[Congressional Record Volume 148, Number 104 (Friday, July 26, 2002)]
[Senate]
[Pages S7398-S7413]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GREATER ACCESS TO AFFORDABLE PHARMACEUTICALS ACT OF 2001
The PRESIDING OFFICER. Under the previous order, the Senate will now
return to legislative session and resume consideration of S. 812, which
the clerk will report.
The legislative clerk read as follows:
A bill (S. 812) to amend the Federal Food, Drug, and
Cosmetic Act to provide greater access to affordable
pharmaceuticals.
Pending:
Reid (for Dorgan) amendment No. 4299, to permit commercial
importation of prescription drugs from Canada.
Amendment No. 4326 to Amendment No. 4299
(Purpose: To provide for health care liability reform)
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. Mr. President, I am about to send to the desk an
amendment. I understand from discussions with the other side, we will
be allowed to vote on or in relation to this amendment sometime Tuesday
morning, with the time prior to that equally divided. I say to my
friend from Nevada, what was he thinking of, a couple of hours equally
divided on Tuesday morning before the vote or in relation thereto?
Mr. REID. I say to my friend, we will probably come in at about 9:30,
have an hour of morning business, with the vote to occur around noon,
which would allow us to do our party conferences. So I suggest 90
minutes equally divided.
Mr. McCONNELL. That would certainly be agreeable to me. I thank the
assistant majority leader.
Mr. REID. Staff is putting that in writing. Before the day is out, we
will try to iron out something like that. We will get it worked out
between the two leaders.
Mr. McCONNELL. I send an amendment to the desk and ask for its
consideration.
The PRESIDING OFFICER. The clerk will report the amendment.
The legislative clerk read as follows:
The Senator from Kentucky [Mr. McConnell] proposes an
amendment numbered 4326 to amendment No. 4299.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the
reading of the amendment be dispensed with.
Mr. DURBIN. Reserving the right to object, and I will not object, if
the Senator could give me a copy of his amendment.
Mr. McCONNELL. I say to my friend from Illinois, I will be happy to
do that. Of course, it will be out there from now until Tuesday morning
so people will have ample opportunity to take a look at it. As soon as
the clerk can Xerox a copy, I am sure he will be glad to give it to the
Senator from Illinois.
Mr. DURBIN. I do not object.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The text of the amendment is printed in today's Record under ``Text
of Amendments.'')
The PRESIDING OFFICER. Who yields time?
The Senator from Kentucky.
Mr. McCONNELL. The Senate last voted on the issue of medical
malpractice back in 1995. It was an amendment I offered at that
particular time. There were 53 votes in support of the amendment,
including Senators Feinstein and Lieberman on the Democratic side who
are still Members of the Senate. In addition, Senator Nunn, Senator
Exon, and Senator Jeffords also supported that medical malpractice
amendment back in 1995, which was, as I said, the last time we had a
vote on this issue.
I will briefly describe what the amendment at the desk would do, and
then I want to talk for a few minutes about the growing crisis. I know
Senator Hatch is anxious to speak on judges, but I do want to at least
describe what the amendment does and make a few observations about the
growing crisis in the country.
First, let me make it clear that the amendment at the desk is pro-
victim and pro-consumer. This amendment does not cap noneconomic--that
is, pain and suffering--damages at all, not one penny. So compensatory
damages--economic as well as pain and suffering--those kinds of damages
are not
[[Page S7399]]
in any way adversely impacted by a cap under the McConnell amendment.
We do place reasonable caps on lawyers' fees. By doing so, it ensures
that the injured victim, not the victim's lawyer, gets the majority of
the award. After all, that is only fair. It is the victim who has
suffered the injury and not the lawyer.
This amendment also allows punitive damages, even though we know, all
of us who understand punitive damages, that they are not designed to
enrich the plaintiff but, rather, to punish the defendant. We allow
punitive damages under a cap, a reasonable limit of twice compensatory
damages. So no limits on compensation for pain and suffering, but a
limit on punitive damages of twice compensatory damages, twice the
economic and noneconomic damages.
Essentially, what we are doing is guaranteeing the injured victim
full compensation. In addition to guaranteeing the injured victim full
compensation, we are also ensuring that they get more of the money to
which they are entitled by providing a reasonable cap on the fee for
the lawyer. In order to bring some certainty to the system and drive
the costs of insurance down, the amendment caps punitive damages at
twice the sum of the compensatory damages awarded. It provides some
certainty. This is a very pro-victim, pro-consumer amendment.
When we voted on this back in 1995, one of the arguments made, I
recall, was that there was no crisis, what is the problem? Frankly, we
thought it was a growing crisis at that point. Today, it is a perfectly
apparent crisis. The Nevada Governor has called a special session
beginning Monday on this very issue. This crisis is sweeping the
country.
We have a map that I think is useful. The red States are States that
are currently experiencing a medical liability crisis; States such as
Nevada that I mentioned, the State of Washington, the States of Oregon,
Texas, Mississippi, Georgia, Florida, and the cluster in the
Northeast--New York, Pennsylvania, West Virginia, and Ohio. My own
State of Kentucky is a State with problem signs.
To give an example, we have doctors moving to Indiana, across the
Ohio River, because Indiana has reasonable caps on recovery, and
therefore they do not have a medical malpractice crisis and the doctors
are not bailing out. In States that have enacted a reasonable approach,
the crisis does not exist.
Another interesting chart gives a sense of what has happened since we
last voted on this issue in 1995. The median jury award then was around
$500,000; today it has gone up to $1 million. I don't think anybody
believes that doctors and nurses and health care professionals are any
more negligent today than they were then. I don't suppose anyone would
suggest there has been some kind of dramatic deterioration in their
behavior over the last 7 years, but in fact the awards have gone up
dramatically, and of course, as we know, the insurance rates along with
it, leading to an exodus from this field across America. The crisis has
arrived. It is here.
To give an example from my own State, a few weeks ago in Corbin, KY,
the Corbin Family Health Center was forced to shut the doors because
the doctors were unable to find an affordable insurance policy. Dr.
Richard Carter and his four colleagues deliver about 250 babies a year
and have never lost a malpractice claim. Yet when their insurance
company, the St. Paul Companies, decided to leave the medical
malpractice business, the Corbin Family Health Doctors lost their
coverage--a group that had never lost a claim. The remaining few
insurance companies that were willing to provide coverage were only
willing to do so for $800,000 to $1 million, a whooping 465 percent
increase.
This is going on all across America. Tuesday we will have an
opportunity to elaborate. There are a number of Senators on my side of
the aisle who want to speak to this national crisis.
I retain the remainder of my time.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Mr. President, this amendment has nothing to do with the
price of prescription drugs, the cost of health care, or even the
insurance premiums of doctors. It has everything to do with the profits
of the insurance industry. At a time when Americans want greater
corporate accountability, in this time of Enron, WorldCom, and other
corporate scandals, it is unbelievable that our Republican friends cozy
up to big insurance corporations to give them a break.
Let me remind my colleagues that the legislation before the Senate is
about the high price of prescription drugs and providing a Medicare
prescription drug benefit. Now the Republican side is trying to divert
attention from this important debate by offering this amendment. It is
an attack on the very people the underlying legislation was designed to
help, those in need of quality medical care.
The McConnell amendment is designed to shield health care providers
from the basic accountability for the care they provide. While those
across the aisle like to talk about doctors, the real beneficiaries
will be the insurance companies. This amendment enriches the insurance
industry at the expense of the most seriously injured patients--men and
women and children whose entire lives have been devastated by medical
negligence and corporate abuse. This proposal also shields HMOs that
fail to provide needed care, drug companies with medicine that has
toxic side effects, and manufacturers of defective medical equipment.
In recent months, the entire Nation has been focused on the need for
greater corporate accountability. The McConnell amendment does the
reverse. It dramatically limits the financial responsibility of the
entire health care industry to compensate injured patients for the harm
they have suffered. When will the Republican Party start worrying about
injured patients and stop trying to shield big business from the
consequences of its wrongdoing? Less accountability will never lead to
better health care.
This amendment places major new restrictions on the right of
seriously injured patients to recover fair compensation for their
injuries. These restrictions only serve to hurt those patients who have
suffered the most severe, life-altering injuries, and to have their
cases proven in court. If we were to arbitrarily restrict the
compensation which seriously injured patients can receive, as the
sponsor proposes, what benefits would result? Certainly, less
accountability for health care providers will never improve the quality
of health care. It will never even result in less costly care.
The cost of medical malpractice premiums constitutes less than two-
thirds of 1 percent. Do we understand that? The cost of medical
malpractice premiums constitutes two-thirds of 1 percent of the
Nation's health care expenditures each year. Malpractice premiums are
not the cause of the high rate of medical inflation.
Over the decade from 1988 to 1998, the cost of medical care rose 13
times faster than the cost of malpractice insurance. This chart
reflects that: The growth of health care costs plus 74 percent; and the
medical malpractice costs, 5.7 percent.
These restrictions are not only unfair to patients but an effective
way to control medical malpractice claims. There is scant evidence to
support the claim that enacting limits will lower insurance rates.
There is substantial evidence to the contrary. There are other much
more direct, effective ways to address the costs of medical malpractice
insurance that do not hurt patients.
The supporters of the McConnell amendment have argued that
restricting an injured patient's right to recover fair compensation
will reduce malpractice premiums. They cite a report released just
yesterday by the Department of Health and Human Services. However, that
data is neither comprehensive or persuasive. It looks at only 10 of the
27 States that do not currently have a cap on malpractice damages, and
it looks at the rate of increase in those States for only 1 year. In
essence, that report cherry-picks the data to support a politically
preordained conclusion.
Let's look at the facts: 23 States currently have a cap on medical
malpractice damages. Most have had those statutes for a substantial
number of years. And 27 States do not have a cap on malpractice
damages. The best evidence of whether such caps affect the cost of
malpractice insurance is to compare the rates in those two groups of
States. Based on the data of medical
[[Page S7400]]
liability monitored on all 50 States, the average liability premium in
2001 for doctors practicing internal medicine was slightly less, 2.2
percent for doctors in States without caps on malpractice, $7,715; and
in States with caps on damages, $7,887. Internists actually pay more
for malpractice insurance in the States that have the caps.
The average liability premium in 2001 for general surgeons was also
slightly less. For doctors in States without caps, $26,144; in States
with caps, it was $26,746. Surgeons are also paying more in States that
have caps.
The average liability premium on OB/GYN physicians in 2001 was only
3.3 percent more for doctors in States without caps, $44,485; and
States with caps, $43,000--a very small difference.
This evidence clearly demonstrates that capping malpractice damages
does not benefit the doctors it purports to help. Their rates remain
virtually the same. It only helps the insurance companies earn bigger
profits.
This chart over here indicates the States without the cap on damages,
States with a cap on damages. I think the proof is in the pudding.
Since malpractice premiums are not affected by the imposition of caps
on recovery, it stands to reason that the availability of physicians
does not differ between States that have caps and the States that do
not. Do we understand that? We are talking about comparing the number
of available physicians between the States that do have caps and the
States that do not. AMA data show that there are 233 physicians per
100,000 residents in States that do not have medical malpractice caps
and 223 physicians per 100,000 residents in States with caps.
Looking at the particularly high cost of obstetrics and gynecology,
States without caps have 29 OB/GYNs per 100,000 while States with caps
have 27.4 per 100,000. Clearly, there is no correlation.
California, the State that has the lowest caps the longest, set a
$250,000 cap on noneconomic damages in the mid-1970s, which has not
been adjusted for inflation since. If the tort reformers are correct,
you would expect California to have had a smaller percent of growth in
premiums since those caps were enacted. Between 1991 and 2000, premiums
in California actually grew more quickly, 3.5 percent, than did the
premiums nationwide.
The State with the caps shows the malpractice insurance actually went
up.
If this amendment were to pass, it would sacrifice fair compensation
for injured patients in a vain attempt to reduce medical malpractice
premiums. Doctors would not get the relief they are seeking. Only the
insurance companies, which created recent market's instability, would
benefit.
Even supporters of the industry acknowledge that enacting tort reform
will not produce lower insurance premiums.
Sherman Joyce, the president of the American Tort Reform Association,
told the Liability Week publication:
We wouldn't tell you or anyone that the reason to pass tort
reform would be to reduce insurance rates.
This is the president of the American Tort Reform Association,
telling Liability Week:
We wouldn't tell you or anyone that the reason to pass tort
reform would be to reduce insurance rates.
Victor Schwartz, the association's general counsel, told Business
Insurance:
. . . many tort reform advocates do not contend that
restricting litigation will lower insurance rates and ``I've
never said that in 30 years.''
The American Insurance Association even released a statement earlier
this year, March 13, 2002, acknowledging:
[T]he insurance industry never promised that tort reform
would achieve specific premium savings.
