CONTROLLING
HEALTHCARE COSTS THROUGH MEDIATION
By
George Reath, Jr., Esq. and David B. Harwi, Esq.
The health care industry is not immune to
the costs, in both dollars and time, of unresolved disputes.
Claims by patients
allegedly injured or by hospital faculty and staff denied positions,
appointments or promotions, claims of harassment, discrimination
or other wrongful conduct, disputes between third party payors
and providers, among others, have all contributed to the
increasing
cost of medical care. Let’s look at ways these disputes
may be resolved if amicable negotiations fail.
LITIGATION
Litigation, a court proceeding, involves three phases - pleadings
to frame the dispute, discovery to ferret out the facts supporting
each disputant’s claims and trial to have a third party
find the “truth” regarding the historical facts and
allocate fault. Truth may be a function of the skill of the
lawyers presenting the facts to the fact finder or the credibility
of a liar. When confronting this arena, more than 90% of disputants
decide that the uncertainty of the process necessitates settlement
of the dispute. Unfortunately, the settlement occurs only after
substantial process costs and time and may not be what any
of
the disputants desire.
ARBITRATION
In recent years participants in the litigation system have
proposed more frequent use of alternative dispute methods to
resolve
disputes. The most common and one frequently provided for in
the boiler plate of agreements is arbitration. Arbitration
is
a forum in which the disputants participate in the selection
of the fact finder and the timetable for events to occur. Like
litigation arbitration is a development of historical facts
with the arbitrator acting as the truth and fault finder. Arbitration’s
procedures and rules are less formal but the costs and time
associated with the process may not be significantly less than
litigation. Furthermore, the disputants still face the uncertainty
of result.
MEDIATION
Yet another form of alternative dispute resolution is mediation.
Most people involved in the American legal system know what
mediation is—or say they do. Some see it as a form of
arbitration, wherein the parties present arguments to a neutral,
discuss
the issues with her, sometimes in the presence of the other
parties, sometimes in a separate room, and seek the guidance
of the neutral in framing a resolution. Others see mediation
as facilitated negotiation, wherein a neutral helps the parties
to identify their interests, discuss them in the presence of
the other parties, or sometimes separately, and work out their
own resolution.
Mediation properly done offers the disputants the opportunity
to vent their anger and communicate clearly their interests
and needs rather than their positions in the dispute. Unlike
arbitration and litigation which always involve historical
fact-finding
and ultimately fault-finding, facilitative or transformative
mediation is a forward-looking process. The ultimate question
to the disputants is “What are we going to do if we can’t
resolve this dispute?” The absence of extensive fact-finding
and the cooperation of the disputants inherent in the process
substantially limits the need for discovery—usually the
most costly part of any significant lawsuit. The process can
be completed in a matter of hours or days, depending on the
complexity of the matter. Mediation is therefore almost always
substantially less costly than arbitration or litigation. A
day of mediation may result in resolution and cost less than
one day of depositions.
Mediation is non-binding (until the disputants themselves commit
to an agreement). It allows the disputants to frame the process
by which resolution is sought, privately, on their own timetable,
in confidence if desired. Most importantly the parties, not
a third party, can decide what the resolution is to be. The
resolution may have nothing to do with the immediate dispute.
Furthermore, if the mediation fails the disputants can always
return to slugging it out in court. But the process seems to
work when the disputants approach it openly and in good faith.
EXAMPLE OF MEDIATION
A simple example may be helpful here. Two siblings are fighting
over ownership of an orange. Each claims the orange.
LITIGATION AND ARBITRATION - Their parent, a
fact finder, upon hearing the siblings’ demands and bases
for ownership, cuts the orange in half and gives a half to
each.
Both siblings leave dissatisfied.
MEDIATION - The siblings select a mediator to
facilitate their negotiations. With the mediator’s coaxing
the siblings learn that one needs the pulp to make orange juice
and the other needs the skin for a recipe. They work out a
solution
to get what they need and each is satisfied.
USES OF MEDIATION
Mediation has broad applicability. Unless a court is needed
to establish a principle of law affecting the disputants, mediation
should be considered. In particular where the disputants have
had a relationship that they want or need to continue, mediation
works. Mediation can defuse potentially serious disputes in
healthcare institutions which depend on continuing relationships
with many constituencies: consider the value of mediation in
issues such as intra-faculty disagreements, supplier disputes,
warranty claims, medical staff disagreements with hospital administrations,
claims of sexual harassment or discrimination and many more.
A non-binding effort to meet budding areas of disagreement head-on
at an early stage will yield less litigation, less disruption
and lower cost. Mediation works.
© Triage
Mediation Services Inc. 1999
