[Congressional Record Volume 148, Number 124 (Thursday, September 26, 2002)]
[House]
[Pages H6705-H6743]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  HELP EFFICIENT, ACCESSIBLE, LOW COST, TIMELY HEALTH CARE ACT OF 2002

  Mr. REYNOLDS. Madam Speaker, by direction of the Committee on Rules, 
I call up House Resolution 553 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 553

       Resolved, That upon the adoption of this resolution it 
     shall be in order without intervention of any point of order 
     to consider in the House the bill (H.R. 4600) to improve 
     patient access to health care services and provide improved 
     medical care by reducing the excessive burden the liability 
     system places on the health care delivery system. The bill 
     shall be considered as read for amendment. In lieu of the 
     amendments recommended by the Committees on the Judiciary and 
     on Energy and Commerce now printed in the bill, the amendment 
     in the nature of a substitute printed in the report of the 
     Committee on Rules accompanying this resolution shall be 
     considered as adopted. The previous question shall be 
     considered as ordered on the bill, as amended, to final 
     passage without intervening motion except: (1) one hour of 
     debate on the bill, as amended, with 40 minutes equally 
     divided and controlled by the chairman and ranking minority 
     member of the Committee on the Judiciary and 20 minutes 
     equally divided and controlled by the chairman and ranking 
     minority member of the Committee on Energy and Commerce; and 
     (2) one motion to recommit with or without instructions.

  The SPEAKER pro tempore (Mrs. Biggert). The gentleman from New York 
(Mr. Reynolds) is recognized for 1 hour.
  (Mr. REYNOLDS asked and was given permission to revise and extend his 
remarks.)
  Mr. REYNOLDS. Madam Speaker, for the purpose of debate only, I yield 
the customary 30 minutes to the gentleman from Florida (Mr. Hastings), 
pending which I yield myself such time as I may consume. During 
consideration of this resolution, all time yielded is for the purpose 
of debate only.
  Madam Speaker, House Resolution 553 is a closed rule providing for 
the consideration of H.R. 4600, the Help Efficient, Accessible, Low 
Cost, Timely Health Care Act of 2002, more commonly known as the HEALTH 
Act. The rule waives all points of order against consideration of the 
bill and provides one motion to recommit, with or without instructions.
  Madam Speaker, when it comes to health care, there is nothing more 
hallowed than the quality of patient care and the integrity of patient 
choice. However, there is an unfortunate and rising trend in our 
country that is not only threatening patient care and choice, but is 
obstructing the way in which doctors and other providers administer 
that care, and it is collectively costing patients, their families, 
doctors and taxpayers billions of dollars every year.
  In recent years, medical liability insurance premiums have soared to 
the highest rates since the mid-1980s. These devastating increases have 
forced health care professionals to limit services, relocate their 
practices, or retire early. Meanwhile, affordability and availability 
of insurance is in grave jeopardy, and, in the end, patients are the 
ones shortchanged.
  One might assume that the generous lawsuit judgment awards and 
settlements would bode well for injured patients seeking redress. 
However, studies show that most injured patients receive little or no 
compensation at all. Alarmingly, there is clear evidence indicating 
that skyrocketing medical liability premiums are a direct result of 
increases in both lawsuit awards and litigation expenses, and, 
according to a study compiled by the United States Department of Health 
and Human Services, excessive litigation is impeding efforts to improve 
the quality of care and raising the cost of health care that all 
Americans pay.
  By placing modest limits on unreasonable awards for economic damages, 
an estimated $60 billion to $108 billion, that is $60 billion to $108 
billion, could be saved in health care costs each year. Reclaiming this 
money would lower premiums for doctors and patients, allowing millions 
of Americans the opportunity to obtain affordable health insurance. 
Currently, runaway litigation expenses are getting in the way.
  Take into consideration my home State of New York. In most instances 
New York physicians are paying the highest medical liability premiums 
in the country and are likely to pay at least 20 percent more in 
premiums over the next year alone. My region of the State is especially 
feeling the impact.
  ``The number of doctors leaving Erie last year doubled from the 
previous year, a trend that continues to 2002,'' wrote Donald Copley, 
M.D., an officer of the Erie County Medical Society in the Business 
First of Buffalo newspaper. The Medical Society of New York says the 
trend of physicians leaving New York State or retiring early is 
happening all across the State.
  When exorbitant litigation goes unchecked, as it has, premiums 
escalate, leaving doctors either unable to afford insurance or unable 
to provide a variety of services, thereby leaving Americans at risk of 
not being able to find a doctor.
  Madam Speaker, this is completely unacceptable.
  The legislation before us today will halt the exodus of providers 
from the health care industry, stabilize premiums, limit staggering 
attorney fees, and, above all, improve patient access to care.
  The HEALTH Act is modeled after legislation adopted by a Democratic 
legislature and a Democratic Governor in the State of California over 
27 years ago. Since that time, insurance premiums in the rest of the 
country have increased over 500 percent, while California's has only 
risen 167 percent.
  California's insurance market has stabilized, increasing patient 
access to care and saving more than $1 billion per year in liability 
premiums. Equally important, California doctors are not leaving the 
State.
  In scaling this model into a national standard, the sponsors of the 
HEALTH Act included a critical component, state flexibility. The HEALTH 
Act respects States rights by allowing States that already have damages 
caps, whether larger or smaller than those provided in the HEALTH Act, 
to retain such caps.
  Madam Speaker, right now this crisis is affecting every State in its 
own way, but the Nation as a whole is suffering.
  President Bush has said that the lawsuit industry is devastating the 
practice of medicine. Let us not pass up our opportunity to step up to 
the plate. Doctors should not be afraid to practice medicine and 
patients should not be afraid of losing their doctor.
  I urge my colleagues to support this rule and the underlying 
legislation.
  Madam Speaker, I reserve the balance of my time.

[[Page H6706]]

  Mr. HASTINGS of Florida. Madam Speaker, I yield myself such time as I 
may consume.
  Madam Speaker, I thank my friend the gentleman from New York (Mr. 
Reynolds) for yielding me time.
  Madam Speaker, I rise today in strong opposition to the closed rule 
for H.R. 4600. This is an extremely complex piece of legislation and 
certainly one that requires a full and open debate. The closed rule 
denies us a much-needed opportunity to discuss its pros and cons.
  To start, I have received, as I am sure other Members have, a number 
of phone calls from physicians in the district that I am privileged to 
serve urging me to support this legislation. Most of them expressed 
their readiness to close their doors because of the high premiums they 
currently pay for malpractice insurance and erroneously, in my 
judgment, believe that H.R. 4600 will relieve them of high malpractice 
insurance premiums.
  There is no question that medical liability insurance rates are out 
of control and doctors, as well as other health care providers, often 
abandon high-risk patients for fear of being sued. However, what many, 
if not all, of the physicians who have called my office fail to realize 
is that H.R. 4600 will not lower doctors' premiums.
  Despite a wide consensus, skyrocketing premiums are not due to bad 
politics. Hiked premiums are the result of insurers' failed profits on 
their market investments. When insurance companies began to make sound 
investments with the insured's money, and when our friends on the other 
side of the aisle allow an open rule so sensible amendments from 
Democrats and Republicans can be heard, then and only then will 
premiums be lowered.
  The fact is, this bill would restrict the amount of money that 
malpractice insurance companies will have to pay. But nowhere in this 
legislation, and I invite my colleagues on the other side to point to 
the place, nowhere in this legislation are any of these savings going 
to be passed along to physicians.
  Had this been an open rule, we could offer amendments similar to that 
of my colleague the gentleman from Massachusetts (Mr. Markey) that 
would require savings realized by the insurers as a result of the 
$250,000 cap be passed on to health care providers in the form of lower 
premiums. There are other Members who are going to speak here that had 
this been an open rule, their amendments would have been included as 
well.
  Medical malpractice is the fifth leading cause of death in the United 
States, where an estimated 98,000 people die annually in United States 
hospitals because of negligent medical errors. The medical malpractice 
system is important because it compensates victims injured by 
negligence, deters future medical misconduct, punishes those who cause 
injury and death through negligence and removes and informs the public 
of harmful products and practices.
  While a $250,000 cap on punitive and non-economic damages may suffice 
for the men and women on the other side of the aisle, my constituents 
and all Americans deserve more. This is a one-size-fits-all 
bureaucratic approach that objectifies victims and the uniqueness of 
their suffering.
  I told the story yesterday of my grandmother's death. In the 
``halcyon'' days of segregation, when she died at the hands of a 
physician, we could not sue for the reason we were black. That is not 
the issue here. But I can tell you this, there was no price that 
anybody could have put on my grandmother, and there is no price that 
anybody can put on your sister or your brother, whether you are a 
doctor or a lawyer or an insurer.