Listen to that. The American Insurance Association even released the
statement on March 13:
[T he insurance industry never promised that tort reform
would achieve specific premium savings.
A National Association of Insurance Commissioners study shows that in
2000, the latest year for which data is available, total insurance
industry profits as a percentage of premiums for medical malpractice
insurance was nearly twice as high--13.6 percent--as overall casualty
and property insurance profits--7.9 percent.
Do we understand that now? The insurance industry commissioners are
now saying that the insurance industry profits, as a percentage of
premiums for medical malpractice, are twice as high as overall casualty
and property insurance profits.
In fact, malpractice was a very lucrative line of insurance for the
industry throughout the 1990s. Recent premium increases have been an
attempt to maintain high profit margins despite sharply declining
investment earnings.
Insurance industry practices are responsible for the sudden, dramatic
premium increases which have occurred in some States in recent months.
The explanation for these premium spikes can be found, not in
legislative halls or in courtrooms, but in the boardrooms of the
insurance companies themselves. There have been substantial increases
in recent months in a number of insurance lines, not just medical
malpractice. In 2001, rates for small commercial accounts have gone up
21 percent, rates for midsize commercial accounts have gone up 32
percent, and rates for large commercial accounts have gone up 36
percent. These increases were attributable to general economic factors
and industry practices, not medical liability tort law.
Insurers make much of their money from investment income. During the
time when investments offer a high profit, companies compete fiercely
with one another for market share. They often do so by underpricing
their plans and insuring poor risks. When investment income dries up
because interest rates fall, the stock market declines, or cumulative
price cuts lower profit, the insurance industry then attempts to
increase its premiums and reduce its coverage. This is a familiar cycle
which produces a manufactured crisis each time their investments turn
downward.
For example, St. Paul, one of the largest medical malpractice
insurers, which has been experiencing serious financial difficulties
lately, actually released $1.1 billion in reserves between 1992 and
1997 to enhance its bottom line and make those dollars available for
investment. Some of the company's investments did not go well. It lost
$108 million in the collapse of Enron alone. When claims became due,
those reserves were not available to pay them.
A recent study of the Consumer Federation of America, presented at a
hearing of the Health Subcommittee of the House Committee on Energy and
Commerce last week, documented this industry's trend:
It is the hard insurance market and the insurance
industry's own business practices that are largely to blame
for the rate shock that physicians have experienced in recent
months.
The Consumer Federation's findings are highly enlightening:
Medical malpractice rates are not rising in a vacuum.
Commercial insurance rates are rising overall. The rate
problem is caused by the classic turn in the economic cycle
of the industry, sped up--but not caused--by terrorist
attacks. Insurers have underpriced malpractice premiums over
the last decade. It would take a 50 percent hike to increase
inflation-adjusted rates to the same level as 10 years ago.
Further limiting patients' right to sue for medical injuries
would have virtually no impact on lowering overall health
care costs. Medical malpractice insurance costs as a
proportion of the national health spending are minuscule,
amounting to less than 60 cents per hundred dollars spent.
Insurer losses for medical malpractice have risen slowly in
the last decade by just over the rate of inflation.
Malpractice claims have not exploded in the last decade.
Closed claims, which include claims where no payout was
made, have remained constant, while paid claims have
averaged just over $110,000. Medical malpractice
profitability over the last decade has been excellent, at
just over 12 percent per year despite a decline in profits
in the last 2 years.
That is the profit they have been making over the last decade.
This analysis of why we are seeing a sudden spike in premiums was
basically confirmed by a June 24, 2002, Wall Street Journal article
describing what happened to the malpractice insurance industry during
the 1990s:
Some of these carriers rushed into malpractice coverage
because an accounting practice widely used in the industry
made the area seem more profitable in the early 1990s than it
really was.
Does that have a ring to it, Mr. President? Carriers rushing in
because an accounting practice widely used in
[[Page S7401]]
the industry made the area seem more profitable in the early 1990s than
it really was? And now we are going to take it out on the individuals
who are most vulnerable and most severely hurt in our society?
A decade of shortsighted price slashing led to industry
losses of nearly $3 billion last year.
I continue the quote from the Wall Street Journal:
I don't like to hear insurance company executives say it's
the tort system--it's self-inflicted--says Donald Zuk, chief
executive of SCPIE Holdings, Inc., a leading malpractice
insurer in California.
This is what he said:
I don't like to hear insurance companies say it's the tort
system--it's self-inflicted. . . .
Zuk then continues:
Then it continues:
The losses were exacerbated by carriers' declining
investment returns. Some insurers had come to expect that big
gains in the 1990s from their bond and stock portfolios would
continue, industry officials say. When the bull market
stalled in 2000, investment gains that had patched over
inadequate premium rates disappeared.
Let's look back at the type of severely injured patients who would be
denied fair compensation under the McConnell amendment. These are the
people who are being asked by those across the aisle to pay for the
mismanagement of the insurance industry and the wrongdoing of health
care providers:
Leyda Uuam--from Massachusetts--underwent surgery to correct a
protruding belly button when she was 5 weeks old. Leyda will never
walk, talk, move, or have any normal function after she suffered brain
injury due to a series of errors by anesthesiologists, nurses, and a
transport team.
When Mrs. Oliveira's unborn baby showed fetal distress her doctor
failed to perform a timely caesarean birth as common sense would
indicate. Instead, he attempted a forceps delivery. When this didn't
work, he made three attempts at vacuum extraction, which were also
unsuccessful. A different physician then attempted a second forceps
delivery, which also failed. Finally, Olivera underwent a caesarean
section, yet her son died within an hour of his birth. An autopsy
report identified the cause of death asphyxia. The hospital, in an
attempt to cover its negligence, amended the report falsely, listing
the cause of death as probably fetal sepsis.
Twelve year-old Steven Olsen is blind and brain damaged today because
of medical negligence. When he was hiking, he fell on a stick in the
woods. The hospital refused his parents' request for a CAT scan, and
instead pumped Steven full of steroids and sent him home with a growing
brain abscess. The next day, Steven Olson became comatose and wound up
back in the hospital. Had he received the $800 CAT scan, which would
have detected the brain mass growing in his skull, Steven would be
perfectly healthy today. The jury awarded Steven $7.1 million in non-
economic damages for his life-sentencing of serious illness and
disability.
Harry Jordan, as man from Long Beach, underwent surgery to remove a
cancerous kidney. The surgeon took out his healthy kidney instead.
Jordan had been living for years on 10 percent kidney function, and he
is now no longer able to work.
Elizabeth, a former fashion model, went to the emergency room
complaining of nausea, vomiting, and ``the worse headache of her
life.'' The doctor misdiagnosed her as having an acute neck sprain and
sent her home. Unfortunately, he failed to diagnose her symptoms as the
warning leak of a brain aneurysm even though he had written a textbook
which included an entire chapter on warning leaks. Ten days after her
hospital visit, Elizabeth's aneurysm ruptured and she had a stroke. The
bleeding destroyed brain tissue, requiring the removal of \1/3\ of the
frontal lobe of her brain. Elizabeth was left paralyzed as a result of
her misdagnosed aneurysm.
Philip Lucy's nasal cancer was misdiagnosed by doctors as high blood
pressure and nerve damage for 2 years, although he continued to
complain of pain. It was finally discovered that his left sinus was
completely filled with a cancerous mass. This necessitated the removal
of his left palate, left cheek, left orbit and his left eye.
LeVern Dostal, a recent retiree, died a slow and painful death after
her surgeon failed to give her antibiotics before her gallbladder
surgery. She developed sepsis and was hospitalized for a lengthy period
of time, during which she underwent 3 more surgeries, as her condition
slowly deteriorated.
Ms. Keck, 63, was admitted to the hospital for pneumonia. She
sustained brain injuries because a nurse failed to monitor her oxygen
level as instructed, and failed to notify the doctors of her worsening
condition. She now suffers from paralysis and cannot speak. The
hospital was purposefully understaffed to increase profits.
As we debate this amendment, let us all remember that we are dealing
with people's lives--many of them have suffered life-altering injuries
as a result of substandard medical care. The law is there to protect
them, not to shield those who caused their injuries.
I hope the Senate will not accept the McConnell amendment for the
reasons I have outlined. As we have seen on so many different
occasions, the neediest, the youngest, and the most vulnerable
individuals in our society are often those who suffer the greatest
kinds of neglect and negligence.
If we are going to have accountability in our society, we ought to
have accountability.
One of the extraordinary things I heard was yesterday during the
President's statement in North Carolina when he talked about
accountability by victims, but not accountability by the insurance
companies and not accountability by the others--not accountability by
others even in the corporate world but accountability by
schoolchildren. If they are not able to learn and be successful, then
they are not included in terms of the completion of their studies. And
now they are being held accountable. We are not getting the resources
for them in order to give them the fair chance.
It seems to me we are being asked to protect the strongest elements
in terms of our society. We have seen that during the course of this
whole debate. Now we see it with regard to an amendment to protect the
insurance companies. When we look at any piece of legislation, we
should ask: Who is going to benefit, and who is going to lose? The
answer is very simple with this amendment. The people who are going to
benefit are going to be the insurance companies themselves, and the
people who are going to pay the price are going to be our most
vulnerable in our society who need our protection.
The PRESIDING OFFICER (Mr. Corzine). The Senator from Kentucky.
Mr. McCONNELL. Mr. President, I listened with interest to the speech
of my good friend from Massachusetts, although I must say that it must
have been drafted to address a different amendment other than the one
the Senator from Kentucky sent to the desk. None of the victims that
Senator Kennedy recounted would have lost a penny of economic or
noneconomic damages under the amendment that is at the desk--not a
penny. We don't cap either pain and suffering, or economic damages.
There is no cap at all.
I did not hear my friend from Massachusetts talk about the legal
fees.
Let us go back and take a look at what this amendment does before
yielding to my friend, the only doctor in the Senate, to address this
issue.
This is a pro-victim amendment. There are no caps on economic and
noneconomic damages in this amendment. Two things are capped: Punitive
damages, which are designed to punish the defendant and not enrich the
plaintiff, are capped at twice the rest of the damages. There is a very
reasonable cap on attorney's fees. And the reason for that is the
plaintiffs--the victims--the senior Senator from Massachusetts is
talking about are only getting about 52 percent of the money. Those
grievously injured parties are not getting enough of the awards.
Let us in this debate talk about the amendment that is before us--not
the amendment that might have been before us.
The AMA supports the amendment--frankly, somewhat tepidly. They would
like to go further. But the AMA does support my amendment. Obviously,
they think it would make a difference in being able to continue to
provide health care for our American citizens.
Mr. President, the amendment I offer would make needed reforms to
medical malpractice litigation.
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There are few challenges facing this body that are more complex than
improving the quality and affordability of health care in America. This
week, we will have debated competing proposals to expand Medicare and
create a prescription drug benefit. Over the past year, the Senate has
passed legislation to strengthen our Nation's defenses against the
threat of bioterrorism and provide new resources to the researchers at
the National Institutes of Health, NIH. While all of these proposals
are worthy of this body's consideration, the Senate has not yet
addressed one of the fundamental problems limiting the accessability
and affordability of quality care: reforming our Nation's flawed
medical malpractice system.
These reforms are essential to ensuring that quality health care is
available and affordable to all Americans. After all, what good is a
Medicare drug benefit if you can't find a doctor to write a
prescription or a pharmacist to fill it? Our current medical
malpractice system encourages excessive litigation, drives up costs,
and literally scares care-givers out of the medical profession. All too
often, these lawsuits result in exorbitant judgements that benefit
personal injury lawyers more than they compensate injured patients.
Enacting reasonable medical malpractice reforms will reduce health
care costs and improve access to care, while allowing legitimate
victims full access to the courts. My amendment would take a modest,
but important, first step at reforming this flawed medical malpractice
system in a manner which I believe will attract significant bipartisan
support.
I have long championed strong, medical malpractice reform
legislation. I believe debate on the Greater Access to Affordable
Pharmaceuticals Act, provides us not only the opportunity, but the
obligation, to enact meaningful malpractice reforms.
Much like the issue of a Medicare drug benefit, medical malpractice
reform is not a new topic for the Senate. During debate on the Product
Liability Fairness Act of 1995, I offered an amendment to enact
reasonable reforms to our Nation's medical malpractice laws. After
debating the amendment for several days, I was proud to have the
support of 53 Senators and my amendment was agreed to by the Senate.
Among those 53 supporters were some prominent Democrats and
Independents: Senators Lieberman, Feinstein, Jeffords, Nunn and Exon.
Today I offer the same amendment the Senate agreed to in 1995. For
the benefit of my colleagues who have joined the Senate since we last
debated this issue, my amendment would do the following: The McConnell
amendment would limit punitive damages to two times the sum of
compensatory damages, economic and non-economic. This provision would
help end the litigation lottery, where punitive damages are awarded out
of all proportion to the underlying conduct. The threat of being
unreasonably held responsible for millions and millions of dollars in
damages hangs like the sword of Damocles over the heads of our medical
professionals.
