigation! An American Bar Association survey found that even 78% of lawyers thought arbitration was quicker and 56% of them thought it was cheaper. In a system where justice is a luxury product, like a yacht, and generally out of range for most ordinary people, arbitration may seem to a consumer the best chance for Wal-Mart "justice" in a world dominated by huge multinational corporations. Why shouldn't your group take advantage of this trend?

In a 1999 study by the Rand Institute for Civil Justice, 28% of HMOs studied required binding arbitration for malpractice cases. In Utah, you would be hard-pressed to find a doctor who doesn't require it. Kaiser requires it of its patients, as does Duke University. These are major players. Interestingly, 55% of those physicians requiring binding arbitration did so at the recommendation of their insurer, while most who did not said it was because they were unfamiliar with such agreements. So you might want to take the time to make yourself familiar.

Talk to your malpractice carrier. Some may be supportive, others may not. This could be because doctors generally prevail in 70% of malpractice cases but only 60% of binding arbitration cases. The awards in binding arbitration, however, are often much smaller. In California, 80% of HMO patients are bound by arbitration agreements, but not all states allow binding arbitration for malpractice.

The charge has been made that since consumers are not the ones who hire arbitrators, judgments often benefit those who do hire them. The New York Times reported on March 16, 2003, "A 2000 report on managed care arbitration, compiled by the California Research Bureau, a state-financed public policy research group, found that none of the arbitrators who awarded patients more than a $1 million from April 1999 to March 2000 were selected by healthcare providers to serve again during that time."

Who wouldn't want to choose those who pass judgment upon us? And pay their salary? While a million dollars may seem like a lot, it is much smaller than the $100 million judgment a jury might just award in an emotionally charged case in which the judgment may have nothing to do with the facts.

Sometimes, it may be not the settlement money but the emotional toll that is the greater cost a malpractice suit extracts. A frivolous lawsuit can take hundreds of thousand of dollars to defend over many years, with untold sleepless nights and no assurance of prevailing. Yes, you may win, but the emotional cost is too great. Then again, you may lose. Remember that most of the public-your jury pool-has zero tolerance for medical errors and expects 100% accuracy. Better to go up against a retired judge who has a better grasp of the law's limitations.

Now the downside. Be careful what you wish for, since you might get it. Binding arbitration is a "pseudolegal" system effectively outside of the real legal system, with limited controls for conflict of interest or appeals. The American Arbitration Association once promised not to arbitrate malpractice cases but then went back on its promise.

Even though a patient may be willing to agree to binding arbitration for a cell phone contract, that may not be the case for healthcare issues. Congress is increasing scrutiny of a system that is perceived as favoring corporations over consumers, with pending legislation to address this bias.

There are some risks to binding arbitration but also some definite upsides: lower liability insurance rates, quicker and cheaper resolution of cases, and maybe even a little bias in your favor.

"By the way, Mr. Jones, Dr. Winchester would like back his bullet that is lodged in your, um, you know. Otherwise, he may hold you liable for unlawful possession of personalproperty."

Dr. Trefelner is a radiologist and cofounder of NightShift Radiology. He invites comments by e-mail at ericxray@pacbell.net or fax at 650/728-5099.