[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
MEDICAL LIABILITY REFORM: CUTTING COSTS, SPURRING INVESTMENT, CREATING 
                                  JOBS

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


                                HEARING

                               BEFORE THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 20, 2011

                               __________

                            Serial No. 112-1

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov



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                       COMMITTEE ON THE JUDICIARY

                      LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina         JERROLD NADLER, New York
ELTON GALLEGLY, California           ROBERT C. ``BOBBY'' SCOTT, 
BOB GOODLATTE, Virginia                  Virginia
DANIEL E. LUNGREN, California        MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio                   ZOE LOFGREN, California
DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana                  MAXINE WATERS, California
J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona                  Georgia
LOUIE GOHMERT, Texas                 PEDRO PIERLUISI, Puerto Rico
JIM JORDAN, Ohio                     MIKE QUIGLEY, Illinois
TED POE, Texas                       JUDY CHU, California
JASON CHAFFETZ, Utah                 TED DEUTCH, Florida
TOM REED, New York                   LINDA T. SANCHEZ, California
TIM GRIFFIN, Arkansas                DEBBIE WASSERMAN SCHULTZ, Florida
TOM MARINO, Pennsylvania
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona

      Sean McLaughlin, Majority Chief of Staff and General Counsel
       Perry Apelbaum, Minority Staff Director and Chief Counsel
                            C O N T E N T S

                              ----------                              

                            JANUARY 20, 2011

                                                                   Page

                           OPENING STATEMENTS

The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, and Chairman, Committee on the Judiciary.......     1
The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Ranking Member, Committee on 
  the Judiciary..................................................     6
The Honorable Trent Franks, a Representative in Congress from the 
  State of Arizona, and Member, Committee on the Judiciary.......     8
The Honorable Jerrold Nadler, a Representative in Congress from 
  the State of New York, and Member, Committee on the Judiciary..     9

                               WITNESSES

Ardis D. Hoven, M.D., Chair, Board of Trustees, American Medical 
  Association
  Oral Testimony.................................................    11
  Prepared Statement.............................................    13
Joanne Doroshow, M.D., Executive Director, Center for Justice and 
  Democracy
  Oral Testimony.................................................    19
  Prepared Statement.............................................    21
Stuart L. Weinstein, M.D., Health Coalition on Liability and 
  Access
  Oral Testimony.................................................    50
  Prepared Statement.............................................    52

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Lamar Smith, a Representative 
  in Congress from the State of Texas, and Chairman, Committee on 
  the Judiciary..................................................     3

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Henry C. ``Hank'' Johnson, 
  Jr., a Representative in Congress from the State of Georgia, 
  and Member, Committee on the Judiciary.........................   103
Prepared Statement of the Honorable Linda T. Sanchez, a 
  Representative in Congress from the State of California, and 
  Member, Committee on the Judiciary.............................   106
Prepared Statement of the American Congress of Obstetricians and 
  Gynecologists (ACOG)...........................................   108
Prepared Statement of the American College of Surgeons...........   114
Study of the American Enterprise Institute (AEI).................   117
Prepared Statement of Lawrence E. Smarr, President/CEO, Physician 
  Insurers Association of America................................   125


                       MEDICAL LIABILITY REFORM:


                  CUTTING COSTS, SPURRING INVESTMENT,



                             CREATING JOBS

                              ----------                              


                       THURSDAY, JANUARY 20, 2011

                          House of Representatives,
                          Committee on the Judiciary,
                                 Washington, DC.

    The Committee met, pursuant to notice, at 10:30 a.m., in 
room 2141, Rayburn House Office Building, the Honorable Lamar 
Smith (Chairman of the Committee) presiding.
    Present: Representatives Smith, Sensenbrenner, Coble, 
Gallegly, Goodlatte, Lungren, Chabot, Forbes, King, Franks, 
Gohmert, Poe, Chaffetz, Reed, Griffin, Marino, Gowdy, Ross, 
Adams, Quayle, Conyers, Nadler, Scott, Watt, Jackson Lee, 
Waters, Johnson, Pierluisi, Quigley, Deutch, Sanchez, and 
Wasserman Schultz.
    Staff Present: (Majority) Allison Halataei, Counsel; Paul 
Taylor, Counsel; and Perry Apelbaum, Minority Staff Director 
and Chief Counsel.
    Mr. Smith. The Judiciary Committee will come to order.
    Welcome everybody. I appreciate the Members who are here, 
as well as our witnesses. And it is nice to see so many people 
in the audience interested in such an important subject, as 
well.
    One quick announcement, I think as most Members know but 
not everybody else may know, is that we are expecting votes in 
about 15 minutes. However, we are only having two votes, so we 
will be taking a recess for about 20 minutes but then we will 
return to resume the hearing.
    I am going to recognize myself for an opening statement, 
then turn to the Ranking Member for his opening statement, as 
well.
    The purpose of this hearing is to discuss the need to 
reduce the waste in our health-care system caused by defensive 
medicine. This practice occurs when doctors are forced by the 
threat of lawsuits to conduct tests and prescribe drugs that 
are not medically required.
    According to a Harvard University research study, 40 
percent of medical malpractice lawsuits filed in the United 
States lack evidence of medical error or any actual patient 
injury. But because there are so many lawsuits, doctors are 
forced to conduct medical tests simply to avoid a possible 
lawsuit.
    Taxpayers pay for this wasteful defensive medicine, which 
adds to all of our health-care costs without improving the 
quality of patient care.
    A survey released last year found defensive medicine is 
practiced by nearly all physicians. President Obama, himself, 
acknowledged the harm caused by defensive medicine, stating, 
quote, ``I want to work to scale back the excessive defensive 
medicine that reinforces our current system and shift to a 
system where we are providing better care rather than simply 
more treatment,'' end quote.
    Yet the health-care legislation he signed does nothing to 
prevent defensive medicine. In fact, it makes matters worse by 
allowing trial lawyers to opt out of any alternatives to 
health-care litigation proposed by the States and by exposing 
doctors to even more lawsuits if they fall short of any of the 
many new Federal guidelines the law creates. The encouragement 
of lawsuit abuse will not only make medical care much more 
expensive, it will also drive more doctors out of business.
    The Judiciary Committee will consider alternative health-
care lawsuit reforms modeled on California's reforms, which 
have been in effect for over 30 years. Those reforms have a 
proven record of reducing defensive medicine, reducing health-
care costs, and increasing the supply of doctors.
    There is a clear need for reform at the Federal level. Many 
state Supreme Courts have nullified reasonable litigation 
management provisions enacted by State legislatures. In such 
States, passage of Federal legislation by Congress may be the 
only means of addressing the State's current crisis in medical 
professional liability and restoring patients' access to 
quality health care.
    Further Federal legislation is needed to stem the flow of 
doctors from one State to another, as they flee States to avoid 
excessive liability cost. Doctors should feel free to practice 
medicine wherever they want, and patients everywhere should be 
able to obtain the medical care they need.
    Last year, the Congressional Budget Office determined that 
a legal reform package would reduce the Federal budget deficit 
by an estimated $54 billion over the next 10 years, and that 
was a conservative estimate. Another CBO report estimates that 
premiums for medical malpractice insurance ultimately would be 
an average of 25 percent to 30 percent below what they would be 
under current law.
    The Government Accountability Office has found that rising 
litigation awards are responsible for skyrocketing medical 
professional liability premiums. Its report states that the GAO 
found that ``losses on medical malpractice claims, which make 
up the largest part of insurers' cost, appear to be the primary 
driver of rate increases in the long run,'' end quote. The GAO 
also concluded that insurer profits, ``are not increasing, 
indicating that insurers are not charging and profiting from 
excessively high premium rates.''
    The National Commission on Fiscal Responsibility and 
Reform, which was created by President Obama, also supports 
health-care litigation reform in its 2010 report. ``Many 
members of the Commission also believe that we should impose 
statutory caps on punitive and noneconomic damages, and we 
recommend that Congress consider this approach and evaluate its 
impact.''
    As a USA Today editorial concluded, one glaring omission 
from the health-care law was the significant tort reform, which 
was opposed by trial lawyers.
    I look forward to hearing from our witnesses today, who 
will help us assess the extent of the current health-care 
litigation cost.
    And I am now pleased to welcome the remarks of the Ranking 
Member, Congressman John Conyers.
    [The prepared statement of Mr. Smith follows:]
    
    
    
    
    
    
    
