Before I answer the question, let me share with you how the issue arises. Lets say your father falls at home, breaks his hip, has the hip surgically repaired at a local hospital, and is sent to a nearby nursing home for 30 days of physical rehabilitation.
Before the nursing home will admit your father to their facility they require him and/or you to sign a 10 page Admission Contract which contains a provision that, in the event the nursing home provides substandard care and your father gets injured as a result, your father agrees NOT to hold the facility accountable for his injuries (and possible death) and additional medical bills by filing a lawsuit in court against the nursing home and letting a jury hear the evidence and decide the case. To the contrary, the Admission Contract requires any such dispute to be resolved by mandatory arbitration…a very abbreviated procedure heard by an individual often selected by the nursing home.
Now to the answer to my question: The nursing home requires mandatory arbitration in order to save money and reduce the financial payments which a jury might award to an injured resident or to a deceased resident’s family. I hope you are not surprised. Even the nursing home industry’s favorite publication, Provider Magazine, puts these facts in black and white.
In a article written by Kathleen Lourde in November of 2010 the following passage appears:
Arbitration agreements benefit providers because the total cost of an arbitrated settlement tends to be about 37 percent lower than a litigated award, according to a 2009 report by Aon Global Risk Consulting.
My Take: If any nursing home (like the many facilities owned by Medical Facilities of America, Inc.) want you to sign an Admission Agreement with a mandatory arbitration requirement…now you know why.