[Senate Hearing 108-659]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-659

      THE MEDICAL LIABILITY CRISIS AND ITS IMPACT ON PATIENT CARE

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                          SALT LAKE CITY, UTAH

                               __________

                            AUGUST 20, 2004

                               __________

                          Serial No. J-108-93

                               __________

         Printed for the use of the Committee on the Judiciary



                    U.S. GOVERNMENT PRINTING OFFICE
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                       COMMITTEE ON THE JUDICIARY

                     ORRIN G. HATCH, Utah, Chairman
CHARLES E. GRASSLEY, Iowa            PATRICK J. LEAHY, Vermont
ARLEN SPECTER, Pennsylvania          EDWARD M. KENNEDY, Massachusetts
JON KYL, Arizona                     JOSEPH R. BIDEN, Jr., Delaware
MIKE DeWINE, Ohio                    HERBERT KOHL, Wisconsin
JEFF SESSIONS, Alabama               DIANNE FEINSTEIN, California
LINDSEY O. GRAHAM, South Carolina    RUSSELL D. FEINGOLD, Wisconsin
LARRY E. CRAIG, Idaho                CHARLES E. SCHUMER, New York
SAXBY CHAMBLISS, Georgia             RICHARD J. DURBIN, Illinois
JOHN CORNYN, Texas                   JOHN EDWARDS, North Carolina
             Bruce Artim, Chief Counsel and Staff Director
      Bruce A. Cohen, Democratic Chief Counsel and Staff Director


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah......     1
    prepared statement...........................................    51

                               WITNESSES

Glodowski, Carla, Lehi, Utah.....................................    28
Granger, Steve, M.D., Surgical Resident, University of Utah, Salt 
  Lake City, Utah................................................    14
Lee, George, M.D., Vice President, Medical Affairs, California 
  Pacific Medical Center, San Francisco, California..............     8
Nelson, John, M.D., President, American Medical Association, Salt 
  Lake City, Utah................................................     6
Page, Donna, Park City, Utah.....................................    26
Rich, Charles, M.D., Salt Lake City, Utah........................    12
Sorenson, Charles W., Jr., M.D., Executive Vice President, Chief 
  Operating Officer, Intermountain Health Care, Salt Lake City, 
  Utah...........................................................    10
Thronson, Charles, Utah Trial Lawyers Association................    31

                       SUBMISSIONS FOR THE RECORD

Fay, John F., Attorney, Low Office of Gregory, Barton & Swapp, 
  Lehi, Utah,letter..............................................    42
Glodowski, Carla, Lehi, Utah, prepared statement.................    44
Granger, Steve, M.D., Surgical Resident, University of Utah, Salt 
  Lake City, Utah, prepared statement............................    48
Havas, Edward B., past President of the Utah Trial Lawyers 
  Association, statement.........................................    56
Lee, George, M.D., On behalf of the American Hospital 
  Association, Vice President, Medical Affairs, California 
  Pacific Medical center, San Francisco, California, prepared 
  statement......................................................    60
Miller, LaRee, Executive Director, Utah Citizens Alliance for 
  Safety & Accountability, letter................................    65
Mortensen, Douglas G., President of the Utah Trial Lawyers 
  Association, statement.........................................    67
Nelson, John, M.D., President, American Medical Association, Salt 
  Lake City, Utah, prepared statement............................    70
Page, Donna, Park City, Utah, prepared statement.................    86
Rich, Charles, M.D., Salt Lake City, Utah, prepared statement....    88
Sorenson, Charles W., Jr., M.D., Executive Vice President, Chief 
  Operating Officer, Intermountain Health Care, Salt Lake City, 
  Utah, prepared statement.......................................    94
Thronson, Charles, Utah Trial Lawyers Association, prepared 
  statement......................................................   102

 
      THE MEDICAL LIABILITY CRISIS AND ITS IMPACT ON PATIENT CARE

                              ----------                              


                        FRIDAY, AUGUST 20, 2004

                              United States Senate,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:00 a.m., at 
the Huntsman Cancer Institute, Auditorium, 6th Floor, 2000 
Circle of Hope, Salt Lake City, Utah, Hon. Orrin Hatch, 
Chairman of the Committee, presiding.
    Present: Senator Hatch.

 OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 
                       THE STATE OF UTAH

    Chairman Hatch. Welcome. We are happy to have all of you 
here in this beautiful facility that is dedicated for the well-
being of mankind. This is an important hearing because we are 
going to consider some of the issues on both sides that make a 
difference in all of our lives.
    Today's hearing will address the medical liability and 
litigation crisis in our country. It's a scourge that is 
preventing patients from receiving high quality health care, or 
in some cases, any care at all, as physicians are driven from 
practice. This liability crisis not only robs many patients of 
access to vital medical care, but needlessly raises health care 
costs for all Americans.
    My colleagues and I have worked hard in the Senate to find 
a remedy for the crisis ravaging our health care system. Most 
recently, the Senate debated S. 2061, the Healthy Mothers and 
Healthy Babies Access to Care Act of 2003 and S. 2207, the 
Pregnancy and Traumatic Care Access Protection Act of 2004.
    S. 2061 addressed obstetrical and gynecological care and 
would hold physicians and insurers accountable for medical 
expenses in instances where they are clearly wrong. The 
legislation established a period of 3 years from the date of 
injury for a person to bring a claim, with exceptions in cases 
involving minors. The bill also would allow for unlimited 
awards of economic damages, while placing reasonable caps on 
non-economic damages, or in other words pain and suffering.
    Economic damages are payment of past and future medical 
expenses and loss of earnings, as well as the cost of having 
services in the home to assist someone who has been injured or 
incapacitated from a negligent act. S. 2061 placed no limit on 
these awards.
    Of course, damages meant to compensate for physical and 
emotional pain and suffering are not quantified. S. 2061 would 
cap awards of these damages at $250,000, in addition to 
economic damages. Very often, jurors award plaintiffs millions 
of dollars just to punish a defendant, not necessarily to 
compensate for what is an intangible loss. S. 2061 would also 
fix contingency fees to ensure that patients with valid claims 
do not see their rewards siphoned away by attorneys. The bill 
would allow lawyers to recoup fees to make a profit, but not at 
the unfair expense of the injured plaintiff.
    The bill debated by the Senate this year, S. 2207, was 
similar to S. 2061 in that it caps non-economic damages at 
$250,000 but leaves economic damages uncapped. The primary 
difference between S. 2207 and S. 2061 is that S. 2207 provides 
relieve to two specialties, OB/GYN and emergency or trauma 
physicians. It was limited to highlight two of the most high-
risk and egregiously affected practice areas in our health care 
system.
    Unfortunately, both bills failed to receive the 60 votes 
necessary to invoke closure in the Senate earlier this year. We 
would have had a majority of votes, but in the Senate now on 
controversial issues you must have a super majority of 60 in 
order to even debate the matter. Since the House of 
Representatives approved legislation at the beginning of the 
108th Congress, it now appears that the Senate inaction may 
derail reform and allow this liability crisis to continue 
unabated.
    To me, it is unconscionable that physicians are being 
driven from practice, and as a result, patients are denied 
access to quality health care. According to the Utah Medical 
Association, liability insurance rates for most Utah physicians 
increased by 55 percent or more in the last 2 years for some 
specialties. For example, those Utah physicians practicing 
obstetrics and gynecology have to deliver about 60 babies a 
year just to cover the standard insurance rate in 2003 at 
$71,000. 2004 insurance rates are now more than $81,000 for 
some OB/GYN physicians. A 2003 survey showed that 25 percent of 
Utah's OB/GYN intend to stop delivering babies within the next 
5 years. 25 percent. And medical liability insurance premiums 
for Utah physicians continue to rise and increase pressures on 
physicians to restrict their services in our home state of 
Utah. Premiums rose by 30 percent in 2002, 20 percent in 2003, 
and a 15 percent increase is expected in 2004.
    I am deeply concerned that we are needlessly compromising 
patient safety and quality health care. We know that only about 
4 percent of hospitalizations involve an adverse event and only 
1 percent of hospitalizations involve an injury that would be 
considered negligent by the courts. These numbers have been 
consistent in large studies done in New York, California, 
Colorado, and here in Utah. However, equally troubling is that 
only 2 percent of cases with actual negligent results or actual 
negligent injuries, excuse me, result in claims. Less than one-
fifth of claims filed actually involve a negligent injury. We 
simply must do something to correct these imbalances.
    The problem is particularly acute for women who need 
obstetrical and gynecologic care because OB/GYN is among the 
top three specialties with the highest professional liability 
insurance premiums. The other two are neurosurgery and 
orthopedic surgery.
    Today, there are 36 members of the Utah Neurosurgical 
Society, and currently there are 27 neurosurgeons practicing in 
Utah. Not all of these physicians are willing to cover high 
risk practice such as emergency rooms and trauma services. 
According to the American Association of Neurological Surgeons, 
AANS, Utah is one of 24 states designated as ``severe crisis'' 
states based on either a 50 percent increase in professional 
liability premiums from 2000 to 2002 or an average of 
neurosurgical professional liability insurance premiums over 
$100,000 a year. Now, this dubious honor for Utah citizens has 
affected their access to neurosurgical care.
    Studies by both the Utah Medical Association and the Utah 
Chapter of the American College of Obstetricians and 
Gynecologists, ACOG, underscore the problem in Utah. Over half, 
50.5 percent, of family practitioners in Utah have already 
given up obstetrical services or have never practiced 
obstetrics. Of the remaining 49.5 percent who still deliver 
babies, 32.7 percent say they plan to stop providing 
obstetrical services within the next decade. These and other 
changes in practice leave nearly 1500 pregnant Utahns without 
OB/GYN care. Now that's a tragedy.
    An August, 2003 General Accounting Office report concluded 
that actions taken by health providers as a result of 
skyrocketing malpractice premiums have contributed to health 
care access problems. These problems included reduced access to 
hospital-based services for deliveries, especially in rural 
areas.
    In addition, the report indicates the states that have 
enacted tort reform laws with caps on non-economic damages have 
slower growth rates in medical malpractice premiums and claims 
payments. From 2001 to 2002, the average premiums for medical 
malpractice insurance increased about 10 percent in states with 
such caps. In comparison, states with more limited reforms 
experienced an integration of 29 percent in medical malpractice 
premiums.
    Medical liability litigation directly and dramatically 
increases health care costs for all Americans. In addition, 
skyrocketing medical litigation costs indirectly increase 
health care costs by changing the way doctors practice 
medicine.
    Defensive medicine is defined as medical care that is 
primarily or solely motivated by fear of malpractice claims and 
not by the patient's medical condition. According to a survey 
of 1800 doctors published in the journal, Medical Economics, 
more than three-quarters of doctors felt they must practice 
unnecessary defensive medicine. A 1998 study of defensive 
medicine by Dr. Mark McClellin, currently the head of the 
Medicare program, showed that medical liability reform, or 
should I say CMS, his study, his 1998 study showed that medical 
liability reform had the potential to reduce defensive medicine 
expenditures by 69 to 124 billion dollars in 2001.
    Now, I used to be a medical malpractice defense lawyer. And 
I have to say that I estimated, when I was practicing, you have 
to do every possible thing you can to have that in your 
history, even if you don't think it's really necessary, so that 
you show that you have done everything, that you've done things 
way above the average in the community, as well, in order to 
have any degree of safety. And consequently that's why I 
estimate there's at least $300 billion a year of unnecessary 
defensive medicine. And frankly it's a big problem.
    The AMA admits to about $70 billion. Listen to the AMA 
today tell us where their figures are now. If the AMA estimates 
$70 billion, you can imagine what it really must be. So it's a 
big problem and it is costing every American. It is causing our 
health care system to run out of control. Something has to be 
done. Something reasonable. Something that still doesn't hurt 
patients or hurt those who have been grievously injured.
    The financial toll of defensive medicine is great, and is 
especially significant for reform purposes, since it does not 
produce any health benefits whatsoever. Not only does 
unnecessary defensive medicine increase costs, it also puts 
Americans at avoidable risk.
    Nearly every test and every treatment has possible side 
effects. Thus, every unnecessary test, procedure, and treatment 
potentially puts a patient in unnecessary harm's way. Seventy-
six percent of physicians are concerned that malpractice 
litigation has hurt their ability to provide quality care to 
patients.
    There is plenty that can be done to address this crisis. 
Last March, the Department of Health and Human Services 
released a report describing how reasonable reforms in some 
states have reduced health care costs and you improved access 
to and quality of care. For example, over the last 2 years, in 
states with limits of $250,000 to $350,000 on non-economic 
damages, premiums have increased an average of just 18 percent 
compared to 45 percent in states without such limits.
    California enacted the Medical Injury Compensation Reform 
Act, also known as MICRA, more than a quarter century ago. 
MICRA slowed the rate of increase in medical liability premiums 
dramatically without negatively affecting the quality of health 
care received by the state's residents. As a result, doctors 
are not leaving California anymore.
    Furthermore--and by the way, they are starting to leave 
Utah. Furthermore, between 1976 and 2000, premiums increased by 
167 percent in California, while they increased 505 percent in 
the rest of the country. Consequently, Californians were saved 
billions of dollars in health care costs, and Federal taxpayers 
were saved billions of dollars in Medicare and Medicaid 
programs.
    Before coming to Congress I litigated several liability 
cases. I have seen heart-wrenching cases in which mistakes were 
made. But more often I have seen heart-wrenching cases in which 
mistakes were not made and doctors were forced to expend 
valuable time and resources defending themselves against 
frivolous lawsuits.
    A recent Institute of Medicine report, ``To Err Is Human,'' 
concluded that ``the majority of medical errors do not result 
from individual recklessness or the actions of a particular 
group. This is not a bad apple problem. More commonly, errors 
are caused by faulty systems, processes, and conditions that 
lead people to make mistakes or fail to prevent them.''
    Now, we need to reform or we need reform to improve the 
health care systems and processes that allow errors to occur 
and to better identify when malpractice has not occurred. The 
reform that I envision would address litigation abuses in order 
to provide swift and appropriate compensation for malpractice 
victims, redress for serious problems, and ensure that medical 
liability costs do not prevent patients from accessing the care 
that they need. And so I believe that Congress must move 
forward with legislation to improve patient safety and reduce 
medical errors.
    Without tort reforms, jurors will continue to award large 
and often unreasonable sums for pain and suffering. And a 
sizable portion of those awards will continue to go to the 
attorney rather than the patient. The end result is that many 
doctors cannot get insurance and many patients cannot get the 
care they need, and a small group of lawyers are sometimes 
unfairly enriched to the detriment of our society. All 
Americans deserve the access to care, the cost savings, and 
legal protections that states like California provide their 
residents. We must begin to address this crisis in our health 
care system, so Utahns and citizens across the country have 
continued access to their doctors, and doctors can provide 
high-quality, cost-effective medical care.
    And I might also add there are decent, honorable attorneys 
who bring suits that are worthy of being brought in this 
country. And we shouldn't lump all attorneys in a category that 
they are all out just for the all mighty buck. There are very 
honorable attorneys in this country and there are suits that 
deserve to be brought, and I have seen them. But there's a high 
percentage of malpractice suits that are brought just to see 
what you can get out of it that are frivolous in nature and 
really are costing all of us billions and billions of 
unnecessary dollars.
    Finally, I want to thank our witnesses for taking time out 
of their busy schedules to join us here today. We all look 
forward to hearing your valuable insights in this ongoing 
crisis and we have people on both sides of these issues.
    I also want to acknowledge some of our friends in the 
audience that will be submitting written testimony on this 
important issue, especially Doug Mortensen, who is President of 
the Utah Trial Lawyers Association. Accompanying Mr. Mortensen 
are Ed Havas, immediate Past-Present of the Utah Trial Lawyers 
Association, and Mr. Joel Alred, the President-Elect of the 
Utah Trial Lawyers Association.
    I would like to also acknowledge LaRee Miller, who is the 
Executive Director of the Utah Citizens Alliance. Ms. Miller is 
also submitting written testimony for this hearing. All of 
these testimonies are important to us and will help us to 
understand this even better than we do today.
    Now, that was a fairly lengthy statement, more lengthy than 
I usually give. But I don't think there's one part that didn't 
need to be said.
    [The prepared statement of Senator Hatch appears as a 
submission for the record.]
    Senator Hatch. On our first panel we have Dr. John Nelson. 
We're very proud of Dr. Nelson. He is the President of the 
American Medical Association. Can you imagine? We in Utah have 
the President of the American Medical Association right here in 
our state, and he is doing a great job. Dr. Nelson is from Salt 
Lake City, Utah and has been a practicing obstetrician/
gynecologist in this area for many years. We are all so proud 
of Dr. Nelson and the dedication he has shown for both Utah 
physicians and physicians across the country. He is a good man, 
he's an honest man, and he is one who I know very, very well.
    Next we have--I think all of our witnesses are honest, by 
the way. Next we have Dr. George Lee who is representing the 
American Hospital Association at today's hearing. He is the 
Vice-President of Medical Affairs for the California Medical 
Center.
    Next we have Dr. Charles Sorenson who is the Executive 
Vice-president and Chief Operating Officer for Intermountain 
Health Care. These are all great people. I know them all.
    Next we have Dr. Charles Rich, who is a retired 
neurosurgeon from Salt Lake, and one of the great 
neurosurgeons. He was also the chief medical officer for the 
2002 Olympic games. And we have tremendous respect for him.
    Finally we have Dr. Steve Granger, also a great person who 
is a surgical president, or who is the surgical president at 
the University of Utah. Or resident, excuse me, at the 
University of Utah. Did I say ``president''? I think I did.
    So Steve is a surgical resident at the University of Utah, 
and we will hear him speak for young people going into the 
medical and health care field today. And this will be Panel 
One, and we will produce a second panel later. So we welcome 
all of you. If you will take your seats at the table, we will 
go to there.
    Let's start with Dr. Nelson, the President of the American 
Medical Association first. And we can go across the table.