My amendment would eliminate joint liability for non-economic and
punitive damages. As a result, defendants would only be liable for
their own proportionate share for the harm that occurred. It is unfair
for an injured person to be found 99 percent liable for his injury, and
his doctor to responsible for only 1 percent, yet the doctor has to pay
for all of the damages.
The amendment places modest limits on attorneys' contingency fees in
medical malpractice cases. Specifically, the amendment would only allow
personal injury lawyers to collect 33 percent of the first $150,000 of
an award and 25 percent of the award on all amounts above $150,000.
My amendment encourages States to develop alternative dispute
resolutions mechanisms to help resolve disputes before they go to
court.
As I noted earlier, the amendment I offer today is the same one that
the Senate agreed to in 1995. Unfortunately, as we all know, it is
impossible to pass contentious legislation in this body without the 60
votes necessary to invoke cloture. Therefore, in the interests of
preventing a filibuster against the larger product liability bill, I
withdrew my medical malpractice amendment, and it has never been signed
into law.
In 1995, the Senate considered our medical malpractice system to be
so flawed that it required the Federal Government to enact these exact
reforms. In the period since then, the system has gotten dramatically
worse, not better.
I might not be so passionate about enacting medical malpractice
reforms if these lawsuits were an accurate mechanism for compensating
patients who had been truly harmed by negligent doctors. Unfortunately,
the data shows just the opposite. In 1996, researchers at the Harvard
School of Public Health performed a study of 51 malpractice cases which
was published in the New England Journal of Medicine. In approximately
half of those cases, the patient had not even been harmed, yet in many
instances the doctor settled the matter out of court, presumably just
to rid themselves of the nuisance. In the report's conclusion, the
researchers found that, ``there was no association between the
occurrence of an adverse event due to negligence or an adverse event of
any type and payment.'' In everyday terms, this means that the
patient's injury had no relation to whether or not they received
payment in their malpractice case.
While the research showing that litigation's effectiveness at
compensating the injured hasn't stopped the personal injury lawyers
from rushing to the courthouse to file more lawsuits, the jackpots in
the personal injury lawyers' litigation lottery have increased
dramatically since we considered this issue in 1995. As my first chart
shows, the Jury Verdict Research Service reports that the median award
made by a jury has more than doubled since 1996, from $474,000 to
$1,000,000 in 2000. Not surprisingly, the increase in jury awards has
led to a similar increase in the dollar value of settlements reached
out of court. Since 1995, the median settlement has increased from
$350,000 to $500,000 in 2000.
These escalating settlements might make one wonder, ``Are our
doctors, nurses and hospitals twice as negligent as they were just 6
years ago?'' The answer is, of course, no: the doctors haven't gotten
worse, but the system has. In fact, plaintiffs only won 38 percent of
the medical malpractice claims that went to trial, essentially the same
as it was in 1995, 35 percent.
I think this bears repeating. In 1995, the Senate considered our
medical malpractice system to be so flawed that it required the federal
government to enact limits on the contingency fees charged by personal
injury lawyers and punitive damages. In the period since then, the
system has gotten worse, not better.
This litigation explosion is manifested in the premiums which doctors
pay for their malpractice insurance. In the 7 years since we last
debated medical malpractice reform on the Senate floor, doctors on Main
Street USA have seen dramatic increases in their insurance premiums.
Since 1995, obstetricans, OB-GYN's, have seen their premiums increase
an average of almost 12 percent a year, each and every year. The same
is true for the general surgeons who have seen their malpractice
premiums increase 13 percent each year. Let me be perfectly clear, I am
not talking about a thirteen percent increase over seven years, these
premiums are increasing 13 percent EVERY year.
This may make people wonder, ``Why should I care about how much
doctors pay for malpractice insurance premiums?'' The answer is access.
Doctors are less likely to provide those services for which they are
likely to be sued.
This is particularly true in rural areas of this Nation. While many
doctors are willing to set up practices in rural areas, they cannot
forgo malpractice insurance. Therefore, many doctors are forced to
establish practices in more urban and suburban areas where they can
earn the fees necessary to cover their malpractice premiums.
This has certainly been the case in Kentucky this year. Just a few
weeks ago, the Corbin Family Health Center in Corbin, KY was forced to
shut its doors because its doctors were unable to find an affordable
insurance policy. Dr. Richard Carter and his four colleagues at Corbin
Family Health deliver about 250 babies a year and have never lost a
malpractice claim. Yet
[[Page S7403]]
when their insurance company, The St. Paul Cos., decided to leave the
medical malpractice business, Corbin Family Health's doctors lost their
coverage. The remaining few insurance companies that were willing to
provide coverage will only do so for $800,000 to $1 million a whopping
465 percent increase.
This is a tragedy. Fifty of the clinic's patients are due to give
birth in the next 2 months, and 130 more are due by the end of this
year.
Fortunately for the families of Corbin, KY, the clinic's doctors were
able to secure coverage last week, and the clinic reopened. However,
their premium is twice what they paid previously. In addressing his
clinic's predicament, the clinic's director, Steven Sartori, noted,
``Even though you're relieved, it's not over because this malpractice
problem is not going to go away . . . There's more doctors who are
going to be in the same predicament I was in.''
This problem is not limited to Kentucky. On July 1 of this year,
Atmore Community Hospital in Atmore, AL, was forced to close its
obstetrics program because it could not afford the 282 percent increase
in malpractice insurance from $23,000 to $88,000. Now, expecting
mothers must travel either to the hospital in Brewton, AL, 30 miles
away, or to the big city hospitals in Mobile or Pensacola. That's more
than an hour and a half drive.
Nor is the problem limited to the South. The administrators at Copper
Queen Community Hospital in Brisbee, AZ were recently forced to close
their maternity ward because their family practitioners were looking at
a 500 percent premium increase. Expectant mothers must now travel more
than 60 miles to the closest hospital in Sierra Vista or Tucson.
According to a recent article in Forbes magazine, four women have since
delivered babies en route.
In New Jersey, the director of Obstetrics and Gynecology at Holy Name
Hospital was forced to lay off six employees from his practice when his
malpractice premiums doubled. He told the New York Times ``The issue
is, we can't stay open. It's going to restrict access to care. It's
going to change the way OB is delivered to the population, and they're
not going to like it.''
While our flawed medical malpractice system may be hitting
obstetricians particularly hard, it is negatively impacting nearly
every aspect of the medical profession. Many radiologists in Georgia
are no longer reading mammograms, Atlanta Business Chronicle, 6/21/
2002, because of the liability associated with the service. These
lifesaving mammograms may only make up 5 percent of a radiologist's
practice, but are responsible for a whopping 75 percent of their
insurance liability. Officials at Memorial Hospital and Manor in
Bainbridge, GA faced a staggering 600 percent increase in premiums
despite a ``nearly spotless claims history,'' Modern Healthcare, 4/1/
2002.
However, no one should be fooled into thinking that this medical
malpractice crisis is limited to the small hospitals of rural America.
Perhaps the most publicized case involves the closure of the trauma
unit at the University of Nevada Medical Center, UMC. Trauma centers
are frequently referred to as ``super emergency rooms'' because they
are staffed with highly trained surgeons and specialists who are
qualified to treat the highest risk cases. Nearly all of the highly
skilled surgeons and orthopedists who worked in the UMC unit decided
they could no longer risk the liability exposure and resigned. UMC's
director Dr. John Fildes explained that, ``We want to be here, that's
the sad thing. These physicians want to take care of patients, but they
are withdrawing from high-risk activities to protect their families and
livelihoods'', Washington Post 7/4/2002.
What does the closing of UMC's Trauma Center mean to the people of
southern Nevada? It means that those patients who are most seriously
injured in car accidents must either be treated at less prepared
emergency rooms or transferred out of state to the nearest trauma
center. Fortunately, UMC has reached a temporary arrangement that will
allow the unit to re-open by classifying its physicians as State
employees for the next 45 days.
Pennsylvania has faced a similar crisis. I would like to read from a
recent article that appeared in the Allentown Morning Call:
Thomas DiBenedetto is a marked man.
He feels the bull's-eye on his back every time someone is wheeled
into Lehigh Valley Hospital's emergency room with broken, mangled
bones.
It's his job to put people back together. DiBenedetto is an
orthopedic surgeon in the Level One trauma center, and he loves what he
does. Or, at least, he did.
Large medical malpractice awards and increasingly litigious patients
have made it difficult for him to enjoy the job he's been doing for 13
years. He has been sued four times.
He won all four cases. Yet, his malpractice insurance costs this year
went up nearly a third, to $44,000. Even though his record is clean, he
expects the bill to continue to climb.
Now, I am tempted to take issue with the AMA's finding in that I
think some of these States have crossed the line from having serious
problems to being in a crisis. I know how bad the situation is in
Kentucky, and I think Kentucky ought to be listed as a crisis State. I
noted the closure of the Corbin Family Health Center earlier, and we
see daily reports of how Kentucky physicians are packing their medical
bags and heading to Indiana, which has more reasonable tort laws.
For those doctors who choose to stick with the profession they love,
they will inevitably be forced to pass these higher malpractice costs
along to consumers in the form of higher fees. Several years ago the
Hudson Institute conducted a study in which it estimated that liability
costs added $450 to the cost of each patient admission to a hospital
and accounted for 5.3 percent of their medical expenditures. In 1994,
the Towers-Perrin Research firm estimated that malpractice expenses
added $12.7 billion to the cost of health care in America. To put that
into terms many Senators can understand, that is more money that
Medicare spent on nursing home care in 1994 and almost as much as was
spent on the Medicare Home Health benefit. I don't think anyone would
argue that these dollars would be better spent improving patient care
rather than lining the pockets of the personal injury lawyers.
I will be the first person to admit that the reforms I propose today
are modest. As many of my colleagues know, I have authored even
stronger reforms contained in free-standing legislation, the Common
Sense Medical Malpractice Reform Act of 2001. Our Nation's health care
is staring down the barrel of a medical malpractice crisis, and it must
be addressed soon. Therefore, I have chosen to offer this amendment
which the Senate already agreed to in 1995. At its heart, this
amendment merely assures that patients, not personal injury lawyers,
receive the vast majority of any jury award or settlement. By
establishing proportional liability, the amendment ensures that damages
are paid by those parties who actually inflict the harm. I believe
these are common sense steps the Senate can take to address, and I urge
my colleagues to support it.
I yield 20 minutes to the distinguished Senator from Tennessee, the
only physician in the Senate who is well versed on this issue. I yield
20 minutes to the Senator from Tennessee.
Mr. DURBIN. Mr. President, parliamentary inquiry: As I understand it,
we have a time agreement in terms of the allocation of time.
The PRESIDING OFFICER. We are under a time agreement. The time is
limited and under the control of the Senator from Kentucky and the
Senator from Massachusetts.
The Senator from Tennessee.
Mr. KENNEDY. Mr. President, I think we were trying to go back and
forth. I know the Senator has to leave. I don't know what the Senator's
time limitation is. Could he take 7 minutes?
Mr. FRIST. Mr. President, I have a time constraint. I have been on
the floor since last night waiting to make my opening statement.
I would be happy to yield 3 minutes, if the Senator has to make an
airplane or something.
Mr. KENNEDY. Mr. President, I want the record very clear--then we are
not going from side to side? I thought we were going from side to side.
I withdraw that.
(Laughter)
Senator McConnell had two speeches.
[[Page S7404]]
We have followed the side-to-side rule. Now we are making it clear
that on this legislation we no longer have to follow it. If that is the
way it is going to be--we have respected that since the start of this
debate. This is the first time I have been on the floor for 7 days that
we have not done that.
I am prepared to yield to the Senator.
The PRESIDING OFFICER. The Senator from Tennessee has the floor.
Mr. FRIST. How much time has been used by each side?
The PRESIDING OFFICER. The Senator from Massachusetts has used 23
minutes. The Senator from Kentucky has used 11 minutes.
The Senator from Tennessee.
Mr. FRIST. Mr. President, I want to change the topic and focus where
I believe the impact is most being felt today. It really has not been
discussed on the floor thus far; and that is, at the level of the
doctor-patient relationship, at the level where care is actually
delivered. We heard a lot about the budget numbers and the insurance
companies and the like, but what I would like to do is focus on where
the impact actually is.
Yesterday, I was at a hospital, not as a physician, but I was there
with someone in my family. I was in an emergency room 2 nights ago and
then yesterday. Again, I was not there as a doctor or as a U.S.
Senator. It was a local hospital, George Washington University
Hospital.
