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

        THE COST OF THE MEDICAL LIABILITY SYSTEM PROPOSALS FOR REFORM,
      INCLUDING H.R. 5, THE HELP EFFICIENT, ACCESSIBLE, LOW-COST, TIMELY
                        HEALTHCARE (HEALTH) ACT OF 2011
    =======================================================================

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HEALTH

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE

                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 APRIL 6, 2011

                                   __________

                               Serial No. 112-33

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

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                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman

    JOE BARTON, Texas                    HENRY A. WAXMAN, California
      Chairman Emeritus                    Ranking Member
    CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
    ED WHITFIELD, Kentucky                 Chairman Emeritus
    JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
    JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
    MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
    GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
    LEE TERRY, Nebraska                  ANNA G. ESHOO, California
    MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
    SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
      Vice Chair                         DIANA DeGETTE, Colorado
    JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
    TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
    MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
    MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
    BRIAN P. BILBRAY, California         JAY INSLEE, Washington
    CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
    PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
    STEVE SCALISE, Louisiana             ANTHONY D. WEINER, New York
    ROBERT E. LATTA, Ohio                JIM MATHESON, Utah
    CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
    GREGG HARPER, Mississippi            JOHN BARROW, Georgia
    LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
    BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin
    BRETT GUTHRIE, Kentucky              Islands
    PETE OLSON, Texas
    DAVID B. McKINLEY, West Virginia
    CORY GARDNER, Colorado
    MIKE POMPEO, Kansas
    ADAM KINZINGER, Illinois
    H. MORGAN GRIFFITH, Virginia

                                     _____

                             Subcommittee on Health

                         JOSEPH R. PITTS, Pennsylvania
                                     Chairman
    MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
      Chairman Emeritus                    Ranking Member
    ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
    JOHN SHIMKUS, Illinois               EDOLPHUS TOWNS, New York
    MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
    SUE WILKINS MYRICK, North Carolina   LOIS CAPPS, California
    TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
    MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
    PHIL GINGREY, Georgia                TAMMY BALDWIN, Wisconsin
    ROBERT E. LATTA, Ohio                MIKE ROSS, Arkansas
    CATHY McMORRIS RODGERS, Washington   ANTHONY D. WEINER, New York
    LEONARD LANCE, New Jersey            HENRY A. WAXMAN, California (ex
    BILL CASSIDY, Louisiana                  officio)
    BRETT GUTHRIE, Kentucky
    JOE BARTON, Texas
    FRED UPTON, Michigan (ex officio)

                                      (ii)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Joseph R. Pitts, a Representative in Congress from the
      Commonwealth of Pennsylvania, opening statement................     1
        Prepared statement...........................................     3
    Hon. Phil Gingrey, a Representative in Congress from the State of
      Georgia, opening statement.....................................     5
    Hon. Lois Capps, a Representative in Congress from the State of
      California, opening statement..................................     5
    Hon. Michael C. Burgess, a Representative in Congress from the
      State of Texas, opening statement..............................     7
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, prepared statement...................................   265
    Hon. Frank Pallone Jr., a Representative in Congress from the
      State of New Jersey, prepared statement........................   268
    Hon. John D. Dingell, a Representative in Congress from the State
      of Michigan, prepared statement................................   273

                                   Witnesses

    Lisa M. Hollier, Fellow, American College of Obstetricians and
      Gynecologists, Professor and Director, Lyndon B. Johnson
      Residency Program, University of Texas Medical School at
      Houston........................................................    12
        Prepared statement...........................................    14
    Joanne Doroshow, Executive Director, The Center for Justice and
      Democracy......................................................    26
        Prepared statement...........................................    28
    Allen B. Kachalia, Medical Director of Quality and Safety,
      Brigham and Women's Hospital, Harvard Medical School...........    71
        Prepared statement...........................................    73
    Brian Wolfman, Visiting Professor, Georgetown University Law
      Center, Co-Director, Institute for Public Representation.......   155
        Prepared statement...........................................   157
    Troy M. Pippett, Past President, American Association of
      Neurological Surgeons, Past President, Florida Medical
      Association....................................................   178
        Prepared statement...........................................   180

                               Submitted Material

    Letter, dated January 26, 2011, from Mr. Burgess to President
      Barack Obama, submitted by Mr. Burgess.........................     9
    Letter, dated April 4, 2011, from the National Conference of
      State Legislators to subcommittee leadership, submitted by Mr.
      Waxman.........................................................   227
    Letter, dated April 5, 2011, from Carmen Balber, Washington, DC,
      Director, Consumer Watchdog, to committee leadership, submitted
      by Mrs. Capps..................................................   234
    New York Times article, dated November 14, 2010, ``Investors Put
      Money on Lawsuits to Get Payouts,'' by Binyamin Appelbaum,
      submitted by Mr. Shimkus.......................................   238
    New York Times article, dated March 9, 2011, ``One Person's
      `Special Interest' Is Another's `Stakeholder,' '' by Thomas
      Kaplan, submitted by Mr. Shimkus...............................   246
    H.R. 5, A Bill in the House of Representatives...................   275
    Statement, dated April 6, 2011, of Lawrence E. Smarr, President/
      CEO, Physician Insurers Association of America, submitted by
      Mr. Pitts......................................................   301

        THE COST OF THE MEDICAL LIABILITY SYSTEM PROPOSALS FOR REFORM,
      INCLUDING H.R. 5, THE HELP EFFICIENT, ACCESSIBLE, LOW-COST, TIMELY
                        HEALTHCARE (HEALTH) ACT OF 2011

                                  ----------

                            WEDNESDAY, APRIL 6, 2011

                      House of Representatives,
                                Subcommittee on Health,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 9:32 a.m., in
    room 2123 of the Rayburn House Office Building, Hon. Joe Pitts
    (chairman of the subcommittee) presiding.
        Members present: Representatives Pitts, Burgess, Whitfield,
    Shimkus, Myrick, Murphy, Blackburn, Gingrey, Latta, Lance,
    Cassidy, Guthrie, Barton, Pallone, Dingell, Capps, Schakowsky,
    Gonzalez, Weiner, and Waxman (ex officio).
        Staff Present: Clay Alspach, Counsel, Health; Debbee
    Keller, Press Secretary; Katie Novaria, Legislative Clerk; John
    O'Shea, Professional Staff Member, Health; Monica Popp,
    Professional Staff Member, Health; Heidi Stirrup, Health Policy
    Coordinator; Phil Barnett, Democratic Staff Director; Stephen
    Cha, Democratic Senior Professional Staff Member; Alli Corr,
    Democratic Policy Analyst; Ruth Katz, Democratic Chief Public
    Health Counsel; Karen Lightfoot, Democratic Communications
    Director, and Senior Policy Advisor; Karen Nelson, Democratic
    Deputy Committee Staff Director for Heath; and Rachel Sher,
    Democratic Senior Counsel.

    OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
             CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr. Pitts. Subcommittee will come to order. Chair
    recognizes himself for 5 minutes for an opening statement. An
    article in Health Affairs in September 2010 titled ``National
    Costs of the Medical Liabilities System'' estimated that the
    medical liability cost including defensive medicine were $55.6
    billion in 2008 dollars, or 2.4 percent of total health care
    spending. According to the Kaiser Family Foundation, total
    payments on medical malpractice claims in 2009 totaled
    $3,471,631,100. The average claims payment for 2009 was
    $323,273.
        Let me share with you what this means to my home State of
    Pennsylvania. According to Kaiser again, Pennsylvania ranks
    second behind New York in the total dollars paid out in
    malpractice claims at $295,459,500 and the average claims
    payment in Pennsylvania was higher than the national average.
    Pennsylvania also paid more malpractice claims than any State
    except New York, California, and Florida with 767 paid claims
    in 2009. According to the Pennsylvania Department of Health,
    nearly 20 percent of the physicians who practice primary care
    say they will leave Pennsylvania in 5 years or less, and only
    one in three physicians who complete their medical degree in
    Pennsylvania plan to remain in the State to practice. Over the
    years, numerous physicians have called my office to tell me how
    the medical liability climate in Pennsylvania has affected
    their practices. Usually these are OB-GYNs, but sometimes
    doctors from other specialties call. Up until a few years ago
    they would tell me and my staff that while they had planned to
    practice for 5, 6, or even more years they were retiring early
    because they just couldn't afford their malpractice insurance
    premiums. Or, they would say they were forced to move their
    practices to nearby Delaware State to remain financially
    viable. Recently doctors have begun to tell me they are moving
    to North Carolina to set up practice.
        Apparently other States have a much less onerous medical
    malpractice climate and Pennsylvania's loss is their gain. My
    home State consistently ranks as having one of the worst
    medical liability climates in the Nation. The high legal costs
    paid by Pennsylvania healthcare providers increase overall
    healthcare costs, limit access to medical care, and inhibit job
    growth. We all agree that patients who are injured by medical
    mistakes should be promptly and fairly compensated. However,
    capping non-economic medical malpractice awards does not deny
    patients their day in court or fair compensation. It merely
    reigns in over the top verdicts and allows conscientious
    doctors to afford insurance coverage and serve their patients.
        The current medical liability system does not work for
    anyone especially patients who need access to quality
    healthcare. Like it or not, patients are inescapably
    intertwined in this malpractice mess where some receive
    unlimited court awards and the rest of us are left with limited
    healthcare and higher cost. We need to find a balance where
    conscientious doctors can afford insurance coverage and
    patients can get quality care when and where they need it.
        I now yield the rest of my time to Dr. Gingrey.
        [The prepared statement of Mr. Pitts follows:]
        [GRAPHIC] [TIFF OMITTED] T1612.001

        [GRAPHIC] [TIFF OMITTED] T1612.002

      OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF GEORGIA

        Mr. Gingrey. Mr. Chairman, thank you so much for yielding
    to me on such an important issue. And as we know this country
    is on the verge of a medical liability crisis.
        Focusing on just my specialty, Obstetrics and Gynecology,
    each OB-GYN will be sued three times in their careers. Think
    about 25 to 30 years of practice. Even though 50 percent of
    these cases are eventually dropped, dismissed, or settled
    without a payment for the plaintiff, 30 percent of OB-GYN
    fellows report increasing cesarean deliveries over traditional
    birth, but the rate in this country is probably now 29 percent.
    Twenty-six percent have stopped performing or offering
    traditional births altogether over this fear of being sued and
    ending their career. But why is this significant?
        As I say, the cesarean sections can cost our health system
    twice as much if not three times as much as routine vaginal
    birth and that is just one example of what is referred to as
    defensive medicine. It is a glaring example, however. The order
    of tests or procedures simply to protect a medical provider
    from a lawsuit is really mounting. You can't get--go to
    emergency room with a headache without coming out with a bill
    for a CT scan or an MRI.
        Studies, most notably one that was done by Pricewaterhouse
    Coopers, show that this defensive practice that doctors are
    engaging in across all specialties quite frankly resulted in
    about $210 billion in additional healthcare costs in 2008 and
    today these costs are certainly much higher because of the
    Patient Protection and Affordable Care Act. I have realized my
    time is running pretty short here and I know I am going to have
    to yield back, but I want to thank the chairman for yielding
    time. Maybe I can get someone else to yield me a little bit
    more time so I can finish my full statement, but it will go in
    the record and this is hugely important. I am so grateful for
    the witnesses and I look forward to your testimony. And I yield
    back, Mr. Chair. Thank you for the time.
        Mr. Pitts. The Chair thanks the gentleman. The Chair
    recognizes the ranking member of the subcommittee, Mrs. Capps,
    for 5 minutes.

       OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mrs. Capps. Thank you, Mr. Chairman. Before we begin this
    hearing I would like to say that this is a bill we have heard
    before; a bill on which we have disagreed before. While the
    goal is clear, meaningful tort reforms that protect patients
    and medical professional and reduce healthcare costs it is also
    clear that differences in our approach remain. We certainly
    should be looking at ways to bring down the cost of medical
    malpractice insurance, but the bill before us today only limits
    the amount of money that patients who have been wrongfully
    harmed can collect to compensate them for their injuries. It
    does nothing to solve the root of that problem, reducing the
    incidents of malpractice.
        I believe we should be focused on improving patient care
    and reducing the astounding number of costly, preventable,
    medical errors that claim 98,000 lives every year. Reducing
    medical errors would not only save lives, it would save a lot
    of money. And as the number of studies have shown, focusing on
    improving patient care and reducing error has led to dramatic
    drops in medical malpractice payment. These medical--these
    studies are instructive on how to reduce the actual not-
    hypothetical cost of malpractice.
        Another area where I think we should set the record
    straight is the notion that excessive or frivolous lawsuits are
    because of rising premiums. The problem is that the lawsuits
    affected by the bill are by definition not frivolous. Where
    large damages are awarded the jury has found that the patient
    has been severely harmed. And in fact, over the last 5 years
    malpractice insurance payments to patients have actually gone
    down all while premiums have continued to go up which raises
    the question of what is the real driving force for these
    expenses. There is also no evidence that capping the damages an
    injured person receives because of malpractice is the most
    effective way to solve this problem. It will not lower
    premiums. It will not even stabilize them. Instead, this
    proposal will penalize innocent victims of medical neglect--
    negligence.
        Furthermore, H.R. 5 goes far beyond protections between
    patients and doctors. In fact, what is concerning is the extent
    to which this bill would protect drug companies and HMOs from
    lawsuits in cases where they have clearly hurt people. This
    expands the issue far beyond what many feel is the proper scope
    of this type of policy.
        Lastly, we disagree about the extent of what the Federal
    Government's role in tort reform should be. At our Governors'
    hearing a few weeks ago, we repeatedly heard these Governors
    stress that the needs of their States were different from one
    another and that to meet the needs of their states they needed
    flexibility. I find it ironic that this majority who for so
    long has been champions of State government, State and local
    control are supporting a bill that would impose a Federal one-
    size-fits-all solution with no flexibility in an area that has
    been traditionally a matter of State law. I believe there can
    be State solutions to this problem and I am interested in
    seeing how the provisions of the Affordable Care Act can help
    solve them. The healthcare law authorizes $50 million over 5
    years in grants to States to explore new approaches to settling
    losses including health court and disclose and offer models.
    This commitment to State solutions is also echoed in the
    President's budget which this year proposes $250 million in
    grants for States to rewrite their own malpractice laws in ways
    that seek to balance the interest of both doctors and patients.
    I look forward to seeing the innovative State solutions that
    these grants will spur. Despite the good intentions for this
    bill, H.R. 5 does not help patients. It does not help the
    medical profession move toward lowering healthcare costs in a
    really meaningful way. Instead, it just shifts the costs of
    malpractice from the party at fault to injured individuals,
    their families, and taxpayers through publicly funded programs
    such as Medicare, Medicaid, and disability benefits. And I
    yield back the balance of my time.
        Mr. Pitts. Chair thanks the gentlelady and now recognizes
    the chairman emeritus of the full committee, Mr. Barton, for 5
    minutes.
        Mr. Barton. Thank you, Mr. Chairman, and I am going to
    yield some of that time to Dr. Burgess and also to Dr. Gingrey.
        Thank you for holding this hearing. As we have seen in my
    home State of Texas, medical malpractice reform can work. In
    Texas they have had cost savings of over $879 million. They
    have also added 21,640 positions since they did reform back in
    2003. Of those 21,640 new doctors, over 1,200 have come from
    the great State of New York. In 2003, New York and Texas had
    basically the same medical malpractice premiums. Since Texas
    implemented its reform package, Texas's premiums have decreased
    by 28 percent while New York State's--excuse me, have increased
    by over 60 percent. The result is obvious. Doctors are coming
    to Texas. They are leaving New York. This is going to be a good
    hearing, and we look forward to our testimony from our
    witnesses. And at this point in time I would like to yield 3
    minutes to Dr. Burgess.

    OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
                  IN CONGRESS FROM THE STATE OF TEXAS

        Mr. Burgess. And I thank the gentleman for yielding. Mr.
    Chairman, this is an important hearing. First want to welcome
    Dr. Lisa Hollier who is an OB-GYN like me from Texas, that is--
    and she is going to share with us some of the good news that
    has come from on the ground, in the State of Texas since 2003
    when Texas enacted its own liability reform--truly a 21st
    century solution to a problem that has been with us for a long
    time.
        Now, the President in his State of the Union Address said
    that medical malpractice reform is needed to reign in frivolous
    lawsuits. Mr. President, I could not agree more. In fact, the
    very next morning I penned a letter in my own hand as you can
    see to the President saying ``I want to work with you on
    this.'' He asked for ideas from on both sides of the aisle. I
    sent the letter down to the White House. I will ask unanimous
    consent to insert this as part of the record and Mr. President,
    I am still waiting on a response and I was serious about this
    offer. As you can see from this hearing, many of us are serious
    about this today.
        I am so painfully aware that many doctors are forced to
    practice defensive medicine, or retire, or run for Congress in
    the face of constant threat of non-meritorious lawsuits and
    unsustainable medical liability insurance. I do not believe we
    need to study this anymore. In Texas, we know what works.
    Liability reform served as a catalyst to bring doctors to
    underserved regions of the State including those that had no
    access to a physician in the past.
        Texas is one of the largest States in the Union, has a
    diverse population, diverse economy and geography, yet our
    reforms have proven successfully tailored to adapt and produce
    across-the-State results. Eighty-two Texas counties have seen a
    net gain in emergency room doctors including 26 counties who
    had none. The Texas State Board of Medical Examiners in 2001
    licensed 2,088 new doctors, the fewest in a decade. Today, they
    are challenged to keep up with the physicians who now want to
    practice in our State. In 2008, over 3,600 new doctors--the
    highest number ever recorded. In my field of obstetrics, Texas
    saw a net loss of 14 obstetricians in the 2 years prior to
    reform. Since then the State has experience a net gain of 192
    obstetricians and over 25 rural counties that never had one now
    do.
        Texas has enjoyed a 62 percent greater growth in newly
    licensed physicians in the past 3 years compared to the 3 years
    preceding liability reform Texas has benefitted. I am happy to
    share this success that we are experiencing so that all States
    can reap the benefit. I have introduced H.R. 896 based on Texas
    reforms but there are other ideas from small to bold and we
    should be considering them. At this point I will yield the
    balance of the time to Dr. Gingrey.
        [The information follows:]
        [GRAPHIC] [TIFF OMITTED] T1612.246

        [GRAPHIC] [TIFF OMITTED] T1612.247

        Mr. Gingrey. Yes, Mr. Chairman, I appreciated the vice
    chairman for yielding to me. I was beginning to like the sound
    of my voice when I got cut off a few minutes ago.
        I was talking about the Provider Shield Act. I want to get
    to the more important act, H.R.5, but as Mr. Waxman, the
    Committee Ranking Member knows himself there is a growing
    concern among the provider and business community that
    Obamacare will increase the threat of liability tremendously
    and drive many providers out of practice if they follow their
    own medical subspecialty guidelines over the treatment edicts
    of Secretary Sebelius. And that bill, then H.R. 816 the
    Provider Shield Act would protect medical providers from these
    edicts and it has gained some bipartisan support.
        But even if H.R. 816 becomes law, the crises that $200
    billion in costs will inflict on our healthcare system remains
    and therefore I have introduces and we will talk about a bi-
    partisan bill legislation H.R. 5 the Health Act, along with
    Congressman David Scott and Chairman Lamar Smith of the
    Judiciary Committee to help bring meaningful medical liability
    reform to this country once and for all. If healthcare costs
    are truly a national concern then solutions to bring down these
    costs are desperately needed. And with that Mr. Chairman, I
    will yield back the expired time.
        Mr. Pitts. Chair thanks the gentleman. If there is no one
    else from the minority wishing to make an opening statement I
    will now welcome and introduce our distinguished panel of
    witnesses. I would like to thank you for appearing before the
    committee this morning. Your willingness to take time out of
    your busy schedules underscores just how important this issue
    is to all of you as it is to all of us.
        Your written testimony will be made a part of the record.
    We ask that you take 5 minutes each to summarize your testimony
    and at this point I will introduce the witnesses in which order
    I ask them to testify.
        The first witness is Dr. Lisa Hollier. Dr. Hollier
    practices obstetrics and gynecology in Houston, Texas and is a
    Professor of OB-GYN and Director of the Lyndon B. Johnson
    Residency Program at the University of Texas Medical School at
    Houston. She is also a fellow of the American College of
    Obstetricians and Gynecologists.
        The next witness is Ms. Joanne Doroshow. Ms. Doroshow is
    President and Executive Director, Center for Justice and
    Democracy, a public Interest organization in New York City that
    is involved in educating the public about issues relating to
    civil justice system.
        The next witness is Dr. Allen Kachalia. Dr. Kachalia is a
    practicing physician at Brigham and Women's Hospital Harvard
    Medical School. He is the Medical Director for Quality and
    Safety at Brigham and Women's Hospital. He also has a law
    degree and conducts research and teaches about legal matters in
    medicine including the Medical Professional Liability System.
        The next witness is Mr. Brian Wolfman. Mr. Wolfman has been
    a practicing lawyer for more than 25 years. He is a Visiting
    Professor of Law and Congress-Director, Institute for Public
    Representation at Georgetown Law School. He also spent almost
    20 years with the Litigation Group of Public Citizen in
    Washington, DC.
        And the final witness is Dr. Troy Tippett. Dr. Tippett is a
    practicing neurosurgeon with more than 35 years of experience.
    He is also past President of both the American Association of
    Neurological Surgeons and the Florida Medical Associations.
    Thank you for coming this morning. Dr. Hollier, you are
    recognized for 5 minutes.

       STATEMENTS OF LISA M. HOLLIER, MD, MPH, FELLOW, AMERICAN
       COLLEGE OF OBSTETRICIANS AND GYNECOLOGISTS, PROFESSOR AND
     DIRECTOR, LYNDON B. JOHNSON RESIDENCY PROGRAM, UNIVERSITY OF
      TEXAS MEDICAL SCHOOL AT HOUSTON; JOANNE DOROSHOW, EXECUTIVE
        DIRECTOR THE CENTER FOR JUSTICE AND DEMOCRACY; ALLEN B.
       KACHALIA, MD, JD, MEDICAL DIRECTOR OF QUALITY AND SAFETY,
      BRIGHAM AND WOMEN'S HOSPITAL, HARVARD MEDICAL SCHOOL; BRIAN
    WOLFMAN, VISITING PROFESSOR, GEORGETOWN UNIVERSITY LAW CENTER,
     CO-DIRECTOR, INSTITUTE FOR PUBLIC REPRESENTATION; AND TROY M.
         TIPPETT, MD, PAST PRESIDENT, AMERICAN ASSOCIATION OF
        NEUROLOGICAL SURGEONS, PAST PRESIDENT, FLORIDA MEDICAL
                              ASSOCIATION

                      STATEMENT OF LISA M. HOLLIER

        Ms. Hollier. Thank you, Chairman Pitts. We applaud you and
    the subcommittee for holding this hearing. My name is Dr. Lisa
    Hollier and I am an obstetrician/gynecologist from Houston,
    Texas speaking on behalf of the American Congress of
    Obstetricians and Gynecologists (ACOG), an organization
    representing more than 54,000 physicians and partners in
    women's health dedicated to improving the healthcare of women.
    ACOG ultimately could not support passage of the Health Reform
    Bill in large part because it didn't include meaningful
    liability reform, an issue we see as critical to reforming our
    healthcare system.
        We simply cannot build a reformed healthcare system on top
    of the broken medical liability system. Without meaningful
    reform, the doctors will continue to be driven out of their
    home States or out of their practices. When OB-GYNs discontinue
    the practice of obstetrics, curtail their surgical services or
    close their doors, women's healthcare suffers. For these
    reasons, ACOG strongly supports H.R. 5, the Health Efficient
    Accessible Low-Cost Timely Healthcare Act introduced by ACOG
    fellow representative, Phil Gingrey.
        Additionally, we appreciate the support from the 17 Members
    of the committee who have cosponsored H.R. 5 including seven on
    the health subcommittee. Thank you Representatives John
    Shimkus, Mike Rogers, Sue Myrick, Marsha Blackburn, Bob Latta,
    Cathy McMorris Rodgers, and Brett Guthrie.
        Every day OB-GYNs are faced with exposure to law suits. In
    fact, 90 percent of ACOG fellows report that they have been
    sued at least once and OB-GYNs are sued an average of 2.7 times
    during their careers. Nearly two-thirds of OB-GYNs have changed
    their practice during the last 3 years because of the high risk
    of liability claims. These changes include increasing the
    number of cesarean deliveries, reducing or not offering trial
    of labor after cesarean, decreasing the number of high-risk
    patients they accept, and even stopping the practice of
    obstetrics altogether due to professional liability concerns.
    The average age at which physicians cease practicing obstetrics
    is now 48, an age once considered the midpoint of an OB-GYN's
    career.
        Our current tort system fails providers and fails patients.
    It is costly, time consuming, inefficient, and unjust with
    widely variable and unpredictable monetary judgment. The system
    is wholly incompatible with the Institute of Medicine's vision
    for the future healthcare system as safe, effective, patient
    centered, timely, efficient, and equitable. This is a national
    problem which demands a national solution.
        That national solution including caps on noneconomic
    damages and other reforms like those found in Texas and
    California would stabilize the medical liability insurance
    market, reduce healthcare cost, eliminate physician flight from
    high risk States and protect a patient's access to the
    healthcare they need. This is why we fully support H.R. 5, the
    Health Act.
        H.R. 5 promotes speedy resolution of claims, fairly
    allocates responsibility, compensates patient injury, maximizes
    patient recovery, puts reasonable limits on the awarded
    punitive damages, ensures payment of medical expenses, allows
    State flexibility, and saves the Federal Government money. We
    know these reforms work. The landscape in my home State of
    Texas changed dramatically after implementing medical liability
    reform in 2003.
        Statewide, 21,640 doctors have been newly licensed in Texas
    since its passage. Texas physicians have also seen their
    liability insurance premiums cut on average 28.3 percent and
    claims and lawsuits in most Texas counties have been cut in
    half. Additionally the State has gained 269 obstetricians after
    a net loss of 14 obstetricians from 2001 to 2003. Twenty-two
    rural counties added at least one obstetrician and 10 counties
    added their first obstetrician. Blanco County which had no
    obstetrician's pre-reform added eight. In all, 57 Texas
    counties have seen a net gain in obstetricians including 28
    medically underserved counties and 20 counties designated as
    partially medically underserved.
        These figures show that a primary result of these reforms
    is increased access to care for women across Texas. H.R. 5
    holds the promise that increased access to care for even more
    women nationwide. We urge this subcommittee and the U.S. House
    to give H.R. 5 speedy approval so that we can better serve our
    patients. Thank you, Chairman Pitts for your commitment and
    your leadership on this issue.
        [The prepared statement of Ms. Hollier follows:]
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        Mr. Pitts. Chair thanks the gentlelady and recognizes Ms.
    Doroshow for 5 minutes.

                      STATEMENT OF JOANNE DOROSHOW

        Ms. Doroshow. Thank you, Chairman Pitts and members of the
    committee. The Center for Justice and Democracy of which I am
    Executive Director is a national public interest organization
    dedicated to educating the public about the importance of the
    civil justice system. My testimony will focus primarily on
    medical malpractice issues since these issues clearly are the
    driver for H.R. 5.
        I would like to first note that thanks to 30 years of
    insurance and medical industry lobbying the medical profession
    now has more legal protections for their negligence than any
    other profession in the country. As a result the number of
    injured patients bringing medical malpractice claims has
    reached historic lows. At the same time, premiums have been
    stable or dropping since 2006 and have further to drop until
    the soft market ends and this is no matter whether a State has
    passed tort reform or not.
        Despite this, a myth exists of medical malpractice
    litigation is a huge driver of our healthcare costs. This is
    even though the Congressional Budget Office found that H.R. 5
    would result in extremely small healthcare savings, about 0.4
    percent. Of this, a trivial amount, 0.3 percent or less is due
    to slightly less utilization of healthcare services that is
    defensive medicine and 0.2 percent or less is due to reduced
    insurance premiums for doctors. As small as these figures are
    even they are inflated because CBO ignored factors that would
    likely increase the deficit.
        In fact, when I met with CBO to discuss these admissions,
    they did not deny that liability restrictions lead to more
    injuries and deaths and could create new burdens on States and
    Federal deficits since the cost of injuries are not eliminated
    by enacting tort reform but merely shifted on to some--on
    someone else including the government. In fact, one of the
    three studies CBO does mention now that there would be a 0.2
    percent increase in the Nation's overall death rate by
    enactment of H.R. 5. How could this possibly be an acceptable
    trade off?
        And it is not like we don't have history as a guide here.
    In fact, history repeatedly shows for example that capping
    damages will not lower insurance rates because what drives
    these rate hikes has nothing to do with the State's tort law.
    It is driven by the insurance underwriting cycle and investment
    income and remedies that do not specifically address this cycle
    will fail to stop these wild price gyrations in the future. In
    fact, when I returned to New York we will be preparing a major
    new campaign to expose the insurance industry's major role in
    the pricing of medical malpractice insurance and to hold them
    accountable for creating cyclical insurance crises for doctors
    in this country. And we hope everyone on this panel joins us in
    this.
        As for H.R. 5, this bill would establish a permanent
    across-the-board $250,000 cap on compensation for noneconomic
    damages in medical malpractice cases. Noneconomic damages
    compensate for injuries like permanent disability,
    disfigurement, blindness, loss of a limb, a damaged
    reproductive system, paralysis, or physical pain and suffering.
    Such caps are incredibly cruel and unfair.
        H.R. 5 would also limit State statute limitations laws, an
    idea that lacks complete logic from a deficit reduction
    standpoint since its only impact would be to cut off
    meritorious claims. It would impose national wage controls on
    an injured patient's attorney preventing the patient from
    getting decent legal assistance. It would limit punitive
    damages even though only 1 percent of medical malpractice
    plaintiffs even receive punitive damages. Where is the crisis
    demanding that Congress interfere with State law in this area?
        It would eliminate joint several liabilities which CBO
    itself says could cause a deficit increase not decrease. Dr.
    Lora Ellenson, a pathologist at New York Presbyterian Hospital
    whose now 13-year-old son Thomas was brain damaged at birth due
    to negligence last month told the New York Daily News ``My son
    cannot walk or talk. He is not able to carry out activities of
    daily living: eating, dressings, toileting, bathing without
    constant assistance from an adult. As a physician I have to
    come face to face with the knowledge that mistakes are made.
    Like most physicians I live with the reality that we might one
    day make an error and be sued. When that day comes I will be
    grief stricken. Not because of the process, although I am sure
    that won't be pleasant, but due the fact that I may have caused
    someone irreparable damage. My only hope is that the damaged
    person can get what they need to live in the best way they are
    able. As a physician I want to know that there will be
    compensation to rebuild a life that has been diminished, yet as
    a mother I also know that no typical physician nor the system
    within which they operate can possibly understand the true
    depths of these mistakes.'' I wish Dr. Ellenson's perspective
    were more represented by the physicians on this panel today. A
    study done in her hospital and other studies around the country
    have found that implementing comprehensive patient safety
    programs not only decreased severe adverse outcomes, but can
    also have an immediate impact on claims and compensation
    payments. That should be our focus, not stripping away the
    rights of children like Thomas Ellenson. Thank you.
        [The prepared statement of Ms. Doroshow follows:]
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        Mr. Pitts. Chair thanks the gentlelady and recognizes Dr.
    Kachalia for 5 minutes for your opening statement.

