[Congressional Record Volume 148, Number 106 (Tuesday, July 30, 2002)]
[Senate]
[Pages S7516-S7529]
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 
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.
       McConnell amendment No. 4326 (to amendment No. 4299), to 
     provide for health care liability reform.

  The PRESIDING OFFICER. The Republican leader.
  Mr. LOTT. Madam President, I do wish to speak in behalf of the 
McConnell amendment. I realize time has expired, but I yield myself 
time under leader time.
  Mr. REID. Will the Senator yield?
  Mr. LOTT. Recognizing Members may be interested in what the schedule 
will be in the next hour and maybe even right after lunch, I will be 
glad to yield to Senator Reid for information.
  Mr. REID. Madam President, both leaders are in the Chamber. I ask 
unanimous consent that whatever time the Republican leader uses for his 
speech, the remaining time until 5 to 1 be equally divided for Senator 
Kennedy and Senator McConnell to speak on the pending amendment.
  The PRESIDING OFFICER. Is there objection?
  Mr. McCONNELL. Reserving the right to object, I say to my friend from 
Nevada, I simply did not hear what he was asking.
  Mr. REID. I am sorry. Morning business got a little out of hand this 
morning. There was too much morning business. We are now on the bill. 
The Republican leader wishes to speak for 5 or 10 minutes under leader 
time. I ask unanimous consent that the remaining time be divided 
equally between Senator McConnell and Senator Kennedy to speak on the 
McConnell amendment.
  Mr. McCONNELL. How much time is remaining?
  Mr. REID. It will probably be about 50 minutes.
  Mr. McCONNELL. Fifty?
  Mr. LOTT. Fifty.
  Mr. McCONNELL. Equally divided.
  Mr. REID. Until 5 to 1.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LOTT. Madam President, I thank Senator Reid for that 
clarification so we can get some further time for debate on this 
important issue and so that Senator McConnell can talk more about the 
specifics.
  I believe in this country we have a medical malpractice crisis. There 
is a huge problem with frivolous lawsuits being filed and large 
verdicts being rendered. Let me read some of what is happening in my 
own State where within a few days the legislature is going to have a 
special session to try to deal with this crisis because doctors are 
getting out of obstetrics; they are getting out of the business of 
delivering babies. And they are getting out because the doctors cannot 
get medical malpractice insurance coverage. As they lose their coverage 
they are also leaving the State. We now have huge areas of the State 
where there are few, if any, doctors available to deliver babies.
  In Mississippi we are expected to lose an estimated 400 doctors this 
year because they are retiring, getting out of practice, or moving to 
other States, including Louisiana. Why Louisiana? Because in Louisiana 
they have some caps on punitive damages that help limit the size of the 
verdicts against doctors.
  Madam President, last year, in Bolivar County, there were six doctors 
providing obstetrical care. Today there are three. In neighboring 
Sunflower County, all four doctors who delivered babies quit private 
practice. So there is a large area where the citizens of my state 
cannot get medical care for pregnant mothers and for delivering babies 
because their doctors cannot get or cannot afford malpractice 
insurance.
  Some expectant mothers now have to drive 100 miles just to get to a 
doctor, let alone a regional hospital. In the northern half of the 
State last year, there were nine practicing neurosurgeons; now there 
are just three on emergency call. And it does not appear that the 
situation is going to get any better soon. The North Mississippi 
Medical Center, a hospital that serves 22 counties and 600,000 people, 
is finding it impossible to recruit new doctors.
  But not only is the next generation of doctors being scared away from 
the

[[Page S7517]]

State by Mississippi's tort friendly medical malpractice environment, 
soaring insurance premiums, and word of multi-million dollar jury 
awards, so are the insurance companies themselves. There used to be 14 
companies underwriting liability in my State, now there's one willing 
to write new policies.
  And those companies that are staying in Mississippi are being forced 
to charge exorbitant rates to cover their liability exposure to 
frivolous lawsuits and large verdicts. For instance, maternity care 
used to make up about 30 percent of family practitioner Scott Nelson's 
practice in his hometown of Cleveland, MS. But Nelson got out of the 
business October 1 when his annual malpractice premium jumped from 
$30,000 to $105,000.
  Had he had continued his practice, Nelson would have had to pay that 
even more exorbitant premiums in the future, and in these small 
communities, the amount of money doctors make is not so great that they 
can afford to pay over $100,000 in medical malpractice insurance year 
in and year out.
  Madam President, the Clarion Ledger in my home state a couple of days 
ago quoted a report from the National Law Journal which found that of 
the 50 firms in America that had the largest verdicts from juries, 9 of 
them are in my State of Mississippi, with one firm getting 5 verdicts 
totaling $177.5 million, the largest of which was against Janssen 
Pharmceutica for $100 million. Another firm got $171.27 million, $150 
million of which was from a single verdict against AC&S Manufacturing.
  I ask unanimous consent that the article I am about to refer to from 
the Clarion-Ledger on July 28, 2002, be printed in the Record.
  There being no objection, the article was ordered to be printed to 
the Record, as follows:

                [From the Clarion-Ledger, July 28, 2002]

              Top 50 Law Firm List Shows 9 in Mississippi

                            (By Sid Salter)

       Mississippi takes the rap for being last in so many indices 
     of economic and social progress. The list of ``worst firsts'' 
     is endless.
       But there is one index in which Mississippi shines like a 
     new penny. That news comes via the pages of The National Law 
     Journal. It's called the ``Litigation 50.''
       Seems that nine of the nation's ``winningest'' 50 law firms 
     in 2001 are in Mississippi--a measure based on The Journal's 
     assessment of the gross amount of money awarded by juries 
     during trials concluded between Jan. 1, 2001, and Dec. 31, 
     2001.
       Quoth The Journal: ``A firm's rankings is based on the 
     total amount from all cases tried to a verdict before a jury, 
     but does not include any money obtained through settlements 
     or through bench trials. The ranking also does not take into 
     account any post-trial changes in the judgment.''


                           Meet the top dogs

       Take a look at Mississippi's players in the ``Litigation 
     50'':
       No. 11, Shannon Law Firm, Hazlehurst, five verdicts 
     totaling $177.5 million, the largest a $100 million verdict 
     against Janssen Pharmceutica Inc.
       No. 12, Blackmon and Blackmon, Canton, six verdicts 
     totaling $171.27 million, the largest a $100 million verdict 
     against Janssen Pharmaceutica Inc.
       No. 14, Isaac Byrd and Associates, Jackson, seven verdicts 
     totaling $150 million, the largest a $150 million verdict 
     against AC&S Manufacturing Inc.
       No. 15, Porter and Malouf, Greenwood, two verdicts totaling 
     $150 million, the largest a $150 million verdict against AC&S 
     Manufacturing Inc.
       No. 24, Grenfell, Sledge and Stevens, Jackson, four 
     verdicts totaling $100 million, the largest a $100 million 
     verdict against Janssen Pharmaceutica Inc.
       No. 25, Owens Law Firm, Jackson, four verdicts totaling 
     $100 million, the largest a $100 million verdict against 
     Janssen Pharmaceutica Inc.
       No. 26, Upshaw, Williams, Biggers, Beckham and Riddick, 
     Greenwood, 26 verdicts totaling $100 million, the largest a 
     $100 million verdict against Janssen Phanaceutica Inc.
       No. 29, Langston Sweet & Freese, Jackson, 13 verdicts 
     totaling $94.27 million, the largest a $71.27 million verdict 
     against Washington Mutual Finance Group.
       No. 37, former Gov. Bill Allain, one verdict totaling $77.5 
     million against St. Paul Fire Insurance.


                          Blackmon's other job

       Certainly, this ranking speaks volumes about every law firm 
     represented in the ``Litigation 50'' ranking and of 
     individual litigators employed by those firms.
       But it also once again calls into question whether state 
     Rep. Ed Blackmon--whose law firm was ranked by The Journal as 
     the 12th most successful plaintiffs' law firm in the country 
     in 2001--should be made co-chairman of the Mississippi 
     Legislature's special joint committee studying tort reform.
       A legislator who is a pharmacist just spent years in the 
     courts defending a conflict of interest charge simply because 
     his pharmacy accepted Medicaid.
       But we're told by the legislative leadership that the 
     state's business and medical community shouldn't worry when 
     one of the nation's top trial lawyers is appointed to oversee 
     proposed tort reforms that could take millions out of his own 
     pockets?
       Foxes? Hen houses? Bingo.

  Mr. LOTT. The ability to have verdicts reach companies--even when 
companies are not directly involved in the alleged wrongdoing--through 
the use of joint and several liability is also causing huge problems in 
the medical malpractice and other fields. Despite the fact that they 
often have only tangential relationships to alleged wrongdoers, the 
plaintiffs' lawyers often include companies in lawsuits simply because 
they have the deep pockets and the companies all too often end up 
getting stuck having to pay the lion's share of multi-million dollar 
verdicts even though they actually did very little wrong.
  I often wonder what government officials and responsible citizens in 
my State think is going to happen over the long term to companies that 
are faced with this kind of threat from juries in my State? What do 
they think is going to happen as the verdicts against doctors continue 
to go up and the insurance premiums to cover medical malpractice 
insurance costs continue to go up. They are finding out very quickly as 
many doctors and other medical providers are literally closing up shop 
and leaving town.
  Madam President, this is a very important issue that is affecting 
health care in America, that is driving up the costs of health care all 
across America, that is making medical malpractice insurance 
unaffordable even for doctors, and which is limiting Americans' access 
to health care. What is the solution?
  Senator McConnell has the solution in his amendment. It would put 
reasonable limits on punitive damages. It would provide for 
proportional liability so one company with marginal involvement is not 
held responsible for the entire costs of a verdict handed down by a 
jury.
  There are also limits on attorney's fees. That provision when you 
think about it is really about the patients, the people who are hurt, 
and not about the attorneys who get 40, 50, 60 percent of a judgment in 
many cases.
  Senator McConnell's amendment also has collateral source reform, to 
stop lawyer's double dipping from both their client's insurance 
companies and the defendants they drag into court.
  The amendment also has alternative dispute resolution. Is that not a 
better way to go, to find a solution without having to go through the 
expense of trials, litigation and jackpot verdicts. Would it not be 
much better to first try to get a quick resolution of the matter 
outside of the courtroom?
  Senator McConnell's amendment should be included as part of this 
debate we are having about health care accessibility and the cost of 
prescription drugs. I should note that nearly identical language passed 
the Senate in 1995 by a vote of 53 to 47, but it was later vetoed by 
President Clinton.
  Senator McConnell's amendment is an important one. I understand that 
Democrats will perhaps move to try to table it, but this is a critical 
issue in America that has to be addressed. The American Medical 
Association announced last month that because of astronomical 
malpractice premium increases, 12 States are in a health care crisis 
mode, with 30 other States on the brink of crisis.
  I ask unanimous consent that a compendium of news accounts about the 
medical malpractice crisis affecting the Nation, which was written by 
the Republican Policy Committee and titled ``Overzealous Trial Lawyers 
Are Denying Medical Care to Expectant Mothers,'' be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Overzealous Trial Lawyers Are Denying Medical Care to Expectant Mothers


                 The Need for Medical Liability Reform

       Mothers and children are being denied medical care because 
     physicians' liability premiums are soaring and forcing many 
     to move to more doctor-friendly states, curtail their 
     practices, or close up shop entirely:
       ``The malpractice crisis has been building for years but 
     culminating last December

