[Congressional Record Volume 148, Number 112 (Monday, September 9, 2002)]
[Senate]
[Pages S8369-S8371]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STOPPING THE LITIGATION LOTTERY
Mr. FRIST. Madam President, the only level one trauma center in Las
Vegas shuts its doors. Twelve orthopedic surgeons at facilities near
Philadelphia resign their practice. Two-thirds of doctors in a small
Mississippi city consider leaving for Louisiana. What is forcing our
medical community to take such drastic measures? The ``litigation
lottery,'' trial lawyers filing too many lawsuits with the hope of
winning excessive awards.
Medical malpractice litigation, when an injured patient sues a doctor
over a medical error, has exploded in the United States. Between 1995
and 2000, the average amount a jury awards a patient rose more than 70
percent to $3.5 million per claim. And more than half of awards now
exceed $1 million. Trial lawyers, who are fueling this surge by hand-
picking patients whom they believe will win large awards, typically
take 30 to 40 percent of the proceeds.
Doctors purchase insurance to protect themselves from malpractice
lawsuits, but excessive awards have pushed the cost of insurance to
unaffordable levels. In 2001, insurance premiums rose 30 percent or
more in some States. And for doctors who perform high-risk procedures
or practice where trial lawyers have won excessive awards, premiums
have risen by as much as 300 percent per year. Many doctors can no
longer afford to do the jobs they love.
But even more disturbing to doctors, because we swear a sacred and
ancient oath to do no harm, is the impact of excessive awards on
patient care. High insurance premiums are forcing doctors to move their
practices to other States, adjust how they practice medicine, or quit
practicing medicine altogether. Trial lawyers may be winning the
litigation lottery, but patients are suffering a health care crisis.
First, excessive malpractice awards hurt access to health care. When
a trauma center closes or specialists resign from a hospital or rural
doctors can't deliver babies, patients must travel longer distances to
get the care they need. They must also select from a smaller pool of
physicians. When minutes, and a doctor's experience, can mean the
difference between life and death, access to health care matters.
Second, excessive malpractice awards increase the cost of health
care. Many doctors are forced to practice defensive medicine. They must
order more tests, write more prescriptions, and refer more patients to
specialists to protect themselves against lawsuits. A recent Federal
report found evidence that reasonable limits on malpractice awards
would reduce health care costs by as much as 5 to 9 percent per year.
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Third, excessive malpractice awards are the single largest barrier to
improving patient safety in our country. Doctors and hospitals want
desperately to improve patient safety by sharing, analyzing, and
learning from medical errors. I have proposed a bill that would let
them do that without the fear of being sued for trying to improve
patient care. But even the most limited restrictions on lawsuits are
unacceptable to some of my Democrat colleagues. They believe trial
lawyers should have open access to any medical error reporting system,
which would render such a system useless because few doctors or
hospitals would participate.
We can turn back this growing health care crisis by reforming medical
malpractice litigation. Some States have already taken the responsible
step of capping awards for noneconomic damages, which are highly
subjective, intangible and the major source of mischief for trial
lawyers. Rightfully, these States have also preserved awards for
economic damages, such as lost wages and medical costs.
But most States have done nothing or not enough to fix the problem.
The American Medical Association lists 12 States that are now in a
health care crisis because of excessive malpractice awards. And 30 more
States are nearing crisis, including Tennessee. This is a national
problem that will worsen without a national solution.
Just prior to the August recess, the Senate debated medical
malpractice litigation reform that would have capped trial lawyers'
fees. Though I support bolder action that includes limiting awards for
noneconomic damages, this bill would have been a good first step. It
would have allowed injured patients to keep a greater share of their
rightful compensation while reducing the incentive for trial lawyers to
pursue excessive awards. Unfortunately, all of my Democrat colleagues
voted against this patient-friendly bill, keeping the litigation
lottery alive and well.
Injured patients have the right to sue for medical malpractice, but
trial lawyers do not have the right to force innocent doctors from
their livelihoods and throw our health care system into crisis. With
millions of uninsured families, increasing health care costs, too many
deaths from medical errors, and no prescription drug benefit for
seniors, the Senate must show its commitment to turning back the
growing health care crisis in our country. Limiting excessive
malpractice awards is one solution that concerned public servants,
providers, and, most importantly, patients can and should support.
Mr. DURBIN. Madam President, I rise today to discuss an issue that
affects a broad coalition of health care providers and the Medicare
beneficiaries they serve. I have become increasingly concerned that the
current method for updating Medicare payments to physicians and other
health care providers does not accurately reflect the costs associated
with delivering high-quality patient care. Reimbursement levels for
providers participating the Medicare Program this year will decline by
5.4 percent. There is little to suggest that the cost of providing care
has declined. In fact, costs to various providers have actually
increased over the past year.
These payment reductions could have strong repercussions on access to
essential health services. A flawed payment update system potentially
jeopardizes access to medically necessary services for millions of
seniors and disabled Americans who rely on Medicare for their health
care. In addition, a flawed payment system makes practicing medicine,
particularly in underserved areas, all the more difficult, if not
impossible for providers participating in the Medicare Program.
Reductions in Medicare physician reimbursement forced Ronald Johnson,
M.D., an Illinois physician, to borrow money to keep his practice
operating. All told, the loan necessary to sustain his practice for an
additional year was equivalent to two-thirds the value of his family
farm.
I share the view of many health care analysts, including MedPAC, that
the methodology used to update physicians payments is flawed. Although
this system was designed to accurately compensate providers for the
care they provide while controlling overall program spending on
physician and other providers services, it has become apparent that the
current system struggles to meet each of these goals. The volatility of
physician payments is also a persistent problem for those providers
attempting to gauge expected revenue from one year to the next.
