Dr. Clough (an AMC/NOMA member) presents his comments on the mandatory arbitration legislation – noting that it is a critical step in fixing a system that has been broken for far too long.

Arbitration Bill

I am Dr. John Clough, and physician at the Cleveland Clinic and on behalf of the Cleveland Clinic, I am pleased to support Senator Coughlin’s mandatory arbitration bill, as a means of controlling the runaway costs of medical liability insurance, which is driving many doctors to leave practice or leave the state. Because the Cleveland Clinic provides liability coverage for its employed physicians, it may not be obvious that the current crisis affects us along with everyone else. Although our experience with lawsuits has been pretty successful over the years, the general overall experience affects us, even though we are self-insured.

Many of you may recall the instance where the neurosurgical group covering one of the Cleveland Clinic Health System’s trauma centers decided they could no longer afford their malpractice insurance premiums and withdrew form that coverage, threatening the hospital’s trauma center status. The Clinic now provides that coverage with its own employed neurosurgeons. The organization has assumed this risk in order to continue providing trauma center coverage for a disadvantaged community. But there is a cost to this.

Here’s how it works. The Cleveland Clinic has to operate like a liability insurance company in maintaining a capital fund adequate to cover whatever may happen in the liability arena. This money is not available for the more usual and appropriate capital needs of the organization, including the provision of new technology. The amount of money in this escrow-like fund has grown over the years, and the required level of capitalization is evaluated by our bond-rating agencies. The Clinic’s bond rating determines the amount of interest we have to pay for borrowed money. If our malpractice litigation fund is judged inadequate by the bond-rating agencies, based on the statewide experience, not our experience, our bond rating drops, and our interest rates on borrowed money increase. This adds to the cost of health care, because that is where the revenue that supports this whole system comes from.

We believe that this legislation will result in a win-win situation. As you have heard, it requires that a balanced panel, selected by both sides of a case, consider the evidence in any malpractice suit and render a decision in a much less expensive setting than open court. If both parties accept the decision, that’s the end of it. The majority of cases probably won’t get past this stage. The few cases in which they don’t agree can then go to court and present their evidence in a trial, including the arbitration panel’s decision. This protects everybody’s rights. This procedure will take cost out of the system without interfering with anyone’s rights to a trial if they still want one.

So we encourage everyone to get behind this legislation. It’s not a total solution to the crisis, but it can be one part of the puzzle. It is an innovative approach that hurts no one while removing cost from the system and helping to keep health costs down.