    
                               __________

    Mr. Conyers. Thank you, Chairman Smith and Members.
    This is our first hearing in the 112th session. And I would 
like to just add for your consideration my recommendations that 
we review, in connection with health care, the antitrust 
exemption that health insurance companies enjoy, the McCarran-
Ferguson exemption, and that the Sunshine Litigation Act that 
ensures and prevents secret settlements from being used to 
endanger the public safety or shield those who may be guilty of 
fraudulent acts, including the medical community, that, in 
turn, would protect all patients and protect professionally 
responsible doctors from abuse of claims of wrongdoing.
    And then you remember the act that me and a former Member, 
Campbell, introduced that empowers doctors to negotiate an even 
playing field with health insurers.
    So I would like us to kindly consider those measures that 
might be more important than an oversight hearing on a subject 
matter that Members of Congress have already announced that 
they are going to introduce, namely H.R. 5, which I expect will 
be coming down the pike one day next week. The letters are 
already circulating on it.
    And so I find that an oversight hearing for a bill that is 
being written to be the subject will come straight to our 
Committee. It isn't exactly reverse, but there is a certain 
irony in the way this is coming off today, and I just wanted to 
put it in the record.
    Now, legislative hearings should be held prior to the 
oversight hearings. But, also, I hope that we can get into the 
issue of the shortage of doctors in rural areas, which is 
critical and which many of us view would be increased by a cap 
on medical liability, this $250,000 cap. Most of our witnesses 
here today realize that that may have a perverse effect before 
it is all over with.
    Now, about the large number of cases filed, one out of 
every eight cases filed ever results in a lawsuit. And that is 
because, with the statute of limitations, attorneys have to 
include in the filings many people who may not be involved and 
are usually excluded from any trial liability but they get 
counted as the ones that are sued. So I am looking forward to a 
discussion about that.
    Now, we have States that constitutionally preclude any 
limitation on Medicare damages. Kentucky and Iowa limit the 
damages. Dr. Hoven is from Kentucky; Dr. Weinstein is from 
Iowa. And Kentucky is one of the four States that 
constitutionally prohibit limits on damages. But there are 
other States--Arizona, Pennsylvania, Wyoming, including the 
trauma center that provided such excellent care to our 
colleague, Gabby Giffords, are all, I think, under some danger 
presented by some of the trends that we are expecting in H.R. 
5. And I think that is something we ought to consider.
    I close with just a comment about the real cost of medical 
malpractice claims. They are only a fraction of the real cost. 
And I end on this note. The sixth-largest cause of death in the 
United States of America, medically, are malpractice cases.
    And so I hope that, as this discussion rolls out this 
morning, we will be considering what we do with the hundreds of 
thousands of people that could be adversely affected, whose 
lifetime costs--even though they are innocent and the case is 
supported by the court and judgments are entered, but with a 
$250,000 cap, as many of us know on all the hearings we have 
had prior to now, that this would be very minimal, indeed.
    And I thank you for the time.
    Mr. Smith. I thank the Ranking Member for his comments.
    We are now going to take a short recess so Members may 
vote. When we return, I will recognize the Chairman and Ranking 
Member of the Constitutional Law Subcommittee for their opening 
statements. They have jurisdiction over this particular issue. 
And then we will get to our witnesses.
    So we stand in recess until about 20 minutes from now.
    [Recess.]
    Mr. Smith. The Committee will resume our hearing.
    And I will now recognize the Chairman of the Constitutional 
Law Subcommittee, the gentleman from Arizona, Mr. Franks, for 
his opening statement. And then we will go to the Ranking 
Member of the Constitutional Law Subcommittee.
    Mr. Franks. Well, thank you, Mr. Chairman.
    Mr. Chairman, the medical liability litigation system in 
the United States, I think, by all accounts, is broken and in 
desperate need of reform. The current system is as ineffective 
a mechanism for adjudicating medical liability claims as it can 
be, which leads to increased health-care costs, unfair and 
unequal awards for victims of medical malpractice, and reduced 
access to health care for all Americans.
    Only reforms to the system at the Federal level can address 
the current national medical liability crisis. Unfortunately, 
the massive health-care overhaul that President Obama signed 
into law last year did not meaningfully address medical 
liability reform. Thus, we are here today to examine this 
continuing problem and evaluate national solutions to this, 
what I believe to be a crisis.
    One of the largest drivers of this crisis is the practice 
of defensive medicine. Defensive medicine leads doctors to 
order unnecessary tests and procedures--not, Mr. Chairman, to 
ensure the health of the patient, but out of fear of 
malpractice liability.
    The cost of defensive medicine is, indeed, staggering. 
According to a 2003 Department of Health and Human Services 
report, the cost of defensive medicine is estimated to be more 
than $70 billion annually. Additionally, medical liability 
litigation increases the cost of health care by escalating 
medical liability insurance premiums. This, in turn, of course, 
leads to higher costs throughout the entire health-care system 
and reduces access to medical services.
    However, Mr. Chairman, despite the increased costs medical 
liability litigation imposes, this litigation fails to 
accomplish its ostensible purpose, the goals of tort law in the 
first place, and that is fairly compensating the victims and 
deterring future negligence.
    The system fails to compensate victims fairly for several 
reasons. First, according to the studies, the vast majority of 
incidents of medical negligence do not result in a claim, and 
most medical practice claims exhibit no evidence of 
malpractice. So, victims of malpractice, or most of them, go 
uncompensated, and most of those who are compensated are not 
truly victims.
    Mr. Chairman, medical malpractice awards vary greatly from 
case to case, even where the claims and injuries are virtually 
identical. And, finally, attorneys regularly reduce damages 
awarded to victims by more than 40 percent through fees and 
costs.
    Moreover, there appears to be little evidence to suggest 
that the current medical liability system deters negligence. 
Rather, the available evidence seems to suggest that the threat 
of litigation causes doctors not to reveal medical errors and 
to practice defensive medicine. And this, of course, subjects 
patients to unnecessary tests and treatments once again.
    So we must reform the medical liability system in the 
United States, Mr. Chairman. Among other benefits, reform could 
do some of the following. It could lead to a significant 
savings on health care; it could reduce the practice of 
defensive medicine; halt the exodus of doctors from high-
litigation States and medical specialties; improve access to 
health care; and save the American taxpayers billions of 
dollars annually while increasing the affordability of health 
insurance.
    Mr. Chairman, meaningful medical liability reforms have 
worked in States such as California and Texas, and it is time 
for action at the Federal level to extend the benefits of 
reform to all Americans.
    And I thank you for the time and yield back.
    Mr. Smith. Thank you, Mr. Franks.
    The gentleman from New York, Mr. Nadler, the Ranking Member 
of the Constitutional Law Subcommittee, is recognized for his 
opening statement.
    Mr. Nadler. Thank you, Mr. Chairman.
    Mr. Chairman, I had not prepared an opening statement 
because I didn't know that we were going to have opening 
statements for Rankings and the Chairmen of the Subcommittees, 
but I will make an opening statement nonetheless.
    I have always believed that this problem is the wrong 
problem and it is a solution in search of a problem.
    If you look at the evidence over many years--and I have 
looked at the evidence in 1986 consideration of reforms to this 
problem in the New York State assembly when I was a member 
there, so I have been involved with this off and on for 25 
years--you find that the real problem is not the excessive cost 
of malpractice--or that the excessive cost of malpractice 
insurance is not caused by lack of the so-called tort reforms 
that are being advanced here and that have been advanced over 
the years--namely, making it harder to get attorneys, capping 
fees, or capping recoveries--that capping these recoveries 
would simply be unfair to people who are very seriously 
injured.
    First of all, we know that most people who suffer real 
damage as a result of medical negligence never sue. So the 
amount of recovery is very small compared to the amount of 
cost.
    Secondly, study after study has found that the real problem 
is that the States--and some people might say the Federal 
Government should do it, but that is a separate discussion--but 
the States, in any event, whose job it is under current law, 
are not disciplining doctors, that something like 90 or 95 
percent of the claims dollars that are awarded come from 2 or 3 
percent of the doctors. Those 2 or 3 percent of the doctors are 
hurting patients, killing patients, and should not be 
practicing medicine. They should be stripped out of practice. 
And if they did, everybody else's malpractice premiums would go 
down because the amount of costs would go way down, and the 
other 97 or 98 percent of doctors would find their malpractice 
premiums much reduced.
    Now, what do we find from the kinds of proposals that we 
consider? Number one, in May 2009, WellPoint, a major 
malpractice insurer, said that liability was not driving up 
health insurance premiums.
    An economist at Harvard University, Amitabh Chandra, in an 
article, ``Malpractice Lawsuits are 'Red Herring' in Obama 
Plan,'' published by Bloomberg in June of last year, concluded 
that, quote, ``Medical malpractice dollars are a red herring'' 
for the system's failures. ``No serious economist thinks that 
saving money in med mal is the way to improve productivity in 
the system. There are so many other sources of inefficiency.''
    We know that preventable medical errors kill as many as 
98,000 Americans each year, at a cost of $29 billion, and these 
proposals would do nothing about that.
    We are told that the defensive medicine is costing us huge 
amounts of money and increasing the cost of the medical system 
as a whole. And yet the GAO, the Government Accountability 
Office, issued a statement saying, quote, ``The overall 
prevalence and costs of [defensive medicine] Have not been 
reliably measured,'' so we don't really know. ``Studies 
designed to measure physicians' defensive medicine practices 
examined physician behavior in specific clinical situations, 
such as treating elderly Medicare patients with certain heart 
conditions. Given their limited scope, the study results cannot 
be generalized to estimate the extent and cost of defensive 
medicine practices across the health-care system,'' unquote.
    Multiple GAO studies have concluded that eliminating 
defensive medicine would have only a minimal effect on reducing 
overall health-care costs.
    But the proposals that I assume we will have before us, 
which are the proposals that are introduced by our colleagues 
on the other side of the aisle every single year, all have in 
common putting a $250,000 limit on noneconomic damages--that is 
to say, on damages other than direct medical costs and lost 
wages, which may be the main damages for someone whose wages 
you can't measure, like a college student or a child because 
you don't know what his wages are going to be or would have 
been.
    But $250,000 is not very much. Now, MICRA in California was 
enacted in 1976, and they felt that $250,000 was a reasonable 
amount then. In today's dollars--or, rather, in 1975 dollars, 
that is now worth $62,000. Would they have enacted a $62,000 
cap in 1975? And if we wanted to take their $250,000 and 
inflate it to keep it at the same value, it would be over a 
million dollars today. So if we are going to pass this kind of 
legislation, which I hope we won't, at the least we should put 
in an inflation factor and start at a million dollars if we 
want to duplicate what MICRA did in California.
    And, of course, in California, MICRA did not reduce the 
premiums at all. They went up, from 1975 to 1988, by 450 
percent. Only after insurance reform was enacted in 1988 by 
California did the insurance premiums level off and actually go 
down a bit. For the 13 years--a perfect experiment--for the 13 
years during which California had the tort reform but not the 
insurance reform, the premiums went up 450 percent. When the 
insurance reform was enacted, premiums went down 8 percent. So 
maybe we should be talking about insurance reform instead of 
tort reform. But, unfortunately, that is not in front of his 
Committee.
    So I think we are off on the wrong track if we are 
concentrating on this. And I see the red light is on. I 
apologize for exceeding my time, and I yield back whatever time 
I don't have left.
    Mr. Smith. Thank you, Mr. Nadler.
    And, without objection, other Members' opening statements 
will be made a part of the record. And now I will introduce our 
witnesses.
    And our first witness is Dr. Ardis Hoven, chair of the 
American Medical Association Board of Trustees. Prior to her 
election to the board, Dr. Hoven served as a member and chair 
of the AMA Council on Medical Service. She was a member of the 
Utilization Review and Accreditation Commission for 6 years and 
served on its executive committee. Most recently, she was 
appointed to the National Advisory Council for Healthcare 
Research and Quality.
    We welcome you.
    Our second witness is Joanne Doroshow, executive director 
of the Center for Justice and Democracy. Ms. Doroshow is the 
founder of the Center for Justice and Democracy and cofounder 
of Americans for Insurance Reform. She is an attorney who has 
worked on issues regarding health-care lawsuits since 1986, 
when she directed an insurance industry and liability project 
for Ralph Nader.
    Welcome to you.
    Our third witness is Dr. Stuart L. Weinstein, a physician 
spokesman for the Health Coalition on Liability and Access. Dr. 
Weinstein is a professor of orthopedic surgery and professor of 
pediatrics at the University of Iowa. He is a former chair of 
Doctors for Medical Liability Reform.
    And we welcome you, as well.
    Just a reminder, each of the witnesses' testimonies will be 
made a part of the record. We do want you to limit your 
testimony to 5 minutes. And there is a light on the table that 
will indicate by its yellow light when you have 1 minute left, 
and then the red light will come on when the 5 minutes is up.
    So we look forward to your testimony, and we will begin 
with Dr. Hoven.

 TESTIMONY OF ARDIS D. HOVEN, M.D., CHAIR, BOARD OF TRUSTEES, 
                  AMERICAN MEDICAL ASSOCIATION

    Dr. Hoven. Thank you, and good morning, Chairman Smith, 
Ranking Member Conyers, and Members of the Committee on the 
Judiciary. As stated, I am Dr. Ardis Hoven, chair of the 
American Medical Association Board of Trustees and a practicing 
internal medicine physician and infectious disease specialist 
in Lexington, Kentucky.
    On behalf of the AMA, thank you for holding this hearing 
today to talk about this very important issue.
    This morning, I will share with you results from AMA 
studies that prove how costly and how often unfair our medical 
liability system is to patients and physicians. Most 
importantly, I will talk about a solution. That solution is a 
package of medical liability reforms based on reforms that have 
already been proven effective in States like California, Texas, 
and Michigan.
    Our current medical liability system has become an 
increasingly irrational system, driven by time-consuming 
litigation and open-ended, noneconomic damage awards that bring 
instability to the liability insurance market. It is also an 
extremely inefficient mechanism for compensating patients 
harmed by negligence, where court costs and attorney fees often 
consume a substantial amount of any compensation awarded to 
patients.
    Let me share with you some of the alarming statistics from 
an August 2010 AMA report that shows how lawsuit-driven our 
system has become.
    Nearly 61 percent of physicians age 55 and older have been 
sued. Before they reach the age of 40, more than 50 percent of 
obstetricians/gynecologists have already been sued. And 64 
percent of medical liability claims that closed in 2009 were 
dropped or dismissed. These claims are clearly not cost-free. 
And let's also not forget the emotional toll on physicians and 
their patients involved in drawn-out lawsuits, which is hard to 
quantify.
    Out of fear of being sued, physicians and other health-care 
providers may take extra precautionary measures, known as ``the 
practice of defensive medicine.'' A 2003 Department of Health 
and Human Services report estimated the cost of the practice of 
defensive medicine to be between $70 billion and $126 billion 
per year. Every dollar that goes toward medical liability costs 
is a dollar that does not go to patients who need care, nor 
toward investment in physician practices, a majority of which 
are small businesses that create jobs that benefit local and 
State economies.
    The good news is there are proven examples of long-term 
reforms that have kept physicians' liability premiums stable, 
but, more importantly, have insured and protected patients' 
access to health care.
    Back in 1974, California was experiencing many of the 
problems we are facing today. In response, California's 
legislature enacted a comprehensive package of reforms called 
the Medical Injury Compensation Reform Act of 1975 over 35 
years ago, which is now commonly referred to as ``MICRA.''
    While total medical liability premiums in the rest of the 
U.S. rose 945 percent between 1976 and 2009, the increase in 
California premiums was less than one-third of that at just 
about 261 percent.
    Recent public polls found that a majority of Americans 
support reasonable limits on noneconomic damages and believe 
that medical liability lawsuits are a primary reason for rising 
health-care costs.
    We look forward to the introduction of the HEALTH Act that 
mirrors California's reforms and also protects current and 
future medical liability reforms at the State level.
    By supporting patients' safety initiatives alongside 
enacting meaningful medical liability reform like the HEALTH 
Act, Congress has the opportunity to protect access to medical 
services, reduce the practice of defensive medicine, improve 
the patient-physician relationship, support physician practices 
and the jobs they create, and curb a wasteful use of precious 
health-care dollars: the costs, both financial and emotional, 
of health-care liability litigation.
    On behalf of the AMA, I would like to extend our 
appreciation for the leadership of the committee. And the AMA 
looks forward to working with you all to pass Federal 
legislation that would bring about meaningful reforms.
    And thank you.
    [The prepared statement of Dr. Hoven follows:]
                  Prepared Statement of Ardis D. Hoven













