[Congressional Record Volume 146, Number 140 (Monday, October 30, 2000)]
[House]
[Pages H11601-H11608]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          MANAGED CARE REFORM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Arizona (Mr. Shadegg) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. SHADEGG. Mr. Speaker, I appreciate this opportunity to address my 
colleagues and to talk about, in fact, the exact same subject that my 
colleague from the other side of the aisle, from the Democrat side of 
the aisle, just addressed. He talked about a wide range of medical 
issues. I am going to do that in this hour as well, but I am going to 
begin by focusing on the issue of patients' rights legislation, the 
issue of HMO reform, the issue of managed care reform. After I have 
spent some time on that and focused on why that issue is so critical 
and why I so strongly disagree with much of what was just said and how 
sad I think it is that this debate has boiled down to this struggle 
where one side is saying the other side is just carrying the water for 
a special interest, then I would like to turn perhaps in the latter 
half of the hour to the issue of the Medicare drug benefit and perhaps 
other topics that are worth talking about and that were raised in the 
remarks in that regard.
  Again, I want to focus tonight on the issue of patients' rights 
legislation, the issue of a Patients' Bill of Rights, the critical 
question facing our country of managed care reform, HMO reform. We are 
in the midst as everyone knows of a political campaign. There are ads 
running across the country saying that it is sad that my party, so 
these ads say, has blocked, the Republican Party, has blocked the 
passage of patients' rights legislation. I simply want to start by 
saying that is not true. Indeed, the opposite is true. We have worked 
very hard to pass patients' rights legislation that will help patients. 
That is the key difference. Sometimes it is said that the devil is in 
the details and the devil is in the details.
  In this case there are two competing ideas on patients' rights 
legislation: one is the idea advanced by Democrats, the idea which they 
are pushing, the idea which their ads talk about, the idea which the 
President is saying he supports; and that proposal sadly does not help 
patients. That proposal helps trial lawyers. Rather than just talk 
about that, I am tonight going to explain exactly, precisely, how their 
legislation would advance the cause of trial lawyers but do literally 
nothing to help and in fact hurt patients and weaken the position of 
doctors to control health care in America. I think that is the debate 
that needs to occur.
  I think we need to understand why, yes, patients' rights legislation 
is vitally important for this country. There are serious problems in 
managed care. But how you enact that legislation, what it does, is so 
critically important and why, sadly, the bill that the Democrats are 
advancing, and they call it a patients' rights piece of legislation, in 
fact is fatally flawed in its structure, because instead of giving 
patients more power, instead of giving doctors the ability to set the 
standard of care and to decide how patients are treated in America, 
that legislation takes power away from HMOs, and that is good, but 
instead of giving that power and that authority to set the standard of 
care in America to doctors where it belongs and to patients where it 
belongs, their legislation gives that ability to trial lawyers to take 
the issue directly to court.
  We have heard just a few minutes ago in the rather partisan remarks 
by my colleague from the Democrat side that the Republicans are for the 
special interest of HMOs and that Democrats are for the people. Sadly, 
that charge is just flat false. Let me start with my position. I have 
been passionately fighting for patients' rights legislation, the right 
patients' rights legislation, for the last 2 years. I have met with 
countless doctors from all over the country, many in my State, I cannot 
tell you how many, my own medical association in Arizona; and I have 
talked with them for hours and hours about how do we go about fixing 
the problem with managed care in America, how do we deal with the 
problems that have been created by managed care in America.
  In every one of those conversations, I have never once heard, well, 
Congressman, the way to fix it is to let lawyers step into the middle 
of the process, take a claim by an injured patient, take my request as 
a doctor to get my patient care and have a lawyer step in and rush to 
court and file a lawsuit. Never has a doctor in America in my home 
State or anywhere else that I have met with said the answer to this 
problem is to let the trial lawyers address the issue. The reality is 
we do need patients' rights legislation to change managed care and to 
make it more pro-patient and more pro-doctor.
  But we need legislation that will accomplish that goal, that will 
take power away from the managed care industry, to tell doctors how to 
treat their patients and move that power over to patients and doctors 
to determine what the standard of care ought to be in America.

[[Page H11602]]

  I am adamantly for managed care reform, and I am a Republican and I 
have fought for that legislation since I have gotten here. One of the 
offhand remarks of my colleague just a moment ago was that the 
conference only met a few times. Well, my colleague was not on the 
conference. I was on the conference. We spent countless hours trying to 
reconcile the differences between a pure trial lawyer piece of 
legislation that will not help patients and a piece of legislation that 
would advance the cause of doctors and patients. I am going to explain 
that in my remarks. I tell you that every other Republican with whom I 
served on that conference committee and the Speaker himself who was 
asking in the last several weeks to try to bridge this gap and try to 
pass legislation, they are all adamantly for the passage of meaningful 
legislation that will empower patients and doctors and solve this 
problem.
  As to my own bona fides on this issue with the gentleman from 
Oklahoma (Mr. Coburn), who is going to join me later in this Special 
Order, we wrote the Coburn-Shadegg managed care reform bill, the 
Coburn-Shadegg patients' rights legislation. That bill would have put 
the emphasis precisely where it should be. It would have empowered 
doctors and patients to resolve medical questions, doctors in 
consultation with their patients to set the standard of care; and it 
would not have given that power over to trial lawyers. It is sad that 
it has gotten tied up in this kind of a debate, but it has.
  Everyone who understands managed care reform understands that we need 
to reform the system in a way that will be pro-patient. Let us start 
with why we need managed care reform. It is important to understand how 
managed care works in America. It was a reform idea itself to try to 
hold down the costs of medical care in America. In that sense, it has 
worked to some degree; but sadly it has been abused, and it is 
susceptible of abuse and we need to fix that.
  Let me talk about why we need to fix it. Right now in America, in our 
managed care system, a given doctor meets with his or her patient, does 
an examination and decides the patient needs a particular type of care. 
And so that doctor makes the recommendation for the care and goes to 
their managed care plan and says, ``My patient needs this care.'' There 
is an initial review of that claim, sadly often by an HMO bureaucrat, 
not a medical personnel, but a nurse or someone else; and let us assume 
it is turned down by the plan. There then is in some instances an 
internal appeal, an appeal to doctors at the managed care plan. If you 
follow that structure, if there is no appeal beyond that, you have a 
doctor, a treating physician, saying that his or her patient needs 
care. And then you have a managed care bureaucrat, an HMO bureaucrat, 
saying, no, you do not get the care. That is where the first point of 
abuse is.
  In America today under that system, a managed care bureaucrat can 
turn down the request for care by the treating physician, and they can 
turn it down perhaps for the wrong reason. They can turn it down to 
protect the profits of the managed care company, rather than to protect 
the care of the individual. I have been working on this issue, and I 
have been in my district when hundreds of people have talked to me over 
time about how they or a member of their family, their mother, their 
father, their daughter, their sister, their brother was abused by a 
managed care company when the treating physician said my patient needs 
this care and the HMO denied the care for a specious reason.
  So what is wrong with that structure? The thing that is wrong with 
that structure is that under that structure, the managed care plan, the 
HMO, is telling the treating physician how he should care for the 
patient. In medical jargon, that really means the managed care plan is 
setting the standard of care for any individual patient under a set of 
circumstances. That is crazy. Managed care plans are essentially 
insurance companies. They ought to try to hold down excessive costs, 
but managed care plans should not set the standard of care. HMO 
bureaucrats should not tell doctors how to treat patients. That ought 
to be a decision made by doctors. They were trained to practice 
medicine. HMO bureaucrats were not trained to practice medicine. So the 
current system is backward. It lets doctors be told how to practice and 
how to treat their patient and what the standard of care in America is 
for a given set of circumstances by an HMO bureaucrat. So that is why I 
fought for managed care reform. They can deny that care for monetary 
reasons, not reasons of care.

