-
HEALTHCARE DISPUTES ACROSS NATIONALBOUNDARIES: THE POTENTIAL FOR
ARBITRATION
DETH SAO,*AMAR GUPTA,t
AND DAVID A. GANTZI
ABSTRACT
Trade in international health services has the potential to play
a lead-ing role in the global economy, but its rapid growth is
impeded by legalbarriers. Advances in technology and cross-border
movement of peopleand health services create legal ambiguities and
uncertainties for busi-nesses and consumers involved in
transnational medical malpracticedisputes. Existing legal
protections and remedies afforded by traditionaljudicial frameworks
are unable to resolve the following challenges: (1)assertion of
personal jurisdiction; (2) choice offorum and law considera-tions;
(3) appropriate theories of liability for injuries and damages
aris-ing from innovations in medical care and delivery of health
services;and (4) enforcement offoreign judgments. Such legal
uncertainties andambiguities call for a uniform means of redress
that is more flexible andpredictable than litigation in a court
room. Arbitration, a privatestreamlined adjudication process that
has been successfully utilized onan international level to resolve
several of the above mentioned legalquandaries, offers a potential
solution. The voluntary, flexible, andlegally binding nature of
arbitration agreements across jurisdictionsmakes this form of
dispute resolution more efficient and adaptive tochanges in the
health services industry than litigation. With carefulconstruction
of an approach that accounts for arbitration costs, reasona-ble
recovery amounts, and complementary mechanisms such as
no-faultcompensation, international arbitration of medical
malpractice disputeswill more fairly and efficiently reallocate the
legal risks borne by busi-nesses and consumers.
* J.D. 2010, James E. Rogers College of Law, University of
Arizona; B.A. 2001, Wel-lesley College.
t Thomas R. Brown Endowed Professor, University of Arizona;
Ph.D. 1980, IndianInstitute of Technology Delhi; M.S. 1980, Sloan
School of Management, MassachusettsInstitute of Technology; B.Tech.
1974, Indian Institute of Technology Kanpur.
+ Samuel M. Fegtly Professor of Law and Director, International
Trade and BusinessLaw Program, James E. Rogers College of Law,
University of Arizona; J.S.M. 1970, StanfordLaw School; J.D. 1967,
Stanford Law School; A.B. 1964, Harvard College.
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The Geo. Wash. Int'l L. Rev.
I. INTRODUCTION
As one of the fastest growing sectors in the world economy,
busi-ness and legal circles have focused much attention and concern
onthe international health services industry. However, several
tradebarriers, chief among them legal liability risks and remedies
forbusinesses and consumers, impede the potential of the health
ser-vices industry to be a leading player in the global economy.
Earlierscholarship in international health services trade has
analyzed legalbarriers in this industry, and this Article attempts
to build uponsuch existing scholarship by proposing the use of
arbitration as amethod of dispute resolution for transnational
medical malprac-tice claims involving businesses and consumers.
International arbitration of medical malpractice disputes
wouldmore fairly and efficiently reallocate the legal risks borne
bypatients and foreign healthcare providers. To build a case for
sucha proposal, Part II will discuss the globalization and growth
of thehealth services trade and its unmet potential. Part III will
addressthe ways in which inefficiencies and inadequacies of current
litiga-tion systems contribute to a gap between the industry's
present per-formance and its potential. Part IV proposes the use of
arbitrationas a viable alternative dispute mechanism to national
courts thatmore effectively resolves the uncertainties associated
with legal lia-bility risks and remedies of traditional medical
malpractice litiga-tion. Part V will examine how the features and
processes ofarbitration may be best applied to medical malpractice
claims inthe context of a business-to-consumer dispute. In
particular, thissection will address public policy considerations,
potential alloca-tion of costs and liabilities of all parties
involved in the transaction,complementary dispute resolution
mechanisms, and alternativeforums and contract provisions. Finally,
Part VI will conclude withthe observation that the proposal of an
international arbitrationframework for cross-border health services
disputes representsmerely one of several feasible and potentially
successful paths topursue, including some that have yet to be
thought of. This Articleseeks to continue the dialogue
demonstrating the necessity to con-sider and act upon new
solutions.
Just as with the Industrial Revolution in the nineteenth
centuryand the Information Technology Revolution of the twentieth
cen-tury, we are now presented with another inevitable
transformationof the global economy through the cross-border
transfer of personsand technological advances for medical care.
And, just as interna-tional business and legal practices adjusted
to the two former
[Vol. 42
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2010] Healthcare Disputes Across National Boundariesglobal
revolutions, so too must we develop flexible frameworks
toaccommodate the ambiguous and ever-changing nature of thehealth
services industry.1
II. GLOBALIZATION OF HEALTH SERVICES
While cross-border exchange in health services is not a new
phe-nomenon, the industry's scope and geographic reach has
growntremendously in the past twenty years.2 Although there are
someexceptions, 3 a historical overview reveals that until recent
decades,health services were primarily local in nature, involving
local par-ties and resources in all stages of such transactions. 4
Several factorsaccounted for the industry's circumscribed
geographic scope,including limitations in medical knowledge,
technology, and trans-portation. 5 Only within the past few decades
have technologicaladvances catapulted trade in health services to
an internationallevel. 6 In 2001, the World Health Organization
(WHO) reportedhealth services as one of the fastest growing global
markets. 7 In2009, the healthcare industry ranked among the top
twenty fastestgrowing global industries.8
The nature and scope of international trade in health
servicesmay be best understood through the four modes of supply
adopted
1. See generally Amar Gupta, David A. Gantz, Devin Sreecharana
& Jeremy Kreyling,Evolving Relationship Between Law, Offshoring
of Professional Services, Intellectual Property, andInternational
Organizations, 21 INFO. RESOURCES MGMT. J. 103 (2008) (discussing
interna-tional frameworks for international property law).
2. Lior Herman, Assessing International Trade in Health Care
Services 4 (European Ctr.for Int'l Political Econ., Working Paper
No. 03, 2009), available at
http://www.ecipe.org/publications/ecipe-working-papers/assessing-internationa-tradein-heathcare-services/?searchterm=Lior%20Herman.
3. For example, in pre-historic times dating as far back as the
Bronze Age, peopletraveled to spas throughout Europe in the belief
that mineral water had curative powers.
JOHN C. PAIGE & LAURA SOULLItRE HARRISON, OUT OF THE VAPORS:
A SocIAL AND ARCHI-TEGTURAL HISTORY OF BATHHOUSE Row 1 (1986),
available at
http://www.nps.gov/history/history/onlinebooks/hosp/bathhouse-row.pdf.
4. Thomas R. McLean, The Global Market for Health Care:
Economics and Regulation, 26WIs. INT'L L.J. 591, 591 (2008). For an
in-depth analysis of the historical local nature ofhealth services,
see Amar Gupta & Deth Sao, The Constitutionality of Current
Legal Barriers toTelemedicine in the United States: Analysis and
Future Directions of its Relationship to National andInternational
Health Care Reform, 21 HEALTH MATRIX (forthcoming 2011) (manuscript
at27-30).
5. McLean, supra note 4, at 591.6. Herman, supra note 2, at 4.7.
Rupa Chanda, Trade in Health Services, 80 BULL. WORLD HEALTH ORG.,
158, 158
(2002), available at
http://www.scielosp.org/pdf/bwho/v8On2/al2v8On2.pdf.8. Global 500
2009: Top Performers - Fastest Growing Industries, CNNMONEY.COM,
http:/
/money.cnn.com/ magazines/fortune/global500/ 2009/ performers/
industries/fastgrow-ers/ (last visited May 3, 2011).
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The Geo. Wash. Int'l L. Rev.
by the General Agreement on Trade in Services (GATS) of theWorld
Trade Organization (WTO): (1) cross-border delivery,where both
supplier and consumer remain in different countries;(2) consumption
abroad, where a consumer travels to a supplier'scountry to consume
a service; (3) commercial presence, where aforeign supplier
establishes a commercial presence in a consumer'scountry; and (4)
presence of natural persons, where labor moves toa consumer's
country.9 In the context of international health ser-vices, mode
one encompasses a variety of services, ranging fromtelemedicine, to
remote education, to the purchase of health insur-ance. 10 Mode two
is broadly termed as medical tourism, where for-eign patients
travel abroad for specialized or more affordablemedical care
unavailable in their home countries.11 Mode threeprimarily
encompasses foreign-ownership of medical practice andhospital
activities in a patient's country.1 2 Mode four commonlyoccurs when
individual foreign healthcare providers move to a con-sumer's
country to offer their medical services. 13 This Article willfocus
on modes one and two of international health services, asthese
cross-border transactions are the most likely to involve thelegal
ambiguities and uncertainties that businesses and consumersface in
the event of a health services dispute.
Existing scholarship lacks comprehensive data on the extent
ofthe health services trade,1 4 but an overview of the services
trade inall sectors offers an instructive introduction to the
nature andtrends of this sub-sector. Contrary to public perception
that ser-vices outsourcing only flows one way-from industrialized
coun-tries to developing countries 15 -the following observations
revealthat trade in services is a two-way flow among many
participatingcountries. For instance, foreigners regularly have
sought healthcare in U.S. hospitals and facilities such as the Mayo
Clinic for
9. Herman, supra note 2, at 2-3.10. Id. at 4.11. DELOITTE CTR.
FOR HEALTH SOLUTIONS, MEDICAL TOURISM: CONSUMERS IN SEARCH
OF VALUE 6 fig. 5 (2008) [hereinafter DELOITrE], available at
http://www.deloitte.com/assets/Dcom-UnitedStates/Local%
20Assets/Documents/us-chsMedicalTourismStudy(3).pdf (identifying
the most popular locations for medical tourism in the world).
12. Herman, supra note 2, at 14. For example, a foreign
commercial presence wouldarise if an Arizona hospital established a
subsidiary in Mexico.
13. See id. at 18.14. Id. at 2.15. See Mark B. Burger, "The
Technology Dog Ate My Job": The DogEat-Dog World of Off-
shore Labor Outsourcing, 16 FLA. J. INT'L L. 807, 817-18 (2004)
(citing T.K. Bhaumik, Out-sourcing Outcry: West Should Compete, Not
Whine, ECON. TIMES (Feb. 17, 2004),
http://articles.economictimes.indiatimes.com/2004-02-17/news/27370823_1_outsourcing-outcry-global-isation-countries
(last visited May 13, 2011)).