                               __________
    Mr. Smith. Dr. Hoven, thank you.
    And Ms. Doroshow?

TESTIMONY OF JOANNE DOROSHOW, M.D., EXECUTIVE DIRECTOR, CENTER 
                   FOR JUSTICE AND DEMOCRACY

    Ms. Doroshow. Thank you, Mr. Chairman, Mr. Conyers, Members 
of the Committee.
    The Center for Justice and Democracy, of which I am 
executive director, is a national public interest organization 
that is dedicated to educating the public about the importance 
of the civil justice system. This is the fourth time I have 
been asked to testify before a congressional Committee in the 
last 9 years on this very important subject of medical 
malpractice, and I am honored to do so.
    I also spoke at two different informal hearings, chaired by 
Mr. Conyers, which featured families, including children, from 
all over the country, whose lives were devastated as a result 
of medical negligence. One of those hearings lasted 4 hours, as 
victim after victim told their stories and pleaded with 
Congress not to cap damages and enact tort reform. They are all 
paying rapt attention today from afar, and I will do my best to 
represent them. But I do hope this Committee decides to hear 
from them directly, because these families are always the 
forgotten faces in the debate about how to reduce health-care 
and insurance costs.
    While I understand this is an oversight hearing and we do 
not know what bills yet may be considered by the Committee, 
typically the push has been for caps on noneconomic damages and 
other measures that force patients who are injured by medical 
negligence or the families of those killed to accept inadequate 
compensation. Meanwhile, the insurance industry gets to pocket 
money that should be available for the sick and injured, and 
they force many to turn elsewhere, including Medicaid, further 
burdening taxpayers.
    And, by the way, with regard to the California situation, 
rates did not come down in California for doctors until 1988, 
when insurance regulatory reform was passed. It was not due to 
the cap.
    These measures will also reduce the financial incentive for 
hospitals to operate safely, which will lead to more costly 
errors. In fact, when the Congressional Budget Office looked 
into it, they looked at several studies that looked at the 
negative health outcomes of tort reform, and one of them found 
it would lead to a 0.2 percent increase in mortality and the 
overall death rate in this country. That is another 4,000 
killed.
    Now, while I cover many issues in my written statement, I 
want to highlight a few other points.
    First of all, there is an epidemic of medical malpractice 
in this country. It has been over a decade since the Institute 
of Medicine study finding 98,000 dying in hospitals each year, 
costing $17 billion to $29 billion, and experts agree there has 
been no meaningful reduction in medical errors in the United 
States. In fact, in November, just last November, HHS reported 
that 1 in 7 hospital patients experience a medical error; 44 
percent are preventable.
    Second, medical malpractice claims and lawsuits are in 
steep decline, according to the National Center for State 
Courts and the insurance industry's own data. Plus, to quote 
from the Harvard School of Public Health study that the 
Chairman mentioned, ``Portraits of a medical malpractice system 
that is stricken with frivolous litigation are overblown, and 
only be a tiny percentage of med mal victims ever sue.'' In 
fact, this is the press release from Harvard, issuing that 
study, that said, ``Study casts doubt on claims that the 
medical malpractice system is plagued by frivolous lawsuits.''
    Med mal premiums have been stable and dropping since 2006. 
And if you read the industry's trade publications, you will 
find out that insurers so overpriced policies in the early part 
of the last decade that they still have too much money in 
reserves and that rates will continue to fall. And this has 
happened whether or not a State has enacted tort reform.
    As far as Texas, health-care costs did not come down when 
caps passed, at all. Applications for new licenses are only 
part of the picture. When it comes to physicians engaged in 
patient care--in other words, considering physicians who 
retire, leave the State, or stop seeing patients--the data 
shows that the per capita number has not grown. In fact, the 
number grew steadily through 2003 and then leveled off. This is 
not a pattern you would expect if 2003 tort reform law was 
responsible.
    When competing for physicians, Texas is more hampered by 
the extraordinary size of its uninsured population, which 
exceeds just about every other State.
    In terms of defensive medicine, CBO found that was not 
pervasive, 0.3 percent, from slightly less utilization of 
health-care services, but even this is too high. What CBO did 
not consider, for example, are the burdens on Medicaid when 
there are no lawsuits or the fact that Medicare and Medicaid 
have liens and subrogation interests in a judgment, so if the 
lawsuit can't be brought, they can't be reimbursed. All of 
these costs need to be added in.
    Finally, these bills all ignore the insurance industry's 
major role in the pricing of medical malpractice insurance 
premiums, an industry that is exempt from antitrust laws under 
the McCarran-Ferguson Act. This needs to be repealed.
    We need to do more to weed out the small number of doctors 
responsible for most malpractice and reduce claims, injuries 
and deaths, and lawsuits.
    Thank you, Mr. Chairman.
    [The prepared statement of Ms. Doroshow follows:]
                 Prepared Statement of Joanne Doroshow


























































                               __________

    Mr. Smith. Thank you, Ms. Doroshow.
    Dr. Weinstein?

            TESTIMONY OF STUART L. WEINSTEIN, M.D., 
            HEALTH COALITION ON LIABILITY AND ACCESS

    Dr. Weinstein. Thank you, Chairman Smith and Ranking Member 
Conyers, for holding this important hearing to consider fixing 
our country's broken liability system.
    I am Stuart Weinstein. I am the Ponseti Chair and professor 
of orthopedic surgery and professor of pediatrics at the 
University of Iowa. I have been a practicing pediatric 
orthopedic surgeon for more than 35 years. I am the past 
president of the American Academy of Orthopedic Surgeons and 
the American Orthopedic Association.
    I would like to begin today by asking each of you to put 
yourself in someone else's shoes. Imagine you are a young, 
pregnant mother living in rural America with no OB/GYN 
practitioner or your local hospital has closed its door to 
obstetrics. Or imagine you are a young doctor, saddled with 
debt, trying to pick a specialty. Despite the great need for 
OB/GYNs, neurosurgeons, trauma physicians, and general 
surgeons, you choose a safer specialty because of risk of 
lawsuit. And, finally, imagine you are an orthopedic surgeon, 
in practice for three decades, but you are facing similar high 
costs for liability insurance and the threat of potential 
litigation. To reduce your liability, you decide to avoid high-
risk cases like trauma cases, or maybe you decide to retire 
altogether.
    Dilemmas like these play out across America every day, as 
medical lawsuit abuse undermines both our health-care system 
and the doctor-patient relationship. Moreover, medical lawsuit 
abuse is driving up health-care costs at a time when we are 
still reeling from one of the worst recessions in modern times.
    I am here today to ask you to create a climate for patient-
centered care by reforming the medical liability system that 
continues to put everyone's health care at risk. The current 
system is clearly broken, and there is widespread agreement 
amongst lawmakers, health-care policy experts, opinion leaders, 
and the public that reform is needed.
    Today, more than 90 percent of OB/GYNs have been sued at 
least once. One-third of orthopedic surgeons, trauma surgeons, 
emergency doctors, and plastic surgeons are sued in any given 
year, and neurosurgeons once every 2 years, on the average. 
And, as you know, most claims are without merit. This toxic 
litigation environment is fundamentally changing the doctor-
patient relationship. It is driving doctors to get out of 
medicine or to practice defensive medicine.
    Defensive medicine is the antithesis of health-care reform 
because it increases health-care costs. And it has the 
potential to lessen access to care and quality of care in two 
ways.
    First, doctors practice assurance behavior, which includes 
ordering tests, particularly imaging studies, performing 
diagnostic procedures or referring patients in order to provide 
an extra layer of protection against abusive lawsuits. A recent 
Gallup survey found that the fear of lawsuits was the driver 
behind 21 percent of all tests and treatments ordered by 
doctors, which equates to 26 percent of all health-care 
dollars, a staggering $650 billion.
    Defensive medicine also includes avoidance behaviors, where 
doctors eliminate high-risk procedures like head injury, trauma 
surgery, vaginal deliveries, or procedures prone to 
complications, and they avoid patients with complex problems or 
patients who seem litigious.
    In 2008, almost half of America's counties had no 
practicing obstetricians. This shouldn't be happening in 
America. And, unfortunately, the PPACA was not comprehensive 
reform, as it didn't address this critical issue.
    There are remedies to fix this broken system, but it is 
imperative that we act now before defensive medicine practices, 
and costs associated with it, becomes the standard of care, 
before health-care costs go higher and unemployment along with 
it, before doctor shortages change the very nature of our 
health-care system.
    Successful reform efforts in States, especially California 
and Texas, have given us a blueprint for Federal medical 
liability reform legislation. HCLA has outlined several 
legislative proposals that preserve State laws already working 
effectively to make the medical liability system fair for both 
patients and health-care providers, but also broaden coverage 
across the Nation.
    I would like to close by telling you about a Maryland 
gynecologist, Dr. Carol Ritter, who stopped delivering babies 
in 2004 when her liability premiums hit $120,000 a year. She 
couldn't deliver enough babies to pay the trial bar's tab. 
Today, Dr. Ritter maintains a gynecology practice and still 
delivers babies, but she does it in Haiti and Honduras and 
Bosnia, where she joins relief efforts helping women in these 
impoverished places get obstetrical care, including delivering 
babies. She says she does it for the sheer joy of what she does 
best, but she can't do it in Maryland.
    I would say to you today that something is very wrong when 
a caring, committed physician like Dr. Ritter can't bring an 
American baby into this world for fear of frivolous lawsuits. 
Ladies and gentlemen, you have the ability and, I think, the 
responsibility to help right that wrong.
    Thank you very much.
    [The prepared statement of Dr. Weinstein follows:]
               Prepared Statement of Stuart L. Weinstein












