  The second reason that we need managed care reform is actually a 
tragedy, and it falls into my own area of expertise. And, that is, that 
as a result of, I believe, an unintended consequence of a Federal law 
called ERISA, a managed care company in America today can deny care; 
and if they negligently deny care, in that example I just gave, they 
make a mistake when they said the treating physician may not provide 
this care, if when they do that the patient is injured or dies, there 
are no damages. There is no recovery. That managed care plan can simply 
walk away and say, ``Wow. Our mistake injured or killed somebody, but 
since we're a managed care plan and we are operating under this Federal 
law called ERISA, we can't be held accountable.'' I think that is an 
outrageous structure for the law. Every one of us knows that if we make 
a mistake, if we, let us say, run a red light at an intersection and 
our negligence injures or kills somebody, we are responsible for that 
injury and hopefully our insurance policy will make the injured person 
whole, will pay damages for them. Sadly, even though every business in 
America, every homeowner in America, every car driver in America, every 
one of us in America is legally accountable when we injure or kill 
somebody, that is not the case for federally governed ERISA managed 
care plans. They have as a result of this Federal law an interpretation 
of it by the United States Supreme Court, immunity. They cannot be held 
liable when they injure or kill someone. That is a tragedy, and it 
should be fixed. That is why I have fought for patients' rights 
legislation and fought to hold plans accountable.
  The best story on that is the story of Mrs. Corcoran. Mrs. Corcoran 
became pregnant. She was an employee of Southern Bell in Louisiana. It 
was her second pregnancy. She applied for benefits. Her treating 
physician was treating her through the course of the pregnancy. At one 
point he told her she needed to go to the hospital, to be in the 
hospital for the balance of her pregnancy so that if there was a 
problem with the baby, and it was her second pregnancy and she had had 
a difficulty the first time, he said, If you're not in the hospital, 
there is a danger you will die or a danger your baby will die.
  Tragically, her HMO denied her that benefit and said, No, we won't 
pay to put you in the hospital. We'll pay for a little bit of home 
nursing, somebody to come by and visit you. Even more tragically, the 
worst possible circumstance happened. While Mrs. Corcoran was home, her 
baby went into distress, still in the womb; and notwithstanding that 
they did everything they could, her baby died as a result of the fact 
that she was not in the hospital. Mr. and Mrs. Corcoran, tragically 
hurt by this event, filed a lawsuit to recover damages; but of course, 
they did not sue their doctor. Their doctor had done the right thing. 
He had said you should be in the hospital but their HMO had said, No, 
I'm sorry, we won't put you in the hospital and we won't pay for it. 
Under the current Federal law, the law provides that the Corcorans 
cannot recover, could not recover, did not recover any damages for the 
death of their child. That is an outrage, and it has to be fixed.
  The next question is, why then, Congressman, have you not embraced 
and why have Republicans not embraced the Democrat Patients' Bill of 
Rights? There is a simple answer to that, and I am going to explain it 
here today. It is because the Democrats' Patients' Bill of Rights will 
not help Mrs. Corcoran. The Democrats' Patients' Bill of Rights would, 
in fact, hurt patients. It would, in fact, hurt doctors. It would, in 
fact, hurt businesses across America; and it would, in fact, cause more 
uninsured Americans. There is one group that the Democrats' Patients' 
Bill of Rights would help and there, is one group that is supporting 
the Democrats' Patients' Bill of Rights, and that group is tied to them 
through contributions, and that is the trial lawyers.

[[Page H11603]]