                              {time}  1200

  This bill sends a clear and distinct message that lawmakers are more 
concerned with abating insurance companies' malpractice problems 
instead of reducing the pain and suffering of the American people.
  Let us call this bill what it really is, and that is another poor 
attempt by my friends on the other side to give financial breaks to 
their corporate friends. One would think that they would learn from 
previous incidents of corporate mishaps; but I guess, Madam Speaker, 
some things never change.
  Madam Speaker, H.R. 4600 is a health care immunity act that benefits 
insurance companies, HMOs, manufacturers and distributors of defective 
products and pharmaceutical companies, not physicians. It is a tort 
reform effort of the worst kind. Stunting the judicial process by 
disallowing the public to litigate unrestricted malpractice suits is 
not only biased, but it is un-American. I am in strong opposition to 
this measure. I urge a ``no'' vote on the rule and the underlying bill.
  Madam Speaker, I reserve the balance of my time.
  Mr. REYNOLDS. Madam Speaker, I yield myself such time as I may 
consume.
  Nothing in the HEALTH act denies injured plaintiffs the ability to 
obtain adequate redress, including compensation for 100 percent of 
their economic losses, their medical costs, their lost wages, their 
future lost wages, rehabilitation costs, and any other economic out-of-
pocket loss suffered as a result of a health care injury. Ceilings on 
noneconomic damages limit only the inherently unquantifiable element 
damages, such as those awarded for pain and suffering, loss of 
enjoyment, and other intangible items. When we look at health care, the 
reality is, and CBO estimates, that under this bill premiums of medical 
malpractice ultimately will be on an average of 25 to 30 percent below 
what they would be under current law. It is time for action.
  Madam Speaker, I yield 3 minutes to the gentleman from California 
(Mr. Cox).
  Mr. COX. Madam Speaker, I want to thank the gentleman from New York 
for yielding me this time.
  He is exactly right. What we are talking about doing here is making 
sure that all of us who have agreed to pay the cost of this system 
through the insurance system, we all pay for it; that is where the 
money comes from, to make sure that we all agree that we will pay for 
unlimited compensation for people who are the victims of medical 
malpractice, that we will pay for 100 percent of any imaginable cost, 
100 percent of all medical costs, 100 percent of lost wages, 100 
percent of lost future earnings, 100 percent of any rehabilitation 
costs; obviously, 100 percent of any medical expenses, doctors, nurses, 
hospitals, prescription drugs, nursing home care, assisted living, 
whatever it is, 100 percent of all of these things.
  But what we are trying to do is save the patients from a system right 
now that is falling down all around them. Doctors are getting out of 
practice; whole hospitals are shutting down, OB-GYNs are not delivering 
babies any more. People are not getting care. There is a crisis in this 
country. We had extraordinary testimony before the Committee on Energy 
and Commerce. We heard that in Nevada, for example, southern Nevada is 
without a trauma center right now; and it is directly attributable to 
this malpractice crisis. We want to do what we have done in California. 
The law has worked, as the gentleman from New York described.
  On June 30 of this year, Methodist Hospital in south Philadelphia, 
which has been delivering babies since 1892, closed its doors because 
of this crisis. They are not going to be delivering babies any more. 
Women need health care; men need health care. We need doctors, we need 
care, we need treatment. The Congressional Budget Office, as the 
gentleman from New York pointed out, said that if we pass this bill, we 
will have $14 billion more available to help our hospitals, available 
for health care, available to keep the cost of health care down so more 
people will have insurance. That is what this is all about. The only 
people who will suffer if this bill is passed are those in their 
enormous mansions right now that are skimming the top in the gold-
plated tort system by faking more than all of the costs that I 
described for themselves.
  In California, what has happened, our premiums, of course, they have 
gone up; they have gone up 140 percent, but at the same time, the rest 
of the country has gone up over 5 percent, so we have a system that is 
much more under control. People are healthier in California. In 
lawsuits, plaintiffs are getting a greater share of the recoveries in 
California than they are in other States. And they are getting the 
recoveries faster. There is no question that the HEALTH act is good for 
everyone, for patients, for doctors, for the whole health care system, 
for hospitals, for

[[Page H6707]]

nurses, for everyone that has come to this Congress.
  Madam Speaker, I urge the enactment of this rule and passage of the 
legislation.
  Mr. HASTINGS of Florida. Madam Speaker, I am very pleased and 
privileged to yield 2\1/2\ minutes to the gentleman from Pennsylvania 
(Mr. Hoeffel), my good friend.
  Mr. HOEFFEL. Madam Speaker, I thank the gentleman for yielding me 
this time and for his leadership on this issue.
  The doctors in my district in Montgomery County, Pennsylvania, and 
all in the Philadelphia area, face a financial crisis, the same as many 
doctors around the country, as we have heard here today. This bill will 
not solve their crisis. This bill does not reflect a comprehensive 
effort to solve the medical malpractice crisis that we face in 
southeastern Pennsylvania and across many parts of this country. Nobody 
wants a compromise. Nobody wants to come together in a reasonable way 
to find a middle ground. That has happened at various State levels, but 
it is not happening here in Washington. It is not happening because the 
Washington representatives of the doctors do not want to compromise; 
the Washington representatives of the lawyers do not want to 
compromise. The Committee on Rules has brought forward a closed rule so 
the House of Representatives cannot be involved in working our will.
  If we were to make a good-faith effort to address medical malpractice 
around the country, we would fundamentally have to address insurance 
industry reform, and that bill is completely silent on that issue. 
Frankly, we need to partially lift the antitrust exemption that the 
insurance industry has enjoyed for 55 years, that allows them to 
collude, to engage in anticompetitive practices. Those are the problems 
that are driving up medical malpractice insurance rates, in addition to 
their losses in the stock market that the gentleman from Florida (Mr. 
Hastings) has already described.
  We need to give the Attorney General the ability to regulate national 
insurance companies because the States are not doing it, and we are 
not, we are not having these anticompetitive practices investigated and 
resolved. If we are going to make a good-faith effort regarding caps 
which are, by their nature, inflexible and arbitrary, we need to add 
judicial discretion, at a minimum, to any cap, so that a court can make 
a judgment that could allow an award to reflect what the jury has found 
in that particular case, not what this body chooses to impose here in 
Washington as an inflexible one-size-fits-all.
  Madam Speaker, this bill does not resolve the problem. We are failing 
here today. I ask for a negative vote on the rule and against the bill.
  Mr. REYNOLDS. Madam Speaker, I yield 3 minutes to the gentleman from 
Illinois (Mr. Kirk).
  Mr. KIRK. Madam Speaker, I rise today in support of the rule and the 
bill. We have a medical malpractice crisis in America and especially in 
my home State of Illinois. I am particularly worried about malpractice 
rates for obstetricians and gynecologists who are leaving the practice 
of medicine, rather than ensure the delivery of healthy babies.
  I spoke with Dr. Gina Wehramann, an Evanston OB-GYN, who reported 
that after malpractice payments were paid, she made just $35,000. Her 
office manager makes $90,000. She is leaving the practice of medicine 
to become a pharmacist where she can triple her income. She reports 
that OB-GYNs are leaving the field of medicine in Illinois in dozens 
and women in northern Illinois will find it hard to receive sufficient 
care for the delivery of their babies. Dr. Wehramann reported that 85 
percent of OB-GYNs in northern Illinois are sued for malpractice. The 
plaintiffs' bar tells us that 85 percent of OB-GYNs in my State are bad 
doctors.
  All of this adds up to a war on women by the plaintiffs' bar. The 
plaintiffs' bar killed contraceptive development in our country, with 
no vote in the Congress and no Presidential decision. European women 
have many more safe and effective options than Americans, but the 
plaintiffs' bar does not care. They believe that 85 percent of all OB-
GYNs are bad doctors and must be sued out of existence.
  The American Association of Neurological Surgeons recently designated 
25 States as crisis States, including my home State of Illinois. A 
constituent of mine, Dr. Jay Alexander, recently told me that his group 
of 17 cardiologists paid $250,000 in premiums last year, but the bill 
this year is $800,000. The stories are not limited to physicians. In 
2001, Lake Forest Hospital paid $734,000 in malpractice coverage, but 
that cost will go up to $1.5 million this year. These costs deprive 
patients of health care at Lake Forest Hospital, and Lake Forest 
Hospital delivers more babies than any other hospital in Lake County, 
Illinois; but they will soon have to deny care to these women because 
of these costs.
  With the passage of H.R. 4600 we will end the plaintiffs' bar's war 
on women. Without this bill, we will continue to see greater distances 
for deliveries, fewer screening services, and less training for women's 
health and health care.
  Madam Speaker, we must restore the doctor-patient relationship. Today 
we have a genuine opportunity to pass this legislation and make sure 
that the women of Illinois and every other State have access to 
obstetric care.
  I urge passage for the bill, and I applaud the gentleman for bringing 
it to the floor.
  Mr. HASTINGS of Florida. Madam Speaker, I yield myself 15 seconds.
  No reflection on my young colleague from Illinois, but as a 40-year 
lawyer and one involved in the process, I find it difficult to believe 
that I participated in something dealing with the elimination of 
contraception, because I protected the rights of women who were 
victims. My belief is it is the right-to-life group that had as much to 
do with the elimination of contraception.
  Madam Speaker, I am pleased to yield 2 minutes to the gentleman from 
New Jersey (Mr. Pascrell), my distinguished friend and colleague.
  Mr. PASCRELL. Madam Speaker, I rise to speak against this unfair rule 
and against this flawed legislation.
  It is really unfortunate that the rule will not allow any amendments 
to improve the bill. My primary concern is that nowhere in H.R. 4600 
does it limit health care lawsuits to just medical malpractice. In 
fact, health care lawsuits applies to any health care liability claim, 
quote unquote.
  H.R. 4600 would undermine the 11 States of the Union, including my 
State of New Jersey, that hold HMOs accountable. We arrived at that in 
a very bipartisan way. It would decimate what we have done in New 
Jersey, what we have worked so hard to do. In my memory, if my memory 
serves me correctly, last summer, a majority in this Congress, on both 
sides of the aisle, voted to hold HMOs accountable when they make 
medical decisions that kill or permanently maim patients.
  So we are on the floor today doing the exact opposite of what most of 
us supported just last summer. In looking at what happened in 
California, I have heard that mentioned a few times this afternoon, 
H.R. 4600 probably would not accomplish its goal of reducing premium 
costs or increasing the availability of medical malpractice insurance, 
either. Premiums in California rose 190 percent in the 12 years 
following the enactment of their claim limitation bill. In its present 
form, H.R. 4600 is not good for patients, and it does not work.