[Vol. 42
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Healthcare Disputes Across National Boundaries
many decades. 16 Gary Hufbauer and Sherry Stephenson cite
stud-ies affirming the bilateral nature of trade in health
services. .17These studies also reveal that what one uses as the
basis for mea-surement determines a country's ranking with respect
to terms ofinsourcing and outsourcing activities.1 8
In a 2002 study that used the share of gross domestic
product(GDP) to measure the value of services being outsourced
abroad,developing countries ranked among the top outsourcers. 19 A
2004study using raw dollars ranked industrialized countries such as
theUnited States, United Kingdom, Germany, France, and the
Nether-lands among the top insourcers.20 In 2006, India had a
higher rateof insourced skilled work than call-center work,
underscoring thevariance in and two-way flow of the services
trade.21 Just as withservices trade in general, the sub-sector of
health services flowsback and forth at varying levels among its
country participants. 22The present information available and
offered below affirms thehealth services industry's emergence in
the international marketplace and its potential to be one of the
leading players in theglobal economy.
A. Cross-border Delivery of Health ServicesAs discussed above,
the cross-border delivery of health services
encompasses a wide range of activities.23 Telemedicine
constitutesthe bulk of these cross-border activities, 24 and is
itself a sub-cate-gory covering a plethora of services. Defined as
"the use of medicalinformation exchanged from one site to another
via electroniccommunications to improve patients' health
status,"25
telemedicine has the potential to perform essentially any
medical
16. Glenn Cohen, Protecting Patients with Passports: Medical
Tourism and the Patient-Protec-tive Argument, 95 IowA L. REv. 1467,
1471 (2010).
17. Gary Hufbauer & Sherry Stephenson, Services Trade: Past
Liberalization and FutureChallenges, 10J. INT'L ECON. L. 605,
624-25 (2007).
18. See id.19. Id. Hufbauer & Stephenson cite examples such
as Angola, the Democratic Repub-
lic of Congo, and Mozambique. Id. at 25. Significantly, the
United States ranked 117thamong the countries examined in this
study. Id.
20. Id.21. Id.22. Herman, supra note 2, at 5-7.23. Id. at 4.24.
McLean, supra note 4, at 593 ("The global market for health care
services is com-
posed of medical tourism and telemedicine.").25. About
Telemedicine, AMERICAN TELEMEDICINE Ass'N,
http://www.americantelemed.
org/i4a/pages/index.cfm?pageD=3331 (last visited May 3,
2011).
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The Geo. Wash. Int'l L. Rev.
service across distances. 26 Presently, trade in telemedicine
includesa wide range of applications, including but not limited to:
two-wayvideo conferencing; 27 electronic communications of
diagnoses, sec-ond opinions, and consultations; and telehealth
services such astelepathology, teleradiology, and telepsychiatry.
28
Several reasons account for the emergence and proliferation
ofcross-border delivery of health services. The lack of access
tohealthcare facilities that many patients face in different parts
of theworld is a significant factor. 29 In both developing and
industrial-ized countries, hospitals and health care providers are
oftenlocated in urban areas, depriving patients in rural areas of
medicalcare.30 Additionally, cross-border delivery of health
services helpsto alleviate the stresses and shortages of medical
professionals asso-ciated with providing round-the-clock medical
care. 31
Spurred by these societal concerns and the economic benefitsfrom
expansion into new markets, many countries are participantsin
cross-border delivery of health services. 32 These countries are
atvarying levels of economic development and experience
differentdegrees of involvement as importers and/or exporters.33
Lior Her-man, an expert in international trade, has conducted trade
patternstudies of several Organization for Economic Cooperation
andDevelopment (OECD) countries that indicate no clear
categoriza-tion of export or import countries, with few exceptions;
instead,
26. McLean, supra note 4, at 605.27. What is Telemedicine &
Telehealth, AMERICAN TELEMEDICINE ASS'N, http://www.
americantelemed.org/files/public/abouttelemedicine/What-Is
Telemedicine.pdf (lastvisited May 3, 2011).
28. Chanda, supra note 7, at 158. For an in-depth analysis of
telemedicine and itsbenefits, see John D. Blum, The Role of Law in
Global E-Health: A Tool for Development andEquity in a Digitally
Divided World, 46 ST. Louis U. L.J. 85, 85, 109 (2002); P. Greg
Gulick, E-Health and the Future of Medicine: The Economic, Legal,
Regulatory, Cultural, and OrganizationalObstacles Facing
Telemedicine and Cybermedicine Programs, 12 ALB. L.J. Sci. &
TECH. 351,352-53, 357-58 (2002); Thomas R. McLean, The Future of
Telemedicine & Its Faustian Reli-ance on Regulatory Trade
Barriers for Protection, 16 HEALTH MATRIX 443, 452 (2006); Susan
E.Volkert, Telemedicine: RXfor the Future of Health Care, 6 MICH.
TELECOMM. & TECH. L. RaV.147, 149 (2000).
29. Herman, supra note 2, at 4.30. Id.31. Id. The World Health
Organization and the American Cancer Society have linked
health hazards to the graveyard shift. Amar Gupta, The 24-Hour
Knowledge Factory: Can itReplace the Graveyard Shift?, COMPUTER,
Jan. 2009, at 66, 66, available at
http://web.mit.edu/lmp/news/Gupta.pdf. This also impacts medical
professionals who must work as a conse-quence of such
circumstances.
32. See Herman, supra note 2, at 5-8.33. See id.
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Healthcare Disputes Across National Boundaries
most countries alternate between trade surpluses and deficits.
34
For instance, the United States engages in both offshoring
andinsourcing activities. In 2004, the nation's telemedicine
markethad an estimated worth of $380 million and grew at more
than15% annual rate.35 Due to the domestic shortage of several
physi-cian specialties, offshoring is a necessary practice.3 , For
example,approximately three hundred U.S. hospitals offshore
outsourceimaging services to cover for the shortage in radiologists
37 and onehundred U.S. hospitals use foreign healthcare providers
forremote monitoring of Intensive Care Units (ICUs) to cover for
theshortage in intensivists. 38 Additionally, U.S. hospitals
provide med-ical services to countries in Central America and the
Eastern Medi-terranean, including telediagnoses, surveillance,
andconsultations. 39
Elsewhere, suppliers employ physicians in India at costs
belowforeign physicians' wages. 40 Researchers estimate that India
cur-rently serves 2% of the U.S. healthcare market.41 Further,
health-care institutions in Bangladesh and Nepal outsource
telepathologyservices to India.42 Similar to India's relationship
with its neigh-bors, China-based health providers offer
telediagnoses to patientsin Macao and several southeast Asian
countries.
43
B. Consumption of Health Services AbroadAs discussed above, the
consumption of health services in for-
eign countries is broadly termed as medical tourism, which
involves"the act of traveling to another country to seek
specialized or eco-nomical medical care, well being and
recuperation of acceptable
34. Id. at 5. Most of these countries have high-income
economies. See Members andPartners, ORG. FOR ECON. CO-OPERATION AND
DEV., http://www.oecd.org/pages/0,341
7,en_
36734052_36761800 11111,00.html (last visited May 15, 2011);
Herman, supra note 2,at 2.
35. Herman, supra note 2, at 4. This is likely a conservative
estimate, as a 2006 federalreport observed that many U.S. health
institutions underreport their offshoring activities.Sanjiv N.
Singh & Robert M. Wachter, Perspectives on Medical Outsourcing
and Telemedicine -Rough Edges in a Flat World?, 358 NEw ENG. J.
MED. 1622, 1623 (2008), available at
http://www.nejm.org/doi/pdf/10.1056/NEJMhle0707298.
36. Nicolas P. Terry, Under-Regulated Health Care Phenomena in a
Flat World: MedicalTourism and Outsourcing, 29 W. NEw ENG. L. REV.
421, 444 (2007).
37. Id. at 445.38. Id. at 444-45.39. Chanda, supra note 7, at
158.40. McLean, supra note 4, at 606.41. Singh & Wachter, supra
note 35, at 1623.42. Chanda, supra note 7, at 158.43. Id.
2010]
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The Geo. Wash. Int'l L. Rev.
quality with the help of a support system." 4 4 Operating as
anunregulated industry,45 the global medical tourism market
reachedapproximately $60 billion in 2008, and was expected to grow
to$100 billion by 2010.46 Over thirty-five countries serve more
thanone million medical tourists annually. 47
Patients seek medical care abroad because of a lack of
domesticaccess to a particular treatment or because a treatment is
lessexpensive abroad than in their own countries. 48 These patients
fallwithin three categories: (1) patients in developing countries
seek-ing specialized or high-quality care in developing or
industrializedcountries; (2) patients from industrialized countries
seekingaffordable or alternative care in developing countries;49
(3)patients seeking medical services not offered in their home
coun-tries due to moral or ideological reasons including abortion,
fertil-ity treatments, and euthanasia. 50 Many destination
hospitalsprovide greater incentives for foreign patients by
obtaining accred-itation of quality care from the U.S.-based Joint
Commission onAccreditation of Healthcare Organizations' (JCAHO)
internationalarm, the Joint Commission International (JCI).51 Such
accredita-tion signifies that a hospital meets uniform requirements
estab-lished by international healthcare experts. 52 Additionally,
manyforeign hospitals advertise that their physicians are U.S.
board cer-tified or are trained at highly regarded U.S. medical
schools.5 3
Just as with cross-border delivery of health services, many
coun-tries engage at varying levels of offshoring and insourcing
activities
44. DELOIrrE, supra note 11, at 6 fig. 5.45. Dana A. Forgione
& Pamela C. Smith, Medical Tourism and Its Impact on the
U.S.
Health Care System, 34 J. HEALTH CARE FIN. 27, 32 (2007).46.
DELOTTE, supra note 11, at 6 fig. 5.47. Id.48. Nathan Cortez,
Patients Without Borders: The Emerging Global Market for Patients
and
the Evolution of Modern Health Care, 83 IND. L.J. 71, 77
(2008).49. Chanda, supra note 7, at 158.50. Puteri Nemie J. Kassim,
Medicine Beyond Borders: The Legal and Ethical Challenges, 28
MED. & L. 439, 443 (2009); Levi Burkett, Comment, Medical
Tourism: Concerns, Benefits, andthe American Legal Perspective, 28
J. LEGAL MED. 223, 229 (2007).
51. See The Joint Commission History, THE JOINT COMMISSION,
10-14,
http://www.jointcommission.org/assets/I/18/JointCommissionHistory.pdf
(last visited May 3, 2011)(explaining that JCAHO implements strict
accreditation standards for all aspects of thehealthcare system,
helping to create globally developed international standards for
health-care, and details accredited hospitals against standardized
national performancestandards).
