[Congressional Record Volume 143, Number 142 (Tuesday, October 21, 1997)]
[Extensions of Remarks]
[Page E2021]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            TO SAVE HEALTH CARE REQUIRES MALPRACTICE REFORM

                                 ______
                                 

                         HON. WILLIAM M. THOMAS

                             of california

                    in the house of representatives

                       Tuesday, October 21, 1997

  Mr. THOMAS. Mr. Speaker, why do we need malpractice reform? Without 
it, the health care industry as a whole faces greater inflation and 
increases in costs, costs which Americans can not afford. With reform, 
however, both the consumer and medical practitioner alike benefit, both 
fiscally and physically.
  Medical malpractice costs have risen 49 percent since 1990. At 
present, the estimated cost of such malpractice insurance is more than 
$9 billion annually, and the costs continue to mount. Add to this 
number the billions of dollars for defensive medicine, and tort 
litigation becomes a major contributor to the financial woes of the 
health care industry. In reforming the tort system, we will free up 
funds and lower the costs of overall health care.
  A recent study performed by Stanford University professors David 
Kessler and Mark McClellan provides compelling evidence of the numerous 
cost-effective benefits of tort reform. By examining nearly almost 2 
million cases of coronary illness among the elderly, over a time period 
spanning approximately 6 years, these analysts concluded that the 
Federal Government would have saved $600 million a year in Medicare 
expenditures on heart disease alone. In fact, the annual overall 
savings projected by the study totaled $10 billion to Medicare, an 
important reason why tort reform should be part of any effective 
strategy to save Medicare from bankruptcy. Even more phenomenal, 
however, are the figures projecting overall savings for the health care 
industry. By implementing tort reform, Kessler and McClellan estimate 
an astounding $50 billion in savings to the health care industry as a 
whole.
  Defensive medicine significantly forces up medical costs. Defensive 
medicine is the practice of ordering extra tests on patients in order 
to protect the health care provider from the risk of being sued. Tort 
reform that directly limits the liability of health care providers, 
according to Kessler and McClellan, could reduce hospital expenditures 
by 5 to 9 percent within 3 years of adoption. This would be done 
primarily by eliminating unnecessary testing associated with defensive 
medicine alone. An excellent example of an illness subject to such 
practices is coronary artery disease. Over the 7-year period examined 
in the Stanford study, States with serious tort reform saw real costs 
rise about 9 percent, as compared to those States which lacked reform 
which experienced an inflationary rate more than 10 percent higher, at 
19. Given the often uncertain diagnosis of this ailment, many doctors 
order up batteries of tests and procedures. As with heart attacks, 
researchers found these tests to be mostly defensive measures, which 
proved unnecessary. In fact, readmission and mortality rates remained 
constant throughout the United States. These extra tests are just one 
example of defensive medicine driving up the costs of effective and 
safe health care.
  Yet these savings in no way harm either private citizens or the 
health care industry. The health care liability system actually tends 
to stymie efforts to make health care safer and more accessible. Rising 
insurance premiums have long charted the rising cost of jury awards and 
out-of-court malpractice settlements. By issuing a cap on pain and 
suffering damages, by eliminating collateral source payments, and by 
placing limits on plaintiff attorney contingency fees, we will be able 
to not only lower health care costs, but also allow more than the mere 
43 cents received for every dollar, at present, to reach injured 
patients.

  In 1975, California, my home State, introduced a number of tort 
reforms applying to medical malpractice. The Medical Injury 
Compensation Act [MICRA] embodies a package of reforms, including a 
$250,000 cap on non-economic damages, which set a precedent which 
national reform should be modeled after.
  I propose that Congress take the following necessary measures in 
implementing tort reform. First and foremost, we must follow 
California's lead and adopt a $250,000 cap on pain and suffering 
awards. This cap will in no way limit the amount of money that an 
injured plaintiff could receive to cover his or her hospital costs, 
doctor bills, lost wages, or other medical expenses. Second, I would 
advise an elimination of collateral source payments. Plaintiffs, and 
their attorneys, often receive payments totaling two or more times the 
actual amount of damage ensued, simply by being paid by multiple 
insurers or defendants. As a third measure, I believe that we must 
place a limit on attorney contingency fees. In so doing, we will 
provide more money to the deserving injured patient. Finally, effective 
tort reform must allow for both periodic payments, and a fair statute 
of limitations.
  In 1995 the House of Representatives passed the product liability 
bill and the Balanced Budget Act, in 1996 the Health Insurance 
Portability and Accountability Act, and in 1997 the Balanced Budget 
Act. Each of these important pieces of legislation included measures to 
instate medical malpractice reform, and each has received my support. 
Four times the House has passed tort reform legislation, and four times 
the Senate has removed such measures from the legislation. We cannot 
allow this pattern to continue.
  By taking the bold steps necessary to reform the tort system, both 
the House and Senate would be bettering the lives of every individual. 
The health care system of this country plays an important role in all 
of our lives. It is the responsibility of the leaders of this Nation to 
maintain it in such a way as to provide the safest, most cost-
effective, and highest quality medicine possible. Without medical 
malpractice reform we fall dangerously short of this goal.

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