[[Page S7518]]

     when the country's largest medical malpractice issuers, the 
     St. Paul Companies, dropped tens of thousands of physicians. 
     Other issuers have also cut back on clients or jacked up 
     premiums. A major reason is the increasing number of personal 
     injury lawsuits--and high-priced damage awards. Last week, 
     the American Medical Association announced that because of 
     astronomical malpractice increases, 12 states are in a 
     healthcare crisis mode, with 30 others on the brink of 
     crisis.'' [Mary Brophy Marcus, ``Healthcare's `Perfect 
     Storm,' '' U.S. News & World Report, 7/1/02]
       The states identified by the American Medical Association 
     as facing a medical liability crisis are:
       Florida, Georgia, Mississippi, Nevada, New Jersey, New 
     York, Ohio, Oregon, Pennsylvania, Texas, Washington, West 
     Virginia.
       Recent medial accounts demonstrate how this crisis is 
     denying people medical care--particularly expectant mothers. 
     Without medical liability reform, the situation is likely to 
     get worse.
       In the border town of Bisbee, Ariz., hospital 
     administrators recently closed the maternity ward because its 
     family practitioners were seeing insurance rate increases of 
     up to 500 percent, to $88,000 a year. The hospital services 
     4,000 square miles. Now, hundreds of women must travel at 
     least 60 miles to the closest hospitals, in Sierra Vista or 
     Tucson. Since the ward's closure, four women have delivered 
     babies en route.'' [Michael Freedman, ``The Tort Mess,'' 
     Forbes.com, 5/13/02]

                              Mississippi

       ``Mississippi . . . is expected to lose 400 doctors this 
     year . . . Last year Bolivar County in western Mississippi 
     had six doctors providing obstetrical care; today it has 
     three. . . . In neighboring Sunflower County, all four 
     doctors who delivered babies have quit private practice. In 
     the northern half of the state last year there were nine 
     practing neurosurgeons; now there are three on emergency 
     call. There used to be 14 companies underwriting liability in 
     Mississippi; now there's one willing to write new policies.'' 
     [Editorial, ``Lawyers vs. Patients,'' The Wall Street 
     Journal, 5/01/02]
       ``The North Mississippi Medical Center, a hospital that 
     serves 22 counties and 600,000 people, is now finding it all 
     but impossible to recruit new doctors. They're scared away by 
     the state's tort-friendly medical malpractice environment, 
     soaring insurance premiums and word of the $5 million award. 
     The hospital . . . may have to cut back on emergency 
     services. There is now no neurosurgeon on call one of every 
     four days. If there's a wreck on the highway that bisects 
     town, or on any of the winding roads in northern Mississippi 
     or Alabama, it will take at least one hour for the victim to 
     be transported to the nearest neurosurgeon in Memphis or 
     Jackson. That hour is crucial; it could cost a life.'' 
     [Michael Freedman, ``The Tort Mess,'' Forbes.com, 5/13/01]
       ``Maternity care used to make up about 30 percent of family 
     practictioner Scott Nelson's practice in his hometown of 
     Cleveland, Miss. But Nelson got of that business Oct. 1, when 
     his annual malpractice premium would have jumped from $30,000 
     to $105,000 had he continued to deliver babies. ``The 
     malpractice insurance environment has literally forced me out 
     of doing it,'' Nelson says.'' [Rita Rubin, ``You Might Feel a 
     Bit of Pinch,'' USA Today, 12/4/01]

                                 Nevada

       ``Kimberly Maugaotega of Las Vegas is 13 weeks pregnant and 
     hasn't seen as obstetrician. When she learned she was 
     expecting, the 33-year-old mother of two called the doctor 
     who delivered her second child but was told he wasn't taking 
     any new pregnant patients. Dr. Shelby Wilbourn plans to leave 
     Nevada because of soaring medical-malpractice insurance rates 
     there. Ms. Mavgaotega says she called 28 obstetricians but 
     couldn't find one who would take her.'' [Rachel Zimmerman and 
     Christopher Oster, ``Insurers' Price Wars Contributed to 
     Doctors Facing Soaring Costs,'' The Wall Street Journal, 6/
     24/02]
       ``Half of the 93 OB-GYNs who deliver babies in Las Vegas's 
     Clark County are no longer accepting new obstetrical 
     patients.'' [Mary Brophy Marcus, ``Healthcare's `Perfect 
     Storm,' '' U.S. News & World Report, 7/1/02]
       ``Twice last month, Las Vegas obstetrician/gynecologist 
     Shelby Wilbourn saw patients who's made an appointment under 
     a false pretense. They said they were having irregular 
     menstrual periods. But when they met Wilbourn face-to-face, 
     they fessed up. The reason they hadn't had a period in a 
     couple of months was because they were pregnant, not because 
     their cycle was out of whack. I had to close the chart and 
     say, `Ma'am, I can't help you, because I'm not doing OB 
     anymore,' Wilbourn says. `They just started sobbing in the 
     office.' . . . Last month, Wilbourn announced to tearful 
     patients and office staff that he had accepted an offer in 
     Belfast, a small town on the coast of Maine . . . [T]he 
     decision to close his practice July 31 was not easy. `I've 
     got a lot of pregnant women I'm not going to be here for,' he 
     says. `I'm going to be turning them loose halfway through 
     a pregnancy, and I can't find them a doctor.' One of them 
     is Deanna Rood, who is due in October. Wilbourn cared for 
     Rood when she was pregnant with her firstborn, a son who 
     will turn 2 in August. `I'm in a scary position right no,' 
     Rood says. `I'm six months pregnant, and I don't have a 
     doctor.' '' [Rita Rubin, ``Fed-Up Obstetricians Look for a 
     Way Out,'' USA Today, 6/30/02]
       ``[Las Vegas OB-GYN Shelby] Wilbourn accepted a new job in 
     Maine last week. He wonders who will deliver the 500 babies 
     born each week in Las Vegas and if there will be any OBs to 
     take emergency calls like the one he recently answered. The 
     patient was 34 weeks pregnant, in premature labor and 
     hemorrhaging, and her baby's heartbeat was frighteningly low. 
     Wilbourn arrived in minutes, and both mother and child made 
     it successfully through childbirth. `If this were next year,' 
     he contends, `that baby would have died.' '' [Mary Brophy 
     Marcus, ``Healthcare's `Perfect Storm,' '' U.S. News & World 
     Report, 7/1/02]
       ``John Nowins, president of the Clark County (Las Vegas) 
     OB-GYN Society, says that 80 percent of his members are 
     phasing out obstetrics because of the jump in malpractice 
     insurance premiums. . . . Nowins, a Chicago native, says he's 
     considering moving to Indiana. `At least they have good tort 
     reform,' he says.'' [Rita Rubin, ``Fed-Up Obstetricians Look 
     for a Way Out,'' USA Today, 6/30/02]
       ``In March, doctors at Nellis Air Force Base in Las Vegas 
     sent a 34-year-old woman with colon cancer to Joseph 
     Thornton, a highly experienced colon and rectal surgeon in 
     the area. Because of the war in Afghanistan, most of Nellis's 
     specialized surgeons are now deployed, and the remaining 
     military doctors said they couldn't remove the cancer unless 
     they cut out the woman's entire colon, leaving her with a 
     colostomy bag to drag around and empty the rest of her life. 
     They hoped that Thornton's expertise might offer a better 
     outcome. Just one problem. Thornton, at age 56, retired on 
     March 31 because his malpractice insurance company was 
     closing, and he couldn't afford what the other insurers were 
     charging. . . . The woman showed up in Thornton's office just 
     before his retirement, but she needed chemotherapy and 
     radiation first, and the surgery couldn't be performed before 
     Thornton's policy expired. `It broke my heart,' he said. `I 
     felt like I was planning my own funeral. . . . My broker got 
     quotes for me and told me I should quit. And he makes a 
     commission on insurance purchases.' '' [Marilyn Werber 
     Serafini, ``Risky Business,'' National Journal, 5/18/02]
       ``In Nevada, 123 physicians have either closed their 
     practices or are planning to do so soon.'' [Mary Brophy 
     Marcus, ``Healthcare's `Perfect Storm,' '' U.S. News & World 
     Report, 7/1/02]
       ``A study by a University of Nevada medical school 
     professor says 42 percent of obstetricians are making plans 
     to move their practices out of southern Nevada. If that 
     happens, only 78 obstetricians would be left in an area that 
     includes Las Vegas, a city of 1.5 million with 23,000 births 
     last year. The same study notes that 76 percent of the city's 
     obstetricians have been sued, and 40 percent have been sued 
     three or more times.'' [Michael Freedman, ``The Tort Mess,'' 
     Forbes.com, 5/13/02]

                               New Jersey

       ``Last week the Garden State's largest malpractice insurer, 
     the MIIX Group, announced it has essentially decided to fold 
     up shop. The decision is notable because MIIX isn't just 
     another insurance company out to make a profit. It began as 
     an association of doctors that got into the business of 
     insuring themselves and other doctors. The company has lost 
     more than $200 million in the past 15 months, and its 
     decision means that about 9,000 New Jersey doctors, 37 
     percent of the state total, may soon lose their insurance. . 
     . . In 2001, three malpractice insurers stopped doing 
     business in the state.'' [Editorial, ``Born to Sue,'' The 
     Wall Street Journal, 5/17/02]

                              Pennsylvania

       ``Kelly Biesecker, 35, spent many extra hours on the 
     highway this spring, driving from her home in Villanova, Pa., 
     to Delran, N.J., so she could continue to use her 
     obstetrician. Dr. Richard Krauss says he moved the obstetrics 
     part of his practice from Philadelphia because malpractice 
     rates had skyrocketed in Pennsylvania. Ms. Biesecker, who 
     gave birth to a healthy boy on June 5, says Dr. Krauss was 
     the doctor she trusted to guard her health and the health of 
     her baby: `You stick with that guy no mater what the 
     distance.' . . . New Jersey hasn't been a panacea, however. 
     His policy there expires July 1, and the carrier refuses to 
     renew it.'' [Rachel Zimmerman and Christopher Oster, 
     ``Insurers' Price Wars Contributed To Doctors Facing Soaring 
     Costs,'' The Wall Street Journal, 6/24/02]
       ``Lauren Kline, 6\1/2\ months pregnant, changed 
     obstetricians when her long-time Philadelphia doctor moved 
     out of state because of rate increases. Now, her new doctor, 
     Robert Friedman, may have to give up delivering babies at his 
     suburban Philadelphia practice. His insurance expires at the 
     end of the month, and he says he is having difficulty finding 
     a carrier that will sell him a policy at any price.'' [Rachel 
     Zimmerman and Christopher Oster, ``Insurers' Price Wars 
     Contributed To Doctors Facing Soaring Costs,'' The Wall 
     Street Journal, 6/24/02]
       ``High insurance rates are also plaguing hospitals, some of 
     which are closing their riskiest services. Grand View 
     Hospital, located in Sellersville, Pa., between Philadelphia 
     and Allentown, is having trouble securing insurance at any 
     price.'' [Marilyn Werber Serafini, ``Risky Business,'' 
     National Journal, 5/18/02]
       ``In Philadelphia, the Methodist Hospital Division of 
     Thomas Jefferson University Hospital will cease to deliver 
     babies effective

[[Page S7519]]

     June 30 . . . More than 90 full- and part-time staff 
     positions at Methodist will disappear.'' [Marilyn Werber 
     Serafini, ``Risky Business,'' National Journal, 5/18/02]
       ``Dr. John Angstadt, 44, started looking to move out of 
     suburban Philadelphia when his insurance increased from 
     $14,000 in 1994 to $66,000 last November. In December he 
     joined a large practice in Savannah, Ga., where he pays just 
     $16,000 for insurance. Now, instead of worrying about rising 
     costs and lawsuits, he can practice medicine. `That was 
     missing in Philadelphia,' he says. `I go up in the morning 
     and the idea of facing another day was onerous.' '' [Michael 
     Freedman, ``The Tort Mess,'' Forbes.com, 5/13/02]

                                 Texas

       ``C. Dale Eubank practices in Texas. . . . `I have been 
     named in suits, and none of them ever went anywhere,' says 
     Eubank, who has delivered 3,000 babies since 1983. Disgusted 
     with what he calls the `litigious environment' in Corpus 
     Christi, Eubank this year decided to stop delivering 
     babies.'' [Rita Rubin, ``Fed-Up Obstetricians Look for a Way 
     Out,'' USA Today, 6/30/02]
       ``Texas used to have 17 [medical liability insurance] 
     carriers; now it has four.'' [Editorial, ``Lawyers vs. 
     Patients,'' The Wall Street Journal, 5/1/02]