52. See generally id. (detailing the various aspects of the
development of the accredita-tion standards).
53. Burkett, supra note 50, at 230.
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Healthcare Disputes Across National Boundaries
related to medical tourism. 54 With respect to the United
States,foreign patients are drawn to the high-quality and
specializedapproach of its healthcare system, while domestic
patients aredriven away because of the system's high-costs relative
to othercountries. 55 A 2008 Deloitte study estimated that by the
end of2017, the United States will have treated approximately
561,000foreign patients. 56 In comparison, approximately 15.75
millionU.S. patients will have traveled abroad for treatment during
thatsame time period.5 7 These cost-conscious consumers are drawn
tocountries such as India, Thailand, and Singapore, which offer
com-parable care for much lower prices-even as low as one-fifth
ofU.S. prices. 58
Similar to the United States, other countries capitalize on
theirmedical areas of specialty and market their services to
attract for-eign patients; Latin American countries such as Brazil,
Cuba, andMexico provide instructive examples. Brazil offers medical
proce-dures, including cosmetic surgeries, at 40-50% of U.S.
prices.5 9Cuba focuses on specialized hospitals offering
high-quality care atcompetitive prices to target markets such as
Latin America, theCaribbean, Europe, and Russia. 60 Mexico provides
mainly dentaland cosmetic surgery at 25-35% of U.S. prices, and
otherwise drawsU.S. patients due to its proximity. 61
In addition to Latin American countries, several Asian
countrieshave emerged as pioneers in medical tourism. 62 Thailand
is cur-rently regarded as the industry leader, successfully
marketing its
54. See Herman, supra note 2, at 5-6, 9.55. See DELOITrE, supra
note 11, at 5, 20.56. Id. at 21 fig. 19.57. Id. at 5 fig. 3. It is
important to note that the Deloitte study does not indicate a
distinction between patients that obtain treatment only once or
multiple times. Addition-ally, research on U.S. patient travel
abroad has unearthed wide variations in estimates. SeeAMA COUNCIL
OF MEDICAL SERVICES, MEDICAL TRAVEL OUTSIDE THE U.S. (2007),
http://www.medretreat.com/templates/UserFiles/Documents/AMA%20Report%
2 0June% 2 02007.pdf. (estimating that 1.5 Million U.S. patients
will have traveled abroad for medicalcare by 2020); How MANY
AMERICAN MEDICAL TOURISTS ARE THERE?, INTERNATIONAL MEDI-CAL TRAVEL
JOURNAL,
http://www.imtjonline.com/articles/2009/how-many-americans-go-abroad-for-treatment-30016/
(last visited May 27, 2011) (noting extreme variations in
esti-mates for U.S. patients traveling overseas by different
institutions and studies).
58. See id. at 6 fig. 5.59. See id. at 6 fig. 5. As the U.S.
dollar has traditionally been the default global cur-
rency, see Edieth Y. Wu, Recent Developments in the Currency
War: The Euro, the Dollar, the Yen,and the Bemu, 15 CONN.J. INT'L
L. 1, 12 (2000), the U.S. dollar will be used as a basis for
thefollowing price comparisons and throughout this Article.
60. Chanda, supra note 7, at 158.61. DELOITrE, supra note 11, at
6 fig. 5.62. Burkett, supra note 50, at 226-28.
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hospitals to expatriates and foreign patients abroad.63 In
2006,Thailand treated 1.2 million foreign patients at an average of
30%of U.S. prices. 64 India is close on Thailand's heels and is the
fastestgrowing medical tourist destination. 65 Patients from
developedand developing countries are attracted to India for
several reasons:specialty areas including neurology, cardiology,
endocrinology,nephrology, and urology; surgical expertise; highly
qualified medi-cal professionals; 66 and affordable treatment
averaging at about20% of U.S. prices. 67 In Malaysia, foreign
patients primarily visitfor cosmetic surgery and alternative
medical care with treatmentaveraging at 25% of U.S. prices. 68
Recognizing the potential and profitability of medical
tourism,several Asian governments have implemented new
policiesdesigned to promote growth in this industry. In Korea, the
govern-ment is involved in the planning stages of new medical
facilitieswith international patients in mind.69 In Taiwan, the
governmentpledged $318 million towards the development of medical
ser-vices. 70 European countries also target their medical services
topatients in neighboring and distant countries. Hungary
attractsEuropean patients by offering dental and cosmetic surgery
at 40-50% of U.S. prices.71 Several nations are attractive
destinationsbecause they offer certain procedures unavailable in
several sur-rounding European countries for moral reasons. 72 For
instance,Norway permits euthanasia 73 and Slovenia performs
fertilitytreatments.74
III. THE LEGITIMACY OF LITIGATION IN RESOLVING
CROSS-BORDERMALPRACTICE CLAIMS ON A GLOBAL LEVEL
Notwithstanding the global reach of health services and
theindustry's accompanying social and economic benefits, the
indus-
63. Id. at 227.64. DELOrrTE, supra note 11, at 6 fig. 5.65.
Cortez, supra note 48, at 90.66. Chanda, supra note 7, at 159.67.
DELOIrrE, supra note 11, at 6 fig. 5.68. Id.69. Id. at 6.70. Id.71.
Id.72. Kassim, supra note 50, at 443; Burkett, supra note 50, at
230.73. Kassim, supra note 50, at 444.74. Burkett, supra note 50,
at 230.
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Healthcare Disputes Across National Boundaries
try is far from reaching its full potential. 75 Herman's study
ofOECD countries' trade in health services noted the
discrepancybetween national and private healthcare expenditures and
the rela-tively low trade in health services in relation to GDP.76
While theaverage ratio of total healthcare trade to GDP is 0.01% of
totalGDP, the average ratio of national and private health
expendituresto GDP rises well above 20%. 7 7 Furthermore, Herman
notes thatwhile 80% of European-based health providers utilize
advanced e-health infrastructures to store patients' data, only
0.7% of suchdata is transferred across national borders. 78 Thus,
the lack of cor-respondence between these figures and the
underutilization of e-health infrastructures point to the unmet
capacity for internationaltrade in health services. 79
To account for such shortfalls, earlier scholarship in this
areahas identified several trade barriers in the health services
industry.These works note that the chief challenges for
cross-border deliv-ery of health services include dissimilar
licensing requirements formedical professionals and differing
national and sub-national legalliability and regulatory regimes.8 0
Similar to the problems encoun-tered with cross-border delivery of
goods and other types of ser-vices, the legal uncertainties of
malpractice liability presents one ofthe major obstacles to medical
tourism.s 1 Such legal limbo meritscloser examination, as health
providers and consumers are hardpressed to find legal recourse
resulting from differences in legaland regulatory regimes, and
diverse cultural expectations.
8 2
Because the nationalities of the parties and the place of
contractbreach or injury necessarily share no common situs,
ambiguitiesabound surrounding appropriate jurisdiction, choice of
law, and
75. See Thomas R. McLean, Telemedicine and the Commoditization
of Medical Services, 10DEPAULJ. HEALTH CARE L. 131, 164 (2007).
76. Herman, supra note 2, at 6.77. Id. at 6-7.78. Id. at 7-8.79.
Id.80. Kassim, supra note 50, at 448. It should be noted that in
addition to trade barri-
ers, resistance to the globalization of health services may
result from public policy consider-ations. Such a discussion is
beyond the scope of this paper, but arguments againstglobalization
include ethical considerations surrounding seeking treatment abroad
forprocedures deemed illegal in one's home country, and unequal
access to health care indeveloping countries as a result of a
preference for foreign patients because of their abilityto pay more
for services. Id. at 442-43.
81. Id. at 441, 445; McLean, supra note 75, at 164.82. Nathan
Cortez, Recalibrating the Legal Risks of Cross-Border Health Care,
10 YALE J.
HEALTH POLY L. & ETHICS 1, 3-4 (2010).
2010]
-
The Geo. Wash. Int'l L. Rev.
enforceability of foreign awards.8 3 In order to understand
thenature and scope of these legal barriers, this section will
separatelyexamine the challenges for dispute resolution in (1)
cross-borderdelivery of health services and (2) consumption of
health servicesabroad.
A. Legal Barriers to Cross-Border Delivery of Health ServicesThe
use of telemedicine across different national legal and regu-
latory regimes raises a variety of legal dilemmas. Two
scenariosdemonstrate the difficulty in deciding which party should
be heldliable, which judicial system has jurisdiction over the
claim, whichlaws or regulations apply, and whether the selected
laws or regula-tions adequately define the telemedicine transaction
in question asmedical malpractice:8 4 (a) misdiagnosis or other
injury by a health-care provider performing the telemedical service
in a differentjurisdiction than where the patient is located; and
(b) misdiagnosisor other injury resulting from technological error
by telemedicaldevice, and not by human error.8 5 These matters are
further com-plicated when including sub-national legal and
regulatory regimesas part of the analysis. For example, many of the
same issues arisewhen health services are delivered across state
lines in the UnitedStates, as each state has the authority to
regulate health profession-als who practice in their territories
and differing procedural andsubstantive laws govern healthcare
disputes in different states.8 6
Because no international agreements or protocols
concerningtelemedicine exist there are no answers to the issues
discussedabove. 7 The uncertainty exists because telemedicine is
still toosmall and too new of an industry to attract international
attentionand action.88 Irrespective of the reasons behind such
neglect, busi-nesses and consumers suffer from higher transaction
costs or forgoparticipation in cross-border trade of health
services due to thelack of reliable legal remedies and protection.8
9
83. See id. at 4-7; Kassim, supra note 50, at 446-47.84. Singh
& Wachter, supra note 35, at 1624.85. Kassim, supra note 50, at
447.86. See Gupta & Sao, supra note 4, at 113-16.87. Leah B.
Mendelsohn, Comment, A Piece of the Puzzle: Telemedicine as an
Instrument to
Facilitate the Improvement of Healthcare in Developing
Countries?, 18 EMORY INT'L L. REv. 151,153 (2004).
88. Thomas R. McLean, The Offshoring of American Medicine:
Scope, Economic Issues andLegal Liabilities, 14 ANNALS HEALTH L.