  STATEMENT OF JOHN NELSON, M.D., PRESIDENT, AMERICAN MEDICAL 
               ASSOCIATION, SALT LAKE CITY, UTAH

    Dr. Nelson. Thank you, Mr. Chairman. How delightful it is 
to be home for both of us.
    Chairman Hatch. You've got that right.
    Dr. Nelson. For the record, I am John Nelson, practicing 
obstetrician/gynecologist in Salt Lake, President of the 
American Medical Association here to tell you that in medicine 
we are having a crisis. What's a crisis? A crisis is when there 
is a sudden intensity of symptoms that increase during the 
course of the disease. We are seeing numerous symptoms today 
that tells us our system is in a crisis. The symptoms are 
unmistakable. A young boy in West Virginia, hurt in a football 
game, who has to be airlifted to another state because there's 
no neurosurgeon in that state that can see him because of 
liability concerns, and a helicopter too small to accommodate 
his mother.
    A nurse in Bisbee, Arizona, bypassing the hospital in which 
she works at night, delivering her baby at the roadside in the 
middle of the night in the desert, because her hospital stopped 
delivering babies.
    A man killed a few blocks from a Level 1 trauma center 
because that trauma center had closed 2 days before he was 
injured, all because of liability concerns.
    Chairman Hatch. Pull that microphone closer, Doctor.
    Dr. Nelson. Yes, sir.
    Chairman Hatch. Can you hear in the back?
    Dr. Nelson. We are concerned about efforts to improve 
patient safety, and quality being stopped because of lawsuit 
fears. Twenty states are in crisis, up from 12 a couple years 
ago. And in Utah, a crisis is looming.
    Escalating jury awards and the high cost of defending 
against lawsuits, even meritless claims--I'll let you fix the 
microphone. It won't be better; it will just be louder.
    Escalating jury awards and high costs of defending against 
these suits, even the smallest ones, are the primary drivers of 
increasing medical liability insurance premiums. And several 
studies show that.
    So doctors have to do one of the three Rs: We restrict our 
practice, we relocate, and we retire. Physicians across this 
country are realizing every day that it simply is not 
acceptable. There's 100,000 physicians in a grass roots effort 
trying to do this. But this isn't a doctor problem, really; it 
is a patient problem. The crisis is becoming a serious problem 
for patients and the access they might have for care. That's 
why the AMA has a Patient Action Network with over 180,000 
patients around the United States who delivered a half million 
messages to members of Congress. We will have 300,000 patients 
by October to do the same.
    For the record, you understand this well because you are an 
attorney. The AMA believes that when an injury is caused by 
negligence, patients are entitled to prompt and fair 
compensation including all economic costs; future earnings, 
lost wages, all medical costs. And when they have these things 
occur, there is pain and there is suffering, we recognize that, 
and some money should be paid. We think a quarter of a million 
dollars is as good a number as any, and a significant amount of 
dollars because everything else has already been taken care of.
    But right now our system is not predictable or fair. You 
have already suggested many who have claims don't bring them. 
We have to figure out a way to take care of these 
unquantifiable damages. The only way studies have suggested to 
do this is to limit not the issue of whether or not the patient 
gets paid for the economic part or the non- economic part.
    What has happened is we have found by study, that that 
which predicts the plaintiff being paid is how badly the person 
has been injured, not the presence of injury.
    What that means, Mr. Chairman, is doctors can follow the 
standards of care and still lose money in a lawsuit. That is 
simply unconscionable. We thank you for your hard work in this 
area. We have tried hard with you to work with Senate Bill 11, 
Patient First Act, which would do exactly as you suggest, to 
put a reasonable limit of $250,00 on the non-economic damage. 
This does work in California. We have the data. We can tell you 
with actuarial data what this will do. The J.O. itself said the 
rates of medical liability insurance premium growth are slower 
in those states where there has been this limit than in the 
states where there are not.
    The Agency for Healthcare Research has told us that there 
are more physicians per capita in states where these terms have 
been enacted instead of the other ones.
    There are many, many more stories. I won't--it would exceed 
my time and the other colleagues on the panel can answer your 
question.
    The American Medical Association thanks you for your 
leadership in this area. We are here to tell you we are like 
the weatherman: There's a storm coming. Mr. Chairman, now is 
the time to take care and batten down the hatches or there will 
not be people delivering babies. There will not be people here 
taking care of our injured children. Thank you very much for 
the time this morning
    [The prepared statement of Dr. Nelson appears as a 
submission for the record.]
    Chairman Hatch. Thank you, President Nelson. Dr. Lee? We 
are happy to have you here, Dr. Lee, and appreciate you.

   STATEMENT OF GEORGE LEE, M.D., ON BEHALF OF THE AMERICAN 
    HOSPITAL ASSOCIATION, VICE PRESIDENT, MEDICAL AFFAIRS, 
  CALIFORNIA PACIFIC MEDICAL CENTER, SAN FRANCISCO, CALIFORNIA

    Dr. Lee. Very pleased to be here. In my current role I'm 
the Executive Associate to the CEO of California Pacific 
Medical Center in San Francisco, which is a Sutter Health 
affiliate. But I have three roles. For twenty years I was the 
Chairman of the obstetrics department and I practiced 
obstetrics. For 12 years I have been a full-time hospital 
administrator. And thirdly, I helped form and have supervised 
the medical malpractice company that our physicians in San 
Francisco belong to and have a lot of experience on that side, 
also.
    I'm here today specifically to represent the American 
Hospital Association's concerns, and the nearly 4700 hospitals 
and health care system members of which there are about 31,000.
    We appreciate the invitation to talk about a serious 
problem and what we believe is the solution. The problem? How 
to control a Federal medical liability system that threatens 
the ability of patients to get the care they need. The 
solution, Federal reforms modelled after those adopted in 
California in 1976. These reforms are working. It is not, by 
any means, a panacea. It doesn't solve all of our justice 
problems. But it's working extremely well.
    The reason it works is that a panel sees the need of all of 
our constituencies. Our patients receive their settlements and 
their awards much more quickly than the rest of the country. 
Our patients receive about 80 percent of the award versus 60 
percent in the rest of the country. Our physicians are able to 
operate in a stable liability system that allows them to 
practice not only in the urban areas where our major facilities 
are, but in the rural areas where it is much more difficult to 
attract physicians.
    Our hospitals have the ability now to have more stable cost 
elements within the liability area so that we can direct more 
of our resources to other services that we wish to provide. And 
our rural communities are in a better position to attract 
physicians, particularly in obstetrics and neurosurgery and 
emergency room.
    Mr. Chairman, the effects of the medical liability crisis 
are well-known, but the bottom line is that patient care is 
jeopardized. In many areas physicians are packing up and 
leaving because they cannot afford the cost of liability 
premiums. Hospitals and other facilities are closing down or 
curtailing important services such as emergency rooms and 
obstetrical departments. Where these kinds of services are 
still available, not only are liability premiums driving up the 
cost of care, but defensive medicine, the ordering of extensive 
tests and other services equally drives up the cost of care.
    And here is a very, very telling statistic. After an 
extensive claims analysis, we can clearly state that there's 
very little correlation between the presence or absence of 
medical negligence and the outcome of malpractice litigation.
    Several states have enacted medical liability reform bills, 
but we strongly believe that this growing problem must be dealt 
with at the national level. The Federal Government pays for 
nearly half of health care delivered in this country. Standards 
of care are now national and defensive medicine costs the 
nation upwards of $100 billion.
    The California reforms enacted under the Medical Injury 
Compensation Reform Act of 1975, that's MICRA, and reflected in 
the legislation that is now the language in Congress should be 
adopted nationwide.
    I had the privilege to serve on one of the committees that 
developed the language for MICRA. For more than 25 years MICRA 
has demonstrated that patients' rights can be protected and at 
the same time medical liability costs can be controlled. States 
that have failed in their efforts to control costs are 
frequently those states that have enacted part of MICRA but not 
all of MICRA.
    The bipartisan Health Efficient, Accessible, Low Cost, 
Timely Health Care Act has been passed by the House but 
continues to run up against roadblocks in the Senate. The 
HEALTH Act contains these following MICRA provisions. It limits 
the amount a plaintiff can receive for pain and suffering. 
That's the cap of $250,000. But importantly, all economic 
losses and all economic costs are paid in full.
    It limits the attorney's care of 40 percent of the first 
$50,000 of the Plaintiff's award, 33 percent of the next, and 
lowers percentages for higher amounts. This means that patients 
receive a higher percentage of their awards. In cases where the 
court decides that the Plaintiff will incur future damages over 
$50,000, the HEALTH Act allows the award to be paid over time. 
That's periodic payments.
    It establishes a fair rule so that each party is liable 
solely for its share of damages and not for a share of any 
others. That's joint and several liability.
    Collateral source rule provides that if there are other 
insurances that will also impact on the ability to provide 
resources to that patient, they can be taken into account when 
awards are made.
    These kinds of reforms have worked in California. Total 
awards in California, even with the cap, have kept pace with 
inflation; in fact, they have exceeded inflation. So the same 
proportion that we determined was an appropriate proportion in 
1976 is what takes place today when awards are made.
    The average medical liability insurance premium in 
California, this is the average across all specialties, is 
$14,000 a year; less than the nearly $24,000 adjusted for 
inflation being charged in 1976. It has been a remarkably 
stable environment in California in that our premiums, although 
they have gone up to some degree, have remained very constant 
particularly for the higher specialties.
    The average time to settlement is now 1.8 years in 
California, as compared to two and a half years in other places 
in the country. As I said before, patients benefit more 
directly today than the attorneys do. And in a $1,000,000 
settlement, a patient used to receive about $600,000 of that 
settlement. Now they receive $800,000. Quicker settlements and 
a higher percent of awards is what the patient receives under 
MICRA.
    The AHA also supports a uniform statute of limitations and 
the continued development of successful conflict resolution 
programs. Non-traditional approaches such as alternative 
dispute resolution systems can play an important role in 
reforming the health care liability system.
    MICRA-style provisions as embodied in the HEALTH Act won't 
make a tort system a perfect system, but it will create 
stability and fairness for patients, physicians, and hospitals.
    Again, we appreciate the opportunity to be with you and I'm 
happy to answer any questions as we move on.
    [The prepared statement of Dr. Lee appears as a submission 
for the record.]
    Chairman Hatch. Thank you, very much. It has been very 
good. Dr. Sorenson? You are handling a major hospital network 
here, so we look forward to hearing your testimony.

