Mediation is an important tool for resolving disputes in the healthcare industry. Disputes can arise in the healthcare industry between providers and insurance companies, providers and patients, and among providers, administrators, and hospital and health care systems. The COVID-19 pandemic has placed unprecedented stress on our health care system for the past two years, stretching providers as well as administrators thin. This stress has resulted in staff and system shortages, reducing the capacity for resolving disputes internally or allocating internal resources to an external dispute resolution program like litigation.
Healthcare industry participants can take this opportunity—when resources are stretched—to embrace a new paradigm for dispute resolution that can cut costs, provide flexibility, decrease power imbalances, and allow parties to design solutions that provide positive benefits going forward. Industry participants can create internal policies that call for mediation as a first choice for dispute resolution, and they can write mediation into their contracts with other industry participants as the preferred mechanism for resolving disputes under the agreement.
Mediation is a dispute resolution process that derives its power from the self-determination of the parties. Parties must agree to mediate—consent is paramount—and once they have agreed, they can choose their mediator and the rules and procedures for the mediation. The mediator should be a neutral third-party who can facilitate and assist the parties in defining their dispute, identifying issues, and crafting a solution that is amenable to all participants.
Mediation provides specific benefits for healthcare industry participants.
First, bringing in a neutral third party instead of working through a dispute using internal resources can free up personnel to attend to the core mission of health care delivery.
Second, the fact that a mediator is an external neutral third party reduces concerns about bias and power imbalances when disputes are managed internally.
Third, because the parties can choose their mediator, concerns about repeat user bias should also be alleviated.
Fourth, mediation is often less expensive and less time-consuming than other forms of dispute resolution, including internal processes.
Fifth, mediation provides the disputants flexibility and allows them to be creative about crafting a solution that works for everyone and provides benefits on a forward-going basis.
Finally, mediation engenders positive feelings, reduces feelings of powerlessness, and enables industry participants to continue working together rather than rupturing those relationships.
In order for mediation to be available and accessible, healthcare industry participants will need to create clear guidelines and standards both internally and in contractual agreements among industry participants for (1) electing mediation, (2) selecting a mediator, and (3) designing a mediation procedure. These guidelines should include providing the disputants with clear information about mediation as well as alternatives to mediation if the parties are unable to agree on mediation, a mediator, or mediation rules and procedures.
When a mediation option for dispute resolution is well-thought out, clearly-presented, and readily available, disputes in the healthcare industry can be solved with fewer resources and less discord in a way that empowers disputants and provides creative, flexible, and forward-looking solutions for all involved. Mediation can strengthen healthcare provision by removing distractions, resolving disputes, and enabling solutions.
Chief Judge Janet DiFiore of the New York Court of Appeals and of the State of New York identified ADR, and specifically mediation, as an important tool in reducing COVID-19 pandemic backups in the state court system (https://www.nycourts.gov/whatsnew/pdf/Apr25-CJ-Message2022.pdf). According to Chief Judge DiFiore, “tens of thousands of cases were referred to virtual and in-person mediation in 2020 and 2021 with an overall settlement rate of over 50%."
Chief Judge DiFiore noted that “[t]here is no question in our minds that ADR will play a very significant role in our ability to efficiently process our dockets and reduce our pandemic-related backlogs," and she emphasized that the state court system is "following through on our commitment to presumptive early ADR and making a concerted push to expand ADR services in our civil and family courts all across the state." She forecast that ADR and mediation will expand to become "a mainstay of the civil justice process in our state.”
Litigation is inadequate to solve the problems businesses face in the twenty-first century. It robs litigants of control, imposes excessive costs in both time and money, and provides unpredictable results.
In court, a litigant has limited control over what remedies a judge might design. Judges often don’t have the tools to fix business problems beyond moving money around. Real business solutions require agreement among the parties–to undertake a project in a new way or to evolve into a new line of business. A judge also might totally misunderstand a litigant’s business or the substance of the dispute–this happens! In failing to understand the problem, the judge is left unable to design a meaningful solution, even if they had the tools to do so.
A litigant could easily find themselves on the other side of a multi-year litigation that has cost hundreds of thousands of dollars in discovery and legal fees with an adverse outcome, or even a favorable outcome but with a remedy that doesn’t fit the problem.
After almost a decade in litigation, I know there is a better way: Mediation.
In mediation, you can be creative. You can think outside the box and create a solution that would not be available to you in a court proceeding. You can obtain a durable and final result quickly, cheaply, and with maximum input and complete veto power. Mediation can also be an important mechanism for information gathering–both about the facts and substance of the dispute, and also about the motivations and pressure points of the other party. Every legal client should demand mediation, and every lawyer should recommend it.
Even if a mediation isn’t successful in completely resolving a dispute, you still leave the mediation with all of your rights intact and and more information than you went in with–potentially bringing a resolution closer to fruition, which can save time, money, resources, and frustration.