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Budget Variance Essay

1490 words - 6 pages

Lawsuit in the Hospital
It is an indisputable fact that health care business inherently carries a unique set of risks as a business organization; lawsuits by patients are common. What is not common is the fact that a trained professional who has sworn by the Hippocratic Oath to “do no harm,” would seek to file a lawsuit against a hospital because his service is no longer needed because of the new direction that the hospital is going (Grand Canyon University, 2011). To be fair, this physician is claiming an “injury.” It is also fair and true to say that this claim was made after this physician was notified that the relationship will be severed after four months. Due to the sequence of ...view middle of the document...

Nevertheless, in order to appreciate the staggering impact of this case being adjudicated in the court, one must fully analyze the pros and cons of that strategy.
The Pros of Going to Court
As indicated above, by going to court, there is a legal path to justice. In event that this hospital loses the case, there is also the appeal process by which the decision can be contested. Additionally, by defending the case in the court, the hospital would send a clear signal to any potential plaintiff that it would not be cowed into settling any frivolous claims.
The Cons of Going to Court
It is becoming increasingly obvious that going to court would not only be expensive but also time-consuming. According to Lemak and Jenkins (2000), “a 250-bed hospital spend about $300,000 to $1million defending medical malpractice lawsuit, not including settlements and judgements” (p.52). Out of these claims, Lemak and Jenkins (200) added, 50% of them are paid. Statistics also indicates that an average of $500,000 is awarded to plaintiff per jury verdict (Lemak and Jenkins, 20066). It goes without saying that the attorney’s fees could be quite exorbitant, thus adding to the cost. This process can also become very time-consuming and cumbersome for various reasons. For example, the pre-trial discoveries, depositions, and sworn testimonies are all legal processes that take time. Additionally, there is the risk of having the hospital’s reputation dragged through the mud and, subsequently tarnishing it in these days of social media information networks),

Arbitration as it is generally understood is a legal recourse that does not involve the court but utilizes the expertise of a specialist in the area of dispute. According to Hofstadter (1964), arbitration has more moral, cost, and other resource benefits than adjudication. The question this hospital is facing is whether it desires adjudication according to law or settlement by arbitration. To answer this question, it is important to look at the pros and cons of arbitration in its entirety relative to this case.
The Pros of Arbitration
Arbitration has eluded to above, utilizes the expertise of a professional rather than a less skilled jury who can be swayed by emotional testimonies rather than by facts (Grand Canyon University, 2011). Arbitration also provides privacy to the outcome of the case since there are no witnesses, no jury, no judge, and no public exposure. Through arbitration, justice of peace, reconciliation, and compromise can be executed (Hofstadter, 1965). Perhaps, the most important advantage of settling this case by arbitration would be that it is cost-effective and an efficient process. According to Orr (2008), it takes “three to four times longer to litigate claims than to arbitrate them” (p.61). So, its efficiency comes not only because it is adjudicated by a specialist, but because it also...

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