STATEMENT OF CHARLES W. SORENSON, JR., M.D., EXECUTIVE VP/CHIEF 
 OPERATING OFFICER, INTERMOUNTAIN HEALTH CARE, SALT LAKE CITY, 
                              UTAH

    Dr. Sorenson. Thank you, Mr. Chairman. I'm a urologic 
surgeon who has practiced in Salt Lake City for the past 22 
years, so I'm testifying as a physician and also on behalf of 
Intermountain Health Care where I serve as Executive Vice-
president and Chief Operating Officer. I appreciate the 
opportunity to offer our perspective on the professional 
liability insurance crisis and a need for Federal tort reform.
    The medical liability crisis is adversely affecting 
patients in Utah in several ways. First, it contributes to the 
increase in costs of medical care which is already rising at an 
alarming rate. As a health care system, we are struggling to 
keep medical care affordable. This represents a considerable 
challenge. The cost of pharmaceuticals, medical equipment, and 
facilities are rapidly increasing. Increasing numbers of 
uninsured and charity patients, coupled with inadequate 
Medicare and Medicaid funding, necessitate cost shifting. This 
further increases costs for those with commercial insurance.
    Adding to these expense challenges is a 136 percent 
increase in malpractice insurance costs over the past 7 years. 
This is despite the fact that Intermountain Health Care has 
received national recognition for clinical excellence and has a 
favorable claims record. We see many dollars expended in the 
defense of claims that are ultimately judged to have no merit. 
Clearly we would much rather spend that money on improving 
patient care or reducing our charges for the patients we serve.
    Costs increase even more because of defensive medicine. 
These additional testing procedures add no useful clinical 
information and serve only to protect the physician in the case 
of a subsequent lawsuit. While we have a strong system-wide 
focus on evidence-based best practices, it is difficult to ask 
physicians to forego certain procedures they believe might 
protect them from litigation, even when such procedures aren't 
based on objective clinical evidence. The unfortunate fact is 
that too many medical standards in America have been created by 
legal precedent rather than by scientific evidence.
    Secondly, while increasing costs are worrisome, I have much 
greater concern about a developing shortage in a number of 
vital medical specialties. We may reach the tipping point, 
where doctors are unwilling to care for the types of illnesses 
and injuries that expose them to unreasonable professional 
liability risk.
    We feel the impact in our emergency rooms and trauma 
centers. Many doctors are reluctant to take E.R. call in such 
specialties as trauma surgery, neurosurgery, orthopedic 
surgery, and plastic surgery. Many have been sued for treating 
the difficult problems encountered there, even when their peers 
found the care they provided was consistent with best 
standards. We worry about who will care for our sickest 
patients when no physician is willing to assume the 
professional and financial risk.
    We feel the impact in Utah's rural communities where 
physicians are simply unable to afford the additional liability 
premiums needed to practice obstetrics or to perform basic 
surgical procedures. The obstetrical crisis is extending even 
to our larger communities where a growing number of physicians 
are giving up obstetrical privileges, leaving expectant mothers 
with fewer choices.
    We are very concerned by predictions of an even greater 
shortage of critical specialists in the future. America's 
medical schools and our own at the University of Utah report a 
dramatic decrease in the number of students pursuing 
residencies in surgical, obstetrical, and other high risk 
specialties. Who will be there to care for all of us and our 
families as patients in the years ahead?
    I'd like to now briefly offer two perspectives on potential 
solutions to the crisis. First, even though Utah has been a 
relatively progressive state in implementing tort reform, our 
problems are increasing. National limits on non-economic 
damages would be especially helpful. While Utah has a cap, it 
has not yet withstood challenge in the state Supreme Court. 
Federal laws that are consistent nationwide and able to 
withstand challenges at the state level would be helpful in 
correcting perverse incentives in our current tort system.
    We recognize the need to fairly compensate injured patient. 
But liability ought to be based on objective science, not on 
emotional appeal. For this reason, some form of alternative 
dispute resolution may be helpful.
    In conclusion, number one, the professional liability 
insurance crisis is adversely affecting the delivery of care in 
Utah. If changes are not made, Utahns will not have access to 
critical specialists in time of their greatest need. Second, 
Federal action on tort reform including limits on non-economic 
damages is urgently needed.
    We definitely agree that injured patients must be fully and 
fairly compensated. The challenge is to develop a better 
process for determining such compensation. On behalf of IHC, 
our volunteer trustees, our clinicians, and the patients we 
serve, we thank you, Mr. Chairman, for your interest and the 
opportunity to testify here.
    [The prepared statement of Dr. Sorenson appears as a 
submission for the record.]
    Chairman Hatch. Thank you.
    Dr. Rich, good to see you. We appreciate all the work you 
did on the Olympics. You must be enjoying the current Olympics 
in Athens.
    Dr. Rich. They have a very good team.
    Chairman Hatch. Our kids have really done well. Can't help 
but watch them.

     STATEMENT OF CHARLES RICH, M.D., SALT LAKE CITY, UTAH

    Dr. Rich. Senator Hatch, thank you for the invitation to 
participate on this panel discussing Utah's professional 
liability crisis and the need for Federal tort reform 
legislation.
    According to the survey that you mentioned from the 
American Association of Neurological Surgeons, Utah is one of 
24 states that they judged to be a ``severe crisis'' 
professional liability state. As a consequence, there is a 
concern that we are, on behalf of our patients, watching the 
situation occur where there is no access to us.
    There are only 27 neurosurgeons practicing in Utah. That's 
a smaller number than were here 5 years ago. Some of them cover 
very liability- intensive Level 1 and Level 2 trauma centers. 
Others would prefer not to. The University of Utah Health 
Sciences Center is self-insured. They have excellent 
neurosurgeons and they operate in a fundamentally different 
environment than those of us in private practice function.
    Chairman Hatch. By ``self-insured,'' what do you mean?
    Dr. Rich. The people at the University of Utah Health 
Sciences self-insure.
    Chairman Hatch. Part of their budget?
    Dr. Rich. That's right.
    Chairman Hatch. So it costs everybody in the state for that 
self-insurance.
    Dr. Rich. But whereas a private- practicing neurosurgeon 
goes to the market and looks for companies like St. Paul or the 
Utah Medical Insurance Association, and has to negotiate each 
year for their own premiums.
    Chairman Hatch. And St. Paul no longer provides--
    Dr. Rich. That's one of the messages here.
    Chairman Hatch. I didn't mean to interrupt you.
    Dr. Rich. No. That's a very pertinent point.
    The issue as it concerns the patients of Utah is the 
following: That although neurosurgeons are few in number, they 
are absolutely essential if there is to be available to the 
Utah public the following services; emergency rooms, tertiary 
or quaternary care, intensive care units, medical air transport 
systems, Level 1 and Level 2 trauma services, and for that 
matter a Utah State Bureau of Emergency Medical Services. 
Without easy access to neurosurgeons, not one of the above is a 
viable, functional entity. Our remarkably small number of 
willing neurosurgeons maintain that vital functional link.
    And I want to emphasize that the group with which I'm 
familiar, you couldn't find a more dedicated, hard-working 
group of people. There are three neurosurgeons in Ogden who 
cover McKay Dee, a Level 2 trauma center; five covering LDS 
Hospital, which is a Level 1 trauma center, taking 1200 
severely traumatized patients a year; and then there are three 
down in Provo covering the Utah Valley Regional Medical Center. 
And if you have never done it, don't underestimate what it 
takes to be on call every third night or every fifth night when 
the prospect of being up all night is a very likely 
possibility.
    There are three ways that this is affecting patients and 
the citizens of Utah as far as their access to neurosurgeons is 
concerned. One of them is early retirement. I cite myself as 
Exhibit A. When I finished with the Olympics I was 66 and very 
healthy. I think I know a lot about neurosurgery, but I knew 
that my premium for that next year would be $82,000 despite the 
fact that I have never had a payout, to my knowledge, from my 
insurance carrier. I wasn't willing to spend $82,000 for a 
reduced level of practice. It simply didn't make any sense.
    This year, if I were doing it, my premium would be $93,000 
and I submit to you that people in my situation start to make a 
judgment as to whether any of this makes sense.
    When you mentioned St. Paul, this has a direct effect on 
our coverage. We have a very large referral center here. One of 
our neurosurgeons who retired this year was insured by St. 
Paul, and when they went out of business he retired forthwith. 
And that had the effect of having our neurosurgeons not on call 
every sixth night, but every fifth night. And I remind you that 
St. Paul is willing to insure hurricanes and property casualty 
problems, but they cannot afford, apparently, to engage in the 
selling of insurance for professional liability.
    The other way that this is affecting the access of Utah 
patients to neurosurgeons is that they are altering their 
practice. There was a survey done of 563 neurosurgeons 
nationwide in 2002; 29 percent responded that they were 
considering retirement, 43 were considering restricting their 
practices to low-risk surgeries, and 19 were considering moving 
in response to the liability insurance crisis.
    There is a penalty that you pay in terms of your liability 
premium for doing craniotomies and cranial work. That is a very 
strange incentive when that's the very service that is needed 
in these emergency services, and yet those who engage in that--
    Chairman Hatch. That's on top of the $91,000?
    Dr. Rich. That's part of what they compute. But if you are 
not doing cranial surgery you pay one, and if you are you are 
paying a higher amount.
    The other way that it is affecting access to the citizens 
of Utah in neurosurgery care is just the entry level. If you 
look at surveys which have been done of medical students--keep 
in mind that neurosurgery requires a six to seven year 
residency post medical school. And it is a very hard program. 
There are fewer and fewer people who are medical students 
applying for the neurosurgery match. That has been documented 
since 1991, and is particularly true since 1995. And I don't 
think anybody doubts that it has something to do with the fact 
that neurosurgery is the most sued surgical sub- specialty and 
certainly has the most difficulty getting liability insurance.
    Four rhetorical questions: If you finished your residency 
in neurosurgery and were looking for a favorable location in 
which to practice, would you choose Utah with a severe 
professional liability crisis? If you were a young neurosurgeon 
already in Utah and noted that the fees paid for neurosurgical 
procedures were higher in Idaho and your professional liability 
premiums were lower, would it be appropriate to move there?
    One of the really capable neurosurgeons that we had in Utah 
left for Coeur d'Alene, Idaho about 3 years ago, and it's good 
for them.
    In good part a reflection of a litigious atmosphere 
practice, the number of practicing neurosurgeons in the United 
States has declined since 1998. By 2002 there were fewer in 
practice than there had been in 1991. During 2001 alone, 327 
board certified neurosurgeons, comprising 10 percent of our 
National work force, left their practices. Considering the 
availability of essential services to the public, of more 
concern is a large proportion of those remaining are in the 50 
to 65 year old age group and they have already altered how and 
where they practice in response to this crisis. And the only 
remaining option they have is to cease practice altogether.
    Senator Hatch, I remind you of the time when my practice 
partner, Bruce Sorenson, and I sat in your office in April of 
1995. As I recall, that very day we discussed tort reform and 
there had been a vote that day that you were disappointed in. I 
think you have been our ally, I think you supported us. We are 
grateful to that. And I think it is important to emphasize that 
the people you are representing in this are the citizens of the 
state of Utah. Thank you.
    [The prepared statement of Dr. Rich appears as a submission 
for the record.]
    Chairman Hatch. Thank you, so much. We appreciate your 
forthright testimony.
    Dr. Granger, you are one of the younger doctors here. We 
want to hear what you have to say about your future and what 
you think about it.