                              {time}  1745

  The Democrats' Patients' Bill of Rights, the bill that has been 
debated on this floor, the bill that the President says he wants to 
pass, moves power away from HMOs and moves it directly to not doctors, 
not patients, it moves it directly to lawyers. That is a problem, and 
let me explain how that Democrat Patients' Bill of Rights, it is known 
as Dingell-Norwood, works. The Vice President referred to it in the 
debate the other day. I do not know that the average American out there 
listening knows the word Dingell-Norwood, so I am just going to refer 
to it as the Democrat Patients' Bill of Rights, but it is the bill that 
Vice President Gore wants us to enact. It is the bill the President has 
asked for us to enact.
  If you live in a congressional district where there is a commercial 
running right now, it is the bill when they say pass a Patients' Bill 
of Rights, they want you to pass the Democrat Patients' Bill of Rights, 
the Dingell-Norwood Patients' Bill of Rights, which will not help 
patients, will not help doctors. It will cause a flood of lawsuits.
  Now, let us start kind of with a fundamental issue in this debate, 
and to do that I want to refer to a chart. This chart asks the basic 
question that anybody concerned about health care ought to ask, and 
that is health care in America, who should make medical decisions? 
Right now one issue is, well, should HMOs make medical decisions? We 
just talked about how under the current structure HMOs, managed care 
companies, indeed maybe even managed care bureaucrats, get to make 
medical decisions. Should HMOs make decisions? I do not think so.
  Another alternative is the one I favor, and that is the one here at 
the bottom; and we have put a red check to show that is where I believe 
the power ought to be. Should patients and doctors, or doctors in 
consultation with their patients, make medical decisions? I think the 
answer to that question is obviously that as between HMO bureaucrats 
making medical decisions, what should be the standard of care, what 
course of treatment is right for a particular patient, should that be 
decided by a treating physician talking to his or her patient or should 
it be decided by some HMO bureaucrat? That is a no brainer. I hope 
everyone in America agrees it should not be an HMO bureaucrat. It ought 
to be the doctor, the treating physician, who has touched you, who 
knows you, who has known you perhaps for years, who has looked you in 
the eye and assessed your medical condition and says, this is what we 
ought to do for your care. It should not be a bureaucrat at the HMO who 
has never seen you and has just read kind of a cold chart.
  That is where this debate ought to be. It ought to be between HMOs 
making those decisions and doctors and patients making those decisions, 
and that ought to be the fight that is going on right now and on that 
one I think we win. It ought to go to doctors in consultation with 
their patients.
  My friends who are doctors tell me that the practice of medicine is 
more art than science, and what they mean by that is that the doctor 
that is treating you, the doctor that knows you, your own treating 
physician, can sense what really ought to be done about your condition. 
The problem with giving this power to HMOs is that that is a cold 
bureaucratic decision often made by somebody who is not even trained as 
a doctor, perhaps made ultimately by someone that is a doctor but has 
not practiced medicine for many years because they could not hack it in 
the practice of medicine. It should not be made by that person who has 
never touched you or felt you or looked in your eye or tried to assess 
in conversation what is really wrong with you. It ought to be made by 
your treating physician.
  So what is this middle line doing here? Why are lawyers in the 
discussion? Well, the answer is, they should not be. Lawyers should not 
be a part of this discussion. We need to write a patients' rights piece 
of legislation that drives care, a patients' rights legislation or 
patients' rights bill that incentivizes or encourages the system and 
the managed care company to deliver the best possible care at the 
earliest possible moment, and that is the goal.
  The goal is the best care at the earliest moment. I think that 
happens when a doctor, after consulting with his or her patient, says 
this is the care that is right. But how are lawyers in this discussion? 
Well, the answer is, some people who want to reform managed care really 
do not really care about patients and doctors. What they care about is 
litigation. Sadly, what they want to do is create a structure where you 
do not get care very quickly because your HMO decided to approve the 
care recommended by your doctor. You do not get care very quickly 
because an independent external review panel said your HMO, when it 
denied you was wrong and darn well better deliver that care, what they 
say is, we really need to turn this whole thing over to lawyers. We 
need to turn it over to trial lawyers. We need to let the trial lawyers 
get to court quick so that those trial lawyers can drag this out in a 
nice long lawsuit. Do not mess with the doctors. Just get in front of a 
judge, drag the lawsuit out and if nothing else perhaps if we do not 
have a meritorious case, we can exact some kind of a settlement.
  I said earlier that the Democrats' bill, the Dingell-Norwood bill, is 
tragically flawed; and it is. This issue has been little discussed on 
the floor, almost not discussed anywhere across America, but if you 
hear the President or the Vice President call for patients' rights 
legislation, you need to know the bill they are asking for is Dingell-
Norwood; and you need to know that bill will not let your doctor make 
the decision. It will take down a restriction that exists in the law 
right now and let your lawyer, if you get one, quickly rush off to 
court and perhaps win himself a large settlement of which he gets a 
third, or 40 percent.
  Now, I believe in the tort system. I think if somebody hurts you, you 
ought to be able to recover your damages; but I sure do not think our 
first goal in patients' rights ought to be to empower lawyers. I think 
it ought to be to incentivize the best possible care at the earliest 
moment.
  I want to move to one more chart. It is a chart that is a schematic 
of the Democrat Dingell-Norwood bill, and I apologize for having to do 
a schematic, but it is how we can illustrate what is wrong with the 
Democrat legislation and why if you hear a commercial that says, by 
gosh, we need patients' rights legislation, you are right, we do need a 
patients' bill of rights; but we do not need the flawed Democrat bill. 
We need a bill that will get you the best care at the earliest possible 
moment; not a lawsuit.
  Let me explain this bill, and we will walk through it. We talked 
about your doctor consulting with you and then making an initial claim. 
Often unfortunately that is currently done through some bureaucrat at 
the HMO, and they may turn you down. The next step under the Democrat's 
bill is a good one, and that is you ought to have a right to get to a 
doctor at the HMO. That is called internal review. You ought to force 
the HMO not to let a bureaucrat turn you down. The HMO ought to have to 
hire a doctor to make a review of your case. Hopefully, that doctor 
will say you get the care, rather than deny you. So that is a good 
step. That is a step in the right direction.
  Everyone in America ought to have an internal review by the plan and 
let the plan make the right decision. But if they do not, the critical 
question in managed care reform, the critical question for patients' 
rights legislation, is what do we do next? I argue the answer is that 
in every case, what we ought to do after internal review, if this 
managed care company, this HMO denies your treating physician and you 
the care you need, the next step ought to be an external review, what 
we call an external review. That is not complicated. What it is is that 
if the plan will not give you the care you need after their doctor has 
looked at it, you ought to have a right to get to three totally 
independent doctors and to have those three totally independent doctors 
review your claim.
  Now when I say totally independent, what do I mean? Well, the law 
that we talk about would say that these doctors have to be selected 
independently. They cannot be controlled by the HMO. They cannot be 
hired by the HMO. They cannot have a conflict of interest because of 
their connection with or their income from the HMO. They have to be 
totally independent of the HMO