205, 248 (2005).
89. Kassim, supra note 50, at 441 (noting that "countries, like
the United States, havenot been able to benefit as greatly from
medical tourism because of increased legal liabilityand
policy").
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1. Potentially Liable Parties
In either of the liability scenarios described above,
potentiallyliable parties may include a remote healthcare provider,
any affili-ated local healthcare provider working in consultation
or con-tracting with that remote healthcare provider,90 and the
supplier ofthe telemedical device. 91 The ability of telemedicine
to involve sev-eral parties in different locations and at varying
capacities in thecourse of medical treatment complicates the nature
and scope of adefendant's liability in malpractice claims.92 For
instance, a plain-tiff pursuing a malpractice claim in the United
States must prove,among other elements, that the defendant had a
duty to thepatient arising out of a physician-patient relationship.
93 The depar-ture from the traditional face-to-face
physician-patient relationshipin telemedical care makes it
difficult to determine when such dutyarises and whether the
standard of care is violated. 94
State case law from the United States has established that a
physi-cian-patient relationship begins "[w] hen the professional
servicesof a physician are accepted by another person for the
purposes ofmedical or surgical treatment."95 In general, state
courts interpretthis standard to mean that such a relationship is
based primarily onimplied or express contract.96 If a patient goes
to a local hospitalfor treatment, and that hospital outsources
pathology services to anoffshore healthcare provider, it is unclear
which parties haveformed a physician-patient relationship. 97
Another similardilemma may occur where a local hospital utilizes a
telemedicaldevice that may be supplied by an offshore entity that
treats apatient without the aid of any human assistance. While in
theUnited States the "ostensible agency" doctrine may
apply-makingthe hospital liable for acts of offshore healthcare
providers-thelack of well-established case law leaves this question
unanswered. 98
90. Heather L. Daly, Telemedicine: The Invisible Legal Barriers
to the Health Care of theFuture, 9 ANNALS HEALTH L. 73, 99-101
(2000).
91. Id. at 100.92. Id.93. Id.94. Id.95. 1 STEVEN E. PEGALIS
& HARVEY F. WACHSMAN, AMERICAN LAW OF MEDICAL MALPRAC-
TICE 24 (2d ed. 1992).96. Id. at 25.97. Singh & Wachter,
supra note 35, at 1624.98. Id. The above considerations in
determining an appropriate liable party similarly
apply to health care providers seeking to minimize their
liability while engaging in cross-border telemedicine. In addition
to facing such legal uncertainties, these health care prov-iders
have the additional burden of finding malpractice insurers willing
to cover such activ-
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2. Determining Appropriate Jurisdiction to Litigate and Enforcea
Claim
In addition to determining which parties are liable, the
injuredparty has the challenge of selecting the appropriate forum
that willlitigate and enforce the claim. The selected court must
have juris-diction over the claim, as jurisdiction grants the court
authority toprescribe, adjudicate, and enforce judgments against
persons andproperty.99 Presently, the available options in
countries such as theUnited States are legal proceedings in (1)
plaintiff's domicile stateor (2) defendant's domicile state. A
party's domicile is "the statewhere an individual habitually
resides, or the state where a com-pany or legal person has its
'seat' or center of management."' 100 Asthe analysis below
demonstrates, each option presents its own set ofdifficulties and
uncertainties.
a. Establishing Jurisdiction in Plaintiffs Domicile StateShould
the plaintiff decide to sue in his own domicile state, he
must be able to assert personal jurisdiction over the defendant
andensure that any favorable judgment rendered will be enforced.'
01This requirement presents several difficulties for plaintiffs.
Notonly do common and civil law countries have different
approachesto asserting personal jurisdiction, but countries from
either legalsystem also may make different determinations because
of theirinterpretation of the laws in question.1 02 In civil law
countries, adefendant may be sued in his domicile and in any
jurisdictionwhere he commits a tort. 03 This guiding principle
elicits a varietyof interpretations, with some national laws
broadening its meaningto include an injury sustained by a plaintiff
within a jurisdictionwhile others restrict its application to the
act of committing atort.10 4 This distinction is crucial in
telemedicine disputes where aforeign healthcare provider renders a
telemedical service in a dif-ferent location than where the
plaintiff suffers an injury resultingfrom that service.
Additionally, some civil law countries have
ities with unknown risks. See Daly, supra note 90, at 99-100;
Singh & Wachter, supra note35, at 1624.
99. RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED
STATES 401(1987).
100. Gary B. Born, Reflections on Judicial Jurisdiction in
International Cases, 17 GA. J. INT'L& COmP. L. 1, 13
(1987).
101. Singh & Wachter, supra note 35, at 1624.102. See, e.g.,
Born, supra note 100, at 14.103. Id. at 13.104. Id. at 13-14.
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Healthcare Disputes Across National Boundaries
enacted legislation broadening their reach of personal
jurisdic-tion.' 05 In France, the French Civil Code grants its
courts thepower to hear any case involving a French citizen. 10 6
Similarly,Luxembourg and the Netherlands grant their courts
jurisdictionover almost all cases where parties are nationals or
residents.
10 7
In comparison to civil law countries, their common law
counter-parts adopt a flexible multi-factor approach to establish
personaljurisdiction.108 Unlike the civil law reliance on
territoriality, thecommon law system considers the principles of
fairness and reason-ableness by examining the quantity and quality
of contacts betweenthe defendant and forum state.109 The test
utilized by U.S. courtsis a representative example, as it requires
a finding of the followingthree elements: (1) the plaintiffs state
has a long-arm statuteallowing for personal jurisdiction; (2) the
defendant has minimumcontacts with the plaintiffs state, as
evidenced by foreseeability ofliability and "purposeful availment"
of the privileges and protec-tions of the laws of that state; and
(3) the exercise of personal juris-diction is reasonable and does
not violate "traditional notions offair play and substantial
justice" guaranteed under the Due ProcessClause of the Fourteenth
Amendment of the U.S. Constitution.
110
This test, like the civil law approach, is open to different
interpreta-tions and offers no reliable outcome to either party in
atelemedicine claim.11'
Even if a plaintiff succeeds in asserting the claim in his
domicilestate, the defendant may utilize the common law doctrine of
forumnon conveniens to dismiss the claim.11 2 Forum non
conveniensempowers courts to dismiss cases under particular
circumstances,and common law countries apply the doctrine
differently from one
105. Id. at 14.106. Id.107. Id.108. Paul R. Dubinsky, Human
Rights Law Meets Private Law Harmonization: The Coming
Conflict, 30 YALEJ. INT'L L. 211, 259-60 (2005).109. Id. at
260.110. See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462,
471-79 (1985); Hanson v.
Denckla, 357 U.S. 235, 251-53 (1958); World-Wide Volkswagen
Corp. v. Woodson, 444U.S. 286, 291-98 (1980); Asahi Metal Indus.
Co. v. Superior Court, 480 U.S. 102, 108-13(1987).
111. Several other common law countries have statutes governing
transnational tortclaims. For instance, Great Britain asserts
personal jurisdiction on a foreign defendant ifthe tort is
committed within its territory. Born, supra note 100, at 12. As
discussed above,the nature of several telemedical services in which
several parties are involved in differentcapacities and locations
makes it difficult to determine where the tort was committed.
112. See generally Martine Stfickelberg, Lis Pendens and Forum
Non Conveniens at the HagueConference, 26 BROOK. J. INT'L L. 949,
954-95 (2001).
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The Geo. Wash. Int'l L. Rev.
another.1 13 For example, Great Britain employs a two-step
analysisthat first requires the defendant to prove that another
appropriateforum is available and second that under the
circumstances justicedemands jurisdiction of a British court. 114
In the United States,courts afford plaintiff domicilairies the
presumption of conve-nience,115 but employ the doctrine after a
finding that the defen-dant will experience an undue burden and an
alternative, moreappropriate forum exists. 1 6 Thus, the existence
and application ofsuch a doctrine present another barrier to the
adjudication of theclaim in a plaintiff's domicile.
Furthermore, it is important to consider the existence of
anycommercial or civil agreements that a country is a party to, as
suchmembership may impact its rules regarding jurisdiction in
relationto fellow member states. The Brussels Convention on the
Jurisdic-tion of Courts and the Recognition and Enforcement
ofJudgmentsin Civil and Commercial Matters (Brussels Convention),
whichonly permits E.U. countries as members, is an instructive
exam-ple. 117 The Brussels Convention prohibits a member state
fromemploying "'exorbitant' jurisdictional devices" against
defendantsdomiciled in fellow member states 1 8 and mandates
enforcementof judgments rendered by fellow member state courts.' 19
Theserestrictions compelled common law member states such asEngland
and Ireland to abandon their exercise of jurisdictionbased on
serving process to a defendant member-domiciliary whilehe was
physical present in their territories. 120
Consideration of agreements such as the Brussels Convention
isalso important for enforcement of awards against a foreign
defen-dant. Absent such regional agreements, no general
consensusexists among countries to enforce each other's
court-issueddecrees.' 21 The first international agreement on
enforcement offoreign judgments, adopted by the 1971 Hague
Conference, failed
113. Id. at 955.114. Id. at 955-56.115. Id. at 956.116. Cortez,
supra note 82, at 11.117. Born, supra note 100, at 15.118. Id.119.
Id. at 16.120. Dubinsky, supra note 108, at 258-59.121.
StTackelberg, supra note 112, at 952. In addition to the Brussels
Convention, other
regional agreements such as the Lugano Convention and the
Inter-American Conventionon the Extraterritorial Validity of
Foreign Judgments and Arbitral Awards commit memberstates to
automatic enforcement of commercial and civil judgments. Id.
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Healthcare Disputes Across National Boundaries
as it was ratified by only three countries. 122 Such
overwhelmingrecalcitrance is owed to wariness by most countries in
automaticallyenforcing a foreign decree without domestic judicial
review. 123 Inthis respect, membership in regional agreements
offers the advan-tage of enforcement of judgments against both
member-domicil-iaries and non-member domiciliaries, in the event a
member statecourt rendered the judgment.124
b. Establishing Jurisdiction in Defendant's Domicile State
In contrast with the effort to sue a defendant in a plaintiff's
dom-icile state, no jurisdictional issues bar adjudication of a
claim in adefendant's domicile state. Civil law countries consider
a defen-dant's domicile to be a basis for jurisdiction for disputes
involvingdomestic and international parties. 125 Similarly, in
common lawcountries, the physical presence of the defendant or the
defen-dant's property within its territories is sufficient to
exercise jurisdic-tion. 126 A defendant domiciliary's use of forum
non conveniensfor dismissal may, however, curtail the relative ease
in bringingforth a claim in this forum.' 27
In the United States, defendant domiciliaries routinely and
suc-cessfully employ this doctrine to dismiss tort claims by
foreignplaintiffs. 128 Unlike a U.S. plaintiff domiciliary, a
foreign plaintiffsforum selection is not given the presumption of
convenience but isviewed as a strategic choice of law preference.