                              {time}  1215

  So I ask that we vote against H.R. 4600. Let us focus on real 
solutions, such as making the Patients' Bill of Rights law. It is good 
to be back on domestic issues.
  Mr. REYNOLDS. Madam Speaker, I yield 3\1/2\ minutes to the 
gentlewoman from Connecticut (Mrs. Johnson).
  Mrs. JOHNSON of Connecticut. Madam Speaker, I thank the gentleman for 
yielding time to me.
  If we are out there talking to our constituents, if we keep in touch 
with the medical communities, not just the doctors but the hospitals, 
the little home health agencies, and if we listen, we will know that 
our Nation is galloping toward a health care crisis of dimensions we 
have never faced before, a crisis of cost and a crisis of access.
  There are whole States in America where a woman cannot find an 
obstetrician who will take a high-risk pregnancy. If we talk to the 
specialty surgeons, many will not take the high-

[[Page H6708]]

risk cases. Very quietly, access to sophisticated, high-risk care is 
declining in America. That is the unique strength of the American 
medical system and it is becoming inaccessible to more and more 
Americans.
  Just in going about my rounds, a five-town area is losing its ENT 
practice. ENT is a relatively low pickup specialty. Their liability 
premiums last year were only $22,000. Next year they are going to be 
closer to $50,000. There are not enough hours in the day for these 
physicians to see enough patients to pay the increase in those 
premiums. They are being forced to leave practice.
  I had a meeting at a senior citizen center in Brookfield, 
Connecticut. A gentleman came in and sat all through the senior 
citizens' questions, and then rose to say that in fact he could not 
stay in practice after 14 years invested in education and training. He 
was leaving in 2 years because there were not enough hours in the day 
for him to see enough patients to pay a $150,000 malpractice premium 
over this year's $100,000.
  My home hospital, in a small little urban community, has all the 
uncompensated care costs and all the difficulties urban hospitals face: 
this year, $300,000 malpractice premiums; next year, $1 million. We 
cannot close our eyes. If this House and our Senate can send a 
malpractice reform bill to the President, we will lower premiums.
  The evidence has been given from California. In California, OB-GYN 
premiums across the board on average are $43,000; nationally, $107,000. 
How can doctors continue, how can hospitals continue, without pushing 
costs up tremendously when their premiums are going to double and 
triple?
  One practice in Waterbury, in the last 7 years the doctors have taken 
a 50 percent pay cut. Why? Because they are paying their people more, 
they are investing in technology and medical supplies. They are doing 
all the right things to provide quality care, to their people. This is 
in Waterbury, Connecticut. They are doing all the right things. Their 
own pay has gone down 50 percent.
  We in this House were unable to protect them from a 5 percent cut 
last year, and the Senate is refusing to act, to protect them from 
another 5% cut this next year. We must protect them from extraordinary 
malpractice increases that will reduce their ability to provide care to 
the women of the Waterbury region.
  Madam Speaker, this is not something Members can close their eyes to. 
It does not do any good to say on a grand scale that we have to reform 
our insurance laws; this is today. It is today women cannot find 
obstetricians to cover high-risk pregnancies. It is today doctors are 
being forced to retire by our failure to provide common sense 
malpractice reform legislation!
  Mr. HASTINGS in Florida. Madam Speaker, I yield myself such time as I 
may consume.
  Madam Speaker, I still point out to the gentlewoman that there is 
nowhere in this bill that says that insurance premiums are going to go 
down as a result of this. We could have passed the measure of the 
gentleman from Massachusetts (Mr. Markey) and would have accomplished 
that.
  Madam Speaker, I yield 1\1/2\ minutes to my good friend, the 
distinguished gentleman from Oregon (Mr. DeFazio).
  Mr. DeFAZIO. Madam Speaker, I thank the gentleman for yielding time 
to me.
  Madam Speaker, I rise in opposition to the rule and the bill. I had 
hoped to offer amendments, as did others, that are not being allowed to 
improve this legislation and deal realistically with this problem.
  Even if we believe the preemption of the laws of the 50 States with 
tort reform, something the Republicans, of course, the States rights 
party, does not normally believe in, would resolve this problem, we 
have to question, why is the pharmaceutical industry in this bill? Are 
they buying malpractice insurance? No. This is an incredible gift to 
the pharmaceutical industry.
  Why is the HMO industry in this bill? Why are the nursing homes in 
this bill? Guess what? It is all about campaign fundraising on that 
side of the aisle. They know this bill is so radical, and is not a 
solution. It is not going anywhere in the Senate, but they want to 
bring it up today with no amendments and no attempt to really resolve 
this.
  No savings are required to be passed on to the doctors in their 
premiums. In fact, the insurers never promised that tort reform would 
achieve specific premium savings. That is the American Insurance 
Association. That is a quote from them.
  The premiums are excessive. Are they excessive because of a cyclical 
change in settlements? No. We have had four crises in 20 years. Guess 
what, there have not been four up-and-down cycles in settlements in 
lawsuits and malpractice; there have been four cycles in the investment 
losses of the insurance industry, bad underwriting, and bad accounting 
on their practice.
  This is another corporate bailout by the Republicans, plain and 
simple. This is not going to help my docs. My docs really want a 
solution. They are desperate. Some of them are even biting on this 
stuff they are shoveling out. They are going to do nothing to resolve 
this problem long-term in this country.
  Mr. REYNOLDS. Madam Speaker, I yield 2\1/2\ minutes to the 
gentlewoman from Wyoming (Mrs. Cubin).
  Mrs. CUBIN. Madam Speaker, I thank the gentleman from New York for 
yielding time to me.
  Madam Speaker, the vast majority of physicians across this country 
are highly qualified medical doctors who look out for the best 
interests of their doctors. My husband has been in the practice of 
medicine in a sole practice for over 30 years. My son now is in his 
second year of medical school, and I know this insurance problem 
intimately.
  The very principle that governs the medical profession is the concept 
of ``do no harm.'' So what does it say about our society when one of 
the greatest preoccupations for physicians these days is fear of being 
sued? In fact, a survey conducted by the organization known as Common 
Good found that 87 percent of physicians now fear potential medical 
malpractice lawsuits more than they did when they started their 
careers, 87 percent.
  Health care costs are drastically inflated when doctors order tests 
that they feel are truly not medically necessary, but they have to 
order those tests in case a lawsuit should be brought against them. 
What they want is to do the right thing by their patient healthwise and 
pocketbook-wise.
  We are not talking about limiting economic damages, we are talking 
about limiting punitive damages. The median medical liability award 
jumped 43 percent in 1 year, from $700,000 in 1999 to $1 million in the 
year 2000. This is having a critical effect on health care in many 
States, many of the lower-populated States, such as Nevada, Oregon, and 
my home State of Wyoming.
  Wyoming goes far beyond what is traditionally known as a rural State. 
The vast majority of Wyoming has the designation of ``frontier,'' which 
means there are fewer than 6 people per square mile. Wyoming's 
population is sparse, with roughly 490,000 spread out over 100,000 
square miles. Providers are few and far between, and health care 
facilities are very limited.
  Madam Speaker, what it means when excessive malpractice litigation 
takes hold is professional liability insurance skyrockets and 
physicians scramble for coverage. There are only two companies in the 
State of Wyoming that provide coverage. What happens is the doctors 
close their doors and have to go to other places to find a job.
  This is a travesty of twofold dimensions: Wyoming loses a good 
physician; but even worse, patients in frontier Wyoming lose access to 
vital primary care. That is unacceptable to me. I urge everyone to 
support this rule and support this legislation for physicians and 
patients alike.
  Mr. HASTINGS of Florida. Madam Speaker, I am privileged to yield 3 
minutes to my good friend, the gentlewoman from Nevada (Ms. Berkley), 
who has a considerable amount of experience in her State, as I do in 
mine, with this problem.
  Ms. BERKLEY. Madam Speaker, I thank the gentleman for yielding time 
to me.
  Madam Speaker, I rise in strong opposition to the closed rule for 
H.R. 4600. Nevada's health care crisis reached alarming proportions 
this past year. Malpractice insurance premiums jumped as much as 
$150,000 a year for many of our doctors. At least 150 Nevada doctors 
closed their practices, and