[[Page H11604]]

so they can make an unbiased decision. Obviously, they also need to be 
independent of your own doctor. So they are truly experts. In our bill, 
we call for them to be practicing physicians, with expertise in the 
field, who are independent of the HMO and independent of you and your 
treating physician.
  Our goal is to have that external review panel of three doctors make 
a quick decision; yes, the patient deserves the care, the plan was 
wrong and, by the way, HMO, if you do not give them the care and they 
get injured or they are injured, then you not only are going to be 
liable for the care you should have given but you are going to be 
liable for all of their economic damages, you are going to be liable 
for all of their pain and suffering; and if the plan acts in an 
arbitrary and capricious fashion, then you are going to be liable for 
punitive damages.
  The bottom line here is that there ought to be a review by three 
doctors very quickly, and we have an expedited time frame to do that. 
Here is the flaw with the Democrat bill, and here is why you see this 
little red circle with a bar through it. It is probably hard to see on 
the TV, but you see under the Democrat Dingell-Norwood bill you do not 
go to external review. As a matter of fact, that will never happen 
under that bill. It will literally never happen, and the three doctors 
over here will not get to set the standard of care by telling plans how 
they should treat patients. They will not get a chance to say was your 
treating physician right or was the plan right. They will not define 
the standard of care in America because under their bill there is this 
gigantic loophole, and it is the lawyers' loophole.
  Here you see the arrow going down. It says, well, guess what? The 
minute you finish internal review you can go straight to court. We do 
not really want an independent panel of doctors to make a decision. We 
want some aggressive trial lawyer to go hire his own expert witnesses 
who will interestingly always side with the trial lawyer, and file a 
lawsuit.
  Now, I said earlier in all of my conversations with doctors across 
America, and I have talked with literally, I think, hundreds, not a 
single one of them, not in Arizona, not anywhere else that I have met 
with them, have they said, you know, Congressman, we really think the 
way to solve the problem with managed care in America is to get people 
to lawsuits, because lawsuits will deliver care. Indeed, none of them 
have said the problem with managed care is that we do not get to court 
quick enough. What they have said is, the plan can turn us down and we 
could get an independent group of doctors to review our request. So 
this is the loophole in their bill; and it is why, and I said earlier, 
that the Democrat's bill is fatally flawed. They talked about how 
Republicans favor the special interests of HMOs. The legislation I 
favor lets HMOs be sued, lets them be held accountable, says if they 
kill Mrs. Corcoran's baby they must pay damages. But it does not carve 
a loophole to prevent people from getting quick care and the proper 
care by letting the case go to court. It rather is legislation that 
says get them care.

  If you talk about special interests, the Democrats have a special 
interest that my colleague on the other side did not talk about a few 
minutes ago, and that special interest is trial lawyers. That is why 
they created this loophole. This, by the way, is a structure that takes 
power away from HMOs and hands that power to trial lawyers. That is 
crazy. What we do need to do is take power away from HMOs to decide how 
you should be treated, or your wife or your daughter or your son. You 
need to take that power away from HMOs and put it in the hands of your 
treating physician and in the hands of an expert panel of independent 
doctors.
  That kind of takes me to the structure that we have proposed; and you 
see here it says, the compromise patients' bill of rights, and it is a 
simple structure. It is a structure that incentivizes or encourages the 
best possible care at the earliest possible moment, because that is 
what managed care reform ought to be about. Tragically, my friends on 
the other side of the aisle, Democrats, adamantly to the death oppose 
this structure. They say absolutely not. We need the trial lawyer plan. 
We do not need the plan that empowers doctors and patients.
  Let us talk about how this structure for the bill is different; and 
again I apologize, but a flowchart really does kind of let you 
understand the legislation. Here in the legislation we are proposing, 
the legislation we have begged the American Medical Association to 
endorse, there is first an initial claim just like the Democrats' bill. 
Then there is internal review, just like the Democrats' bill in 
Dingell-Norwood; but you will notice there is no loophole here. We do 
not let the lawyers cut off external review. What we say is that if the 
plan turns you down at external review and says to your treating 
physician, no, we are not going to give you the care, you would have an 
immediate right, indeed we have three different time procedures, one 
for extremely urgent situations where it is within a matter of hours 
you would have a right to get to external review. If it is less urgent, 
there are two more time frames for less urgent circumstances. But if 
you were denied that internal, you would get to go within hours in an 
emergency situation to the external review that I talked about, and 
that external review is conducted by three independent doctors who will 
get to judge the recommendation of your treating physician that my 
patient needs an MRI, and judge the decision of the managed care 
company that, no, your patient does not need an MRI.
  Those three independent doctors would have to be practicing 
physicians, as opposed to physicians who quit years ago because they 
could not make it. They would have to be experts in the field, and they 
would get to make a decision.
  Now, here is the key: that can happen within hours under certain 
circumstances and once that happens, and it may be hard for you to read 
but right here it says, the HMO is bound by the decision of this 
medical panel and the patient receives the care. You can see that this 
is a quick process. It happens very quickly. By the way, there is no 
lawyer yet. The lawyer did not get in here. The lawyer did not get to 
take the case off to trial court or get into discovery and try to 
extort a settlement. This went straight through. It went through 
internal review, and it went to the external review; and if the 
external review panel says the treating physician is right, you get the 
care. Sadly, the Democrats do not like this bill because it cuts trial 
lawyers out to that point in time.
  Now, what do we do about the people who are truly injured? Well, we 
say in our legislation, if as you have been going through this process 
you were injured, not only do you get the care here but now you have 
the right to go to court after the plan has been told to deliver the 
care, you have the right to go to court and you have the right to 
recover your damages. So it is not that we are against giving people 
access to trial lawyers. I have many friends who are trial lawyers, and 
they do a great service for people who are truly injured. It is not 
that we are against the tort system. Indeed, I am outraged by the fact 
that Mrs. Corcoran, under the current structure of the Federal law, her 
baby was killed by a managed care company, and they did not have to pay 
a dime. They just got to walk away. But the issue is where do you put 
in legal accountability? The Democrats, the Dingell-Norwood bill, lets 
lawyers jump in right up front, boom, here we just get to go straight 
to court.