129 As a result, anoverwhelming number of forum non conveniens
motions aregranted in situations where the alleged injury occurred
in anothercountry. 1 0 This widespread practice provides a warning
for pro-spective plaintiffs seeking to sue healthcare providers
domiciled incommon law countries, particularly the United
States.
13'
122. Id.123. Id.124. Born, supra note 100, at 16.125.
Developments in the Law: State-Court Jurisdiction, 73 HARV. L. REV.
911, 913 (1960).126. Id. at 915.127. See generally Walter W.
Heiser, Forum Non Conveniens and Retaliatory Legislation: The
Impact on the Available Alternative Forum Inquiry and on the
Desirability of Forum Non Conveniensas a Defense Tactic, 56 KAN. L.
REV. 609 (2008) (discussing how U.S. defendants are usingthe
doctrine of forum non conveniens to dismiss lawsuits filed against
them in the UnitedStates and how foreign countries are enacting
retaliatory legislation to this U.S. practice).
128. Id. at 609.129. Id. at 613.130. Id. at 609.131. Plaintiffs
must consider that medical malpractice claims are a subset of tort
law
and the nature of telemedical services makes the location of
injury a subject of dispute.The potential impact of a defendant
domiciliary's use of forum non conveniens in other
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The Geo. Wash. Int'l L. Rev.
In the event that a foreign plaintiff successfully brings suit
in adefendant's domicile court, the plaintiff may face additional
chal-lenges. Foreign patients will not only have to navigate an
unfamil-iar legal system, but also adjust their cultural
expectations to theforum state's remedies and procedures. 32 In
particular, thosepatients hailing from industrialized countries are
likely subject tomore onerous burdens of proof and relatively
inadequate legalprotection afforded by developing countries.' 33 As
a consequence,such challenges and shortcomings make litigation an
undesirablesolution for many consumers.
3. Choice of Law and Adequacy of Existing Laws
In addition to identifying the appropriate liable parties and
juris-diction, telemedicine disputes are complicated by choice of
lawconsiderations and determinations of whether the selected law
inquestion adequately resolves the legal issues raised
bytelemedicine. There is no uniform approach to choice of
lawdeterminations, as courts follow the particular rules adopted
bytheir jurisdictions.13 For instance, Great Britain applies the
lex locidelicti rule-the law of the place of injury governs the
dispute-specifically applying the rule to personal injury and
deathclaims. 135 In contrast, a minority of states in the United
States fol-low the lex loci delicti rule, but the majority has
adopted the "mostsignificant relationship" rule for tort claims,
requiring a court tochoose whichever law has the "most significant
relationship to theoccurrence and parties."'1 6 Factors include:
place of injury; placeof conduct causing injury; parties'
domiciles, residence, national-ity, place of incorporation, and
place of business; and place whererelationship between the parties
is centered.13 7 The ambiguitiessurrounding how telemedicine fits
within the practice of medicine
countries is plausible, particularly because of the actions of
several countries in response toU.S. forum non conveniens
dismissals. See id. at 610. For instance, several countries
haveenacted legislation barring their courts from hearing any
action from domiciliary partiespreviously dismissed on forum non
conveniens grounds by another country. Id.
132. Cortez, supra note 82, at 5.133. Cortez, supra note 48, at
106.134. See William Tetley, New Development in Private
International Law: Tolofson v. Jensen
and Gagnon v. Lucas, 44 AM.J. CoMP. L. 647, 659-65 (1996)
(comparing tort choice of lawrules in Canada to choice of law
determinations in the United Kingdom, the United States,Australia,
France, Switzerland, the European Union, Louisiana, and
Quebec).
135. Id. at 659.136. Id. at 661-62.137. Id. at 662.
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Healthcare Disputes Across National Boundaries
and the occurrence of injury allow for open-ended and
contradic-tory interpretations of the outcomes of these tests.
As alluded to earlier, only a handful of legal regimes
haveaddressed telemedicine licensure and governance. 138 While
morethan half of U.S. states have addressed telemedicine licensing,
139the international community is woefully behind-Malaysia is
theonly country with a comprehensive telemedicine regime. 140
Malay-sia's Telemedicine Act of 1997 (Telemedicine Act)
providesdetailed guidelines for telemedicine licensure and informed
con-sent. 41 However, with the exception of informed consent
require-ments, these laws fail to address the legal liability
considerationsdiscussed above. 142 Furthermore, because no
Malaysian courtshave decided any medical malpractice cases
involvingtelemedicine, there are no interpretations or applications
of theintent and parameters of the Telemedicine Act. 143
Such gaps and inconsistencies in telemedicine regulation at
sub-national, national, and international levels complicate a
court'sapplication of the facts of telemedicine cases to
traditional mal-practice frameworks. As discussed above, 144 it is
unclear whether aphysician-patient relationship arises from
performance of atelemedical service. 145 Another area of legal
ambiguity lies in theappropriate standard of care, as it is unclear
whether technologicalinnovations and practices associated with
telemedical servicesshould change such a standard or if courts
should create a newstandard. 46 In the United States, the standard
of care for onlinetreatment by physicians in a medical malpractice
case is still unde-fined by many states. 147 Other issues include
whether the duty of
138. See supra Part III.A.1.139. See Telemedicine Licensing
Provisions by State, AM. C. OF RADIOLOGY, http://www.acr.
org/SecondaryMainMenuCategories/GR_-
Econ/FeaturedCategories/state/state
issues/TelemedicineLicensingProvisionsbyStateDoc8.aspx (last
visited May 11, 2011).
140. Hsing-Hao WNu, Evolving Medical Service in the Information
Age: A Legal Analysis ofApplying Telemedicine Programs in Taiwan,
27 MED. & L. 775, 784 (2008) (noting that Malay-sia's
telemedicine law "specifically addresses legal issues concerning
telemedicine, such aslicensure, informed consent and telemedicine,
standard development").
141. See id.; Kassim, supra note 50, at 447 n.32.142. See
Kassim, supra note 50, at 447.143. Id.144. See supra Part
III.A.1.145. See Kassim, supra note 50, at 447.146. Id.147. Some
states follow the FSMB's view that online treatment warrants the
same stan-
dard of care as in-person treatment, and that sole use of an
online questionnaire is unac-ceptable. See FED'N OF STATE MED. BDS.
OF THE U.S., MODEL GUIDELINES FOR THEAPPROPRIATE USE OF THE
INTERNET IN MEDICAL PRACTICE (2002), available at
http://www.fsmb.org/pdf/2002-grpol-use-of-internet.pdf.
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confidentiality and informed consent extends to
telemedicalservices. 148
B. Legal Barriers to Consumption of Health Services AbroadMany
of the legal barriers surrounding telemedical service
claims also impede successful adjudication of and recovery
frommedical tourism malpractice claims. Just as with
cross-borderteleiedicine service claims, no international regime
exists for legalremedies resulting from unsatisfactory cross-border
medicalcare. 149 The analysis below highlights the challenges that
partiesconfront.
1. Potentially Liable Parties
There are several potential liable parties in a medical
tourismclaim: foreign healthcare providers, 150 intermediaries,
employers,and insurers. 15 1 Just as with cross-border telemedicine
claims, how-ever, a plaintiff must overcome personal jurisdiction
and forumnon conveniens challenges, which are discussed more fully
belowwithin the context of medical tourism.
While procedural legal barriers impede pursuit of a
foreignhealthcare provider defendant, the difficulty of finding and
prov-ing theories of liability impede pursuit of the remaining
potentialdefendants. 15 2 In the United States, intermediaries that
serve asfacilitators for overseas care, employers, and insurers may
be liablefor corporate negligence or failure to obtain informed
consent.'53
For both of these claims, the difficulties in obtaining evidence
in aforeign country and differences in regulatory and
credentialingstandards between parties' countries make proving such
claims adaunting enterprise. 54 In Great Britain, case law
establishes nonon-delegable duty to patients, leaving no theory of
liability inclaims against this insurer. 155 As a result, injured
British patientsmust seek legal recourse against the place of
treatment. 15 6
148. Kassim, supra note 50, at 447; see Singh & Wachter,
supra note 35, at 1624.149. Kassim, supra note 50, at 445.150.
Cortez, supra note 82, at 9. Foreign health care providers are
logical defendants
because the injury causation and circumstances of treatment meet
the elements of tradi-tional malpractice frameworks.
151. See id. at 9-19.152. See id.153. See id. at 15-18.154.
Id.155. See Terry, supra note 36, at 464.156. Id.
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Healthcare Disputes Across National Boundaries
Finally, charitable and government immunity for heath
careinstitutions is another category of potential barriers worth
not-ing.157 In the United States, state charitable immunity shields
non-profit entities from liability under circumstances in
accordancewith the relevant state law in question.158 As examples,
some statecourts restrict immunity to nonpaying patients while
others allowrecovery from non-trust hospital assets.' 59 In
comparison, govern-ment immunity requires a government's consent in
order to besued.1 60 In the United States, recent case law has
shown theseimmunities have limited success as defenses for eligible
parties. 16
2. Determining Appropriate Jurisdiction to Litigate and Enforcea
Claim
As discussed above, an injured party may pursue a claim against
aforeign healthcare provider in his domicile state or the
defendant'sdomicile state. 162 Should a plaintiff choose his
domicile state, hefaces the same challenges of establishing
personal jurisdiction,defeating forum non conveniens motions, and
enforcing anyfavorable judgments in a foreign court.163 These
issues are unlikelyto arise if suit is brought in defendant's
domicile, as issues regard-ing place of injury and whether it is in
the chosen forum's interestare well settled.164 The major drawbacks
to this second option,however, are similar to the challenges of
defending a cross-bordertelemedicine claim in a foreign
court.165
3. Determining Choice of Law
Even after jurisdiction is established, parties to the dispute
mustaddress the additional challenge of choice of law
determinations.Depending on the laws of the countries involved, a
court's selec-tion may be pivotal in deciding the outcome and
remedies availa-
157. SeeJohn F. Bales, III & Lisa A. DeMarco, Selected
Topics in Medical Malpractice Litiga-tion, in HEALTH CARE. LAW 448
(BennettJ. Yankowitz & Richard A. Feinstein eds., 1993).