On a side table, I picked up a newsletter. Again, it was not intended
for me. The newsletter is called the ``GW Medicine Notes.'' I have it
in my hand. It is written by their medical staff for their medical
staff and, I guess, for people in the hospital. The letter is from the
chairman, Dr. Alan G. Wasserman. The whole front page really tells the
story that much of the debate will be about today and on Tuesday.
I will open with just one sentence or two sentences from this letter,
again not intended for me, but to really express the sentiment, the
impact of what is happening all across America because what we are
seeing today is, indeed, a crisis.
The words, again, from Dr. Wasserman, in what is called the ``GW
Medicine Notes,'' a monthly publication of GW, the George Washington
Department of Medicine:
What we have is a runaway train that isn't stopping. The malpractice
problem is not just a physician problem. It is beginning to affect the
ability of patients to get proper care in a timely manner.
I may refer back to this letter because I found it fascinating,
sitting there yesterday waiting for an MRI scan, just to see the
sentiment that patients are actually being hurt. When I saw the words:
``What we have is a runaway train that isn't stopping,'' the imagery, I
think, is very appropriate.
We cannot do little things. This train is barreling through, and
patients are being hurt. Forget all the rhetoric, the dollars and
cents, the bad insurance companies and the profits. Patients are being
hurt by the current tort system that we have in effect today. The good
news is, there is something we can do about it, and it starts right
here with the McConnell amendment that is on the floor today.
I want my colleagues to listen very carefully. I hope, in the
expanded reach, people are listening, because we have an opportunity,
in this amendment, to improve patient care, and to reverse this runaway
train, which is hurting patients today.
How can I say so definitively that patients are being hurt? You can
look in the media. You can go into hospitals. I encourage everybody to
ask their doctor. The next time you see your doctor or see a nurse or
go into a hospital or interact with your health care system, just ask:
What are these malpractice premiums doing?
We will talk a little bit about why premiums are going up.
What is being said around the country? Pick up the newspaper any day
all across the country. Allentown, PA; Beckley, WV; New York, NY;
Kansas City, KS; Jackson, MS.
Jackson, MS, November 23, 2001:
Costs Lead Rural Doctors to Drop Obstetrics.
That is because of the cost of the malpractice insurance. OB/GYNs are
refusing to deliver babies and are dropping obstetrics.
Allentown, PA:
CARE CRISIS: Malpractice premiums crippling doctors. The
emergency has stricken physicians in southeastern
Pennsylvania, forcing some to leave their practices and
patients behind.
Beckley, WV:
The situation may be more acute in West Virginia than
anyplace else, but doctors across the board and around the
country are facing double-digit hikes in malpractice
premiums, something many hadn't seen since the 1980s.
Kansas City, KA:
Insurance rates reach crisis level for doctors. Some
physicians have been forced to leave practices.
Again, we are talking about access to health care and costs of health
care.
Dayton, OH:
WOMEN'S HEALTH CARE CRISIS LOOMS. . . . Rising malpractice
premiums may force some doctors to stop delivering babies.
Buffalo, NY:
Soaring costs of medical malpractice insurance have caused
fears among doctors that they will be forced to either quit
their profession or practice in another state.
We all recognize this problem. I think both sides are going to state,
again and again, that medical liability insurance premiums are
skyrocketing. Why? The facts are there. We know it. We see it. Our
physicians tell us why. We can look at what our insurance companies are
having to charge today. The question is, why?
Medical liability claims and damage awards are exploding, and when
they explode, that ends up being translated into increased premiums.
People think those increased premiums are paid for by the doctor. When
the doctor pays $50,000 or $100,000 in malpractice insurance, it is not
really paid by the doctor, because the doctor is going to pass that
straight back to the patients.
When you go to a doctor for a particular procedure part of that
procedure is going just to buy the insurance. These costs ultimately
increase premiums. First of all, increased jury awards increase
premiums. They are eventually passed back to the patient.
We saw a chart earlier today. Let me just show it again. It is not
just in George Washington Hospital, where I happened to find this
newsletter and talked to the doctors and nurses there, and not just at
Vanderbilt but all throughout the local and national medical community.
The problem is all over the United States of America.
This is from the AMA. Basically, it outlines, in red, those States
that are in crisis. You can see, it is not just on the east coast, and
it is not just in the South, and it is not just in the Northwest. Shown
in red are States in crisis: New York, Pennsylvania, Texas, Nevada, and
Washington. Shown in yellow, including my home State, are States with
problem signs. As these rates increase 15, 16, 17 percent, sometimes 20
percent, sometimes 30 percent, they will force more states into the
red, unless we act.
The end product of all this, all those articles, the end product of
the newsletter--this is what is circulating in hospitals and clinics
all over the United States of America--is that patients are suffering.
Why do I say that? No. 1, access to care. It is not just a matter of
the costs, but it is access to care. If you are in a motor vehicle
accident and you need a trauma center, we have seen trauma centers
close because of these escalating, out-of-sight, skyrocketing premiums,
which no longer can be tolerated. If you are one of those individuals
who needs that care, the access is not there, and you are going to be
hurt.
If you need an obstetrician--in many ways, it is a woman's issue--and
your former gynecologist-obstetrician is one who gave up that interest
in delivering babies because the malpractice insurance was so high,
your access to obstetrics care, the delivery of babies, and the
prenatal and perinatal care all of a sudden disappears.
Why? Ask your obstetrician. It is because the malpractice insurance
has gone sky-high, from $10,000, $20,000, $30,000, $50,000, $100,000 up
to $150,000, and it can no longer be sustained over time.
So physicians are dropping services. They have no choice. They are
moving away from procedures that have a higher challenge rate because
of the risk of the procedures. But if you are one who needs that
procedure, you suffer from a lack of access to care. Those procedures
that are a little bit higher
[[Page S7405]]
risk, physicians are beginning to leave and not do them.
We have had letters read about malpractice insurance. All of us
understand that malpractice insurance needs to be addressed. It is the
only way to improve the system itself. Malpractice does occur. There is
nothing in the McConnell amendment that in any way lowers the standards
on malpractice. You will have the other side reading a whole series of
letters from people who have been injured. And as the Senator from
Kentucky pointed out, there is nothing in his amendment that lowers the
standards in any way in addressing true malpractice.
My colleagues who are physicians are now demanding action by
Congress. Why? Because they took that Hippocratic oath to take care of
patients, to do no harm. To illustrate this runaway train concept that
Dr. Wasserman mentioned in his newsletter, things are at a crisis, we
have level 1 trauma centers closing. Thank goodness they are not
closing permanently but closing for this very reason--not for a whole
broad range of reasons of cost increases but for this very reason--the
high costs of liability insurance.
A level 1 trauma center is a big deal. It is not just an emergency
room, and emergency rooms are terribly important, but it is not just an
emergency room that sutures cuts or takes care of serious headaches.
This is where you go if you are in a severe motor vehicle accident,
have severe head trauma, multiple injuries, bleeding in the abdomen.
This is where you go where you have trained specialists 24 hours a day
to save your life. That is what a level 1 trauma center is.
The only level 1 trauma center facility at the University of Nevada
Medical Center closed on July 3 after 57 orthopedic surgeons basically
resigned because medical malpractice insurance rates made it too costly
for them to treat high-risk patients.
Luckily, fortunately, the trauma center reopened when the surgeons
agreed to return for at least 45 days. People can look at that case and
say it was for this reason or that. The bottom line is, we have a group
of people in a community who took an oath to take care of patients, but
basically said this is such a severe, fast-moving, heavy, runaway train
that we can't sustain what we do professionally because of this crisis.
This particular trauma center is one of the 10 busiest in the country
and is the only one in Las Vegas. When it closed, the nearest trauma
center was roughly an hour and 20 minutes away.
Therefore, when we talk dollars and cents and insurance companies
making money, we need to address all of that. But let's recognize that
we have to fix the system which has now gotten so bad, so severe that
premiums are skyrocketing. That increase is passed on to patients.
Patients cannot afford increases in health care costs. We have known
that for a long time.
Now what is happening, the actual care expected by the American
people and that the American people deserve is less available. We call
it less access. But whether it is a trauma center closing, whether it
is a woman who wants to keep her obstetrician, but the obstetrician
says he can't afford to keep delivering babies because of these
premiums, because of these excessive lawsuits, these frivolous lawsuits
today, he can't afford his old specialty that he was trained to do.
Then there is the third component of access. You have physicians
leaving parts of the country. Basically, some parts of the country,
these red areas where you have this crisis level, malpractice insurance
has gotten so high that a physician can either quit--and they are doing
that; they have no choice. Ask your physicians.
Mr. McCONNELL. Will the Senator yield?
Mr. FRIST. I am happy to yield.
Mr. McCONNELL. In response to his observation, what is happening in
my State is they are going across the river to Indiana which, as you
will note, is a State which has modest caps on recovery; therefore,
affordable rates.
Mr. FRIST. I thank the Senator from Kentucky. He is exactly right. We
have people moving from a yellow State, such as Kentucky, to a white
State. The white means States that are currently OK. You see
California. I will come back to California and comment on that. We have
people from Mississippi, that already has fewer physicians, moving up
to Tennessee. And who knows, they may end up moving to Wisconsin or
Indiana or out to California for the same reason.
What is important, in response to the Senator from Kentucky's
question, is that physicians are making decisions not on places they
either like to practice to deliver the care they are trained to do, but
now they are making decisions because of this exorbitant, runaway
train. It is almost like a litigation lottery, malpractice lawsuit
premiums that they are having to pay. They tell you that. That is the
reason they are moving.
So we have the cost issue. We have the specialty issue. We have
physicians changing specialties, not because of their individual
practice, what kind of care they are giving, but because the premiums
are that higher for obstetricians versus gynecologists. Obstetricians
deliver the baby; the gynecologists takes care of many other women's
issues. Then you have the geographic movement to other States.
There is a reason for all of this. It is a litigation problem. We
need to fix the problem, and it can be fixed. The numbers are
staggering. Between 1995 and the year 2000, the average injury award
jumped over a 5-year period more than 70 percent to $3.5 million. That
is the average. More than half of all injury awards today top $1
million of all the awards. The payouts aren't the only problem.
Simply defending a malpractice claim, whatever the claim is, is more
than $20,000, whether or not the doctor is at fault or the hospital is
at fault. So there is an incentive through these exorbitant contingency
fees where the trial lawyers, the personal injury lawyers, may make 40
percent. If there is a jury award, the trial lawyer, the personal
injury lawyer gets 40 percent of the cut. Thus the personal injury
lawyer has the incentive, the economic incentive to go out and engage
in lawsuits, in frivolous lawsuits.
Each one of those which comes forward, no matter what, just to defend
costs at least $20,000. In 2001, physicians in many States saw their
liability premiums for these frivolous lawsuits, excessive lawsuits
that go to the millions and millions of dollars, with the trial lawyers
taking off 40 percent--and Senator McConnell's amendment addresses this
contingency fee very directly to put some sort of control on the
incentive that trial lawyers have to dig up these cases, then the
physicians, because of the tremendous cost, whether the case is
frivolous or not, they tell their insurance company to settle the case.
They don't want to be tied up in a court. They want to deliver care.
That is what physicians are trained to do. That is what they are
obligated to do.
The solution: Intelligent, reasonable tort reform, sensible reform
with fair and equitable compensation for those negligently injured.
California has addressed this. Hopefully, over the next several days or
hours we will address their experience. We have seen California put
very reasonable controls and caps and incentives addressing things
broadly, and they have been able to control their costs. So we know it
can be done.
I see my time is about over. I look forward to coming back Monday to
talk a little bit more about this issue. The bottom line is, the
McConnell amendment will help patients. That is what it is about.
Patients are suffering today. We know sensible tort reform works. We
have seen it in California, in those States that have been progressive
enough to do that. Now we have a duty to make sure these red States
become yellow States and eventually become white States where we don't
have this crisis today.
Sensible tort reform works. Let's act now to protect patients, their
accessibility to quality care, the premiums that physicians have to pay
which are ultimately translated down to cost to that individual
patient.
I urge support of the underlying amendment.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. I thank the Senator from Tennessee. He has a unique
perspective as the only physician in the Senate for lending his voice
to this most important cause. I might say to my friend, to those on the
other side of the aisle, we may or may not win Tuesday morning, but
this is not going
[[Page S7406]]
away. We will be back, and we will some day address this problem
because it is a national problem. Some on the other side will argue for
States rights, which I always find interesting coming from very liberal
Members of the Senate, that somehow this is not a Federal problem. I
intend to outline in my full remarks exactly why it is a national
problem and can only be corrected at the national level. I thank my
friend for his outstanding comments this morning and look forward to
continued discussion next week.
Mr. FRIST. Mr. President, I ask the Senator from Kentucky to allow me
to enter three sentences in the Record, and then I will close.
First, I thank the Senator for his comments. This does give us an
opportunity to point to the fact that this is a national crisis that
has to be addressed. We have an obligation to address this crisis.