STATEMENT OF STEVE GRANGER, M.D., SURGICAL RESIDENT, UNIVERSITY 
                 OF UTAH, SALT LAKE CITY, UTAH

    Dr. Granger. Thanks for the opportunity to represent 
medical students and residents in this important hearing.
    As you mentioned, I'm in my general surgery residency here 
at the University of Utah. I chose a career in medicine as an 
undergraduate because of my interest in the sciences, and a 
naive desire to help in the healing process. I did not have a 
personal or family background in health care or law. At the 
time of this early decision, medical malpractice was little 
more than a bad commercial to me.
    Through 4 years of medical school and 4 years of residency, 
this naive view of malpractice couldn't have changed more 
dramatically. Unfortunately I believe most medical students now 
consider the effects of malpractice when choosing a medical 
specialty. Students who are particularly adept at surgery or 
obstetrics are consciously deciding to pursue alternative 
specialties because they want to avoid the perceived 
devastating effects of the country's malpractice crisis.
    Four years of undergraduate studies followed by 4 years of 
medical school and then an additional three to 7 years of 
residency is a significant commitment, and students are 
unwilling to enter specialties where they perceive they will be 
thrown to the wolves. A study published in 1998 at the 
University of North Carolina showed that perceived malpractice 
premiums have had a negative impact on medical students 
choosing specialties in surgery. And I think this influence has 
only worsened since 1998.
    The few of us that do still hold that naive notion that we 
can practice in these certain specialties have our eyes further 
opened when we enter residency. As residents, we are protected 
from almost all the business and insurance aspects of health 
care. We really have minimal to no exposure with 
reimbursements, business decisions, and malpractice insurance 
as residents. We don't act independently and therefore we are 
protected from lawsuits in residency.
    Even in the currently hostile environment of health care, 
our education continues to focus on the proper care of the 
patient. Yet despite this protective environment, we see and 
feel the overpowering influence that medical malpractice has on 
patient care and leading to practice decisions. Two of the 
surgical residents that I worked with as an intern, I have a 
small class of five that get accepted every year into our 
surgical program, and two of our five my first year clearly 
stated that they wished to enter alternative nonsurgical 
specialties and they dropped their surgical training for 
another specialty. They didn't want to work as hard as surgery 
demands during residency only to find themselves caught in the 
middle of a broken system. So they stopped their surgical 
training and chose alternative specialties.
    I remember long conversations with these two residents 
where they questioned my sanity to stay in a specialty that 
works as hard only to have more risk. I propose that no 
businessman or executive would choose to enter an environment 
where they are guaranteed to have higher risk for guaranteed 
lower pay.
    A survey conducted in 2003 of residents in their final year 
of training, you should have been excited about the prospects 
of finally venturing off into their careers showed that one in 
four of these graduating residents would choose a different 
vocation altogether if they could start over, and that their 
predominant concern was related to malpractice.
    Physicians have been charged with care of the sick, whether 
a friend or enemy. Historically, media portrayals such as MASH 
depicted the physician as a patient advocate, often at great 
personal or professional costs. Under this environment that we 
are still trained in today, compassionate quality care of the 
patient is our highest priority and training.
    Interestingly, in June of this year at a national American 
Medical Association meeting a proposal was made and debated 
about whether medical treatment should be refused to 
malpractice lawyers. This seems comical to me and it was widely 
shunned at the AMA meeting, but it does depict the nature of 
our current environment. Imagine the new medical student creed: 
We will care for our patients, friends, enemies, terrorists, 
but not malpractice lawyers.
    That's an interesting statistic, an interesting discussion 
and it was widely shunned, but it does depict the nature of the 
environment.
    One interesting statistic shows that before 1960, only one 
of every seven physicians was sued during their careers. 
However, current estimates indicate that one in seven 
physicians is sued every year. For a medical student and a 
resident, this environment is discouraging.
    My training emphasizes competent, compassionate care of the 
patient. Every interaction of every day is about how I can 
better care for my patients, often at great personal sacrifice. 
This is all I'm exposed to as a resident. I don't get exposed 
to any of the medical liability environment except to see its 
impact. All I want to do is care for the patient, and that is 
to spend my professional life caring for the patient. But I 
fear in the current environment many decisions are made 
regarding practice based on the impacts of medical liability.
    Difficult problems rarely have simple solutions, but I 
think the difficulty of the solutions shouldn't prohibit 
aggressive efforts at a multi-faceted solution.
    Fortunately, for the physician and patient, medicine can 
still be about care of the patient, but I fear that under the 
current medical liability environment this altruism will be 
more impossible with every passing medical school class.
    I appreciate your advocacy for change and hope that we can 
cause some of these efforts to occur.
    [The prepared statement of Dr. Granger appears as a 
submission for the record.]
    Chairman Hatch. Thank you so much. It has been a nice panel 
and certainly has presented a lot of the problems that exist. I 
know you have to leave, Dr. Nelson, so I want to start with you 
first. And that is, in your job as the AMA President, the 
American Medical Association President, I know you had the 
opportunity to speak to thousands of physicians across the 
country. What are these physicians hearing from their patients 
regarding the medical liability crisis?
    Dr. Nelson. We have traveled from border to border and 
coast to coast. I was in Oregon last week and heard a series of 
stories of concern. I'm thinking of a young woman in Newcastle, 
Wyoming who delivered her baby by Caesarean section, was 
pregnant for the second time. In the eighth month of her 
pregnancy, the liability premiums increased and the doctors 
couldn't afford them. She had to go over a hundred miles to 
another state to deliver their baby elsewhere.
    I'm thinking of Dr. Melissa Edwards who all her life wanted 
to be an obstetrician. At age 15 a caring teacher took her to a 
hospital, and she became an obstetrician, working her way 
through on her own from a blue collar family. Board certified. 
Wonderful doctor. Watched a colleague of hers one night deliver 
a baby. The colleague did appropriately but a lawsuit, $8 
million for cerebral palsy, a disease known to occur in utero 
and not because of birth trauma, was assessed against this 
other doctor. And Dr. Edwards quit the practice of obstetrics.
    What we are seeing is the doctors are doing the three R's; 
they are retiring, they are restricting their practice. Lots of 
doctors are not delivering.
    This is only the tip of the iceberg, Senator. Forty-eight 
percent of medical students tell the American Medical 
Association where they will practice and what they will 
practice is dependent on the liability situation. And this year 
in obstetrics and gynecology, the best of all specialties, I 
might add, 68 percent of the residencies did not fill, nearly a 
third of the residencies did not fill this year.
    Bring that home. Last year, in the entire medical school 
class in the University of Massachusetts, not one doctor went 
into obstetrics. 2002, the University of Utah, not one of a 
hundred doctors are going into obstetrics. 2003, two will, but 
one will not deliver babies. And I don't have the 2004 data. 
But of the last 200 doctors, only one will deliver babies. This 
is only the tip of the iceberg. We have to fix this or there 
will not be people to take care of patients.
    Chairman Hatch. In the state of Utah where we have a lot of 
babies, it seems to me we have have to encourage people to go 
into obstetrics. But let me ask you this: You have traveled all 
over the country. How many states allow physicians to practice 
without--I don't like the word ``malpractice,'' but without 
medical liability insurance?
    Dr. Nelson. It varies from state to state. There are 15 
states out of 50 that have a law on the state statutes that 
suggests that for a physician to practice in a hospital he or 
she must have professional liability insurance.
    The more common circumstance is that the hospital medical 
staff itself demands it, or the medical station in which they 
serve. That's the case where I practice at LDS Hospital. We 
think it is appropriate for our colleagues to be protected so 
it doesn't negatively affect on patients. But the issue is how 
much it costs.
    There are some very unique schemes. You have to look at 
Connecticut and what they are doing. You have to look at 
Pennsylvania. There's a surcharge for a catastrophic fund that 
doubles the amount of liability insurance. It is so bad there 
you have to get it from two companies. They will only sell half 
the policy. Specialists in my specialty in Florida spend 
$250,000 a year per doctor. Most doctors there are not having 
liability insurance. If the hospital or the state makes a rule 
they have to have it, those doctors simply will not practice.
    Chairman Hatch. What happens if a doctor doesn't have 
medical liability insurance?
    Dr. Nelson. Of course, if the law or the statute or the 
hospital says they have to have it and can't practice, they'll 
lose the patient as well as the doctor.
    There are negligent acts. We acknowledge that. When a 
patient has been injured through the act of negligence on the 
part of the physician, that patient should be paid promptly, 
fairly, and completely. We even believe there should be some 
monies paid, a substantial amount, a quarter of a million 
dollars for pain and suffering in addition to every other thing 
that should be paid.
    Our concern is that the data tells us, the evidence tells 
us that that is not the case. What we are seeing is that when a 
person is badly injured, that is what determines whether there 
is payout. We actually have cases where the doctor follows the 
standard of care and there is still payout.
    Chairman Hatch. All of you have chatted about this to a 
degree, but how many physicians have either retired or limited 
their scope of practice due to medical liability concerns? And 
how are the patients affected by that? You have all talked 
about that a little bit here. But is patient access to care 
more limited as a result of this?
    Dr. Nelson. We cannot give you actual numbers. We have one 
person who is the alliance president in Pennsylvania, he has a 
white coat ceremony. He goes up on the stage and has a white 
coat and a name of every doctor in practice in Pennsylvania 
that year, and we are up to several hundred. The problem is the 
count isn't accurate.
    For example, I have a license in Wyoming which is very 
difficult to get. I have maintained it. I have not delivered a 
baby in Wyoming since 1992. I haven't delivered in Salt Lake 
City since 2003. In both states the opponents of this side 
would suggest I'm available. But my patients can't count on me 
in either state. We don't have the data and we need help in 
getting it. So it's not just the number of doctors; it's what 
they actually do.
    Chairman Hatch. Dr. Nelson, has the AMA seen direct 
evidence that medical liability premiums have risen more slowly 
in the states with non-economic damages?
    Let's understand. When we are talking about economic 
damages we are talking about lost wages, medical care, hospital 
costs, et cetera, et cetera. When we are talking about non-
economic damages, basically pain and suffering that a jury is 
going to have to determine.
    Dr. Nelson. Medications, orthotics, prosthetics, hospice 
care, trauma care. Everything a person would need.
    Chairman Hatch. All the bills that can be received are paid 
by the economic damages.
    Dr. Nelson. We can give you three pieces of evidence. 
Number one, the California circumstance where premiums, on 
average, have risen three times faster across the country than 
in California since the enactment of MICRA.
    A study by Tillinghast-Towers and Perrin, an actuarial 
firm, who says the factor for liability premiums to increase, 
the fact that the liability premiums go up, is due to the fact 
that there is payoffs that have to do with non-economic 
damages. Last year the state of Texas passed a state 
Constitutional amendment in which they limited the losses to 
$250,000. The largest liability carrier in that state increased 
those premiums by 12 percent, and seven new carriers are coming 
into the state of Texas this year that are leaving other 
states. There's no question. In six states that don't have a 
crisis all have in common some method to limit non-economic 
damages. And by the way, I'm sure you know, people in 
California sue twice as often as the rest of the country. It 
does not limit their access to court.
    Chairman Hatch. You have been a real help here and I 
appreciate the work you have done for the AMA. And we are proud 
as fellow Utahns that you head the whole association and we 
have been privileged to listen to you.
    I'm going to have some tough questions in addition for some 
of you others, but I'm letting him off the hook here.
    Dr. Nelson. I'll take a couple, too, Senator.
    Chairman Hatch. I knew you would. If you need to leave, go 
ahead.
    When I ask some of these tougher questions, any of you can 
answer if you care to. Any of you can answer any of these 
questions that I'm asking. Dr. Lee?
    Dr. Lee. I want to make an additional comment that you 
asked on the long-term impact of when physicians lose their 
liability insurance what happens to patients, what happens to 
the system.
    Chairman Hatch. Yes.
    Dr. Lee. I want to go back to 1976 in California in our 
rural communities. I happen to have a small ranch in northern 
California, Mendocino County, a population of about 15,000 
people. Prior to 1976, most of the obstetrics was performed by 
people in general practice. They had a few obstetricians at one 
central hospital, one central community in that county.
    When the crisis of 1976 occurred, most of the general 
practitioners stopped providing obstetrical practice, and at 
the present time, patients now have to travel 50 to 75 miles 
from other parts of the county to get to the one central 
hospital that will provide obstetrical services.
    The impact is not exactly what is happening today. The 
impact is what will happen over time. When those resources 
withdraw from a rural county, it takes forever to try to get 
those resources to go back. Changes--and patterns of practice 
change. Physicians no longer want to go back into the rural 
communities because it is difficult to make a living in rural 
communities. And once the system changes and the physicians 
leave, getting them back is very difficult, and then the 
patient no longer has access to the services. That's the longer 
term impact. And that's what can happen in Utah if this 
continues on and on. You begin to lose the resources in your 
rural communities.
    Chairman Hatch. Let me ask you this: As head of the 
American Hospital Association, how many hospitals across the 
country are paying for their physicians' medical liability 
insurance or costs? Not even the insurance but--
    Dr. Lee. That varies dramatically from state to state. If 
you take Florida, which has a very serious problem, many of the 
obstetricians from Florida are either going without insurance 
or the majority of them are actually now being employed by the 
hospitals. So the hospital is footing the whole package of 
providing obstetrical services.
    Now, they can do that for a certain amount of time. But at 
some point in time, there are only certain resources the 
hospital has. If you direct all those resources to obstetrics, 
you have to pull back on the other things you have, taking care 
of other patients who perhaps don't have the same access, 
financial resources, that the more wealthy blue collar patients 
have.
    Dr. Nelson. So it's a wrong answer to a tough question. 
There are at least two reasons why hospitals shouldn't do that. 
Number one, hospitals are already strapped. There are many, 
many other things of concern to them. They shouldn't have to 
pay that. And when they do, all that does is shift the costs on 
their back. It doesn't fix the system. It is just a different 
way to pay for a system that is broken.
    In the state of Oregon the legislature there is paying $10 
a year for the next 4 years to subsidize the liability premiums 
of doctors in rural areas. That's money that could be used for 
health care that isn't currently being used.
    Chairman Hatch. I understand some hospitals are hiring 
doctors to avoid the medical issues, because the doctors have 
the insurance.
    Dr. Sorenson. I'm not aware of that, Senator. Intermountain 
Health Care employs about 450 physicians in its physician group 
and insures those physicians, but the costs of the professional 
liability insurance is considered in the terms of their 
practice costs. We try to compensate our physicians according 
to the market. And so they are affected by the rising costs.
    Chairman Hatch. But you have to have medical liability 
insurance, and the doctors do, too.
    Dr. Sorenson. That's correct.
    Chairman Hatch. And if there's an unfortunate result and 
litigation is brought, it is probably brought against both of 
you, isn't it?
    Dr. Sorenson. That is correct.
    Chairman Hatch. And you have a whole raft of other--
    Dr. Sorenson. Usually the hospital gets drawn into cases 
because it is perceived as the deep pocket, even when the 
hospital may have had minimal contact with the patient. And at 
least in our case, many cases are ultimately dismissed but 
after very expensive and lengthy litigation.
    Chairman Hatch. Let me ask you another question. What would 
be the consequences to IHC, Intermountain Health Care, or even 
the state of Utah if we continue to experience the inability to 
recruit and retain certain specialties such as obstetrics, 
neurosurgery, or orthopedic surgery? And are we facing that?
    Dr. Sorenson. Yes, we are currently facing that, as Dr. 
Rich indicated. And particularly in those specialties that are 
most acute; in things like neurosurgery, trauma surgery, 