Until 1989, Medicare physician payments were based on a reasonable
charge payment system. This system was thought to be responsible for
escalating program costs, and the Medicare physician fee schedule was
adopted in response to these concerns.
The current method for updating Medicare physician payments is unique
because the annual increase or decrease in physician payments does not
simply reflect changes in the cost of medical goods and services.
Unlike other payment systems, an expenditure target for physician
services, know, as the sustainable growth rate, (SGR), is calculated
each year. Annual payment updates for physician services, that reflect
the changes in the costs of medical goods and services, are then
increased or reduced to meet targeted expenditures for the program. In
other words, physician payment updates only reflect actual changes in
the cost of medical goods and services when actual costs equal the
target growth rate in physician payments.
Setting target expenditures, or the SGR, for physician payments that
do not depart from the actual costs associated with delivering patient
care has proven difficult. Methods for calculating the SGR have
contributed to this divergence. The SGR is calculated using estimated
changes in spending due to fee increases, changes in Medicare fee-for-
service enrollent, gross domestic product GDP per capita and the cost
of new laws and regulations. Moreover, many of the factors that
strongly influence the overall cost of services are difficult to
measure including patient preference, technological advances, and
changing demographics.
In particular, the inclusion of the GDP in SGR calculations is
problematic. Economic downturn may lead to sharp reductions in GDP that
are far more dramatic than changes in Medicare beneficiary need. This
volatility can have devastating effects on the program and threaten
beneficiary access to critical health care services. At a time when
beneficiary need is growing due to an aging U.S. population, providing
physicians and other health care professionals with adequate
reimbursement levels is an the more important.
Also, erroneous CMS enrollment and spending data collected in
previous years has exacerbated and already difficult financial
situation. Although the necessary corrections were made, the changes
have a disproportionately negative financial impact over the coming
year.
Efforts to control Medicare spending should not jeopardize the
integrity of the health care system. Designing a physician
reimbursement system that is less volatile and reflects the actual cost
of delivering high-quality patient care is absolutely necessary. Now is
the time to take a closer look at the way Medicare payments affect
those serving some of our Nation's most vulnerable citizens. Further
delay could make it financially untenable for doctors such as Ronald
Johnson to practice in areas like Pittsfield, IL.
I ask that the article from FPReport be printed in the Record.
[From FPReport, May 2002]
Lower Payments Force FPs To Risk Personal Loss for Their Patients,
Practices
(By Jody Gloor)
For a growing number of family physicians, Medicare payment
cuts ultimately could break up the ``families'' dependent on
them--families composed of patients, employees and entire
communities.
While some FPs have stopped accepting new Medicare
patients, others are putting personal loss on the line to
keep their ``families'' intact.
One rural doctor in Illinois who borrowed money to meet his
payroll is now borrowing against his dream farm to repay
those loans and protect his practice from financial failure.
Medicare patients make up one-third of the Pittsfield
practice of Ronald Johnson, M.D., and the area's only
hospital claims nearly 80 percent of its patients use
Medicare. With an average age of 58 in the two counties
Johnson serves, ``we don't have the choice of not taking
Medicare patients. That's our life here,'' he said in a
recent telephone interview. ``They are our neighbors; they
are our friends. We have to take care of each other.''
[[Page S8371]]
When he added the losses from Medicare reimbursements and
accounts receivables that have doubled in the past six
months, Johnson realized he needed to borrow an amount that
nearly equaled the value of his farm.
``I got lucky,'' he said, ``because the farm has been
taking care of itself financially. Now, it's going to take
care of us and our patients.''
Johnson is finalizing a loan for two-thirds of his farm's
value. It's an amount that realistically, he said, can
sustain his practice for another year--two at the most--
depending on factors including future Medicare reimbursement
rates, the local economy and land values.
``I'd never thought I would spend this much of my time
being a businessman,'' he said. ``It's such a joy to sit down
and see a patient. I thought that was what I was training
for.''
AAFP Director Arlene Brown, M.D., of Ruidoso, NM., said she
and her staff ``saw the writing on the wall'' when Medicare
physician payments dropped and accounts receivables
increased. Something had to happen to keep her ``frontier
medicine'' practice open.
Brown serves 8,000 patients, some of whom must drive 50
miles on a dirt road to reach a paved road--then must drive
another 100 miles to her office. At least 30 percent rely on
Medicare, she said, ``and we can't stop accepting these
patients.''
So Brown took a pay cut and turned to her staff for help.
The employees--a close-knit ``family''--didn't want to see
anyone lose his or her job, she said. Instead of eliminating
a position and/or cutting patient services, all staff members
agreed to cut their hours and pay by 15 to 18 percent.
``We must stay open,'' Brown said. ``We now if my patients
have to get their primary care 200 miles away from home, they
won't go get it. They depend on me, and on us.''
How long can her practice hold out for a permanent
financial solution? Not long, Brown said. She's hoping
efforts to get the federal government to rethink Medicare and
correct the physician payment formula will succeed soon.
``If not, we'll be cutting some services we don't have to
provide,'' she said. ``The first to go will be flu shots.''
Next to go will be the free assistance older and low-income
patients get when they need help to buy prescription drugs.
``It all makes for bad medicine,'' Brown said, ``but it
could help keep our doors open.''
If her practice closes, the entire community--her
community--could collapse, she said. ``A majority of
Americans eat, live, sleep and die in small communities. If
we shut down the very things that help small communities
survive, like medicine, then those communities will die.''
(At the request of Mr. DASCHLE, the following statement was ordered
to be printed in the Record.)
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