                     STATEMENT OF ALLEN B. KACHALIA

        Mr. Kachalia. Mr. Chairman and members of the committee, I
    thank you for the opportunity to testify today. It is a
    privilege to be here. I am here today because I was asked to
    speak with regard to the evidence related to the need that we
    have for malpractice reform and the measures that are currently
    under consideration. It is exciting to see that Congress is
    considering malpractice reform especially given the need we
    have today to improve our healthcare system comprehensively.
        I will quickly cover three main points: 1, what do we know
    about malpractice system performance; 2, what reform needs do
    we have; and 3, what does the evidence tell us with regard to
    the traditional tort reform measures that have been enacted in
    the States. I will base my testimony on both my clinical and
    research experience that you mentioned earlier.
        So first I would like to start by discussing why we need
    malpractice reform. We have a malpractice system that
    theoretically exists to 1, duly compensate injured patients,
    and to 2, reduce substandard care. However, there is general
    agreement among many experts that the system is not serving
    these functions well. If we turned to frequently cited evidence
    with regard to performance of the malpractice system, we can
    learn that patients claim compensation in only about 2 percent
    of negligent injuries that occur. And even less frequently do
    they receive payment.
        However, the problem is not just from the patient side.
    There is also a problem from the physician perspective. If we
    look at claims that have been filed there is concern that too
    low number of the claims that are filed actually contain
    negligence--approximately one in six. More recently generated
    evidence, however, indicates that about 60 percent of filed
    claims may actually have an error in them, but still the
    malpractice system does not seem to adjudicate these claims
    properly with about a quarter of them being improperly
    adjudicated. Now, this type of inaccuracy can actually
    undermine both patient and physician confidence in our system.
        Compounding these problems in data that demonstrates that
    the majority of our premium dollars seem to go to fund overhead
    costs rather than compensating patients. All of this occurs in
    the context of which there are very high insurance premiums for
    many physicians and of course we cannot ignore the emotional
    costs that can be associated with a law suit whether or not the
    suit has merit. There are also unwanted, indirect offenses of
    the malpractice system. This includes of course defensive
    medicine and the fact of the possibility of litigation that is
    always present can undermine the trust that we need in the
    patient/physician relationship.
        So what these findings show is what they show us what we
    need from reform. We need improvements that will actually fix
    the liability related shortcomings for both patients and
    physicians and a system that will perform these functions much
    more efficiently. But our reform targets should probably not
    stop there. Reform should also address how well the malpractice
    system improves the quality of care that we provide. After all,
    this is one of the system's main goals.
        So therefore, as Congress considers any reform it becomes
    important for Congress to determine what their primary goal is.
    Will legislation start in one area alone or will it try to
    tackle multiple problems at once and what is the interaction
    between making those choices? However, regardless of the
    approach that is taken, it remains important to contemplate any
    new reforms with the current evidence as to what we know in
    mind.
        So if I can turn to the evidence here there is a number of
    States have enacted tort reform over the years there has been a
    growing base on the evidence that we have with regard to the
    effect of these reforms. Last year we completed a review of the
    evidence on the effect of many traditional tort reforms and
    briefly here is what we learned.
        For caps on damages, the evidence seems to indicate that
    caps can lower the average size of claims payments which
    shouldn't be surprising because that is what they are designed
    to do and this actually appears to translate into lower
    premiums for physicians. There is good evidence to also suggest
    that caps made less in defensive practices, however, the effect
    of caps on the overall quality of care remains unknown.
        For statute of limitations there is reasonable evidence to
    show that they may lower premiums but it is unclear what the
    statute of limitations do with regard to claims frequency and
    they also do not appear to change the average award size. The
    evidence on defensive practices and other care related metrics
    is limited in this regard.
        For attorney fee limits, overall the evidence shows that
    fee limits do not seem to translate to lower claims frequency,
    cost, or insurance premiums and there is little evidence as to
    what happens with regard to care related metrics. So in summary
    as we continue to focus on how lower costs and improved quality
    in healthcare today, our medical malpractice system is a good
    target. Based on data on system performance as we consider how
    to reform the system it becomes important to evaluate reforms
    not just on liability consequences for patients and providers,
    but also to consider the effects on overall cost and quality of
    care.
        As a practical matter, Congress may offer incremental
    reform, but it is important to keep in mind that the ultimate
    goal of reform should be reform that addresses all the ails of
    our system and that veil consideration of more comprehensive
    reforms has also been put out there by Members of Congress. I
    would like to emphasize that regardless of the type of reform
    that is passed, it is critical to measure its impact and to
    have plans that call for proper and timely adjustments based on
    what the data tells us. Just as we continue to seek better data
    and evidence in medical care, we should ask the same of our
    liability system. Thank you.
        [The prepared statement of Mr. Kachalia follows:]
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        Mr. Pitts. Chair thanks the gentleman and recognizes Mr.
    Wolfman for 5 minutes.

                       STATEMENT OF BRIAN WOLFMAN

        Mr. Wolfman. Chairman Pitts and members of the committee,
    thank you for the opportunity to appear today in opposition to
    H.R. 5. I want to focus on what H.R. 5 calls medical product
    claims: suits brought by patients claiming that their injuries
    were caused by a defective or mislabeled drug or medical
    device. I will address three particularly harmful attributes of
    H.R. 5: its limits on noneconomic damages, attorney fees, and
    punitive damages.
        The act would limit noneconomic damages to $250,000. What
    does that mean in human terms? My written testimony answers
    this question in detail, but today I will focus on one example.
    In Wyeth v. Levine, Diana Levine, a musician lost an arm
    because of the negligence of a huge drug company Wyeth. She was
    awarded $5 million in noneconomic damages. Ms. Levine
    experiences phantom pain in her missing arm every day,
    sometimes excruciating. She had been a well-known Vermont
    musician who loved to play and create music, but her life was
    fundamentally altered forever. She is beset by depression, the
    mental anguish that frays relationships, and undermines desire
    from living a life that will never be fully restored. The idea
    that $250,000 can fully compensate for these life altering
    injuries is, to be blunt, absurd, and that H.R. 5 fixes
    noneconomic damages at $250,000 forever regardless of the
    impact of inflation underscores the conclusion that the cap is
    not a genuine attempt at gauging the impact on real people's
    lives of noneconomic injuries.
        Wyeth defended this case with great tenacity. Ms. Levine's
    lawyers were required to hire four experts, take wide ranging
    discovery, conduct a trial, defend pre and post trial motions,
    and defend lengthy multi-year appeals. The financial impact of
    Ms. Levine's injuries became so severe that she went into
    massive debt during the case and had to take out a large loan
    against her judgment. In preparing for this testimony, I asked
    Ms. Levine's small-town Vermont lawyer if he would have taken
    on Ms. Levine's case had the law limited economic damages to
    $250,000. His answer: one word, no.
        Studies show that a $250,000 cap on noneconomic damages
    disproportionally harms women, members of minority groups, and
    older people all of whom rely heavily on noneconomic damages to
    be made whole. Society should compensate harm and discourage
    negligent conduct just as much when it is visited upon a
    relatively poor person as when it is visited upon someone who
    is economically advantaged.
        The act would also limit contingent attorney fees to just
    15 percent on recoveries over $600,000. Those figures appear to
    be plucked out of the air with no explanation of how they would
    correct a supposed distortion in the market for contingent fee
    legal services. For someone who does not understand the
    economic reality of risk taking in a free enterprise economy,
    this provision may appear pro-consumer. After all, limiting the
    lawyer's recovery helps the client, right? Wrong.
        The free market does not cap contingent fees at 15 percent
    because lawyers are not willing to offer that term in a free
    market to their clients. The risk and expense of complex
    medical products litigation is too great. Ms. Levine audibly
    obtained a significant verdict but her lawyer did not know that
    result going in. He knew that Wyeth was likely to put on a
    formidable defense and take the case all the way to the Supreme
    Court. Viewed in hindsight, of course, Ms. Levine would have
    done better if a large chunk of her lawyer's fee had been paid
    to her. But if the Congress of the United States had demanded
    that a small town Vermont lawyer limit his fees to 15 percent,
    Ms. Levine never would have been able to find a competent
    lawyer to take her case in the first place.
        H.R.5 also bars punitive damages in cases where the product
    was approved by the FDA. Given the reality of FDA regulation,
    that makes no sense. Prescription drugs are FDA approved after
    relatively small clinical trials that do not always unearth all
    of the product's hazards and side effects. After approval the
    product is used by the public at large, a sort of mammoth
    clinical experiment and the manufacturer learns more about the
    product. In fact, fully half of all drug labeling updates to
    warn of serious adverse drug reactions occurs seven or more
    years after the drug is approved. Many drug liability suits
    concern information that not before the FDA at the time of the
    drug's approval. And so it is irrational to immunize the
    manufacturer based on that approval particularly where the
    manufacturer was grossly negligent in assuring that its product
    label remained up to date. But H.R. 5 would do just that.
        For this reason as well, H.R. 5 would undermine consumer
    health and safety and the committee should reject it. Thank
    you.
        [The prepared statement of Mr. Wolfman follows:]
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        Mr. Pitts. The Chair thanks the gentleman and recognizes
    Dr. Tippett for 5 minutes.