                              {time}  1800

  Our bill says, no. Let us let a panel of three independent doctors 
make the decision, and then, if the plan is wrong and someone has been 
injured, then let us go to court. Let us let someone recover their 
economic damages; if they lost time from work, they ought to be able to 
recover that. If they have suffered pain and suffering as a result of 
this wrongful decision by the HMO, perhaps motivated by their desire to 
keep their profit line looking good rather than the patient's need for 
health care, then they get to recover their economic damages, they get 
to recover what we call their noneconomic damages, which means their 
pain and suffering, and if the plan did not follow the instructions of 
the external panel, then there are punitive damages on top of that. But 
we can see that this structure is designed to empower doctors, not 
lawyers, and that is the huge difference. That is the debate that has 
been going on.

[[Page H11605]]

  Sometimes in the last few days when I have been thinking about this 
issue, I thought, how could it have been so complicated for 2 years for 
us not to get across the issue and explain to the American people, 
patients' rights legislation is vitally needed, but the bill they want, 
the bill the Democrats are pushing on us, the bill they talked about in 
their ads and the bill the President will probably speak about many 
times between now and election day, the bill that the Vice President 
will talk about many times between now and the election does not help 
doctors; most importantly, it does not help patients. What it helps is 
trial lawyers. We want a bill that empowers doctors to decide what care 
should be, what the standard of care should be.
  I have to tell my colleagues, and in a moment I want to discuss these 
issues with the gentleman from Oklahoma, I have to say that I am 
amazed. If the Trial Lawyers Association were actively advocating this 
structure, the structure where one gets to court, but they do not get 
to a panel of independent doctors, I could understand that. But what 
puzzles me and what I do not understand is that the American Medical 
Association is supporting that structure, the trial lawyer structure, 
and I do not understand, and I hope some day they will explain to me, 
why the American Medical Association is not supporting a structure that 
will empower doctors rather than lawyers.
  We do need to diminish the ability of managed care companies to hurt 
people. We do need to take away from HMOs the ability to set the 
standard of care. The standard of care in America ought to be set by 
doctors who are trained in medicine. But, when we take that power away 
from a managed care company and move that power somewhere, I suggest it 
would be a tragic mistake to, as the Democrats propose, move that 
power, to decide how one should be treated as a patient who needs 
medical care, to move that power to a trial lawyer, rather than moving 
it to a trained physician; in our structure, to a panel of trained 
physicians who will tell the HMOs exactly what the standard of care 
ought to be.
  For perhaps any doctors listening across America, in my own city of 
Phoenix, and the reason I care about this issue, the managed care 
penetration is so deep, they have such power.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Walden of Oregon). The Chair would 
remind Members to direct their remarks to the Chair and not to the 
television audience.
  Mr. SHADEGG. Mr. Speaker, let me point out that in my State of 
Arizona, there are so many managed care companies that a doctor that 
does not sign up with an HMO, indeed with several HMOs literally can 
barely survive economically, and yet we look at the structure that 
currently exists where HMOs tell practicing physicians what care they 
can and cannot deliver, one can imagine that the doctors in my State 
are enraged at that structure.
  Mr. Speaker, the doctors in Arizona, and I have talked with hundreds 
of them over the last 2 years, they want a structure where doctors set 
the standard of care and where doctors tell HMOs how patients should be 
treated; where doctors tell the managed care company, this is the right 
kind of treatment to give to a patient. The doctors in Arizona, at 
least, and the other doctors I have talked to, do not want to turn that 
ability to set the standard of care over to lawyers or even to 
encourage more lawsuits. You bet: If somebody is injured, then, in 
fact, a trial lawyer should come in and recover for their injury, and 
indeed, I wish that Mrs. Corcoran, I wish we could have passed this law 
in a way to allow Mrs. Corcoran and her husband to be made whole for 
the managed care company's decision that killed their baby. We cannot 
do that for them, but we can do that for future people, for someone 
tomorrow.
  That is why I have worked so hard here at the end of this session, 
desperately around the clock, with everyone involved in this debate, to 
try to pass a patients' bill of rights that would correct these 
problems in a way that will help patients and will help doctors.
  Mr. COBURN. Mr. Speaker, if the gentleman will yield, I wanted to 
clarify and ask the gentleman a couple of questions. Several times in 
the gentleman's discussion, he used the word HMOs. What we really also 
mean is managed care, which means PPOs and managed insurance products 
that deny one adequate care. I believe that is correct, is it not?
  Mr. SHADEGG. Mr. Speaker, I used the term HMOs to refer to a broad 
array. Some would argue that PPOs are a little bit different, that one 
gets a little better care under a PPO. But fundamentally, we are 
talking about managed care companies and HMOs, which are health care 
management organizations, whose job it is to manage the care, and it is 
these managed care companies or HMOs, and now as they are kind of 
morphing themselves into the latest version which is a PPO, we are 
talking about all of these structures under which someone other than 
the treating physician gets to make the decision.
  In our discussions of this in the past, the gentleman has pointed out 
that if you have a fee-for-service plan, your doctor gets to make these 
decisions. There is not someone second-guessing him. Of course, it does 
not matter to me whether we are talking about the doctor being second-
guessed by an HMO or being second-guessed by a managed care company, or 
being second-guessed by a PPO. The fundamental issue is, if the plan 
one is in gives some insurance company bureaucrat or some insurance 
company employee the power to deny the treating physician the ability 
to deliver the care they think is appropriate, there ought to be a 
quick appeal and they ought to get a quick answer so that the patient 
can get the care he or she needs.
  Mr. COBURN. Mr. Speaker, I want to thank the gentleman for taking the 
time on the House floor on an evening when we are supposed to be either 
home in Oklahoma or home in Arizona working with our constituency to 
explain this.
  I want to just kind of go through those charts with the gentleman for 
a minute, because I see another big defect in the Dingell, or the 
Norwood-Dingell bill that is so espoused by President Clinton, Vice 
President Gore and the American Medical Association. I also want the 
Members of this body to know that the American Medical Association 
represents 25 percent or fewer of the physicians in this country.
  I happen to be a member of the American Medical Association, as the 
gentleman knows, and I am amazed at the position that the American 
Medical Association has taken on this bill.
  But the point I want to make is that the bill that the gentleman and 
I designed, its first goal was designed to give people care and give it 
quickly and appropriately. And the bill that Norwood, Dingell has 
passed, or passed the House, but not passed the Senate, thank goodness, 
was not designed to give care quickly. What it was designed was to give 
a revenue source for the trial bar so that we would in fact punish the 
HMOs for bad actions in the past. It is almost like it is a revenge 
bill.
  But the point I want to make is what we tried to do is create a 
system where everybody learned. Think for a minute. I am a practicing 
physician. Since I have been in Congress, I have delivered over 400 
babies, and I have delivered almost over 3,500 in my career. I have 
three great partners who are covering for me. I should be there and on 
call tonight, but they are kind enough to cover for me.

