Capitalism has many benefits. Some might argue that the singular focus of profits might be misplaced in the field of health care. But, until we have a system of providing medical treatment to our citizens outside the framework of profits, we are forced to reckon with potential problems when the two intersect. One such circumstance was recently reported on: private equity firms are buying up medical practices, and forcing patients of the doctors of those practices to sign binding arbitration agreements.

If you live in the USA and are old enough to sign contracts or waivers, you have likely encountered an arbitration provision. Essentially, such provisions force you to agree to give away your rights to a jury trial if you suffer harm from the other party. Instead, a binding third party “neutral” will decide the matter.

Proponents of this system say that such an agreement for resolving differences is a cost saver: it saves money during the process of resolving the dispute, and in cutting those costs, it saves the medical practices money in the form of lower malpractice insurance premiums. This helps – some say – stem the tide of OUT OF CONTROL MALPRACTICE LITIGATION WHICH IS BANKRUPTING OUR ENTIRE SOCIETY.

With regard to the latter proposition, the data I have seen shows that, while the size of individual claims has risen over time, the number of claims has fallen sharply, resulting in a net result that much less is actually being paid overall.

With regard to cutting the costs of individual disputes through binding arbitration, I take as truth that such a process will invariably be cheaper. But what is the patient giving up by signing that paperwork? At least two important things.

First, the patient’s chances for a successful outcome go down. Often the arbitrator is hand picked by the insurance company for the defendant. And that arbitrator may have bias towards the institution for which he or she routinely works (guess which one it is – the malpractice victim who has never had a previous claim arbitrated, or the insurance company who regularly arbitrates such claims?).

Second, society’s desire for transparency in medicine. Often times the arbitration agreement includes a confidentiality provision, so that the arbitration process (including the outcome) is blanketed in secrecy. No other possible future patients of the medical practice or the doctor will ever know that a mistake was made, or harm was caused.

Watch out for such forms the next time you visit your doctor or health care clinic.