                               Washington

       ``Jen Fleming of Friday Harbor says she keeps hoping she 
     can persuade Robert and Barbara Pringle, a husband-wife OB-
     GYN team, to care for her during her next pregnancy. In 
     January 1999, Fleming delivered a stillborn daughter. A few 
     months later, she became pregnant with her son, who is now 2. 
     `Now they'll have to refer me to someone else' when she gets 
     pregnant, Fleming says. ``It's a shame, because they're the 
     ones who got us through our second pregnancy.' The Pringles, 
     who practice in Mount Vernon, Wash., stopped taking new OB 
     patients a few weeks ago.'' [Rita Rubin, ``Fed-Up 
     Obstetricians Look for a Way Out,'' USA Today, 6/30/02]

                             West Virginia

       ``The state of West Virginia, no stranger to problems, has 
     a severe one on its hands now: a `doctors crisis.' That's 
     what many are calling it, and with good reason. West Virginia 
     is losing doctors every day; communities are going without 
     care; no doctors are coming in--it is almost impossible to 
     recruit. The problem is the legal atmosphere: The state has 
     earned the designation `Tort Hell,' or, if you are a 
     plaintiff's attorney, `Tort Heaven.' In probably no other 
     state is it as hard to be a doctor, or to remain one. Doctors 
     are becoming desperate; the public, slowly--and in some 
     areas, not so slowly--is waking up. The need for reform is 
     crying. Of course, this need is felt all across the country; 
     but nowhere is it felt more acutely than in West Virginia.'' 
     [Jay Nordlinger, ``Welcome to `Tort Hell,' '' National 
     Review, 8/20/01]
       ``Jane Kurucz, a general surgeon who specializes in breast 
     diseases . . . is a typical case, but with an unusual twist: 
     On Sunday afternoon, July 29, a rally was a staged in support 
     of her, in a downtown park. The event was organized by a 
     patient, unhappy at losing her doctor, and, more than 
     unhappy, angry. Dr. Kurcuz has been practicing for 13 years. 
     In that time, she has had one lawsuit against her (amazingly 
     low for West Virginia), now pending. On May 1, she received a 
     letter informing her that her insurance would not be renewed. 
     . . . Jane Kurucz had to close up shop on August 1.'' [Jay 
     Nordlinger, ``Welcome to `Tort Hell,' '' National Review, 8/
     20/01]
       ``Huntington is now essentially without breast surgery. It 
     may soon be without neurosurgery. The local neurosurgeons pay 
     over $160,000 a year in insurance, if they manage to qualify 
     for it. And as they leave, a chain reaction occurs: The 
     city's residency program collapses; the medical school is in 
     jeopardy. `The cascade effect is tremendous,' as Dr. Kurucz 
     says.'' [Jay Nordlinger, ``Welcome to `Tort Hell,' '' 
     National Review, 8/20/01]
       ``Wheeling, W. Va.'s last emergency-room neurosurgeon 
     recently left the state, which means that people with severed 
     hands and other traumatic injuries must be helicoptered out 
     of state for treatment.'' [Mary Brophy Marcus, ``Healthcare's 
     `Perfect Storm,' '' U.S. News & World Report, 7/1/02]
       ``In Wheeling, one of West Virginia's largest cities, all 
     of the neurosurgeons have left. Corder says it's common for 
     trauma patients who need a neurosurgeon to be airlifted to 
     Pittsburgh. On one such occasion, he said, a patient was 
     flown to Pittsburgh only to be examined and discharged 15 
     minutes after being seen. The cost for the helicopter ride 
     was $4,000.'' [Marilyn Werber Serafini, ``Risky Business,'' 
     National Journal, 5/18/02]
       ``In West Virginia, the sole community hospitals in Putnam 
     and Jackson counties have closed their obstetrics units 
     because obstetricians are facing enormous premium increases 
     and are choosing to leave the area, according to Thomas J. 
     Corder, chairman of the West Virginia Hospital Association 
     and president of Camden-Clark Memorial Hospital in 
     Parkersburg.'' [Marilyn Werber Serafini, ``Risky Business,'' 
     National Journal, 5/18/02]
       ``West Virginia was good for Joe Prud'homme. The Texas 
     native never expected to put down roots in Beckley, W. Va., 
     where he got a temporary job after touring the world for a 
     year. In the ensuing 6\1/2\ years, though, Prud'homme set up 
     his own orthopedic surgery practice and married a local woman 
     with a large extended family nearby. But last week, 
     Prud'homme and his wife, who are expecting their first baby 
     any day, packed up and left the state. If Prud'homme had 
     continued practicing in Beckley, his annual premium would 
     have doubled Nov. 1, to more than $80,000. In Blacksburg, 
     Va., 80 miles to the southeast, he's paying $18,000. . . . 
     Despite the inconvenience, Fran Pemberton, 50, and her 
     mother-in-law, Betty Pemberton, 70, will make the three-hour 
     round trip to see Prud'homme in Blacksburg. `I have to miss a 
     shift's work every time we go down there.' says Fram 
     Pemberton, a high school cook. Prud'homme performed carpal-
     tunnel surgery on her wrists. Her mother-in-law needs knee-
     replacement surgery. `We have a lot of general practitioners 
     who are pretty good doctors,' Fran Pemberton says. `But to 
     have a specialist anymore, you have to go somewhere.' '' 
     [Rita Rubin, ``You Might Feel a Bit of a Pinch,'' USA 
     Today, 12/4/01]
       ``Ronn Grandia, M.D., [Bruce Hoak, M.D.], and Michael Hall, 
     M.D., saw no option but to close after liability insurance 
     priced their three-man surgical practice out of existence. 
     `We just don't have the resources to pay the premium,' Dr. 
     Hall said. . . . After practicing in Ohio for five years, 
     Ronn Grandia, M.D., returned to West Virginia in 1996. . . . 
     But this month he starts to practice across the state line at 
     Holzer Clinic in Gallipolis, Ohio. He'll be able to live in 
     the same house in West Virginia and even treat some of the 
     same patients. But by practicing in Ohio, he can afford his 
     professional liability insurance. . . . Bruce Hoak, M.D., the 
     third physician at Southern Surgical Associates, is headed to 
     his native Texas and also will pay about half the rate he 
     would have paid in West Virginia. . . . With these three 
     general surgeons leaving Charleston, Thomas Memorial Hospital 
     will be left with just four general surgeons. That's down 
     from eight. Another surgeon left earlier, also citing high 
     insurance rates. `Nobody has been willing to consider it a 
     crisis until thousands of patients started losing their 
     physicians,' Dr. Hall said. `We are only the first wave.' '' 
     [Tanya Albert, ``Soaring Premiums Force Doctors to Close 
     Practice,'' American Medical News, 9/10/01]
       ``Dr. R. Todd De Pond misses the howling new infants but 
     not the costly insurance protection required for presiding at 
     their births. `I've decided not to do obstetrics at all,' Dr. 
     De Pond said of his retreat to the gynecology half of his 
     practice in what West Virginia medical officials warn is a 
     statewide crisis in skyrocketing malpractice insurance rates. 
     Scores of doctors are curtailing services by dropping high-
     risk obstetrical and neurosurgical procedures rather than pay 
     premium increases of 30 percent and more, the State Medical 
     Association says. At the same time, about 100 doctors, one in 
     20, have in the last two years retired early or moved from 
     West Virginia, one of the costliest areas in the nation for 
     malpractice coverage. . . . `It has gotten worse every year,' 
     said Dr. De Pond, who used to handle 15 maternity cases a 
     month.'' [Francis X. Clines, ``Insurance-Squeezed Doctors 
     Fold Their Tents,'' The New York Times, 6/13/02]
       ``Bluefield Regional Center, a major hospital in the 
     state's hardscrabble south, lost 12 doctors in the last two 
     years and has been able to replace only 2.'' [Francis X. 
     Clines, ``Insurance-Squeezed Doctors Fold Their Tents,'' The 
     New York Times, 6/13/02]


                         an untenable situation

       How bad has the medical liability environment become? As 
     one article states [Michael Freedman, ``The Tort Mess,'' 
     Forbes.com, 5/13/02]:
       ``In some parts of the country, doctors say, it is almost 
     better to let a patient die than to attempt heroic surgery, 
     fail and risk a lawsuit.''
       If the medical liability system is making doctors think 
     twice about saving lives, that system needs to be reformed.
  Mr. LOTT. Madam President, if we do not get some control of these 
outlandish lawsuits and the verdicts that are being handed down both in 
the field of medical malpractice and in the broader area of tort 
reform, the never-ending stream of lawsuits that are being filed in 
this country is going to continue putting good men and women out of the 
practice of medicine, good companies out of business, and good men and 
women out of work.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Johnson). Under the previous order, the 
time until 12:55 will be equally divided and controlled by the Senator 
from Massachusetts and the Senator from Kentucky or their designees.
  The Senator from Massachusetts.
  Mr. KENNEDY. So we have how much time, Mr. President?
  The PRESIDING OFFICER. Twenty-six minutes.
  Mr. KENNEDY. I yield myself 7 minutes.
  Mr. President, we have heard some discussion earlier today about the 
state of the debate on the prescription drug program. To remind all of 
our colleagues, that legislation would have been tied up in the Finance 
Committee for over 5 years. It was only because of the leadership of 
Senator Daschle that

[[Page S7520]]

