MONEY & MEDICINE; For Patients, Unpleasant Surprises in Arbitration

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The New York Times

The parents of Jesica Santillan, the 17-year-old girl who died last month after a bungled heart-lung transplant, have yet to decide whether to sue for medical malpractice, according to the family’s lawyer, Kurt Dixon. But there is a chance that they won’t be able to, anyway — they may have signed an agreement with Duke University Hospital before the operation to settle any medical malpractice claims through binding arbitration. Mr. Dixon said last week that he was still awaiting medical records, so he’s not sure if that was the case.

More and more health care providers are pushing for binding arbitration — in which an arbitrator or panel of arbitrators unconnected to a case hears arguments from both sides and renders a decision — to reduce their costs.

“We all have the impression that medical malpractice arbitration agreements are expanding, and expanding rapidly,” said John Vail, senior litigation counsel at the Center for Constitutional Litigation in Washington. It advises the Association of Trial Lawyers of America on constitutional issues.

The Florida Medical Association held a series of well-attended seminars around the state in December and January to teach doctors how to put arbitration agreements in place. In Utah, the Legislature passed a bill recently that allows doctors and hospitals to turn away patients who will not sign arbitration agreements. (Emergency services are excluded.) Governor Michael O. Leavitt is expected to sign it this month.

“Insurance for some specialists and for ob-gyns is rising substantially,” said State Senator Leonard Blackham, the bill’s sponsor. “We’re going to do this as a trial and see if premiums can’t come down.”

Patients who go through arbitration instead of a jury trial, however, may feel as if they have been hurt twice: first by their health care provider, then by the system that is supposed to resolve the problem. They generally have little choice in the way claims are handled. Gary and Sharon Rushford of San Jose, Calif., certainly didn’t.

In 1998, Mr. Rushford, then 51 and the owner of a general contracting business, noticed pain and tingling in his foot when he worked out at the gym. He said that over three months, his doctor in the Kaiser Permanente H.M.O., who worked at its hospital in Santa Clara, Calif., never examined him and instead prescribed painkillers over the phone and referred him to a podiatrist and

physical therapy. The pain became so bad that he went to the emergency room, where doctors diagnosed a blood clot in his leg. Doctors broke up the clot, but it kept coming back. The vascular surgeon then in charge of the case failed to prescribe enough blood-thinning medication, standard treatment in a case like his, Mr. Rushford said. The clot worsened in a few weeks, and despite three operations to try to re-establish blood flow to his foot, he said, his leg had to be amputated above the knee.

The Rushfords went to arbitration, as Kaiser requires for all malpractice claims. At first, they said, they could not find a lawyer to represent their case, despite several attempts. Many lawyers are hesitant to take these cases, because arbitration awards are often lower than jury trial awards and are perceived as being harder to win. The Rushfords eventually turned to Sharonrose

Cannistraci, the lawyer who handled legal matters relating to their construction business.

Selection of arbitrators varies by health care provider and by state. In California, Kaiser arbitrators are chosen by an office overseen by a 13-member board composed of Kaiser stakeholders and members of the public. The parties in a case choose an arbitrator from a large pool assembled by the office, but if they cannot agree on one, the office chooses. The arbitrators are usually retired judges.

In the Rushfords’ case, Kaiser said it had asked State Superior Court in San Mateo County to pick the arbitrator. The Rushfords were not comfortable participating in the selection early on because they had no lawyer, according to Ms. Cannistraci.

Their arbitrator was a retired judge who had dealt with 13 other disputes involving Kaiser; in four of them, Kaiser used the same lawyer it used in the Rushfords’ case.

In December 2001, the arbitrator ruled in favor of Kaiser. In his decision, he said that although the surgeon had breached the standard of care by twice failing to give Mr. Rushford enough blood-thinning medication, the Rushfords didn’t prove that failure to do so resulted in the loss of Mr. Rushford’s leg.

Ms. Cannistraci said the couple is challenging the decision, based in part on their contention that Kaiser doctors had engaged in false testimony by saying they had done tests that had not been performed.

Ms. Cannistraci said she had no complaints about how the judge handled the case. “But there’s an inherent conflict of interest,” she said. “These retired judges are making their living based on arbitrations, and they do repeat arbitrations on Kaiser cases. That’s their bread and butter.”

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 few arbitrators who awarded patients more than $1 million from April 1999 to March 2000 were selected by health care providers to serve again during that time.

Kaiser declined to comment on the specifics of the Rushfords’ case. Matthew Schiffgens, a company spokesman, said: “We feel the arbitration process we have is fair, fast and efficient for resolving member disputes. We stand by the decision of the independent arbitrators, be they for or against the health plan.”

Arbitration isn’t cheap. The two parties generally split the cost of the arbitrator’s time, whose rates are often several hundred dollars an hour. Mrs. Rushford estimates that she and her husband spent more than $200,000 making their case, which included hiring medical experts.

Critics say one troubling aspect of arbitration is its secrecy. Proceedings are often confidential. There is no public airing of issues or acknowledgment of error, and no development of case law or establishment of precedent. “Part of the value of the Seventh Amendment right to a trial by jury is that the public sees the facts,” said Jamie Court, executive director of the Foundation for

Taxpayer and Consumer Rights.

A hearing on the the Rushfords’ challenge is scheduled for April 2 in the court in San Mateo. Under state law, if their petition is granted, the case would go to a different arbitrator, selected by the two parties. The Rushfords instead have asked for a jury trial, based on a previous case in which the California Supreme Court found that evidence of fraud during arbitration could constitute a waiver of the right to arbitrate.

The Rushfords say they won’t give up. “It’s something that Kaiser banks on, that you’re not going to be able to afford to fight them,” Mrs. Rushford said, adding that they are fortunate to have the financial means to pursue their fight. “Well, they picked the wrong person in this case.”


Michelle Andrews is a freelance writer in Manhattan specializing in health care. Her column on its economics appears the third Sunday of each month. E-mail: [email protected]

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