The Corporate Roots of Medical Errors

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Opinon Editorial by Jamie Court

San Diego Union-Tribune

This month, the chief lobbyist for the HMO industry pronounced managed-care reform dead in Congress due to a new focus on “patient safety” prompted by a highly publicized report that more people die annually from medical errors than from car crashes, breast cancer or AIDS.

The report, by the National Academy of Science’s Institute of Medicine, has sparked a vigorous and laudable voluntary response from the public and private sector, but Congress must not allow it to be used to derail real reform of the corporate roots of medical negligence.

The impact of for-profit corporations and their medical downsizing on patient safety was not even examined by the Institute of Medicine panel. This is not surprising when you consider some of the panelists’ professions — three HMO chief executive officers, one health plan executive medical director and assorted health industry think tankers, including Kaiser‘s CEO David Lawrence. The director of the project, Janet Corrigan, is a former employee of the main HMO trade lobbying group. The medical-insurance complex is ecstatic over the report’s subtext that no legal blame should be associated with negligence (hence the title “To Err Is Human”) and hopes it will result in a continuing shield of legal immunity for HMOs. That scenario would be a death knell for improving patients’ rights.

HMOs have long insisted that they have nothing to do with the quality of health care, since they merely deny “coverage” for patients and do not deal with “treatment,” which can always be delivered by the doctor or hospital at its own cost if payment is denied by the HMO. One can imagine the window-less committee room in which that logic was accepted.

In the real world, the power of HMOs and other profit corporations is felt decisively throughout the medical delivery process. If wrong medications are given or a call light is not answered in a timely way, it may be because registered nurses are overworked and in short supply due to corporate cost-cutting. When a high-risk birth is botched and a newborn crippled because a nurse midwife, not an OB-GYN, delivers the child, HMO corner-cutting is likely to play a role. Doctors forced to spend too little time with patients make more mistakes. The roots of too many human medical errors are corporate. When the role of corporations is analyzed, the only conclusion to be reached is that legal accountability hastens beneficial changes in corporate behavior. For instance, breast cancer patients at California HMOs only won access to innovative treatments after Health Net was slapped with an $89.1 million verdict in December of 1993 for unfairly treating breast cancer patient Nelene Fox.

The rule holds for the car, drug and manufacturing industries. Nothing inspires corporations like money and sunshine, and California is poised to be at the forefront of positive changes in medical corporations’ behavior if it guarantees a public forum and legal accountability for corporate negligence.

Legislation signed by Gov. Gray Davis lets patients recover compensatory and punitive damages from HMOs after Jan. 1, 2001 when the corporations interfere with the quality of health care. Unfortunately, HMOs can still force patients into pre-dispute binding arbitration simply as a condition of joining.

In forced arbitration, repeated quality of care violations are shielded from public view because no documents or testimony are made public. There is no jury of one’s peers, publicly accountable judge or media scrutiny. There is judicial review only in cases of outright fraud, not judicial error, and arbitrators often depend on repeat business from HMOs and are, therefore, more likely to rule in their favor.

Assembly Bill 1751, sponsored by Sheila Kuehl, D-Santa Monica, requires that HMO arbitration be voluntarily entered into only after a dispute occurs.

It would obligate HMOs to pay attention to patients’ safety. In 1998, a joint commission of the American Bar Association, American Medical Association, and American Arbitration Association concluded, “In disputes involving patients, binding forms of dispute resolution should be used only where parties agree to do so after a dispute arises.”

Nelene Fox’s Health Net enrollment form included a binding arbitration provision. Ironically, her family could expose and change Health Net‘s practices in court only because the HMO lost her signature card, where she signed away her right to trial.

All the major HMOs in the state require pre-dispute binding arbitration. Patients should not have to choose between their Seventh Amendment right to trial and access to health care. Without the curtain of arbitration, the corporate origins of medical errors would not be so easily forgotten.

Court is co-author of “Making A Killing: HMOs and The Threat To Your Health” from Common Courage Press.

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