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National News Stories of Interest About Kaiser Permanente

Arbitration cuts both ways in claims against hospitals 

Oakland Tribune, The (CA) 

April 7, 2003 
Section: Headline News 

Arbitration cuts both ways in claims against hospitals 

   Rebecca Vesely, STAFF WRITER 
Patients of Kaiser Permanente and many other health providers could get a surprise if they sue for malpractice: Their case will not be decided in court by a jury but through binding arbitration. In arbitration, plaintiff and defendant appear before a judge or panel of judges in an office setting and present their sides of the case. 

Arbitration can be a double-edged sword; claims are usually decided more quickly than in court and costs are generally lower. But there is little chance for appeal, and the proceedings occur in private. Because there is no jury, both parties must rely on the fairness of the chosen mediators. 

"Some lawyers think it is easier to win in arbitration because most good judges will recognize liability and will see through the smoke and mirrors that some juries don't," said James Bostwick, a San Francisco lawyer who represents malpractice victims. "I think we get more positive results for liability with arbitration but less money than with a jury." 

Kaiser Permanente, Blue Cross of California and most other major health care providers require arbitration as a condition of membership -- spelled out in enrollment paperwork. Blue Shield of California is the only major plan in the state that does not use arbitra-tion, according to the California Association of Health Plans. 

Kaiser has been using arbitration to settle malpractice cases since 1971. It has far more malpractice arbitration cases because it provides malpractice insurance for its physicians. This means that if a Kaiser patient sues a doctor and a hospital, both claims will end up in arbitration. Patients with other health providers may find that if they sue a hospital and a doctor separately for malpractice, they will go through arbitration with the hospital and the courts with the doctor, or vice versa, depending on their insurance policy. 

Gary Rushford, a 57-year-old general contractor from San Jose, learned that he would have to go through arbitration when he went to a Kaiser hospital emergency room complaining of leg pain in 1998. He had been a Kaiser member for more than 25 years, and this was the first time he was asked to sign the agreement. 

"We joked, 'This is what they make you sign before they cut off your leg and you sue,'" said wife Sharon Rushford. "That's exactly what happened." 

The Rushfords said that for three months before going to the ER, their doctor had insisted on prescribing pain medication over the phone and referred them to a physical therapist and podiatrist, who failed to detect a lack of blood flow to his foot. When intense pain finally drove Rushford to the ER, a doctor diagnosed an arterial blood clot. 

The clot was cleared, but Sharon Rushford said that the attending doctor sent her husband home without blood thinning medication, a standard protocol. He reclotted, and several days later was admitted for surgery to remove the clot. Again, he said he went home with insufficient blood thinning medication. 

After two more operations and further tissue damage due to lack of blood flow, his leg was amputated above the knee. 

The Rushfords sued Kaiser seeking economic damages -- which are not limited under California's medical malpractice law -- because Rushford could no longer run his general contracting business. 

Both the plaintiff and the defendant normally select the arbitrator, but the Rushfords said they were not comfortable doing so because they could not find a lawyer to take their case. They eventually signed on attorney Sharonrose Cannistraci, who handles legal issues for their construction business. 

The arbitrator for the case, chosen by the San Mateo County Superior Court, was a retired judge who had mediated more than a dozen disputes involving Kaiser, Cannistraci said. 

In December 2001 the arbitrator ruled in Kaiser's favor. Although he found that the doctor had breached standard of care for failing to prescribe the blood thinner, he said the Rushfords had not proved that this lapse led to the loss of Rushford's leg. 

Only rarely are arbitration rulings reversed, most notably in cases where one party commits fraud. The Rushfords are now petitioning to vacate arbitration and go before a jury on grounds that Kaiser committed fraud by suppressing information about a blood test, Cannistraci said. 

"Whatever the arbitrator rules, whether its in our favor or not, we will abide by that," said Kaiser spokeswoman Kathleen McKenna. 

McKenna added that the Rushford case is not representative of Kaiser's arbitration policy today. 

Since 1999, Kaiser has instituted notable reforms. All arbitration matters are now handled by an independent attorney, called the Office of the Independent Administrator (OIA). The office seeks resolution to all claims within 18 months, and keeps a data base of more than 300 arbitrators on file for claimants to choose from. 

Of the 119 cases against Kaiser in the state that went to a hearing in 2002, 51 awards were made to patients. Sums ranged from $500 to $3.8 million with a median award of $168,000, according to the OIA annual report. 

The reforms came after a 1997 California Supreme Court ruling against Kaiser. The court found that Kaiser committed fraud by promising speedy hearings but instead took an average of 21/2 years for each complaint. The case was brought by the wife of Wilfredo Engalla, who died of lung cancer before his arbitration case was heard. 

If the Rushfords win their petition, their case could go before a jury. A Superior Court judge in San Mateo County is expected to rule on the petition this week. 

Sharon Rushford said so far the process has cost her and her husband $200,000 out of pocket. But she says its not about the money. 

"Winning this motion would give recognition to our case," she said. "It would mean that the courts would know what happened to us." 

Contact Rebecca Vesely at

(c) 2003 The Oakland Tribune. All rights reserved. Reproduced with the permission of Media NewsGroup, Inc. by NewsBank, Inc.