we were able to ensure that we had some debate on the floor of the 
Senate on a matter of central importance to families all over this 
country. With the leadership of Senator Graham, Senator Miller, and 
others, we have had a good debate.
  We had some votes in the Senate on some very important comprehensive 
measures. There was the vote, which I was proud to support, on Senator 
Graham's amendment, which received 52 votes. If we had had 8 votes from 
that side of the aisle, this legislation would be on its way now to a 
conference and there would be a real possibility of gaining 
comprehensive coverage. That program provided a $25 premium, no 
deductible, and limited copays at $10 for generic drugs, $40 for brand 
name drugs. It also had a catastrophic program. That was the way to go. 
But it was defeated. No one supported it.
  Now, 10 days later, can we make a difference and provide some relief 
to the seniors in our country? Senator Graham will have the 
opportunity, after the disposal of this amendment, to make his case, 
which I intend to support for reasons I will outline during the course 
of that debate. But none of us should be under any illusion of where 
the responsibility lies in terms of our failure to get a comprehensive 
program. We were able to gather the support of virtually every Member 
on this side of the aisle for a very comprehensive program with low 
premiums and no deductibles, and a very reasonable copay that had the 
support of all of the senior groups.
  When I listen to those who were opposed to it talk about their 
alternative, they clearly did not have the support of a single senior 
group.
  Now let us get back to what is at hand, and that is the medical 
malpractice amendment introduced by my friend from the State of 
Kentucky.
  On Friday, the sponsor of this amendment, Mr. McConnell--which has 
also been characterized by the Senator from Tennessee--described it as 
``pro-victim and pro-consumer.'' He claimed that since his amendment 
did not contain a cap on non-economic damages, it would not ``adversely 
affect'' an injured patient's ability to recover compensation for 
injuries caused by a health care provider. In fact, the McConnell 
amendment is pro-HMO, pro-drug manufacturer, and pro-insurance company, 
at the expense of patients.
  Make no mistake about it. There is a great deal in this amendment 
which would deprive serious injured patients of fair compensation. At 
virtually every stage of the legal process, the amendment 
systematically rewrites the rules of civil law to tip the balance in 
favor of defendants. It would arbitrarily shield health care providers 
and their insurance companies from basic responsibility for the harm 
they cause.
  At a time when the American people are calling for greater corporate 
accountability, it is unbelievable that our Republican colleagues would 
bring to the floor an amendment which would do just the opposite. The 
McConnell amendment would allow the entire health care industry to 
avoid accountability for the care they provide and that is not 
acceptable.
  While those across the aisle like to talk about doctors, the real 
beneficiaries will be insurance companies. This amendment would enrich 
the insurance industry at the expense of the most seriously injured 
patients; men, women, and children whose entire lives have been 
devastated by medical neglect and corporate abuse.
  This proposal would also shield HMOs that fail to provide needed 
care, nursing homes that neglect elderly patients, drug companies whose 
medicine has toxic side effects, and manufacturers of defective medical 
equipment.
  It would drastically limit 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.
  There is no real question about the effect of their amendment. It 
would, in fact, place major new restrictions on the right of seriously 
injured patients to recover fair compensation for their injuries. Let's 
look at what the amendment actually does.
  It abolishes joint and several liability for non-economic damages. 
This means the most seriously injured people may never receive all of 
the compensation that the court has awarded to them. Under the 
amendment, health care provides whose misconduct contributed to the 
patient's injuries will be able to escape responsibility for paying 
full compensation to that patient. The patient's injuries would not 
have happened if not for the misconduct of both defendants, so each 
defendant should be responsible for making sure the victim is fully 
compensated.
  The bias in the McConnell amendment could not be clearer. It would 
preempt State laws that allow fair treatment for injured patients, but 
would allow State laws to be enacted which had greater restrictions on 
patients' rights than the proposed federal law. This one-way preemption 
shows how result-oriented the amendment really is. It is not about 
fairness or balance. It is about protecting defendants.
  The amendment preempts state statutes of limitation, cutting back the 
time allowed by many states for a patient to file suit against the 
health care provider who injured him.
  It mandates that providers and insurance companies be permitted to 
pay a judgment in installments rather than all at once. Allowing health 
care providers, including HMO's, large drug manufacturers and their 
insurance companies to pay on the installment plan transfers 
compensatory dollars that rightfully belong to an injured patient back 
to the wrongdoer. If the patient does not receive the money for years, 
he in reality is getting less money than the court concluded that he 
deserves for his injuries.
  The amendment makes it much harder to sue a physician for injuring a 
baby or its mother during the delivery process if the doctor had not 
previously treated the mother. It requires a much higher burden of 
proof, clear and convincing evidence, than is normally provided for in 
a civil case. There is no reason why a practicing physician should not 
be held to the normal standard of medical care merely because he had 
not previously treated the patient. Such a provision is grossly unfair 
to pregnant women. In essence, their doctors are held to a lower 
standard of care than all other medical professionals.
  The places extremely restrictive limitations on when an injured 
patient can receive punitive damages, and how much punitive damages the 
victim can recover. It would cap punitive damages at twice the amount 
of compensatory damages, no matter how egregious the defendant's 
conduct and no matter how large its assets. This would destroy the 
deterrent effect of punitive damages in the very few cases where 
punitives would still be allowed.
  Even more outrageous is the language on page 23 which appears to say 
that the government would take half of any punitive damages which the 
injured patient did receive. This amounts to a confiscatory tax on 
punitive recoveries, which is extremely unfair to the victims. It is 
the victims who have been harmed by the malevolent conduct. The 
government should not arbitrarily take half of the jury award.
  It imposes unprecedented limits on the amount of the contingent fee 
which a client and his or her attorney can agree to. This will make it 
more difficult for injured patients to retain the attorney of their 
choice in cases that involve complex legal issues. It can have the 
effect of denying them their day in court. Again the provision is one-
sided, because it places no limit on how much the health care provider 
can spend defending the case.
  If we were to enact all of these arbitrary restrictions on the 
compensation which seriously injured patients can receive, what 
benefits would result in our health case system? Certainly less 
accountability for health care providers will never improve the quality 
of health care. Substandard medical care is a growing problem.
  The Agency for Healthcare Research and Quality at HHS found that the 
number of adverse effects from medical treatment has more than doubled 
in recent years. These disturbing statistics make clear that we need 
more accountability in the health care system, not less. In this era of 
managed care and cost controls, it is ludicrous to suggest

[[Page S7521]]

that the major problem facing American health care is ``defensive 
medicine.'' The problem is not ``too much health care,'' it is ``too 
little'' quality health care.
  In the time remaining, I will cover two or three other points. This 
chart asks, Do malpractice premiums drive up medical costs? It shows 
health care and malpractice inflation. Look at health care costs they 
have gone up 74 percent since 1988; medical malpractice costs, 5.7 
percent.
  For States without caps on damages, the average cost of medical 
malpractice insurance is $7,715 for internal medicine; in States with 
caps on damages, it is $7,887. For general surgery, it is $26,144 for 
States without and $26,746 for States with caps on damages; for OB/GYN, 
it is $43,000 for States without caps versus $44,000 for States with 
caps.
  The impact on general health care issues has been considerably less. 
The fact remains that the number of doctors per 100,000 people in 
States which do have the caps versus those that do not are virtually 
identical. The costs of the premiums are exactly the same.
  Let's get focused on where the needs are and the beneficiaries and 
the losers of this amendment. The beneficiaries will be the insurance 
companies; the losers will be the patients who are going to suffer 
because of negligence. That is wrong. That proposal should not be 
accepted.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. How much time do I have?
  The PRESIDING OFFICER. Twenty-six minutes.
  Mr. McCONNELL. Mr. President, this amendment is related to the crisis 
of medical malpractice that we have across our country due to the 
failure to impose accountability and responsibility on big, powerful 
trial lawyers who are running roughshod over doctors and taking 
advantage of their clients. That is what this debate is about.
  Senator Hatch is here and I yield him 2 minutes. After Senator Hatch, 
Senator Frist would like 3 minutes.
  Mr. KERRY. Mr. President, just to inquire, are we going to go back 
and forth? I didn't know the Senator had the right to yield successive 
periods of time.
  The PRESIDING OFFICER. There is no order at this point.
  Mr. McCONNELL. Mr. President, Senator Frist had to go to a meeting. 
He is only asking for 3 minutes, and Senator Hatch is only taking 2 
minutes.
  Mr. KERRY. I understand.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I listened to the impassioned speech of the 
Senator from Massachusetts. The fact is, there will not be any medical 
liability insurance companies. One major company has gone out of 
business because of what amounts to unreasonable litigation all over 
the country.
  It used to be that all you had to do was show that you met the 
standard of practice in the community and that was enough to alleviate 
doctors from medical liability. When the doctor of informed consent 
came into being, then every case from that point went to a jury. The 
reason is because they could make any claim they wanted, and ingenious 
lawyers can write the claims so they go to the jury.
  We have a crisis in this country. I estimated 15 years ago that at 
least $300 billion a year was being wasted in unnecessary defensive 
medicine. If anything, that number has gone up. Mr. President, 50.5 
percent of family practitioners in Utah have given up obstetrical 
services or never practiced obstetrics. Of the remaining 49.5 percent 
still delivering babies, 32.7 percent plan to stop providing OB/GYN 
services within the next decade. Most plan to stop within the next 5 
years.
  The people who are really going to be hurt will be the most 
vulnerable people in our society, the children.
  Frankly, we have to stop letting this medical liability situation go 
stock wild. It is way out of control. This is an amendment that does 
make intelligent approaches to trying to resolve the problems.
  This is an important issue about which I have spoken on previous 
occasions. I am pleased to see that on July 25, President Bush 
announced his desire to address the medical malpractice problem. We 
welcome his support in this effort.
  As many of you will recall, we debated, and passed, the exact 
provisions that are contained in the McConnell amendment during the 
Commonsense Product Liability and Legal Reform Act debate back in 1995. 
Unfortunately, the language was stripped from the bill in conference. I 
will say many of the same things now that I said back then, because, 
regrettably, they still apply and need to be said. I am sorely 
disappointed that in the ensuing seven years we have still not acted to 
address the fact that medical malpractice costs have spiraled out of 
control and are forcing many doctors and hospitals out of the 
profession. The situation has gotten worse, not better. We must act now 
if we are at all serious about fixing the crisis in healthcare delivery 
this has caused in many parts of this country.
  Make no mistake, we have a healthcare crisis in this country, one 
that is due in large part to litigation that is out of control. Many 
may not be aware of just how serious the ramifications of the crisis 
are.
  I will ask unanimous consent to have printed in the Record a July 18 
Associated Press article, ``Soaring Malpractice Insurance Squeezes out 
Doctors, Clinics,'' which highlights these problems. The article points 
to the ``national problem that doctors say is obliging many of them to 
flee certain states or give up certain specialties--or the entire 
profession--because of skyrocketing insurance premiums linked to 
soaring jury awards.''
  The article goes on to note that, as I am sure my colleagues from 
Nevada are acutely aware and Senators McConnell and Frist already 
mentioned--the University Medical Center trauma clinic in Las Vegas--
the only Level 1 trauma center in Nevada--closed down on July 3 of this 
year. The 58 doctors who were associated with the trauma center had 
insisted on much-needed relief from the soaring cost of medical 
malpractice insurance. Consequently, the day after the center closed, a 
victim of a serious traffic accident had to be transported to the next 
nearest emergency room which was an hour away. The trauma center was 
hurriedly reopened on July 13, but with only 10-15 doctors working on a 
temporary basis, with limited liability, while the Governor tries to 
enact legislation limiting awards in medical malpractice cases. We 
don't know if that trauma center will be forced to close again. 
Commenting on the trauma center's closure, its Director, Dr. John 
Fildes, stated that ``the standard of care in our community was set 
back 25 years.''
  No one knows whether the life of that tragic accident victim in Las 
Vegas could have been saved had he been treated at the nearby hospital. 
Would any of us want that to happen to our loved ones--traveling an 
hour to receive emergency care? I certainly wouldn't, and the Senate 
should take the necessary steps to ensure that it does not happen to 
anyone else.

  The problem of providing necessary healthcare in the face of rising 
insurance costs and the threat of excessive litigation cuts across 
multiple specialties, not just emergency services.
  Ensuring the availability of adequate obstetric care continues to be 
a rising problem. According to the same article, one Arizona hospital, 
a clinic in Oregon, and two Pennsylvania hospitals recently have closed 
their obstetrics units. Several counties in upstate New York have no 
obstetricians covering night shifts. There is an increasing shortage in 
my home state of Utah as well. Studies by both the Utah Medical 
Association and the Utah Chapter of the American College of 
Obstetricians and Gynecologists underscore the problem in my state:

       50.5 percent of Family Practitioners in Utah have already 
     given up obstetrical services or never practiced obstetrics. 
     Of the remaining 49.5 percent who still deliver babies, 32.7 
     percent say they plan to stop providing OB services within 
     the next decade. Most plan to stop within the next five 
     years.

  According to this Utah Medical Association study:

       Professional liability concerns [was] given as the chief 
     contributing factor in the decision to discontinue 
     obstetrical services. Such concerns include the cost of 
     liability insurance premiums, the hassles and costs involved 
     in defending against obstetrical lawsuits and a general fear 
     of being sued in today's litigious environment.

  Mr. President, ensuring the availability of quality prenatal and 
delivery

[[Page S7522]]

care for the most vulnerable members of our society is imperative for 
obvious reasons.
  The newly-released Department of Health and Human Services report 
``Confronting the New Health Care Crisis: Improving Health Care Quality 
and Lowering Cost by Fixing our Medical Liability System'' released by 
HHS Secretary Tommy Thompson includes a detailed review of recent 
studies on the consequences of out-of-control medical liability crisis 
that is threatening healthcare in many parts of America. Even volunteer 
medical services are threatened. According to the report, ``[m]any 
doctors cannot volunteer their services for a patient who cannot pay, 
and the proportion of the physicians who provide charity care at all 
has declined, because doctors cannot afford the required liability 
coverage.'' It further details the rising costs of insurance premiums:

       Doctors alone had to pay over $6 billion in medical 
     liability premiums last year, and premiums this year in many 
     states have increased by more than 20 percent on average and 
     more than 75 percent for specialties in some states. . 
     .Excessive liability also adds $30 billion to $60 billion 
     annually to Federal government payments for Medicare, 
     Medicaid, the State Children's Health Insurance Program, 
     Veterans' Administration health care, health care for Federal 
     Employees, and other government programs.

