The first time that healthcare disputes started becoming a serious problem for the courts was in the 1970s. Since then, while more ways to resolve disputes have evolved, many people still shy away from binding arbitration despite its potential.
Recently, the growth of managed care has brought new decisions and decision-makers into the fray known as healthcare delivery, which only suggests that such disputes are likely to increase. Since increases in disputes are already being reported around the country, more people in healthcare disputes are looking for options outside the courtroom to resolve their conflicts.
One of these alternatives is binding arbitration. It’s somewhat controversial as a mandatory contractual option. Supporters of the practice believe that it leads to informed decision-making and better relationships between patients and their doctors. Those who oppose the use of binding arbitration argue that arbitrators are afraid of awarding patients with large monetary awards when this process is used, denying some patients of fair damages (a fear that appears to be unfounded in fact).
Even though many note the possible concerns regarding binding arbitration, decision makers are not being asked to consider the potential of this alternative dispute resolution form. In a recent survey of hospitals and physicians, 91 percent of respondents noted that they did not ask patients to sign arbitration agreements. While this is the case in hospitals, new enrollees in HMO plans are asked 71 percent of the time to sign an agreement to arbitrate in the event of a dispute. The potential for contractually binding arbitration MUST be at least considered.
Most of the physicians and hospitals that didn’t ask patients to sign an agreement said that they avoided the practice simply because they were unfamiliar with binding arbitration agreements. Some also noted that arbitration agreements could “set the wrong tone” for the provider-patient interaction by suggesting that problems were likely to happen. (Again, the truth is that it does just the opposite.) Most of the physicians who did use binding arbitration agreements said that they had done so on the advice of their insurance provider, and many believed that going through binding arbitration was less expensive and confrontational than litigation.
When used properly, binding arbitration agreements can ensure that you will know in advance just how a dispute will proceed. In virtually all instances, arbitrated cases can be closed out much more quickly than litigated ones, and the expense of going through arbitration is much lower than attorney fees for a court case. As arbitration grows more prominent in a wide variety of industries, it’s likely that it will gain more traction and even generate procedural norms for healthcare disputes.
