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Jason R. Schultz P.C

Arbitration a growing trend in health care


Posted on Feb 11, 2008

Within the space of two weeks late last year, Michael and Hedy Cohen, who happen to be experts on medical errors, each encountered what they saw as a disturbing development in the modern doctor-patient relationship.

They were asked by two groups of suburban doctors to sign away their right to a jury trial in the interest of reducing malpractice costs.

Legal experts say such attempts to channel potentially unhappy patients away from the court system and into arbitration are becoming increasingly common in health care. Agreements to settle future disputes with binding arbitration, in which an appointed individual or small panel decides the case instead of a judge or jury, are now pervasive in contracts involving many other things we buy, including credit cards, cell phones and cars.

Proponents say arbitration is faster, cheaper and fairer than trials, but critics say the secretive system can be weighted against consumers and makes it harder to track complaints or build legal precedents.

Eugene Rosov, who runs two malpractice-insurance companies that advise doctors to use arbitration agreements, said he thought they ultimately would reduce the cost of insurance and defensive medicine - tests ordered primarily to protect against lawsuits. "This agreement is better for doctors and for patients," said Rosov, whose companies have 35 subscribers in New Jersey and Pennsylvania. "The only person it's bad for is the plaintiffs attorneys."

But Temple University law professor Bill Woodward thinks the growth of a private judicial system "is a pretty nasty legal development, I think, and it's just crying out for correction from Congress."

A bill introduced last year by Sen. Russ Feingold (D., Wis.) aims to do that. It would prohibit pre-dispute arbitration clauses involving employment, consumer, franchise and civil rights disputes.

Michael Cohen was handed an arbitration agreement when he visited his longtime primary-care doctor in Bucks County. Cohen said he was not the suing kind, but the thought of being asked to give up his right to sue "stopped me in my tracks."

He said no, and his doctor saw him anyway.

Then Hedy Cohen, who has had a kidney transplant, was mailed a similar form by a group of kidney specialists she planned to see for the first time. The form from Hypertension-Nephrology Associates in Willow Grove insisted on binding arbitration and said she would have to pay the doctors' legal fees if she filed a complaint and lost.

Hedy Cohen said no and was told to find another nephrologist.

That was fine with Cohen, a nurse with a master's degree in health-care administration. "I couldn't have a relationship with this person because they had already set the tone," she said. "We're adversaries before we even know each other."

Jerry Dolchin, the nephrologists' attorney, said the doctors began using the forms at the height of Pennsylvania's malpractice crisis in 2003, when doctors, he said, were being "hit pretty hard by overzealous plaintiffs' lawyers." Since then, he said, "hundreds and hundreds and hundreds" of patients have signed the form.

Ruth Schulze, a North Jersey gynecologist, started asking patients to sign an arbitration agreement last year after she bought malpractice protection from Obstetricians & Gynecologists Risk Retention Group of America Inc., one of Rosov's companies. She gave up obstetrics two years ago after she was told she would have to pay more than $120,000 for insurance.

Schulze said she won each of the three times she was sued, but left the trials disenchanted. "It is not really a trial of your peers," she said. "It's theater."

Her patients have largely embraced the new approach, she said. She will not do surgery on anyone who refuses to sign the form, which limits pain and suffering payments.

For her, the arbitration agreement sets the groundwork for a more trusting doctor-patient relationship. Patients need to understand that bad things happen in spite of doctors' best efforts. "Medicine is not guaranteed perfection," she said.

Steven Barrer, a Montgomery County neurosurgeon, says he thinks he was the first in his area to start using an arbitration agreement around 2003. Barrer wanted to "somehow create malpractice reform for myself since it wasn't coming from the courts and it wasn't coming from the legislature."

He got the idea for an arbitration agreement from his cell phone contract. "I figured if they can do it, why can't I?" he said.

Out of thousands of new patients, only about 10 have refused to sign the form. He does not ask patients with emergencies.

No one knows how many doctors here use such agreements, but the practice does not appear widespread. It is common on the West Coast, and legal experts say it is spreading nationally. Many nursing homes ask residents to sign arbitration agreements, experts said. Golden Living, a national chain that operates 40 nursing homes in Pennsylvania, says about half of its residents agree to arbitration.

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