  The HHS study further details how reasonable medical 
malpractice reforms in some states have been working to reduce 
healthcare costs and improve access and quality of care. I urge my 
colleagues to read this report.

  Our entire medical system--which everyone knows is heralded as the 
best in the world--is based on a total reliance on the abilities of the 
health care professionals who treat us, professionals who have 
sacrificed immeasurably to get the requisite training and 
credentialing. These are professionals who spend long and hard hours in 
school and at work to make our system the best in the world.
  Will there be mistakes? Of course there will be; we are only human. 
And while we must strive for perfection, that by definition cannot be. 
My heart goes out to each and every person who has suffered an adverse 
medical event, whether it was caused by the medical delivery system or 
not.
  I was a trial attorney before I came to Congress. I saw heart-
wrenching cases in which mistakes were made. But I also saw heart-
wrenching cases in which mistakes were not made and doctors were forced 
to expend valuable time and resources defending themselves against 
frivolous lawsuits. I have litigated these cases, both as an attorney 
for the plaintiff and as an attorney for the defendant.
  No one in this body knows better than I--perhaps with the exception 
of our colleague from Tennessee, Senator Frist--what the defects are in 
this system. Mr. President, I wish we could design a system which would 
protect each and everyone from harm, but that is not possible. Our job 
is to design the best system we can. But in a country as large and 
diverse as this one, problems are inevitable. The task before us is to 
make sure the system minimizes those problems. Thus the question before 
us is: how to design a system which protects both the patient and the 
provider? I do not believe that a protracted war between trial 
attorneys and health care professionals is the way to accomplish that 
goal.
  Why do we need to pass this amendment dealing with medical 
malpractice liability? Medical liability costs are out of control, as I 
have already stated. President Bush's Council of Economic Advisers 
published a paper in April estimating that the U.S. tort system, 
costing $180 billion, of which medical torts comprise a large part, is 
the most expensive in the world as a percentage of gross domestic 
product, equivalent to a three percent tax on wages. Professional 
liability rates are rising in response to our runaway tort system. And 
liability costs are having a direct impact on healthcare spending.
  It is often the case that doctors feel compelled to run diagnostic 
tests that are costly and unnecessary, in order to cover themselves--it 
is defensive medicine. It is wasteful, but unfortunately has become 
necessary. The only way to stop this is to get some reason into the 
system.
  Senator McConnell's amendment attempts to address many of the 
problems in this area by instilling a much needed measure of stability 
into our legal lottery that will benefit both patient and provider.
  How? This amendment would take the following, necessary, steps: To 
start, the amendment sets standards for punitive damages. In order for 
a claimant to receive such damages, he or she must prove by clear and 
convincing evidence that either:
  The defendant intended to injure the claimant for a reason unrelated 
to health care;
  The defendant understood the claimant was substantially certain to 
suffer unnecessary injury and yet still deliberately failed to avoid 
such injury; or
  The defendant acted with a conscious, flagrant disregard of a 
substantial and unjustifiable risk of unnecessary injury, which the 
defendant failed to avoid in a manner which constituted a gross 
deviation from the normal standard of conduct.
  Furthermore, punitive damages would be limited to two times the sum 
of compensatory damages, which includes both economic and non-economic 
damages.
  With our current system, defendants who are only one percent at fault 
could be held responsible for 100 percent of the award--which certainly 
does nothing to encourage doctors to continue to provide care. Under 
this amendment, there would be proportionate liability for non-economic 
and punitive damages, so that doctors are only liable for their actual 
share of damages if culpability is established. However, joint 
liability would remain for economic damages.
  In addition, courts would be allowed to require periodic payments for 
large awards rather than lump sums, which makes it easier for insurers 
to judge their appropriate reserves. I would note that under Utah law, 
periodic payments for awards of over $100,000 are mandatory. This does 
not reduce the claimant's award. Past and current expenses will 
continue to be paid at the time of judgment, while future damages can 
be funded over time with less risk of bankrupting the defendant. Awards 
in malpractice cases also would be reduced by the amount of 
compensation received from collateral sources, in order to prevent the 
practice of ``double dipping.''
  This amendment also limits attorneys' fees, but I think, in a 
reasonable manner. Attorneys' fees that could be paid out of an award 
would be limited to 33 percent of the first $150,000 and 25 percent of 
any amount awarded above that. I have to say, I am concerned about any 
limitation on attorneys' fees, but there have been some colossal rip-
offs in this area and this appears to be a reasonable approach in the 
McConnell amendment. Lawyers should be compensated, and they should be 
fairly and reasonably compensated. But studies have shown that a 
surprisingly low proportion of every dollar spent on liability 
litigation ever reaches patients. That is a strong indication that our 
liability system has been turned squarely on its head. Despite all the 
tremendous litigation costs, the beneficiaries seem to be lawyers, not 
patients. This important provision ensures that the injured party will 
receive more of the award, and the attorney less.

  The amendment would further require that a medical malpractice 
complaint must be filed within two years after the claimant discovered, 
or in the exercise of reasonable care should have discovered the injury 
and its cause. This is similar to the law in Utah, which provides for a 
2-year statute of limitations, with a 4-year maximum.
  And with regard to obstetric care, to address the rising number of 
lawsuits filed against emergency room doctors who deliver babies of 
women they have not previously treated, this amendment incorporates an 
amendment offered by Senator Thompson back in 1995 which passed 
overwhelmingly. Under this provision, for obstetric services, if a 
health care provider had not previously treated the pregnancy, the 
provider shall not be found to have committed malpractice unless proof 
of the malpractice meets the standard of clear and convincing evidence.
  This amendment also encourages states to develop a state-based 
alternative dispute resolution mechanism to avoid the necessity of 
going to court. I have long felt that our fault-based liability system 
may not be the most equitable or the most efficient. it is expensive, 
time consuming, and unpredictable.

[[Page S7523]]

  The McConnell amendment also requires that a portion of all punitive 
damage awards be set aside to: No. 1, improve state licensing, 
investigating, and disciplining of medical professionals; and, No. 2, 
reduce medical malpractice expenses for physicians who volunteer to 
provide care in medically under served areas.
  Finally, the scope of this amendment applies to all federal and state 
medical malpractice cases, except in those states that already have 
stronger medical malpractice reforms.
  Mr. President, it is clear that we need to do something to deal with 
this crisis, and I believe the McConnell amendment is a step in the 
right direction. What is important is that we take steps to benefit 
both the patient and the health care provider, not the trial lawyers--
otherwise we are in danger of losing access to necessary healthcare. I 
urge my colleagues to support this amendment.
  Mr. McCONNELL. I yield 3 minutes to the Senator from Tennessee.
  Mr. FRIST. First, I want to go back to the theme that I introduced 
last Friday: This is not about insurance companies or injured patients 
but about patients broadly. The debate boils down to patients broadly; 
to the American people versus a broken system of runaway, skyrocketing 
premiums secondary to the trial lawyers.
  As I paint the picture, look at the skyrocketing medical premiums 
which we know are out there. They have an impact that is directly 
translated to access of health care. This is important to everyone 
listening to me today because they want access to health care, and 
affordable access to health care.
  What is happening is that the skyrocketing costs, coupled with these 
runaway jury awards, have an impact on physicians in the following way. 
As the Senator from Mississippi said a few minutes ago, physicians are 
leaving parts of the country. They are relocating. They are stopping 
certain riskier procedures, such as delivering babies. Because of these 
skyrocketing premiums, obstetricians are having to stop delivering 
babies and neurosurgeons are beginning to limit their practices. We 
will hear shortly about trauma centers closing in Nevada and elsewhere. 
Trauma centers provide highly specialized care, and they are actually 
closing because of these skyrocketing premiums.
  We also talked a little yesterday about defensive medicine. It 
increases costs the system overall, but these costs also translate down 
to how much you pay every time you go see a doctor or pay an insurance 
premium.
  Ask your physician about defensive medicine. Eighty percent of 
physicians practice defensive medicine to the tune of billions of 
dollars. Patients are hurt in terms of poor access to health care and 
in terms of greater costs to them.
  Let me just close, by asking the following: Who do you believe? Is it 
the insurance companies? Is it the trial lawyers? I will simply say, go 
back and ask somebody you trust for your health care. Ask your doctor 
who is telling the truth about the impact of skyrocketing medical 
malpractice costs; ask your doctors why physicians are leaving States 
to practice in other States where there is some sort of control on 
these runaway costs. Ask your doctor why physicians are retiring early 
or refusing to see certain patients. Ask your doctor why obstetricians 
are refusing to take new patients, or adjusting their practice just to 
practice gynecology and not obstetrics. Ask your doctor why trauma 
centers are closing today because of these skyrocketing premiums. Ask 
your doctor whether legal reform in the area of medical malpractice is 
good for patients.
  I do not care about the insurance companies. They can come or go; 
they can deny business. The people I care about are the patients, who 
need access to better care. To better understand this debate ask your 
doctor, somebody you trust. Call them on the phone today, and I 
guarantee the answer they will give you is that the judicial system 
today is out of control and must be reformed. That is what the 
McConnell amendment does.
  To summarize, States across the country are experiencing a health 
care liability crisis. Medical liability insurance premiums are 
skyrocketing as medical liability claims and damage awards are 
exploding. This problem is not limited to just a few States or a few 
areas of the country. It is nationwide, and it is getting worse.
  The end result of this national crisis is simple: patients suffer. 
Patients suffer because in many areas because their access to care is 
in grave danger due to rising medical liability insurance premiums. 
Doctors are being forced to leave their practices, to stop performing 
high risks procedures and to drop vital services. Specialists are 
leaving certain areas or simply retiring. Women suffer the most. One 
out of 10 OB/GYNs no longer delivers babies because of the high cost of 
liability insurance. In addition, emergency departments are losing 
staff and scaling back certain services. This can literally be a life 
or death problem.
  The problem is so sever that, according to the AMA, there is a crisis 
in 12 States where patient access to care is now seriously threatened 
And there are 30 more States that are near crisis, including my home 
State of Tennessee.
  Patients also suffer because of the large costs of defensive 
medicine. To avoid situations in which a contingency fee attorney can 
claim injury occurred because certain tests were not performed, doctors 
engage in ``defensive medicine'' by performing testes and prescribing 
medicines that are not necessary for health reasons. This costs our 
economy billions.
  As a doctor I know this problem is real. I don't need to know all the 
facts and figures because I have heard from many of my colleagues from 
across the country who are concerned about their liability insurance. I 
have heard from many who are seriously considering leaving an area or 
dropping a service because of the liability problem. They don't want to 
leave or change their practice, but the are being forced to do so.
  My colleagues are demanding action by Congress to address this crisis 
in order to help their patients and to continue to provide quality 
health care.
  So we are we in this crisis? Why are malpractice premiums 
skyrocketing? Why is patient access in jeopardy? Why are trauma centers 
closing? Why are OB/GYNs refusing to deliver babies? Why are maternity 
wards shutting down?
  The answer is simple--medial malpractice suits are out of control. 
Between 1995 and 2000 the average jury award jumped more than 70 
percent to $3.5 million, and more than half of all jury awards today 
top $1 million. However, payouts aren't the only problem. Simply 
Defending a malpractice claim costs on average over $20,000, whether or 
not a doctor or hospital is at fault.
  Of course, this litigation is having a major impact on medical 
liability premiums. In 2001, physicians in many states saw rates raised 
by 30 percent or more and in some areas in some specialities, 
malpractice insurance is rising by as much as 300 percent per year. In 
New York and Florida obstetricians, gynecologists and surgeons pay more 
than $100,000 for $1 million in coverage. Soon, the annual premium 
which these doctors pay could reach $200,000. In my home State of 
Tennessee--a State that is not considered in crisis by th AMA--premiums 
rose 17.3 percent last year and are rising 15-17 percent this year.
  It should be no surprise that these premium increases are causing 
this serious health care access problems across the country.
  We know what must be done--intelligent and reasonable tort reform. 
Such reform will help solve this problem and, most importantly, help 
patients. Sensible reform will provide for fair and equitable 
compensation for those negligently injured and stabilize the insurance 
marketplace which will help maintain patients' access to quality health 
care.
  Experience at the state level clearly shows the dramatic benefit of 
tort reform. California tort reform, the Medical Injury and 
Compensation Refom Act, or MICRA, which became law in the mid 1970s, is 
the most obvious example of what works. California doctors and patients 
have been spared the medical liability crisis that other States are 
facing. In fact, California currently has some of the lowest medical 
malpractice insurance premiums in the country.
  This is why I strongly support this amendment offered by Senator 
McConnell. Though this amendment does not include all the measures that 
I think are necessary to address this problem,