Dr. Frank Boehm, who is a good friend of mine, writes a newspaper
article in the Nashville Tennessean. Though I do not have one of his
articles, he keeps a really good feel of what is going on around the
State of Tennessee and around the country and is also one of the
preeminent high-risk obstetrical doctors in the United States of
America. I communicated with him the other day.
I close with two or three sentences of what he said. He sees a lot of
these high-risk cases coming through and reviews a lot of cases. He
says:
What this has taught me is that doctors, hospitals and
nurses are being sued in large numbers, in large part because
of the possibility of a settlement or trial judgment of a
large amount of money.
Then he talks about some of the things we can do, many of which are
in the underlying McConnell amendment.
He closes with this:
Doctors need tort reform and so do our patients. With many
physicians leaving States to practice elsewhere, or just
closing up shop, patients are suffering from a lack of access
to medical care in many parts of our country.
That was in an e-mail in response to my question of what is the lay
of the land.
I thank the Chair.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. Mr. President, I thank the Senator from Tennessee
particularly for his fine observation. There has been an effort on the
part of some--and I am sure we will hear it again Tuesday--to say this
is about insurance companies. This is not about insurance companies. It
is about doctors, and it is about patients.
The AMA does support the McConnell amendment. I ask unanimous consent
that a letter indicating their support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
American Medical Association,
Chicago, Illinois, July 25, 2002.
Re Medical Liability Reform Amendment
Hon. Mitch McConnell,
U.S. Senate, Washington, DC.
Dear Senator McConnell: The American Medical Association
(AMA) commends you for your leadership and initiative in
offering an amendment to S. 812 (``Greater Access to
Affordable Pharmaceuticals Act of 2001'') that would bring
several common-sense reforms to our nation's broken medical
liability litigation system.
Many states in our nation are experiencing an emerging
medical liability insurance crisis. Due to large jury awards
and the burgeoning costs of defending against lawsuits
(including frivolous claims), medical liability insurance
premiums are skyrocketing. In many cases, physicians are
finding that liability insurance is no longer available or
affordable. The media now reports on almost a daily basis
that the situation has become so critical in some states that
physicians are forced to limit services, retire early, or
move to another state where the medical liability system is
more stable.
The most troubling aspect of our unrestrained medical
liability system is the effect on patients. Access to care is
seriously threatened in states such as Florida, Mississippi,
Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania,
Texas, Washington, and West Virginia. In other states,
including Kentucky, a crisis is looming. Emergency
departments are losing staff and scaling back certain
services such as trauma care. Many OB/GYN's have stopped
delivering babies, and some advanced and high-risk procedures
are being postponed because surgeons cannot find or afford
insurance.
Your amendment includes key building blocks to effective
reforms, such as allowing injured patients unlimited economic
damages (e.g., past and future medical expenses, loss of past
and future earnings, cost of domestic services, etc.),
establishing a ``fair share'' rule that allocates damage
awards fairly and in proportion to a party's degree of fault,
preventing double recovery of damages, allowing periodic
payment of future damages, and preventing excessive attorney
contingent fees (thereby maximizing the recovery of
patients).
In addition to these necessary reforms, we urge you to
include a reasonable limit of $250,000 for non-economic
(e.g., pain and suffering) damage awards, while allowing
states the flexibility to establish or maintain their own
laws limiting damage awards that have proven effective as
stabilizing the medical liability insurance market. Multiple
studies have shown that a limit on non-economic damages is
the most effective reform to contain run-away medical
liability costs. Such reform has also been proven effective
at the state level. We also urge you to include a reasonable
cap on punitive damages, such as the greater of 2 times
economic damages or $250,000.
By enacting meaningful medical liability reforms, Congress
has the opportunity to increase access to medical services,
eliminate much of the need for medical treatment motivated
primarily as a precaution against lawsuits, improve the
patient-physician relationship, help prevent avoidable
patient injury, improve patient safety, and curb the single
most wasteful use of precious health care dollars--the costs,
both financial and emotional, of health care liability
litigation.
The proposals in your amendment are an important step in
the right direction to strengthen our health care system. The
AMA looks forward to working with you regarding a reasonable
reform on non-economic damages.
Sincerely,
Michael D. Maves, MD, MBA.
Mr. McCONNELL. Mr. President, I see the Senator from Ohio in the
Chamber. I will be happy to yield him such time as he may need.
Mr. VOINOVICH. Mr. President, about 10 minutes will do it.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. VOINOVICH. Mr. President, I rise today as a Senator from a State
that is on the edge of becoming one of those red areas on that national
map. This Senator does not want his State to become one of those red
States. I rise in strong support of Senator McConnell's medical
liability amendment.
The litigation tornado that continues to sweep the Nation does not
seem to be losing strength. In fact, at the rate lawsuits continue to
be filed, the only entity that stands to lose strength is our economy.
The cost of malpractice insurance has had an enormous impact on the
rising costs of health care and the cost of health care insurance to
the extent that more and more of my constituents are complaining that
the cost of insurance is so high that they can no longer afford to buy
it.
In particular, the effect of rampant litigation has really had a
disastrous impact on the health care industry. When a pharmaceutical
company decides not to develop and produce a new drug because the cost
of possible litigation could erase any profit, who really loses?
When physicians choose not to perform certain procedures, such as
delivering babies, because malpractice insurance rates are too high,
who loses?
Even worse, when a physician stops practicing medicine because he or
she no longer can afford the insurance premiums or is so fearful of
malpractice being filed against them, who loses?
Recently, the American Medical Association released an analysis which
found that medical liability has reached crisis proportion--I
underscore ``crisis proportion''--in 12 States. One of those 12 States
is Ohio.
In addition, the American College of Obstetrics and Gynecology, the
ACOG, issued a red alert and warned that without State and Federal
reforms, chronic problems in the Nation's medical liability system
could severely jeopardize the availability of physicians to deliver
babies in the United States of America.
The good news for Ohioans is that Ohio did not make the ACOG's list
of nine hot States, those in which a liability insurance crisis
currently threatens the number of physicians available to deliver
babies.
The bad news is that Ohio is only one step short of that mark. It is
one of three States where a crisis is brewing. In fact, signs of the
crisis are already beginning to show.
Currently, in Hancock County in northwest Ohio, they have only one
physician to deliver babies. Think about it, a county with a population
of
[[Page S7407]]
over 70,000 people has 1 physician to deliver babies. He has indicated
that if his insurance premiums continue to climb at the current rate,
he will have to close up shop.
That sounds like a crisis to me, and I am sure it sounds like a
crisis to the women in Hancock County who need someone there to deliver
their babies.
I believe this amendment that Senator McConnell has before us gets us
on our way to enacting meaningful medical liability reform. It limits
attorney's fees so that the money awarded in court goes to the injured
parties, who are the people who really need the money. It also allows
physicians to pay any large judgments against them over a period of
time to avoid bankruptcy and requires all parties to participate in
alternative dispute resolution proceedings, such as mediation or
arbitration, before going to court. It limits punitive damages to twice
the sum of compensatory damages. These are all reasonable limitations.
One of the growing areas in the legal profession is mediation and
arbitration. In fact, the Michael Moritz School of Law at Ohio State
University, of which I am a graduate, is one of the leaders of that
initiative in the legal profession.
When I was Governor of Ohio, I joined the chief justice of the
supreme court and wrote to all the businesses in our State encouraging
them to agree to a mediation and arbitration in order to reduce
litigation costs and, frankly, improve the economic environment in our
State.
Why shouldn't we do this in medical malpractice cases? Doesn't it
make sense? Providing a commonsense approach to our medical liability
problems is certainly a win-win situation. Patients would not have to
give away large portions of their judgments to their attorneys and
physicians could focus on doing what they do best: practicing medicine
and providing health care.
I know there are differences of opinion about how to approach this,
but we do have a crisis in this country. If those who are opposed to
Senator McConnell's amendment are concerned about this problem, then it
would serve us well to sit down and figure out some way we can address
this problem. We need to do it now, not tomorrow, not next month. I can
tell you, if we do not do something about this problem, we are going to
see more and more people in this country do without medical care. We
are going to see a lot more of our physicians dropping out of the
practice of medicine. And we truly will have something we never
experienced in this great country, and that is a health care crisis.
I thank the Chair. I yield back any time to the Senator from
Kentucky.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. Mr. President, I thank the Senator from Ohio, who
represents one of those red States in crisis, for his important
contribution to this debate. I thank him so much.
Mr. President, I ask unanimous consent that Senator Frist be allowed
to control the remainder of the time we have for the morning on this
issue.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Tennessee.
Mr. FRIST. Mr. President, how much time is remaining on our side?
The PRESIDING OFFICER. The Senator has 50 minutes under his control.
Mr. FRIST. And the other side?
The PRESIDING OFFICER. Sixty-seven minutes.
Mr. FRIST. Mr. President, I mentioned in comments a few minutes ago
the fact that I was in the hospital yesterday and two nights ago with a
family member and I will go there in a few minutes. Being there as a
patient's family is a different perspective than being there as a
physician or Senator.
As one walks those halls and sees people working hard, day in and day
out, 24 hours a day, as one watches the shift change at 7 or 8 at
night, fresh people coming in and starting, and see physicians coming
in at 9, 10 at night, starting early in the morning, seeing the
emergency room and trauma centers going on around-the-clock, when one
sees that and recognizes that we can do something that will make that
better when the trends, especially in the last 3 to 4 years, are
getting worse, it makes one feel very passionately about that.
When I see doctors leaving the practice of medicine for this reason,
these exorbitant, skyrocketing, out of control--this runaway train
which I mentioned earlier, such good imagery--it makes me want to
passionately come to this body and make sure that people understand,
make sure that my colleagues understand, that physicians are leaving
the practice of medicine because of these exorbitant malpractice suits.
A physician who gets up every morning to take care of patients who
come through that door is being charged $100,000 not for what they do
but to cover the legal system and these out-of-control malpractice
suits, which I will say are in many cases driven by the trial lawyers,
there is no question in my mind, and if you talk to people broadly they
will say lawyers have the incentive.
When one sees that happening and sees that patients are going to
suffer, they want to act. That is what this McConnell amendment allows
us to do, to do something that does not solve the problem; it does not
go as far as I want to go. As the Senator from Kentucky said, does not
go so far as the American Medical Association, which represents so many
tens of thousands of doctors, would go, but it is a first step. It puts
the issue back on the table, and we ought to talk about this issue in
this body.
It has been 7 years since we have actually addressed this issue, an
issue that patients are being hurt by, that is driving physicians out
of the practice of medicine, that is driving physicians from Kentucky
to Indiana, from Mississippi to Tennessee, out of New York City, out of
New York, out of Texas, out of Florida, that is driving the price of
health care up unnecessarily. It is unnecessary. In fact, it is hurting
patients unnecessarily; it is not helping patients.
If there is malpractice, there needs to be appropriate punishment.
There needs to be appropriate economic compensation. It needs to be
fair. It needs to be equitable. But these skyrocketing lawsuits, many
of them frivolous, need to be brought under some sort of moderation and
some sort of control.
I mentioned that Dr. Wasserman, who is chairman of the Department of
Medicine at George Washington University, who is in the hospital
working right now--we did not even really talk about this specifically
in any detail, but in the newsletter that I quoted earlier, which is
pretty good reflection of what is going on in every hospital around the
country, it is important for my colleagues to know that sentiment.
In that same newsletter, I read one sentence earlier saying that what
we are facing, in terms of this lack of tort reform, a medical
liability crisis being a runaway train, a beautiful analogy. He said,
and I quote from the second paragraph of the letter:
Malpractice rates are increasing at a rapid rate across
this nation. Insurance companies are going out of business,
refusing to write new policies, or raising rates 50 to 200
percent.
People say, why? Some say it is the bad insurance companies that are
making profits and taking advantage of people broadly, and that is
where the problem is. Well, I disagree. It may be part of the problem
that may need to be addressed, but the fundamental problem is the
frivolous lawsuits, with no sort of restraint, with out-of-control
incentives for the personal injury lawyers to take a 40 percent cut, to
increase the number of cases, to bring these suits, again with no
limits, no caps, not a $100,000 cap, a $500,000 cap, a $1 million cap,
$5 million cap or $10 million--it does not matter what it is, they take
away 40 percent of whatever it is so they are going to drive it high.
The McConnell amendment stops short of what I would really like to
do, and it does not have any sort of limitation of payments. It looks
at limits on attorney's fees, establishes proportional liability, looks
at both scopes, such as collateral service reform, which we will be
able to talk about, but it is a good first step.
Dr. Wasserman, in his newsletter--and this will be the last time I
will quote from it, but it captures it--says: Be patient. There is a
coming crisis. Already, there is a shortage of physicians in certain
medical specialties in certain areas. Do not try to have a baby in Las
Vegas. There are no obstetricians. Try to find a rheumatologist
[[Page S7408]]
in Florida in the winter with less than a 3-month wait.