[[Page H6709]]

1 in 10 obstetricians have stopped delivering babies. Others are 
limiting their practices.
  Pregnant women find it difficult to get care. Our largest emergency 
center closed temporarily when huge malpractice rates forced doctors 
out the door. So, Madam Speaker, I know firsthand the problems caused 
by runaway insurance rates, but H.R. 4600 is not the answer.
  Let me tell the Members how this harms this Nation's health care. It 
caps noneconomic damages in the aggregate, barring punitive damages 
even in the most gross acts of malpractice. It caps noneconomic damages 
in a way that hits low-income Americans the hardest.
  There is no provision for enhancing patient safety. Judicial 
discretion of egregious circumstances does not exist, or streamlining 
our court cases. This bill wipes out all of the hard work that Nevada's 
legislature and its carefully-crafted solution and legislation would 
solve.
  The State of Nevada has passed a reform plan that is a far better 
starting point than H.R. 4600. This measure, signed by the Governor 
last month, is a product of hard negotiations and compromise, hard work 
by the medical and the legal and the insurance professionals. It passed 
a bipartisan legislature unanimously.
  I find it very interesting that many of my colleagues on the other 
side of the aisle keep talking about Nevada's health care crisis. Not 
one of them will stand with me and suggest that Nevada's health care 
solution might be an answer to the problem.
  The Nevada plan holds both doctors and lawyers accountable while 
setting limits on noneconomic damages. It allows judges discretion to 
make higher awards in the most egregious cases of malpractice. It does 
not let medical products manufacturers or HMOs or the pharmaceutical 
companies off the hook.
  Madam Speaker, in an unwise rush to vote on H.R. 4600, my amendment 
that brings the Nevada plan to the floor was denied. My husband is a 
physician. I know firsthand the crisis facing the medical profession. I 
live with it every day. This Congress has an obligation to help ease 
the crisis so doctors can continue to treat their patients.
  This legislation is so extreme it has no chance, no chance of passing 
and getting to the President's desk for signature. While this Congress 
is playing games with medical malpractice problems, the problem only 
gets worse, and this legislation will do nothing, absolutely nothing, 
to help because it will never be passed. This is an election year ploy, 
and it is shameful in its transparency. I am embarrassed. I am 
embarrassed for the United States Congress. I am embarrassed for the 
other side of the aisle.
  Mr. REYNOLDS. Madam Speaker, I yield 3 minutes to the gentleman from 
Pennsylvania (Mr. Peterson).
  Mr. PETERSON of Pennsylvania. Madam Speaker, I thank the gentleman 
from New York for yielding time to me.
  Madam Speaker, I have been involved in legislative issues for 25 
years at the State and in Congress. Most of the time, my number one 
issue has been health care. I chaired health at the State for 10 years. 
I believe this is the greatest health care crisis facing my State, 
Pennsylvania, and this country that we will see.
  Let me give a little Pennsylvania information. Pennsylvania hospital 
malpractice premiums in the last 12 months have increased an aggregate 
of 220 percent. One-third of the hospitals have increased over 300 
percent.
  Forty percent of the hospitals in Pennsylvania have closed or 
curtailed services; number one, OB-GYN; number two, trauma, when people 
are the most seriously ill or traveling further and further; three, 
neurosurgery and other surgical specialties.
  Half of the hospitals in Pennsylvania cannot recruit a physician and 
are losing the physicians that they have. Fifty percent of teaching 
programs are finding out that almost all of their students are leaving 
Pennsylvania. Three-fourths of hospital physicians were denied coverage 
from an insurance company, and the only reason in Pennsylvania they 
have coverage is because we have a high-risk pool, at outrageous 
prices.
  Thirty-two rural hospitals in my district, the most rural part of 
Pennsylvania, had to form their own insurance company because no one 
would insure them. Eighteen additional hospitals in Pennsylvania are 
forming their own insurance company. These people have no idea where 
this is going to take them and what their long-term risks are.
  Hospital coverage alone for medical malpractice in Pennsylvania is in 
excess of one-half billion dollars and rising daily. That does not 
include physician costs, it does not include nursing homes and health 
agencies. That is over half a billion dollars that does not treat a 
patient.

                              {time}  1230

  The worst part of the crisis is OB-GYNs and the poorest of American 
women are going to be denied; those who cannot travel long distances 
are going to be denied prenatal care, and we will pay for that decades 
ahead. Any struggling rural hospital that loses their surgeons or OB-
GYNs will soon close.
  Let me tell my colleagues what they have not heard about this 
morning. The real opposition to this bill. It limits trial lawyers' 
rewards. That is what the opposition to this bill is about. But let us 
see if it is fair. Fifty percent of a $50,000 reward they can still 
get. That is pretty good pay; 33 1/3 percent of the next $50,000. So 
that is 42 percent on a $100,000 claim. I think that is pretty good 
pay. Twenty-five percent on the next half a million. So on a $600,000 
claim, they get 28 percent reward. Pretty good pay. Fifteen percent on 
anything thereafter. So a million dollar reward, they will still make 
23 percent that will not go to the victim. I think that is darn good 
pay.
  If we do not address this issue in this country, we are going to be 
doing the biggest disservice to those who need health care because it 
will not be available in rural areas, and they are not even a high-risk 
area. It will not be available in urban areas. I am told the 
Philadelphia sports teams are having to leave Philadelphia for 
orthopedic care. A tragedy. Let us fix it.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 3 minutes to my good 
friend and thoughtful legislator, the gentlewoman from California (Ms. 
Eshoo).
  Ms. ESHOO. Mr. Speaker, I thank my friend and colleague from the 
Committee on Rules for yielding me this time.
  I am going to try to keep the volume down and talk about what is in 
this bill. There is no question, my colleagues, that we have a problem 
in the country. No Member of Congress can say that the status quo is 
all right. It is not okay for those that are coming into this world not 
to have the best services of a doctor, of an OB-GYN, of pediatricians; 
nor is it fair for those who are in the autumn of their lives not to 
have the right kind of medical assistance.
  I think there is unanimity in recognizing what the problem is and 
that we should be unified in how we resolve this. As a Californian, I 
know what the MICRA law is. For those who do not know what it stands 
for, it is the Medical Injury Compensation Reform Act. It has been on 
the books in California for more than a quarter of a century. Democrats 
put it into place. Democratic Governors have not repealed it. 
Republican legislators, Democratic Governors, regardless of what that 
combination has been, for those who take shots at lawyers and 
Democrats, a Democratic legislature, and for over a quarter of a 
century, they have kept this law in place.
  In the Congress we have looked at MICRA; and the general consensus 
has been that MICRA is good, MICRA works. To the gentleman and my 
friend from Pennsylvania (Mr. Greenwood), I told him I will not only be 
a cosponsor, I will be an original cosponsor of MICRA. This is not 
MICRA. MICRA places a $250,000 cap on economic damages and malpractice 
cases. This bill does that as well, and I think that is right. But it 
also does on product liability cases against drug and medical device 
manufacturers. How can any Member say to their constituents that that 
is all right, that they have no recourse? This is not about lawyers. 
This is about injured patients. We have to stand next to them as well.
  The gentlewoman from Connecticut said do not close your eyes; do not 
close your eyes to that part of the bill.