                      STATEMENT OF TROY M. TIPPETT

        Mr. Tippett. Thank you, Chairman Pitts, and--thank you,
    Chairman Pitts and Ranking Member Pallone, for holding this
    important hearing to consider this essential business of fixing
    our country's broken medical liability system. I am grateful
    for the opportunity to appear before this distinguished
    committee on behalf of the Health Coalition on Liability and
    Access or HCLA to strongly endorse and support passage of H.R.
    5, the Health Act of 2011 as it was originally introduced in
    January.
        HCLA represents a broad, national coalition of physicians,
    hospitals, employers, healthcare liability insurers and those
    who have joined together to seek some common sense solutions
    that will help reduce healthcare costs for all Americans and
    insure patient access to quality medical care by enacting
    medical liability reform at the Federal level. We believe all
    Americans pay the price when the profits of personal injury
    lawyers take precedence over patient care.
        Today our current medical liability system increases
    healthcare costs to unsustainably high medical insurance
    premiums and by encouraging the practice of defensive medicine.
    It reduces access to care as we see more and more physicians,
    particularly younger physicians avoid high risk specialties and
    procedures that are the frequent target of lawsuit abuse. Also,
    it has become a significant factor in the erosion of the all
    important doctor/patient relationship. HCLA believes H.R. 5 is
    the kind of comprehensive solution that would bring fairness
    and common sense back to our medical liability system. Any
    reform legislation should include the following points.
        There should be no limit on awards for economic damages. It
    should have a reasonable statute of limitations on the medical
    malpractice claims. It should have a reasonable limit of
    $250,000 on awards for noneconomic damages, and it should have
    a replacement of joint and several liability with a fair share
    rule. And there should be limits on the contingency fees that
    lawyers can charge so that more that that money goes back to
    the patient, and it should have a collateral source rule
    reform.
        Last month, the CBO published two reports that clearly show
    enactment of this legislation and similar legislation would
    help lower healthcare costs by lowering medical health
    insurance liability premiums by reducing the practice of
    defensive medicine and by lowering private health insurance
    premiums. The CBO estimated that passage of legislation would
    save the government $62 billion. Now, I don't know where you
    come from, but in my part of the woods that is a significant
    amount of money. $62 billion is worth saving. A number of
    States have made significant gains in reducing medical lawsuit
    in views, but as personal injury lawyers work State by State to
    overturn liability reforms and expand areas open to litigation
    it is clear that medical liability remains a national problem
    that requires a comprehensive Federal solution.
        We look forward to working with the committee and others in
    Congress to develop the kind of Federal remedy that will bring
    consistency and common sense back to the system. There can be
    no real healthcare reform without meaningful medical liability
    reform. We ask you to please pass H.R. 5.
        [The prepared statement of Mr. Tippett follows:]
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        Mr. Pitts. Chair thanks the gentleman. I would like to
    thank the panel for their opening statements and I will now
    begin the questioning and recognize myself for 5 minutes for
    that purpose.
        Dr. Hollier, you have been practicing in Texas for a number
    of years. Some of that time was before the State enacted
    medical liability reform. Can you tell us how things have
    changed for you since medical liability reform in terms of your
    ability to provide healthcare to your patients, please?
        Ms. Hollier. Thank you, Mr. Chairman. The reforms in Texas
    have truly changed the climate in which we practice medicine. I
    work in a medical school and I counsel medical students on a
    routine basis. Before the passage of medical liability reforms,
    many of my students asked questions and were very concerned
    about entering a specialty such as obstetrics because of
    professional liability concerns. In the era after our reforms
    had passed, those medical students have regained their interest
    in our specialty and are excited about the practice of
    obstetrics.
        We have seen literally hundreds of thousands of extra
    patient visits because we have increased access to doctors
    across the State of Texas because those doctors are more able
    to provide the care that our patients need.
        Mr. Pitts. Thank you. Dr. Tippett, in order to help us
    understand why a doctor might practice defensive medicine, can
    you give us some sense of what it means professionally to be
    named a defendant in a malpractice suit? Even in the case
    doesn't result in a judgment against you, most neurosurgeons
    have been sued. Would you please elaborate?
        Mr. Tippett. Yes, thank you very much. Well, in Florida you
    can count on the one out of one permanent resident year just
    about these days unfortunately, but just--my--when I first
    started practicing in Pensacola, Florida, in 1976 I will never
    forget it. Within a year of when I started practice, one day I
    opened the door and there is a Deputy Sheriff. He is handing me
    this subpoena and I am, you know, I am kind of naive. I didn't
    know what--I said what in the world is this and I opened it up
    and it said you are being sued. And I--you would have thought I
    had stuck my hand in electrical current with a hot--with cold
    water on my face. I mean it is that shocking.
        And the devastation doesn't stop for about 4 years after
    that, I can tell you. It doesn't go away. First of all I say,
    well, I don't even know who this patient is. Well, it turns out
    it was a patient that I had walked in the room that they were
    operating on when I was a resident in Memphis, Tennessee,
    several years before. I didn't have any idea who the patient
    was. Well, they tried to get him to drop me from the trial. Of
    course they didn't. I ended up--I had just started my practice
    in Pensacola. I had to take time out of my practice. I would go
    to Memphis, Tennessee, for the trial. I sat in the courtroom
    for a week not--my name is not mentioned one time. At the end
    of the presentation of the plaintiff's case the judge--the
    first time my attorney says anything is will you dismiss my
    client and the judge says yes. And so you know I am kind of
    stunned. I don't know what is going on. I am walking out of the
    room and the plaintiff's attorney stops me and says--shakes my
    hand and says, you know, no offense. And I am saying--here, you
    know I have just been stabbed in the back and no big deal. And
    that is just one. I could go on with other.
        Mr. Pitts. Thank you. Dr. Kachalia, you and your colleague
    Michelle Mello have done an exhaustive review of this issue,
    possibly the most exhaustive review to date. From what I can
    tell, part of your message is that the data regarding some
    aspects of medical liability reform are not robust at this
    time. However, there does seem to be mature data about caps on
    noneconomic damages. I found it interesting in your research
    that caps do not seem to reduce the number of claims, but
    study--studies of the effects on caps on claim payouts have
    found a significant effect--typically on the order of 20 to 30
    percent reduction in the average award size. If the number of
    claims remains stable, it would seem that patients are still
    able to bring cases, but the number of unpredictably high
    awards is reduced. That seems like exactly what we would want
    medical liability reform to do. In your opinion is that a fair
    thing to say? Would you elaborate?
        Mr. Kachalia. So, I think you are right with regard to what
    we would want liability reform to do which is to bring--if
    awards are thought to be excessive to make them more
    reasonable. And with regard to caps they do seem to--as you
    pointed out, they do seem to lower the average payment and the
    premiums to go with it. And they--from what we can see from the
    evidence they don't seem to have an effect on the total number
    of claims that occur. So if caps were working without harming
    patient access to compensation, that is exactly how we would
    want them to work, but most of these studies weren't
    necessarily--they don't necessarily tell us as you pointed
    out--there is very little data with regard to what happens to
    patient access to compensation in overall quality of care. So
    those still remain unknown questions. But you are right, at the
    end of the day to some extent caps can help lower the premiums
    which is what they are meaning to do.
        Mr. Pitts. My time is expired. Chair recognizes the ranking
    member for 5 minutes for questions.
        Mr. Pallone. Thank you, Mr. Chairman. I do appreciate your
    having this hearing today because I can't support and never
    have supported H.R. 5, but I do understand that medical
    malpractice and liability is a real problem for doctors in my
    home State in the country. But I also think we can't forget
    that medical malpractice reform also affects patients and any
    truer form has to take a balanced approach and include
    protections for the legal rights of patients, because many
    people are serious injured through medical malpractice.
        Now I want to focus on three things which I have been
    articulating for years about H.R. 5. It has been around--I
    don't know how many times we have taken this up, you know,
    since--when the Republicans were in the majority. I have three
    problems with it. First of all it extends way beyond medical
    malpractice. You know it has new protection and nursing home,
    pharmaceuticals, device, insurance companies and others and I
    really feel very strongly that if we are really going to focus
    on this issue it just should be medical malpractice. It
    shouldn't be all these other types of tort reform.
        The second thing is that the 250,000 cap is just unworkable
    and unrealistic. I mean it has been around for 10, 20 years and
    you know, with inflation and everything you talk about $250,000
    cap I just think is unrealistic. And the last thing is I don't
    believe that just having caps is going to truly control
    premiums. I think the only--I mean it may be a factor, but a
    more important factor is actually having some kind of controls
    on the premiums themselves. You know some kind of you know
    actual way of saying, you know, premiums can't go above a
    certain amount, whatever. So those are my questions. I want to
    ask questions and I am going to try to get all three in in the
    3 minutes that I have left. Let me start with Ms. Doroshow.
        First of all, this $250,000 cap, it seems to me it is very
    unrealistic and secondly the idea of just tort reform being an
    answer to reducing or controlling premiums for doctors--I mean
    isn't it true that in California example--I know Mr. Waxman has
    often used this as an example that you know when they just did
    the tort reform premiums kept going up. And it wasn't until
    they actually instituted something I guess with one of their
    propositions that actually said--that addressed prices. And so
    if you would ask me that a 250 cap and the need for price
    controls or however you want to call it and not just talking
    about the caps?
        Ms. Doroshow. Well, look at California because that was the
    State that first enacted a $250,000 cap in 1975 without an
    inflation adjustment. And I think if you were to adjust to
    today this would be well over a million dollars in terms of a
    limit. It is incredibly low and cruel amount of money that as
    Brian mentioned has a disproportionate impact on seniors,
    children, low wage earners, women who don't work outside the
    home.
        In terms of the insurance issue, after the cap passed rates
    went up about 450 percent until 1988 when Prop 103 passed. This
    is the strongest insurance regulatory law in the country and
    since then rates have stayed below what the national average
    is. And in the last hard market between 2001--2003 there were--
    or 2005 there were three attempts by insurers in California to
    raise rates. Because of Prop 103 there is a hearing
    requirement. The consumer groups came in, challenged the rate
    hikes and all three of them were reduced saving doctors about
    $66 million in California. Nothing will work unless you
    institute insurance reform.
        Mr. Pallone. All right, let me just--and I appreciate this
    answer to the questions, but Mr. Wolfman, to my third point
    which is this bill you know not just dealing with all these
    other tort reforms with farm devices, all that. I mean is that
    necessary? Isn't the problem primarily with doctors? Why are we
    throwing all the--the kitchen sink in here?
        Mr. Wolfman. Representative Pallone, as I said the--this
    bill seems--I am not here to speak about malpractice, but this
    seems particularly ill fitted to claims against device and drug
    manufacturers that bring out enormous or war chests to litigate
    cases. And the notion that you in difficult cases where you
    need the best lawyers, the notion that you can go forward when
    there is extreme negligence with no opportunity for punitive
    damages. A $250,000 cap and these draconian nonmarket
    limitations on attorney's fees is just fantastic. It is not
    going to happen. And----
        Mr. Pallone. Well, let me say this, Mr. Chairman, you know
    I just want you to know that if you and the Republicans were
    willing to work with us on these three issues, you know
    unrealistic cap, just narrowing this to doctors or medical
    malpractice, and third you know including actual going after
    the rates and actually controlling rates then I think we could
    come to a workable solution. But the way H.R. 5 is now, it is
    going to--same thing over and over again. It will never go
    anywhere and it is just a waste of time.
        Mr. Pitts. Gentleman's time is expired. Chair recognizes
    the vice chairman of the committee, Dr. Burgess, for 5 minutes
    for questions.
        Mr. Burgess. I thank the chairman. You know I am actually
    tempted to ask the gentleman from New Jersey if he would look
    at 896 since he just made that gracious offer. On the other
    hand, Texas receives so many of your recently educated
    physicians from New Jersey that I am worried about disrupting
    our physician workforce pipeline because, as you know, we did
    pass a year ago or sign into law a year ago a bill--you may
    have heard of it--called the Patient Protection and Affordable
    Care Act, which is going to ensure according to congressional
    an additional 32 million people. And although I have my doubts
    about that figure, they are all going to need doctors. In Texas
    we may be well on the way to satisfying that demand because we
    have done the right thing with liability reform on the ground
    in Texas.
        I am so intrigued by the concept of what has been talked
    about on limiting attorney's fees. You know, maybe doctors have
    gone about it the wrong way. Maybe we should have gone to the
    billable hour several years ago and not let Medicare dictate
    our fees as has happened in this country for years. But we do
    live under a federally imposed fee schedule and maybe if we
    could apply that to our legal brethren maybe some of these
    problems would go away as well so I am going to be on the phone
    to Dr. Berwick shortly after this hearing ends and see if we
    cannot extend the benefits of the sustainable growth rate
    formula to the Nation's attorneys.
        Well, we did pass medical liability reform in 2003. Dr.
    Hollier, do recall did anything similar to the proposition in
    California pass that limited--was a price control on medical
    liability, the cost of the insurance itself, or were simply the
    reforms that we built into the system? Of course the
    legislature passed the law in June of 2003. The State passed--
    the people of the State of Texas passed a constitutional
    amendment in September of 2003 that allowed the law to
    circumvent the court's process and become immediately
    implemented. That seemed to me to be the big break point, not
    putting a cap on what malpractice insurance can charge. Can you
    address that?
        Ms. Hollier. Yes, sir, there were no additional measures
    such as those implemented in California. Liability premiums for
    physicians began to decrease relatively soon after the
    September passage of the amendment. And physicians had seen
    their liability premiums decrease by about 28 percent keeping
    many of these doctors in their practice keeping patients with
    the ability to access the specialty care that they need close
    to home.
        Mr. Burgess. Yes, of course you work in a medical school
    and it is not just a medical school. It is my medical school,
    so I am grateful for your service there. But give us an idea of
    what that 28 percent means to the practicing OB-GYN in the
    greater Houston metropolitan area.
        Ms. Hollier. For many physicians prior to liability reform,
    obstetrician/gynecologists were paying premiums in excess of
    $100,000, some as high as $150,000. So 28 percent reductions
    are very important. And what it means for our doctors is that
    we can continue to stay in practice and provide care for our
    patients.
        Mr. Burgess. And the story about counties in Texas having
    ER doctors and OB-GYNs that had never had one before is that
    just some fantasy made up by doctors or is that an actual fact?
        Ms. Hollier. That is an actual fact, Representative
    Burgess.
        Mr. Burgess. And you know we talk about Texas, but let me
    talk about New York for a moment because I happened to be in
    New York a couple of weeks ago and the New York Times had this
    wonderful ad. When these doctors say we need liability reform
    there are 350,000 reasons to trust them and there you see what
    I like to call mature physicians standing there holding infants
    in their arms. And I asked--this was given to me by the head of
    the Greater New York Hospital Association, and I asked him what
    the liability premium was in the city of New York for an OB-GYN
    and he said in excess of $200,000. And clearly that is a
    barrier for the young physician getting out of their medical
    school and their residency experience. And they probably owe--
    well, Dr. Hollier or Dr. Kachalia, tell us what is a young
    doctor likely to owe today getting out of a 4-year OB-GYN
    residency? $150,000 in student loans, $200,000?
        Ms. Hollier. I think that is a reasonable estimate, sir.
        Mr. Burgess. And on top of that before they can deliver
    their first baby a $200,000 liability payment because no one
    can afford to practice--you couldn't dare run the risk of
    practicing without liability insurance. So how in the world are
    we asking our cadre of young doctors to begin practice in--with
    this environment in the city of New York? No wonder they look
    to the allegiant fields of Houston, Texas, and Fort Worth,
    Texas. They may not be green fields, because it is pretty hot
    in the summertime, but they are certainly greener fields than
    in New York. Thank you, Mr. Chairman. I will yield back the
    balance of my time.
        Mr. Pitts. Chair thanks the gentleman and now recognizes
    the gentleman from Texas, Mr. Gonzalez for questions.
        Mr. Gonzalez. Thank you very much, Mr. Chairman. Dr.
    Hollier, do we have a medical malpractice--not an emergency,
    but let--not a crisis, but do we have medical malpractice
    problems in the State of Texas?
        Ms. Hollier. Sorry, sir. I think the climate in Texas has
    changed dramatically post reform. And I think our patients have
    had significant benefits.
        Mr. Gonzalez. Well, let me ask you. I will put it this way.
    Do we have occurrences of medical malpractice in Texas?
        Ms. Hollier. Yes, sir.
        Mr. Gonzalez. But those doctors make mistakes?
        Ms. Hollier. Yes, sir.
        Mr. Gonzalez. And sometimes they are pretty serious
    mistakes?
        Ms. Hollier. Yes, sir.
        Mr. Gonzalez. All right, you know a lot of doctors, don't