                               __________

    Mr. Smith. Thank you, Dr. Weinstein.
    And I will recognize myself for questions and, Dr. Hoven, I 
would like to address my first question to you.
    You heard mentioned a while ago and you know, of course, 
that the Congressional Budget Office estimates that we would 
save $54 billion over 10 years if we reduce the cost of 
defensive medicine.
    There are other studies--for instance, the Pacific Research 
Institute says that defensive medicine costs $191 billion. A 
Price Waterhouse Coopers study puts it at $239 billion. And 
Newsweek reports that, all told, doctors order $650 billion in 
unnecessary care every year.
    I don't know which of those figures is correct, but they 
all point to the same direction, which is defensive medicine is 
expensive and costs, let's say, at a very minimum, tens of 
billions of dollars, probably, every year.
    My question is this: Who pays for the cost of all that 
defensive medicine?
    Dr. Hoven. Thank you.
    We all pay for the cost of that defensive medicine. At the 
end of the day, patients pay for it. We pay taxes that pay for 
it. We all pay, ultimately, for the cost of that defensive 
care.
    Now, it is very important to realize, in the culture of 
fear in which we are all practicing medicine now--and I use 
that term because I think it is very real--that most physicians 
want to practice medicine the best possible way they can. They 
want to do the best job they can. But what they recognize is 
that their clinical judgment is not allowed to carry any weight 
in the court of law, so that, in fact, we do these things for 
assurance to protect ourselves. And, at the end of the day, 
that is where those costs do come around.
    Mr. Smith. Yeah, okay. Thank you, Dr. Hoven.
    Dr. Weinstein, the Congressional Budget Office estimates 
that, if we were to enact medical liability reform, premiums 
would drop 25 to 30 percent. Who benefits from a drop in 
premiums of 25 to 30 percent? Or maybe I should say, is the 
benefit limited to the physician and medical personnel or not?
    Dr. Weinstein. I think, ultimately, Mr. Chairman, is that 
when medical liability premiums begin to drop, the culture of 
fear amongst physicians eventually will change. This is a 
cultural change that will have to occur over time. And once 
that cultural change occurs, then the practices of defensive 
medicine, which you have heard about over and over again, will 
eventually change, as well, and our health-care costs will go 
down. So, ultimately, patients and the American public will 
benefit.
    Mr. Smith. Patients and the consumers benefit.
    My last question is to both Dr. Weinstein and Dr. Hoven. 
And I want to ask you all to respond to a point that Ms. 
Doroshow made, where she said that, basically, it wasn't 
medical liability reform that reduced premiums, it was 
insurance reform. And she gave the example of California.
    Who would like to respond? Either California or Texas.
    Dr. Hoven?
    Dr. Hoven. I will go first.
    It takes 8 to 10 years to see the effects of these reforms 
when they are enacted. There really is not firm, hard evidence 
that, in fact, the insurance change was the result. It was the 
fact that, across the country, it takes 8 to 10 years to begin 
to see the evolution of change when these reforms are put in 
place.
    Mr. Smith. Okay.
    And Dr. Weinstein?
    Dr. Weinstein. Mr. Chairman, I think that all would agree 
that the system in California compensates the patients in a 
much more rapid fashion and also more appropriate, so that 
patients who are indeed injured get the majority of the reward.
    Mr. Smith. Okay.
    And, Dr. Weinstein or Dr. Hoven, respond to this, if you 
would. In regard to the California insurance reform--I am 
looking at a newspaper article. It said that Proposition 103 
that required a rollback of insurance premiums and not 
California's health-care litigation reforms have controlled 
medical professional liability premiums. That is the assertion. 
But, according to the Orange County Register, ``A rollback 
under Proposition 103 never took place because the California 
Supreme Court amended Proposition 103 to say that insurers 
could not be forced to implement the 20 percent rollback if it 
would deprive them of a fair profit.''
    So it is hard to see the correlation, therefore, between 
the insurance reform and the drop in premiums. And, clearly, 
the drop in premiums were a result of the medical liability 
reforms.
    I thank you all for your responses, and I will recognize 
the Ranking Member for his questions.
    Mr. Conyers. Thanks, Chairman.
    And I thank the witnesses.
    Where are we now in terms of the Health Care Reform Act, 
which sometimes is derogatorily referred to as ObamaCare--I use 
the term because I think it is going to go down historically as 
one of the great advances in health care.
    But didn't the Health Care Reform Act, which still, by the 
way, is the law of the land and will be until the President 
signs the repeal, which I wouldn't recommend anybody to hold 
their breath on--we provided money for examining this very same 
subject, Section 10607.
    Does anybody know anything about that here?
    Yes, sir?
    Dr. Weinstein. Mr. Conyers, are you referring to the 
demonstration projects?
    Mr. Conyers. Yes, the $50 million for a 5-year period 
that--demonstration grants for the development to States for 
alternatives to current tort litigation. That is right.
    Dr. Weinstein. If I could address that question, I would 
say that the way the demonstration projects--which haven't been 
funded, I don't believe, yet--but the way the demonstration 
projects are outlined, I believe that the patients can then 
withdraw at any time and choose another alternative.
    And I am a full-time educator/clinician scientist, and I 
would say, when you design a research study which allows 
patients to cross over or change, you don't get good 
information at the end of the day. That is not the good 
scientific method, if you will, if you want to find out what 
works best. So I would argue that the way that is designed has 
a flaw to it.
    And, also, there have been demonstration projects across 
the States for a number of years.
    Dr. Hoven. If I could comment?
    Ms. Doroshow. Could I----
    Mr. Conyers. Sure, you can.
    Ms. Doroshow. Actually, in conjunction with that provision 
in the health-care bill, HHS has actually awarded, now, a 
number of grants to many States, up to $3 million, to develop 
alternative procedures and other kinds of patient-safety-
oriented litigation reforms.
    So those grant proposals were already given; there was 
money. And these demonstration projects are in the process of 
being explored right now at the State level. I live in one 
State where that is true, New York.
    Mr. Conyers. Well, are we here--can I get a response from 
all of our witnesses about the whole concept of providing 
health care for the 47 million or more people that can't afford 
it? Are any of you here silently or vocally in support of a 
universal health-care plan?
    Dr. Hoven. If I may speak to that, sir?
    Mr. Conyers. Sure.
    Dr. Hoven. The American Medical Association recognizes that 
the PPACA is not a perfect bill, but it is a first step in 
getting us to where we need to be in this country--medical 
liability reform, alternative mechanisms for dispute resolution 
that are to be funded through that legislation are under way as 
we speak.
    We in no way support a mechanism that does not recognize 
that every person in this country needs affordable care and 
access to quality health care.
    Mr. Conyers. Well, the bill that was just repealed 
yesterday provided for millions of more people getting health 
care because we raised the ceiling on Medicaid and we allowed 
the inclusion of children in the parents' health-care plan 
until age 26, a 7-year increase. Did that help any?
    Dr. Hoven. We will wait and see.
    Mr. Conyers. We will wait and see? You mean you will wait 
to see if there are any parents that want to keep their kids 
included for 7 more years? I haven't found one yet that doesn't 
want that provision in the bill.
    Dr. Hoven. Let me go back to my earlier comments. Access to 
care for everyone is what we want and need in this country.
    Mr. Conyers. Well, I know it. Yeah, that is a great 
statement. That is what I want, too. And that is why I was 
asking you about some of the provisions of the bill that was 
just dunked last night by the 112th Congress.
    But I thank you, Mr. Chairman.
    Mr. Smith. Okay, thank you, Mr. Conyers.
    The gentleman from New York, Mr. Reed, is recognized for 
his questions.
    Mr. Reed. Well, thank you, Mr. Chairman.
    I thank the witnesses for appearing today.
    I will ask Dr. Weinstein, when I looked at the National 
Commission on Fiscal Responsibility and Reform, the President's 
commission to explore ways to reduce the deficit, it was 
recommended in there that health-care litigation reform as a 
policy could save money and go to limit the deficit. The 
deficit is a huge issue and a priority for many new Members of 
Congress, of which I am one.
    Do you agree that lawsuit reform could and would reduce the 
deficit?
    Dr. Weinstein. Yes, sir, I do. I think that has been shown. 
I think the CBO report that Senator Hatch had requested 
information on showed it would reduce it by $54 billion over 10 
years. And depending on what study you look at, I think there 
has been widespread discussion in the media, by Members of 
Congress, and also by various groups who have looked at this 
issue. Senator Kerry and Senator Hatch on ``This Week'' on ABC, 
I think, both felt that this would be a significant step 
forward, addressing the medical liability issue.
    So I think that, to us, there is no question that this 
would, indeed, reduce health-care spending.
    Mr. Reed. Dr. Hoven, would you agree?
    Dr. Hoven. I most certainly would agree. I think, clearly, 
that is not chump change we are talking about. And we clearly 
need to move ahead. And, you know, that is a conservative 
estimate, and it may even be greater than that.
    Mr. Reed. And, Ms. Doroshow, would you agree or disagree 
with that?
    Ms. Doroshow. I absolutely disagree with that.
    I think that what CBO did unfortunately avoided a number of 
very important issues that will end up increasing the deficit, 
burdening Medicaid and Medicare, in particular--three things, 
in particular.
    One is, when you enact these kinds of severe tort reforms, 
there are many people with legitimate cases that cannot find 
attorneys anymore and cannot bring cases. This is well-
documented as having happened in California. In fact, you had a 
witness before this Committee in 1994 testifying to that 
effect. And it is certainly happening in Texas. So you have 
many people that are going to end up going on Medicaid that 
otherwise would have been compensated through an insurance 
company.
    Second, as I mentioned, there are liens and subrogation 
rights that Medicare and Medicaid have when there is a judgment 
or a verdict in a lawsuit. In other words, they can get 
reimbursed. If there is no lawsuit, that reimbursement is gone. 
So they lose money in that regard.
    Third, these kinds of measures are going to make hospitals 
more unsafe. There are going to be many, many more errors. Even 
the CBO, in its letter to Senator Hatch, talked about one study 
that would increase the mortality rate in this country by 0.2 
percent. And that doesn't even include the injuries. So you are 
going to have more people hurt, more expense taking care of 
those people.
    And, frankly, when you enact any kind of cap on noneconomic 
damages, in particular, those have a disproportionate impact on 
senior citizens, children, low-income earners. And, certainly, 
senior citizens, what has happened in Texas with the cap, those 
cases really are not being brought anymore. So senior citizens 
who are on Medicare, who should have a right to seek 
accountability from a hospital that caused negligence, no 
longer are bringing those lawsuits, and so Medicare is paying.
    There are lots of costs that are going to end up increasing 
the deficit.
    Mr. Reed. Well, but my understanding is that we are not 
looking to discourage legitimate lawsuits. We are allowing 
economic damages to be fully compensated. And the subrogation 
rights that you refer to are derived from the economic damage 
calculation, because those are lost wages--or medical bills, 
past and future, that the subrogation rights are derived from.
    So what we are talking is focusing on the frivolous 
lawsuits that are there. So I guess I don't follow your logic 
saying that that is a reason why----
    Ms. Doroshow. No, I think that is actually not what history 
shows. History shows, when you cap noneconomic damages, there 
are certain classes of cases that are no longer brought.
    That is what has happened in California, and that is what 
this individual testified. An insurance defense lawyer 
testified before this very Committee in 1994: Entire categories 
of cases can no longer be brought, those that involve primarily 
noneconomic damages.
    For example, one of the people we brought to Washington a 
couple of times, a woman named Linda McDougal, she was the 
victim of negligence----
    Mr. Reed. Thank you, Ms. Doroshow. I think my time has 
expired.
    Thank you, Mr. Chairman.
    Mr. Smith. Thank you, Mr. Reed, for your questions.
    Ms. Doroshow, if you want to finish the sentence, you may 
do so.
    Ms. Doroshow. Well, she had an unnecessary double 
mastectomy because the lab misdiagnosed cancer when she didn't 
have it. And she came down to testify a few times. But her 
damages were entirely noneconomic in nature.
    Mr. Smith. All right.
    Ms. Doroshow. So a cap only affected cases--her case.
    Mr. Smith. Okay. Thank you very much.
    The gentleman from Virginia, Mr. Scott, is recognized for 
his questions.
    Mr. Scott. Thank you, Mr. Chairman.
    One of the problems we have in this discussion is a lot of 
the problems are articulated and then solutions are offered and 
very little effort is made to see how the solutions actually 
solve the problems.
    Ms. Hoven, did I understand your testimony that physicians 
are routinely charging for services that are not medically 
necessary to the tune of $70 billion to $126 billion?
    Dr. Hoven. I am talking about defensive medicine.
    Mr. Scott. I asked you, are those services that are not 
medically necessary?
    Dr. Hoven. They are services that are medically indicated 
and medically necessary if you look at guidelines and criteria. 
However, what does not happen is--my clinical judgment whether 
to employ that test is disregarded.
    Mr. Scott. Are you suggesting that the services are not 
medically necessary? If liability were not a factor, would the 
services be provided or not?
    Dr. Hoven. It depends on the case. It depends on the 
situation. It depends on the environment of care.
    Mr. Scott. And you are suggesting that in $70 billion to 
$126 billion worth of cases, services were rendered that were 
not medically necessary, were not needed?
    Dr. Hoven. That is not what I said, Congressman.
    Mr. Scott. Well, what are you saying?
    Dr. Hoven. I am saying that health care delivered in the 
examining room, in the operating room, is driven by what is 
based on clinical judgment and based on assurance testing, 
which is documentation and proving that, in fact, that is what 
is wrong with a patient.
    When we talk about cost control in this country, we are 
talking about the fact that--and this goes to the whole issue 
of cost containment, which is, if, in fact, you would recognize 
my medical judgment and allow me to decide when it is important 
to do a test or not, then our patients would be better served.
    Mr. Scott. By not providing the services?
    Dr. Hoven. If, in my judgment, they don't need it.
    Mr. Scott. And you are not able to--and you charge for 
services that, in your judgment, are not needed to the tune of 
$70 billion to $126 billion?
    Dr. Hoven. I do not do that. However, let me----
    Mr. Scott. Well, I mean, your testimony was that physicians 
are charging $70 billion to $126 billion more than necessary 
and then blame it on liability. Now, is that your testimony?
    Dr. Hoven. Yes, that is my testimony.
    Mr. Scott. That it is not necessary, that you are providing 
services that are not necessary. Either they are necessary or 
they are not.
    Dr. Hoven. We are practicing in a culture of fear. And that 
culture of fear lends itself to protecting oneself. I have been 
sued, Congressman. Let me tell you----
    Mr. Scott. Wait a minute. I just asked you a simple 
question. You gave $70 billion to $126 billion. I just want to 
know what that represents.
    Dr. Hoven. That is costs for tests and procedures which, if 
you look at guidelines, would be medically necessary, but my 
medical judgment is discounted.
    Mr. Scott. That, based on your medical judgment, should not 
have been provided.
    Dr. Hoven. Not necessarily.
    Mr. Scott. Okay, well, I am not going to--Ms. Doroshow, if 
physicians are charging for services that are not necessary, 
how is that different from medical fraud?
    Ms. Doroshow. That is a good question, because in order to 
get reimbursed--to file a claim with Medicare and to be 
reimbursed, physicians have to file a form and certify that the 
test and procedure, the services that they provided are 
medically necessary for the health of the patient. So it does 
