poly: Arbitrators Decline the Big Time

From: Robin Hanson <hanson@econ.berkeley.edu>
Date: Thu Jul 02 1998 - 15:53:25 PDT

The following seems like disappointing news wrt getting more
private law. It seems that the American Arbitration Association
doesn't want to deal with cases when the stakes get too high.
This makes it harder to see how we might eventually transition
cases now tried in public courts under criminal law into cases
tried in private courts under contract law.

>Subject: American Health Line 07/01/98 http://cloakroom.com
> The American Arbitration Association will no longer handle
>mandatory arbitrations between patients and health care providers
>over benefit denials, concluding that the stakes in such cases
>are simply too high. AAA Senior Vice President George Friedman
>said, "[W]ith a consumer it might be a computer or a house that's
>at stake, but here it's someone's life." The Wall Street Journal
>reports that most disputes over denied health benefits are
>currently settled by internal panels of doctors. However,
>critics call that system "biased" against patients. With
>Congress debating patients' rights legislation that "would
>require external review of decisions to deny benefits,"
>arbitrators are expecting the volume of health care cases to
>"explode." The AAA, "the nation's largest alternative dispute-
>resolution provider," has long been a proponent of voluntary
>arbitration but previously had not "refused to administer"
>mandatory cases.
> The Wall Street Journal reports that the AAA's "change of
>heart grew out of" a joint committee composed of officials from
>AAA, the American Medical Association and the American Bar
>Association. Formed after the California Supreme Court blasted
>Kaiser Permanente's internal mandatory arbitration system (see
>past stories), the committee "is expected to announce its
>recommendations late this month." "In addition to calling for
>voluntary arbitration and mediation of patient disputes," the
>joint committee is "expected" to recommend limiting waits on
>emergency medical decisions to 24 hours, with an independent
>doctor as arbitrator; providing patients with a lawyer in
>arbitration proceedings; releasing medical charts and awarding
>"the same damages in arbitration as in court." In an attempt to
>assure that the recommendations are adopted, the AAA will not
>"administer arbitrations for companies that don't adopt all" of
>the measures. The Journal notes that these recommendations do
>not apply to malpractice cases and that the policies may be
>extended to other areas of arbitration (Jacobs, 7/1).
> A front-page Investor's Business Daily article notes that
>while President Clinton and many members of Congress want to give
>patients the right to sue their private health plans, "Washington
>... won't hold itself to the same tough standard." According to
>the article, "Clinton and members of Congress from both parties
>want to continue to shield federal health insurance programs from
>the liability suits and malpractice awards they would allow
>against the private sector" (Gettlin, 7/1).

Robin Hanson
hanson@econ.berkeley.edu http://hanson.berkeley.edu/
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-2627
Received on Thu Jul 2 23:01:00 1998

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