orthopedic surgery, plastic surgery. Those things that involve 
our trauma centers, our emergency room. We are having a hard 
time because a decreasing number of physicians are unwilling to 
take calls in that setting. They recognize that there's a high 
risk of litigation involving these very complicated cases. Even 
in cases, as I mentioned in my testimony, where the care was 
according to the best national standards, if there's a bad 
outcome sometimes judgments are rendered based on the bad 
outcome alone, not based on whether or not best practices were 
followed.
    Chairman Hatch. That's interesting. What you are saying is 
the doctor may have practiced the highest standard of medical 
care, but because this is not an exact science, somebody for 
some totally unrelated reason or just because they have gone to 
him in the process, had some condition that was not the fault 
of the doctors in any way , or that nothing was the fault of 
the doctors, but the unfortunate result results in litigation. 
And who knows what the juries will do with those cases because 
it's much easier to identify with the person who has had the 
unfortunate result than it is with the doctor or hospital, the 
health care provider or nurse.
    Dr. Sorenson. That's exactly right, Senator Hatch. And 
that's why we are experiencing the shortages and we predict 
even greater shortages in those specialties that deal with most 
difficult patients; patients whose injury or disease has a high 
risk of a poor outcome, regardless of how good the care is.
    Another interesting thing, and Dr. Rich and I were talking 
about this. If you look at the most respected neurosurgeons in 
the United States, or trauma surgeons or cardiac surgeons or 
orthopedic surgeons, every one of them, virtually every one of 
them has been sued multiple times. These are the physicians 
that we, as physicians, would go to. And there is not a 
correlation between bad physicians and the frequency of lawsuit 
as much as there is a correlation between specialties and how 
often people are sued.
    Chairman Hatch. Dr. Rich, I think you have been eloquent 
with regard to Utah's problems in retaining or acquiring or 
enlisting or supporting neurosurgery and neurosurgeons in the 
state. Are you suggesting that the number of neurosurgeons in 
Utah will continue to decrease unless we solve this medical 
liability process? And maybe you might tell us what that means 
if we don't have access to the neurosurgeons.
    Dr. Rich. Well, I think there are two observations--
    Chairman Hatch. First of all, I think it's fair to say that 
neurosurgeons is one of the most specialized, all of these are 
specialties, but neurosurgery is one where there is much more 
likelihood of having an unfortunate result that had nothing to 
do with the ability of the doctor. Am I fair in saying that?
    Dr. Rich. Well, in some of the brain tumors, in some 
cerebrovascular anomalies, in some spine disorders there's a 
risk inherent in the procedure, known well before the 
procedure, that it can be done absolutely correctly, seemingly 
go perfectly well during the procedure, and there can be an 
unfavorable outcome.
    Chairman Hatch. In every case the patient is informed that 
this could happen.
    Dr. Rich. Yes. But believe me, Senator Hatch, I have known 
from neurosurgeons who just are emotional basket cases when 
that happens. It is not as though this is something that anyone 
ever comes to the point where they get used to it.
    But the bottom line is that if there isn't some limit, then 
you are going to have a very fundamental problem. It's not a 
spigot that you can turn on and off. I didn't finish my 
neurosurgical residency until I was 35. My son has now gone 
into neurosurgery and he didn't finish his residency until he 
was 35 years old. So if you take that long to train people to 
do this and then we have all heard today that medical students 
are more and more risk averse and they are responding to the 
appropriate incentives and they are not going to go into these, 
as was just said the real alarm is to look down the road and 
say, is the time going to come when someone who today just 
assumes that if their mother has had a cerebral hemorrhage and 
goes to an E.R., they are going to have a two-hour rapid 
intervention and have done whatever needs to be done? I think 
anybody who knows the landscape here knows that the numbers 
don't look good, either in terms of the number of people who 
are entering that field or the perverse incentives that are 
taking people who are still well within their capacities to 
practice that are incentivized to leave practice. So I don't 
think there's any question that if this isn't addressed that 
it's going to result in a real man power problem for highly 
specialized surgical subspecialities.
    Chairman Hatch. Especially less and less neurosurgeons in 
the state of Utah to help with these very serious cases.
    Dr. Rich. I think it's inevitable.
    Chairman Hatch. It's a matter of great concern to me. You 
have indicated that you didn't or you really didn't finish 
your, was it, until you were 35 years of age?
    Dr. Rich. That's correct.
    Chairman Hatch. That means if you take an average person, 
at 18 you graduate from high school, 4 years of college at 22, 
3 years of medical school. Right?
    Dr. Rich. Four years of medical school.
    Chairman Hatch. Four years of medical school. That's 26.
    Dr. Rich. All neurosurgery residencies are 6 years; some 
are 7 years.
    Chairman Hatch. You have 26 plus six, that's 33.
    Dr. Rich. A mission and military service.
    Chairman Hatch. I see. But the average neurosurgeon is 
going to be 32 or 33 before he or she is ready for practice.
    Dr. Rich. That's correct.
    Chairman Hatch. It not only means that you have to 
sacrifice from 18 years on up--and I take it during these years 
of residency, you are not being paid astronomical sums of 
money.
    Dr. Rich. At Johns Hopkins my rent was more than I was 
being paid.
    Chairman Hatch. The point is you sacrifice all the years 
until you get to the point where you are 32, 33, 35 in your 
case and your son's case, and then your prospects are limited 
if there's an unfortunate result so this--
    Dr. Rich. That's correct.
    Chairman Hatch. And even if you start at 35, you are going 
to have to pay $91,000 for liability insurance.
    Dr. Rich. The UMIA does something I think is very--it lets 
you work up over 5 years, knowing that you have just barely 
entered practice. But within 5 years, you are going full bore. 
And for the guys around here, that's about $100,000.
    Chairman Hatch. Doctor, how many of you have left practices 
or even limited their practices due to medical liability 
insurance in this particular what you consider to be a crisis?
    Dr. Rich. Citing myself as an example, I would be happy to 
work in a limited environment. But with the overhead that high, 
one has to make a decision whether you can afford to.
    I think the other is the example I gave of a very 
contributing gentleman willing to cover this very onerous 
regional trauma center who, when St. Paul went out of business, 
he went out of business. And when he went out of business we 
went from an every sixth to an every five night call schedule.
    Chairman Hatch. With someone like you who has this 
experience but wants a limited practice but would like to keep 
helping people, with someone like you if you wanted to go work, 
say, in a rural area or some charitable medical group helping 
the poor, do you have any sense to do that?
    Dr. Rich. I think a lot do. The gentleman who went out of 
practice and is no longer covering the trauma center is in 
Mongolia on an LDS mission.
    Chairman Hatch. I'm talking about within this country. 
Because if you can't afford the $91,000 of insurance, you are 
really risking your home, your family, and everything else that 
you accumulated over the years.
    Dr. Rich. You can stay busy. I'm going to be an examiner 
for the American Board of Surgery. I still serve on boards and 
committees.
    Chairman Hatch. But that's different from operating on 
people.
    Dr. Rich. Can't afford to do that.
    Chairman Hatch. Well, we can't afford to lose people like 
you. And I know you very, very well and know how competent you 
are. And, like you say, you have never been sued for medical 
liability in all the years of practice. And yet you can't 
afford --you are at the top of your profession. You have a 
number of years. I know doctors who are doing an awful lot of 
great work into their seventies. Some even in their eighties. 
The famous heart physician down there in Houston.
    Dr. Nelson. Dubecki?
    Chairman Hatch. I know him personally and I watched him 
perform open heart surgery once. And he is almost a hundred 
years old and still giving services all over the world. But 
doctors just can't afford to do it, can't afford the insurance.
    Dr. Rich. That's why I agree with the comments being made 
about it being a broken system. You depend on the incentives 
being correct, and then you work for the public. And the 
incentives are bringing about results that do not conform to 
what benefits them.
    Chairman Hatch. Dr. Granger, how many of your colleagues 
and students, well, students and residents and so forth, have 
changed their hoped-for specialties because of medical 
liability concerns?
    Dr. Granger. I think there's a significant impact on 
medical students deciding what specialty to practice. Dr. 
Nelson mentioned even in our own university in 2002, no 
students chose to go into obstetrics because of the medical 
liability crisis. And in 2003, I think there were two, but one 
of them was going to go into gynecological practice and not 
practice obstetrics. So in 2 years we entered one student into 
obstetrics. That's a small percentage and there's certainly a 
greater need there. And then in the surgical training here at 
the University, we have five residents every year that are 
chosen to go into surgical specialties.
    Chairman Hatch. General surgery.
    Dr. Granger. And two of the five jumped out after 1 year 
and changed completely what they were going to do because of 
the concerns regarding medical liability.
    Chairman Hatch. Referring to Dr. Nelson, he talked about 
how few are going into obstetrics today and they are not even 
trying medical school. It seems to me we can't afford that.
    Dr. Nelson. When I was a resident we had 20 percent of our 
class going into obstetrics and gynecology. It is such a deep 
problem. There isn't time to go into it all here today. But I 
was decrying to one of my Canadian colleagues the day before 
yesterday in Toronto the issue that we are not even teaching 
residents by best practice anymore. We are teaching how to 
protect themselves in case of a liability suit. Seventy-five 
percent of doctors are saying that the way they practice is 
affected directly by the concern, the fear of liability.
    Chairman Hatch. I estimated about $300 billion, and this 
was twenty years ago, $300 billion, and this is the testimony 
of someone in the field, of procedures that were unnecessary. 
We want to practice defensive medicine when it's necessary to 
do the best you can. But I'm talking about unnecessary 
defensive medicine. Do you think I'm that far off?
    Dr. Nelson. I think you're low.
    Chairman Hatch. And that was twenty years ago when I said 
that.
    Dr. Nelson. Seventy-five percent of doctors said the way 
they practice is being affected, and they thought 95 percent of 
their colleagues are being affected.
    Chairman Hatch. Let me ask a tough question. In my practice 
I saw the wrong leg taken off. Clearly negligence. The wrong 
eye taken out. And I have seen other similar things. How do you 
solve the problem in those cases where there should be pretty 
high non-economic awards? Clearly negligent.
    Dr. Nelson. Fairly and completely. When something like that 
happens, a physician is negligent and should be held 
responsible.
    Chairman Hatch. I have seen the wrong kidney taken out. You 
only have two. You have to have two legs, two eyes. What do we 
do about that?
    One of the problems that I see in the current legislation 
in Congress is that the $250,000 or $300,000 or $500,000, and I 
expect it will go up to at least $500,000 in non-economic 
expenses. But in other words all the non-economic costs 
including lost wages and so forth can all be reimbursed on the 
economic damage side. But what do you do about the pain, 
suffering, inconvenience, and loss of health, life, and so 
forth?
    Dr. Nelson. You pay something for sure.
    Chairman Hatch. What do we do?
    Dr. Nelson. You pay an amount. We need to fund a system 
that is fair. If you are my patient and I give you Ampicillin 
which I have given you before, but this time you have a 
reaction where your kidney shuts down, your heart stops, you 
are very injured. Did I make a mistake? No. Was I at fault? No. 
But what happens is because you are injured you are likely to 
be compensated. We have to differentiate between those things.
    Chairman Hatch. So many could get compensated who never 
really would get compensated otherwise.
    Dr. Nelson. Right. It's an issue of equity. And the equity 
is people ought to get the money due them when they are 
injured, for sure. But if there is going to be a system where 
everything that could go wrong can be compensated, that can't 
be on the backs of only the physicians.
    Chairman Hatch. My question is a little bit different than 
that. My question is this is a system that should be fair. And 
the wrong leg is taken off, the wrong eye taken out, the wrong 
kidney taken out, shouldn't there be an ability to go beyond 
whatever the cap is? I think there should be a cap. The 
question is should there be an ability to go beyond that cap in 
those really egregious negligent cases?
    Dr. Nelson. No, there should not be.
    Chairman Hatch. You don't think so?
    Dr. Nelson. No, sir, I don't. And the reason I don't think 
there should be is we already allege and assert we are willing 
to pay every single farthing for the economic damage, and 
something for the non-economic part. If there's punitive damage 
because the person does something willful, that's a punitive 
issue. That's a criminal issue.
    Chairman Hatch. Again, you are talking about punitive 
damages, and that's more than the cap.
    Dr. Nelson. Punitive damages, we have no argument with 
that. We are talking about the liability only.
    Chairman Hatch. Then what you are saying is, if I interpret 
it correctly, and you correct me if I'm wrong, is that where 
there's a clear cut gross negligent situation like the wrong 
leg, wrong eye, where there's a clear gross negligent 
situation, I wouldn't call it punitive damage, but there could 
be more damage if they can prove that. Yes? Go ahead.
    Dr. Lee. I feel strongly, too, about a fixed cap, and I 
feel strongly about what I have watched the last 30 years. I 
stated in my early discussion that we don't have a perfect 
system. I don't believe we will ever get a perfect system, 
based on all the variables that are in play. But we have to 
have a reasonable system, a system that works very well.
    Chairman Hatch. For the vast majority of the people. A 
utilitarian stem.
    Dr. Lee. If we take one example out of the millions, we 
come up with the wrong conclusion. We look at what does public 
policy have to do for all the people being served? The 
difficulty with a cap, when you don't have a very fixed cap, 
the cap is incentive to get cases fixed early, not to go off 
frivolous cases. If you multiply the financial impact of the 
cap across the entire process, it's much broader and deeper 
than just is it $250,000 or $500,000? And I think in 
California, what we have seen is the ability to resolve cases 
very, very quickly, half of the time it takes in the rest of 
the country. An ability to get--
    Chairman Hatch. And a more fair basis.
    Dr. Lee. An ability to get more of a percentage of the 
award to the patient on a fast, predictable way. And it's the 
entire package of the cap plus the other parts of MICRA. If we 
start to unravel one part of MICRA and then another, you openly 
get into a new system which hasn't been tried. We have no 
evidence that it is going to work. And we do have a system 
right now that has had 30 years of experience that has been 
very predictable.
    Chairman Hatch. And I take it innovative lawyers will find 
a way around it. If you have a gross negligent provision, 
lawyers will find a way around that. So that everything is 
gross negligence.
    Dr. Nelson. Our thinking is when there's a hole in the 
limit, there's no limit.
    I would point out this in closing. Seventy percent of 
lawsuits brought against physicians go away without no payment 
to anybody. It costs about $40,00 per case to make that happen. 
Of those that do go to court, 80 percent of the time the jury 
finds in favor of the physician. That costs about $90,000.
    Of those where there's a payout, in addition to the payout, 
the cost is $328,000 per case. There are 125,000 medical 
liability cases in court in any given day in this country. 
There are not that many bad doctors. This system is broken. We 
hope this will be a great first step to go to a better system. 
Your point is one we need to be discussing. What is a better 
system? A medical court? An administration system? Something 
like a Workmen's Comp, some other plan. But right now the 
patient is hemorrhaging. If we don't stop this hemorrhage, 
there won't be a patient.
    Thank you very much.
    Chairman Hatch. This has been great. I have had a lot of 
hearings through the years on issues like this and this has 
been one of the best panels I have ever seen. And all decent, 
honorable people who have expressed, I think, the problems as 
well as they could be expressed. I'm indebted to you, to you 
taking this time, and I really appreciate it. You have helped a 
lot of people understand this better. Keep working on it. And 
we appreciate all of you and we will let you go. Thank you. 
Appreciate you coming up.
    [Recess.]
    Chairman Hatch. On our second panel we have Ms. Donna Page 
of Park City Utah whose bacterial infection was repeatedly 
misdiagnosed; who was one of the torchbearers for the Salt Lake 
City 2002 Olympics, and we are grateful to have her here. If 
she would come, we would appreciate it.
    Next we have Ms. Karla Glodowski whose son went into the 
hospital with a cut fingertip and left the hospital severely 
disabled. We are very interested in hearing these two 
witnesses.
    And finally we have Mr. Charles Thronson who is 
representing Utah Trial Lawyers Association, and we are glad to 
have him here, as well, and look forward to taking this 
testimony.
    Start with you, Ms. Page. Thank you so much.
    Ms. Page. Thank you.
    Chairman Hatch. Look forward to hearing from you. Mr. 
Thronson, grateful to have you here.
    Mr. Thronson. Thank you, Senator.
    Chairman Hatch. And get Karla and her little boy here. We 
appreciate that.
    Ms. Page, we will start with you.

