Last-best-of­fer should be law

The Hazleton Standard-Speaker - - OPINION -

When state At­tor­ney Gen­eral Josh Shapiro asked the Com­mon­wealth Court last week to in­ter­vene in a mar­ket-share battle be­tween the state’s largest health care provider and its largest in­surer, he in­cluded a pro­posal that could be bor­rowed to re­solve another pol­icy is­sue.

The case in question is an im­pend­ing end to a five-year con­sent de­cree be­tween the Uni­ver­sity of Pitts­burgh Health Sys­tem and High­mark in­sur­ance. July 1, UPMC in­tends to place 70,000 High­mark sub­scribers out of its net­works, po­ten­tially in­creas­ing their costs and dis­rupt­ing their con­ti­nu­ity of care.

Shapiro wants the court to con­tinue the con­sent de­cree in­def­i­nitely. As part of that, he pro­posed that the court em­ploy a sys­tem of last-best-of­fer ar­bi­tra­tion to set­tle any re­im­burse­ment dis­putes be­tween the health care sys­tem billing for care and the in­surer pay­ing the bill.

Un­der last-best-of­fer, each side would pro­pose a pay­ment and an ar­bi­tra­tor would choose one of them, and would not be al­lowed to fash­ion a com­pro­mise.

As a re­sult, the par­ties would be more likely to fash­ion a com­pro­mise of their own than to risk los­ing ev­ery­thing with an ex­treme pro­posal to an ar­bi­tra­tor.

The sys­tem is best known for its suc­cess in Ma­jor League Base­ball. Play­ers with be­tween three and six years in the ma­jor leagues typ­i­cally are el­i­gi­ble for last-best-of­fer salary ar­bi­tra­tion. The player and the team each make a pro­posal and the ar­bi­tra­tor chooses one of them.

This year, of the 198 play­ers el­i­gi­ble for ar­bi­tra­tion, more than 190 reached agree­ments with their teams with­out go­ing to ar­bi­tra­tion. That, of course, is the ob­jec­tive of the ex­er­cise. The risk of los­ing in ar­bi­tra­tion causes each side to com­pro­mise to­ward the mid­dle.

Penn­syl­va­nia law­mak­ers should out­law teacher strikes and man­date the lastbest-of­fer ar­bi­tra­tion sys­tem as the means to re­solve school dis­trict la­bor im­passes. The cur­rent sys­tem is a farce, since state law re­quires teach­ers to teach and, there­fore, be paid for 180 days of school re­gard­less of whether they “strike.”

Last-best-of­fer is an in­stru­ment of com­pro­mise to pro­duce fair set­tle­ments. The Leg­is­la­ture should make it the law.

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