[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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