raise a question whether or not some claims may be false.
    Mr. Scott. If someone were to do a survey to say, why did 
you provide the services that were not necessary, what would be 
the convenient answer? If they ask you, why did you provide the 
services that were not necessary, what would be a nice, 
convenient----
    Ms. Doroshow. To say that they----
    Mr. Scott. Because they were afraid of lawsuits, so they 
can charge for services that weren't even needed.
    Ms. Hoven, did you indicate that you supported a fair 
determination for medical malpractice issues, so that those who 
had bona fide cases could actually recover?
    Dr. Hoven. Most definitely, Congressman.
    Mr. Scott. Now you are aware that the Institute of Medicine 
estimates about 100,000 deaths due to medical mistakes and only 
about 5,000 to 10,000 wrongful death cases are paid every year?
    Dr. Hoven. Well, if you look at the statistics, which you 
are obviously very familiar with, we are talking about apples 
and oranges here in many situations. We are talking about 
errors and adverse events as opposed to true malpractice and 
negligence. So I think you have to be careful about the 
terminology.
    Mr. Scott. So what would be the barrier to 90 to 95 percent 
of the cases that were caused my medical errors from 
recovering?
    Dr. Hoven. They should be able to recover.
    What the Health Act would do would allow them to recover so 
that they would be appropriately rewarded for what happened to 
them in their loss. The Health Act talks about that in terms of 
all of the economic elements that are involved, including their 
health care.
    Mr. Scott. Mr. Chairman, my time has expired.
    Mr. Smith. Thank you, Mr. Scott.
    The gentleman from Pennsylvania, Mr. Marino, is recognized 
for his questions.
    Mr. Marino. Mr. Chairman, I yield my time.
    Thank you.
    Mr. Smith. We will go to the gentlewoman from Florida for 
her questions, Mrs. Adams.
    Mrs. Adams. Thank you, Mr. Chair.
    Ms. Doroshow, I was looking at this Institute of Medicine 
study. And you cited it in your opening statement and in your 
packet. And it says that as many as 98,000 patients die 
annually due to medical errors. And what we found was that it 
has shown to be exaggerated and unreliable, isn't that true, 
because based on, shortly after its release in 2000, the study 
came under heavy criticism for imprecise methodology that 
greatly overstated the rate of death from medical errors?
    For example, the study data treated deaths from drug abuse 
as medication errors. And Dr. Troyen Brennan, the lead Harvard 
researcher who compiled much of the data upon which the report 
was based later revisited his methodology and determined that 
the actual figure could be less than 10 percent of the IOM's 
estimate. Is that true?
    Ms. Doroshow. Well, what is true is that many other studies 
since then have found far more than 98,000 deaths; many other 
institutions that have looked into it. And, just in November, 
HHS took a look at this issue again, and they found that one in 
seven patients in hospitals are victims of an adverse event, 
and 44 percent of them are preventable.
    Also, there was a study just also released in November of 
North Carolina hospitals--North Carolina is supposed to be a 
leader in patient safety--basically, finding that since the 
Institute of Medicine report, patient safety has not improved 
at all. And it really kind of shocked the authors of this 
research study, and they found that the errors that are causing 
deaths and injuries are continuing at an epidemic rate.
    So I would say that the 98,000 figure at this point is low 
and has been probably upped by every patient and government 
study that has looked into it since.
    Mrs. Adams. So your testimony is that every adverse event 
is a medical malpractice?
    Ms. Doroshow. I am looking at the studies and how they 
define it. In, for example, the HHS study, they found one in 
seven Medicare patients are the victim of an adverse event, and 
44 percent are preventable.
    Mrs. Adams. Again, are you saying, in your eyes, is an 
adverse event medical malpractice?
    Ms. Doroshow. A preventable adverse event is.
    Mrs. Adams. The other thing I wanted to know, I know who 
Dr. Hoven is representing and I know who Dr. Weinstein is 
representing. But I couldn't find in your documentation where 
the Center for Democracy and Justice gets its funding. Could 
you provide the Committee with a list of your fellow and 
associate members so we have an accurate understanding of the 
point of view which you are presenting?
    And, also, you mentioned the demo projects and that they 
are going to get grant funding. Are you or anybody that is 
associated with the Center for Justice and Democracy able to 
apply for those grants?
    Ms. Doroshow. Apply for which grants?
    Mrs. Adams. The ones for the research that you were 
speaking about earlier.
    Ms. Doroshow. Well, we are tiny. We have about five people 
on our staff. We are not a high-budget operation. So we don't 
really have the staff to do research projects like that. We 
hope other people would do that.
    Mrs. Adams. Again, I would like to know, like your fellow 
and associate members, are they going to be applying for those 
grants?
    Ms. Doroshow. Our associate members? I would have no 
information about any of that. I don't know. Those grants were 
already--that process has already taken place. HHS has already 
granted the money. In New York, for example, it granted $3 
million to the Office of Court Administration in conjunction 
with the Department of Health that is looking at a specific 
proposal that was presented to them. So, actually, I know a lot 
about that proposal. I know about a few of the others. But that 
has already happened.
    Mrs. Adams. Are you aware--and this goes to all three of 
you, and I think Dr. Weinstein and Dr. Hoven have said this, 
and I just want to make sure that you are aware also--that 
there are certain professions in the medical field that have 
stopped practicing because they can't see enough patients in 
order to cover their insurance costs, just the cost alone; not 
because they have done anything wrong, but they cannot see 
enough patients to cover their malpractice insurance costs.
    Ms. Doroshow. Well, I hope that also you are aware that 
since 2006, we have been in a soft insurance market. That is 
why you don't hear any longer about doctors picketing on State 
legislatures and capitals and trauma centers, et cetera, that 
we did in the early part of the 2000's, when we were in a hard 
insurance market, when rates were going up 100, 200 percent for 
doctors. This is a cyclical industry. This has happened three 
times in the last 30 years when rates have shot up like this.
    To believe that the legal system has anything to do with 
it, you would have to believe that juries engineered large 
awards in 1975; and then stopped for 10 years; and then did it 
again in 1986 to 1988; and then stopped for 17 years; and then 
started up again in 2001. Of course, that has never been true. 
The claims have always been steady and stable.
    So what is driving insurance rate hikes is the insurance 
and accounting practices of the insurance industry. The 
solutions to that problem lie with the insurance industry. They 
should not be solved on the backs of injured patients.
    Mrs. Adams. I see my time has expired. I look forward to 
further discussion.
    Mr. Smith. Thank you, Mrs. Adams.
    The gentlewoman from Texas, Ms. Jackson Lee, is recognized 
for her questions.
    Ms. Jackson Lee. Than you, Mr. Chairman.
    Let me thank all of the witnesses for their presence here 
today. And I want you to know that each of your presentations 
are particularly respected and admired.
    I want to start with the representative, Dr. Hoven, from 
the American Medical Association. Coming from Houston, I think 
many of you are aware, probably so for me, that we have one of 
the greatest medical centers in the world, the Texas Medical 
Center. I am very proud of a recent $150 million private 
donation just recently received by the Texas--by MD Anderson. 
And so I have a great familiarity with a lot of physicians and 
applaud their work and thank them for some of the lifesaving 
research that they have been engaged in.
    But building on the present national law, which is, of 
course, the Patient Protection and the Affordable Care Act, Dr. 
Hoven, one of your peers or one of your colleagues who happened 
to serve in this body, Senator Frist, indicated that that law 
was the fundamental platform upon which we could now base our 
desire to go forward, to have additional provisions.
    So I just want to get a clear understanding. It is my 
understanding the American Medical Association supported the 
bill. Is that correct?
    Dr. Hoven. The American Medical Association supported parts 
of the bill. We believe that access to care, covering the 
uninsured, decreasing costs and improving quality, are very, 
very important first steps.
    Ms. Jackson Lee. So you are telling me doctors would not 
support eliminating the preexisting conditions and allowing 
children to stay on their insurance until age 26?
    Dr. Hoven. We do support that.
    Ms. Jackson Lee. All right. So I think a great part of the 
bill, you did, and you probably would--I am not sure; maybe 
because you are before a large group that you don't want to say 
that the AMA supported it, but it is my understanding they did. 
I see someone shaking their head behind bill. So you support 
the bill. Did the AMA support the bill?
    Dr. Hoven. The AMA did support the bill. We have recognized 
it is an imperfect bill.
    Ms. Jackson Lee. You are absolutely right. And I will 
assure you, those of us who are lawyers as well agree with you, 
because it is very difficult to write a perfect bill. But as 
Dr. Frist said, this is a bill that is the law of the land. In 
fact, he even said he would have voted for it. So I want to 
clear the record that this is a bill that really does answer a 
lot of questions, but we can always do better.
    Let me indicate to Ms. Doroshow, if I have it correctly, in 
the process of hearings, we have witnesses that represent the 
majority view. The majority is represented by Republicans, 
chaired by Mr. Smith. And we have a right to have a witness 
that maybe has a different perspective.
    So to inquire of your funding, whether you are getting 
grants, every hearing we will find that we will have witnesses 
that agree with the predominant view of the majority, but we 
will also have in this democracy the right to have a different 
view.
    I suppose you have a different view from the Health Act 
that is before us, is that correct? There is a bill--you have a 
slightly different view, is that my understanding, between this 
question dealing with tort reform or medical malpractice?
    Ms. Doroshow. I certainly have a different view from the 
other witnesses, yes.
    Ms. Jackson Lee. That is the point I am making. So let me 
inquire.
    And as I do that, I think the point that I wanted to engage 
with Dr. Hoven was to say that I want to find every way that we 
can work with physicians. I want their doors to be open. I want 
them to be in community health clinics. I want them to have 
their own private practice. I want them to be OB/GYNs. In fact, 
Dr. Natalie Carroll Dailey, an OB/GYN, former president of the 
National Medical Association, I count her as a very dear friend 
but also someone who counsels me.
    So let me be very clear. Answer these two questions, to Ms. 
Doroshow: What is the reality of how many frivolous lawsuits we 
have? You have a notation of the Harvard School of Public 
Health. Give me that, quickly.
    The second thing is, insurance companies. Isn't that the 
crux of the problem? Are the patients the ones that are 
charging doctors $120,000for insurance, or is it the insurance 
companies, who have documented that they will not lower costs 
even if there is a low count of medical malpractice lawsuits in 
that doctor's area, in that doctor's office, and in that State? 
Isn't that true?
    Ms. Doroshow. Absolutely.
    Ms. Jackson Lee. Would you just comment very quickly. And 
let me, as I say that, say to you, my mother had a pacemaker 
for 20 years. She had a procedure to give her a new one. The 
next day she was dead.
    I would like you to be able to answer my questions, if the 
Chairman would indulge your answer, please.
    Ms. Doroshow. Well, in terms of the Harvard study, this is 
important because this is the study that gets, I think, 
misrepresented often and figures about 40 percent of the cases 
are frivolous.
    Actually, the Harvard study found the exact opposite. In 
fact, I will read the quote from the author of that study, the 
lead author, David Studdert: Some critics have suggested that 
the malpractice system is inundated with groundless lawsuits 
and that whether a plaintiff recovers a money is like a random 
lottery, virtually unrelated to whether the claim has merit. 
These findings, the Harvard School of Public Health findings, 
cast doubt on that view by showing that most malpractice claims 
involve medical error and serious injury and that claims with 
merit are far more likely to be paid than claims without merit.
    And there is a lot of extensive research done on that 
study. And the headline of the Harvard press release was: 
``Study Casts Doubt on Claims that Medical Malpractice System 
is Plagued by Frivolous Lawsuits.'' So that clearly is not a 
problem.
    Mr. Smith. The gentlewoman's time has expired.
    Than you, Ms. Doroshow.
    We will recognize the gentleman from Virginia, Mr. Forbes, 
for his questions.
    Mr. Forbes. Thank you, Mr. Chairman.
    And I want to thank all of our witnesses. I truly believe 
all three of you are here to do what you think is in the best 
interest of our patients and of the United States.
    I feel the same way about the Members that we have up here. 
But we all have specific constituencies.
    As much as I love the Chairman, I know that there are times 
that--he is from Texas, and he has a Texas constituency; the 
gentleman from Arkansas has an Arkansas constituency; and the 
gentlewoman from Florida has a Florida constituency. And that 
is why we tell everybody, the gentleman from Florida, the 
gentleman from Arkansas.
    I think it is important that we know when you are 
testifying who you are constituencies are. And two of our 
witnesses have set that forward. And Congresswoman Adams asked 
what I think is a fair question to Ms. Doroshow, and that is if 
she would just be willing to give us your sources of public 
funding and your membership, would you make those public so we 
know who those constituencies are?
    Ms. Doroshow. Well, we are a 501(c)3 tax-exempt 
organization, and we do not release the names and information 
about our donors. I will say that we get different kinds of 
funding. We get foundation grants, for example. In fact, I 
started the organization in 1998, and it was just myself sort 
of sitting there writing letters to the editor with a little 
bit of money from a friend of mine, and I got a large grant 
from the Stern Family Fund.
    Mr. Forbes. Ms. Doroshow, I just only have 5 minutes. So 
the answer is that you won't let us know who your membership is 
and your sources of funding.
    Ms. Doroshow. Absolutely not.
    Mr. Forbes. Okay. Then we will take that into account. And 
let me just say that sometimes this is not as complex as we try 
to make it.
    The reality is that everybody at home who watches these 
hearings and who looks at these issues, they know when you are 
talking about not changing tort reform who the true 
beneficiaries of that are. They are the trial lawyers. And the 
trial lawyers are the ones that put the dollars behind it. The 
trial lawyers are the ones that will sit here and tell us, if 
we don't do this, we are going to be impacted, and we are could 
be losing our jobs.
    On the other hand, we know who some of the major 
beneficiaries are if we do tort reform, and that is some of our 
doctors. And they tell us, hey, if we don't do this, we could 
be losing our jobs.
    One of the interesting things I can tell you and tell this 
Committee, I have never in my entire career had a single 
constituent walk into me and say, I am worried because I can't 
find a trial lawyer out there. But I have them over and over 
coming to me now, truly worried that they cannot find doctors 
to represent them. And, secondly, when I hear people talk about 
the 2 or 3 percent of bad doctors, that sometimes falls on 
hollow ground because the same people that will point and say, 
oh, yeah, we can't do malpractice reform because it is 2 or 3 
percent of bad doctors fight us every time we try to get rid of 
the 2 or 3 percent of bad doctors, the same way they try to do 
when we try to get rid of the 2 or 3 percent of bad teachers.
    So my question to you is this, all three of you. I am a 
firm believer in modeling and simulation. We use it in the 
Armed Services Committee to try to model for us our most 
difficult weapon systems, our military strategies. We are so 
confident in it, although we know it has some flaws, that we 
put the entire defense of the United States sometime on 
modeling and simulation that we can do.
    Do we have any efforts at modeling and simulation that 
would help show us what the health care world would be like if 
we did tort reform and if we got rid of some of the litigation 
and whether it would benefit us or not? And if we don't, what 
can we do to help you move forward in that?
    Dr. Weinstein?