  What has happened in terms of what we have designed is that if a 
doctor recommends a treatment that is not appropriate as judged by a 3-
doctor panel, a couple of things happen. Number one is the doctor 
learns, the doctor improves, the doctor gets up to speed on where he or 
she should be in terms of the latest professionally accepted standards 
of care.
  Mr. Speaker, in Texas where they have a bill similar to what we have 
proposed, 45 percent of the time the doctor panel finds that the 
doctors are wrong. Well, what is good about that is that it improves 
the care. The other part of the time, the 55 percent of the time when 
the plans have been deemed to be wrong by the doctor panel, the plans 
learn what is or is not appropriate care. If we bypass all of that and 
send it to court, we do not get the benefits, number one, of improving 
the quality of care and educating the managed care company; we bypass 
all of

[[Page H11606]]

that, and we spend a tremendous amount of dollars doing that, and the 
loss is, we do not improve care for the next person.
  Mr. Speaker, that is one of the most important aspects of our bill, 
besides getting care and letting doctors decide, independent doctors, 
is we designed a system under which we would raise the level of care 
and the quality of care for everyone in America, whether they had 
insurance or not insurance, HMO or PPO or managed care, but that doctor 
who got turned down learned something by being turned down. So 
therefore, the next time they saw that situation, they were improved in 
the quality and skills and care that they gave.
  Mr. SHADEGG. Mr. Speaker, if the gentleman would yield just on that 
point, it occurred to me as I listened to the gentleman precisely the 
point the gentleman is making with regard to improving care. I think it 
is very important to understand that.
  Under the structure we have talked about, if immediately following 
internal review by the plan, one wants to appeal and one gets to appeal 
immediately to an external panel of doctors, one has a chance for that 
panel, the gentleman said, to educate the plan on the care they ought 
to be delivering, and once the plan has been told a couple of times by 
that external panel, no, you should not be denying care under this set 
of circumstances, you can bet the plan will quit denying care under 
that set of circumstances.
  The other scenario, the trial lawyer scenario, I used to be a 
practicing lawyer and I have tried my share of lawsuits, I can tell one 
thing that never happens once you get into litigation, you almost never 
settle. You polarize physicians at the extremes.
  So under the structure we are talking about where you go to internal 
review and you quickly go to external review and the panel tells the 
HMO the plan they should be delivering, there is a chance for education 
and reconciliation and for everybody to learn what the standard of care 
ought to be and for the care to be given as quickly as possible.
  Mr. Speaker, I just want to make the point that under the alternative 
structure where we go from internal review straight to lawsuits, what 
we have is two polarized, extreme positions, with the lawyer for the 
plan doing battle and going to war with the lawyer for the patient, and 
it is not a reconciliation, and there is no education.
  I just have to make one other comment. George W. Bush, the Republican 
candidate for President, in some ways almost characterizes this 
perfectly. He says, for too long the partisan fights back here between 
Republicans and Democrats have kept us from getting anything done. He 
says, I am going to come to Washington and bridge that partisan fight 
and try to bring Republicans and Democrats together to get something 
done. It occurred to me that the partisan structure where we have been 
fighting each other for the last several years in this Congress and 
doing more for the lawsuit structure. The plaintiff's lawyer says, the 
defense lawyer is wrong and the defense lawyer says the plaintiff's 
lawyer is wrong. We have this war going on. Instead, we could have a 
reconciliation.
  It just occurred to me that is exactly what George W. Bush is saying 
to America. Let us not have that polarized, pitched fight. Let us try 
to talk to each other.
  Mr. COBURN. Mr. Speaker, if the gentleman will yield, I wanted to 
make one more point. As a practicing physician who has been exposed to 
liability in the past, one of the things we know is that if we do what 
the Dingell-Norwood bill would set forth, the one thing we do know is 
that costs would rise significantly. The second thing we know is there 
will not be any learning history, because the ideal will be to get a 
patient and sue a managed care plan rather than to change the behavior, 
either on the part of the HMO or the practicing physician. We ought to 
incentivize people to do what is right. We should not incentivize 
additional torts in this country.
  In terms of full disclosure, I want everybody to know, I voted for 
Dingell-Norwood. I made a commitment to the gentleman from Georgia (Mr. 
Norwood) to do that, not because I agreed with the bill, but because I 
wanted to move the process along; because I, like the gentleman, 
believe Mrs. Corcoran and the future Mrs. Corcorans have to have a 
remedy; that if, in fact, somebody does something wrong to them, they 
have to have a remedy.
  It is amazing. My brother-in-law would find it really ironic, as much 
as the doctors have railed against trial lawyers, they have done us 
great service in many areas in our country, and we do need to have a 
mechanism for remuneration and remediation for when somebody is 
injured. However, we do not need, and what this Norwood-Dingell bill 
does, is create a system where all the money is not going to go to 
health care, it is going to go to the trial lawyers.
  Mr. SHADEGG. Mr. Speaker, I very much appreciate the gentleman 
bringing up the fact of cost. I was here on the floor during the 
previous Special Order by our Democrat colleague.

