PICK ONE:YOUR DOCTOR OR YOUR RIGHTS

As private equity investors take over doctors’ offices, they’re popularizing a controversial legal practice: forcing patients to agree to binding arbitration before they can receive care

HEATHER PERLBERG

IN the summer of 2019, Jessie Harrell went to see her gynecologist for a routine appointment. She’d been seeing Dr. Tim Baird for 14 years, ever since she showed up at the hospital in labor five weeks early. He’d been on call that morning, and she’d been reassured by his calm demeanor, even as he delivered her first child via an emergency cesarean section.

But this time, right before Harrell’s visit, a staff member in Dr. Baird’s office in Jacksonville, Fla., called and asked her to watch a video on the medical group’s website. She clicked a link and saw an attractive actress in an immaculate office explaining a new policy. All of Dr. Baird’s patients, Harrell learned, needed to sign a form agreeing to “binding arbitration,” a legal concept that meant she was waiving her right to a jury trial in the event of medical malpractice.

When she objected, the woman on the phone told her she could see Dr. Baird one more time, but she’d have to find a new practice after that. In the exam room the doctor began as he always had, by asking Harrell about her two daughters. He was apologetic about the new requirement but said it was out of his hands. His office and dozens of other locations in his medical group had been sold to Lindsay Goldberg, a New York-based private equity firm with more than 100 physician offices and surgery centers across Florida. This was the new reality, he said, whether he liked it or not.

Harrell was heartbroken, and not just because she trusted Dr. Baird. Harrell is a lawyer—she has her own appellate firm in Jacksonville—so giving up a constitutional right would’ve been bad enough. What made it even worse was that she recognized every page of the agreement the office was asking her to sign. In 2016 she’d successfully argued a case that involved a woman who’d sued her gynecologist, a doctor with a large group called Women’s Care Florida, after signing an almost identical form. It was a horrible story: Her client, who had symptoms of early labor, arrived late to an appointment and was turned away, with the doctors’ office rescheduling for four days later. A day before the new appointment, she gave birth to a stillborn baby. Under normal circumstances, the patient would’ve been able to go through the state’s legal process, which meant either agreeing to arbitration or moving to trial. Women’s Care, though, insisted on enforcing the binding arbitration agreement, which meant she (as well as her husband and then unborn child) had already given up their rights.

Harrell and a colleague, Bryan Gowdy, had argued during the appeal that the Women’s Care agreement was unenforceable under state law. The Florida Supreme Court sided with them, saying the agreement was void. And yet somehow here it was again. In the three years since she’d won, Women’s Care had been bought by Lindsay Goldberg, which then bought Dr. Baird’s practice, too. The medical group had continued using the form—in the hope, she guessed, that even an unenforceable arbitration agreement would be enough to dissuade a malpractice victim from suing.

It was an outrage, she thought, as she walked out of Dr. Baird’s office. “Why would I agree to that after hearing the Supreme Court say it was unfair to patients?” Harrell asked in a Zoom interview with Bloomberg Businessweek from her home. In the background, Archer, a rescue greyhound who once raced under the name Miami Hurricane, lazed on a white sofa. Harrell’s face tightened as she spoke. “People shouldn’t be put in this take-it-or-leave-it position after having been shown a five-minute video on arbitration propaganda.”

THE argument for arbitration hinges on the rising costs imposed by malpractice lawsuits, which some policymakers and doctors say have made medicine more litigious and led to worse care. One in three babies in the U.S. is delivered via C-section, a procedure that, compared with vaginal delivery, is more expensive for patients, requires a longer recovery period, and carries higher risks of infection and blood loss—but which is less likely to result in a lawsuit if complications occur during labor, at least according to the American Congress of Obstetricians & Gynecologists. The group has said that limiting physician liability would cause C-section rates to drop.