San Diego Business Journal

The state Legislature is debating a measure that appears to give Californians more options when a dispute arises with their health care service plan. Unfortunately, this bill is a wolf disguised in sheep's clothing.

Assemblywoman Sheila James Kuehl, D-Malibu, is considered by her colleagues to be one of the best and brightest in the Legislature. However, her measure, AB-1751, is not in the best interest of California's consumers.

Currently, when a consumer signs up with a health plan, such as medical or dental, he or she signs a standard contract which mandates that disputes be settled through "pre-dispute binding arbitration." Health plans often require enrollees to use arbitration rather than a jury trial to resolve legal differences in order to save time and money for both the enrollee and the health plan.

AB-1751 seeks to eliminate mandatory arbitration, which will have a direct impact on consumers, driving up the costs of health insurance and creating a disincentive for employers to offer health care benefits. Eliminating arbitration will also clog an already overcrowded court system.

Arbitration and other forms of alternative dispute resolution have become effective methods to avoid drawn-out, expensive court cases. Both the plaintiff and defendant save time and money when arbitration is used as a method of dispute resolution. On average, a jury trial takes 2 & #733; years to resolve, while arbitration can usually resolve cases in less than nine months.

The American Bar Association conducted a study which concluded that individuals who used arbitration were more satisfied with their results than those who chose to go to trial. Arbitration has become such an effective tool in solving problems that the joint Commission on Health Care Dispute Resolution actually recommends the use of arbitration to consumers.

During last year's HMO reform debates, doctors challenged health care service plans to bring needed reform to the health care delivery system. This year, interestingly enough, provider groups agree with health care service plans that binding arbitration is an important and effective way to solve disputes between consumers and their health care providers. The California Medical Association, the California Association of Dental Plans and other organizations are working together to point out the deficiencies of AB-1751.

A better alternative to the arbitration reform debate can be found in SB-1934. This measure keeps arbitration intact but will ultimately level the playing field between arbitration and litigation. Consumers can still use the arbitration process, avoid long and costly trials and still receive the same financial outcome provided by jury trials.

HMO reforms approved last year were steps in the right direction. Gov. Gray Davis and the California Legislature should keep the momentum going by supporting SB-1934. This measure will maintain a proven dispute resolution process while providing consumers with the right to receive uncapped damages.

AB-1751, on the other hand, will dismantle a proven dispute resolution process, only to line the pockets of trial lawyers.

Becker is president of the California Association of Dental Plans.