                              {time}  1815

  I heard a lot of railing against the Republicans backing special 
interests and they do not care about people and they are just for the 
HMOs. They hate little people and do not care about it. That kind of 
rhetoric I do not think is very productive, and I do not think it helps 
bridge the gap and solve problems in America.
  But I thought it was interesting that in the close of his remarks, he 
said he had had a conversation with an employee at a restaurant he 
frequents. And I have actually been to his district a number of times, 
and I have a friend who has family in that district. It is on the beach 
in New Jersey. The gentleman talked about a friend that worked for a 
restaurant, and she would very much liked to have had health insurance, 
but her employer, with whom she had a good relationship, could not 
afford to provide that insurance.
  It is important to understand that if we do this wrong, if we drive 
our system to lawsuits rather than care, if we encourage many, many 
lawsuits to be filed, and the latest structure is that they want to be 
able to bring these lawsuits in State court and in Federal court, if we 
encourage too many lawsuits, if we turn the system over to the trial 
lawyers, then costs are going to go up.
  The structure we have tried to encourage goes at this issue of cost. 
It says, if Americans are injured, they ought to have the right to go 
to court. I have many, many good friends in Arizona who are trial 
lawyers who I respect immensely. I talked to one just a few hours ago 
back in Arizona, and he has helped me immensely to learn about this 
issue. He wants to be able to go to court when he has a genuinely 
injured patient that an HMO has injured. But I do not think he wants to 
be able to run off to court and have lawsuits filed under frivolous 
circumstances.
  That is a point we have not talked about. The structure that we have 
asked for where every case would go from the initial denial by the HMO 
to this panel of expert doctors who would decide, is a treating 
physician right and the patient ought to get the care or is the plan 
right and they should not get that care, that mechanism will screen out 
frivolous lawsuits. It is the frivolous lawsuits that will be turned 
down by that mechanism. The meritorious lawsuits where this panel of 
three expert physicians says, no, this plan was dead wrong; the injured 
party goes to court and they get to recover damages and get to be made 
whole.
  But, Mr. Speaker, if we encourage too many frivolous lawsuits, if we 
encourage lawyers who are not conscientious to be able to file a 
lawsuit in Federal court any time they want and muck up the system with 
an excessive number of lawsuits, costs will go up.
  One of the things that we have not talked about here is that issue of 
cost and its implications for the uninsured. We cannot get into a long 
discussion about the uninsured, but that is one of the tragic problems 
here. We have too many people in America, 44 million, who are 
uninsured. If we drive costs up further, then we are going to have even 
more uninsured.
  As the gentleman from Oklahoma knows, I believe we need to make it 
possible for every American to have insurance. I favor a tax credit so 
that they can go buy insurance. And for those who can't afford to go 
buy insurance, I favor a refundable tax credit. But it is important to 
understand that the Democratic bill, the Dingell-Norwood bill, perhaps 
supported by many

[[Page H11607]]

of our colleagues on the other side, not understanding what it will do, 
that bill will drive costs through the roof and will hurt health care 
in America.
  Indeed, I fear it will lead to a single-payer, government-run, one-
size-fits-all type of health care where we do not get to consult with 
our doctor and decide the care; some Federal bureaucrat decides the 
care.
  Mr. COBURN. Mr. Speaker, the gentleman from Arizona and I have been 
here almost 6 years, completing 6 years; and we have seen a lot of 
instances in which Washington sees a problem and then fixes the wrong 
problem. And we heard the gentleman from New Jersey (Mr. Pallone) talk 
about a Medicare drug benefit, and we have heard how they want to add 
that to the Medicare program.
  Mr. Speaker, Medicare is going to go broke in 2015, and adding a 
Medicare drug plan as he would like to add, what that will do is just 
ensure that it is bankrupt about 2007. My point being that it is easy 
to do mischief and to do the wrong thing here, but it is even easier to 
fix the wrong problem.
  I believe that we have another chart there that I think really 
summarizes what we want to talk about, that is, if we want to empower 
patients and doctors, and by that meaning we want more patients to get 
care and we want them to get the right care the first time from the 
managed care firm, and we want to incentivize those people who are 
supplying the money to pay for that care to do the right thing and to 
do it in an economically efficient and prudent fashion, then what we 
want is to put doctors with a check on them by other doctors, 
not doctors with a check on them by a lawsuit, in charge of that care.

  Why would we let lawyers today decide the care in the country? And 
why would we take it from the managed care firms now and not give it to 
the doctors, but yet give it to the lawyers? For the life of me, I do 
not understand. And for the doctors in Oklahoma that I have talked to 
and I hope will be aware of what is going on, for the life of me I do 
not understand why the most recognized body in health care in this 
country has chosen to move the decision-making on care not back to the 
doctors from the HMOs or managed care, but rather has decided that they 
are going to endorse a bill that moves it to the courts and the trial 
lawyers.
  Mr. Speaker, it makes no sense for care, it makes no sense for costs, 
and it makes no sense for those people who have no insurance. It is 
just going to inflate the cost of their care as well as put more people 
in the ranks of the uninsured. I yield back to the gentleman from 
Arizona.
  Mr. SHADEGG. Mr. Speaker, I thank the gentleman for yielding. It is 
probably worth it, in the minutes we have left, to focus on really the 
crux of this issue, what we care about, what this discussion is about, 
why I believe the issue is so critical, why the gentleman from Oklahoma 
(Mr. Coburn) believes it is so critical.
  In the immediate preceding hour there was a lot of rather harsh 
rhetoric saying that Republicans do not care about a Patients' Bill of 
Rights, Republicans do not care about patients, Republicans are just 
for HMOs. That kind of talk makes me angry. It is divisive. It divides 
the country. It is polarizing, and it is just flat wrong.
  I have worked, as the gentleman from Oklahoma has, now for 2 years 
nonstop on patients' rights legislation. I consider it a privilege that 
the gentleman and I were able to write a patients' rights piece of 
legislation, a bill that moves the ability for medical decisions to be 
made, not by HMOs, but moves that ability away from managed care 
companies and PPOs and HMOs and gives that decision-making authority to 
doctors to make the decisions about the standard of care.
  But on this partisan attack, I just have to say that it upsets me. 
Because after writing the bill with the gentleman, I had the privilege 
of being appointed to the conference committee. I served on that 
conference committee. I did not miss a single one of those meetings, 
and I spent countless hours with my House colleagues, Republicans and 
Democrats, countless hours with my colleagues in the other body in the 
Senate. Mr. Speaker, not a single Republican that I dealt with in that 
process, not one did not want to pass a Patients' Bill of Rights that 
would do the right thing; a Patients' Bill of Rights that would empower 
doctors, not lawyers; a Patients' Bill of Rights that would deliver 
care at the quickest point in time. They understood these issues. They 
discussed these issues at great length. And the reality is we could not 
get there because of the opposition of Democrats.
  So this kind of ``Republicans do not care about patients; they only 
care about special interests,'' that rhetoric is not productive. What 
we need is to pass legislation and quit pointing fingers of blame. We 
do need to analyze the issue, and we need to understand what should 
happen in the legislation.
  Again, I want to conclude by referring to this chart, because it 
really sums up this whole debate. Health care in America, who should 
make medical decisions? The Republican position is very, very clear, 
contrary to what has been said here on the floor. Contrary to what the 
President might say. Contrary to what the Vice President may say. 
Contrary to what that commercial that our constituents are watching in 
their congressional campaigns back home may say.
  The Republican position is that doctors, in consultation with their 
patients, should make health care decisions. So on this chart where it 
says, ``Who should make those decisions?'' HMOs? Our answer is no. 
Managed care companies can do their job, but they should not ultimately 
have the decision authority. That decision authority should be the 
treating physician's to decide care. Lawyers? Absolutely not. And that 
is the central feature, as we have talked about for the last hour, of 
this fight.
  The Democrats' bill, the Dingell-Norwood bill, and I brought it to 
the floor to hold up, this is Dingell-Norwood One, the first bill they 
wrote. It had the same structures. It empowered lawyers, not doctors 
and patients. After a lengthy debate, they produced Dingell-Norwood 
Two. I have read every word of every one of these bills. I have pored 
over them and highlighted the pages. The fundamental flaw in the 
legislation that they want is that it does take power away from HMOs, 
but it does not give that power to doctors or patients. It gives that 
power to lawyers. It encouraged lawyers to go to court, and it makes 
possible for them to go to court. It makes it possible for them to go 
to court before there is an independent review by three doctors to say, 
was the plan right or was the plan wrong?