            STATEMENT OF DONNA PAGE, PARK CITY, UTAH

    Ms. Page. Thank you, and I appreciate you listening to my 
testimony.
    In January of 2000, I was an extremely healthy--
    Chairman Hatch. Pull that microphone closer, right about 
there.
    Ms. Page. I was an extremely happy 63-year-old woman. I had 
my own successful tax preparation business and many hobbies. My 
husband and I enjoyed skiing, hiking, tennis, working out with 
weights, and we also traveled. Loved theater, loved dancing, 
and had lots of other activities.
    Six months before this, I competed in the Honolulu Tinman 
Triathlon, which consists of a half mile ocean swim, a 25 mile 
bike ride, and a 6.2 run. I was in very good shape.
    Chairman Hatch. That's very impressive.
    Ms. Page. On February 17, 2000 I didn't fell well, which 
was very unusual for me because I'm always healthy. I seldom go 
to the doctor but I am health conscious and will go if I think 
there is a problem. One lesson I learned from this experience 
was never let a doctor put you off. If you are sick, make sure 
you don't let a medical professional minimize the problems. I 
had a high temperature and went to the clinic. The doctor told 
me simply to take Tylenol and sent me home.
    The next day I was very feverish and felt much worse. My 
husband took me to a large hospital emergency room in Salt Lake 
City where I spent the entire day. During the day my fever 
spiked at over 106 degrees and my blood chemistry deteriorated, 
which I later learned are clear signs of a major infection. At 
the end of the day the doctors did nothing and sent me home 
again with no further instructions.
    The third day I was deathly ill and I could hardly walk. I 
went back to the clinic in Park City and the doctor recommended 
I take Gas-X and once again sent me home.
    Early in the morning of February 20, we went back to the 
hospital emergency room and exploratory surgery was performed. 
The doctors came out of the operating room and told my husband 
to get my family together as I would not survive the day. That 
began the battle that would change my life.
    It turned out I had a Strep A infection that had been 
misdiagnosed for the last 4 days that was shutting down my 
body. I spent the next 2 months in a medically induced coma. It 
was necessary to amputate both my legs below the knee, all the 
fingers and part of the right hand, and most of the fingers on 
my left hand. I was very close to death many, many times.
    On top of that, as I was finally recovering, a nurse stuck 
a feeding tube in my lung and filled my lung with feeding 
solution, causing a respiratory arrest. If I had received 
medical treatment that I needed when I first went to the 
emergency room, these horrific things would not have happened 
to me.
    After 4 months, I left the hospital to face the challenges 
of a very new life. We are not ``lawsuit type people,'' if 
there is such a thing like that in Utah. I did receive very, 
very poor medical attention that would change my life forever 
in awful ways. After much discussion and soul-searching, we 
decided to file a lawsuit as we knew our financial needs were 
going to be quite different than our original retirement plans.
    A cap of $250,000 would not have come close to solving our 
problems. We had a lovely home but had to sell it because it 
had three stories, and that does not work if you don't have 
legs. Also, remember that insurance companies and even Medicare 
want to be at least partially repaid if a settlement is 
received. And lawyers cannot work for free.
    This illness used up most of my medical insurance. For once 
I was lucky to be old and able to apply for Medicare less than 
a year after leaving the hospital. What if I had been 54 
instead of 64? I now have Medicare but I must purchase the most 
expensive supplement insurance available as my legs, which are 
replaced every several years, cost $40,000 plus, and the 
accessories necessary to make them work cost several thousand 
dollars a year.
    There are so many things I need that are not covered by 
insurance. I need special equipment to turn on lamps, to hold a 
pencil, and a million little other things. The tax preparation 
business I had nurtured for 40 years, and the income from it, 
are a thing of the past. I am blessed with a loving husband who 
takes wonderful care of me, however he is almost 9 years older 
than me and odds are I will outlive him. In many years my 
illness aged him a lot more than it did me.
    I cannot live alone. I'm very independent but there are so 
many things I just cannot do. Simple things like lifting a pan 
of water from the stove to the sink, or trying to cut big 
pieces of meat are beyond my capabilities. There are doors and 
windows that are more than I can handle. I used to hop on the 
kitchen counter to reach high cabinets, but that's out of the 
question now. I don't want to ever be a burden to my children, 
but if something happens to my husband, this is a real 
possibility.
    After my illness, I applied for long-term care insurance. 
But to no one's surprise I was uninsurable. The settlement I 
received in my lawsuit did not make us rich but it will be my 
long-term care insurance.
    Two years ago, after I was misdiagnosed and had to have all 
my amputations, I was asked to carry the Olympic torch as it 
come through Park City and that was probably one of the biggest 
honors in my life. Because I have no fingers left we were able 
to strap the torch to my palms and that's how I carried it.
    I'm a survivor and I'm not a complainer but I seriously 
doubt that anyone here today actually believes that a $250,000 
damage cap is fair compensation for the pain and suffering that 
I and my entire family have gone through and will go through 
for the rest of our lives. And I seriously doubt that anyone on 
the panel, you, Senator Hatch, or the doctors that were here in 
this audience, would think that a $250,000 cap was fair if they 
had a wife or child that had to have their legs and fingers 
amputated and live the rest of their lives that way as a result 
of medical negligence. Thank you. And if you have any 
questions, please ask.
    [The prepared statement of Ms. Page appears as a submission 
for the record.]
    Chairman Hatch. Thank you. I appreciate you coming, and 
appreciate you bearing that torch, too.
    Ms. Page. Thank you.
    Chairman Hatch. You're clearly a very good person.
    Ms. Page. Thank you.
    Chairman Hatch. Ms. Glodowski, we want to hear about you 
and your son.
    Mr. Thronson. Senator Hatch, if you would let me show a 
short video of Christopher Glodowski which we will now show. 
This is a before and after video.
    [Video played.]
    Chairman Hatch. Shall we take your testimony now?

            STATEMENT OF CARLA GLODOWSKI, LEHI, UTAH

    Ms. Glodowski. Thank you. On July 5, 2002, my 16-month-old 
son Christopher Karac Glodowski stuck his finger in my older 
daughter's bike chain. She was unaware that it was there and 
the tip to first joint was cut off. We rushed him to the 
hospital and were told that he was a good candidate for 
replantation and we decided to have the medical team attempt 
the reattachment.
    Chairman Hatch. Would you read just a little bit slower, 
because you are excited and we can't quite understand as well. 
I think I can, but I want to make sure everybody can.
    Ms. Glodowski. Okay. Due to the lack of professionalism and 
the inattentiveness of the doctors, my son was allowed to 
suffer a bronchial spasm to the point of oxygen deprivation. He 
went into cardiac arrest and had to be revived with chest 
compressions and finally epinephrine. After this occurred, the 
medical team chose not to tell me what had happened to my son. 
They did not give me the choice to end an elective surgery to 
explore why my healthy son was responding this way. They 
continued with the surgery, and they took away my right as his 
parent.
    Karac did not come out of the operation with the 
appropriate responses. He was unable to awaken and could not 
breathe on his own. He had to be life-flighted to Primary 
Children's Medical Center and he was subject to a battery of 
tests to determine why he was responding abnormally. Some of 
the tests included AIDS, blood tests for genetic disorders, 
MRIs, and additional surgeries for a muscle and skin biopsy.
    The second MRI showed he had suffered a severe anoxic brain 
injury. His body had gone too long without oxygen. He would 
never again be normal.
    Later as experts were hired and depositions were taken, we 
finally began to receive the truth about what happened to 
Karac. He has asthma, which the doctors knew before they 
operated on him, and he has a more sensitive airway than 
someone who doesn't. When they intubated, he had a bronchial 
spasm and it was not treated right away with epinephrine. In 
fact, this medication was given last. He was allowed to cascade 
downward until he had a heart rate of 20 and no blood pressure.
    An independent handwriting expert had to be hired to prove 
that Karac's charts were altered to look like he wasn't in 
distress as long as he was. The charting has two periods in 
which nothing was charted. Karac was dying and the entire room 
of medical personnel was allowing it to happen. The very people 
that swore under oath that patient safety was their primary 
concern denied having any responsibility.
    I have not worked since this happened to my son. My 
employer was not supportive, and I was forced to quit my job. 
Due to the fact that I made a majority of our family's income, 
we began to suffer severe financial difficulty.
    On November 10, 2003, we settled our case out of court for 
an undisclosed amount. I did not want to settle, but due to our 
situation it was the only way to guarantee that Karac would get 
the money to care for him for the rest of his life. In settling 
with the other parties involved, we had to agree not to mention 
the names of the medical personnel involved or the medical 
facility where it occurred. In essence, I feel we have to 
protect them and their identities when they should have 
protected my son.
    And in protecting their names I have learned from their co-
workers that they still do not show remorse or acknowledge 
guilt. In fact, they are stating that my son came into the 
hospital in the condition he is in now.
    I'd like to tell you more about my son, Christopher Karac, 
and the incomprehensible effect this has had on my family. We 
call him either Bubba or Karac. My husband named Karac after 
Robert Plant's son. Robert Plant was a member of the rock group 
Lead Zeppelin. His son died at the age of 5 of a mysterious 
virus and Robert Plant co-wrote a song, ``All of my Love,'' as 
a way of overcoming his grief. This song has now come to mean a 
lot to myself as well. Although my son is still alive, on July 
5, 2002, the medical personnel that operated on him killed the 
boy he was supposed to grow up to be, and left a hurt and 
damaged shell.
    Prior to July 5, Karac was full of energy. He loved to play 
catch, interacting with his sisters and eating. He was quick to 
laugh and smile and was full of life. Now he is quadriplegic, 
suffers from cortical blindness. He cannot eat normally and 
must receive his nutrition through a tube in his stomach. He 
has a baclofen pump implanted under his skin with a catheter 
threaded into his spinal cord. This mechanism delivers a 
constant supply of medication to his body to help control 
muscle contractions. He suffers from high blood pressure, 
reflux, irritability, and has difficulty sleeping. The quality 
of Karac's life has been horribly altered. He is committed to a 
life of pain and frustration.
    A few of the things not taken from him are his smile and 
laugh and his love for his family and music. Ironically, his 
favorite music is Lead Zeppelin.
    This has also had an acute effect on my daughters. My 
oldest daughter, Kielee, still displays problems with guilt. 
She wants to know when Karac's finger is going to grow back. 
She wants to know when he is going to get better and walk and 
talk. She has moments when she will become thoughtful and when 
I ask her what is wrong she will cry and tell me that she will 
never hurt Bubba again. She is unable to separate the accident 
with the bike and the monstrosity that actually happened to him 
at the hospital. They are linked together in her mind.
    Kiera is five and just learning to read. She was eating a 
piece of Laffy Taffy in the car and read me the joke. ``What 
has two legs but can't walk?'' I thought about it for a moment 
but did not come up with the answer. Kiera came up with her own 
answer. She said, ``Bubba.'' I started to cry and could not 
drive through my tears. I do not know what the true answer was, 
but hers is forever burned into my mind.
    My husband has lost his namesake and his baseball player 
partner and he has quietly dealt with what has happened to 
Bubba. He has been forced to continue to work a dead-end job 
because we have to keep medical insurance. And when he does 
break down, he tells me that he let Bubba down. He was supposed 
to protect him and not let anything bad happen to him.
    And as for myself, I despise the person who coined the 
cliche, ``Time heals all wounds.'' I know I will not live long 
enough to heal. To this day, I still cannot talk about what 
happened to Bubba without breaking down. The day that Bubba's 
finger was cut off, I was trimming the rosebushes around our 
house and I remember thinking that the sheers were sharp and I 
needed to put them away properly so the kids wouldn't cut 
themselves. And at that point I heard Chris yelling. I believe 
God was trying to tell me something was going to happen, but I 
didn't listen.
    We recently found out we are going to have a new little 
baby boy in September. This should be an extremely happy time 
for all of us, but I can't help crying. I keep wondering if 
this is a way to replace Bubba, and somehow get raising him 
right this time. It's so hard to be happy when I'm worried all 
the time. I'm worried about dying before Karac, and having him 
die before myself, and being physically unfit to care for him. 
I stress about the girls being emotionally scarred and I'm 
concerned about spending enough time with them. I do not want 
them to resent Bubba. It also saddens me to know that every 
Saturday our family time includes everyone but Bubba. He is 
left home with a nurse. Our family has been destroyed.
    The money we received in this settlement has done nothing 
to help put our family back together, but it has taken away the 
financial burden. I have been able to purchase additional 
therapy equipment for him, receive additional therapies, and it 
will help assure that Karac will have the best quality of life 
possible.
    I cannot fathom the thought of anyone thinking that putting 
a cap on the amount awarded to families who have been 
victimized by malpractice will solve anything. In my eyes, it's 
an attempt to victimize the innocent even further. My son's 
life did not come with any dollar sign attached. Although he 
wasn't important to those who operated on him on July 5, he is 
important to me and he can't be replaced.
    Damage caps only hurt the people who are the most injured. 
Our claim was not frivolous or a junk lawsuit. The only junk in 
this case was the quality of medical care Karac received. I 
want those of you who are voting on this topic to consider how 
you would vote if this was your son. Should you protect 
innocent babies like Karac or doctors that lie and alter 
records? My son had to undergo many additional tests and 
surgeries because of their deceit.
    I would give anything to have my son back. In my eyes the 
doctors are replaceable. Don't let this happen to your family 
before you make the correct decision. Make it now. Doctors 
already have more protection than anyone else. Protect 
families. Reform insurance companies and hold bad doctors 
accountable. Do not continue to victimize those who have 
already lost so much. Make the right and only decision.
    [The prepared statement of Ms. Glodowski appears as a 
submission for the record.]
    Chairman Hatch. Thank you. We appreciate you taking time. 
Appreciate you bringing your son with you. Appreciate very much 
the pain and suffering you have gone through. Mr. Thronson? We 
will turn the time over to you.