[[Page H6710]]

This bill is overburdensome. It is not MICRA, no matter how they 
advertise it to be such. It does not honor the people we represent. It 
should be rejected. It is a closed rule because it is closed thinking. 
I urge a ``no'' vote.
  Mr. REYNOLDS. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Illinois (Mrs. Biggert).
  Mrs. BIGGERT. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise in strong support of the rule on H.R. 4600. 
Malpractice lawsuits are spiraling out of control. Too many doctors are 
settling cases even though they have not committed a medical error, and 
good doctors are ordering excessive tests and procedures and treatments 
out of fear.
  These were the primary issues a panel of experts highlighted at a 
medical forum I hosted last month in my congressional district. The 
experts said these issues, or cracks in our medical system, are driving 
physicians and hospitals out of business.
  Are some malpractice lawsuits necessary? Absolutely. Patients must 
have access to justice and restitution. But it is wrong when excessive 
costs of malpractice suits and excessive costs of malpractice insurance 
drive out health care providers.
  Mr. Speaker, Congress had the opportunity to fix the malpractice 
system last summer, but we failed to do so. The good news is that we 
have another chance today to take the big step towards preserving the 
long-term viability of the medical system in Illinois and around the 
country. I urge my colleagues to support the rule on H.R. 4600.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 2 minutes to my very 
good friend, the gentleman from Michigan (Mr. Stupak).
  Mr. STUPAK. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise today in opposition to the rule and the 
underlying bill. This legislation, H.R. 4600, says if we cap lawsuit 
damages, everything will be okay; but in this bill, once again, the 
majority party has gone way too far. In this area, as they have in so 
many other areas, the right to sue is being attacked as the root of all 
evil and stopping Americans from having access and their day in court. 
It is not the magic cure-all as the majority party would make it out to 
be. In fact, when we eliminate and take away the incentive to behave or 
to be sued, we eliminate deterrence.
  And we have gone too far. This is not just malpractice. This is 
product liability. This is nursing home care. It is all rolled into 
this one big bill. I understand and I sympathize with those doctors 
facing huge premiums, but this bill is not the answer they are seeking. 
We went to offer an amendment, the antitrust, to take the antitrust 
exemption that insurance companies enjoy so they cannot jack up those 
premiums 200, 300 percent.
  They can because they can all get together. They are not subject to 
monopoly laws and anti-trust laws. And of course we were denied because 
this is a closed rule.
  Also we heard the gentlewoman from California (Ms. Eshoo) say that if 
you think that this bill is the answer to the malpractice problem, we 
need to look no further than California, which has a law in place for 
the last 26 years and this bill is claimed to be done and modeled after 
that California law. California medical malpractice insurance problems 
have not disappeared because of the law they passed 26 years ago. They 
still have it. It did not work.
  The focus should not be just this simplistic answer of putting a cap 
on lawsuits and everything would be okay.
  In Michigan we did this 10 years ago. Many of the provisions of this 
bill were in Michigan's bill passed in the early 90's. Michigan is now 
considered one of the States, once again, in medical malpractice crisis 
because the premiums have risen so much. If caps do not work, it is 
time we look at this crisis from a new focus, a new set of eyes; and 
what we have to do is start looking at why and look for ways to prevent 
malpractice.
  Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I just disagree with my friend, the gentleman from 
Michigan (Mr. Stupak). One cannot argue with the facts that in 
California the premiums in the last 27 years have gone up 167 percent. 
The rest of the country is 500 percent. Doctors are not leaving 
California like they are in New York, and we have heard testimony from 
other States like Pennsylvania. So the reality is there is a result 
based on the acts of that Democratic legislature and Governor 27 years 
ago. And in addition, we know the CBO in scoring this says that this 
legislation versus the current law as it is today would reduce the 
premiums paid by 25 to 30 percent for medical malpractice.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 30 seconds to the 
gentleman from Michigan (Mr. Stupak).
  Mr. STUPAK. Mr. Speaker, since the last speaker brought up Michigan, 
I thought I would bring it up. Even with our caps in Michigan, our 
premiums for our doctors are higher than those States without caps. If 
California has gone up 167 percent in the last few years and the rest 
of country has gone up 500 percent for malpractice premiums, is it not 
time we took away the anti-trust exemption for the insurance companies 
so they cannot go up 500 percent when the rate of inflation is 2 or 3 
percent? Why are they going up 500 percent? It is not the lawsuits. It 
is the stock market, the Enrons and all the other things.
  When St. Paul pulls $1.5 billion out of their reserves, they have to 
make it up someway, and they make it up on the backs of doctors.
  Mr. HASTINGS of Florida. Mr. Speaker, how much time remains?
  The SPEAKER pro tempore (Mr. Isakson). The gentleman from Florida 
(Mr. Hastings) has 10 minutes remaining. The gentleman from New York 
(Mr. Reynolds) has 6\1/2\ minutes remaining.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield 1 minute to the 
distinguished gentleman from Virginia (Mr. Scott).
  Mr. SCOTT. Mr. Speaker, if we talk about malpractice, we ought to 
talk about malpractice. If this bill passes, there is no commitment 
from any insurance company to actually reduce rates. There are some 
provision in here that have nothing to do with malpractice rates.
  The previous speaker mentioned attorneys' fees and how reducing 
attorneys' fees will reduce attorneys' fees. It did not have anything 
to do with malpractice insurance. He said if you have a $1 million 
settlement, that if you limit lawyers' fees to 23 percent that will do 
some good. He did not say that the malpractice carrier will pay a 
million dollars. If it is a one-third fee, they will pay a million 
dollars. If it is no fee, they will pay a million dollars. This does 
not have anything to do with malpractice.
  We ought to focus on the malpractice problem, not just gratuitously 
hurt the innocent victims of malpractice.
  Mr. REYNOLDS. Mr. Speaker, we have heard from a lot of lawyers today 
and a few business people. I would like to now have an opportunity to 
hear from a medical doctor educated in the University of Buffalo and 
then moved to Florida.
  Mr. Speaker, I yield 2 minutes to the gentleman from Florida (Mr. 
Weldon).
  (Mr. WELDON of Florida asked and was given permission to revise and 
extend his remarks.)
  Mr. WELDON of Florida. Mr. Speaker, I thank the gentleman for 
yielding me time.
  Mr. Speaker, I rise in support of this rule and the underlying bill. 
I just want to touch on a very, very important issue and that is 
defensive medicine, the incorrect costs of liability on the practice of 
medicine in the United States. Now, I practiced medicine for 15 years 
prior to being elected. I still see patients once a month. I practice 
defensive medicine. I know it is real.
  I want to share with my colleagues who think this is not a Federal 
issue. A study was done, it was published in the Journal of Economics 
in May of 1996, looking at the impact of the California tort reforms on 
health care costs and specifically they looked in the Medicare plan. 
And they discovered that there was a 5 to 9 percent reduction in health 
care costs brought about in the Medicare plan in the State of 
California attributable to the caps on noneconomic damages and less 
defensive medicine.
  This is an excellent study, and I would encourage all of my 
colleagues

[[Page H6711]]

to read it. What this study also looked at was morbidity and mortality. 
They said it is not enough to just look at a decline in health care 
charges, but was it having an adverse effect on patients; were there 
more complications; were there more deaths. And lo and behold there 
were not. The researchers out of Stanford University, it is an 
excellent study published by Kessler and McClellan, they extrapolated 
this data and concluded that defensive medicine, because of liability, 
costs us $50 billion a year.
  How can that be? I can tell you the patients came in my office. I 
thought they had this; I would order that test. And then I would say to 
myself, What if they have something else? What if they have this or 
that? What if they sue me? So I would start ordering the additional 
tests to prevent myself from being sued.
  Mr. Speaker, I encourage my colleagues to support this rule and 
support the underlying bill. It is a Federal issue.

          [From the Quarterly Journal of Economics, May 1996]

                Do Doctors Practice Defensive Medicine?

                  [By Daniel Kessler; Mark McClellan]

       ``Defensive medicine'' is a potentially serious social 
     problem: if fear of liability drives health care providers to 
     administer treatments that do not have worthwhile medical 
     benefits, then the current liability system may generate 
     inefficiencies much larger than the cost of compensating 
     malpractice claimants. To obtain direct empirical evidence on 
     this question, we analyze the effects of malpractice 
     liability reforms using data on all elderly Medicare 
     beneficiaries treated for serious heart disease in 1984, 
     1987, and 1990. We find that malpractice reforms that 
     directly reduce provider liability pressure lead to 
     reductions of 5 to 9 percent in medical expenditures without 
     substantial effects on mortality or medical complications. We 
     conclude that liability reforms can reduce defensive medical 
     practices.