At some point, this will be politically important when more people
are denied immediate access to health care, and then maybe change will
come.
That hurts me in many ways, because it basically says we do not have
the guts to face an issue that is not just dollars and cents and
profits and all of this class warfare that we hear about, but an issue
that is hurting patients, where the patients suffer.
The example is right before our eyes, and I do not see how we cannot
address it. The example I mentioned earlier in the great State of
Nevada, where physicians actually had to close down a trauma center, a
level-1 trauma center, which is sophisticated care that can be
delivered adequately in no other way, and if you are in that automobile
accident, your care is in jeopardy. It does not have to be this way if
we can pass this amendment, continue the discussion, again, hopefully
improve and strengthen this amendment in the future.
This is not going to go away. It is getting worse. It is getting
worse before our eyes. We last talked about it on this floor 7 years
ago. This is the first time since then. That is inexcusable. I
mentioned the level 1 trauma center having to close, leaving patients
for that period of time if they were in an accident having to go an
additional hour and a half for proper care.
Let's look at the obstetricians and gynecologists. Again, as I
mentioned earlier, an obstetrician/gynecologist is trained to do
gynecology, women's health issues. An obstetrician's practice is to
deliver babies. It is a good example because as these doctors'
insurance premiums go sky high, and when they go sky high, the
obstetricians are saying: I cannot deliver babies anymore. I am going
to change to the field of gynecology.
Then the mom, who has been going to that obstetrician for 5 years, 10
years or 15 years, goes to see their physician who says: I am not
delivering babies anymore, and the reason I am not is because I cannot
afford that malpractice insurance. So then all of a sudden there is
this problem with access to care affecting the individual. We talked a
little bit about costs; we talked about physicians moving.
I again ask women all over this country to ask their obstetrician
what is happening to obstetrics care today because of malpractice
insurance.
Nationwide, 1 out of 10 OB/GYNs no longer deliver babies because of
this high cost of liability insurance. Obstetricians are not just
geographically moving but are leaving the practice altogether. Again, I
can say that. I can go to a hospital and say that. I can say that as a
Senator and as a physician. The best thing is for people to talk to
their obstetricians and ask how this malpractice insurance impacts on
them.
Earlier today we heard some comments about insurance companies, and I
think on Tuesday we will have the opportunity to come back to that as
well. Much of my focus is on the individual patient and on the impact
on the practice of medicine, which is very real. I do want to at least
introduce the fact that these insurance companies, many of which are
not-for-profit in the sense that they are mutual funds--and I will use
the example of the State Volunteer Mutual Insurance Company in
Tennessee. It is owned by the physicians in Tennessee.
Again, it is not a red State yet. It is on the verge of being a
crisis State. Eighty percent of the physicians in Tennessee come
together and have a mutual insurance company because they can have the
input and they can try to keep the rates down in the very best way
possible.
I will read from a letter, and I ask unanimous consent to have this
printed in the Record, dated July 25, from the State Volunteer Mutual
Insurance Company.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
State Volunteer Mutual Insurance Company,
Brentwood, Tennessee, July 25, 2002.
Hon. William H. Frist, MD,
U.S. Senate,
Washington, DC.
Dear Senator Frist: I am writing to urge you to support
tort reform legislation currently being considered by the
Congress.
According to recent news reports, doctors and hospitals in
a number of states are currently facing a true crisis in the
cost and availability of professional liability insurance.
These states include West Virginia, Pennsylvania, New Jersey,
Florida, Nevada and Mississippi and several other states.
Access to patient care in those states is being adversely
impacted, especially in the area of pre-natal and obstetrical
care.
While our situation in Tennessee has not yet reached the
crisis experienced in those states, there are many
indications that our state could well face the same sort of
problems in coming years if we do not act now to make some
changes in our civil justice system.
St. Paul Insurance Company, the nation's largest writer of
health care professional liability insurance, experienced
such losses that it announced last December that it was
completely withdrawing from the market, adversely affecting
tens of thousands of physicians who carried coverage with
that company, some of whom were in Tennessee.
Professional liability premiums for doctors in Tennessee
have been steadily rising in recent years. According to State
Volunteer Mutual Insurance Company, which covers most
practitioners in Tennessee, premiums have increased by 45
percent over the past three years, in order to keep up with
rapidly escalating losses in medical malpractice lawsuits.
Only approximately 4 percent of this 45 percent increase was
related to lower investment yield, with the remainder being
due to increasing medical malpractice losses. State Volunteer
Mutual Insurance Company is a policyholder owned mutual
company with no outside investors.
In recent years both juries and judges in Tennessee have
made multi-million dollar awards for non-economic type
damages, over and above a plaintiff's actual economic
losses. (According to State Volunteer, in one recent case
a jury awarded only $25,000 in economic damages but
awarded non-economic damages of $1,600,000. Another case
resulted in a jury award of $100,000 economic loss and
$1,900,000 non-economic damages. A judge in another case
awarded $1,062,080 in economic loss and gave $4,500,000
non-economic damages. Another judge awarded $687,691
economic loss and gave $3,000,000 in non-economic damages.
One jury awarded $7,811 in economic loss but gave
$2,650,000 non-economic damages.)
Awards in personal injury and wrongful death cases in
Tennessee are dramatically increasing, according to the
latest statistical report of the state's Administrative
Office of the Courts. In fiscal year 2001, even though fewer
cases were disposed of in our courts than in the previous
year, damages awarded statewide were more than $94 million.
This represented an increase of more than $51 million over
the previous year. The total was the largest since the courts
began reporting these statistics. According to the same
report, the average award for fiscal year 2001 was $209,284,
up $95,064 from the previous year, the largest average since
awards have been reported.
Senator Frist, doctors and hospitals in Tennessee are
dedicated to providing excellent care to our state's
population but at a time when health care reimbursements are
shrinking, and professional inability costs are dramatically
increasing, doctors in Tennessee believe that the Congress
should enact some common sense tort reform that will preserve
citizens' access to health care and compensate them for their
actural economic damages caused by negligence, while
modifying the current system of unlimited liability that
doctors and other health care professionals and institutions
currently face. Reforms modeled after California's ``MICRA''
law make sense to me. California passed legislation in 1975
that helped solve a crisis in that state. It is my
understanding that key provisions in California's civil
justice reform included the following:
$250,000 cap on non-economic damages;
reasonable sliding scale for lawyers' contingency fees;
collateral source payment offsets;
periodic payment of future damages.
I believe similar reforms on a national basis will go far
toward alleviating the health care crisis now facing much of
the country and will help avoid such a crisis from coming to
pass in Tennessee.
Thank you for your attention and concern regarding this
important issue.
Sincerely,
Steven C. Williams,
President and Chief Executive Officer.
Mr. FRIST. The State Volunteer Mutual Insurance Company is a
policyholder owned mutual company with no outside investors.
So I think they don't have a huge incentive to go out and gouge the
communities or patients. It is mutually owned by physicians throughout
the State.
In the letter to me, I read further:
Senator Frist, doctors and hospitals in Tennessee are
dedicated to providing excellent care to our state's
population. But at a time when health care reimbursements are
shrinking, and professional liability costs are dramatically
increasing, doctors in Tennessee believe that Congress should
enact some common sense tort reform that will preserve
citizens' access to health care and compensate them for their
actual economic damages caused by negligence, while modifying
the current system of unlimited liability that doctors and
other health care professionals and institutions currently
face.
[[Page S7409]]
This letter was written by Steven C. Williams, president and CEO of
the insurance company, but also representing 80 percent of the
physicians in Tennessee, calling for sensible reform, for moderate
reform, reform that does not go overboard. That is what the McConnell
medical malpractice amendment indeed does.
What is most important is what is happening to patients. Patients are
suffering under the current system. It is a runaway train. We all know
it is a problem. We have seen it in Las Vegas at the trauma center. We
see it in various States. We go in our physician's offices and hear it.
The problem is getting worse. It is increasing in its impact and not
getting better. That is why we call for action now.
The Tennessee Medical Association, in a letter dated July 24, 2002,
to me:
We have a storm brewing here in Tennessee. While the waves
are not yet crashing in on us, as in many states, including
our next-door-neighbor, Mississippi, it most certainly is
coming. Over the last two years, medical malpractice
insurance rates have gone up 32 percent.
Of additional concern is that in Tennessee there is a very clear
trend of increasing awards in medical malpractice cases. This, we
believe, is fueled in large part by a growing public perception and
environment that likens the courtroom to a casino where there appears
to be no limit.
That was Michael A. McAdoo, president, Tennessee Medical Association.
The medical liability premiums are skyrocketing. It is because the
medical liability claims are exploding. It is because the awards are
exploding. The problem is not limited to just the Northeast or the
Southeast. But as you can see from this map, the medical liability
crisis is all over the United States of America. It has to do with cost
and access to care and physicians leaving their profession.
The response to what we do means we have to identify the underlying
problem and not just worry around the edges or tinker around the edges.
I mentioned earlier, an average jury award over a 5-year period jumped
more than 70 percent on average. When more than half of all jury awards
top $1 million, we have this field of defensive medicine. That means
physicians in the emergency room that I was in two nights ago,
attending to a patient, are going to err in going a little bit too far
in terms of tests. Why? Because if that headache, which to your exam is
just a routine frontal headache treatable by a doctor, if you do not
get the CAT scan or MRI scan, the risk, although it is beyond the
normal bounds of routine accepted medical practice, a physician, a
nurse, or a hospital is going to err on getting the expensive tests,
although in your clinical judgment and using the practiced guidelines
out there today, you do not need the tests. But you will get that
series of more expensive tests that unnecessary testing.
Again, the American people pay for it. Those costs are unnecessary.
They are there because of the fear of skyrocketing lawsuits, numbers of
lawsuits, awards themselves. No one wants to be in that category. The
best protection is to get the range of tests, although you may think
they are unnecessary.
What is the effect on the doctor? In 2001, physicians in many States
saw their rates rise by 30 percent, and even more. That is just
physicians, generally. If you look at the specialists, such as
obstetricians or possibly neurosurgeons or neonatal specialists,
malpractice insurance is rising by as much as 200 percent, and in some
cases 300 percent.
In New York and in Florida, obstetricians--the ones who deliver
babies--gynecologists, and surgeons pay more than $100,000 for $1
million in coverage. That $100,000 they pay comes out of their pocket
initially, but for them to stay in business and continue what they do,
they take that $100,000 and pass it on to the people who are listening
to me, the people all across America. That is why this issue is so
powerful today.
People for the first time realize one doctor out there, who took an
oath to do no harm, to help patients, who trained 4 years in medical
school, a year in internship, 5 years in surgical residency, 2 years in
specialty training, and a year of fellowship, just to be able to help
people, are having to pay $100,000, not to help people, but to protect
themselves. That is absurd.
Ultimately, for them to stay in business it gets passed all the way
back through the system to that individual patient. It may come in
taxes. It may come for those who do not have insurance, and pay retail,
who do not have any insurance when the overall prices in health care go
up. If you do not have insurance, you are in trouble today because the
overall price of health care has skyrocketed. This is an area where
through commonsense tort reform we can lower this escalating cost of
health care across the board.
For annual premiums, some doctors in Florida and New York pay, again,
above $100,000. That is one individual doctor. This is not a big
corporation that pays this. It is not a big hospital paying it. These
are individual doctors paying this money so they can fulfill that
Hippocratic oath of doing no harm.
In Tennessee, which is not yet in the crisis mode, and is not
considered to be in crisis, but it has problem signs today, the
premiums rose 17.3 percent last year in 1 year. They will rise anywhere
from 15 percent to 17 percent this year. What we need to do is ask why.
Is there more malpractice today? Are physicians not as well trained
today as they were a year ago, or 5 years ago, or 10 years ago? Are
they not using the tests appropriately today in order to take care of
patients?
If so, we need to debate that issue and look at it and look at the
data that is out there.
No, I think the dynamics are because of frivolous lawsuits, because
the personal injury trial lawyers have a huge incentive, a huge
financial incentive for themselves in order to bring cases forward,
which puts physicians in a position where it is easier to settle these
cases rather than to spend a year or 2 years, if you have the
insurance. So there is this huge settlement, even if you don't have
malpractice, even if you know that you are absolutely innocent. It is
easier to settle for $1 million or $2 million so you can go back to the
practice of medicine.
The system is broken, and it is getting worse.
Can it be fixed? Yes. The McConnell amendment makes a first step
there--intelligent, reasonable, balanced tort reform. It will help
address it, but it will not solve the entire problem. It is not going
to make it go away, but I can tell you, it will help patients because
they will not have to be driven to the ranks of the uninsured; because
that obstetrician, with whom they have the first baby and second baby,
will not have left practice because of that malpractice insurance;
because they will be able to see the neurosurgeon for their brain tumor
in their region because he or she did not move from Texas to Wisconsin
because of these exorbitant malpractice rates.