    you, I assume? And if I was a member of your family would there
    be certain doctors that you would not recommend that I go to,
    honestly?
        Ms. Hollier. I don't have a list in my mind such as that.
        Mr. Gonzalez. OK. Dr. Tippett, in Florida are there
    occurrences of medical malpractice?
        Mr. Tippett. Yes, sir, there are occurrences of
    malpractice, but what we are talking about here is to try to
    continue to provide access to medical care in the State of
    Florida. In South Florida, for example, most----
        Mr. Gonzalez. And Doctor, I only have 5 minutes and I
    understand where you are going, but since I only have the 5
    minutes I would like to get where I would like to get but I end
    up in this discussion. You know a lot of doctors. If I was a
    member of your family, would there be certain doctors that you
    wouldn't recommend I see?
        Mr. Tippett. Would not recommend you see?
        Mr. Gonzalez. Sure.
        Mr. Tippett. I would put it in the other way. There are
    certain doctors that I would prefer over some other physicians.
    For example, I sent my daughter yesterday to my partner. I
    think that----
        Mr. Gonzalez. But why would I send them to the doctors at
    the bottom of the list?
        Mr. Tippett. I am sorry?
        Mr. Gonzalez. Why wouldn't you send your daughter to those
    doctors at the bottom of this hierarchy of qualified doctors?
    You are sending them to the one that you respect the most. I
    understand that. But you must have questions about all those
    others that are practicing that you would not send your
    daughter to.
        Mr. Tippett. Well, I wouldn't send my daughter to every
    doctor in town. I would only pick out as you would in your
    family the one you thought that was most appropriate.
        Mr. Gonzalez. Well, that is my point.
        Mr. Tippett. It is not always based on quality of the care.
    It is based on whether all of those factors----
        Mr. Gonzalez. Qualifications, ability, and competency in
    every profession, including the legal. That is why we have
    malpractice suits, because I will tell you this: In my private
    conversations with my friends who are doctors they would
    definitely tell me who to stay away from. And I venture to
    guess anybody up here today that has a dear friend or a family
    member or even Dr. Burgess himself who is a physician before he
    came to Congress obviously--knows those members of the medical
    profession that pose a danger to their patients.
        But like any profession we are going to have that. The
    problem is the profession doesn't really discipline and
    regulate itself. Most professions don't. So somehow we have to
    have a system that will protect the rights of those patients. I
    understand where we are all coming from: affordable healthcare,
    quality healthcare, defensive medicine and so on. So let us
    look at the Texas experiment. This is the goal standard, the
    goal standard.
        Average liability premium for internal medicine--
    malpractice premiums for internal medicine are 27 percent
    higher in Texas than in States without caps because what we are
    trying to do is take that basic cost out of the equation and
    provide quality healthcare for everyone. But if someone is
    injured as a result of negligence they may just be left out in
    the cold. But let us just leave that aside. What we are trying
    to accomplish is reducing malpractice insurance premiums.
    General surgeons, OB-GYN malpractice premiums for doctors
    averaged across specialties are 6 percent higher in Texas than
    in States without caps. Malpractice premiums for general
    surgery are 21 percent higher in Texas than in States without
    caps.
        Those are the realities and we also know that the practice
    of defensive medicine may be an issue, but studies also show
    that that may be more attributable to overutilization because
    we know that is out there. It also may be due to unreasonable
    patients that is bigger--I have got an insurance company or the
    government's going to pay so run every test that you can run on
    me. There are other reasons for the increased testing other
    than what we have referred to as defensive medicine. I am just
    saying let us be fair to the physician, but let us be fair to
    the patient and make sure that they have an adequate remedy
    when they are injured, disfigured, and disabled. Thank you, I
    yield back.
        Mr. Pitts. Chair thanks the gentleman. Yields 5 minutes to
    the gentleman from Georgia, Dr. Gingrey.
        Mr. Gingrey. I thank the chairman for yielding. Let me
    first go to Ms. Doroshow. I see that you represent the Center
    for Justice and Democracy. Let me ask you a series of questions
    and these are just strictly yes or no. Do you believe that all
    Americans in this country deserve justice?
        Ms. Doroshow. Yes.
        Mr. Gingrey. That is easy. Do you believe that medical
    providers should be held financially responsible for their
    share of medical errors?
        Ms. Doroshow. If they are fully responsible.
        Mr. Gingrey. Yes or no? Their share of medical errors?
        Ms. Doroshow. Well, are you talking about the----
        Mr. Gingrey. If I say their share, obviously the question
    means they are not fully responsible. They have made some
    responsibility. I am asking you yes or no, should they be held
    financially responsible for their share of the medical error?
        Ms. Doroshow. If the----
        Mr. Gingrey. Yes or no?
        Ms. Doroshow. Yes, but----
        Mr. Gingrey. All right, your answer is yes. I have got
    another--a number of questions so we need to move on. Do you
    believe that medical providers should be sued and held
    financially responsible for medical errors that they did not
    cause? Surely you can answer that yes or no.
        Ms. Doroshow. I think not. That is correct.
        Mr. Gingrey. They should be?
        Ms. Doroshow. No, they shouldn't.
        Mr. Gingrey. Thank you. I expected that. Do you believe
    that off-duty medical providers who happen to witness a
    horrible car crash and step in because victim's life hangs in
    the balance should have liability protections, understanding
    that oftentimes they would be working without the benefit of
    any medical equipment or a stable environment? They are on the
    street. They are trying to provide emergency care. Should they
    be held liability?
        Ms. Doroshow. These are good Samaritan laws and they--most
    States have them. That is different from an emergency room law.
        Mr. Gingrey. So most States have a law that would hold them
    not liable?
        Ms. Doroshow. Right.
        Mr. Gingrey. Your answer is yes.
        Ms. Doroshow. They are not expected to encounter----
        Mr. Gingrey. Thank you. So basically the reason I ask you
    these questions is justice is a subjective term for your
    organization. Is it not? Is justice a subjective term?
        Mr. Doroshow. Exactly. I mean this is a determination by
    the jury if you are talking about a lawsuit, and that is what
    we believe in, the judge and jury.
        Mr. Gingery. Well, we don't have a jury here. We just
    simply have a panel of witnesses----
        Ms. Doroshow. Well, we are talking about the civil justice
    system.
        Mr. Gingrey. And I am asking you pretty straightforward yes
    or no question. OK. Well, let me move on. Thank you very much
    for your response. I am going to go to Dr. Tippett. Dr.
    Tippett, thank you for your testimony. I have heard from many
    medical providers that in the bill PPACA, Affordable Care Act
    we sometimes refer to it on this side as Obamacare, not
    pejoratively, of course. We--you know it has created some new
    liability concerns. How does Obamacare create new liability
    concerns, Dr. Tippett?
        Mr. Tippett. Well, there are any number of ways and it is
    so we don't yet know about what many things that may come of
    this progress, but of this bill. But for example if some panel
    determines that you can't have this sort of treatment under
    Medicare and you have the treatment anyway, and things don't go
    well, you may be sued in that regard. We considered this bill
    when we looked at it overall as a growth industry for the
    plaintiffs bar in terms of things that they could find that
    doctors do wrong. When there--comparative effectiveness I think
    is probably the most fertile ground for the plaintiffs bar. Any
    time----
        Mr. Gingrey. Well, let me--I want to interrupt you just for
    a second because I get your drift. Do you then think that
    medical providers need to be protected from these new liability
    causes of action that may be embedded in the new Obamacare law?
        Mr. Tippett. Absolutely, yes, sir.
        Mr. Gingrey. Well, I want to once again let the panel know
    that I have a bipartisan bill, bipartisan bill H.R. 816 and I
    hope Congress will move quickly because if Obamacare is going
    to deepen this liability crisis it must be stopped. And of
    course that is what the provider shield law will actually do,
    and I think it is very important that we get that passed. Let
    me in my remaining minute to go to Dr. Hollier. Dr. Hollier, it
    is great to have you as a witness because you are a fellow OB-
    GYN, an American College of OB-GYN. And I am a very, very proud
    member and I practiced in that specialty as you probably know
    for 26 years delivering over 5,000 babies, so it is near and
    dear to my heart and I appreciate you being with us. According
    to studies almost 30 percent of OB-GYNs have increased the
    number of cesarean deliveries and 26 percent have stopped
    performing or offering traditional deliveries because of
    liability concerns and defensive medicine. Is that correct?
        Ms. Hollier. Yes, sir. According to our recent surveys by
    the American Congress of Obstetricians and Gynecologist our
    physicians are increasing those.
        Mr. Gingrey. All right, very quickly are cesarean
    deliveries more expensive than traditional--let us say a VBAC
    vaginal birth after a cesarean delivery?
        Ms. Hollier. Yes, sir.
        Mr. Gingrey. You state in your testimony that patients who
    eventually receive compensation through our current liability
    system obtain less than 50 percent of the amount awarded. What
    happens to the remaining 50 percent of the judgment or
    settlement?
        Ms. Hollier. That goes to the attorney, sir.
        Mr. Gingrey. It goes to who?
        Ms. Hollier. The attorneys.
        Mr. Gingrey. OK. Thank you and I see my time is expired. I
    yield back.
        Mr. Pitts. Chair thanks the gentleman. Now recognizes the
    Ranking Member from California, Mr. Waxman for 5 minutes of
    questions.
        Mr. Waxman. Thank you very much, Mr. Chairman. I think
    medical malpractice is a real problem. I don't think the system
    is a very good one. People who should be compensated when they
    are hurt are often not because their cases are not attractive
    enough for a lawyer to take on. Some people are
    overcompensated. There is not justice in the system and this
    has been a perplexing issue for many, many years.
        In California, we adopted a law that--called MICRA which
    has been the law that many other States are emulating and a
    good part of the bill H.R. 5 is based on MICRA. But I have a
    question about whether we ought to be doing this at the Federal
    level. States have tried different approaches. There is no
    perfect approach to this unless you want to say it is about the
    providers. Providers will never be responsible even when they
    are negligent or even in reckless. I don't think that makes any
    sense. I don't like some of these caps. Frankly it is such a
    low cap and hasn't been expanded so that--$250,000 seems to be
    an inadequate compensation for people who are going to live the
    rest of their lives disfigured and in pain.
        So I think it is still a State matter because the States
    have jurisdiction over insurance. The States have jurisdiction
    over licensure. One of the ways to deal with doctors who commit
    malpractice is to--is for--to have their peers under State law
    do something about it. That is a State matter. All States have
    already examined this issue of medical reform, liability reform
    and they have their own different systems, but we want to now
    in this bill preempt the whole matter and make it a one size
    fits all. That is why the National Conference of State
    Legislatures has written to express its strong bipartisan
    opposition to H.R. 5, and Mr. Chairman, I would like to ask
    unanimous consent to put their letter into the record.
        Mr. Pitts. Without objection, so ordered.
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        Mr. Waxman. Ms. Doroshow, am I correct in my statement that
    States are trying different things out?
        Ms. Doroshow. That States----
        Mr. Waxman. Are doing different things on their own?
        Ms. Doroshow. Well, yes, they have for 35 years.
        Mr. Waxman. Now Section 11 of this bill spells out to the
    extent to which State medical liability laws would be abolished
    or prevented from being enacted in the first place, in other
    words preempted. Ironically, the title of this section is State
    Flexibility and Protection of State's Rights but it preempts
    the States if they don't follow the Federal model.
        Professor Wolfman, can--what would this Section 11 mean for
    existing or potential State medical liability reform laws?
        Mr. Wolfman. Well, essentially it is essentially one way
    preemption. What it does is it preempts States. For instance if
    a State had a law saying or a policy that you know the jury can
    determine what is appropriate noneconomic damages that would be
    preempted. But if a State had a provision that was more
    punitive in my view, you know a $200,000 cap, that would not be
    preempted.
        Mr. Waxman. That would----
        Mr. Wolfman. One way.
        Mr. Waxman. There is a provision in this bill that says if
    it--if there is greater protection in healthcare providers and
    healthcare organizations----
        Mr. Wolfman. That is correct.
        Mr. Waxman [continuing]. That would not be preempted.
        Mr. Wolfman. That is absolutely correct.
        Mr. Waxman. But the bill goes on to preempt State laws to
    protect consumers?
        Mr. Wolfman. That is correct. It is one way.
        Mr. Waxman. That is a one-way preemption. California's law
    has worked as I understand it to hold down insurance premium
    from malpractice, but that also seems to have been part of the
    insurance reforms adopted by the State. I don't know if any of
    you--Ms. Doroshow, you have lived in California over----
        Ms. Doroshow. Yes. What----
        Mr. Waxman. Is that an accurate statement?
        Ms. Doroshow. It is the Prop 103 insurance regulatory law
    that passed in 1988 that is primarily responsible for that.
    Yes, for controlling rates in California.
        Mr. Waxman. Do you know if any evaluation has been done of
    the California medical situation to see whether it has stopped
    excessive practice in medicine or defensive medicine?
        Ms. Doroshow. In----
        Mr. Waxman. Or is defensive medicine practiced in
    California the same as other places?
        Ms. Doroshow. As well as Texas. I mean, it--when you enact
    these caps and other tort reforms it has absolutely no effect
    on that issue. I mean, how could it? You are just limiting one
    small measure of damages and in a case it is not is going to
    change somebody's practice. And I think that is generally what
    has been true. It certainly was true according to a very well-
    known article about Texas, McAllen, Texas in the New Yorker
    Magazine where they talked to some cardiologist and sat down
    and said they acknowledged the $250,000 cap had practically
    wiped out law suits in that State and yet they were still
    practicing the same kind of tests. And they attributed it--
    admitted that it was due to overutilization, having nothing to
    do with the legal system.
        Mr. Waxman. I would like my colleagues that support this
    bill which may well be almost all the Republicans, maybe all of
    them. I still think there are states' rights and states'
    prerogatives, and this really tramples on all of that. And that
    troubles me a lot. All answers to questions are not found in
    Washington, DC. Yield back my time.
        Mr. Pitts. Chair thanks the gentleman and now recognizes
    the gentleman from Kentucky, Mr. Guthrie for 5 minutes of
    questions.
        Mr. Guthrie. Thank you, Mr. Chairman. My friend from Texas
    said who is left out in the cold and what is fair for the
    patient. And in the terms of access to legal representation and
    you would have to say perhaps that there would be if you limit
    fees--obviously if you are going to limit price, price
    controls--you know people are going to in turn to that business
    as often. But the question as I have listened to the Texas
    story and I can tell you about Kentucky is what is fair for the
    patient in term of access to healthcare? I mean, that is the
    issue that we have. I believe if I am correct 22 rural counties
    gained OB-GYNs and 10 counties had an OB-GYN that did not have.
    In my situation I have three children. If I had a fourth, we
    couldn't have the same doctor who delivered the first three
    because he doesn't practice OB because of medical malpractice
    specifically for that. Two hospitals in my hometown, one
    doesn't do OB anymore because of medical malpractice. Now there
    is a hospital across town you can go to, but if you get into
    rural parts of Kentucky, it--you can't--and it is part of the
    eastern part of the State you have to drive a couple hours to
    Lexington. You know about disproportionate effect on the poor.
    Not that middle class and upper middle class people don't have
    to drive 2 hours, but they can afford it a lot easier than
    somebody that is poor.
        And I am telling you if you give free healthcare to
    somebody in parts of my State they are not going to be able to
    go to a doctor unless they drive 2 or--over 2 hours because of
    access to medical care. An OB-GYN that I am very close to has
    to pay $105,000 for healthcare OB-GYN practice in Kentucky. So
    that is why we are losing people practicing.
        So even if you admit and I think you would have to if you
    are a person that doesn't believe in--if you--economics and you
    said the free market of price controls would perhaps limit some
    people to big awards, the overall--what we have to look at and
    Ms. Doroshow, is it a fair argument to look at to say well,
    what about the access? Because you know some people are arguing
    that tort reform didn't change the issues in Texas. You know
    the evidence seems to say they did, but I can tell you we are
    losing OB-GYNs. If it is not tort reform for some reason in
    Kentucky and it is the access to care not something that we as
    policymakers have to make decisions when we--what is fair for
    one patient--maybe access to the legal. What is fair for one
    patient--access to care.
        Ms. Doroshow. Well, I would point you to page 23 of my
    written testimony where it describes study after study after
    government study showing that medical malpractice issues have
    absolutely nothing to do with the access to care argument. And
    frankly, if the argument is that insurance rates are too high
    as they have been three times in the last 30 years as we have
    gone through this cyclical market, the solutions to that
    problem lie with the insurance industry. They should not be
    solved on the backs of injured patients. And we are dedicated.
    We have an organization called Americans for Insurance Reform
    that is dedicated to try to help get some control over the
    property, casualty insurance industry. That is one of the least
    regulated industries in the country. They are exempt from anti-
    trust laws and that is something that Congress could do is to
    get rid of the anti-trust exemption that----
        Mr. Guthrie. What about the Texas situation? The Texas--
    didn't--I am asking. I am not trying to lead you in a way or
    Mr. Wolfman, did Texas malpractice reform not lower premiums?
    Is that--are you thinking it was something outside of? Because
    they didn't put caps in control.
        Ms. Doroshow. Texas--right after the law was passed in
    2003, Texas insurers went in for between a 35 and 65 request
    for rate hikes. That is because we are in a hard market in this