                              INTRODUCTION

       The medical malpractice liability system has two principal 
     roles: providing redress to individuals who suffer negligent 
     injuries, and creating incentives for doctors to provide 
     appropriately careful treatment to their patients [Bell 
     1984]. Malpractice law seeks to accomplish these goals by 
     penalizing physicians whose negligence causes an adverse 
     patient health outcome, and using these penalties to 
     compensate the injured patients [Danzon 1985]. Considerable 
     evidence indicates that the current malpractice system is 
     neither sensitive nor specific in providing compensation. For 
     example, the Harvard Medical Practice Study [1990] found that 
     sixteen times as many patients suffered an injury from 
     negligent medical care as received compensation in New York 
     State in 1984. In any event, the cost of compensating 
     malpractice claimants is not an important source of medical 
     expenditure growth: compensation paid and the costs of 
     administering that compensation through the legal system 
     account for less than 1 percent of expenditures [OTA 1993].
       The effects of the malpractice system on physician 
     behavior, in contrast, may have much more substantial effects 
     on health care costs and outcomes, even though virtually all 
     physicians are fully insured against the financial costs of 
     malpractice such as damages and legal defense expenses. 
     Physicians may employ costly precautionary treatments in 
     order to avoid nonfinancial penalties such as fear or 
     reputational harm, decreased self-esteem from adverse 
     publicity, and the time and unpleasantness of defending a 
     claim [Charles, Pyskoty, and Nelson 1988; Weiler et al. 
     1993].
       On the one hand, these penalties for malpractice may deter 
     doctors and other providers from putting patients as 
     excessive risk of adverse health outcomes. On the other hand, 
     these penalties may also drive physicians to be too careful--
     to administer precautionary treatments with minimal expected 
     medical benefit out of fear of legal liability--and thus to 
     practice ``defensive medicine.'' Many physicians and policy-
     makers have argued that the incentive costs of the 
     malpractice system, due to extra tests and procedures ordered 
     in response to the perceived threat of a medical malpractice 
     claim, may account for a substantial portion of the explosive 
     growth in health care costs [Reynolds, Rizzo, and Gonzalez 
     1987; OTA 1993, 1994]. The practice of defensive medicine 
     may even have adverse effects on patient health outcomes, 
     if liability induces providers either to administer 
     harmful treatments or to forgo risky but beneficial ones. 
     For these reasons, defensive medicine is a crucial policy 
     concern [Sloan, Mergenhagen, and Bovbjerg 1989].
       Despite this policy importance, there is virtually no 
     direct evidence on the existence and magnitude of defensive 
     medical practices. Such evidence is essential for determining 
     appropriate tort liability policy. In this paper we seek to 
     provide such direct evidence on the prevalence of defensive 
     medicine by examining the link between medical malpractice 
     tort law, treatment intensity, and patient outcomes. We use 
     longitudinal data on all elderly Medicare recipients 
     hospitalized for treatment of a new heart attack (acute 
     myocardial infarction, or AMI) or of new ischemic heart 
     disease (IHD) in 1984, 1987, and 1990, matched with 
     information on tort laws from the state in which the patient 
     was treated. We study the effect of tort law reforms on total 
     hospital expenditures on the patient in the year after AMI or 
     IHD to measure intensity of treatment. We also model the 
     effect of tort law reforms on important patient outcomes. We 
     estimate the effect of reforms on a serious adverse outcome 
     that is common in our study population: mortality within one 
     year of occurrence of the cardiac illness. We also estimate 
     the effect of tort reforms on two other common adverse 
     outcomes related to a patient's quality of life; whether the 
     patient experienced a subsequent AMI or heart failure 
     requiring hospitalization in the year following the initial 
     illness.
       To the extent that reductions in medical malpractice tort 
     liability lead to reductions in intensity but not with 
     increases in adverse health outcomes, medical care for these 
     health problems is defensive; that is doctors supply a 
     socially excessive level of care due to malpractice liability 
     pressures. Put another way, tort reforms that reduce 
     liability also reduce inefficiency in the medical care 
     delivery system to the extent that they reduce health 
     expenditures which do not provide commensurate benefits. We 
     assess the magnitude of defensive treatment behavior by 
     calculating the cost of an additional year of life or an 
     additional year of cardiac health achieved through treatment 
     intensity induced by specific aspects of the liability 
     system. If liability-induced precaution results in low 
     expenditures per year of life saved relative to generally 
     accepted costs per year of life saved of other medical 
     treatments, then the existing liability system provides 
     incentives for efficient care. But if liability-induced 
     precaution results in high expenditures per year of life 
     saved, then the liability system provides incentives for 
     socially excessive care. Because the precision with which we 
     measure the consequences of reforms is critical, we include 
     all U.S. elderly patients with heart diseases in 1984, 1987, 
     and 1990 in our analysis.
       Section I of the paper discusses the theoretical ambiguity 
     of the impact of the current liability system on efficiency 
     in health care. For this reason, liability policy should be 
     guided by empirical evidence on its consequences for ``due 
     care'' in medical practice. Section II reviews the previous 
     empirical literature. Although the existing evidence on the 
     effectiveness of alternative liability rules has provided 
     considerable insights, direct evidence on the crucial effects 
     of the tort system on physician behavior is virtually 
     nonexistent. Section III presents our econometric models of 
     the effects of liability rules on treatment decisions, costs, 
     and patient outcomes, and formally describes the test for 
     defensive medicine used in the paper. We identify liability 
     effects by comparing trends in treatment choice, costs, and 
     outcomes in states adopting various liability reforms to 
     trends in those that did not. We also review a number of 
     approaches to enriching the model, assisting in the 
     evaluation of its statistical validity and providing further 
     insights into the tort reform effects. Section IV discusses 
     the details of our data, and motivates our analysis of 
     elderly Medicare beneficiaries for purposes of assessing the 
     costs of defensive medicine. Section V presents the empirical 
     results. Section VI discusses implications for policy, and 
     Section VII concludes.

    I. Malpractice liability and efficient precaution in health care

       In general, malpractice claims are adjudicated in state 
     courts according to state laws. These laws require three 
     elements for a successful claim. First, the claimant must 
     show that the patient actually suffered an adverse event. 
     Second, a successful malpractice claimant must establish that 
     the provider caused the event: the claimant must attribute 
     the injury to the action or inaction of the provider, as 
     opposed to nature. Third, a successful claimant must show 
     that the provider was negligent. Stated simply, this entails 
     showing that the provider took less care than that which is 
     customarily practiced by the average member of the profession 
     in good standing, given the circumstances of the doctor and 
     the patient [Keeton et al. 1984]. Collectively, this three-
     part test of the validity of a malpractice claim is known as 
     the ``negligence rule.''
       In addition to patient compensation, the principal role of 
     the liability system is to induce doctors to take the optimal 
     level of precaution against patient injury. However, a 
     negligence rule may lead doctors to take socially 
     insufficient precaution, such that the marginal social 
     benefit of precaution would be greater than the marginal 
     social cost. Or, it may lead doctors to take socially 
     excessive precaution, that is, to practice defensive 
     medicine, such that the marginal social benefit of precaution 
     would be less than the marginal social cost [Farber and White 
     1991]. The negligence rule may not generate socially optimal 
     behavior in health care because the private incentives for 
     precaution facing doctors and patients differ from the social 
     incentives. First, the costs of accidents borne by the 
     physician differ from the social costs of accidents. Because 
     malpractice insurance is not strongly experience rated [Sloan 
     1990], physicians bear little of the costs of patient 
     injuries from malpractice. However, physicians bear 
     significant uninsured expenses in response to a malpractice 
     claim, such as the value of time

