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Estimated reading time: 6 minutes. Contains 1252 words

Why the Kaiser Arbitration System is highly unfair.

Source documents are cited in the body of paragraphs for the convenience of the reader.

In the year 2004 Dr. Harvey Frey wrote:

Many health care service plans (HMOs) will not sell coverage unless the client agrees in advance to  mandatory binding arbitration. But, under current law, arbitration is much more unfair to enrollees  than an action in a real court, if they have a claim against their HMO. The reasons are: 

Enrollees are currently forced to sign away many of their Constitutional Due Process rights in order  to get coverage. 
Arbitrators don't have to apply or follow the law. They can make gross errors about the facts. Their  decisions cannot be appealed even if they make obvious errors. 

Arbitrators are more likely to be biased toward the HMO than a judge or a jury would be. 

Many arbitrators depend on repeat business for a significant portion of their income. HMOs arbitrate  much more frequently than plaintiffs, so can and do maintain dossiers on arbitrators. They know who  has ruled against them, and can refuse to use them for future cases. This threat of being blackballed by  the HMOs represents a significant conflict of interest for an arbitrator, and an incentive to benefit the  HMO, in order to safeguard his own future income. A judge's or jury member's income can not be  affected by his decision, as an arbitrator's can. 
The procedures of arbitration are not as fair to enrollees as those of a court trial. 

The enrollee is less able to get needed information from the HMO than in a trial. HMOs can drag  out the proceedings to enrollee's detriment. A frequent arbitrator, inured to malpractice, is less likely to reflect community sensibilities to the same degree as a jury of citizens. Arbitration actually results  in lower awards than trials. It is precisely this unfairness which is the reason that HMOs push so  aggressively for arbitration. 
Arbitration costs enrollees more than equivalent court trials. If an enrollee can't pay the higher costs,  and the HMO won't, the enrollee can never get his case heard. Under current law, enrollees must  often advance the costs of arbitration administration and arbitrators' compensation before their case  can be heard. His or her share of the costs of a three arbitrator panel may be in the range of $10,000 to  $20,000. The comparable cost to file a complaint in the California Superior Court is less than $200,  plus jury fees and court reporter fees if the case goes to trial. 
Currently, the law allows the enrollee's constitutional right to a trial to be signed away by employers to  save themselves money. This should not be allowed. 

Arbitration proceedings are more secret than trials, inhibiting regulatory oversight, and preventing other  enrollees from learning about bad HMOs and doctors. 

Since written arbitration decisions are generally less comprehensive than those of lawsuits, and since  arbitrators are not required to follow the law, as judges are, the Department of Managed Health Care  is not able to review arbitrated disputes for regulatory issues which may not have been addressed  by the arbitrator. 
Arbitration may not decrease conflict in the long run.  Decisions are not reported and are not binding in future cases, so the same issues may be arbitrated  again and again in the absence of binding precedent. Injunctions, which might prevent repetitive  malpractice, are unavailable to arbitrators as remedies. The lower awards typically given by arbitrators  are less likely to discourage repetitive malpractice. 
Judges gain personal advantage from arbitration, which may cause them to overlook its potential for injustice.  When salaried, their workload is eased by diverting cases out of the judicial system. They may look  forward to a comfortable retirement, funded by acting as private arbitrators themselves. It is therefore to  their financial benefit to insure a steady stream of cases to arbitration, in spite of the clearcut detriments to  plaintiffs outlined above. 

Many HMOs require patients to pursue medical claims thorugh arbitration processes rather than the courts.  Kaiser Permanente is one of those HMOs that force arbitration on most people.  One of the things that is so special about Kaiser arbitrations is that they were allowed to write the rules and administer the system.  It is like the fox guarding the henhouse.  Of course over the years things were modified a bit and laws were changed and believed or maybe hoped that things would be different, that reform took place, that lives would be saved.
Source:  Source:  'Kaiser Justice' System's Fairness Is Questioned : Health: HMO says arbitration is speedier, cheaper than courts. Critics claim that the deck is stacked. - by MICHAEL A. HILTZIK and DAVID R. OLMOS | TIMES STAFF WRITERS

Because Kaiser was found to have delayed an arbitration that a patient who Kaiser had caused harm to by not diagnosing an illness and who died while waiting  the Office of the Independent Arbitrator  was created by the state of California, and is administered out of the law office of  Marcella A Bell.   This office claims that it is a neutral, independent office and is not part of Kaiser.
They even have a Blue Ribbon Report online at
and it is also replicated here as things related to Kaiser often disappear once attention is focused on them:

In this case, the Blue Ribbon reports really found nothing terribly wrong with Kaiser and gave them glowing reports.  There simply did not seem to be much data to work with except Kaiser's.  They did make a few suggestions and made it clear that there are time limits to get to arbitration.

Those rules are followed so well, that today, some arbitrations are still being dragged out, well past the time frame indicated by law.  For instance the Victorino Noval arbitration that still has not really taken place even though it began four years ago and this year is 2015.  In this specific case the arbitrator is allowing Kaiser employees to not testify until the statute of limitations has tolled because they want to avoid criminal prosecution.  They actually put that in writing.   See:

Southern California Attorney Chant Yedalian state "Kaiser broke California law by forcing patients into secret arbitration proceedings without fully and properly disclosing that they had given up their rights."   "Kaiser routinely funnels aggrieved patients and survivors into binding arbitration and denies them access to the courtroom."
Please read:

Another thing that took place for the protection of the patients was California created the Department of Managed Health Care.  A number of people are helped by that organization and a number over the years have not been.  Until recently it was being run by a former Kaiser Permanente Attorney; Brent Barnhart.
" It would be interesting to learn about the cases he presided over when he represented Kaiser, but the cases are secret. Kaiser patients have to agree to binding arbitration instead of bringing their cases to the justice system."

A few other well placed Kaiser government and government related employees are listed here at:
and here at:

It appears that Kaiser has it all sewn up from all government branches.  Perhaps they are accountable to no one.