    country. It was happening in every State in the country. In
    2006, rates stabilized everywhere in the country. In every
    State in the country no matter whether they passed these laws
    or not and that simply as----
        Mr. Guthrie. But so the access in these rural counties in
    Texas--was it, you don't think----
        Ms. Doroshow. The access to the rural counties--look in
    2007 there is a big Texas Observer article called ``Baby I
    Lied.'' It was all about how misrepresenting the medical
    societies word in terms of where the access was going to
    improve in those rural counties and they were not--they had not
    improved. And I would also point you to this very important
    study by Charles Silver, David Hymen, Bernard Black, the impact
    of the 2003 medical malpractice and its cap on physicians
    supply. Basically the account----
        Mr. Guthrie. I am not cutting you off because I don't want
    to hear it and I----
        Ms. Doroshow. Well, this is----
        Mr. Guthrie [continuing]. Understand----
        Ms. Doroshow. This is the actual analysis of what happened
    to physician supply in Texas. The----
        Mr. Guthrie. But I know we are losing OB-GYNs in Kentucky
    and rural part and maybe there are lots other but as a doctor,
    I know you just--what you said. I am not trying to cut you off
    because I don't want to hear it. I just want to give Dr.
    Hollier--I guess you have 20 seconds to say that.
        Ms. Hollier. Thanks. Ranks of rural obstetricians increased
    by 27 percent. Imagine yourself 9 months----
        Mr. Guthrie. Because of malpractice or that is the question
    that--that is this----
        Ms. Hollier. Yes.
        Mr. Guthrie. You are not denying the increase, right, Dr.
    Doroshow?
        Ms. Doroshow. Yes, I am denying it.
        Mr. Guthrie. You are denying that it increased? OK.
        Ms. Doroshow. According to this study, population went up 2
    percent. OB-GYNs went up 1.6 percent annually since the cap
    passed.
        Mr. Guthrie. But we have OB-GYNs in Bowling Green. The
    question is we don't have then in some county----
        Ms. Doroshow. Well there are dual problems that are very
    common in every single State. The way to fix that problem is to
    provide incentives for doctors to go into those areas not to
    cap damages for the entire State.
        Mr. Guthrie. But they did in Texas. That is the question.
    Thanks. I yield back.
        Mr. Pitts. Chair thanks gentleman and recognizes gentlelady
    from California, Mrs. Capps for 5 minutes.
        Mrs. Capps. Thank you, Mr. Chairman. As I touched on in my
    opening today I believe that in order to solve the issues of
    rising malpractice costs, we can't ignore one of the major
    issues here which is reducing the incidents of malpractice,
    bringing down the astounding number of costly medical errors
    that claim 98,000 lives a year. I want to be clear many of
    these deaths would be wholly preventable through the adoption
    of simple measures like increased focus on communication
    between doctors and nurses, appropriate staffing levels as
    increasing the use of simple but effective checklists.
        To that end, I join with my colleague Mr. Holt on--in
    introducing the Medical Checklist Act of 2010 in the 111th
    Congress. Checklists have long been used in commercial aviation
    as well as the number of other fields to ensure that
    complicated procedures are performed safely. They have been
    used because they work and their increased use in medical
    centers--settings is one way to improve patient test--safety.
    In your testimony, Ms. Doroshow, you spoke of the importance of
    focusing on patient safety and highlighted how one study in
    obstetrics department was able to reduce medical errors in
    claims by 99.1 percent by instituting a department wide program
    focused on ways that they can improve patient care; for
    example, establishing new drug protocols, improving
    communications between medical staff. What kind of incentives
    do you believe prompted the implementation of this systemic
    approach to improving patient safety? Do you think this kind of
    program could be replicated in other hospitals or other
    branches of medicine?
        Ms. Doroshow. Absolutely and in fact it is not the only--it
    is New York Presbyterian Cornell Medical Center study beginning
    in 2002. At the request of the insurance carrier for this
    hospital, they implemented these things and as you said
    claims--everything went down. But it is not the only situation
    where that has been repeated. We also had somebody testify
    before, a task force I was on from a Boston hospital the same
    kind of results. It is extraordinarily successful at reducing
    errors and claims in compensation payments.
        Mrs. Capps. And then real quickly in your reading of H.R. 5
    is there anything that improves on patient protection measures
    that reduce the instance of medical errors?
        Ms. Doroshow. No, absolutely not.
        Mrs. Capps. OK. Well, I think this is an area where all of
    us can agree that this kind of approach, these innovative
    approaches are--is worth learning from. I want to turn now to
    Dr. Kachalia. In your testimony, you described your review of
    the current evidence regarding the effective liability reform
    measures such as those contained in H.R. 5, you say for example
    there is not enough evidence to evaluate the impact of caps on
    the overall quality of care. I found the paper that you did in
    2008 very interesting. You wrote that with regard to problems
    of liability costs and quality, there is a growing awareness
    and this is a quote from your statement--your letter.
    ``Traditional tort reform measures such as caps on noneconomic
    damages will not solve them.'' You go on to say that ``There is
    also increasing recognition that such measures do little or
    nothing to make care safer. Would you agree then, Dr. Kachalia,
    that the grants program included in the Affordable Care Act
    that permits States to conduct pilot projects to test some of
    these methods is a sensible first step before we enact sweeping
    legislation that would impose a batter of tort reform
    provisions on all States? And kind of a yes or no, because I
    will...
        Mr. Kachalia. So----
        Mrs. Capps. Actually, I have time.
        Mr. Kachalia. So yes, I actually think the grants program
    that is being contemplated is a great thing because as we look
    to improve our liability system we should be looking to see how
    we can improve the quality of the safety of the care that we
    deliver at the same time. So as we--I think there is general
    recognition also that we need to fix the premium problem. We
    need to fix this issue with excessive economic awards, but at
    the same time there is no reason we couldn't package this with
    other measures that will also help with safety. So I think a
    grants program to investigate and give us more data on how to
    fix these problems is all--would be a welcome thing.
        Mrs. Capps. And to corroborate that, Ms. Doroshow, the
    Affordable Care Act does include grants and encourage States to
    experiment with various methods to address medical liability in
    their State. Of course in keeping with the way that we have
    always treated medical as a State and not a Federal issue, do
    you want to comment on the same kinds of programs that you have
    seen where States are kind of testing the waters to see if
    there are programs that they can implement at the State level?
        Ms. Doroshow. Yes, I mean a number of grants were made by
    HHS and we are waiting to see the results of those. Most of
    them are very focused on patients safety which I think is the
    correct way to go in solving this problem.
        Mrs. Capps. Thank you. And I yield back my time but I ask
    unanimous consent to insert in the record a letter from the
    Consumer Watchdog that clearly shows that caps alone did
    nothing to decrease medical malpractice premiums by the study.
        Mr. Pitts. Without objection, so ordered.
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        Mr. Pitts. Chair now recognizes the gentleman from
    Illinois, Mr. Shimkus, for 5 minutes.
        Mr. Shimkus. Thank you, Mr. Chairman. This is a really
    great hearing. I have been a Member since '96. We have dealt
    with this numerous times. And it is not an easy issue, and so I
    appreciate all the folks at the panel. First, Mr. Chairman, I
    would like to submit into the record two articles. One November
    14, 2010; March 9, 2011, New York Times, and I don't know who
    this was. And it----
        Mr. Pitts. Without objection.
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        Mr. Shimkus. It addresses an issue of loaning money, in
    essence usury and rates within the States. Let me read the
    paragraph: ``Large banks, hedge funds and private investors
    hungry for new and lucrative opportunities are bankrolling
    other people's lawsuits, pumping hundreds of millions of
    dollars into medical malpractice claims, divorce battles and
    class actions against corporations--all in the hope of sharing
    in the potential winnings.'' So they are using medical issues
    and there is a--actually, there really is a debate now in
    States and whether this is a State issue or Federal issue I am
    still going to try to reconcile that debate. It has been raised
    up, but States are--we are involved with credit card rates now
    here nationally. States are involved in loan sharking and
    payday loan issues and rates, so I would like to submit that.
    And I have got some other things, but Dr. Tippett, you are a
    neurosurgeon? Is that correct?
        Mr. Tippett. Yes, sir, I am a neurosurgeon.
        Mr. Shimkus. And in Illinois we have gone on and off of
    medical liability reforms and we just had one. It just got
    overruled by the Supreme Court. Now we are kind of in limbo
    until we see if anything else could pass. Before the last
    passage of State Liability Reforms we did not have a single
    neurosurgeon south of Springfield, Illinois, which is parts of
    52 counties. Now as a practitioner of that specialty that is a
    danger sign,s wouldn't you think?
        Mr. Tippett. Absolutely. You talk about--everybody's
    talking about what do we want to do about patient safety and I
    am thinking when you don't have someone there to take care of
    the patient it is not very safe. If you have got to travel 500
    miles to get to see a doctor, that is not safe.
        Mr. Shimkus. Fifty-two counties, yes.
        Mr. Tippett. We are all for patient safety, but you have to
    have the physician access.
        Mr. Shimkus. Yes, reclaiming my time. Fifty-two counties is
    a third of the State of Illinois, and at that time we would
    have to airlift folks who are in critical acts--I mean to
    airlift them 100, 150 miles maybe to New York--not New York to
    St. Louis, Dens Sens, maybe Paducah, to other places who had
    across the State line who had neurosurgeons because they had
    lower--and that is why I think if you hear the testimony of
    some of the members' concerns, we are from rural districts. We
    are from districts that have problems with access to care and
    that is where our passion for this debate comes from. So I
    just--I will put that on the table.
        The other thing I found interesting, Ms. Doroshow, and I
    appreciate your testimony. I appreciate you raising this issue
    of Dr. Lora Ellenson and the quotes in there and the story.
    Because I think if I ask this question to everyone--this is the
    doctor who has the disabled son that wants a judgment to be
    made to pay for the care of that son for the rest of his life.
    No one at this panel would disagree with that. Would you? Would
    you, Dr. Hollier? Would you disagree?
        Ms. Hollier. Would not disagree.
        Mr. Shimkus. Ms. Doroshow, would you disagree?
        Ms. Doroshow. Would not.
        Mr. Shimkus. Yes, Dr. Kachalia? You wouldn't disagree. Mr.
    Wolfman?
        Mr. Wolfman. No.
        Mr. Shimkus. Dr. Tippett?
        Mr. Tippett. Absolutely not.
        Mr. Shimkus. So no one would disagree with it. There is
    something that we can all agree upon. Now this debate is really
    about--and I am not a lawyer, OK, and sometimes I wish I was
    and sometimes I am glad I am not--but this is the issue of the
    second part of a medical liability claim which is pain and
    suffering. Now, this is in the issue because the Governor of
    New York is trying to cap pain and suffering at $250,000. Is
    that correct, Ms. Doroshow?
        Ms. Doroshow. That is--no. I mean, that was----
        Mr. Shimkus. Yes, that was in the story that you used it
    for?
        Ms. Doroshow. No, that is over it. That was withdrawn.
        Mr. Shimkus. OK, but it was.
        Ms. Doroshow. That was withdrawn.
        Mr. Shimkus. But it was----
        Ms. Doroshow. It was the hospitals that were on a refined
    scheme that----
        Mr. Shimkus. All right, do I want to read the story that
    you quote in your--do I want to read the story?
        Ms. Doroshow. Well----
        Mr. Shimkus. The story----
        Ms. Doroshow. Since I wasn't involved in it----
        Mr. Shimkus. OK. I don't want to fight this.
        Ms. Doroshow [continuing]. I can----
        Mr. Shimkus. The story is based on Cuomo had proposed
    capping at $250,000. That is part of the story that you used.
    And I don't want to go on that fight, but that is what raised
    this story was her concern of Governor Cuomo's.
        Ms. Doroshow. Well----
        Mr. Shimkus. Now the issue was this. Mr. Chairman, the time
    is mine. The time is not the ranking member of the full
    committee's, and I ask for my 15----
        Mr. Pitts. Shimkus----
        Mr. Shimkus [continuing]. Seconds returned based upon the
    disruption by the ranking member.
        Mr. Pitts. You may proceed.
        Mr. Shimkus. Thank you, Mr. Chairman. Now the issue is
    this, that in a court case what we should have--there is
    economic damages that should be recovered. This issue of pain
    and suffering is what is driving this. Now in California, one
    economic damage case recovered $96 million. So this debate is
    about the pain and suffering aspect that actuarially insurers
    can never quantify because there is no cap. Thank you, Mr.
    Chairman. I yield back my time.
        Mr. Pitts. Chair thanks the gentleman and recognizes the
    gentleman from New York, Mr. Weiner, for 5 minutes.
        Mr. Weiner. Thank you, Mr. Chairman. You know, I think that
    Mr. Gingrey's question earlier should inform our debate about
    who should make these decisions. Now Mr. Gingrey suggested in
    his questions that you should or he should, when in fact we
    have a history of jurisprudence in this country that empowers
    our constituents to make these decisions, that they are smart
    enough to send Mr. Gingrey to Congress, they should be smart
    enough to sit on a jury. Or alternatively they should be smart
    enough to pass State laws. It is interesting that in Mr.
    Gingrey's explanation of Constitutional authority for this
    bill, he writes the Constitutional authority in which this
    legislation is based is on Article I, Section VIII, Clause III
    of the Constitution as healthcare related lawsuits are
    activities that affect interstate commerce. If that is the
    explanation for trumping tort law in the States where does--so
    we can take this book--this is New Jersey's law and say that
    apparently Congress knows better. So we are going to trump
    State law. Like there is not a Federal tort regime now. It is
    basically they are in the individual States. It is the right of
    the States. The Tenth Amendment of the Constitution reserves
    this for the States. Why stop there? If we are not going allow
    the State to make health-related tort laws, then who is going
    to decide? I am impressed with Mr. Wolfman--and, by the way, I
    am not a lawyer, but if we ever had a law firm Wolfman and
    Weiner, I mean, we would just--I am serious, we would just get
    clients just on the sheer intimidation factor. But perhaps you
    can talk a little bit about the idea that there are some areas
    of the law that we reserve for the States and the effect that
    this would have on the regime of State tort law because
    frankly, we could really go to every extreme. You really could
    say that every court case can be decided in this room
    theoretically. I mean, if you are going to say, if you are
    going to trump State tort laws for this, where does it stop? Is
    there no line that you don't cross? I mean, I thought that part
    of the ethos of this new Congress was respect for the
    Constitution. I mean, this basically tramples on the Tenth
    Amendment worse than anything I have seen in awhile. You want
    to comment on that, Mr. Wolfman?
        Mr. Wolfman. Yes, Mr. Weiner, that--first of all you are
    right that the tort system has been traditionally one in which
    the State has had plenary authority. And let me just add and I
    think that this goes to the point that was asked to me earlier.
    What this bill does, it not only trumps the States, but it does
    it in entirely a one-way direction. So in other words, what it
    does is it is--it pretends that the State system will continue
    to exist and it only imposes Federal law when it undermines the
    rights----
        Mr. Weiner. Right.
        Mr. Wolfman [continuing]. Of people who are harmed. And
    that is--and let me make one other point. Now it is one thing
    to waive around a $96 million punitive--pain and suffering
    judgment. There is a big difference between 250,000 and 96
    million. That is what we are talking about. We are talking
    about the people who have to live for the rest of their lives
    with disfigurement, phantom pain, blindness--$250,000?
        Mr. Weiner. Well, and then there is the other question that
    I think is at the foundation and it is worth having a
    conversation here about. Who gets to make the decision? If you
    are patient in rural Georgia in Mr. Gingrey's district and you
    want a jury of your peers to hear your case or you are a doctor
    or you are a hospital and you want a jury of your peers to hear
    the case, under this law effect--under this proposal,
    effectively that jury is meaningless. If that jury comes to the
    conclusion and there are smart people in Georgia. There are
    smart people in Mr. Gingrey's district and they hear the
    evidence and they draw a certain conclusion, they are now going
    to be told that actually it doesn't really matter. That
    exercise, your State legislator that passed that law doesn't
    matter. The State legislature that approved it and the Governor
    that signed it--doesn't matter. That jury that sat--doesn't
    matter. The witnesses that were called--doesn't matter. The
    victim himself, his or herself doesn't matter as it relates to
    Georgia. It only matters as it relates essentially to big
    Washington. You are saying it is going to be in the Federal
    judicial system. And I would say that it is very hard for
    anyone to call themselves small government or respectful of the
    Constitution or concerned about states' rights and support the
    Gingrey measure. Because what you are really saying is all of
    those things we have heard about. Even the Texas law could
    theoretically be trumped tomorrow because we can just change
    the limit or change a word and suddenly Texas laws are thrown
    out. I mean, we have all these law books that are filled with
    what people have done. The Code of Virginia--all these
    different laws that were passed and now we are going to say
    that no, it is Washington that is going to make that decision.
    I, for one, find that offensive to the Constitution of the
    United States.
        Mr. Pitts. The gentleman's time is expired. The Chair
    recognizes the gentleman from Louisiana, Dr. Cassidy, for 5
    minutes for questions.
        Mr. Cassidy. Thank you. I will first by--end up by quoting
    or at least summarizing the gist of Mr. Weiner's speech from
    yesterday saying that we can't rely on State insurance
    commissioners to create standards because otherwise, I think I
    remember him saying, somebody in one State will define the
    lowest common denominator and there was a basic obligation of
    the people who set the kind of rules in which there needs to be
    rules of the road. So it seems a little contradictory. That
    said, Mr.--Dr. Kachalia, I enjoyed your brief, if you will. I
    am a physician so it is--I don't want to insult you by calling
    it a brief, no offense to the attorneys. But it was well-