 STATEMENT OF CHARLES THRONSON, UTAH TRIAL LAWYERS ASSOCIATION

    Mr. Thronson. Thank you, Senator Hatch.
    As many times as I have seen this, it is still hard for me 
to watch this video. And as many times as I have talked to 
Karla, it is still very difficult for me to hear the story 
again, even though I handled her case.
    You just heard the heartbreaking stories of two of my 
clients. Unfortunately, these families were not alone in their 
tragedy. I have walls in my office full of photographs of 
people like Christopher and Donna. Preventable medical errors 
like those happen far too often in Utah and across the United 
States. In fact, a new study puts the number of people who die 
each year in the U.S. from preventable medical errors at 
200,000 Americans a year, up from an earlier study by the 
Institutes of Medicine--not an attorney's group; the Institutes 
of Medicine--showing upwards of 90,000 dead, making medical 
mistakes the third leading cause of death in the nation, behind 
heart disease and cancer. This is the equivalent of two 747 
crashes every day in this country. Every day of the year, year 
in and year out. And that does not include the hundreds of 
thousands who are injured like Christopher or Donna who are not 
killed outright.
    The real crisis is not medical malpractice litigation. The 
real problem is medical malpractice. Overworked nurses, 
exhausted residents, fewer staff per patient, use of 
paraprofessionals, medication errors, and the list goes on and 
on.
    When we talk about our healthcare system and how to make it 
better, and we talk about altering our time-tested justice 
system in which you have been a long-time part of, we would all 
be well advised to keep these people, these families at the 
front of our minds. Tell these people that their claims are 
frivolous and their lawsuits are junk.
    I think we can all agree that if something like the 
catastrophic loss these two patients suffered happened to 
someone in our families, we would all want full justice and 
accountability. We would want a fair shake. We would want the 
specifics of the case to be heard by a jury of people like us. 
Our citizens, our neighbors, people who pay their taxes and 
vote. People who put up their flags and send their sons to 
fight for us. Ordinary people. Entrusted people. We wouldn't 
want some one-size fits all mandates from the Federal 
Government, putting a value on the life and suffering of a 
loved one no matter how shocking the case or horrifying the 
long-suffering.
    Senator it is easy not to question the apocryphal stories 
of doctors begging on the streets because their malpractice 
insurance is too high. It's easy to latch onto a few highly 
publicized cases of justice gone awry, and I'm not denying that 
there are some cases where that's happened, although those are 
in the extreme minority. It is easy to accept urban legends as 
fact. In short, it becomes easy to lose sight of the real facts 
and the best interest of real people.
    I'm going to ask you to consider a few statistics before 
you think about limiting the rights of those people who have 
been truly injured. First, contrary to the claims of those 
seeking what some call tort reforms, there in fact has been no 
explosion of lawsuits in liability cases generally or in 
medical malpractice cases specifically. The Department of 
Justice's Bureau of Justice statistics report the number of 
tort lawsuits decreased by 31.8 percent between 1992 and 2001. 
That word is ``decreased'' by 31.8 percent.
    According to the National Center for State Courts, medical 
malpractice filings per capita decreased by 1 percent between 
1998 and 2002 when this alleged crisis supposedly was 
occurring. And according to the National Practitioner Databank, 
which requires all physicians to report a payment in a medical 
malpractice case, according to the Databank the number of 
malpractice payments dropped 7.7 percent from 2001 to 2002. And 
the Government Accounting Office calculates the total cost of 
malpractice litigation--that is when the claim is filed, the 
attorneys' fees, the defense costs, expert witnesses, trial, 
everything--is substantially less than 2 percent of all health 
care costs. A proverbial drop in the bucket. This is hardly an 
explosion or crisis.
    Senator I find it interesting that there are no insurance 
company executives here today. It would be even more 
interesting to put them under oath like the Senate did with the 
tobacco executive industries and ask them why, when there is no 
evidence of a crisis or runaway juries, they increased 
liability premiums 30 to 60 percent in 1 year. Property and 
casualty insurance profits last year rose 900 percent. What a 
fantastic business. As an industry, you can increase premiums 
as much as you want for essential liability coverage; blame the 
increases solely on the people who have already been injured or 
killed, and of course on the attorneys who represent them; have 
your insureds, the doctors, accept this admittedly phony 
explanation lock, stock, and barrel; and have Congress and the 
various state legislatures rush through legislation to fix a 
problem that never existed in the first place, thereby 
guaranteeing your profits and hurting the injured people that 
the insurance you were selling was theoretically designed to 
help.
    The bottom line is--and I have practiced in Utah for almost 
30 years. There has never, ever been, in the state of Utah, a 
verdict in a malpractice case that can, by any stretch of the 
imagination, be called a runaway or excessive verdict. Ever in 
the state. And this is the same situation in most states. There 
are always some exceptions. Like we always say, ``Yeah, but 
that's not Utah.'' And this is the same story in most states 
who are facing the same push by the insurance industry and 
medical lobbying.
    The CBO, Congressional Budget Office, has found that recent 
increases in malpractice premiums are as much linked to market 
fluctuations and poor investments by insurance companies as 
they are to payouts and malpractice cases. And claims the 
doctors are leaving their practices in droves because 
malpractice premiums have not been substantiated.
    You will see in Dr. Nelson's materials, he discusses a 
physician who has been well publicized in St. George who claims 
he had to leave his practice delivering babies. That physician 
has had a number of successful claims brought against him and 
he could no longer afford the insurance premiums because of his 
prior claims history. I don't see that to be a crisis, other 
than perhaps for him.
    The Government Accounting Office investigated the 
situations in five states and reported problems and found mixed 
evidence. On the one hand, GAO confirmed instances of reduced 
access to emergency surgery and newborn delivery, albeit in 
scattered rural areas. On the other hand, it found that many 
reported reductions in supply by health care providers could 
not be substantiated or did not widely affect access to health 
care.
    Utah has always had a problem attracting physicians to 
rural areas. Some cities, for instance, Gunnison, has set up 
their own hospital and provided incentives to attract 
physicians down there. It's always been a concern.
    The other issue is Utah medical insurance actively 
discourages family practice physicians from delivering babies. 
Why do they do that? Because the claims history for a family 
practice physician is much worse than board certified OB/GYNs. 
And I see Karac agrees with me on that point.
    Health care providers already have more protections than 
any other profession in virtually every state of the country. 
In Utah, and I know you know this well, physicians have a very 
short statute of limitations in which a claim can be brought; 
protections on informed consent; a notice of intent 
requirement; a prelitigation screening process; requirements 
for qualified expert testimony before a physician can be held 
liable; and you have to have an expert to even get to a jury or 
you will be dismissed on summary judgment; caps on attorneys' 
fees that already exist in Utah, but only plaintiffs' attorneys 
are capped, not defense counsel. They can charge whatever they 
want. Not that you did. But they can.
    Caps on general damages. We had a damage cap here. It was 
finally adjusted a couple years ago only for inflation from a 
$250,000 cap that was enacted in 1986. Cap on judgments against 
state-run health care facilities; no collateral source rule; 
and a provision that any judgment against a physician must be 
paid over time rather than as a lump sum, among other special 
interest protection.
    You have heard about MICRA and the physicians touting what 
a success MICRA has been. Utah has most of the provisions that 
MICRA has, including caps on attorneys' fees. The one provision 
it doesn't have is a sliding scale attorneys' fees. And it is 
so interesting to me to hear a physician say, ``What we really 
want to do is get more money to the injured people,'' while at 
the same time the same physicians are saying, ``But we want to 
cap their damages, of course at 250,000.'' The real reason they 
want sliding scale attorneys' fees is to drive out of the 
practice qualified, experienced attorneys who have represented 
people in significant cases in the past, to make it 
economically impossible to continue. Because it is so expensive 
and so time-consuming to do these medical cases for free.
    All of this evidence adds up to the conclusion that our 
medical liability system is hardly in crisis. The famous 
Harvard Medical School study of 30,000 patients in New York, 
30,000 patient records selected at random, this is Harvard 
Medical School, has found in reality that in seven cases of 
actual medical malpractice, only one--for every seven cases, 
only one claim of medical malpractice litigation was ever 
filed.
    Proposals to limit how much patients can receive as 
compensation for non-economic damages in cases of medical 
malpractice will not achieve their stated goal. Proponents of 
caps on non-economic damages say a Federal limit of $250,000 
would stop frivolous lawsuits from being filed. But when a jury 
sees an error so serious that it justifies giving the victim 
more than $250,000 aside from lost wages and medical bills, 
that is, by definition, not a frivolous lawsuit. If your son or 
daughter ends up in a wheelchair for life because of a medical 
error, would you want a mandate from the Federal Government 
deciding what is fair in your case? Most Americans trust a jury 
of people like their fellow American citizens to make a better 
decision concerning specific facts of the case.
    Instead of limiting how much patients can be compensated 
when they suffer tragic losses, we ought to be trying to find 
ways to make our health care system better so that fewer 
mistakes are made. Solutions like requiring insurance companies 
to open their books to the public, and factually justify 
proposed high premium increases or mandatory reporting of 
medical errors or penalties for alteration or intentional 
destruction of medical records like we saw in the Glodowski 
case, and hospital systems and technology to reduce medical 
errors would all have far greater benefit to consumers than 
limiting access to the court system when an injury or death 
occurs.
    And I urge you, as you continue your discussions, and I 
know you will keep an open mind about improving our health care 
system. And as you consider proposals to change the way our 
justice system handles medical negligence claims, I want you to 
hold on to one thought. Imagine yourself, if you can, and I 
know how sympathetic you are to this issue, in the shoes of 
Karla Glodowski or Donna Page. Imagine the pain they and their 
families have suffered, and ask yourself what is truly fair for 
catastrophic victims of medical negligence? What is truly best 
for preventing the errors in the future? And what is truly best 
not for insurance executives or the medical lobby, but for the 
long-term health of the people of the United States. Thank you.
    [The prepared statement of Mr. Thronson appears as a 
submission for the record.]
    Chairman Hatch. Thank you. I want to thank all three of you 
for testifying today. It is important that people hear both 
sides of these issues, and I have tried to do that. I 
particularly want to thank you, Ms. Page, and you, Mrs. 
Glodowski. And of course are appreciative of having you here, 
Mr. Thronson, because I know the trial lawyers take a lot of 
abuse, and they give a lot of abuse, too. I have seen it both 
ways. And as a trial lawyer myself, I know how important some 
of the work is that is done by plaintiffs' lawyers.
    It takes a lot of courage for you folks to be here today 
and talk about your personal stories. It means a lot to me. And 
I'm truly grateful that both of you would share these 
experiences with us for the record. And both of you have my 
deepest sympathy for what you have gone through, and what you 
have to go through in the future. And I know this hasn't been 
easy for either of you to testify, but what you have done is 
important.
    But I would like to pose a question to both of you, and I 
think it is a question that is a fair one. I have been a strong 
supporter of placing caps on non-economic damages except, and 
there's an exception, in the most egregious cases where there's 
true gross negligence. In my opinion, each of your cases would 
fit in that egregious category. I don't know all the facts and 
I can't definitively state that, or categorically state that as 
totally accurate. But I believe that.
    Now, would you think that might be a way of solving this 
problem as you have heard the medical testimony here today, and 
I think they make a very good case that we are all losing 
because the system is out of whack, maybe both ways. But still 
out of whack. But if your cases were truly--and I believe them 
to be--egregious cases, then if I had my way you would be able 
to get non-economic damages, substantial non-economic damages. 
Ms. Page?
    Ms. Page. You know, this issue is so close to my heart that 
I don't think I could probably give you a really fair answer.
    Chairman Hatch. That's fair.
    Ms. Page. I couldn't ever see a cap.
    Chairman Hatch. You would hate to ever see a cap in any 
way?
    Ms. Page. That's right.
    Chairman Hatch. But you will give some consideration of my 
attempt or desire to try and solve these problems.
    Ms. Page. I thought what you said to the doctors was well 
said, and I saw their backs bristle. They weren't having any 
part of it.
    Chairman Hatch. Keep in mind what they were saying is -and 
it's true--that if they had a cap situation a lot of people who 
don't recover today would recover. What I'm saying is, is the 
reality then in the truly bad cases like yours there would be 
no cap? Because there is a lot of data out here, a lot of cases 
brought that shouldn't be brought. There are some that should 
be brought that aren't brought. And there are some that should 
be brought that aren't brought where damages should be more 
than $250,000 or $350,000 or $500,000 or whatever the cap 
situation would be.
    How do you feel about that, Ms. Glodowski? Assuming that 
you would have a right to recover all the necessary damages 
that in your case justifies them because it's an egregious 
case.
    Ms. Glodowski. I think that creates a problem, too, because 
who is going to decide who has been hurt enough to not be 
capped? And then you have another little grey area where--
    Chairman Hatch. The same people who decide it today: The 
judges and the jurors.
    Ms. Glodowski. I personally don't think that--
    Chairman Hatch. I'm not trying to put--
    Ms. Glodowski. Most of these malpractice cases are not even 
taken to trial. And then, because of the amount of insurance 
that these doctors had, we already basically were capped by the 
amount we could get. Because they were under-insured already. 
And then they took that as a starting point of what they could 