[[Page H6712]]

     and emotional energy spent on legal defense [OTA 1993, p. 7]. 
     Second, patients and physicians bear little of the costs of 
     medical care associated with physician precaution in any 
     particular case because most health care is financed through 
     health insurance. Generally, insured expenses for drugs, 
     diagnostic tests, and other services performed for 
     precautionary purposes are much larger than the uninsured 
     costs of the physician's own effort. Third, physicians bear 
     substantial costs of accidents only when patients file 
     claims, and patients may not file a malpractice claim in 
     response to every negligent medical injury [Harvard Medical 
     Practice Study 1990].
       The direction and extent of the divergence between the 
     privately and socially optimal levels of precaution depends 
     in part on states' legal environments. Although the basic 
     framework of the negligence rule applies to most medical 
     malpractice claims in the United States, individual states 
     have modified their tort law to either expand or limit 
     malpractice liability along various dimensions over the past 
     30 years. For example, several states have imposed caps on 
     malpractice damages such that recoverable losses are limited 
     to a fixed dollar amount, such as $250,000. These 
     modifications to the basic negligence rule can affect both 
     the costs to physicians and the benefit to patients from a 
     given malpractice claim or lawsuit, and thereby also affect 
     the frequency and average settlement amount (``severity'') of 
     claims. We use the term malpractice pressure to describe the 
     extent to which a state's legal environment provides high 
     benefits to plaintiffs or high costs to physicians or both. 
     (Malpractice pressure can be multidimensional.)
       If the legal environment creates little malpractice 
     pressure and externalized costs of medical treatment are 
     small, then the privately optimal care choice may be below 
     the social optimum. In this case, low benefits from filing 
     malpractice claims and lawsuits reduce nonpecuniary costs of 
     accidents for physicians, who may then take less care than 
     the low cost of diagnostic tests, for example, would warrant. 
     However, if the legal environment creates substantial 
     malpractice pressure and externalized costs of treatment are 
     large, then the privately optimal care choice may be above 
     the social optimum: privately chosen care decisions will be 
     defensive. For example, increasing technological intensity 
     (with a reduced share of physician effort costs relative 
     to total medical care costs) and increasing generosity of 
     tort compensation of medical injury would lead to 
     relatively more defensive medical practice.
       Incentives to practice defensively may be intensified if 
     judges and juries impose liability with error. For example, 
     the fact that health care providers' precautionary behavior 
     may be ex post difficult to verify may give them the 
     incentive to take too much care [Cooler and Ulen 1986; 
     Craswell and Calfee 1986]. Excessive care results from the 
     all-or-nothing nature of the liability decision: small 
     increases in precaution above the optimal level may result in 
     large decreases in expected liability.
       Because privately optimal behavior under the basic 
     negligence rule may result in medical treatment that has 
     marginal social benefits either greater or less than the 
     marginal social costs, the level of malpractice pressure that 
     provides appropriate incentives is an empirical question. In 
     theory, marginal changes to the negligence rule can either 
     improve or reduce efficiency, depending on their effects on 
     precautionary behavior, total health care costs, and adverse 
     health outcomes. Previous studies have analyzed effects of 
     legal reforms on measures of malpractice pressure, such as 
     the level of compensation paid malpractice claimants. To 
     address the potentially much larger behavioral consequences 
     of malpractice pressure, we study the impact of changes in 
     the legal environment on health care expenditures to measure 
     the marginal social cost of treatment induced by the 
     liability system, and the impact of law changes on adverse 
     health events to measure the marginal social benefit of law-
     induced treatment. As a result, we can provide direct 
     evidence on the efficiency of a baseline malpractice system 
     and, if it is inefficient, identify efficiency-improving 
     reforms.

                   II. Previous empirical literature

       The previous empirical literature is consistent with the 
     hypothesis that providers practice defensive medicine, 
     although it does not provide direct evidence on the existence 
     or magnitude of the problem. One arm of the literature uses 
     surveys of physicians to assess whether doctors practice 
     defensive medicine [Reynolds, Rizzo, and Gonzalez 1987; Moser 
     and Musaccio 1991; OTA 1994]. Such physician surveys measure 
     the cost of defensive medicine only through further 
     untestable assumptions about the relationship between survey 
     responses, actual treatment behavior, and patient outcomes. 
     Although surveys indicate that doctors believe that they 
     practice defensively, surveys only provide information about 
     what treatments doctors say that they would administer in a 
     hypothetical situation: they do not measure behavior in real 
     situations.
       Another body of work uses clinical studies of the 
     effectiveness of intensive treatment [Leveno et al. 1986; Shy 
     et al. 1990]. These studies find that certain intensive 
     treatments which are generally thought to be used defensively 
     have an insignificant impact on health outcomes. Similarly, 
     clinical evaluations of malpractice control policies at 
     specific hospitals have found that intensive treatments 
     thought to serve a defensive purpose are ``overused'' by 
     physicians [Master et al. 1987]. However, this work does not 
     directly answer the policy question of interest: does 
     intensive treatment administered out of fear of malpractice 
     claims have any effect on patient outcomes? Few medical 
     technologies in general use have been known to be ineffective 
     in all applications, and the average effect of a procedure in 
     a population may be quite different from its effect at the 
     margin in, for example, the additional patients who receive 
     it because of more stringent liability rules [McClellan 
     1995]. Evaluating malpractice liability reforms requires 
     evidence on the effectiveness of intensive treatment in the 
     ``marginal'' patients.
       A third, well-developed arm of the literature estimates the 
     effects of changes in the legal environment on measures of 
     the compensation paid and the frequency of malpractice 
     claims. Danzon [1982, 1986] and Sloan, Mergenhagen, and 
     Bovbjerg [1989] find that tort reforms that cap 
     physicians' liability at some maximum level or require 
     awards in malpractice cases to be offset by the amount of 
     compensation received by patients from collateral sources 
     reduce payments per claim. Danzon [1986] also finds that 
     collateral-source-rule reforms and statute-of-limitations 
     reductions reduce claim frequency. Based on data from 
     malpractice insurance markets, Zuckerman, Bovbjerg, and 
     Sloan [1990] and Barker [1992] reach similar conclusions: 
     Zuckerman, Bovbjerg, and Sloan find that caps on damages 
     and statute-of-limitations reductions reduce malpractice 
     premiums, and Barker finds that caps on damages increase 
     profitability.
       Despite significant variety in data and methods, this 
     literature contains an important unified message about the 
     types of legal reforms that affect physicians' incentives. 
     The two reforms most commonly found to reduce payments to and 
     the frequency of claims, caps on damages and collateral-
     source-rule reforms, share a common property: they directly 
     reduce expected malpractice awards. Caps on damages truncate 
     the distribution of awards; mandatory collateral-source 
     offsets shift down its mean. Other malpractice reforms that 
     only affect malpractice awards indirectly, such as reforms 
     imposing mandatory periodic payments (which require damages 
     in certain cases to be disbursed in the form of an annuity 
     that pays out over time) or statute-of-limitations 
     reductions, have had a less discernible impact on liability 
     and hence on malpractice pressure.
       However, estimates of the impact of reforms on frequency 
     and severity from these analyses are only the first step 
     toward answering the policy question of interest: do doctors 
     practice defensive medicine? Taken alone, they only provide 
     evidence of the effects of legal reforms on doctors' 
     incentives; they do not provide evidence of the effects of 
     legal reforms on doctors' behavior. Identifying the existence 
     of defensive treatment practices and the extent of 
     inefficient precaution due to legal liability requires a 
     comparison of the response of costs of precaution and the 
     response of losses from adverse events to changes in the 
     legal environment.
       A number of studies have sought to investigate physicians' 
     behavioral response to malpractice pressure. These studies 
     generally have analyzed the costs of defensive medicine by 
     relating physicians' actual exposure to malpractice claims to 
     clinical practices and patient outcomes [Rock 1988; Harvard 
     Medical Practice Study 1990; Localio et al. 1993; Baldwin et 
     al. 1995]. Rock, Localio et al., and the Harvard Medical 
     Practice Study find results consistent with defensive 
     medicine; Baldwin et al. do not. However, concerns about 
     unobserved heterogeneity across providers and across small 
     geographic areas qualify the results of all of these studies. 
     The studies used frequency of claims or magnitude of 
     insurance premiums at the level of individual doctors, 
     hospitals, or areas within a single state over a limited time 
     period to measure malpractice pressure. Because malpractice 
     laws within a state at a given time are constant, the 
     measures of malpractice pressure used in these studies arose 
     not from laws but from primarily unobserved factors at the 
     level of individual providers or small areas, creating a 
     potentially serious problem of selection bias. For example, 
     the claims frequency or insurance premiums of a particular 
     provider or area may be relatively high because the provider 
     is relatively low quality, because the patients are 
     particularly sick (and hence prone to adverse outcomes), 
     because the patients had more ``taste'' for medical 
     interventions (and hence are more likely to disagree with 
     their provider about management decisions), or because of 
     many other factors. The sources of the variation in legal 
     environment are unclear and probably multifactorial. All of 
     these factors are extremely difficult to capture fully in 
     observational data sets and could lead to an apparent but 
     noncausal association between measured malpractice pressure 
     and treatment decisions or outcomes.
       Thus, while previous analyses have provided a range of 
     insights about the malpractice liability system, they have 
     not provided direct empirical evidence on how malpractice 
     reforms would actually affect physician behavior, medical 
     costs, and health outcomes.