    referenced. I like that. I also have here a chapter from a
    textbook on healthcare economics. And it is saying stuff that
    frankly I find very disturbing. Let us see, less than half of
    malpractice insurance premiums, one third of 1 percent of total
    healthcare, but less than half of malpractice healthcare
    premiums are returned to victims of negligence and the
    remainder is spent on overhead and legal fees. So it is less
    than half. I mean, the medical loss ratio in PPACA for
    insurance companies is 85-15 percent. This is something like 55
    going to overhead and 45 not. That is disturbing. It also goes
    on to say that there is limited evidence. Mr. Gonzalez
    suggested that the purpose as did you, Ms. Doroshow, the
    purpose of malpractice is the deter bad physicians, but this
    article goes on to say that there is limited evidence that bad
    physicians are removed through the malpractice system. Any
    comments upon that?
        Mr. Kachalia. If I can start, so starting with the overhead
    costs I do think that is one of the biggest problems that we
    have in our current system with the way the litigation process
    works you often have the need for expert testimony on both
    sides.
        Mr. Cassidy. So just to summarize that is money not going
    to victims of malpractice, it is money going to overhead?
        Mr. Kachalia. Correct.
        Mr. Cassidy. OK. Continue.
        Mr. Kachalia. Correct. And so this is one of the problems
    that we have noted in the system because there--we advocate it
    shows that there is a need for reform in this regard because it
    takes way too long and it is much too expensive to adjudicate
    claims. So that if we----
        Mr. Cassidy. If we have somebody who is a victim of
    malpractice, a sponge is left in the belly, then really there
    is a length of time before that is adjudicated, the patient
    gets relief, begins to get the extra dollars she may need for
    her recovery and an ordinate amount is consumed in overhead?
    Fair example?
        Mr. Kachalia. That can be a fair example although unless
    people are starting to settle much more quickly, but if they--
    if the provider chooses not to settle, yes, that is a fair
    example.
        Mr. Cassidy. OK. So Mr. Gonzalez's point that we are
    actually using the malpractice system to drive physicians out
    who shouldn't be practicing, do you think that is valid? Does
    that work?
        Mr. Kachalia. I don't remember his exact example but I am
    not sure that the medical malpractice system--because we don't
    see as many claims as one would expect for the amount of error
    that occurs. It may not necessarily be sending the right signal
    to all of the providers we want to send it to. I do think that
    to some extent it does impact people and does drive some
    accountability because people do worry about being sued. And I
    do think there is some accountability----
        Mr. Cassidy. Now, that accountability though--I am a
    physician, so one of the general surgeon says that when he goes
    to the emergency room it used to be a history and physical
    form. Now it is a history, physical, and CT scan form.
        Mr. Kachalia. Right.
        Mr. Cassidy. Because folks are so afraid if you come in
    with a headache you could have had the headache for 10 years,
    you are getting a CT scan. I see Dr. Tippett nodding his head.
    I think $1,000 test with lots of radiation, but that way if you
    are sued you have got the CT scan. In fact, fair to say it also
    drives some of that practice, too.
        Mr. Kachalia. I think it is fair to say it drives defensive
    practices and also drives accountability at the same time. The
    question is which one is being--which one is winning the battle
    so to say?
        Mr. Cassidy. Now, I also read in this article from an
    academic textbook that only 2 percent of negligence victims
    file claims, but 6 percent of patients who are not victims of
    negligence file claims. That is incredible. Dr.--Mr. Wolfman is
    looking kind of surprised. I can find the exact reference and I
    can show the chapter. But that apparently people who aren't
    victims of negligence 6 percent of the time file malpractice
    claims. Dr. Tippett, how would that impact your practice?
        Mr. Tippet. Well, it--I mean, you had the perfect example.
    You can't get into or out of my office without having an MRI
    scan these days and it is not because you need one necessarily
    when you come in, but because when we see a patient in the
    office we think of a differential diagnosis rather than just to
    that one thing like treat a simple back pain for a few weeks to
    see if they are going to get better because there is one in a
    thousand chance that patient may have a tumor in their spine we
    get an MRI scan. That is unnecessary, increasing the cost of
    medicine. It doesn't need to be done, but nevertheless it is
    exactly what occurs in every ER and every doctor's office in
    this country.
        Mr. Cassidy. I am sorry. I am out of time. I had a question
    for you, Ms. Doroshow and I forgot--one question, Dr. Hollier,
    why is it Hollier, not Hollier as in Louisianans?
        Ms. Hollier. It is Hollier, sir.
        Mr. Cassidy. Thank you very much. I just--warms my heart.
        Mr. Pitts. Chair thanks the gentleman. Recognizes
    gentlelady from Illinois, Ms. Schakowsky for 5 minutes.
        Ms. Schakowsky. Dr. Tippett, you just said that you perform
    unnecessary procedures?
        Mr. Tippett. That is not what I said.
        Ms. Schakowsky. Yes, you used the word unnecessary.
        Mr. Tippett. No.
        Ms. Schakowsky. We could go back and ask for a reading of
    the transcript, but you said that----
        Mr. Tippett. Unnecessary at that particular time.
        Ms. Schakowsky. Uh-huh.
        Mr. Tippett. It is a necessary procedure in the
    differential diagnosis that I mentioned earlier, so it is not
    unnecessary. It is the question of timing. My point was----
        Ms. Schakowsky. But you are saying--now you are saying it
    is unnecessary because I want to know if you--when you do that
    you order--if you order something that is medically unnecessary
    do you also bill Medicare and Medicaid for or private insurance
    for this work?
        Mr. Tippett. I don't order tests that are unnecessary.
        Ms. Schakowsky. Excuse me?
        Mr. Tippett. I don't order tests that are unnecessary.
        Ms. Schakowsky. Well, OK, you said it was absolutely
    unnecessary. I wanted to just----
        Mr. Tippett. At that particular time. I am sorry I was
    trying to be brief in my comments----
        Ms. Schakowsky. Yes, exactly.
        Mr. Tippett [continuing]. And I did not add to the----
        Ms. Schakowsky. You said no one leaves your office without
    getting an MRI because--and the implication was because you
    want to avoid litigation. And what I am asking you if you are
    billing Medicare, Medicaid, or private insurance for these
    procedures that you view to be unnecessary.
        Mr. Tippett. I didn't say I viewed them to be unnecessary.
        Ms. Schakowsky. You did.
        Mr. Tippett. I said--no, ma'am, I did not finish the
    sentence earlier when I said that test wasn't necessary at that
    particular time.
        Ms. Schakowsky. No, you didn't. OK.
        Mr. Tippett. It is a necessary test to determine whether or
    not someone has a tumor was my entire----
        Ms. Schakowsky. Yes, I actually wanted to start what I was
    saying until I heard that disturbing sentence--those disturbing
    remarks that actually I think there might be a way that we
    could be on the same side with doctors. This is not a war
    between doctors and lawyers. This is about people that get
    hurt. Now what--it is so interesting to me that injured
    patients become the focus. And we are going to take it out on
    them rather than looking at the insurance companies. And why it
    is that you who have maybe never been sued and doctors, the
    small number who actually may engage in dangerous behavior that
    causes patients to be injured, why you are asked to pay the
    similar insurance? I--there is--it doesn't-- I don't believe
    there is experience rating in medical malpractice insurance. Is
    that true, Ms. Doroshow?
        Ms. Doroshow. Right, it is rated by specialty primarily
    now.
        Ms. Schakowsky. You know which really, I think is unfair.
    All of us want to see that obstetrician gynecologist, and
    neurosurgeons are able to practice where they want to practice
    without and without any distinction from the bad actors that
    are in those professions. And we all admit that there have to
    be those. So what I wanted to ask Mr. Wolfman or Ms. Doroshow,
    will capping damages, that is actually making sure that the
    real victims lead to lower rates?
        Ms. Doroshow. Well, if history is any guide at all, it
    absolutely won't. You look at State after State. Missouri for
    example, Maryland both had severe caps in the mid-80s. They
    experienced very severe insurance crises in the early part of
    the 2000s. Missouri's rates went up 121 percent. This is true
    in every State. Ohio passed caps. The insurers immediately went
    in; asked for rate hikes. Oklahoma the same thing. Mississippi
    the same thing. In Texas they would be--after 2003 the cap
    passed. The insurers immediately went in for rate hikes. Until
    the market stabilizes and it happens everywhere in the country
    irrespective of a State's tort law. States will--rates will
    continue to go up. That is an insurance problem that needs to
    be fixed.
        Ms. Schakowsky. Exactly and I think that we are absolutely
    looking in the wrong direction and if we want to help doctors
    to be able to in their view afford to practice where they want
    to practice, to say to people whose lives have been permanently
    altered that the burden is now going to be on you. And by the
    way, $250,000 which was a number decided in California years
    and years ago would be a million dollars now. So we are not
    even talking about a situation where we are going to be able to
    people--to have people restore their lives. I think if we could
    work together on figure--on pointing our finger in the right
    direction that this is an insurance problem--it has already
    been stated that most people, and you stated it yourself, Dr.
    Kachalia, that not as many injured people actually file claims.
    A very small percent do because you know it is laborious, it is
    expensive, it is hard to do.
        Mr. Kachalia. It is not as if you want me to comment, but I
    do think there is a premium problem, but there is also the
    issue of the emotional cost of a suit that gets attached and
    the behaviors that result from it. So it is not just all about
    premiums.
        Ms. Schakowsky. Well, there is a lot of emotion attached to
    having the wrong breast removed or yes. Um-hum.
        Mr. Pitts. The gentlelady's time has expired. Chair now
    recognizes my colleague from Pennsylvania Dr. Murphy for 5
    minutes.
        Mr. Murphy. Thank you, Mr. Chairman. A few questions here.
    First, Mr. Wolfman, I am trying to understand this--how this
    works. Is there a correlation between unlimited noneconomic
    damages and unlimited punitive damages in improvement in
    healthcare?
        Mr. Wolfman. I think the answer to that is yes with one
    caveat. I mean, that----
        Mr. Murphy. Do--was there a study that you could refer us
    to? I would have actually looked to see that. I am not looking
    for you to--I am not going to put you on the spot with a guess.
        Mr. Murphy. There are. There are some famous studies on
    punitive damages that show some relationship. I just--with the
    word unlimited, but yes and I can get those to the committee.
        Mr. Murphy. I mean, I am not talking about a single award
    that is given in a case, but I mean overall?
        Mr. Wolfman. Yes, yes.
        Mr. Murphy. You think you can do that for us? Thank you. So
    in other words feel that when we have the ability for higher
    damages or punitive damages not economic damages we could--
    expect to see overall improvement in healthcare driven by that
    factor separate from other things?
        Mr. Wolfman. As I understand what you are saying I think
    the answer is yes and I can get that to the committee.
        Mr. Murphy. OK. Now, is there also a correlation then
    between the more an attorney gets paid and an improvement in
    healthcare?
        Mr. Wolfman. I think the answer to that is yes and no and I
    think it is not an easy answer that what I--the point I was
    making about lawyer compensation through our contingent fee
    system is that if you have rates that are driven by the
    Congress of the United States that are way below the market
    which is what this bill does you are not going to attract
    lawyers to take important difficult cases. You are not going to
    get the best lawyers on the most difficult cases particularly
    the cases for instance older people who have no wage income,
    people whose income so to speak would decide----
        Mr. Murphy. And the attorney wouldn't have the money to
    really advance this case. I understand that point.
        Mr. Wolfman. Right, that is the problem. So it----
        Mr. Murphy. You have a delay--this goes back----
        Mr. Wolfman. Your correlation that you are talking about
    I--with all respect doesn't ask the right question.
        Mr. Murphy. Well, I mean----
        Mr. Wolfman. The question is whether the market is going to
    attract people to take difficult cases.
        Mr. Murphy. It is important because then you would have the
    justice delayed is justice denied issue. Well, let us talk
    about that market. I know in Pennsylvania we have some serious
    problems with attracting neurologists and OB-GYNs to the
    market. And for some of the physicians here perhaps some of you
    can enlighten me on this, but I know when I have seen in States
    they list the number of people who have a medical degree or
    license in that State. My understanding they will look at all
    licenses including the residents and interns, semi-retired
    physicians and even those who may still have a license in
    Pennsylvania but have moved down to South Carolina or somewhere
    else to retire in. Is that correct? Can anybody--I see some
    heads nod that is correct.
        Mr. Tippett. That is correct.
        Mr. Murphy. I also hear from some top medical schools--I am
    on the faculty of the University of Pittsburgh School of
    Medicine. I should disclose that--the Department of Pediatrics.
    And one of the things I hear from some other departments is for
    example, they will have an entire class year after year of
    graduates from a top level residency program in OB-GYN and not
    a single one of those residents remains in Pennsylvania. So I
    go to this question then if we don't have OB-GYNs and I have
    friends of mine who are neurologist say they have spent years
    trying to attract a neurologist to join their practice. I have
    some neurologists here in front of us. If you don't have enough
    people to treat patients, what does that do in terms of
    delaying care? Anybody answer that for me or enough OB-GYNs in
    a practice to delay--does that affect care?
        Ms. Hollier. Absolutely. If you don't have available
    obstetrician gynecologists care is definitely affected. Imagine
    being 9 months pregnant in Blanco County that had no
    obstetricians prior to the passing of----
        Mr. Murphy. And why don't they want to stay in that State?
        Ms. Hollier. OB-GYN doctors do want to stay in the State of
    Texas.
        Mr. Murphy. But what are--is the cost of medical liability
    insurance part of that overall concern in one State versus
    another and they can leave and go to another State?
        Now I go back to Mr. Wolfman's comment at the crux of not
    going forward with H.R. 5 as you affect the marketplace. So I
    ask the physicians, does this affect the marketplace to not
    deal with this issue? Dr. Tippett?
        Mr. Tippett. Well, absolutely.
        Mr. Murphy. Dr. Kachalia, does that affect the marketplace?
        Mr. Kachalia. I mean I will reiterate. I think we need
    reform. It is going to help the marketplace.
        Mr. Murphy. Ms. Doroshow, you have a comment you want to
    make?
        Ms. Doroshow. Well, you know Michelle Mello from Harvard
    actually did a study of Pennsylvania doctors and compared
    access to care in Pennsylvania before and after the most recent
    liability insurance crisis when rates went up.
        Mr. Murphy. Um-hum.
        Ms. Doroshow. And found there is no connection whatsoever.
        Mr. Murphy. Between amount of physicians?
        Ms. Doroshow. It is in my----
        Mr. Murphy. Yes, I appreciate that. I was a State Senator
    at the time and that is why I was saying that point before.
        Ms. Doroshow. You should take a look at that study.
        Mr. Murphy. If they count the number of physicians
    available in Pennsylvania, look at all licenses and that is a
    distorted statistic. I just want information, the truth, and it
    is--but I appreciate and Mr. Wolfman if you could get me those
    studies I would really be grateful. Thank you. I yield back.
        Mr. Pitts. Chair thanks the gentleman and now recognizes
    the Ranking Member Emeritus, Distinguished Gentleman from
    Michigan, Mr. Dingell for 5 minutes for questions.
        Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
    Professor Wolfman, you described in your testimony the sad
    story of Diana Levine who lost her arm as a result of an
    inadequate labeled drug. Here is a case of noneconomic damages
    and it is--we find it quite overwhelming. The lady in question
    was a musician by trade. Without her arm it is doubtful she
    will ever be able to return to her profession. She found as you
    indicated a small town Vermont lawyer who took the manufacturer
    all the way to the Supreme Court. In fact, I was one of those
    who joined a number of my colleagues in signing an amicus
    curiae Brief in support of the Levine case. I find it haunting
    as her lawyer hesitatingly admitted that her case might never
    have brought to court had a $250,000 noneconomic damages cap
    been in place. Obviously it isn't every day that cases are
    taken all the way to the Supreme Court, and I hope it isn't
    every day that people suffer the kind of loss that she
    suffered.
        Now, Professor Wolfman, can you provide some other examples
    of the types of cases that you have seen dealing with FDA
    approved drugs and medical devices?
        Mr. Wolfman. Yes, I can, Representative Dingell, and what I
    would like to do is if I could direct your attention to my
    testimony and I will just--I know the time is short, so but
    beginning at page 12 of my testimony I talk about a number of
    other examples and one that I think is similar to the problem
    of Ms. Levine is the case of Karen Bartlett. She took an anti-
    inflammatory drug and these were in the same family of drugs as
    cause terrible problems and were taken off the market, the
    NSAID drugs. She ended up having all these complications
    including blindness. I think it is just awful and it is
    described in some detail, page 14 of my testimony. But the
    defense put up by the company was--required 50 pretrial
    motions, 50 motions during trial. She had to hire four expert
    witnesses, a pharmacologist, a burn surgeon, economist, a life
    care planner and then there was another 50 post trial motions
    after the verdict came in. Now, no rational lawyer could take
    that case given the enormous amount of noneconomic damages.
        Mr. Dingell. First off the preparing of the Briefs and the
    appearing of the filing of the papers and paying witness fees
    and a wide array of other things, the cost of that had to be
    astronomical.
        Mr. Wolfman. Right. And so--and yes she got a significant
    noneconomic damage award, $16 million, but she is going to live
    blind her whole life. But the point is is that no rational
    lawyer knew the result going in, no rational lawyer would take
    that meritorious case if the limit was $250,000. It is very--it
    is much easier to attack these kind of awards after the fact
    and that is the economic problem, the economic problem in
    looking at it from an after the fact perspective.
        Mr. Dingell. Thank you very much. Now, Dr. Kachalia, you
    work as a physician at Brigham and Women's Hospital and Harvard
    Medical School. I am interested in your perspective on this
    legislation. Does capping of liability of pharmaceutical