[[Page S7524]]

it is a good step in the right direction. We know that sensible tort 
reform works. It holds down rising health care costs and helps maintain 
access to quality health care. We must act now to protect patients and 
their accessibility to quality health care before the problem gets 
worse.
  I encourage my colleagues to vote for this important amendment.
  I reserve the balance of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. Mr. President, I yield 4 minutes to the Senator from 
Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President, I thank my colleague for the time.
  I listened to the Senator from Tennessee, who is also a physician, 
speaking a moment ago. All of us have heard the complaints of doctors, 
of individuals, with respect to premiums. One wishes we were fashioning 
a remedy to some of the problems within the medical system that fits. 
This is not a remedy that fits. This is, in fact, an excuse for people 
who have always tried to liberate malefactors of one kind or another 
from responsibility to the legal system through the normal court 
process that is part of our Constitution.
  People don't like being sued--of course not--so they try to find a 
way, statutorily, to limit their liability for things that they do 
wrong. The fact is, this particular remedy is not going to deal with 
the problem, No. 1, and, No. 2, it unfairly double victimizes American 
citizens who are the victims of some kind of incident of malpractice or 
of medical error from being able to seek the appropriate redress for 
that and being able to keep the level of accountability in our system 
which only, today, is provided by that capacity to be able to bring 
suit.
  In fact, in our Patients' Bill of Rights, we directly passed the 
right to sue nursing homes and HMOs, which Americans want, when they 
are unfairly treated. This amendment even reaches to undo that right 
which the Senate granted but which we have not yet, obviously, put into 
law.
  The fact is, this is not a serious approach to the problem that our 
physician, Senator, fellow Member, has articulated. Yes, there are some 
high premiums, but the president of the American Tort Reform 
Association has been quoted as saying:

       We wouldn't tell you that the reason to pass tort reform 
     would be to reduce insurance rates.

  So the McConnell amendment will not result in lower premiums, which 
is what they are screaming about. In fact, California, which enacted 
medical malpractice tort reform in 1974, has malpractice premiums 19 
percent higher than the national average. So why are medical 
malpractice insurance premiums rising? Let's look to what the Wall 
Street Journal tells us--not known for its liberal stance on tort 
reform. In a June article, they stated:

       Even doctors are beginning to acknowledge that the 
     conventional focus on jury awards deflects attention from the 
     insurance industry's behavior.

  According to the International Risk Management Institute, the reason 
premiums are rising is because throughout the 1990s insurance companies 
cross-subsidized low premiums with profits from investments. This 
enabled them to lower the premiums to attract more policyholders. Now 
the economy has slowed and investment profits have dried up, and 
investing decisions, not tort claims, bear the responsibility for 
rising premiums.
  Moreover, medical malpractice insurance costs, as a proportion of 
national health insurance care spending, amounts to less than 60 cents 
per $100 spent.
  We should ask any American whether they are prepared to pay 60 cents 
of the cost of medical care of all the hundred dollars that are spent 
in order to know that, if something is done wrong to them, they have 
the right of redress.
  Moreover, it is false to state that claims have ``exploded'' in the 
last decade. Closed claims, which include claims where no payout has 
been made, have remained constant, while paid claims have averaged just 
over $110,000. Meanwhile, this is the most important point----
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. KENNEDY. I yield an additional minute.
  Mr. KERRY. Mr. President, incidents of medical errors are growing. 
Countless Americans risk serious injury because of mistakes made in 
hospitals and in other places. Medical errors occur all over the 
system. In hospitals alone, the Institute of Medicine has reported that 
between 44,000 and 98,000 Americans are killed by medical errors 
annually. Using the 44,000 figure, medical errors are the eighth 
leading cause of death in the United States, more than breast cancer 
and more than AIDS. So I think to take away from Americans the single 
available tool they have to try to make the system be accountable, in 
the absence of any other responsible effort, is wrong.
  Using the 98,000 figure, medical errors would be the fifth-leading 
cause of death in this country.
  As the IOM report puts it,

       These stunningly high rates of medical errors--resulting in 
     deaths, permanent disability and unnecessary suffering are 
     unacceptable in a medical system that promises first to do no 
     harm.

  Now, clearly, some medical errors are the direct result of physician 
negligence and many are not. But it is clear that we ought to think 
long and hard before placing an arbitrary cap on the financial value of 
human life.
  Knowing that the McConnell amendment would have virtually no impact 
on insurance premiums, let's look at the merits of the legislation: The 
amendment before us is not simply about preventing excessive 
malpractice actions.
  When the Senate flipped to Democratic control a little more than a 
year ago, the Senate finally passed a real Patients Bill of Rights. For 
the first time, the Senate sought to hold HMOs truly accountable for 
their actions. But this amendment would severely limit suits not only 
against standard medical malpractice actions, but also actions against 
HMOs and nursing homes. This amendment is extremely broad in scope and 
is directly opposite of the Senate's position on the Patients' Bill of 
Rights.
  The amendment's restrictive statute of limitations are similarly 
misguided. The amendment reduces the amount of time a patient has to 
file a lawsuit to 2 years from the date the injury was discovered. So 
if someone contracts HIV through a negligent transfusion but learned of 
the disease 5 years after the transfusion, he or she would be barred 
from filing a claim. This statute of limitations would cut off claims 
for diseases with long incubation periods. Even shareholders, investors 
and others have 5 years under the just-enacted accounting reform bill.
  This amendment would also punish injured patients who have prudently 
purchased insurance policies to protect themselves and their families. 
Senator McConnell would require a judge to reduce the amount of damage 
award by all collateral sources, such as life or disability insurance 
payments. So if you are thoughtful enough to purchase health care--a 
growing difficulty for too many Americans--you will be less likely to 
be compensated for someone else's negligence. This just does not make 
sense.
  I know how difficult is for hospitals to find specialized doctors and 
nurses today. The Nation's shortage of nurses has reached crisis stage, 
and we do need to keep experienced health care professionals on the 
job. But this amendment will not help control malpractice premiums.
  I am prepared to talk about reasonable ways to do this. In 
Massachusetts years ago we put in a screening system. There are many 
ways to approach this, but this is an arbitrary limit, which will be 
unfair to the average American and will not result in lowering 
premiums.
  The PRESIDING OFFICER. The time of the Senator has expired. Who 
yields time?
  The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, the pending amendment should be called 
a clients' bill of rights because it is designed not to in any way 
handicap the recovery of the victim, but to rearrange the relationship 
between the lawyer and the victim so the victim can get more of the 
money he or she justly deserves and to deal with the problem of runaway 
punitive damages--which are not for the purpose of rewarding the 
plaintiff anyway; they are for the purpose of punishing the defendant.
  I was in Henderson, KY, which is right on the Ohio River, Friday 
night.

[[Page S7525]]

There were four doctors at the meeting I attended. Every single one of 
them was on the verge of moving over to Indiana--it is very easy for 
them; they just go across the Ohio River--in order to escape this 
malpractice crisis which has afflicted, of course, my State of 
Kentucky. It hasn't afflicted Indiana because they have reasonable caps 
on recovery and have had for years.
  The next day, on Saturday, I was in Morganfield, KY, and there were 
some people there who have a son who lives in Mississippi. The 
distinguished Republican leader was talking about the crisis in 
Mississippi. The son of one of the people in Morganfield is an 
obstetrician in Mississippi, getting ready to pack his bags and move to 
a State where they have dealt this issue.
  Speaking of a State that has a crisis, there is no State that has a 
greater crisis than the State of Nevada, and our colleague from Nevada 
is here to discuss the crisis in Nevada. It is my understanding that 
there is a special session going on this very week.

  Mr. President, how much time do I have remaining?
  The PRESIDING OFFICER. Seventeen and one-half minutes.
  Mr. McCONNELL. I yield 10 minutes to the Senator from Nevada.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. ENSIGN. Mr. President, I thank the senior Senator from Kentucky 
for yielding time.
  There is a serious crisis going on in the State of Nevada. We have 
heard here today that insurance rates are not going up. Let me tell you 
that they are dramatically going up in Nevada, and it is because jury 
awards are out of control.
  About one-half of the doctors in southern Nevada have their homes up 
for sale because they cannot afford increased medical liability 
premiums. Whether these are OB/GYNs or neurosurgeons or orthopedic 
surgeons, many of the specialists are taking their practices and moving 
them to States that have enacted tort reform and/or medical liability 
reform measures that are similar to the McConnell amendment we are 
considering here today.
  In my State right now, obstetricians are telling pregnant mothers in 
late stages of pregnancy they will not deliver their babies. We are the 
fastest growing county--Clark County--in America. Yet these 
obstetricians are saying they are not taking any new patients. OBs are 
saying they will not take any new patients because they cannot afford 
to, and those are the ones who are staying in town. Unfortunately, many 
of them are leaving.
  Let me give you an example. There is a couple who are both OB/GYNs 
who practice together. In fact, they delivered my wife's and my three 
children. They have already been in several meetings to move their 
practice to either northern or southern California where their medical 
liability insurance rates would be about one-fifth of what they would 
pay in the State of Nevada.
  On July 3, our only level 1 trauma center closed for 10 days. This 
trauma center services four States. If someone has a serious accident 
and has severe trauma, this is where they would get the kind of care 
necessary for saving their life. The reason it is closed was, once 
again, was because doctors were afraid they would not be able to get 
the kind of insurance coverage they needed and they would lose 
everything they worked for their whole life if they were sued. The only 
reason it was reopened was because they were afforded insurance 
coverage that included a $50,000 cap on damages. They were told--If you 
practice here, and there happens to be some kind of a malpractice, we 
will cap the jury award at $50,000.
  Now, there are no such caps in the McConnell amendment we are 
discussing. However, I believe very strongly in caps on non-economic 
damages. I wish they were part of this amendment.
  As a matter of fact, yesterday Nevada's Governor proposed and laid 
out a compromise with Republican and Democrat legislators in which 
there would be a $350,000 cap on jury awards for non-economic damages. 
You would be able to recover, through economic damages, everything you 
would have ever earned and expenses you incurred for medical bills. But 
on non-economic damages there would be a $350,000 cap, except in cases 
where treatment was received at the trauma center--that would be kept 
it at a $50,000 cap. They did this because they know that it is the 
only way they can keep the trauma center open.
  In any case, there are several other provisions in the McConnell 
amendment that are very important. This idea of joint and several 
liability was mentioned. The Senator from Massachusetts talked about 
this; that it is important to keep joint liability so the patient would 
be able to get the whole award.
  Now let me tell you what this really means. If you are practicing in 
a trauma center, and if you are responsible for 1 percent of the 
medical malpractice that happened in a particular case, you can be held 
responsible for 100 percent of the jury award.