offer us and tried to talk us down. And I'm sure if it did go 
to court and we did get awarded more, they would have taken out 
bankruptcy and we would have lost anyway. So I don't see how 
they are going to help anything.
    Chairman Hatch. Okay. Mr. Thronson, I respect you and 
respect the profession. I have been in your shoes. I started 
out as a defense lawyer. I understood how frightened defense 
lawyers can be and how difficult the job is. And I wound up 
doing both plaintiff and defense work. I have to say, I enjoyed 
the plaintiff's work much more than I enjoyed the defense work 
and I was remunerated much more. It's easier to--it's not 
easier to do but it is much more enjoyable in many respects. So 
I respect many plaintiffs' lawyers.
    There's a lot of situations where I think the process is 
currently under abuse, and you know it and I know it. There are 
people in our profession who might not rise to the ethical 
level that you do who would do anything to make money. And I 
cite a particular area, an analysis done by top radiologists 
that a high percentage of these asbestos cases brought by 
Plaintiffs' lawyers, a high percentage of the medical testimony 
that was given was fraudulent and false and that's what gives 
us all a bad reputation.
    Let me just ask you this: Your position, as I understand 
it, is that the too high liability insurance premiums result 
from price gouging from insurance companies. Now, isn't it also 
true that here in Utah, many doctors participate in self- 
insured ways, in self-insurance pools. And we still have a 
$91,000 premium for a neurosurgeon who has never had a case 
brought against him, and there are a number in that category, 
which caused Dr. Rich to retire because at his time and age he 
didn't want to work full-time but couldn't afford to work or it 
wasn't worth the incentives to work part-time with that type of 
a high insurance payment.
    So I guess what I'm saying is that even though he hasn't 
ever had a case brought against him, that didn't cause him to 
retire earlier. Wanting a higher quality of life probably 
caused him to retire and so forth. But my point is there's a 
significant number of Utah doctors who have participated in 
this self-insurance pool, so it isn't the insurance companies 
that are going to necessarily cost him the $91,000 price for 
neurosurgeons.
    So what do you say to these doctors who are in this 
insurance pool, who are like Dr. Rich, and more importantly to 
the patients or to other doctors who are retiring because they 
can't afford the premiums? What do we say to them? I would like 
to see the very best people stay in the profession as long as 
they can do a good job. And I know Dr. Rich and I know that 
nobody did a better job.
    Mr. Thronson. Right. Let me address the issue, if I could, 
about Utah medical insurance, which is the Mutual Company owned 
and started by physicians, and it insures about 80 percent of 
physicians in the state of Utah.
    They are insured--they provide insurance up to about 
$300,000 for a claim. And most, as I understand it, most of 
UMIA's investments are in bonds, they really aren't in the 
stock market. They are a very conservative company and they 
have a lot of investments, a lot of money stashed away. But 
then they go to the market and get reinsurance. And so they buy 
it from Lloyds of London or some of these AIG, some of these 
reinsurance companies. And that's where the premium increases 
come from. It is because UMIA is being charged high prices by 
these reinsurance companies.
    Now, I'm a consumer of medical services. Dr. Nelson 
delivered three of my children. I don't want people like Dr. 
Nelson to leave the practice. It seems to me that if there 
could be some kind of insurance reform which, by the way, 
nothing happened in insurance rates in California under MICRA 
until the California legislature adopted insurance reform and 
forced the insurance companies to identify and justify, just 
like utilities have to do and others--
    Chairman Hatch. Also understand there's a number of 
insurance companies that won't go to California because they 
don't think they can make a decent enough profit. So those that 
were lost in California, some have stayed and some have left.
    Mr. Thronson. That's true. But as we have heard, the 
insurance situation is relatively stable in California, but 
primarily in terms of the insurance thing, because the state 
looks over the books and says, ``Okay, this is justified,'' or, 
``This isn't.''
    Now, I don't think it is justified to have a physician like 
Dr. Rich have to pay $91,000 who has never had a claim against 
him. Why they charge him that, I don't have any idea. But there 
are physicians who have had multiple cases against them who 
probably should pay that.
    Chairman Hatch. Well, they charged him that because they 
presume some day he will have a claim against him because he is 
a neurosurgeon and there may be more than one claim. And some 
of the claims, as you and I both know, are frivolous. Some 
aren't. I certainly think these two cases are not, certainly. 
But some are. And I have to admit, as somebody who defended 
some of these cases, I saw cases brought that should never have 
been brought. And they were brought because the insurance 
company, where there was insurance, or the doctor, where there 
wasn't, couldn't afford to take a risk in front of a jury that 
might run away or might be influenced by emotions that might 
cause an unfair verdict.
    Mr. Thronson. Well, since you practiced and since that 
time, Utah has adopted all those short form measures. We have a 
prelitigation screening panel, we all have the tort reform 
gamut.
    Now, I'm not saying, and I would never say, that there 
aren't cases that shouldn't be brought. There are cases that 
shouldn't be brought in every genre of litigation.
    One suggestion I have, which I haven't heard before, is I 
would not be opposed to having a certification process for 
trial attorneys who practice in medical malpractice. It is so 
specialized an area that I think that if there was a state 
requirement here or national requirement to have attorneys who 
decide to practice in the area, plaintiff and defense, be 
certified and go through some sort of screening process and 
scheduling and classroom work, experiential level and so forth. 
To the extent that there are unskilled practitioners out there, 
it might solve the problem.
    I know what you are talking about with asbestos. It is a 
problem that there is junk science going on there. But in these 
cases, even though oftentimes defendants will say, ``Well, even 
in Karla's case they are still denying what happened.'' It's 
interesting.
    Chairman Hatch. And there's both sides to these cases, too. 
You take, you know, this attitude that women should have babies 
by Cesarean because it might prevent cerebral palsy. You know 
that is junk science and I know it's junk science. And yet 
millions and millions of dollars have been recovered by some 
doctors who testified because that's their profession, who come 
in and say, ``That is not junk science.'' And because they have 
a medical degree, the courts accept them as experts in the 
field. Just like these radiologists who are certifying some 
aspect of asbestosis even though there is not the slightest 
indication of it. And yet in all of those cases there's been 
recovery because of false testimony by some of these doctors 
who testify.
    Mr. Thronson. You are talking about Utah jurors and Kansas 
jurors and Missouri jurors and North Dakota jurors. If some guy 
comes in--
    Chairman Hatch. I agree with you. I think in Utah we have a 
much fairer situation. If you go to Madison County, Illinois 
it's a much different situation.
    Mr. Thronson. Or some place in Alabama. If you get some guy 
that comes in--
    Chairman Hatch. And that's not the only jurisdiction, as 
you know.
    Mr. Thronson. --with white shoes and sunglasses and says, 
``This is how this baby got injured,'' they would be decimated 
by the highly qualified defense attorneys in town. Bruce 
Jensen, Elliott Williams, those guys that would come in. The 
guy would be thrown out of court and run out of town. You have 
to give some faith, I think, to the jury system to do the right 
thing.
    Chairman Hatch. I did have faith in it. As someone who 
tried many jury trials, I have faith in it. And certainly in an 
area like Utah where the people are practical and it's 
plausible and so forth, and where I think the Bar, by and 
large, is responsible, like yourself.
    I'm just concerned, and I think you should be concerned, 
that our whole profession gets a black eye because of some of 
the situations throughout the country where attorneys exploit 
that and junk science is used. Sometimes it doesn't even rise 
to the level of junk science. And you know that and I know 
that. And I guess what I'm saying is that--and I agree, Utah 
has had a number of reforms with respect to the past. Many were 
adopted in recent years such as the cap of $400,000, which is 
adjusted for inflation in Utah, index for inflation. 
Prelitigation training process, some or all of which you have 
mentioned.
    There's no question, and Dr. Nelson testified that the 
medical malpractice premiums have risen more slowly in states 
that have had some measure of tort reform or some measure of 
this type of reform where states have instituted some measure 
of non-economic caps and other tort reform measures.
    I had problems in this area because when I see an egregious 
case, a wrong eye, wrong leg, and these two here, let me just 
say in cases I have personally seen, these cases were not 
handled by bad physicians. They were terrific physicians who 
just made mistakes, but they were egregious mistakes. And I 
don't think a cap of $250,000 or even $400,000 in those cases 
or these cases is adequate.
    On the other hand, you and I both know that you can, 
through expert testimony, prove an awful lot of damages in the 
economic phase of it. And good attorneys are going to get 
reasonable results even with tort reform. What's wrong is we 
have some who aren't good attorneys, who aren't honest 
attorneys, who are giving all of us a bad name and doing it 
just for money. And that's the only thing I'm concerned about. 
If I had a magic wand and I could wave it and solve all the 
problems, I would do it. I appreciate any help you can give me 
in this area.
    I personally want to express my sympathy and deep feelings 
for you two women and your families. It took courage to be here 
today. I'm personally grateful you are here and took time to be 
here. Let's work together and see what we can do to resolve the 
conflicts. I don't think it helps the profession or most people 
who are injured to have people who--and I kind of agree with 
your idea about specialties in this field, that people ought to 
have to qualify, to be people of integrity who do those type of 
lawsuits. And I think it would help everybody and the verdicts 
would be higher, too, in the areas where they are justified. 
You wanted to say one other thing?
    Mr. Thronson. I just wanted to comment on the cap issue you 
asked about. I think Karla is right. Most cases, probably 95 
percent of my cases settle, and I think that's close to what 
the average is. But what happens when we get to mediation or 
some sort of settlement conference is the Defendants say, 
``Well, look, $250,000,'' or Donna's case, it was $250,000 at 
the time. That's all the jury can award you so that's the 
number, and then we will negotiate down from that. So it 
becomes a hammer.
    Chairman Hatch. Sure.
    Mr. Thronson. I can go in and say in Karla's case or 
Donna's case, this is an egregious case and they will say, 
``No, it's not.'' And so where do we go from there? I mean, I 
think we would be very willing to continue the dialogue and 
look at any of those things, but I think you have identified a 
significant area and that is this one-size-fits-all idea for a 
cap doesn't fit all people.
    Chairman Hatch. Well, I agree with that. And the one-size-
fits-all idea does help millions more who will never get help. 
It may be helpful but it still doesn't justify these type of 
cases, I have to admit.
    Let me just say I have tried to solve these problems like 
the asbestos problem. We all know that the high percentage of 
those cases really should never have been brought. They are 
hurting the whole legal profession and we all know that 
everybody in society is paying the cost. Settling companies are 
already bankrupt, and these are the companies where the 
mesothelioma cases really were, where people are going to die. 
They get a nickel and a dollar from those cases, and some of 
the other cases that are brought are just fraudulent, to be 
honest with you. And some day, I'm worried that some day the 
whole legal profession, the Plaintiffs' lawyers are going to 
get sued because of the undignified and unrighteous acts of 
those who aren't as honest.
    In this particular area I have seen very egregious faults 
on both sides. I have seen attorneys who have brought in 
doctors who will say anything they want them to say. Not honest 
doctors. I have seen patients who had bad results where the 
doctors have done everything they possibly could and get huge 
verdicts because of some of the fraudulent testimony. But I 
have also seen folks like these who have not been compensated 
fairly and I don't like that, either. And I wish I was an 
oracle and had the ability to solve problems with snapping my 
finger. I work at it and try to solve it but I need your help 
and I need the help of the first panel who have been very 
helpful in many respects. And we will have to keep working on 
it and see what we can do. But I want it to be right and I want 
it to be fair.
    Let me just close by saying after listening to today's 
testimony, in my opinion I think we all have the same goal. The 
system that we all desire is one that leaves no injured person 
who has really truly been injured without remedy, but at the 
same time does not have a devastating impact on those who have 
dedicated their lives in caring for others such as physicians 
and other health care professionals, and society at large.
    There needs to be some appropriate balance and all of us 
involved in this discussion--patients, physicians, and other 
health care providers, state officials, members of Congress, 
members of the legal profession--we need to work together and 
try and find some balance in these particular areas so that 
people who deserve compensation really are. People who don't 
really aren't.
    So I want to thank all of our witnesses for traveling here 
today to present the Committee with compelling and thoughtful 
testimony. Both panels have been excellent. I believe the 
medical liability crisis is one that has to be addressed and I 
believe that we have heard some interesting ideas on how these 
matters may be addressed.
    And before I close this hearing I would just say we will 
include the written testimony of the Utah Trial Lawyers 
Association and the Utah Citizens Alliance, and it will be made 
a part of the record. The hearing record will be kept open for 
two weeks so the members of the Committee may submit 
statements, and we will do everything we can to try to resolve 
these matters in a way that is fair, decent, honorable, and 
above board.
    In that regard, I want to thank every witness who has 
testified here today. Everyone has done a good job. Everyone 
has been important. And both sides of this issue have been 
explained to the degree that we can in this limited hearing. 
And I will just keep working on and hope that we can do justice 
in the end, which is what all of us who are honest really hope 
can be done. And I want to thank every witness for being here. 
Thanks so much. And with that we are recessed until further 
notice. Thank you.
    [Whereupon, at 12:30 p.m., the Committee was adjourned.]
    [Submissions for the record follow.] 

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