    companies protect physicians from lawsuits?
        Mr. Kachalia. So, the question is in regard to how I feel
    about the capping with the?
        Mr. Dingell. Yes, does it--does capping of the liability
    protect you from lawsuits? Yes or no.
        Mr. Kachalia. Well, if you look at the data here, it seems
    that the capping liability does not seem to lower the number of
    claims, so it may not protect us from lawsuits.
        Mr. Dingell. Just--I have limited time. Yes or no?
        Mr. Kachalia. No.
        Mr. Dingell. All right, it seems that making drug companies
    less responsible would not help doctors. With--is it your
    opinion that this would interfere with your deciding what
    medication is best for your patient? Yes or no?
        Mr. Kachalia. Is my question what--I am sorry. Could you
    repeat the question one more time?
        Mr. Dingell. Well, it may-it is my view that capping of
    these risks may actually encourage drug companies to withhold
    safety data that you could use to best determine what
    medication is necessary for your patient. Is that a correct
    assumption on my part or not?
        Mr. Kachalia. I mean it is a possibility any time you cap a
    company's liability.
        Mr. Dingell. Thank you. Thank you. Now, well, thank you. I
    notice my time is up. Thank you, Mr. Chairman.
        Mr. Pitts. Chair thanks gentleman. The chair will now
    recognize the Vice-Chair of the Full Committee, gentlewoman
    from North Carolina Mrs. Myrick for 5 minutes.
        Mrs. Myrick. Thank you, Mr. Chairman. I would like to ask a
    question to Doctors Tippett and Hollier. Is that correct? Can
    you speak to the savings to the overall system that would
    result if a national medical liability law like H.R. 5 went
    into effect? And I ask that because there have been estimates
    that defensive medicine costs our Nation up to 200 billion a
    year. And according to the Congressional Budget Office's recent
    publication Reducing the Deficit Spending and Revenue Options,
    comprehensive medical liability reform would reduce the budget
    deficit by $62 billion over 10 years. Dr. Tippett, you want to?
        Mr. Tippett. Well, I think that--I think that figure tells
    us that it is difficult to quantitate the exact amount. And I
    can only speak to my own personal knowledge. I see it happen
    every day in which tests are ordered that as I said earlier if
    given proper time if you weren't forced to do so because of
    your fears that someday if you didn't think of every possible
    diagnosis you wouldn't have ordered that test. But maybe I see
    patients all the time that I am trying to operate on and they
    have to have a cardiology clearance when everybody knows they
    don't really need a cardiology clearance but it is because of
    some mild thing, an EKG. I mean, you could go on and on. There
    is a huge cost and I see every day that increases the cost to
    you and me and to everyone else who tries to pay but because of
    a fear of being sued.
        Mrs. Myrick. Dr. Hollier?
        Ms. Hollier. Representative Myrick, I think H.R. 5 would
    produce important cost savings. What we have seen in Texas
    after the passage of liability reform is that a number of
    healthcare systems had had significant liability savings and
    they have reinvested those savings in new technology, in
    patient care, and in patient safety initiatives.
        Mrs. Myrick. Do you think the current medical professional
    liability system makes you a better or a safer doctor by acting
    as an incentive to practice good medicine? Both of you again.
        Mr. Tippett. Shall I go first? Well, I think the perfect
    example and I have heard over and over today how if you get--
    have these lawsuits then it is going to get rid of the bad
    doctors in the system. And I think about a pole that we just
    did among the leaders of neurosurgery in the United States. One
    hundred of our best cream of the cream leadership in
    neurosurgery almost all of them academics, 25 percent had been
    sued between four and seven times for liability. Twenty-five
    percent--does that mean we need to get rid of all of those 25
    percent? Are they bad doctors? Well, obviously not. They handle
    the complex cases. They take care of the most difficult
    patients. It is absurd.
        Mrs. Myrick. Yes, that is a challenge in our community, too
    with our neurosurgeons in particular when--because it is a
    large hospital that does handle very complicated cases and not
    just--I mean, nothing is run of the mill when it comes to your
    brain and neurology et cetera, but it is a real concern. And we
    are seeing people who are--some of my friends who are in their
    late, maybe mid-50s and they are telling me over and over again
    both in OB-GYN and neurology or neurosurgeons that they are
    going to retire and we are losing--we stand a really strong
    shot of losing some really good top notch doctors. And doesn't
    mean that others will take their place, but they are telling me
    that the younger people aren't coming into their professions.
    And so there is this you know, what are we going to do to
    service the population? And that really is where I am coming
    from when I talk about is there a way to bring this under
    control so we don't have some of the so called defensive
    medicine. I appreciate your time and being here today. Thank
    you all. And I yield back.
        Mr. Pitts. Chair thanks----
        Mr. Burgess. Will you yield?
        Mr. Pitts. Go ahead.
        Mrs. Myrick. Yes.
        Mr. Burgess. I thank the gentlelady for yielding. Ms.
    Doroshow, I need to ask you a question about your testimony
    about McAllen, Texas. I am aware of Dr. Gandhi's article. I
    don't know if you are aware and I apologize for not having it
    here, but he has written a subsequent article where he
    questions some of his own conclusions on that. But because of
    the article that Dr. Gandhi wrote a couple of years ago I went
    to McAllen, Texas, and visited with the doctors down there. The
    question before me was are doctors in McAllen, Texas over
    utilizing in order to overbill Medicare? And I think what Dr.
    Gandhi thought--found in his subsequent relook was that it is
    the publicly financed systems of medical care, Medicare,
    Medicaid, SCHIP which seem to be prone to this type of
    difficulty. You rarely see Aetna, Cigna, and United sending
    wheelchairs to patients who don't need them. So something about
    the precertification process was helpful there. But the other
    thing and the reason that medical liability reform was
    important in the equation was nobody practiced in McAllen prior
    to 2003. The reason there are so many urological procedures
    done now in McAllen is they hadn't had a urologist for over a
    decade. There was a lot of pathology that had gone undiagnosed
    and untreated. So it is not just a simple equation as these
    sometimes draw. The President I know ahs made a big deal of
    this that Texas proves that medical liability reform does not
    bring down costs. I would say those two statements are true,
    true, and unrelated. McAllen is a different location because of
    some of the problems that were brought because of medical
    liability. Thank you, Mr. Chairman. I will yield back.
        Mr. Pitts. Chair thanks the gentleman and recognizes the
    gentleman from Kentucky, Mr. Whitfield, for 5 minutes for
    questions.
        Mr. Whitfield. Thank you, Mr. Chairman. I want to thank the
    witnesses for being here today. We appreciate your taking time
    to discuss this with us. Since I was not here, maybe you have
    already covered this and if you have that will be fine, but it
    is my understanding that many medical students when they are
    looking for their specialty that one of the considerations that
    they look at is liability. And we know that a large percentage
    of OB-GYN physicians are sued. We know that neurosurgeons are
    sued and Dr. Hollier, you responded to that. Would you agree
    that that is an issue with--I mean, what I am concerned about
    we may be getting in some specialty areas that may have a
    shortage in the future perhaps.
        Ms. Hollier. It is an important concern. I have been
    counseling medical students in conjunction with UT Houston
    Medical School for a number of years both before and after the
    liability reforms in Texas. Before the reforms, one issue that
    always came up in speaking with medical students was their
    concern about entering the field of obstetrics because of the
    medical liability. They were seeing practicing OB-GYNs having
    to close their offices and stop practicing obstetrics at very
    young ages and that is not a future that they wanted.
        After the medical liability reforms, my counseling sessions
    are very different and medical students have a renewed interest
    in our specialty preserving the healthcare limit for the
    future.
        Mr. Whitfield. Dr. Burgess, I would be happy to yield
    additional time if you would like it.
        Mr. Burgess. And I thank the gentleman for yielding. Dr.
    Tippett, you were starting to talk about patient safety a
    moment ago and how the impact of medical liability reform may
    in fact advance the cause of patient safety and just like you,
    I mean, I can recall multiple anecdotes from the past. But one
    of the most striking for me was my very first year in Congress.
    I wasn't on the Health Subcommittee of Energy and Commerce, I
    was on the Transportation Committee, because that is where
    doctors go when they come to Congress. And the chairman at that
    time was a gentleman from Alaska and one afternoon I found
    myself in Nome, Alaska, with the chairman and he had sort of a
    Chamber of Commerce luncheon. I was seated at a table of
    doctors and they were all excited about the fact that we might
    pass medical liability reform in Washington. And I said, so is
    it a problem here? They said it is an enormous problem. So I
    asked the gentleman sitting next to me what type of medicine do
    you practice? He said well, just like you I am an OB-GYN. And
    he said we can't get an anesthesiologist up here because of the
    problems with medical liability. I said wait a minute, Bubba,
    you can't practice OB-GYN without an anesthesiologist. What--
    forget an epidural in labor--what do you do if you have to do a
    C-section? He said we have to get them on an air ambulance and
    get them to Anchorage. I mean, that is 400 miles away, and this
    was in the middle of the summer and some of the worst weather I
    had ever seen in my life. I got to believe it is worse in the
    winter. How is patient safety advanced by putting a mother on
    an air ambulance to Anchorage, Alaska, from Nome? I mean, that
    is the sort of thing we are talking about. Is that not correct?
        Mr. Tippett. Yes, sir, it certainly is. And you can go on
    from there. The trauma system in our country is so dependent on
    immediate, immediate availability of the critical specialties.
    You have seen that in your own body here in the last few months
    of what happens when you have the immediate availability of a
    neurosurgeon and others to take care of something like a head
    injury or a gunshot wound. If that goes away then you lose all
    of this. I applaud my dermatology colleagues but they really
    can't take care of a blunt gunshot wound to the brain when it
    comes in. And when we have medical students who are purely
    interested in going to dermatology now it really worries me.
    And when you have neurosurgeons who 68 percent of them are not
    doing Pediatric neurosurgery anymore it is not because they
    don't want to. It is because of the long problems that you have
    with statute of limitations and other things with taking care
    of child. It is a travesty.
        Mr. Burgess. Yes, sir, and you know in Texas right before
    we passed the reforms in 2003, the Dallas-Fort Worth area lost
    one of its two neurosurgeons because of the renewal for their
    liability premium. It was well into six figures. It was a
    fantastic amount of money. He said I can't do it. I am not. I
    am going to go work, get an academic medical center somewhere.
    We had one neurosurgeon. It put the entire trauma system of the
    Dallas-Fort Worth Metroplex at risk because one guy cannot
    cover an area of four million people 24 hours a day, seven days
    a week. And we were at risk of losing our trauma designation.
    So it--I mean, these are real world--patient safety isn't going
    to be advanced if that happens. Is that correct?
        Mr. Tippett. That is absolutely correct. I can cite--I mean
    half the neurosurgeons in South Florida for example can't
    afford to have liability insurance. As we said here today they
    are having to self insure. And I talk to neurosurgeon after
    neurosurgeon. A young one goes down to Miami to practice and
    says I just can't take the emotional stress of not having
    liability. I mean you can imagine with the hatchet hanging over
    your head every day you just can't take it. And you could go on
    and on around the country. We are at great risk not only of
    having young people not go into the various specialties, but
    also having them limit their practice after they do. We have a
    big problem in neurosurgery now with neurosurgeons saying I am
    just going to become a spine surgeon. I am not going to take
    care of cranial problems. And it is purely because of this and
    other issues which we are talking about something to try to do
    something to correct that right now.
        I keep hearing all of this about we don't have any evidence
    and I keep--I am a country neurosurgeon, but it looks to me
    like 35 years of experience in California is a pretty good
    example of how things work. And I haven't really seen a lot
    patient people leave California because they didn't get
    $250,000 cap. And I also haven't seen plaintiffs' attorneys go
    away in California in the last 35 years. They all seem to be
    doing pretty well.
        Mr. Pitts. The gentleman's time is expired. Chair
    recognizes gentleman from New Jersey, Mr. Lance for 5 minutes.
        Mr. Lance. Thank you very much. Let me just say that in New
    Jersey we really do not have medical malpractice insurance
    reform the way it exists in States like California and Texas.
    And we have among the highest health insurance costs in the
    nation. In some surveys we are really at the top which is of
    course extremely expensive for everyone--our residents and the
    business community. And this is an issue of great importance
    and I support what we are trying to do here. And I know that
    Dr. Burgess has other questions and Mr. Chairman, I would ask
    that my term-time be given to Dr. Burgess.
        Mr. Burgess. I thank the gentleman for yielding. Mr.
    Wolfman, you cite some rather dramatic examples in your
    testimony. I got to tell you administration of Phenergan
    entering a course of a therapeutic event is something I saw I
    don't know how many tens of thousands of times during my
    professional career. True enough there can be a rare but severe
    reaction which is what you mentioned in your papers. Stephens-
    Johnsons syndrome, a fixed drug eruption doesn't happen very
    often. When it does it is so dramatic you will never forget it.
    Is it possible to construct a system to help people who are
    harmed by the extremely rare outliers and not punish everyone
    else along the way?
        Mr. Wolfman. I don't know the answer to, you know,
    everything that you might do to construct a person--perfect
    health care system with a perfect set of incentives, but let me
    just say this. Going back to the Phenergan issue, no question
    Phenergan is used, you know frequently. It was the method of
    administration that wasn't warned against. The company had
    evidence----
        Mr. Burgess. But to be fair there and we have another OB-
    GYN on the panel. I mean, I cannot tell you how many times I
    ordered the administration of Demerol and Phenergan
    intravenously for someone who was in pain.
        Mr. Wolfman. Well, the FDA says it is not a good idea and
    the--one of the competitors of Wyeth said it was not--shouldn't
    be done, either. But I--the point is, is that these cases--I
    tried to be fair in my testimony. I put out five examples. You
    could use many others. Two of them went to defendants'
    verdicts. You know, the point was that these were all cases
    that were, you know, reasonable cases to the ball--all cases in
    the ballpark. None of those cases would have been brought if
    there was a $250,000 cap.
        Mr. Burgess. But it was reasonable not to bring a case, but
    these are cases that represented the extremes of incidents in
    medical practice.
        Mr. Wolfman. Right.
        Mr. Burgess. Should we be legislating to the extreme? Is
    that the type of--is that the type of system that will yield
    the best, most cost effective result?
        Mr. Wolfman. Well, I think the--again there is two
    questions there. One is, are you creating the proper incentives
    for the physicians? Also are you properly compensating the
    victim of the problem? I don't agree and we could be here all
    day saying that these were extreme situations. I think in these
    instances, for instance in Ms. Levine's situation you had a
    potentially very, very serious side effect that was greatly
    augmented by the way it was administered and she came into the
    hospital with a headache. So the risk benefit wasn't
    appropriately calculated in that situation because the company
    failed to warn about the method of administration.
        Mr. Burgess. Let me just interrupt you a second to
    Hollier--do you still give Demerol and Phenergan to women in
    labor?
        Ms. Hollier. Yes, sir.
        Mr. Burgess. And is it sometimes administered through an
    IV?
        Ms. Hollier. Yes, sir.
        Mr. Burgess. OK. I just wanted to make sure I hadn't
    missed----
        Mr. Wolfman. No, no, no----
        Mr. Burgess. Shouldn't--hadn't missed something in the last
    8 years.
        Mr. Wolfman. No----
        Mr. Burgess. I appreciate the continuing of this case and I
    am going to mark that down as one of my----
        Mr. Wolfman. With all respect, that--with all respect, that
    was the problem. Ms. Levine didn't get it through an IV. The
    testimony was clear even from the defendant's witnesses that if
    it had been administered through IV it was virtually certain
    that she would not have been harmed.
        Mr. Burgess. Let me ask you a question because you seem to
    have a beef with the Food and Drug Administration. And I will
    just tell you right now we are up against a significant problem
    in this country. The Food and Drug Administration has gotten so
    risk adverse that virtually nothing can get through. We heard
    from medical device manufacturers here in one of our other
    subcommittees the other day. There is an enormous amount of
    human suffering and the potential for curing disease that is
    essentially being left on the shelf in the pipeline going to
    other countries. Some panel--we have to work together to find a
    way to stop this top-heavy, top-down, centralized punitive
    activity that is going on at the Food and Drug Administration.
    And unfortunately from some of the testimony you provide us
    here today I don't see us moving in that direction. We have got
    to work past this. These are not people who are bringing
    devices to the market that want to harm someone. These are not
    companies that are developing spending millions of dollars on
    developing new medications to harm someone. They are trying to
    alleviate human suffering and cure problems and prevent
    problems, and we have made the landscape almost unnavigable for
    particularly the small device manufacturers. But I will speak
    with the pharmaceutical industry. And thank you, Mr. Chairman.
    I will yield back.
        Mr. Pitts. Gentleman's time is expired. This has been an
    excellent panel. In conclusion I would like to thank all of the
    witnesses and the Members that participated in today's hearing.
    And I remind Members that they have 10 business days to submit
    questions for the record. Members should submit their questions
    by the close of business on April 20, and I ask that the
    witnesses all agree to respond promptly to these questions.
    Thank you again for the excellent testimony, and this
    subcommittee is now adjourned.
        [Whereupon, at 11:52 a.m., the subcommittee was adjourned.]
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