I mentioned earlier that today is different than 6 years ago when we
last addressed it. It is in a lot of different ways because the problem
is getting worse. Ask the physicians, ask the people in the hospitals
who are working there every day. Read the newspaper, and you will see
that every newspaper is going to address this in a direct way. I think
we need to go back and look at hard data that is out there today, in
terms of what certain States have done and been able to accomplish and
what other States have tried, and learn from that.
In California there is what is called MICRA, which is the Medical
Injury and Compensation Reform Act. It became law in the mid-1970s. It
is a good example of what works. When you look at States, other big
States, you see a lot of them are in trouble. You see New York City is
in trouble. If you are in New York City, talk to the physicians, talk
to the medical community, ask them what has happened in terms of these
tort issues recently.
Look at Pennsylvania; it is in trouble. Look at Florida, look at
Texas, where there is trouble. This is California in white, meaning
they do not have a huge problem there. You do not hear it. I was in
California this past weekend and probably talked to six or seven people
in the medical profession at academic health care centers, and it is
not No. 1 on their list for reform because they say it is not a big
issue there.
Why? In the 1970s, California passed MICRA--Medical Injury and
Compensation Reform Act. California doctors and patients have been
spared much of
[[Page S7410]]
the medical liability crisis that we see across the country today. I
think it is a good surrogate measure, that California's premium, the
premiums they are paying today, are among the lowest medical
malpractice insurance premiums in the country. MICRA is the reason.
I have used this example of obstetricians and gynecologists, so I
will keep going back to that. It is the reason that the obstetrician,
the one who delivers babies in California, may pay about $40,000 for
medical liability insurance where, if you took that same obstetrician--
same training, same medical school, had done the same number of
procedures, delivered the same number of babies--and you put them in,
let's say Florida or let's say New Jersey, or you put them in New York,
the premiums--here, say, $40,000 for that insurance--it will be above
$100,000, maybe up as high as $150,000. The same person, same training,
same number of babies, same Hippocratic Oath--"Do no harm''--here
paying around $40,000; in these red States, paying upwards to $150,000.
My colleagues have to ask why, but more important, the American
people have to ask why. Is there less malpractice in California? I
don't think so. Better trained doctors in California? I don't think so.
The reason goes back to the tort system, the liability system.
In other States it has been allowed to run out of control, and that
is why this McConnell amendment comes in. Again, we have not really
talked about all the things that are in the amendment. We will have the
opportunity to do that. But that is why it is important to go back and
look at what is in the amendment. It doesn't go very far. It doesn't go
far enough for me or, I think, for most of my colleagues in the medical
profession.
But why does MICRA work? Why does this doctor with the same training
pay so much less than these other States?
Let's look at MICRA. What does MICRA do? This is not the McConnell
amendment. I don't want to confuse the two, but it shows what
commonsense reform in a State that was way ahead of the curve can
accomplish. MICRA does limit attorney's contingency fees to a sliding
fee scale. This allows the patient, when there is an award, to keep the
money.
If it is malpractice and you are trying to compensate the patient, to
have the lawyer walk away with 40 percent of the money doesn't make
sense to me. I don't think it makes sense to the American people once
they really understand that. With this limiting of how much the
attorney can take out of what is sent home by the jury to the patient,
by limiting that in some way, you have some element of control of this
runaway train which is hurting patients.
It is pretty simple. In my mind it is simple. If you look at how much
a lot of these personal injury trial lawyers make today, especially in
the environment where we are looking a lot more at the corporate world,
the numbers are incredible. Ask, if you take the top 50 personal injury
trial lawyers in America, what is their take? What do they make? The
incentive is there.
If you are in the field of law, you would like to say, I am out just
to save the world and do good. But when you take 40 percent of the take
after a multimillion malpractice injury--first of all, the patient
doesn't get it. That is who it is really about--or that is who it is
about in the medical profession. It needs to be about the patient. That
is whom you take the oath to serve.
It is hard for me to understand how you could have the huge
contingency fees today when you hear physicians are leaving, they are
not taking care of patients, they are being forced to close down trauma
centers.
MICRA places a statute of limitations on bringing a suit 1 year from
discovery or 3 years. This is the California law. This ensures that a
suit would be brought in a reasonable amount of time. It protects
evidence, and it also keeps people from sort of searching in the bowels
of a hospital or advertising for cases 5 years ago, or 20 years ago, or
30 years ago. Again, malpractice occurs at a certain point in time, and
we need to punish it, and punish it hard. But to go out and stir up
these cases so you can be paid for it, I think is inappropriate.
What MICRA does--and again this is not in the McConnell legislation,
and this I hope will come back to the floor again and again and again
until we fix it--MICRA, California law, caps future noneconomic damages
at $250,000. These are not the economic damages. There is full
compensation there. So, under MICRA, patients are fully compensated for
their economic loss due to medical malpractice, and they are
compensated for lost wages, and they are compensated for the medical
care and the future costs of medical care.
I use California as an example because we have not talked about it on
the floor of the Senate. We haven't talked about it in committee,
because this whole issue has not been addressed. The bottom line is you
can have reforms--which the majority of States do not have today, and
that is the reason there is a role for this body to act--because the
problem is well identified, and the problem is getting worse. The
problem has not been adequately addressed by States--California and a
handful of others have addressed it--so that we have an obligation to
the patients.
The reforms in California have helped the patients. Injured patients
receive a larger share of whatever award. If there is malpractice and
there is an award, the patient can walk--hopefully, can walk--home with
more of that award. In addition, these reforms have helped slow down
the overall rising cost of medicine.
There is no question in my mind that physicians are practicing
defensive medicine, which the physicians have to practice, and this
drives up the overall cost of health care today.
We talk a lot about prescription drugs, about the importance of
generics, about the importance of coverage within Medicare, and about
having a competitive system--all of which we hope will actually slow
down the skyrocketing costs of medical care today. Indeed, the cost of
health care in California has been slowed by the slowing and the
restraining of these out-of-control, skyrocketing, runaway train costs
in liability that other States have.
Mr. EDWARDS. Mr. President, will the Senator yield for a time
question?
Mr. FRIST. I would be happy to yield.
Mr. EDWARDS. Does the Senator have an idea how much more time he will
take?
Mr. FRIST. Probably 5 minutes, and then I would be happy to yield the
floor.
Madam President, how much time do we have on either side?
The PRESIDING OFFICER (Ms. STABENOW). Eighteen and one-half minutes.
Mr. FRIST. Madam President, let me take a couple of minutes, and then
I would be happy to sit down and look forward to the opportunity to
talk about all of this on Tuesday, which I believe is when we will come
back to this.
The McConnell medical malpractice amendment does the following:
It limits punitive damages. It limits punitive damages to two times
the sum of what are called compensatory damages. Again, this gets sort
of technical. We talk about economic damages and noneconomic damages.
It allows punitive damages in those cases where the award has been
proven by clear evidence and by convincing evidence.
I mentioned attorney fees. I am critical of that because I don't
understand in this day and time why personal injury trial lawyers walk
away with so much money that has been awarded to the person who has
been injured. But it does limit attorney fees.
The McConnell amendment places very modest limits on attorney's
contingency fees and medical malpractice cases. Specifically, the
amendment allows personal injury lawyers to collect 33 percent, or a
third, of a $150,000 award, and about $25 percent of the award on all
amounts above $150,000.
Again, that is pretty modest from my standpoint. The fact that an
award to somebody who has been injured is $150,000, it was malpractice,
and the fact that a trial lawyer will take away a third of that for
their pocket, again, to me--that is what is in the amendment--that is
an improvement over today. But, again, in the future I hope we come
back and address that.
The statute of limitations--I mentioned California's law--the
amendment requires that a medical malpractice complaint must be filed
within 2 years of discovering the injury and
[[Page S7411]]
the cause. Again, that is when it should be filed.
The McConnell amendment is modest. It identifies the problem. It
gives us the opportunity to talk about the problem on both sides of the
aisle. It does not include all of the measures I think are necessary to
address this problem eventually. But it is a good first step in the
right direction.
We have evidence that reasonable tort reform--and we can debate what
reasonable tort reform is. I think, again, the McConnell amendment is
the first step. It doesn't go quite far enough, but it is a good first
step.
We know that by addressing this we are going to hold down health care
costs which are skyrocketing. The premiums are going up 15 percent, 17
percent, and 20 percent--last year, this year and next year. That
translates down to the patient. Those premiums are eventually going to
be passed down to the patient. To my mind, there is no question but
that we will put them in the ranks of the uninsured.
On the access issue, the McConnell amendment is a simple amendment. I
am convinced. Ask your physician, if you have the opportunity over the
weekend. I am absolutely convinced it will improve access when we know
that access overall is deteriorating.
We need to look at Las Vegas, and we need to look at the many
examples which are in newspapers all across the country of physicians
leaving a specialty practice because of malpractice insurance, or
leaving a State.
We have an opportunity to do something which protects patients and
which improves their access and clearly stops the deteriorating access
to quality care before this problem gets worse.
I urge support of this amendment and look forward to coming back to
it over the next several days.
I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from North Carolina.
Mr. EDWARDS. Madam President, I yield myself such time as I may use.
Let me say, first, from the discussion that we have been having all
over America, and on the floor of the Senate for the last few weeks
about trying to reinsert some responsibility and accountability because
of the fundamental notion we believe in this country that everybody--
every person, every company, big business, small business, and
everybody in America--should be responsible and accountable for what
they do, one of the reasons we have had such a downslide in Wall Street
lately is people have lost confidence in the responsibility of people
who run some--I emphasize ``some''--of the companies that have been on
the front pages of the newspapers for the last several months. What
they want us to do is reimpose some of that corporate responsibility.
So we work very hard on that.
At a time when the focus is on trying to make sure we have real
responsibility and real accountability in this country, the President
yesterday went to my home State to do exactly the opposite. The
President went to North Carolina to say: I am going to side with big
insurance companies and against victims. I am going to say if a child
who has been severely hurt as a result of bad care is trying to get
some help for him and his family over a long period of time, I am going
to put a limit on that. I am going to put a limit for a very simple
reason: The big insurance companies of America will have to pay.
Unfortunately, there is a pattern with this administration. Every
time they have a choice between the interests of average Americans,
kids, families, and people who do not have lobbyists in Washington, DC,
representing them, on the one hand, and on the other hand, the
interests of big HMOs, big oil companies, big energy companies, the
drug industry, the pharmaceutical drug industry, and big insurance
industry in this case--whenever those interests come into conflict with
the interests of ordinary Americans, this administration consistently
sides with the big interests. They have done it on the Patients' Bill
of Rights.
They have prevented us from having a real and meaningful Patients'
Bill of Rights. While we try to protect families and patients, they
side with the big HMOs. I think we are going to overcome it.
On preventing us from having a meaningful prescription drug benefit
for senior citizens and doing something about the costs of prescription
drugs in this country, on which the Presiding Officer has worked so
hard, we know that is a fight between ordinary Americans and ordinary
families who need these prescription drugs and the pharmaceutical
industry. The President has stood with the big pharmaceutical industry.
On trying to do something about clean air in this country, the
President and his administration have proposed weakening our clean air
law--all in the interest of protecting his friends in the oil industry,
in the energy industry, and against the interests of ordinary
Americans.
So now he adds to that list, going to my home State of North
Carolina, to say to the victims: I am going to make sure the big
insurance companies of America are protected. At the end of the day,
that is all this is about.
The proposal the President made is different from this amendment--
which I will talk about in a minute--which is to impose a limit of
$250,000 on some of the damages for children can be recovered against
these big insurance companies.
For example, in the case of a child who may be born blind or crippled
for life or a child who has to be taken care of by his or her parents
every single day, 7 days a week, every day of the year for the rest of
their lives, the President says: I am going to make sure the insurance
companies don't have to pay what they are obligated to pay to that
family, to that child.
It is wrong. It is no more complicated than that. And the children
and the families, who have been the victims, know it is wrong.
The President held a roundtable yesterday in North Carolina on this
subject. How many victims participated in that roundtable? How many
people whose lives have been destroyed and who need the help that the
insurance company is obligated to provide for them participated?
Everybody else was well represented. What about the people who don't
have lobbyists? What about the people who aren't represented here in
Washington by lobbyists? The families, the kids who are hurt by all
this, were they at the roundtable? Were their voices heard?
I invite the President to come back to North Carolina, and this time,
instead of talking to these powerful interests, I hope he will sit down
with regular folks who have been the victims and listen to what they
have to say, listen to what their lives are like.
One of the phrases that was used in the administration proposal was:
You have these families who have won the lottery.