158. See id. at 449.159. Id. at 450.160. Id. at 449.161. See id.
at 451.162. See supra Part III.A.2.163. See supra Part III.A.2.a.;
Cortez, supra note 82, at 9-14 (discussing the challenges of
forum non conveniens and establishing personal jurisdiction).
Cortez observes that thedearth of U.S. case law renders it unclear
whether medical tourists can recover in U.S.courts. Id. at 8.
Cortez speculates that the absence of such case law is due to
private, out-of-court settlements. Id.
164. See Developments in the Law: State-Court Jurisdiction,
supra note 125, at 913.165. See supra Part III.A.2.b.
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The Geo. Wash. Int'l L. Rev.
ble. 166 As discussed earlier, each court adopts a different
approachto determining choice of law.' 67 In the context of medical
tourismclaims, the U.S. case Chadwick v. Arabian American Oil Co.
demon-strates the dispositive impact choice of law. 168 In
Chadwick, a Dela-ware district court followed the lex loci delicti
rule in a medicalmalpractice claim by a U.S. plaintiff against a
Saudi Arabian oilcompany incorporated in Delaware. 169 The
plaintiff argued thedefendant was vicariously liable for
malpractice committed by thedefendant's physician in Saudi Arabia.
70 The court used SaudiArabian law because of its adherence to the
lex loci delicti rule anddismissed the action because Saudi law did
not recognize vicariousliability.' 71
Furthermore, the differences in legal remedies and awardamounts
among countries add to the uncertainty and stress of thelitigation
process for the foreign plaintiff. For instance, Thailand'saverage
recovery amount is $2500172 and its courts do not awardpain and
suffering damages. 173 In contrast, the mean and medianrecoveries
for successful U.S. malpractice plaintiffs are $311,000and $175,000
respectively.17 4 Such variations in substantive lawsand legal
remedies not only further affirm the uncertainties associ-ated in
pursing a cross-border malpractice claim using traditionaljudicial
systems, but also the tremendous investment in money andtime of
such a process.
IV. ARBITRATION AS AN APPROPRIATE INTERNATIONAL
DISPUTERESOLUTION MECHANISM FOR CROSS-BORDER
HEALTH SERVICES CLAIMS
As demonstrated earlier, the fluid and changing nature of
theinternational health services industry continues to create
legaldilemmas and ambiguities that escape existing legal
protectionsand remedies afforded by traditional judicial
frameworks. Rigidjurisdictional and choice of law approaches are
ill-equipped to
166. See Cortez, supra note 82, at 13.167. See supra Part
III.A.3.168. See Cortez, supra note 82, at 13; Kassim, supra note
50, at 445-46.169. See Chadwick v. Arabian Am. Oil Co., 656 F.
Supp. 857, 858 (D. Del. 1987).170. See id. at 858-59.171. See id.
at 858-60. Scholars have also criticized other countries' laws
relating to
malpractice, observing that countries such as Malaysia and
Singapore have biased stan-dards that favor physicians in proving
medical negligence. Kassim, supra note 50, at 446.
172. Cortez, supra note 82, at 4.173. Kassim, supra note 50, at
446.174. Cortez, supra note 82, at 4.
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Healthcare Disputes Across National Boundaries
resolve disputes arising from the cross-border movement of
peopleand health services.1 75 Existing substantive legal
principles have yetto provide adequate theories of liability for
injuries and damagesarising from innovations in medical care and
delivery of health ser-vices. 176 Such legal uncertainties and
ambiguities call for a uni-form means of redress that is more
flexible and predictable thanlitigation in a courtroom. Given such
needs, arbitration offers apotential solution. Arbitration, a form
of alternative dispute reso-lution (ADR), has been successfully
utilized on an internationallevel, 177 is more efficient and
adaptive to changes in the health ser-vices industry than
litigation and has the authority and bindingforce of a court
decree.178 The analysis below will serve two pur-poses: (1) discuss
additional concerns with the existing medicalmalpractice system;
and (2) analyze the potential of arbitration asan international
framework for resolving medical malpracticeclaims.
A. Medical Malpractice Litigation Is an Inefficient and
IneffectiveMethod of Deterrence and Compensation in
the International Sphere
The process of medical malpractice litigation is not only
toocostly and inefficient,1 79 but also poorly compensates
injuredpatients.180 Only about forty cents out of every dollar paid
in mal-practice insurance premiums goes to injured patients while
theremainder goes towards administrative and litigation expenses.
81
Additionally, for every dollar an injured patient receives in
com-pensation, fifty-four cents goes towards administrative
expenses.1
8 2
In addition to inefficient allocation of costs and
compensation,medical malpractice litigation is biased against
patients and dis-courages them from bringing claims.'8 3 For
example, epidemio-logical studies of medical injury and malpractice
claims indicate
175. See supra Part III.176. Id.177. See Martha Neil,
International Arbitration Has Become a Lucrative Field After
Decades of
Disfavor, ABAJ., Sept. 2002, at 28, 28.178. See Keith Maurer,
Mediation, Arbitration, and "I'm Sony" Programs, 47 FOR THE
DEF.
37, 37-38 (2005).179. See Cortez, supra note 82, at 20.180. THE
SYNTHESIS PROJECT, RESEARCH REP. No. 8, UNDERSTANDING MEDICAL
MALPRAC-
TICE INSURANCE: A PRIMER 7 (2006) [hereinafter SYNTHESIS
PROJECT], available at
http://www.rwjf.org/pr/synthesis/reportsand-briefs/pdf/noO_primer.pdf.
181. Id.182. Cortez, supra note 82, at 20.183. See SYNTHESIS
PROJECT, supra note 180, at 7.
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The Geo. Wash. Int'l L. Rev.
that only about 2% of injuries due to medical negligence
becomemalpractice claims.184 Also, the Institute of Medicine
estimatesthat between 44,000 and 98,000 U.S. patients die in
hospitals asresult of preventable medical errors, but a vast
majority of thesepatients' families do not sue. 8 5 Furthermore,
defendants prevailin most cases. 186 In the United States, juries
overwhelmingly findin favor of physicians at a rate of nearly 80%.
187
Finally, medical malpractice litigation fails to deter
negligentcare because it does not address medical error.188 An
at-faulthealthcare provider experiences no financial set-back from
anycompensation owed to an injured patient, as that provider's
insur-ance carrier (1) is responsible for defending and/or settling
theclaim; (2) compensates the patient for damages or
settlementamount; and (3) does not raise the premium resulting from
anyclaims against that provider. 189 Insurers base healthcare
providerpremiums primarily on geographical region of practice
rather thanincidence of malpractice. 190 The absence of any
financial penaltyarising from fault also diminishes the
effectiveness of other deter-rent measures, such as the requirement
to report insurance pay-ments of claims to the National
Practitioner Data Bank.1 1
B. The Domestic Use of Alternative Dispute Resolution in
MedicalMalpractice Claims Supports the Viability of an
Arbitration
Framework Across BordersIn addition to the inefficiencies and
ineffectiveness of medical
malpractice litigation, the current use in several countries of
ADRin medical malpractice claims supports reconsideration of the
useof traditional judicial frameworks.192 The primary forms of ADR
inquestion are mediation and arbitration.1 9 3 Mediation involves
aneutral third party, known as a mediator, who facilitates
negotia-tions between parties to a dispute but has no authority to
render a
184. Id.185. Cortez, supra note 82, at 19.186. Kenneth A.
DeVille, The Jury Is Out: Pre-Dispute Binding Arbitration
Agreements for
Medical Malpractice Claims, 28J. LEGAL MED. 333, 368 (2007).187.
Id.188. See SYNTHESIS PROJECT, supra note 180, at 7.189. Bales
& DeMarco, supra note 157, at 392.190. Id. at 392.191. Id. at
393.192. See infra Part IV.B.1.193. See Katherine Benesch, The
Increasing Use of Arbitration and Mediation in Adjudicat-
ing Healthcare Cases, N.J. LAw., Apr. 2007, at 28, 28.
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Healthcare Disputes Across National Boundaries
decision. 194 In comparison, arbitration is a private
streamlinedadjudication process involving a neutral third party,
known as anarbitrator, whose role is similar to that of a
judge-ensuring com-pliance with procedural rules and rendering an
enforceable judg-ment.195 Unlike litigation, parties to the dispute
contractuallyagree to a set of procedural and substantive rules to
govern theprocess and to decide who will serve as an
arbitrator.
1 96
1. National and Sub-National Governments' MeasuresPromoting the
Use of ADR
Several national and sub-national governments have enacted
leg-islation or established administrative agencies encouraging or
man-dating the use of ADR.197 In the United States, governments
areincreasingly recognizing arbitration as a legitimate dispute
resolu-tion alternative to medical malpractice litigation. 19
Federal andstate judicial systems encourage the resolution of
healthcare casesby ADR, as courts direct cases to these forums with
parties' con-sent.199 Additionally, when parties enter into a
written contractwith an arbitration clause and one party seeks
litigation, most fed-eral courts return the case to arbitration.200
When the arbitrationclause is upheld and an arbitration
organization is identified in thecontract, that organization's
rules and procedures will govern theclaim. 20 1 A variety of
arbitration organizations with a nationalreach are able to preside
over these cases, including: National Arbi-tration Forum, American
Health Lawyers Association, AmericanArbitration Association (AAA),
and Judicial Arbitration and Media-tion Services. 202
In addition to federal and state courts encouraging ADR
overlitigation, some state legislatures have gone an extra step in
enact-ing laws requiring medical malpractice claims to be
arbitrated, or
194. Maurer, supra note 178, at 37.195. Id.196. William S.
Fiske, Comment, Should Small and Medium-Size American
Businesses
"Going Global" Use International Commercial Arbitration ?, 18
TRANSNAT'L LAw. 455, 458 (2005).197. See, e.g., Nancy M. Simone,
Medical Malpractice Litigation: A Comparative Analysis of
the United States and Great Britain, 12 SUFFOLK TRANSNAT'L L.J.