    Dr. Weinstein. If I could address that question, I think 
you have a model out there existing already, and that is the 
most recent Texas reform. You also have California, which has a 
longer history.
    And the Texas reform obviously showed lowering premiums but 
increasing numbers of critical care specialists, particularly 
in underserved counties. That included also pediatricians, 
emergency physicians, et cetera.
    If I might, could I come back to the issue of the frivolous 
lawsuits? Is that possible.
    Mr. Forbes. Absolutely.
    Dr. Weinstein. Congresswoman Adams asked about this. And I 
think the issues are that the data would be that 64 percent of 
suits are either withdrawn, dropped, or dismissed because they 
lack merit. Less than 1 percent are actually decided for the 
plaintiff.
    And when you come to the New York study, which is called 
the Harvard study, that looked at New York data, you are 
talking about extrapolation of 280 cases of error. And in that 
study, errors could be someone falling in the hallway walking, 
and that was lumped together with someone who had a significant 
surgical error. And the study has been flawed, as was pointed 
out.
    Mr. Forbes. Dr. Weinstein, my time is up. I don't mean to 
cut you off, but I just wanted to say the point that you made 
about California and Texas is so accurate. We hear over and 
over we are going to do these demonstration projects, but you 
have two monstrous demonstration projects. And if we are going 
to ignore those, we are certainly going to ignore the other 
demonstration projects.
    Dr. Hoven, I don't have time for you to give me your 
answer, but if you could submit it to us in writing.
    Or, Ms. Doroshow, we would love to have it on the modeling 
simulation part.
    Mr. Smith. Thank you, Mr. Forbes.
    The gentleman from North Carolina, Mr. Watt, is recognized 
for his questions.
    Mr. Watt. Thank you, Mr. Chairman.
    Let me first apologize to the witnesses. I had to leave to 
go to a meeting and didn't hear anything other than a small 
part of the first witness's testimony. But I assure you I will 
read it.
    I didn't come back to ask questions about what you said 
because I didn't hear what you said.
    I came back, really, to make sure that any perspective that 
I have on this issue gets into the record, because this is 
where I differ with a lot of my colleagues who have thought 
that this is an appropriate issue for us to deal with in the 
U.S. House Judiciary Committee.
    I am kind of a States' rights old-school guy on this and 
have always believed that tort law was a matter of State law. I 
concede that we have the authority to write tort standards for 
Medicare recipients and for the range of people that we do. But 
general tort law, from my perspective, has always been a matter 
of State law.
    I happen to live in Charlotte, North Carolina, and that is 
right on the South Carolina line, but I have never seen a 
hospital that straddles the line. They don't operate--I have 
never seen a medical procedure take place in interstate 
commerce. I concede they use stuff that comes through 
interstate commerce. Everything we do comes through interstate 
commerce. But I just think that this is an issue that my 
conservative colleagues, the States' righters, have lost their 
way on.
    Were I a member of the North Carolina State legislature, 
perhaps I would listen very intently to whether we need to, in 
North Carolina, do tort reform. And they have at the State 
legislature level in North Carolina. I happen to think that 
they are as intelligent and bright in the State legislature of 
North Carolina as we happen to be here in the Congress of the 
United States. We don't have any monopoly on knowledge on this 
issue. It is a State issue. It has historically been a State 
issue. And I think my conservative colleagues have lost their 
way trying to make this a Federal issue.
    So I want that in the record. They say I used to be the 
chair of the States' Rights Caucus on this Committee. Maybe 
this is one of those times that I got that reputation as being 
the chair of the States' Rights Caucus. But we can debate 
whether, State-by-State, States ought to be doing this. We 
could even debate whether we ought to be applying some 
different standards for Medicare recipients or Medicaid 
recipients. But I just think, as a general proposition, having 
a debate about doing general tort law reform in the Congress of 
the United States offends that Constitution that we read the 
first day of this session on the floor. So that is my 
perspective.
    I appreciate you all being here as witnesses. But I didn't 
want to miss the opportunity to put that perspective in the 
record in public, not that I haven't done it before. If you go 
back to the 111th Congress, the 110th Congress, the 109th 
Congress, and you go all the way back to when I started, 
whatever Congress that was, I think I have given my perspective 
on this over and over and over again because we have been 
talking about this for the 18 years that I have been here. And 
my position on it hadn't changed.
    We don't do malpractice interstate. If a doctor is 
operating on somebody that lives in another State, they can get 
into Federal court and apply whatever State law it is that 
applied in that jurisdiction.
    So that is my story, and I am sticking to it.
    Mr. Lungren. Would the gentleman yield for a moment?
    Mr. Watt. I don't have any time left.
    Mr. Smith. The gentleman's time has expired.
    Let me say to the gentleman, we appreciate his consistency 
over the years in being for States' rights and appreciate his 
being an original founder of the States' Rights Caucus on the 
Judiciary Committee.
    I will now go to the gentleman from Arkansas, Mr. Griffin, 
for his questions.
    Mr. Griffin. Thank you, Mr. Chairman.
    Dr. Weinstein, I am particularly interested in the Gallup 
Poll that came out in February of 2010. Over the last year or 
so, I have talked to a lot of doctors in my district who are 
advocates for some sort of medical liability reform. During the 
last year, this poll came out, and I was struck by the numbers. 
And I saw that you referenced this Gallup Poll in your 
statement.
    The first question I have for you, is the data in this 
Gallup Poll, the one that came out in February, is it 
consistent with other data that you have seen, particularly the 
point that physicians attributed 26 percent of overall health 
care costs to the practice of defensive medicine; and then, 
secondly, that 73 percent of the physicians agreed they had 
practiced some form of defensive medicine in the past 12 
months?
    So my first question is whether that data in the Gallup 
Poll is consistent with data that you have seen elsewhere.
    Dr. Weinstein. Mr. Griffin, I think the data on the cost of 
defensive medicine vary considerably, from low estimates of $56 
billion over 10 years to--this was the largest estimate--$650 
billion. And you can go back to studies like Kessler and 
McClellan and others who have looked at it, and the costs of 
defensive medicine are astronomic. Physicians practice 
defensive medicine. It is not going away.
    A very well-done study, not by doctors but by lawyers, this 
Harvard group, shows that 90-plus percent of physicians in the 
State of Pennsylvania practice defensive medicine. Whey they 
surveyed residents, doctors in training across all the 
residencies in Pennsylvania, they found that 81 percent felt 
they couldn't be honest with patients. They viewed every 
patient as a potential lawsuit. And the most depressing 
statistic of all was 28 percent of residents across the 
spectrum in Pennsylvania regretted their choice of becoming a 
doctor because of the liability crisis.
    Mr. Griffin. With regard to the Pennsylvania data that you 
are discussing, have you turned that data over to the 
Committee?
    Dr. Weinstein. Yes, sir, that is in the written testimony, 
the reference to that.
    Mr. Griffin. What procedures--could you give us some 
specifics on the procedures that are usually subject to the 
practice of defensive medicine?
    Dr. Weinstein. Sure. Defensive medicine breaks down to two 
areas. One is assurance behavior. You need to assure yourself 
you haven't missed something. As has been pointed out by Dr. 
Hoven, in medical school, you are trained to take a history, do 
a physical examination, and try and put this puzzle together. 
Occasionally, you will need one test, a lab test or an imaging 
study, and then you will take it in an orderly progression.
    But the climate of fear that exists from the medical 
standpoint is such that you need to keep taking that 
progression, that orderly progression, to the very end from the 
beginning because, should you miss something, your life and 
your ability to practice medicine and your craft is over. So 
that is the assurance behavior.
    Avoidance behavior is most medical students come out of 
medical school with--in our school, it is over $100,000 in 
debt. So when they choose a career, they come out of our 
orthopedic surgery residency able to take care of anybody who 
is brought in off the highway who has had a traumatic injury 
and put them together again, but the majority of them don't 
want to do that. They don't want to cover the emergency room 
because that is a high-risk environment. So you avoid things 
that are high risk. You avoid OB. If you are a neurosurgeon, 
you don't take care of children head injuries. A doctor doesn't 
do vaginal deliveries or any deliveries at all. So that is how 
the avoidance behavior affects the American public.
    Mr. Griffin. So, getting down to the specific medical 
procedures that are usually subject to that, you mentioned head 
injuries; you mentioned OB/GYN. Can you get even more specific 
in terms of the actual procedures?
    Dr. Weinstein. Well, I think just head injuries in 
children. There are very few neurosurgeons willing to take care 
of a head injury in a child. At one time in this town, 40 
percent of OB/GYNs weren't doing deliveries. This was a few 
years ago. One in seven OB/GYNs no longer just deliver babies. 
OB/GYNS now get, on average, get out of obstetrics at age 48, 
which would be a mid-career point. You are just reaching your 
peak. You have got another 20 years of practice. But now OB/
GYNs stop practicing obstetrics at age 48 because of the 
liability risk.
    Mr. Griffin. If you have a number of tests that are being 
conducted using equipment and using resources and, in some 
instances, they are not necessary, they are more to assure or 
to avoid, can you comment on that crowding out tests that need 
to be conducted that are necessary?
    Dr. Weinstein. I think that when you crowd a system with--I 
won't say that they are unnecessary tests. The gentleman 
earlier was sort of implying that these tests are illegal that 
you are doing; you are defrauding Medicare. I think that is not 
the truth. But, basically, as I mentioned, when you progress to 
solve a puzzle in taking care of a patient, you follow an 
orderly progression. If this doesn't work, then we will do this 
study. We will do a CT scan or a myelogram or an MRI. But we 
can't afford to do that any more.
    So what happens is you use valuable resources, imaging 
resources in particular, to do defensive medicine to take that 
step number 10 and bring it down to step number 2, and you 
deprive someone who actually needs that resource from the use 
of it.
    Mr. Griffin. So, if a young child who has a head injury 
comes into the emergency room, an ideal situation, you are 
saying a doctor would look at that child and say, well, I am 
going to start at step one. And if I think I need to go to step 
2 on my way to 10, then I will do that progressively. But in 
the current environment, they see the child and they 
automatically say, we have got to do 1 through 10.
    Dr. Weinstein. Well, I think if there is a pediatric
    neurosurgeon or a neurosurgeon willing to take care of that 
injury at that hospital, because I think three-quarters of our 
emergency rooms are at risk because of the availability or lack 
of availability of on-call specialists, that doctor will 
proceed with the entire battery from step one.
    Mr. Griffin. And not progressively.
    Dr. Weinstein. Not necessarily in an orderly, progressive 
fashion, which you learned in medical school.
    Mr. Griffin. Sure.
    Mr. Smith. Thank you. Mr. Griffin. I appreciate the 
questions.
    The gentleman from Georgia, Mr. Johnson, who had the 
advantage of going to law school in Texas--is recognized for 
his questions.
    Mr. Johnson. Thank you, Mr. Chairman.
    Dr. Weinstein, it is a fact, is it not, that doctors are 
human beings?
    Dr. Weinstein. Yes, sir, they are.
    Mr. Johnson. And it is also a fact that human beings are 
not perfect. Isn't it true?
    Dr. Weinstein. Absolutely.
    Mr. Johnson. So doctors, just like human beings, make 
mistakes.
    Would you disagree with that, Dr. Hoven?
    Dr. Hoven. Errors occur.
    Mr. Johnson. Errors occur. Mistakes can be made. Isn't that 
true?
    Dr. Hoven. They can.
    Mr. Johnson. By doctors. Correct?
    Dr. Hoven. That is true.
    Mr. Johnson. And so now when a doctor makes a mistake, it 
can cause a death or it can cause a diminished quality of life 
in the victim. Would anybody disagree with that?
    Hearing no objection or hearing nothing, I will assume that 
you agree with me on that.
    That diminished life of a victim of what I will refer to as 
medical negligence, it has a value that a jury puts on it, and 
we call that noneconomic loss what, Lawyer Doroshow? What do we 
call that noneconomic loss, recovery for----
    Ms. Doroshow. Permanent disability, blindness, 
disfigurement, mutilation.
    Mr. Johnson. Pain and suffering for whatever may arise as a 
result of the doctor's negligence. Pain and suffering. 
Noneconomic loss. That is worth something, don't you think?
    Now the question is, how much is pain and suffering worth? 
That might be a little different for Quanisha Scott who, back 
in Little Rock, Arkansas, in 2007, a 29-year old, went for a 
partial thyroidectomy to remove a goiter, and 12 hours later, 
she began to develop a shortness of breath and began feeling 
her neck tighten. Despite complaints to the nurses, her 
condition was not appropriately monitored or reported to a 
physician. She went into respiratory arrest and suffered severe 
brain damage. It was later discovered that she had a hematoma 
at the site of the surgery. She is now bedridden and totally 
dependent on her mother for care.
    Now that is pain and suffering. Do you think that pain and 
suffering is worth more than an arbitrary cap of $250,000? If 
you do, I disagree with you.
    If you think that Lauren Lollini out in Denver should be 
limited to $250,000 for pain and suffering--she went to a 
Denver hospital for kidney stone surgery in February of 2009. 
Six weeks later, her health began to deteriorate, with feelings 
of exhaustion and a loss of appetite. After a week of her 
illness, she became jaundiced and had an inflamed liver. The 
doctors at an urgent care clinic diagnosed her with hepatitis 
C. Thirty-five other patients became infected with hepatitis C 
at that hospital at the same time. A State investigation 
revealed that the outbreak began with a hospital staff person 
who used hospital syringes and painkillers during drug use.
    Ms. Lollini is now convicted and sentenced to a lifetime of 
pain and suffering. How much is that worth? Is that worth 
$250,000? No. It is worth a whole lot more than that.
    And what this legislation does is puts an arbitrary cap of 
$250,000 on noneconomic losses; pain and suffering. It is 
actually an affront to the United States Constitution, the 7th 
Amendment, which guarantees people a right to a jury trial when 
the amount in controversy is in excess of $20.
    So, on one hand, we are talking about eliminating health 
care for everybody, and now we are talking about, 1 day later, 
we are talking about denying access to the courts for people 
who have been hurt.
    That is about all I have got to say.
    Thank you, Mr. Chairman.
    Mr. Lungren [Presiding]. The gentleman's time has expired.
    Next, the Chair recognizes Mr. Ross from Florida for 5 
minutes.
    Mr. Ross. Thank you, Mr. Chairman.
    Being from Florida, it is interesting, we did a little bit 
of research, and we saw that for an internal medicine 
physician, they pay as much as $57,000 for medical malpractice, 
but yet in Minnesota, they pay just a little bit more than 
$3,000, which makes you wonder whether the injuries are more 
severe in Florida than they are in Minnesota or whether it is a 
result of the litigation environment.
    And what I would like to do is just step away from the 
substantive part of what we have been talking about and not 
talk about damages or awards, but let's talk about the 
procedure. For example, in my practice, I will probably say 
that the vast majority of my cases have resolved at the 
mediation level. Whether it be court-ordered or voluntary, 
mediation seems to work.
    And I guess, Ms. Doroshow, I would ask you, would you not 
agree that dispute resolution, as opposed to an actual trial, 
is more efficient, more effective in getting the needed 
benefits to the injured parties?
    Ms. Doroshow. Ninety percent of cases do settle, but it is 
because of the threat of a jury trial, the possibility of a 
jury trial, that that happens. You take away the jury trial 
option, and that won't happen.
    Mr. Ross. I am not saying take away the jury trial, but I 
am also saying that when you are in the dispute resolution, a 
