Dispute Resolution Service Developed over 20 Years

By Nichols, Max | THE JOURNAL RECORD, August 10, 1991 | Go to article overview

Dispute Resolution Service Developed over 20 Years


Nichols, Max, THE JOURNAL RECORD


Journal Record Columnist The notion that disputes can be settled faster and cheaper with alternative methods than in court certainly is not new _ even in the health-care industry.

The new Alternative Dispute Resolution Service of the National Health Lawyers Association was developed after a series of efforts over the last 20 years in various parts of the country. Its development was led by James L. Hall Jr., Oklahoma City attorney who is an arbitrator in securities and labor.

He also supervises the health-law practice of Crowe & Dunlevy.

"Arbitration and mediation have been used for decades to resolve labor disputes," said Hall, president of Crowe & Dunlevy and chairman of the health lawyers association task force to establish the service. "They have been used extensively in the securities and construction industries.

"ADR (alternative dispute resolution) has also been used by some health-care organizations, but it has never been tried on a national basis in this industry." Playing a leading role in this movement was natural for Crowe & Dunlevy, a 92-year-old law firm and largest in Oklahoma. It has recognized for years that alternative methods of resolving disputes often are more effective than litigation for its clients as a member of the American Arbitration Association.

Attorneys of the firm serve on the association Panel of Commercial Arbitrators and the National Association of Securities Dealers Inc.

arbitration panel. Crowe & Dunlevy also is a member of the Center for Public Resources Inc. Legal Program to Develop Alternatives to Litigation and has a policy statement supporting such alternatives.

In health care, alternative dispute resolution was started as early as the 1970s in Southern California and Michigan. They range to a mediation program started in 1989 by Hospital Corp. of America, which operates Presbyterian Hospital in Oklahoma City and other Oklahoma hospitals among 200 in the nation.

The steadily growing movement toward the new national service, which will begin in early 1992, has stemmed from rising legal costs and the increasing complexity of relationships, both contributing to the overall increasing cost of health care.

These relationships include physicians and physicians groups, hospitals and hospital groups, employees, insurance and vendors as well as new technology, procedures and new services. Similar problems have led to a growing use of alternative dispute resolution in other industries.

General Motors Corp., for example, has developed a system for resolving disputes with dealers. Deere & Co. mediates liability cases involving its machinery products. The Federal Deposit Insurance Corp. has trained 100 dispute coordinators nationwide to mediate bank loan disputes.

Among the health-care problems, malpractice gets the most notoriety.

Jury Verdict Research Inc. of Hudson, Ohio, reported 130 jury verdicts involving physicians as sole defendants in 1989 with a midpoint of $330,000, up from $284,000 in 1988. Verdicts involving hospitals were down 50 percent but still substantial with a midpoint of $350,000 for 77 decisions.

Another incentive for health care is a bill introduced into the U.S.

Senate earlier this year and supported by President George Bush. It encourages states to place limits on court awards for non-economic damages and to set up a mediation system.

It would require all federal health programs to settle medical injury claims through binding arbitration, including beneficiaries of Medicare, Medicaid, federal employees' health plans, public health and veterans'

programs. Non- complying states would have reduced aid through Medicare and Medicaid.

In the past, a variety of alternative dispute resolution methods have been tried beyond arbitration (with an arbitrator settling a dispute) and mediation (with a mediator helping the parties reach agreement). One is called med-arb _ automatic arbitration if mediation doesn't work. …

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