Nursing home corporations insist that patient's right to sue be waived

The Associated Press reported this week that many of the large corporations which operate nursing homes are now insisting that patients waive their right to sue for negligence as part of the admission process.  While binding arbitration agreements can be a friendly, useful and efficient means of settling disputes and setting compensation, they are also easily abused when imposed by one party on another:  that is especially true when the parties are grossly unequal in resources and sophistication, or the agreement is "imposed" under duress.

We often encourage parties to accept arbitration agreements in particular circumstances.  We have participated in that process as advocates, as arbitrators and even as a party.  Binding arbitration can be a quick, private, inexpensive way to resolve a dispute and to assure a  more predictable outcome.  Prejudice of one kind or another is less likely to play a role if the arbitrators (usually 3) are carefully vetted and chosen.  Nevertheless, imposing this kind of arrangement, on the nursing homes' terms, on the highly emotional day of admission, is a dangerous and unfair precedent.  We should exercise great care in allowing a corporation (or any party having a bargaining advantage) to impose on other citizens a waiver of the normal rights of citizenship.

Many in Congress are examining whether these agreements should be outlawed or limited.  In our experience, binding arbitration procedures within a proper framework can be an appropriate alternative:  in the 1980s, the State of Ohio instituted an arbitration system for malpractive victims that was so efficient and fair, the medical insurers insisted on disbanding it within a decade.  The insurers found that their insured doctors benefitted from juror prejudice in their favor by comparison with carefully selected and highly educated arbitrators.

We would recommend that limitations be enacted to require a "knowing and voluntary" waiver of these rights of citizenship.  AT A MINIMUM, the patient's family should be given 30 days after admission to withdraw from the agreement, so that it is assured that any waiver is "knowing and voluntary" and thoughtfully considered--after the storm of emotions have passed and the family gets a feel for the facility.  Further, the manner and terms of allowable arbitration agreements should be defined so that the terms imposed are reasonable (that is, they provide a reasonable length of time to act; the arbitrators are chosen from a neutral field; there are no evidentiary presumptions that preclude a level playing field; the arbitration result is enforceable in Court; and due process is preserved throughout).

Sadly, the motivation for this kind of agreement is--as demonstrated in Ohio--usually not efficient justice.  Typically, as here, the impetus for imposing these agreements is to assure some form of corporate advantage, and in the Bush era, civil servants have been unwilling to place restraints on this kind of behavior.  Absent close scrutiny by our elected representatives, families will lose their right to a level playing field and the "cost" of poor care will be minimized--at least for caregivers, if not for victims and their families.  At some point, we all must recognize that one very direct cost of denying victims' rights is to reduce the cost--and thus increase the likelihood--of dangerous or negligent behavior.  A fear of being held accountable financially is sometimes the only effective way of influencing corporate boardrooms.

Interested readers should read the earlier blog entries discussing the move to purchase nursing homes by private investment firms--and their tendency to immediately engage in cost- and staff-cutting to enhance profitability at the expense of safety.  See November 16, 2007, entry "More on nursing homes as an "investment"; and September 24, 2007, "Nursing home liability".