  Is that fair? That isn't fair.
  That is also one of the reasons rates continue to go up across the 
country.
  Neurosurgeons are leaving our State. This isn't about trial lawyers 
versus doctors. This is about availability of doctors. This is about 
whether we are going to have people such as Senator Bill Frist--a very 
talented heart surgeon--continue to go into the practice of medicine 
and who want to save lives. We have people who are not only leaving our 
State, but who are just retiring their practices early because of this 
crisis.
  One of the best surgeons in Las Vegas--a gastrointestinal surgeon--
was planning on retiring in 1 year. He actually retired this year 
because had he stayed in the practice an additional year, he would not 
have only had to pay $200,000 for insurance this year, but he would 
have faced what is called ``tail coverage''. Tail coverage is what a 
doctor pays when they quit practicing or change insurance companies in 
order to cover any claims which might arise from when they were covered 
under the previous company or while they were still practicing. He 
would have had to pay another $400,000 just for tail insurance. He 
makes about $200,000 a year. So, it would have cost him $600,000 to 
practice while he would have only earned $200,000 for the year. It was 
obviously ridiculous to stay in business, so he quit practicing.
  Las Vegas and southern Nevada lost one of their best surgeons because 
of early retirement, leaving even more patients without the services of 
a highly-trained, highly respected physician. That kind of situation is 
indicative of how badly broken the system is.
  Let me briefly mention just one of the abuses in our civil justice 
system and how that contributes to the overall problem we are having in 
runaway jury verdicts. If you are accused of medical malpractice you 
are brought into the courtroom, at which time the case is laid out. At 
some point during the case, ``expert'' witnesses are called to testify. 
I put ``expert'' in quotations because many physicians can be brought 
in as an expert. Unfortunately, there are physicians who are now 
working in concert with trial lawyers, and it is really their business 
to become expert witnesses even though they are not experts. Not to 
impugn their motives, but certainly this happens, and many times the 
abuse is blatantly outrageous. Yet the jury hears from the supposed 
``experts,'' and in main part of that testimony, medical malpractice is 
found by the jury.
  This illustrates what is happening in States and cities all across 
the United States. It is a system that is prejudiced toward finding 
malpractice. While the McConnell amendment does not specifically 
address this issue, it does help bring some accountability and 
feasibility back to our civil justice system.
  I am a veterinarian, and I have worked in the health care profession 
for some time. Anybody who has worked in health care understands human 
error. Do you know why? It is because we are humans who practice. And 
anytime you have human beings practicing a profession, you are going to 
have errors--sometimes errors that can't be helped. There are some very 
sad cases, and we want to ensure those people continue to be able to 
have a remedy. But, outside of providing appropriate compensation, our 
system of secondary recovery it is out of control. The system needs to 
be brought back into balance.
  The bottom line is when you have human beings, there are errors. 
However, we must remember that often times those errors are not 
malpractice. The physician did not intend to hurt his or her patient. 
But more often than

[[Page S7526]]

not, it can appear as malpractice to a jury. We need to make sure that 
we have a system in place that most justly adjudicates each and every 
case on its merits, and fairly places culpability where it should be 
placed.

  Under the current system, juries are out of control with awards that 
we are all paying for. Medicare costs and private insurance premiums 
are higher, and they keep going up every year. There are several 
factors that contribute to this rise in costs, but none more than the 
excessive, unfounded awards given out by juries on a seemingly regular 
basis.
  Mr. KENNEDY. Mr. President, will the Senator yield for a question?
  Mr. ENSIGN. Mr. President, let me finish my statement, and then I 
would be happy to yield.
  In the State of Nevada last year, the average OB/GYN made about 
$200,000. Now, taking into consideration that figure, their insurance 
rates went from about $35,000 a year to about $130,000 a year. We can't 
pass that cost on anymore. That means basically every OB/GYN in 
southern Nevada is going to have to either see double the number of 
patients they are seeing now or just quit practicing altogether.
  There is a huge incentive for these doctors to go to California where 
their rates will not only not go up, but they will actually go down 
from what they were the previous year.
  I keep mentioning California because California enacted the Medical 
Injury Compensation Recovery Act (MICRA). MICRA has all the reforms 
that are in Senator McConnell's amendment--plus they have the $250,000 
cap on noneconomic damages.
  MICRA has been challenged in the courts four times. It has been 
upheld four times. It is not that people in the State of California do 
not receive injury awards. It isn't that the people in California are 
disadvantaged in some way so the patients don't get what they need.
  There was a situation in 1975 that California recognized as a crisis. 
Because of court challenges, the bill didn't actually take effect until 
1985. But since that time, they have had a stable situation where 
insurance companies know approximately what is going to happen and know 
how much their costs are going to be. Consequently, their rates have 
stabilized.
  There are about 12 States right now, according to the American 
Medical Association, that are in crisis, Nevada being the worst of all.
  Because of this crisis, Nevada's Governor had to call a special 
legislative session. Now, we only meet every 2 years in our 
legislature. Therefore, he had to call a special session just to deal 
with this severe crisis that is going on right now.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. ENSIGN. Let's enact this amendment to bring about some reasonable 
reforms to our medical liability system in the United States.
  There is a crisis happening right now in my home State of Nevada. 
Obstetricians are telling pregnant mothers in late stages of their 
pregnancy that they can't deliver their babies.
  On July 3, our only Level One trauma center closed for ten days, 
leaving victims of car accidents and gun shot wounds without 
appropriate care. Officials are saying it will probably have to close 
again.
  Neurosurgeons are canceling operations with patients who have spinal 
cord injuries that adversely affect every second of their daily lives.
  In fact, as I talk to you right now, the Nevada Legislature has been 
forced to meet in a special session with Governor Kenny Guinn to 
address this crisis.
  What is the common thread between these events? It lies in the fact 
that all of these health care providers are unable to afford the 
skyrocketing cost of their medical malpractice insurance.
  So, if this is a Nevada problem, then why would I bring this issue to 
the floor of the United States Senate?
  Because it is no longer just a Nevada problem; it is now a nationwide 
problem. President Bush recognized this fact last week when he called 
our medical liability system ``badly broken,'' and emphasized the 
immediate need for Federal medical liability reform.
  In order to illustrate this urgent need, let me give you some 
examples of what I am talking about:
  In Bisbee, AZ, the only maternity ward has closed. Expectant mothers 
must now drive more than a half hour to the nearest town to deliver;
  In Broward County, FL, 14 of the 16 practicing neurosurgeons are 
uninsured;
  In Mississippi, 324 doctors have stopped delivering babies in the 
last decade. Today, only 10 percent of family doctors will deliver 
babies;
  In Wheeling, WV, all of the neurosurgeons have stopped practicing. I 
could go on and on about a number of different States.
  We have to examine why this current crisis is happening. What it 
boils down to is two factors: affordability and availability.
  On affordability, let me give you a statistic from the American 
Medical Association. In 2000, medical liability insurance rates 
increased by at least 30 percent in 8 States, and by at least 25 
percent in more than 12 States. I don't know too many physicians that 
can afford such rates. These rates are forcing more physicians, 
hospitals, and other health care providers to limit their practices or 
leave the profession altogether.
  On availability, thousands of doctors nationwide have been left with 
no liability insurance as major liability insurers are either leaving 
the market or raising rates to astronomical levels.
  Now, why are insurers raising rates and/or leaving the market? 
Because there is no stability in the marketplace for providing medical 
liability insurance.
  Why is there no stability in the marketplace? Because our healthcare 
system is being overrun by frivolous lawsuits and outrageous jury 
awards.
  Let me give you some statistics to illustrate these points. This 
information is according to the Physician Insurers Association of 
America's Data Sharing Project:
  Since 1998, the average claim payment value has risen from 
approximately $130,000 in 1988 to $330,000 in 2001. Likewise, since 
1988, the median claim payment values have risen from approximately 
$50,000 in 1988 to $175,000 in 2001.
  In 1985, less than 1 percent of the claims that were paid were equal 
or greater than $1 million. Contrast that to 2001 when 7.9 percent of 
the claims paid were equal or greater than $1 million.
  This excessive litigation is leading to higher health care costs for 
every American and an unstable piece of mind for our health care 
providers. To fend off litigation, healthcare professionals are forced 
to practice defensive medicine by ordering unnecessary tests just so 
that they will not be sued for ``under-diagnosing'' their patients.
  A recent study by the Department of Health and Human Services found 
defensive medicine is costing the Federal Government an estimated $28 
billion to $47 billion in unnecessary healthcare costs.
  And who else pays for those unnecessary costs? Every American with 
health insurance, in the form of higher premiums. Gone are the days 
when our civil justice system was used to help protect patients. Now we 
are left with a system that is used to primarily fatten the wallets of 
personal injury attorneys.
  More often than not, medical liability claims are more financially 
beneficial to the lawyers than they are to the injured and sick 
patients.
  According to the Physician Insurers Association of America's Data 
Sharing Project, only fifty cents of every dollar paid in medical 
liability awards go to the patients. Only 50 cents.
  Additionally, nearly 70 percent of all medical liability claims 
result in no payment to the plaintiff.
  So what does all this mean? It means that we need to bring some 
accountability back to the civil justice system by way of medical 
liability reform.
  Not only would this allow physicians to continue to concentrate fully 
on providing superior care to their patients, it would help 
tremendously in curbing the skyrocketing costs of healthcare for 
consumers.
  In addition, and probably even more staggering, is the success rate 
of most medical liability claims. Consider this information:
  In 2001, only 1.3 percent of all claims filed ended in a verdict for 
the plaintiff. In contrast, 61.1 percent were dropped or dismissed for 
various reasons.
  These numbers highlight the significant amount of frivolous lawsuits 
that

[[Page S7527]]

