[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 U.S. GOVERNMENT PRINTING OFFICE 71-612 WASHINGTON : 2013 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 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:] [GRAPHIC] [TIFF OMITTED] T1612.003 [GRAPHIC] [TIFF OMITTED] T1612.004 [GRAPHIC] [TIFF OMITTED] T1612.005 [GRAPHIC] [TIFF OMITTED] T1612.006 [GRAPHIC] [TIFF OMITTED] T1612.007 [GRAPHIC] [TIFF OMITTED] T1612.008 [GRAPHIC] [TIFF OMITTED] T1612.009 [GRAPHIC] [TIFF OMITTED] T1612.010 [GRAPHIC] [TIFF OMITTED] T1612.011 [GRAPHIC] [TIFF OMITTED] T1612.012 [GRAPHIC] [TIFF OMITTED] T1612.013 [GRAPHIC] [TIFF OMITTED] T1612.014 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. 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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. 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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:] [GRAPHIC] [TIFF OMITTED] T1612.140 [GRAPHIC] [TIFF OMITTED] T1612.141 [GRAPHIC] [TIFF OMITTED] T1612.142 [GRAPHIC] [TIFF OMITTED] T1612.143 [GRAPHIC] [TIFF OMITTED] T1612.144 [GRAPHIC] [TIFF OMITTED] T1612.145 [GRAPHIC] [TIFF OMITTED] T1612.146 [GRAPHIC] [TIFF OMITTED] T1612.147 [GRAPHIC] [TIFF OMITTED] T1612.148 [GRAPHIC] [TIFF OMITTED] T1612.149 [GRAPHIC] [TIFF OMITTED] T1612.150 [GRAPHIC] [TIFF OMITTED] T1612.151 [GRAPHIC] [TIFF OMITTED] T1612.152 [GRAPHIC] [TIFF OMITTED] T1612.153 [GRAPHIC] [TIFF OMITTED] T1612.154 [GRAPHIC] [TIFF OMITTED] T1612.155 [GRAPHIC] [TIFF OMITTED] T1612.156 [GRAPHIC] [TIFF OMITTED] T1612.157 [GRAPHIC] [TIFF OMITTED] T1612.158 [GRAPHIC] [TIFF OMITTED] T1612.159 [GRAPHIC] [TIFF OMITTED] T1612.160 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. 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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. [The information follows:] [GRAPHIC] [TIFF OMITTED] T1612.199 [GRAPHIC] [TIFF OMITTED] T1612.200 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. [The information follows:] [GRAPHIC] [TIFF OMITTED] T1612.201 [GRAPHIC] [TIFF OMITTED] T1612.202 [GRAPHIC] [TIFF OMITTED] T1612.203 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. [The information follows:] [GRAPHIC] [TIFF OMITTED] T1612.248 [GRAPHIC] [TIFF OMITTED] T1612.249 [GRAPHIC] [TIFF OMITTED] T1612.250 [GRAPHIC] [TIFF OMITTED] T1612.251 [GRAPHIC] [TIFF OMITTED] T1612.252 [GRAPHIC] [TIFF OMITTED] T1612.253 [GRAPHIC] [TIFF OMITTED] T1612.254 [GRAPHIC] [TIFF OMITTED] T1612.255 [GRAPHIC] [TIFF OMITTED] T1612.256 [GRAPHIC] [TIFF OMITTED] T1612.257 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. 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