577, 597 (1989); Cortez, supranote 82, at 23-24.
198. Simone, supra note 197, at 597.199. Benesch, supra note
193, at 29. These referred cases must be governed by rules of
the jurisdiction in which they were filed. Id.200. Id.201.
DeVille, supra note 186, at 338.202. Id. at 337.
20101
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The Geo. Wash. Int'l L. Rev.
for arbitration panels to include physicians. 203 The
MarylandHealth Care Malpractice Claims Act, for example, requires
court-ordered mediation or mandatory arbitration. 204 According to
thestate's legislators, the reasoning behind such legislation is
four-fold: (1) prevent non-meritorious claims in litigation because
weakclaims are exposed in arbitration; (2) promote settlement of
meri-torious claims because arbitration encourages settlement; (3)
pro-mote accuracy in decisions because arbitration leads to
moreaccurate decisions; and (4) promote predictability because
arbitra-tion awards are more predictable and reasonable. 205
Arbitration isrequired in medical injuries in which a healthcare
provider isinvolved. 20 6 A panel comprised of a lawyer, a
healthcare provider,and a lay person presides over the claim. 20
7
Some governments go beyond promoting or mandating privateADR and
establish administrative agencies as an alternative to liti-gation.
India's 1986 Consumer Protection Act (the Act) led to thecreation
of Consumer Disputes Redressal Agencies (consumerforums), which
offer cheaper and faster non-judicial forums vestedwith the
legitimacy of courts.208 These consumer forums includeadjudication
of medical malpractice claims and allow patients tosue private and
public physicians for negligent care.2 09 Empow-ered with the same
capacity as a civil court, these consumer forumsoperate similar to
judicial proceedings, but with a panel of mem-bers with judicial
and nonjudicial backgrounds rendering deci-sions in place of a
jury.210 While these consumer forums weredesigned by the respective
governments to resolve a claim withinapproximately half a year, the
forums usually resolve a claim withintwo to three years-much faster
than other methods of claim reso-lution.211 Additionally, India's
consumer forum framework may bemore effective in deterring
negligent care than traditional mal-practice litigation because the
forums publish decisions on the
203. Christopher J. Marchand, Arbitration and Long-Term Health
Care, MD. B.J., July/Aug. 2005, at 32, 35.
204. See id. at 34, 36.205. Id. at 35.206. Id.207. Id.208. See
Cortez, supra note 82, at 23 (noting that consumer forums were
"intended to
create a fair, efficient alternative").209. Id. at 26.210. Id.
at 24-25.211. Id. at 27. Relative to the ten-year or more recovery
period in India's litigation
system and the U.S. recovery period of four to five years for
malpractice claims, such adelay is arguably a relatively minor
weakness of this system. Id. at 24, 27.
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Healthcare Disputes Across National Boundaries
Internet, alerting consumers to healthcare providers with
adversejudgments against them.212
The major criticisms of these consumer forums lie in the
pecu-liar challenges patients face in proving malpractice 213 and
thesmall compensation awards the consumer forum panels
dis-pense.214 India's healthcare community makes it difficult
forpatients to obtain experts willing to testify to a colleague's
negli-gence and to retrieve from local hospitals medical records
and rel-evant information related to their treatment.215 While this
critiquemay be valid, the observation that recovery awards are
inadequateto satisfy expectations of those from industrialized
countries maybe off-set by the fact that these awards correspond
with India's lowcosts of medical treatment. 216
Great Britain offers an instructive example of a
governmentimplementing administrative agencies for the purposes of
deter-ring negligent care.21 7 One of these agency forums is the
HospitalComplaints Procedure, which offers a statutory remedy for
patientsbringing medical injury claims before a consultant or
regionalmedical officer.218 This procedure enables patients to
express con-cerns and prevent similar future injuries.21 9 Another
notable Brit-ish forum is the General Medical Council, which deals
with seriouscomplaints and enables patients to seek sanctions
against healthcare providers. 220 Although it must be noted that
British patientsmay be unlikely to sue because their taxes go
towards the cost ofhealth care, 221 the administrative process of
addressing patientconcerns and the implementation of sanctions are
worth consider-ing as part of a potential overarching international
health serviceslegal regime.
2. Non-Government Actors' Preference and Use of ADR
In parallel with government efforts to promote ADR as a
methodfor dispute resolution, several businesses and consumers in
the
212. See Recent Consumer Court Decisions-Part 1 2011, CONSUMER
LAW INDIA (Feb. 10,2011),
http://consumerlaw.in/recent-consumer-court-decisions-part-l- 2
011/, for an exam-ple of a forum decision published on the
Internet.
213. Cortez, supra note 82, at 28.214. Id. at 31.215. Id. at
28-29.216. Id. at 23.217. Simone, supra note 197, at 593.218. Id.
at 592-93.219. Id. at 593.220. Id. at 594-95.221. Id. at 590.
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The Geo. Wash. Int'l L. Rev.
healthcare industry have contractually consented to arbitration
as ameans of redress. 222 A notable example is Kaiser Permanente
(Kai-ser), a California-based nonprofit health management
organiza-tion (HMO), which has mandated arbitration among its
memberssince 1971.223 To further encourage speed and efficiency,
Kaiserpays for neutral arbitrators' fees and expenses when claims
aregreater than $200,000, claimants waive their state statutory
right tothree arbitrators and waive objection to Kaiser paying
these fees. 224As of 2009, Kaiser paid for these fees in 85% of
cases. 225 In thesame year, 91% of these cases were medical
malpracticedisputes. 226
The most recent annual report on Kaiser's arbitration
system,conducted in 2009, revealed that a majority of participants,
includ-ing neutral arbitrators and parties to the dispute, felt the
process"was better than going to court."227 The time frame for
disputeresolution averaged twelve months, 228 in comparison to the
four tofive year average for payouts from litigation in the United
States. 229Just as significantly, Kaiser compensated half its
claimants by set-tling the dispute in a majority of these cases,
with a median awardof $377,589.230 In comparison, a 2006 National
Practitioner DataBank report calculated that the median award
arising out of litiga-tion was $175,000 per patient.2 31
Furthermore, it is significant to note that arbitration and
media-tion are common in business-to-business disputes in the
healthcareindustry.232 Business entities such as healthcare
providers, payors,
222. See, e.g., OFFICE OF THE INDEP. ADM'R, FIRST ANNUAL REPORT
OF THE OFFICE OF THEINDEPENDENT ADMINISTRATOR OF THE KAISER
FOUNDATION HEALTH PLAN, INC. MANDATORYARBITRATION SYSTEM FOR
DISPUTES WITH HEALTH PLAN MEMBERS: MARCH 29, 1999 - MARCH28, 2000,
at 1 n.1 (2000) [hereinafter FIRST ANNUAL REPORT], available at
http://www.oia-kaiserarb.com/oia/Forms%20&%20Reports/annrptyrl
.PDF.223. Id. In 1997, Kaiser handed administrative control of
its arbitration process to an
independent body in response to a California Supreme Court
decision that cited Kaiser'sself-administration approach as the
source of undue delay in resolving claims. Id. at i.
224. Id. at 24.225. OFFICE OF THE INDEP. ADM'R, ELEVENTH ANNUAL
REPORT OF THE OFFICE OF THE
INDEPENDENT ADMINISTRATOR OF THE KAISER FOUNDATION HEALTH PLAN,
INC. MANDATORYARBITRATION SYSTEM FOR DISPUTES WITH HEALTH PLAN
MEMBERS: JANUARY 1, 2009 - DECEM-BER 31, 2009, at i (2010)
[hereinafter ELEVENTH ANNUAL REPORT], available at
http://www.oia-kaiserarb.com/oia/Forms/2009%2OAnnual%2OReport.pdf.
226. Id. at 12.227. Id. at i.228. Id. at iv.229. Cortez, supra
note 82, at 27.230. ELEVENTH ANNUAL REPORT, supra note 225, at
iii.231. Cortez, supra note 82, at 19.232. Benesch, supra note 193,
at 28.
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Healthcare Disputes Across National Boundaries
managed care plans, and other health-related companies are
typi-cal participants. 233 Healthcare lawyers trained and
experienced inarbitration and mediation handle many large
healthcare disputesinvolving, but not limited to, large
reimbursements, managed care,and complex healthcare contract
disputes. 234 Business-to-con-sumer disputes related to long-term
care are also common in thissub-sector of the health industry.23 5
Thus, the familiarity that somany players have in the healthcare
industry with arbitration andmediation lends support to the
feasibility and success of transfer-ring business-to-consumer
medical malpractice claims to theseforums.
C. Arbitration of Cross-Border Medical Malpractice Claims Offers
anEfficient and Effective Method to Achieve Public Policy Goals
In addition to government support and familiarity among
par-ticipants in the healthcare industry with ADR, this section
willdemonstrate that arbitration has the potential to achieve the
publicpolicy goals of accurate judgments, just compensation, and
deter-rence of negligent medical care. The below analysis of the
featuresand processes of arbitration will highlight the ways in
which arbi-tration is a viable alternative to litigation for
cross-border medicalmalpractice claims.
1. Arbitration Agreements and Awards are Binding
AcrossJurisdictions Under Regional and International Treatiesor
Customary Law
The greatest advantage arbitration has over litigation in
resolv-ing cross-border disputes is the enforceability of
arbitration agree-ments and awards in foreign jurisdictions. 236 As
discussed above,an arbitrator has the authority to render an
enforceable, final deci-sion.237 These agreements and decisions are
binding on the par-ties, all jurisdictions empowered by legislation
enabling courts toenforce arbitration awards, 238 and all countries
that are members
233. Id.234. Id. at 30.235. Id.236. JOSEPH LOOKOFSKY,
UNDERSTANDING THE CISG 1.4 (3d (worldwide) ed. 2008).237. Maurer,
supra note 178, at 37.
238. S. Spencer Elg, Health Care Arbitration Agreements in
Tennessee, TENN. B.J., Oct. 2009,at 15, 16.