lot of factors come into play as to why you want to settle the 
case, whether it be because of the facts or the law. And in 
some cases, it is the burden of proof, is it not?
    Ms. Doroshow. Well, the cases, the studies that I have 
looked at least, show that the cases that settle, there is 
negligence, there is error, there is injury. The cases that end 
up--the small number of cases that end up going to trial are 
the ones where it is a little more unclear, and they need a 
trial to resolve it.
    So I think the system as it is right now is very efficient 
because most cases do settle. And that is really a system that 
really shouldn't be played around with. It is working now.
    Mr. Ross. But in terms of burdens of proof, I mean, 
different jurisdictions have like scintilla of evidence as 
opposed to clear and convincing. And that, would you not agree, 
that a burden of proof will be a factor that comes into play as 
to whether you want to settle a case?
    Ms. Doroshow. For example, in Texas, for emergency room 
injuries, they made the burden of proof so incredibly difficult 
that it has knocked out all--every single emergency room 
negligence case. So what has happened there is the state of 
care in emergency rooms has become much more unsafe. And that 
is sort of what happened there. So, yeah, it does vary, and 
State law does determine that.
    Mr. Ross. Dr. Hoven, with the AMA, are there not practice 
protocols that physicians, groups, specialties, subscribe to in 
the performance of their duties?
    Dr. Hoven. Thank you for that question. Yes.
    The AMA has been upfront going forward in many years, in 
fact, since the mid-1990's, in terms of measures, development, 
quality guidelines, outcome objectives. We have had a major 
role in this, and it has been applicable. And it is now 
standard of care. These guidelines are extremely useful in 
allowing us for evidence-based care.
    Mr. Ross. Not only extremely essential, but they sometimes 
lead to the practice of defensive medicine. In other words, if 
your practice protocol requires that if this diagnosis is made, 
then this form of treatment is required; sometimes physicians 
may do that even though they may not need to just to stay 
within the realms of the practice protocols.
    Dr. Hoven. That is correct. And in fact, legislation needs 
to be out there that gives me, using my clinical judgment and 
my clinical knowledge, the ability to provide the best care for 
that patient at that particular point in time.
    Mr. Ross. Then, Dr. Weinstein, wouldn't you agree that if 
we had established practice protocols and we required by way of 
the funding of Medicaid or Medicare that it is contingent--the 
receipt is contingent upon established practice protocols in 
each jurisdiction and those practice protocols are followed--
and the burden of proof would then have to shift from the 
physician to the plaintiff to show that by way of either clear 
and convincing evidence that they deviated from the practice 
and protocols or committed egregious error, would that not in 
and of itself provide a substantial reduction in the amount of 
litigation and the amount of awards out there?
    Dr. Weinstein. Well, I think that, first of all, all 
medical groups, including the AMA and others, have been working 
on guidelines, appropriateness criteria to help physicians 
establish a safer method of practice. But all patients don't 
fit in every single guideline. Patients are individuals. They 
have different comorbidities. And so they provide a general 
framework in which to start. But it is not a one-size-fits-all. 
Medicine is not like a cookbook that you follow this step and 
go this step. It has to be a physician interacting using their 
clinical skills to determine whether that guideline fits that 
particular patient or that appropriateness criteria needs to 
deviate for that.
    Mr. Ross. And in those cases where practice protocols are 
employed, should not the practicing physician have at least the 
defense that the burden of proof would now shift--that the 
doctor has established that he did the following protocols that 
were required of that particular specialty, and now there must 
be a showing by a greater weight of the evidence, clear and 
convincing evidence, that then the physician deviated from or 
committed egregious error.
    Dr. Weinstein. Well, I think--again, I am not a lawyer--I 
can only speak from a physician's standpoint--that the 
guidelines and appropriateness criteria are very good 
foundations for me as a practitioner to follow or to look at 
when I see an individual patient. But I have to use my skill 
and judgment acquired over, in my case, 35 years of practicing 
medicine, to decide if my patient fits exactly that paradigm. 
Otherwise, I need to have the ability to not have my hands 
tied. Otherwise, I am going to hurt my patient.
    Mr. Lungren. The gentleman's time has expired.
    The gentleman from South Carolina, Mr. Gowdy.
    Mr. Gowdy. Thank you, Mr. Chairman.
    Ms. Doroshow, I am going to ask you a series of what I hope 
are narrowly tailored questions in hopes of an equally narrowly 
tailored answer. Do you support any toughening of rule 11 
sanctions for frivolous lawsuits, lawsuits that are dismissed 
or lawsuits where summary judgment is granted?
    Ms. Doroshow. I think rule 11 is probably sufficient 
enough, but----
    Mr. Gowdy. But you do not support a toughening of that?
    Ms. Doroshow. No, I would prefer that to ever taking away 
the rights of victims and the clients----
    Mr. Gowdy. I may not have phrased my question well, so 
forgive me for that. Do you support a toughening of rule 11 
sanctions for frivolous lawsuits?
    Ms. Doroshow. I think, obviously, I would have to see the 
provision. I don't have a problem with that, I mean, you know, 
in general.
    Mr. Gowdy. So the answer is: You don't have a problem with 
that.
    Ms. Doroshow. I don't have a problem with that.
    Mr. Gowdy. You could support that.
    Ms. Doroshow. Provided I looked at what you were asking me 
to support. That is a reasonable request.
    Mr. Gowdy. How about this, how about joint and several 
liability reform. Do you support that or not?
    Ms. Doroshow. Absolutely not.
    Mr. Gowdy. Do you support a higher quantum of proof for 
emergency care?
    Ms. Doroshow. Absolutely not.
    Mr. Gowdy. Do you support any tort reform?
    Ms. Doroshow. I support provisions that would repeal tort 
reform currently in existence in States, absolutely.
    Mr. Gowdy. Do you support any tort reform?
    Ms. Doroshow. For example?
    Mr. Gowdy. Well, I just gave you four of them. We were 0 
for 4.
    Ms. Doroshow. I support a law that would prohibit 
confidential settlements where there are public health and 
safety issues involved. I would support that tort reform.
    Mr. Gowdy. Dr. Hoven, many of us oppose the current health 
care law because, in our judgment, individual mandate is 
beginning to make the commerce clause so elastic as to be 
amorphous. For those of us that want to support tort reform, 
draw the nexus for us, draw the connection where it is an 
appropriate use of congressional power to supplant State tort 
laws, and while you are doing it, do we also surrender the 
States determining scope of practice issues if you federalize 
tort reform?
    Dr. Hoven. There is a role for both. The law we are talking 
about, the Health Act, in fact supports States in what they 
have already done and proffered and what they are putting into 
place. In States that don't have it, such as mine, Kentucky, we 
desperately need the Federal regulation, the Federal 
legislation to get us to a different place, for all of the 
reasons I have talked about before, which have got to do with 
access and cost.
    So there is a role for both. But the Health Act recognizes 
that, I believe, and would achieve what we are looking for in 
the global topic of medical liability reform.
    Mr. Gowdy. And when you say the Health Act recognizes that, 
you are referring specifically to the State flexibility 
provision that doesn't supplant current State law.
    Dr. Hoven. That is correct.
    Mr. Gowdy. Is there any concern on behalf of physicians 
that if you allow congressional encroachment, if you will, into 
this area, that Congress will also want to decide scope-of-
practice issues between ophthalmologists and optometrists and 
nurse anesthetists and anesthesiologists and other traditional 
State issues?
    Dr. Hoven. No. I mean, these are two separate issues. We 
fully recognize scope-of-practice issues. We deal with those; 
have been doing that for years and years. These are two 
different issues.
    Mr. Gowdy. You don't think we lower the bar on the commerce 
clause at all by federalizing tort reform?
    Dr. Hoven. I trust you.
    Mr. Gowdy. I am a lawyer. Don't.
    Final question. Implicit--actually, more than implicit--in 
some of the questions that have been asked this morning have 
been very thinly veiled accusations of health care fraud, 
Medicare fraud, Medicaid fraud, for what we consider to be 
defensive medicine. Would you take a crack at explaining the 
predicament that physicians find themselves in with this 
culture of litigation and defensive medicine?
    Dr. Weinstein. Yes, I think that, as I sort of outlined 
before, as a physician, you have skills. History, physical 
examination. You put laboratory tests or imaging studies 
together to come and solve a puzzle for what is wrong with your 
patient or how to treat them. And then there is an orderly 
progression. If this turns out to be this way, I might go into 
in this direction or another direction. But what has happened 
is if you have this progression of multiple steps to get to the 
end, you don't stop at square one and say, let's see how it 
works; how does this treatment work; if they are not getting 
better, we will do something else.
    What happens is, from the diagnostic standpoint, you do 
everything, because for fear that there is an adverse outcome 
or something happens, then you are at risk. So what happens is 
that the patient gets everything that is out there under the 
sun as opposed to just the stepwise progression toward an 
orderly either diagnosis or management plan.
    Mr. Gowdy. I would like to thank all three panelists and 
thank you, Mr. Chairman.
    Mr. Lungren. Thank you. The gentleman from Arizona, Mr. 
Quayle, is recognized for 5 minutes.
    Mr. Quayle. Thank you, Mr. Chairman, and thanks to all of 
you for showing up. This is a very important topic if we are 
actually going to address and take control of our health care 
costs going forward. It is an important thing if we are going 
to have access to quality care.
    My first question is to Dr. Weinstein. You state in your 
testimony that doctors in high-risk specialties have not only 
faced the brunt of abusive lawsuits but over the last decade 
have seen their insurance premiums rise exponentially. While 
some insurance premiums have leveled off recently or decreased 
slightly in some areas, they remain a serious burden for many 
doctors across the country. Moreover, with the implementation 
of the new health care bill, we may discover this has been a 
brief lull before the storm.
    Can you expand on what you mean by the brief lull before 
the storm and why the insurance premiums might have been going 
off in a lull for a short amount of time?
    Dr. Weinstein. I think that we are in a lull, if you will, 
until we see how the Health Care Reform Act plays out and what 
happens here in this body and across the way. But I think that 
right now we need to look at the provisions of that and what 
actually becomes law, what actually is implemented, to see 
whether there are other avenues.
    You know, just in the State of Massachusetts recently Lee 
the Supreme Court I think reinstituted a suit against a 
physician who had prescribed high blood pressure medication for 
his patient. That patient subsequently had an automobile 
accident where someone was killed, and now the physician is 
being sued for treating the patient's hypertension.
    So there are always avenues that can be pursued by the 
trial bar. This is a very fertile area. The front page story of 
the New York Times in November showed how hedge funds and 
investment banks are investing in medical liability lawsuits. 
This is big money. This is big business. And it is unfortunate. 
But I think with the new health care law, we will have to see 
how things unfold and what happens as to what avenues are 
opened by that.
    Mr. Quayle. And staying on that with the high-risk 
specialties, and if you look at the aging doctor population 
that is happening, you don't have many people going into the 
profession, and especially in those high-risk specialties, if 
we cannot actually control those liability insurance costs, how 
will that affect the quality of care for these different areas 
of expertise?
    Dr. Weinstein. When you lose high-risk specialties, I think 
every American is in danger when they have a problem--let's say 
in your State, Arizona, I think that was witnessed several 
weeks ago, unfortunately, but if you don't have the specialists 
available and have level one trauma centers available in a 
reasonable distance, you know, minutes matter. And I think the 
American public now can no longer expect that they could be 
traveling along a highway, have an accident, and expect they 
will go to an emergency room and be saved. That is an 
unrealistic expectation because of the shortage of high-risk 
specialists or, where there are high-risk specialists, their 
unwillingness to put themselves at risk by taking on high-risk 
cases.
    Mr. Quayle. Do you know kind of the average, I mean, I know 
from talking to some people I know in the OB/GYN profession, it 
is over a $100,000 dollars, or in the area, just to turn their 
lights on. What is the average of some of those high-risk 
specialties?
    Dr. Weinstein. Well, I think the ranges are significant. It 
depends on the State, but I think, in some areas, even in high-
risk spine surgery, for example, you are having physicians 
paying several hundred--$300,000, $400,000--in liability 
premiums. I can't tell you what the averages are. They are very 
high.
    Mr. Quayle. Dr. Hoven, I was just wondering, there is an 
enormous financial toll on doctors when they have to defend 
frivolous lawsuits, but what is the emotional toll, and how 
does that affect the doctor-patient relationship for that 
doctor going forward?
    Dr. Hoven. It is very traumatic. Doctors want to heal, 
provide care, and take the best possible care. And when, all of 
a sudden, you are confronted with a lawsuit over which you have 
no control or you are part of something else in the suit 
process, it devastates you. I was sued. I tried to talk about 
that little bit ago. I was sued. For 5 years after that--and 
this goes to the issue of practicing defensive medicine--I 
refused to see--add any new patients to my practice. I found 
myself constantly thinking, what have I missed, what have I 
missed, what have I missed, even though I know I was bringing 
the best potential care there. This affects a physician's 
health. This affects their family's health. And most 
importantly, it begins to affect the relationship between the 
patients and the doctor, because all of a sudden, that threat, 
that fear of threat and trauma, is out there.
    I consider myself a very good physician. And yet, in that 
process, I felt that I was damaged by the process.
    Mr. Quayle. Thank you very much.
    Mr. Chairman, I yield back.
    Mr. Lungren. The Chair would recognize the Chairman from 
the Subcommittee that has jurisdiction over this issue, Mr. 
Franks from Arizona, for 5 minutes.
    Mr. Franks. Well, thank you, Mr. Chairman.
    Dr. Weinstein, I guess my first question would be to you, 
and perhaps, Dr. Hoven, you would follow up as well. Opponents 
of medical liability reform often argue, as you know, that 
reforming the medical liability system, especially through 
limiting noneconomic and punitive damages, will lead to the 
practice of medicine itself being less safe. I think that is a 
pretty critically important question to answer.
    So, based on your experiences, do you believe that placing 
limits on noneconomic and punitive damages will affect whether 
doctors practice high-quality medicine or not?
    Dr. Weinstein. No, I don't, sir. It is pretty clear that 
the current system we have neither protects patients who are 
injured, nor does it make the system safer. We are not a 
country of infinite resources. And when you talk about economic 
damages, those can be quantified; whereas, you talk about 
noneconomic damages, there is no way those are quantifiable. 
And without infinite resources, it does not affect the quality 
of care of systems such as that.
    Mr. Franks. Dr. Hoven, do you have anything to add?
    Dr. Hoven. Thank you. I would agree with the doctor's 
comments.
    And I would also add that in this era, in the last 10 to 15 
years, medicine, physicians have taken huge leadership roles 
following the IOM report, for example, in moving medicine to a 
different place, improving quality, improving systems, 
diminishing errors. So this discussion about physician 
responsibility and liability in this setting is difficult 
because we in fact have made major, major strides in improving 
health care throughout this country.
    Mr. Franks. Dr. Weinstein, I thought one of the most 
striking pieces of your written testimony was your discussion 
of how our broken medical liability system disincentivizes 
doctors from entering certain medical specialties and 