  We have to ask ourselves why. Why do they oppose giving the ability 
to decide what the standard of care in America should be? Why do they 
oppose that? Why are they opposed to giving it to doctors and rather 
want to give it to lawyers? I do not know the answer to that question. 
I am puzzled by the answer to that question.
  I know that many of my Democrat colleagues are very sincere about 
their concern about patients and very sincere in their opposition to 
HMOs and managed care. But for the life of me, I think it is because 
they have not carefully studied the bill that they have been 
advocating, but that bill which the President would say is vitally 
important will not help health care in America.
  Indeed, that bill, if we encourage excessive, frivolous lawsuits by 
not letting a panel of expert doctors review the case, if we facilitate 
and make possible frivolous lawsuits in State courts and Federal courts 
and we allow that to happen before there is an independent review by 
doctors of whether the care was right or wrong, there is a very, very, 
very real danger. And that very real danger is that by turning the 
system over to lawyers and lawsuits and not having an independent 
external review by doctors but rather letting a lawyer get ahold of the 
client and rush off to court with a lawsuit and demand a settlement 
will polarize the parties.
  The HMO has been sued. They hire their defense attorney. The 
plaintiff has her lawsuit going forward. Now we have a polarized 
position. Not only will that drive costs through the roof and perhaps 
result in thousands more uninsured; but as the gentleman from Oklahoma 
has pointed out, it will not incentivize the best care at the earliest 
point in time, and it will not create an atmosphere in which there is 
education, in which this panel of doctors teaches the HMO what it 
really ought to be approving and what it maybe can turn down.

[[Page H11608]]

  We will not have that educational process. We will not have 
incentives to deliver the best care at the right time. What we will 
have instead is a quick lawsuit process whereby power to decide care is 
taken away from doctors and awarded to lawyers.
  We simply cannot make that mistake. There is no margin of safety 
financially to allow costs to escalate like that. We can pass 
legislation. Indeed, I would argue we can pass legislation this 
Congress which does what we have asked for it to do which empowers 
doctors in consultation with their patients to make the right care 
decisions, which encourages the best care at the earliest time, and 
which teaches HMOs what care they ought to be approving and not 
approving, rather than throwing the whole thing over to the lawyers.
  Mr. COBURN. Mr. Speaker, I would make one point. I believe the 
gentleman has hit on something. I believe that most people really do 
not understand the impact of the Norwood-Dingell bill. I believe that 
we can bring people together. I believe that we can put people before 
politics.
  I know this is an election year issue. I am not running for 
reelection, so I do not have a dog in this fight as far as the 
election. But what I do know is that our job is to bring people 
together. And I want to thank the gentleman from Arizona (Mr. Shadegg), 
for first of all his insight and understanding of what has gone on with 
this legislation. Also, his tremendous effort, the amount of time that 
he have given up away from his family; the amount of time he could have 
been in Arizona that he was here meeting in a conference, trying to do 
the right thing. Not for HMOs, not for trial lawyers, but for doctors 
and patients. For that I am forever grateful.
  Mr. SHADEGG. Mr. Speaker, I thank the gentleman and would echo those 
remarks. I think the reality is clear. I know the gentleman from 
Georgia (Mr. Norwood) and the gentleman from Michigan (Mr. Dingell), 
and both of them are honorable men and both have the best interests of 
patients at heart. But, sadly, what happens in Washington, D.C. is that 
these debates get pulled down into political wars and the Democrat 
party has a constituency and that constituency happens to be trial 
lawyers.
  So I think this bill got drafted with the input of trial lawyers and, 
sadly, we have a war going on. I do not defend the insurance companies 
either. We have a polarization here with the insurance companies and 
the HMOs on one side saying: do not pass any legislation. We have the 
trial lawyers on the other side saying: no, turn it all over to us. 
Sadly, nobody is fighting for the doctors and the patients.
  Look how thick this bill is. I think many of our colleagues, indeed, 
I would guess the vast majority of our colleagues have not had the 
chance, because these issues are too complicated, to study Dingell-
Norwood and understand its public policy flaw and recognize that it 
does have the danger of driving costs up, and try to understand that 
the legislation that we are asking for which would empower doctors and 
patients and would enable doctors to teach plans what care they ought 
to approve and not approve, that legislation has not been studied 
carefully.
  I think we can still pass it this Congress. The gentleman and I have 
been in consultation with our Senate colleagues, and we may even have a 
meeting yet with them tonight on this. I am encouraged. I think we can, 
if we cut the partisan bickering, pass legislation that will protect 
patients across America. I appreciate the gentleman from Oklahoma for 
his brilliance and instruction and all of his help in this debate. It 
has been a great privilege.

                          ____________________