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The Geo. Wash. Int'l L. Rev.
to various regional and international treaties recognizing
othermembers' arbitration awards. 239
Alternatively, if a country is a non-signatory to the relevant
trea-ties, arbitration agreements and awards may still be enforced
undercustomary law through Friendship Commerce and
NavigationTreaties (FCN treaties) 240 or general principles of
comity.2 4 1 Mem-ber countries of FCN treaties will enforce
arbitration awards of fel-low member countries as long as
enforcement does not violate amember country's public policy. 242
When an award is made in astate that is neither a member of an FCN
treaty or any relevantcommercial arbitration treaty, enforcement
may be sought underthe principle of comity. 243 This principle
appeals to a country'ssense of international duty and regard for
the rights of personsunder another nation's laws.244
Parties who contract to resolve disputes through
arbitrationavoid jurisdictional and choice of law concerns because
they con-sent to a set of procedural and substantive rules to
govern the pro-cess and the choice of an arbitrator. 245
Arbitration operates muchlike pre-trial and trial phases of
litigation, in which parties may filecounter and cross-claims
throughout this process. 246 A combina-tion of arbitration
statutes, agency rules, and the contract enteredinto by parties
binding them to arbitration govern procedural andsubstantive
rules.2 47
239. Karim Benyekhlef & Fabien GCtlinas, Online Dispute
Resolution, LEx ELECrRONMCA,Summer 2005, at 51,
http://www.lex-electronica.org/articles/vl0-2/BenyekhlefGelinas.pdf.
240. See Treaty of Friendship, Commerce and Navigation,
U.S.-Kor., art. V(2), Nov. 28,1956, 8 U.S.T. 2217 [hereinafter
U.S.-Korea Treaty]; Treaty of Friendship, Commerce andNavigation,
U.S.-W. Ger., art. VI(2), Oct. 29, 1954, 7 U.S.T. 1839 [hereinafter
U.S.-W. Ger-many Treaty]; Treaty of Friendship, Commerce and
Navigation, U.S.-Japan, art. IV(2), Apr.2, 1953, 4 U.S.T. 2063
[hereinafter U.S.-Japan Treaty]; Treaty of Friendship, Commerceand
Navigation, U.S.-Greece, art. VI(2), Aug. 3, 1951, 5 U.S.T. 1829
[hereinafter U.S.-Greece Treaty].
241. 81 AM. JUR. Trials 236 (2001).242. See, e.g., U.S.-Japan
Treaty, supra note 240, art. IV(2); U.S.-Greece Treaty, supra
note 240, art. VI(2).243. 81 AM. JUR. Trials 236 (2001).244. Id.
While there is no consensus on the definition of comity, this
principle is
understood as "not only a theoretical but also a legal
justification for the resolution ofconflict of laws problems
[where] a court in one country may apply the laws of anothercountry
by virtue of comity." Donald Earl Childress III, Comity as
Conflict: Resituating Inter-national Comity as Conflict of Laws, 44
U.C. DAvis L. Rav. 11, 13 (2010).
245. Fiske, supra note 196, at 458.246. DeVille, supra note 186,
at 338-39.247. Elg, supra note 238, at 16.
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Healthcare Disputes Across National Boundaries
2. An Arbitrator's Decision-Making Powers and ExpertiseResolve
Legal Ambiguities and Uncertainties of Cross-Border Health Services
Claims
Another key attribute of arbitration is its procedure of
selectingqualified decision-makers for evaluating complex,
specialized casessuch as medical malpractice claims. 248
Arbitrators are more appro-priate decision-makers than juries
because parties to the disputemost often select arbitrators who
have a background and expertisein the subject matter of the
dispute. 249 Parties in medical malprac-tice cases typically select
arbitrators from a list of qualified candi-dates.250 Furthermore,
all national laws, institutional rules, andinternational
arbitration treaties require arbitrators to be neutraland
independent in their decision-making. 251
In the global and ever-changing industry of health services, it
iscrucial to have decision-makers who are neutral and
independent,and able to adapt existing substantive legal principles
to new con-flicts and ambiguities that arise from continuous
transformationsto medical care. 252 As discussed above,
technological advances inthe cross-border delivery of telemedical
services have impacted thelegal relationships of healthcare
providers and consumers, and thestandard of care owed to the
latter.2 53 Just as important, the global-ization of health
services has created even more variation in thestandard of care, as
one country's assessment of acceptable caremay be deemed
unacceptable by another country.254 Given theseconsiderations,
expertise in healthcare enables decision-makers tohave realistic
expectations of defendants and to make more accu-rate and informed
judgments of whether a medical practitionerviolated the relevant
standard of care. 255
The participation of parties in the process of selecting
decision-makers in an arbitration system also contributes to a
sense of confi-dence and fairness in the process. 25 6 The process
of choosing anarbitrator customarily requires each party to select
his own arbitra-
248. DeVille, supra note 186, at 369.249. Id. at 341; Ljiljana
Biukovic, International Commercial Arbitration in Cyberspace:
Recent
Developments, 22 NW. J. INT'L L. & Bus. 319, 344 (2002).250.
DeVille, supra note 186, at 338.251. Biukovic, supra note 249, at
344.252. See McLean, supra note 88, at 252.253. Id.254. Id. at
252-53.255. DeVille, supra note 186, at 341.256. Thomas J.
Stipanowich, Contract and Conflict Management, 2001 Wis. L. REV.
831,
871 (2001).
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The Geo. Wash. Int'l L. Rev.
tor, and then the selected arbitrators together decide upon a
thirdarbitrator who serves as the only neutral judge.25 7 The
selection ofarbitration panels for medical malpractice disputes
follows the cus-tomary selection process. 25 8 While this approach
is not the sole, ornecessarily the best method, the interests of
all parties are repre-sented at all stages, thereby diminishing
suspicions of bias in theselection process.
3. Arbitration Offers a Forum for Adjudication That Is
MoreNeutral and Fair than Litigation
Evidence suggests that the decision to use an arbitration
panelover a judge and jury in adjudicating medical malpractice
claimswould offer a more neutral forum. First, arbitration dilutes
suspi-cions of bias towards any one party by removing the claim
fromeither party's domicile court.259 Second, arbitration may
reduce oreliminate the well-documented bias thatjudges and juries
have fordefendant healthcare providers. In the United States, for
example,juries side with the defendant in nearly 80% of medical
malprac-tice claims. 260 Such bias towards the defendant is not
isolated tothe United States, as other countries' judicial systems
share thesame perspective. Several Indian courts have expressed
criticism ofpatients who bring medical malpractice claims.261
Thailand's judi-cial system is also hostile to medical malpractice
suits-the low rateof tort litigation and dramatic decrease in tort
claims in the pasttwenty years in certain provinces are indicative
of such hostilityagainst plaintiffs. 262 Such bias towards
defendants, in combinationwith evidence that a vast majority of
injured parties do not sue, 2 6 3underscores the failure of
litigation in meeting the public policygoals of just punishment and
compensation.
While the above observations indicate arbitration would serve
asa more neutral forum, it is worth noting that there are
shortcom-ings in this process. Some studies show that plaintiffs
prevail moreoften in arbitration than litigation, 264 and therefore
the process
257. Elg, supra note 238, at 16.258. DeVille, supra note 186, at
338.259. Neil, supra note 177, at 28.260. DeVille, supra note 186,
at 368. Notably, two decades of studies conducted in the
United States confirm that defendants win an overwhelming
majority of these disputes.David A. Hyman & Charles Silver,
Medical Malpractice Litigation and Tort Reform: It's the
Incen-tives, Stupid, 59 VAND. L. REv. 1085, 1107 (2006).
261. Cortez, supra note 82, at 36.262. Id. at 45-46.263.
SvNTHESlS PROJECT, supra note 180, at 7; Cortez, supra note 82, at
19.264. Maurer, supra note 178, at 41.
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Healthcare Disputes Across National Boundaries
may be biased towards plaintiffs. But such an outcome should
beconsidered within the context of the arbitration process.
Unlikelitigation, both parties play a role in selecting the
decision-makersand a defendant healthcare provider arguably has an
advantagebecause it has gone through arbitration more often and is
there-fore able to design the process to suit its needs.26
5
In contrast, arbitrators may be biased towards businesses
becausebusinesses are repeat clients. 266 Although the findings
that plain-tiffs have a higher rate of recovery in arbitration than
litigationundercuts this critique, it is worthwhile to consider
arrangementsor mechanisms that discourage an appearance of or
actual bias.For an instance, an initial critique of Kaiser's
arbitration system wasthat the HMO's policy of paying for neutral
arbitrator fees wouldresult in the tribunal's bias towards the HMO.
267 To resolve thissituation, Kaiser's independent arbitration
administrative body rec-ommended that counsel from both parties
work out a voluntaryarrangement or revise Kaiser's rules so that
payment appears tocome from a neutral source. 268
4. Arbitration Offers an Efficient and Faster Resolution
ofMedical Malpractice Claims
In addition to providing predictability in the
decision-makingprocess and a more neutral forum for aggrieved
parties, arbitrationoffers a faster, more efficient, and more
flexible approach thantraditional courts to resolving unique or
particular issues of medi-cal malpractice claims for several
reasons. First, the arbitrator orrelevant procedural rules limit
discovery time and procedures.
269
Second, there is no jury because the arbitrator serves as a
factfinder in the decision-making process and usually has expertise
inthe area of the dispute. 270 Third, although the arbitrator has
widediscretion for his decisions, he is bound to follow the
proceduraland substantive rules of law of the arbitration
agreement.
27'
Finally, the grounds on which a party may appeal are much
morelimited than those provided to an appellate court and such
limitedappellate rights facilitates faster and more certain
resolution of the
265. DeVille, supra note 186, at 373.266. Id.267. FiRST ANNUAL
REPORT, supra note 222, at 31.268. Id.269. DeVille, supra note 186,
at 338. Parties typically require an arbitrator's permission
to take depositions. Marchand, supra note 203, at 34.270.
Marchand, supra note 203, at 35.271. DeVille, supra note 186, at
338.
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The Geo. Wash. Int'l L. Rev.
dispute.2 72 Arbitrator decisions are "virtually unreviewable"
onappeal, including mistakes of law, procedure, and evidence.
273Appeals usually only succeed in instances of fraud, exceeding
thescope of the arbitration agreement, or blatant disregard for
thelaw.274 As a result of such truncated procedures, aggrieved
partieswho prevail receive a greater portion of the judgment and
withinan earlier time frame than in litigation. 275
Another related, but disputed, benefit to such a streamlined
pro-cess is lower costs. Proponents of arbitration assert that
itdecreases transaction costs for all parties involved as claims
areheard more quickly and the discovery process is less lengthy
thantraditional trials.276 However, arbitration costs are not
nec