are filed, costing healthcare professionals valuable patient time, and 
ultimately costing every insured American millions in increased health 
care costs.
  Medical liability reform is not something that is new to the Senate. 
During debate on the 1995 Product Liability Bill, the Senate considered 
and voted on medical liability reform proposals. In fact, one of those 
proposals is the exact amendment that we are considering here today.
  This amendment takes a sincere and aggressive approach toward helping 
reign in our out of control civil justice system. It does so in the 
following ways: sensible limits on punitive damages; elimination of 
joint liability on most damages, making sure that defendants are only 
liable for their fair share; modest limits on attorney's fees in 
medical malpractice cases to maximize patient recovery; collateral 
source reform to prevent plaintiffs and attorneys from ``double 
dipping'' for compensation; alternative dispute resolution to encourage 
states to develop mechanisms to help resolve disputes before they go to 
court; and periodic payments for large awards.
  Although I am strongly in favor of this proposal, I must mention that 
the one significant provision it is missing is a cap on non-economic 
damages. I believe this cap could only strengthen the proposal we are 
considering today. However, every other reform in this amendment has 
proven to be effective in bringing accountability back to the civil 
justice system.
  This amendment was passed in 1995 on a vote of 53-47. Therefore, with 
the number of Senators who supported this proposal before, coupled with 
the number of senators whose States are facing a medical liability 
crisis, I think we have an excellent chance to pass this amendment. 
Just to highlight that point, a recent study conducted by Wirthlin 
Worldwide found that 78 percent of Americans express concern that 
skyrocketing medical liability costs resulting from the current system 
could limit their access to care. Clearly, the American public sees the 
crisis we care facing and are calling for nationwide reform. Americans 
are afraid they will not have anyone to deliver their babies or perform 
life-saving procedures on their loved ones in emergencies, and they 
should not have to be. If there are senators here today that are still 
not convinced about the need and overall effectiveness of medical 
liability reform, let me briefly explain how to put your doubts to 
rest.
  Let's take a look at the wildly successful Medical Injury 
Compensation Reform Act (MICRA) of 1975 that California has in place. 
Now, I will concede that the amendment before us is not identical to 
MICRA, but it does incorporate all but one of the major provisions that 
MICRA contains.
  To further explore the impact of MICRA, just look at the difference 
between how medical liability premiums have risen in California versus 
the rest of the United States. According to the National Association of 
Insurance Commissioners, from 1976 through 1999, California's insurance 
premiums has risen 167 percent, while the other 49 States' premiums 
have risen 505 percent.
  Obviously, MICRA has brought about real reform in California's 
professional liability system, while still protecting the rights of 
injured patients. Studies have shown the following. The number of 
frivolous lawsuits going to trial has declined dramatically; injured 
patients receive a larger share of their awards; the number of 
disciplinary actions against incompetent health care providers has 
increased.
  The bottom line is that California's medical liability system works. 
Shouldn't these types of outcomes be shared by every state, and 
ultimately every patient, in America?
  Again, the amendment before us contains all but one of the major 
provisions that MICRA entails, so each senator has something to 
substantiate their vote. And let us remember one important point we are 
NOT limiting the amount of economic and non-economic damages that can 
be recovered by the patient.
  All we are doing is bringing some accountability and reasonability 
back to our civil justice system in the form of common-sense reforms 
which I know will lead to lower health care costs for every American.
  I know it is possible to pass these types of reform measures through 
the Houses of Congress, because while I was a member of the House of 
Representatives we passed some type of medical liability reform measure 
six times. Unfortunately, each time it was stalled in the Senate and 
real reform was never enacted.
  But the next time around I am hopeful that it will be different. And 
there is no better time than now for the Senate to make a strong 
statement on behalf of American patients.
  Let's make sure there are no more expectant mothers turned away at 
the door and refused pre-natal care.
  Let's make sure trauma patients receive immediate and appropriate 
medical services.
  And, let's make sure that we continue to provide patients everywhere 
the opportunity to receive affordable, accessible, and quality health 
care for years to come.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. I yield 6 minutes to the Senator from Tennessee.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Mr. President, let me address what I consider to be the 
real issue, really the only issue, as far as I am concerned. It is not 
who the bad guys are and who the good guys are. I have seen excesses on 
both sides of this issue. It is not a matter of what is best for the 
trial lawyers or best for the insurance companies or even what is best 
for the patients. It is a question of whether we have a limited form of 
government, whether we have a Federal Government with enumerated 
powers. That is the underlying issue. It is amazing to me that we can 
have a debate on something such as this without it even being brought 
up.
  What we have is an amendment which will take things that have been 
under the purview of the State governments for 200 years and federalize 
them. This is getting to be such a common occurrence that nobody pays 
much attention to it anymore. I pay attention to it. I think it is a 
bad trend. I think it goes against the system of government that our 
Founding Fathers set up and has worked in our favor for 200 years.
  Mr. REID. Will the Senator yield for a brief question?
  Mr. THOMPSON. Yes.
  Mr. REID. Is the Senator aware that the State of Nevada is in a 
special session to work out malpractice problems, and does the Senator 
believe that is the way we should go?
  Mr. THOMPSON. The answer to that question is yes. I am amazed to hear 
that we have a problem in a particular State and that the solution is 
for the citizens of the small town in that State maybe to drive past 
the courthouse and drive through the capital, past the statehouse, and 
get on an airplane and fly to Washington, DC, to talk about a Federal 
solution against their own State.
  Tennessee just had a discussion about a State income tax and a State 
sales tax. One of the points made against a higher State sales tax was 
that the State of Kentucky and the State of Mississippi and the State 
of Arkansas, all these other surrounding States, had a lower sales tax 
and people would go to those States to buy their goods, just as 
apparently people are going from one State to another to take advantage 
of a better medical malpractice case.
  The answer to that is, that is the way it is supposed to work. That 
is our system of government. That is the reason we have States, to have 
competition among States. If we extend the commerce clause to this, 
after having been told by the Supreme Court in the Lopez case that the 
commerce clause does not extend to guns in the local school, after 
having been told in the Morrison case by the Supreme Court that the 
commerce clause does not extend to a sex-based crime at a local level--
if we extend the commerce clause to the delivery of a baby in 
Lawrenceburg, TN, there is nothing to which we cannot extend the 
commerce clause. I regret to say, it is some of us who talk about 
limited government and enumerated powers who are doing this. I do not 
think it is sound policy.
  It does not matter whether or not there are excesses on one side or 
another. States are supposed to address these matters. I would not come 
here

[[Page S7528]]

and say the State of Tennessee is inadequate in this regard unless I 
was willing to go back to the State of Tennessee and fight for a change 
in the laws. Senator Kennedy and I, are we supposed to write the laws 
for the State of Tennessee with regard to something that has been under 
their purview for 200 years? I don't think so.

  We can disagree on what those laws should be, but we cannot disagree, 
surely, on the principle that underlies this debate. The proposed 
amendment goes so far as to require that each State require 50 percent 
of all punitive damage awards be used for licensing, investigating, 
disciplining, and certifying health care professionals and the 
reduction of malpractice costs for the health care professional 
volunteers.
  This requirement would get us into the management of the licensing 
and regulation of health care professionals in every State in this 
country. This is just one step away from national standards and 
national regulation, not just in the health care area but potentially 
in any other area.
  Regardless of whether you think medical malpractice premiums are too 
high or lawyers are terrible people, or whatever, if we walk away at 
this time from this principle, when we want to assert this principle, 
we are not going to have any principles to stand on because we will 
have ignored them so often for the particular causes we want at the 
moment that they will be totally eroded. I submit to the Chamber that 
is too high a price to pay.
  I yield back whatever time remains.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, I listened carefully to the Senator 
from Tennessee. I commend him for being very consistent in his concern 
about federalism and States rights. He has raised that issue not just 
on the occasion of today's amendment but across the board. He has 
certainly been consistent. I do find it somewhat amusing to hear it 
invoked from time to time by those on the other side of the aisle for 
whom States rights are rarely a concern.
  Let me say to my good friend from Tennessee, he raises exactly the 
point I wanted to address in my remaining time this morning. This is a 
national crisis, a national crisis in the delivery of medical services. 
This is a national problem, and it demands a national solution. States 
all across the country--in the West, the South, the Midwest, and the 
East--are in crisis. Many more States are experiencing serious 
problems, including my own State of Kentucky. Because it is a national 
problem, it demands a national solution. Furthermore, it is necessary 
and appropriate for the Federal Government to be involved in fixing 
this problem.
  Let me give you my first reason. As the single largest purchaser of 
health care, the Federal Government has a compelling interest in health 
care liability reform. In 2002, the Federal Government will spend $223 
billion on Medicare, $145 billion more on Medicaid, and $11.3 billion 
more on Federal employee health benefits. That is a total of $400 
billion by the Federal Government on health care.
  Furthermore, a 1996 study by Stanford economists projected that 
commonsense medical malpractice reforms, many of which are included in 
my amendment, could reduce health care costs by 5 to 9 percent without 
jeopardizing the quality of care. Using this study, the Department of 
Health and Human Services projects that reducing the practice of 
defensive medicine could save the Federal taxpayers between $23 and $42 
billion.
  Finally, Federal legislation is necessary because of the increasingly 
interstate character of health care. I just mentioned, a few moments 
ago, the four physicians I saw Friday night in Henderson, KY, on the 
verge of moving to Indiana. That is fine for them. It doesn't do much 
for their patients who are left without care on the Kentucky side. 
Patients in the Washington, DC, area receive care not only here but in 
Maryland and Virginia. Many of the Nation's finest health care 
facilities--the Mayo Clinic and M.D. Anderson--treat patients from 
across the country.
  While a Federal solution is necessary and appropriate, my amendment 
does not wholly preempt State medical malpractice reforms. The 
amendment would not preempt those States that have already developed 
strong medical malpractice laws.
  This crisis has been created by the failure of the National 
Government to act. That has caused a problem. This crisis is due to the 
failure to impose accountability and responsibility--the same things we 
have been talking about around here the last few weeks with regard to 
corporate America--on big, powerful trial lawyers who are running 
roughshod over doctors and in many instances taking advantage of their 
own clients.
  As a result of our failure to act, there has been an explosion in 
medical malpractice awards. Let us take a look at this chart which 
shows the explosion in medical malpractice awards from roughly $500,000 
in 1995, up to $1 million in 2000.
  Now, I gather my friends on the other side apparently think doctors 
have become twice as incompetent in the last few years or that medical 
schools are now turning out graduates who are inept. But I am inclined 
to believe that the medical professionals at the AMA and other health 
care organizations don't agree with that. The standard of care of 
physicians has not radically deteriorated in just the last few years. 
Rather, from looking at the problem, I believe the AMA and other health 
groups when they say it is our medical malpractice liability system, 
not our delivery system, that is badly broken.
  The amendment I offer is a modest one. As I have said repeatedly, it 
doesn't in any way cap compensatory damages to the victim. It simply 
seeks to cap lawyer's fees so more money will go to the injured victim, 
and caps punitive damages, which are not designed to compensate the 
injured party in any event but to punish the defendant--cap that at 
twice the balance of the compensatory damages. So this doesn't take any 
funds that are needed to put the injured victim back on his or her 
feet. It simply addresses the issue of lawyer abuse and of excessive 
punitive damages, which are not designed to enrich the injured party in 
any event.
  It is a very modest amendment. The AMA supports this amendment. They 
would have liked it to be much stronger, but I crafted this amendment 
in a very modest way in order to make it more palatable to more 
Senators. We have had a vote on this amendment before, back in 1995. At 
that point, it got 53 votes, including Senators Feinstein, Lieberman, 
and Jeffords, who are still in the Senate.
  As I said, this is a pro-victim amendment. There is no cap on 
noneconomic pain and suffering damages, no cap on compensatory damages. 
There is simply a reasonable cap on lawyer's fees and a cap on punitive 
damages at twice the balance of the other damages.
  So I think this is clearly a national problem requiring a national 
solution. I hope the amendment will be approved.
  Mr. KENNEDY. Mr. President, I yield 1 minute to the Senator from 
Tennessee.
  Mr. THOMPSON. Mr. President, just a very brief response. I think the 
logical extension of this amendment would mean if we could pass any 
large Federal program--as we have--such as Medicare, Social Security, 
and I guess our defense appropriations bills, and so forth, then we 
could take any activity, even noncommercial activity in the smallest 
hamlet of the smallest town in America, anything they would do that 
might arguably impact on the cost of those programs would be fair game 
under the spending clause.
  If that is the case, that is not a direction in which we need to go. 
I would contrast what we are doing here with regard to delivery of a 
baby, let's say, in Lawrenceburg, TN, and the rules the State of 
Tennessee imposed upon that we would abrogate--I contrast that with a 
product liability debate we had. I voted for that bill. That is an 
inherently interstate commerce, commercial activity. I have concluded 
that there was a legitimate reason to have some national standards with 
regard to that. I think our Founding Fathers would have approved of 
that. I think it is a far cry from where we are with regard to this.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. KENNEDY. Mr. President, how much time do I have?
  The PRESIDING OFFICER. The Senator has 1 minute 50 seconds.
  Mr. KENNEDY. Mr. President, as I understand it, we will have a very 
brief

[[Page S7529]]

time after the break. I point out that the National Association of 
Insurance Commissioners study shows that in 2000--the latest year for 
which data is available--the total insurance industry profits, as a per 
average premium for medical malpractice insurance, were twice as high 
as overall casualty and property insurance profits. In fact, 
malpractice insurance was a very lucrative area for the industry, 
averaging a 12 percent profit. Over a 10-year period, their premiums 
went up 1.9 percent, and they are making 12 percent on that.
  This is about the insurance industry; it is not about the doctors. We 
will have more to say about this. This is a lucrative aspect of the 
insurance industry--everyone knows it--and they just want to cash in on 
this opportunity at the present time.
  Mr. President, I see our leader on his feet at this time in 
anticipation of a consent agreement, so I withhold further comments.
  Mr. REID. Mr. President, I ask unanimous consent that the time from 
2:15 p.m. this afternoon until 2:45 p.m. be equally divided between 
Senators Kennedy and McConnell or their designees and that at 2:45 p.m. 
Senator Reid of Nevada or his designee be recognized to move to table 
Senator McConnell's amendment.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.

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