Arbitration can obscure safety problems in nursing homes

This is the third post in a series on a proposed CMS rule that would eliminate an Obama-era ban on pre-dispute arbitration for nursing home residents. For the intro, see here.

As I explored in my last post, the research suggests that malpractice law doesn’t much improve the quality of care in nursing homes. If that’s right, then maybe it doesn’t pose safety risks to allow nursing homes to include arbitration clauses in their admissions contracts.

But that conclusion may be too hasty. The available studies investigate how malpractice lawsuits directly change the behavior of nursing homes. They don’t purport to study how tort law, by highlighting endemic safety problems, can mobilize a policy response.

Consider just one example. In 1986, the Institute of Medicine released a landmark report (“Improving the Quality of Care in Nursing Homes”) prompted in part by litigation in which nursing home residents “proved a variety of violations of regulatory standards, including theft of personal funds, overuse of psychotropic drugs, inadequate care resulting in decubitus ulcers, inadequate skin and nail care, inadequate bowel assistance, and sanitation problems.” That report led directly to the adoption of the Nursing Home Reform Act, which imposed minimum safety requirements and instituted mandatory inspections. The research indicates that these changes led to substantial improvements in nursing home quality. Without malpractice litigation, those improvements may never have come to pass.

Quality remains depressingly low, however, as a follow-up report in 2000 concluded. That report, too, was prompted in part by litigation. “Concerns about problems in the quality of long-term care persist despite some improvements in recent years, and are reflected in, and spurred by, recent government reports, congressional hearings, newspaper stories, and criminal and civil court cases.” No one today thinks that we’ve addressed the concern. As Rachel Werner and Tamara Konetzka noted in a 2010 piece in Health Affairs, “ongoing quality problems and the large number of nursing home residents at risk have kept nursing home quality under scrutiny for decades.” A recent, eye-opening exposé from Jordan Rau at Kaiser Health News and the New York Times details how federal oversight of nursing homes is failing to grapple with rampant quality deficiencies.

Lawsuits are public, and often include the sorts of graphic, shocking details that draw press attention and public outrage. For one example, drawn from a law review article by Lisa Tripp:

Mrs. Sauer was often times found wet without being changed in four hours. She had pressure sores on her back, lower buttock, and arms on days she was found sitting in urine and excrement. A former staff member remembered seeing Mrs. Sauer at one time with a pressure sore the size of a softball, which was open. Her sores and blisters became infected. She was frequently double-padded, and even triple-padded, rather than single-padded for her incontinence problems. At times, she had no water pitcher in her room; nor did she receive a bath for a week or longer, due to there not being enough staff at the facility. She was described as “always thirsty” and her nursing notes indicated that she was heard moaning and crying. At the time she was hospitalized prior to her death, she had a severe vaginal infection. When she was in the geriatric chair, she was not “let loose” every two hours, as required by law. Finally, Mrs. Sauer was found to suffer from poor oral hygiene with caked food and debris in her mouth.

These details only emerged because Mrs. Sauer’s family filed a lawsuit. If the Sauers had been forced into arbitration, Tripp writes, “[t]he chilling description … would have disappeared from public consciousness.”

That secrecy may matter more than is commonly assumed. In an important book, Making Rights Real, Charles Epp examines the role that tort law played in getting police departments, employers, and park administrators to address longstanding problems in the 1980s and 1990s:

Police departments created strict policies on the use of force and cracked down on abusive officers. Government human relations departments created and strictly enforced policies prohibiting sexual harassment. Parks administrators tore out and replaced play equipment in tens of thousands of playgrounds, designing and managing the new installations to reduce the risk of injury. I argue that these developments, and many more, came about because newly energized activist movements and liability lawyers forced agencies to face up to long-ignored problems of abuse and injury, and because managers came to recognize that these legal claims represented fundamental threats to their public and professional legitimacy.

One of Epp’s most striking conclusions is that the financial penalties associated with tort judgments were too small to have driven the changes. What mattered, instead, was the bad publicity associated with lawsuits—and the concomitant damage to professional legitimacy. That legitimacy threat was the “engine of pressure,” not money.

Now, nursing homes aren’t government bureaucracies like the ones that Epp studied. But they’re closer than you might think. They’re dependent on public funding and they’re exquisitely attuned to the risk that public outrage could erode support for that funding. They also recognize that the outrage could lead to enhanced oversight. No less than police departments, nursing homes have an interest in avoiding threats to their professional integrity.

A pre-dispute arbitration agreement is one technique for avoiding those threats. But it’s a technique that leaves the underlying quality problems to fester like a bedsore.

I don’t want to overstate the case. Malpractice litigation isn’t the only way that quality problems come to light, and not all nursing homes insist on pre-dispute arbitration. (In 2011, Tripp found that 43% of North Carolina nursing homes, including all of the largest nursing-home chains, included pre-dispute arbitration agreements in their admissions contracts.) Plus, even if shifting from litigation to arbitration hampers the campaign to improve nursing home quality, the costs of litigation might still outweigh its benefits.

But I will confess to disquiet. The deplorable quality of care in many nursing homes is a national crisis, even if it doesn’t show up on the front page every day. Is now really the time to give the industry another tool to shield its conduct from public scrutiny?


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