discourages others from performing high-risk procedures or 
treating really high-risk patients. How could legal reforms 
similar to the California's MICRA or the Health Act, which 
passed the House in 2003 here, positively affect a doctor's 
decision to practice in high-risk specialties or to treat high-
risk patients.
    Dr. Weinstein. Well, I think with reasonable reform I think 
physician culture will change. Physicians will then feel it is 
worth the risk. There is always a risk when you talk about 
high-risk medicine. But it is worth the risk to be able to use 
the skills that you learned in your medical school and 
residency training and your fellowship training to help restore 
function, alleviate pain, and restore life to individuals. But 
unless reform such as those previous ones you have outlined is 
implemented that just won't happen.
    Mr. Franks. Dr. Hoven, I have to tell you, just personally 
I am extremely grateful to the medical community because of 
having them have a tremendous impact on my own life. I had 
major surgeries starting out at birth. So I think that, you 
know, the importance of allowing doctors to pursue that calling 
that they have to try to help heal their fellow human beings is 
a profound significance in our society.
    If I could ask sort of a hypothetical or just sort of ask 
you to reach out, if you could do one thing--and Dr. Weinstein 
I'll put you on deck, too. If you can answer it, it will be my 
last question. If you could do one thing in terms of public 
policy that we might pass that would strengthen the doctor-
patient relationship, that would allow you as a doctor to work 
better with your patients and would also deliver the best care 
possible where you would protect both the patient and the 
doctor and the entire medical process in terms of liability 
reform, what is one thing you would do? What is the one 
priority that you would tell us, if you could only have one?
    Dr. Hoven. Thank you. Thank you for your comments.
    And the answer to that is stabilization. The medical 
liability situation must be stabilized, and that stabilization 
includes addressing economic and noneconomic payments. It also 
has to remove from us in that stabilization the culture of fear 
and when somebody is looking over our shoulder all of the time. 
And that will improve and continue to enhance the patient-
physician relationship. It will stabilize care in this country, 
it will improve access to care, and it will improve quality.
    Mr. Franks. Thank you.
    Dr. Weinstein.
    Dr. Weinstein. And I would say we need a rational solution 
to this situation. Because, right now, it is irrational. Nobody 
has benefited from it. And unless we do have some type of 
stability injured patients will not get compensated 
appropriately, and the system will never get better. Because 
system errors require a system of transparency, and you can 
only have a system of transparency when you have a stable 
situation where everyone can work together toward the same end 
of making a safer health care system.
    Mr. Franks. Thank you all for coming.
    Thank you, Mr. Chairman.
    Mr. Lungren. The gentleman's time has expired.
    The gentleman from Virginia, Mr. Goodlatte, is recognized 
for 5 minutes.
    Mr. Goodlatte. Ms. Doroshow, I would like to follow up on a 
question asked by the gentleman from South Carolina, Mr. Gowdy. 
One of the questions he asked you related to whether or not you 
would support a higher proof of negligence or substandard care 
for emergency care, and you said not just no but absolutely 
not.
    So if we have--and all of us have at some time or another 
been in a theater, a sporting event, in a stadium or whatever 
where somebody becomes injured or ill; and the first question 
is, is there a doctor in the house. Now, you expect that doctor 
to identify themselves and come forward and help that 
individual. If they know very little about the circumstances, 
don't know what this patient's medical records are, previous 
history, treatment, what they might be allergic to, to try to 
save their life, you wouldn't provide a higher standard of 
protection for that doctor under those circumstances?
    Ms. Doroshow. The standard is already pretty high. I mean, 
you're not finding lots of emergency room cases moving forward 
in this country. But when you do that--first of all, the 
emergency room, according to the Institute of Medicine----
    Mr. Goodlatte. But you would support--you would support a 
higher standard of----
    Ms. Doroshow. No.
    Mr. Goodlatte. Well, that's the question he asked you--
higher standard of negligence for somebody in an emergency 
situation.
    Ms. Doroshow. Emergency rooms are the most unsafe and 
dangerous parts of a hospital. That is according to the 
Institute of Medicine. It is where many people go who don't 
have insurance.
    Mr. Goodlatte. How about a theater or a sporting event or 
somebody injured in an accident on the highway where a doctor 
happens to be coming by to provide assistance?
    Ms. Doroshow. I believe that the civil justice system that 
exists in this country is able to handle cases that go forward 
based on the State common law that exists, that has been 
developed by the State. If the State common law--and, frankly, 
if the State decides----
    Mr. Goodlatte. Well, most--just reclaiming my time, most 
States have specific statutory liability provisions in addition 
to the common law.
    Ms. Doroshow. Exactly. Look at Texas. What has happened in 
Texas is they have made the standard of liability for emergency 
room malpractice so high that it has knocked out virtually all 
cases. So you have a situation where a woman was in an 
emergency room, was misdiagnosed, as a result of that her legs 
have been cut off, and she cannot get an attorney.
    Mr. Goodlatte. Well, I am going to reclaim my time because 
it is limited and tell you that you are again avoiding my 
question.
    Ms. Doroshow. I am not.
    Mr. Goodlatte. What about on the highway, in the theater, 
at the sporting event, out in public, away from a medical 
facility, if a doctor provides care, volunteers that care, 
under those circumstances, very different than an emergency 
room? But I agree an emergency room should be different than 
other standards of care as well. But in an emergency itself, 
should the doctor have greater protection?
    Ms. Doroshow. I believe that the law should be what the 
State common law is right now.
    Mr. Goodlatte. I am going to go on to another question. 
Thank you.
    Dr. Hoven, some argue that lowering a doctor's malpractice 
liability insurance bill does not really lower health care 
costs in a way that benefits patients. I don't agree with that. 
What are your views on it?
    Dr. Hoven. Well, I disagree with that statement as well. It 
is very clear that liability costs have to be something we can 
budget for and build into our costs of running a practice or a 
clinic. Money that I don't have to spend on liability insurance 
I can and do turn back into a practice to retain a nurse to 
provide care to 100 diabetic patients so that our costs are 
lowered. So I think that we have to be very careful in this 
phraseology. But, in actuality, if I can budget, I know what my 
monies are going to be, they are not out of sight, I can in 
fact improve care and quality and access to my patients.
    Mr. Goodlatte. Thank you.
    And, Dr. Weinstein, Newsweek magazine reported that younger 
physicians are especially frustrated with practicing defensive 
medicine. Between rising insurance rates, increasing defensive 
medicine, and the regulations in bureaucracy in the new health 
care law, are you concerned that in the future fewer of our 
best young students will choose to pursue medical careers?
    Dr. Weinstein. Yes. I think the evidence there is very 
clear. And, again, this is borne out in the Pew Charitable 
Trusts study that was done by the Harvard Group and the
    Columbia University legal team which shows that physicians 
in all residencies are discouraged, number one, to be doctors. 
Twenty-eight percent regretted even choosing medicine as a 
career. And that 81 percent viewed every patient they encounter 
is a potential lawsuit. I think this is a terrible state of 
affairs.
    So there is no question that the younger generation is 
profoundly affected in their career choices, in their practice 
locations, and the context in which they practice, in other 
words, what they cut down their skill set to and what they are 
willing to offer the community in which they live.
    Mr. Goodlatte. They can spend a lot of years and hundreds 
of thousands of dollars to receive a license to practice 
medicine. And the cost then of liability insurance and the risk 
if they have to make a claim against that insurance or more 
than one claim against that insurance to their future as a 
physician, what is that risk?
    Dr. Weinstein. Well, I think the issue here is that you--
there are plenty of people who need good medical care that 
aren't necessarily high risk. And if you feel you can have a 
satisfactory practice without putting your life and your family 
at risk by unnecessary liability many younger physicians are 
taking that route.
    Mr. Goodlatte. And that is indeed the crux of the problem, 
that the quality of medical care and the availability of 
medical care is very much affected by the perception of the 
medical profession and the reality to the medical profession of 
the current standards with regard to medical liability.
    Dr. Weinstein. Yeah. There is no question that access and 
quality of care are profoundly affected by the current 
situation.
    Mr. Goodlatte. Thank you.
    Thank you, Mr. Chairman.
    Mr. Lungren. [Presiding.] Thank you very much.
    I will yield myself 5 minutes.
    I come to this like everybody else does, as a product of my 
experience. I confess to you my dad was a doctor. He was a 
board-certified cardiologist and internist. He was chief of 
staff of Long Beach Memorial Hospital in southern California.
    I was his wayward son. I went to law school, but I spent 5 
years doing medical malpractice defense, although I did some 
plaintiffs' cases in southern California. My practice bracketed 
the time before MICRA and after MICRA; and for anybody to 
suggest that MICRA didn't make a difference, you weren't there.
    I happened to be a young attorney at the time, and I had 
some classmates from high school and college who went to 
medical school, and they were about to enter the practice of 
medicine. And a number of them left the State of California 
because the insurance rates were so high. I remember a good 
friend of mine who is an anesthesiologist who left the State. 
Some OB/GYNs I knew left the State. Some doctors who were 
involved in brain surgery left the State because of the high 
costs.
    I don't know where you get these figures that it wasn't 
until '88 that we saw any progress, because the absolute 
increase on a yearly basis of the premiums paid for by the 
doctors leveled off after we passed MICRA.
    It was interesting to hear the gentleman from Georgia talk 
about the noneconomic damages. That is true. That is one of the 
key parts of MICRA. It puts a limit on noneconomic damages, 
pain and suffering. Why? Because that is the most potentially 
abused part of the system. I can prove losses for future 
earnings. I can prove what the costs are, the direct costs.
    Pain and suffering, if you think about it, if before an 
instant you were to ask somebody how much would it be worth to 
you to lose your arm or your leg, they would probably say you 
couldn't pay me enough money to do that. After the fact, when 
you talk about pain and suffering it is a very difficult figure 
to determine. And so you make a rational judgment by the 
legislature or the people as to what that limit would be. 
Because, otherwise, it has an adverse effect on the potential 
for people having access to medical care.
    I mean, it is not a perfect system. It never has been a 
perfect system. So I will just say from my standpoint, as 
someone who was there when we passed it in California, I saw a 
tremendous difference.
    And then when people talk about frivolous lawsuits--let's 
talk about the real world. When a plaintiff's attorney files a 
lawsuit, begins the lawsuit, he or she sues everybody in sight 
because he or she can't be sure who was responsible. By the 
time you get to trial you ought to know as the plaintiff, 
plaintiff's attorney, who you think really is responsible and 
you ought to let out the other people. And if you don't we 
ought to have a very simple modified losers pay provision so 
that at the time of trial you can present to the judge and say 
if they have no case or they get less than what I am offering 
now all attorney fees and costs should be borne by the 
plaintiff.
    Because I was in settlement conferences where the judge 
would say to me, I know your hospital or I know doctor C 
doesn't have any liability, but the cost of defense will be 
$10,000, so throw in $10,000. And that was considered a, quote, 
unquote, settlement.
    In every case I am aware of, you have that dilemma. And so 
when you are talking about even real cases of malpractice, a 
lot of other people are involved in the case and they may 
settle out, but there was no real liability. And unless you 
sort of change that dynamic you are going to have this 
situation.
    So I have to overcome my reluctance to do this on a Federal 
level because I thought California, we were ahead of the rest 
of the country when we passed what we did. You probably 
couldn't have passed MICRA on the Federal level at the time.
    But I am sorry my friend from North Carolina is not here 
because he said very clearly to me health care is not covered 
by the commerce clause. So I would hope that he would make that 
presentation before the courts that are considering the 
lawsuits right now.
    So I am sorry I don't have any questions for you. Just 
listening to everything I have to put it into my sense of--no, 
he said if someone is not taken care of across the State 
border, they are in a hospital here or a hospital there, that 
is not interstate commerce--that is what he said--it is not 
covered by the commerce clause.
    Anyway, but having heard all of this it brings me back to 
the arguments that we were making in California in 1974 and 
1975. And we made a reasonable judgment in California. Frankly, 
I think it has worked very, very well. I think it is a model 
for the rest of the country. And I don't think there is any 
doubt that the specialties that are available in California are 
available in larger numbers today than they would have been had 
we not passed MICRA.
    So there is no perfect system. I think we all recognize it. 
What we are trying to do is define that which will give us the 
best overall response to a continued problem. How do we meet 
our challenge? How do we provide health care for the people of 
the United States?
    And the last note is I take my hat off to the medical 
community because I had major kidney surgery when I was four, I 
have had five knee surgeries, I have got a new hip, I have got 
a new knee, you repaired my Achilles tendon just a while ago. I 
am a walking example of what medical care can do for people in 
the United States. And my wife says, you are getting older; and 
I say, yeah, but I am getting new parts. So I just want to let 
you know, there is hope.
    I would like to thank all of our witnesses for their 
testimony today.
    Without objection, all Members will have 5 legislative days 
to submit to the Chair additional written questions for the 
witnesses which we will forward and ask you if you would 
respond to those please as quickly as you could so that we 
could make your answers a part of the record. If we send them 
to you, they will be serious questions from Members, some of 
whom weren't able to attend, some who had to leave, some who 
have more questions for you. And I would thank you if you would 
seriously consider that, all three of you.
    Without objection, all Members will have 5 legislative days 
to submit any additional materials for inclusion in the record.
    With that, again, I would like to thank the witnesses. I 
know it is an imposition on your time. I know we have to run 
off and do votes and so forth and you sit here. But we thank 
you very much for your testimony. It is very, very helpful.
    And with that this hearing is adjourned.
    [Whereupon, at 1:15 p.m., the Committee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

 Prepared Statement of the Honorable Henry C. ``Hank'' Johnson, Jr., a 
   Representative in Congress from the State of Georgia, and Member, 
                       Committee on the Judiciary








                                

Prepared Statement of the Honorable Linda T. Sanchez, a Representative 
in Congress from the State of California, and Member, Committee on the 
                               Judiciary






                                

     Prepared Statement of the American Congress of Obstetricians 
                        and Gynecologists (ACOG)














                                

         Prepared Statement of the American College of Surgeons








                                

            Study of the American Enterprise Institute (AEI)


















                                

        Prepared Statement of Lawrence E. Smarr, President/CEO, 
               Physician Insurers Association of America











                                 
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