Well, I can tell you what the parents of a child who was a victim
said yesterday from North Carolina. I know these people because I
represent them. The parents said: Our little girl was born, and because
of the type of care she got, she couldn't see, she couldn't hear, she
couldn't walk. Every day of her life--7 days a week, 24 hours a day--we
took care of her. And we loved her so much. There is nothing we
wouldn't have done for her. And then she died. And when we go to visit
her at her grave, we don't feel much like we won the lottery.
These are the people whom these kinds of proposals affect. These are
real people with real lives. We have to look at the consequences, even
though they are not up here with powerful, fancy lobbyists representing
them. They are the people we have to look out for. And they are the
people who expect their President to look out for them. Unfortunately,
he continues to stand with big insurance companies, with big
pharmaceutical companies, with big HMOs. These people need his help. It
is no more complicated than that.
Now, as to this amendment and the purpose of it, first, medical
malpractice premiums constitute less than 1 percent of health care
costs in this country. So think about the logic. The argument is, we
are going to do something about health care costs in this country, and
the way we are going to do it is to try to do something misguided--we
are going to try to do something about medical malpractice premiums,
which constitute about two-thirds of 1 percent of health care costs in
this country.
First of all, it is the wrong place to start if you are going to do
something
[[Page S7412]]
about health care costs in this country. If you want to do something
about health care costs, you ought to do what the Presiding Officer and
I and so many of us have tried to do--bring the cost of prescription
drugs under control in this country, because that will have a real
effect on health care costs. They are a driving force in rising health
care costs in this country.
This is minuscule by comparison. So, No. 1, it is a misguided effort
in terms of what it is focused on. No. 2, it will not work because
these kinds of proposals--the President's proposal yesterday in North
Carolina, and this amendment, which is different--are proposals that
impose limitations on recoveries for victims, for families, to try to
get rid of some concepts in the law. They have been used in many places
around the country. They do not work. They do not, in fact, have the
kind of impact on insurance premiums that these people who are
proposing them say they have.
If you look at medical malpractice premiums in this country, and you
look at the States that have these provisions that impose limits on the
families, and then you look at the States that do not have them, the
costs of medical malpractice insurance--I am looking for the year 2001
for internal medicine, for general surgery, for obstetrics and
gynecology--are virtually identical.
This all sounds logical. If you impose limits on what the victims and
the families can recover, why does that not help bring the cost of the
insurance down? Why does it not have an effect on premiums? Because
logic would tell you it would because insurance companies have to pay
less, theoretically. So as a result, why don't they lower the premiums?
Because the insurance company premiums have nothing to do with this.
That is the reason.
The insurance company takes the money that they receive in premiums,
and they invest it. Where do they invest it? They invest it in that
same stock market in which most of the people in America are invested.
You can look at every time they start raising premiums. They come to
Washington and say: There is a crisis; we have to do something about
this; this is a serious problem; we have these outrageous awards for
children and families; we have to stop it. And the way to stop it is to
cut off the rights of the victims. That is the way to stop it.
So why? Because they are not doing well in their investments. Every
single time, when the stock market falls, and the insurance companies'
money that is invested is not bringing back a good return--in fact,
they are losing money--they raise premiums.
Who has to pay those higher premiums? The health care providers. They
are just as much a victim of this as the kids and the families who are
victims of the bad medical care. The insurance companies are the ones
that are responsible. You can look at it. It is as sure as the Sun is
going to come up tomorrow, if they are doing well on their investments,
the premiums stay relatively stable. When they are not doing well on
their investments, the premiums go up. That is what this is all about.
While these kinds of proposals are aimed at reducing the rights of
victims--which is what they are--instead, what we ought to be doing is
looking at what the big insurance companies are doing when they get
unhappy with the results of their own investments. That is what drives
this.
If you look at what has happened in these States--the Senator from
Tennessee talked about California at great length. California has some
of the most severe limitations in the country on what victims can
recover--severe limitations. They have been in place a long time.
So let's look at what has happened in California.
Between 1991 and 2000, over that about 10 years--a little less than
10 years--the premiums in California went up more than the national
premiums. Why? Why in the world, if they have got these serious
limitations on recoveries--and they have been in place for years in
California--why would their premiums go up? And why would they go up
faster than in the rest of the country, many places which do not have
these kinds of limitations? Because the rise in premiums, and what is
happening in what insurance companies charge people around the country,
is in direct relation to how they are doing in their own investments.
In some cases, it is an insurance company or the insurance industry
that exists in a region, in some cases it is national, and in many
cases, of course, it is connected to the international and the
reinsurance markets, but it is clear as day that it is directly related
to how they are doing in their investments in the stock market.
So this effort is misguided. Besides that, I do want to point out,
though, that the Senators who are proposing this amendment to put
limits on what victims can receive, even they are not willing to go as
far as the administration is. The administration proposes a $250,000
limit on some damages for children, among others, who have a lifelong
disability as a result of bad medical care.
This amendment does not make that proposal. They are not willing to
go that far. They know that when you put a limit on those kinds of
recoveries, on those kinds of damages, it is like a laser directed at
the most severely injured, and usually the youngest, because young
children who have severe injuries for life, which they and their
parents are going to have to carry for the rest of their lives--and you
are limiting them to $250,000 in those kinds of damages--$250,000--
nobody in America thinks that makes sense. That is why that is not
part, I suspect, of this proposal.
Instead, this proposal goes about it in a different kind of way. What
this proposal suggests is a couple things: One, that we get rid of
something called joint and several liability. Without going into too
much detail about this, we believe in this country--and it has been the
law of the land for many years--that if you have a victim, whether it
is a victim of criminal conduct or bad medical care, or somebody who
has behaved wrongly, and you have a victim, the victim should not be
the one held responsible. If you have several people who caused it,
they share the responsibility.
What this proposal says is, all right, somebody got hurt as a result
of the bad behavior of a group of people. Always remember, you have an
amount that has been lost by the victim. Let's say it is $100,000 that
has been lost by the victim. If that money has been lost, it is shared
among the defendants. What we have always said in America is, as part
of our law, the victim should never be the one held responsible for
that loss. The loss doesn't go away. The loss is always there; the
damages are always there.
This proposal says, if you have five people who are responsible, then
among those five people, none of them can be required to pay more than
whatever a jury determines is their percentage responsibility. But
remember, these are all wrongdoers. So on one side of the equation you
have a child who is innocent. On the other side of the equation you
have the group of wrongdoers. The amount that has been lost does not
change. Somebody has to be responsible for that. So are we going to say
that the wrongdoers are responsible or are we going to shift some of
that responsibility to the innocent victim?
That is what this proposal does. It says we are going to get rid of
what is called joint and several liability, which means you can collect
against any one or all of the wrongdoers, and says instead, if there is
a wrongdoer you can't get to, for whatever reason, that part of the
responsibility goes back to the victim. It violates what we believe in
this country. It violates our fundamental notion of responsibility and
accountability that the people who ought to be held accountable for
they are the people who did wrong, not the innocent victim. That is
what is wrong with this specific proposal.
There are other proposals. The next proposal says if there is an
award of something called punitive damages, then half of that money
will go to the Government. Now, let's talk about that in a real case.
Let's explain what the effect of that is.
To get punitive damages, the conduct has to be either criminal or
very close to criminal. That is what is required in order for punitive
damages to be awarded. So let's say you have a teenage girl who is the
victim of this kind of criminal conduct. The jury awards these damages
to that young girl. This is what this amendment says to that
[[Page S7413]]
victim of essentially criminal conduct: We are going to impose a 50
percent tax on you. That is what we are going to do. We are going to
say to the victim of this conduct: There is a 50 percent tax on the
damages that a jury, after hearing the whole case, has decided you are
entitled to, 50 percent. That is going to go to the Government.
Is that the signal we want to send as a Congress, as the U.S. Senate?
Do we want to say to the American people that we as a body want to
impose a 50 percent tax on a child who has been the victim of what is
essentially criminal conduct? This is crazy. It doesn't make any sense.
It also violates our basic notions of fairness and responsibility and
accountability.
We have talked a great deal on the floor about doing things about the
victims of criminal conduct. This essentially falls in the same
category. It makes no sense for the government to impose a 50 percent
tax on a child who has been the victim of what amounts to criminal
conduct.
These provisions--and there are others--are wrong: getting rid of
what is called joint and several liability, which means the wrongdoers
don't necessarily have to pay for all of what has happened, while some
of it gets shifted to the victim. That is wrong.
Second, to say we are going to impose a 50 percent tax on a victim, a
child who has been essentially the victim of criminal conduct, that is
wrong.
More important than all of that, this whole effort is misguided. If
what we want to do is do something about health care costs, we should
not focus on what is well less than 1 percent of health care costs. We
ought to focus on the things that really make a difference, such as the
rising cost of prescription drugs.
More importantly, the people who need us to look out for them are the
very people that this amendment is aimed at--the kids, the families,
the victims. We need to stand up for them. They need us to be willing
to stand up for them no matter who is outside the floor of the Senate
representing the most powerful interests in America.
No matter how many lobbyists the insurance industry has, no matter
how many lobbyists the HMOs have, the big energy companies, the big oil
companies, who is going to stand up for these kids and these families?
If they don't have us to stand up for them, they have nobody.
On all of these fronts, whether we are talking about doing something
about the high cost of prescription drugs for people, whether we are
talking about kids and families who are the victims of bad medical
care, whether we are talking about trying to protect our air for our
children and for our families, on all these fronts, we have to stand up
for them. The people who voted for us and sent us to the Congress are
counting on us because they don't have lobbyists up there. They have
nobody here outside the halls of Congress representing them. They count
on us to stand up for them.
As we go through these fights, we will stand up for them. This is one
of them.
How much time do we have remaining?
The PRESIDING OFFICER. Forty-five and a half minutes.
Mr. EDWARDS. Madam President, I reserve the remainder of my time and
yield the floor.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Before the Senator from North Carolina leaves, I would like
to ask him a question or two. I am sorry I was not able to hear all of
his remarks. Having tried a few cases in my day, one of the concerns I
have about this tort debate is the fact that the insurance industry is
the only one that I know of, other than baseball, that can sit down in
a restaurant in sight of everybody or in some dark room, wherever they
want, and knowingly and openly conspire to set prices. There is nothing
wrong with that. That is because of the McCarran-Ferguson law passed
during the depths of the Depression. They can do this.
Let me say to my friend, to show how unnecessary the debate is here
in the Senate, first of all, this is something the States should be
doing, as is happening in Nevada.
This coming Monday, the Nevada State legislature is convening in a
special session to deal with medical malpractice. I may not agree with
what the State legislature does or doesn't do, but that is where this
should be settled.
The State of Nevada is different than the State of North Carolina. We
have all kinds of different problems with our torts than the Senator
does.
I have two questions for my friend. First of all, do you think it
would be a good idea for the Congress, after some 70 years, to take a
look at McCarran-Ferguson to find out if insurance companies should be
exempt from fixing prices, be exempt from the Sherman Antitrust Act?
That is my first question.
The second question is, don't you think that tort liability, whether
it is medical devices, medical malpractice, or products liability,
should be settled by State legislatures?
Mr. EDWARDS. The Senator asked two very good questions. First, I
think it is a terrific idea for us to look at the insurance industry,
its practices in general, and what effect McCarran-Ferguson has on
those practices. The Senator describes a large part of the problem.
The Senator knows as well as I do, you can't move in Washington
without bumping into some lobbyist representing the insurance industry.
They are so well heard and so well represented. I think it is a very
good idea.
As to the second question, we have differences between North
Carolina, my State, and the State of Nevada, and differences between us
and California. These are the kinds of issues that ought to be resolved
at the State level. We have always believed that. There is a little bit
of an inconsistency for the administration that normally says these are
matters that ought to be left to the States, we trust the States to
make these decisions; but in the case where they want to do something
on behalf of the insurance industry, which is what this is, they want
to take it away from the States; they want to do it at the national
level.
What has historically been done in this area is the way it should be
done, which is these are matters about State courts, how State courts
handle these kinds of cases. They are in touch with it. They know what
is happening in their individual States, what the problems are, and
they can address them in a responsible and equitable way.
I thank the Senator for his questions.
We reserve the remainder of our time, Madam President.
The PRESIDING OFFICER. Who yields time?
Mr. REID. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
The PRESIDING OFFICER (Mr. Reid). In my capacity as a Senator from
the State of Nevada, I ask unanimous consent that the order for the
quorum call be rescinded.
Without objection, it is so ordered.
In my capacity as a Senator from the State of Nevada, I ask unanimous
consent that the quorum call that will shortly be called for be charged
equally against both sides for the time remaining.
Without objection, it is so ordered.
I suggest the absence of a quorum, and the clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BENNETT. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. SARBANES). Without objection, it is so
ordered.
____________________