                         III. Econometric modes

       Our statistical methods seek to measure the effects of 
     changes in an identifiable

[[Page H6713]]

     source of variation in malpractice pressure influencing 
     medical decision making--state tort laws--that is not related 
     to unobserved heterogeneity across patients and providers. We 
     compare time trends across reforming and nonreforming states 
     during a seven-year period in inpatient hospital 
     expenditures, and in outcome measures including all-cause 
     cardiacmortality as well as the occurrence of cardiac 
     complications directed related to quality of life. We model 
     average expenditures and outcomes as essentially 
     nonparametric functions of patient demographic 
     characteristics, state legal and political characteristics, 
     and state- and time-fixed effects. We model the effects of 
     state tort law changes as differences in time trends before 
     and after the tort law changes. We test for the existence and 
     magnitude of defensive medicine based on the relationship of 
     the law-change effects on medical expenditures and health 
     outcomes.
       While this strategy fundamentally involves differences-in-
     differences between reforming and nonreforming states to 
     identify effects, we modify conventional differences-in-
     differences estimation strategies in several ways. First, as 
     noted above, our models include few restrictive parametric or 
     distributional assumptions about functional forms for 
     expenditures or health outcomes. Second, we do not only model 
     reforms as simple one-time shifts. Malpractice reforms might 
     have more complex, longer term effects on medical practices 
     for a number of reasons. Law changes may not have 
     instantaneous effects because it may take time for lawyers, 
     physicians, and patients to learn about their consequences 
     for liability, and then to re-establish equilibrium 
     practices. Law changes may affect not only the static climate 
     of medical decision making, but also the climate for further 
     medical interventions by reducing pressure for technological 
     intensity growth. Thus, the long-term consequences of reforms 
     may be different from their short-term effects. By using a 
     panel data set including a seven-year panel, our modeling 
     framework permits a more robust analysis of differences in 
     time trends before and after adoption.
       We use a panel-data framework with observations on 
     successive cohorts of heart disease patients for estimating 
     the prevalence of defensive medicine. In state s=1, S during 
     year t=1, T, our observational units consist of individual 
     T=1, [N.sub.st] who are hospitalized with new occurrences of 
     particular illnesses such as a heart attack. Each patient has 
     observable characteristics [X.sub.ist], which we describe as 
     a fully interacted set of binary variables, as well as many 
     unobservable characteristics that also influence both 
     treatment decisions and outcomes. The individual receives 
     treatment of aggregate intensity [R.sub.ist], where R donates 
     total hospital expenditures in the year after the health 
     event. The patient has a health outcome [O.sub.ist], possibly 
     affected by the intensity of treatment received, where a 
     higher value denotes a more adverse outcome (O is binary in 
     our models).
       We define state tort systems in effect at the time of each 
     individual's health event based on the existence of two 
     categories of reforms from a maximum-liability regime: direct 
     and indirect malpractice reforms. Previous studies, 
     summarized in Section II, found differences between these 
     types of reforms on claims behavior and malpractice 
     insurance premiums (Section IV below discusses our reform 
     classification in detail). We denote the existence of 
     direct reforms in state s at time t using two binary 
     variables [L.sub.mst]: [L.sub.1st] = 1 if state s has 
     adopted a direct reform at time t, and [L.sub.2st] = 1 if 
     state s has adopted an indirect reform at time t. 
     [L.sub.st] = [[L.sub.1st][L.sub.2st]] is thus a two-
     dimensional binary vector describing the existence of 
     malpractice reforms.
       We first estimate linear models of average expenditure and 
     outcome effects using these individual-level variables. The 
     expenditure models are of the form, (1) [R.sub.ist] = 
     [[theta].sub.t] + [[alpha].sub.s] + [X.sub.ist][beta] + 
     [W.sub.st][gamma] + [L.sub.st][[phi].sub.m] + [V.sub.ist], 
     where [[theta].sub.t] is a time-fixed effect, [[alpha].sub.s] 
     is a state-fixed effect, [W.sub.st] is a vector of variables 
     described below which summarize the legal-political 
     environment of the state over time, [beta] and [gamma] are 
     vectors of the corresponding average-effect estimates for the 
     demographic controls and additional state-time controls, 
     [[phi].sub.m] is the two-dimensional average effect of 
     malpractice reforms on growth rate, and [v.sub.ist] is a 
     mean-zero independently distributed error term with 
     E([v.sub.ist] [pipe] [X.sub.ist], [L.sub.st],[W.sub.st]) = 0. 
     Because legal reforms may affect both the level and the 
     growth rate of expenditures, we estimate different baseline 
     time trends [[theta].sub.t] for states adopting reforms 
     before 1985 (which were generally adopted before 1980) and 
     nonadopting states. Our data set includes essentially all 
     elderly patients hospitalized with the heart diseases of 
     interest for the years of our study, so that our results 
     describe the actual average differences in trends associated 
     with malpractice reforms in the U.S. elderly population. We 
     report standard errors for inferences about average 
     differences that might arise in potential populations (e.g., 
     elderly patients with these health problems in other years). 
     Our model assumes that patients grouped at the level of state 
     and time have similar distributions of unobservable 
     characteristics that influence medical treatments and health 
     outcomes. Assuming that malpractice laws affect malpractice 
     pressure, but do not directly affect patient expenditures or 
     outcomes, then the coefficients [phi] identify the average 
     effects of changes in malpractice pressure resulting from 
     malpractice reforms.
       To distinguish short-term and long-term effects of legal 
     reforms, we estimated less restrictive models of the average 
     effects of legal reforms that utilize the long duration of 
     our panel. These ``dynamic'' models estimate separate growth 
     rate effects [[phi].sub.md] based on time-since-adoption: (2) 
     [Mathematical Expression Omitted] where we include separate 
     short-term average effects [[phi].sub.m0] and long-term 
     average effects [[phi].sub.m1]. We estimate the short-term 
     effect of the law (within two years of adoption) 
     [[phi].sub.m0] by setting [d.sub.st0] = 1 for 1985-1987 
     adopters in 1987 and 1988-1990 adopters in 1990, and we 
     estimate the long-term effect (three to five years since 
     adoption) by setting [d.sub.st] = 1 for 1985-1987 adopters in 
     1990.
       The estimated average effects [[phi].sub.md]d in these 
     models form the basis for tests of the effects of malpractice 
     reforms on health care expenditures and outcomes, and thus 
     for tests of the existence and magnitude of defensive 
     medicine. In all of these models, there is evidence of 
     defensive medicine if, for direct or indirect reforms m, 
     [[phi].sub.md] < 0 in our models of medical expenditures and 
     [[phi].sub.md] = 0 in our models of health outcomes. In other 
     words, if a state law reform is associated with a reduction 
     in the growth rate of medical expenditures and does not 
     adversely affect the growth rate of adverse heath outcomes 
     through its impact on treatment decisions, then malpractice 
     pressure is too high from the perspective of social 
     welfare, and defensive medicine exists. More generally, 
     defensive medicine exists if the effect of malpractice 
     reforms on expenditures is ``large'' relative to the 
     effect on health outcomes. Thus, in the results that 
     follow, we test both whether expenditure and outcome 
     effects of reforms differ substantially from zero, as well 
     as the ratio of expenditure to outcome effects.
       The power of the test for defensive medicine depends on the 
     statistical precision of the estimated effects of law reforms 
     on outcomes. Consequently, we evaluate the confidence 
     intervals surrounding our estimates of outcome efforts 
     carefully. It is not feasible to collect information on all 
     health outcomes that may matter to some degree to individual 
     patients. Instead, our tests focus on important health 
     outcomes, including mortality and significant cardiac 
     complications, which are reliably observed in our study 
     population. Because the cardiac complications we consider 
     reflect the two principal ways in which poorly treated heart 
     disease would affect quality of life (e.g., through further 
     heart attacks or through impaired cardiac function), 
     estimates of effects on these health outcomes along with 
     mortality would presumably capture any important health 
     consequences of malpractice reforms.
       We estimated additional specifications of our models to 
     test whether reform adoption is not in fact correlated with 
     unobserved trends in malpractice pressures or patient 
     characteristics across the state-time groups. One set of 
     specification tests was based on the inclusion of random 
     effects for state-time interactions. To account for any 
     geographically correlated variations in costs or expenditures 
     over time, we included Huber-White [1980] standard error 
     corrections for zip code-time error correlations. We also 
     tested whether our estimated standard errors were sensitive 
     to Huber-White corrections for state-time error correlations.
       Another set of specification tests involved evaluating a 
     range of variables [W.sub.st] summarizing the political and 
     regulatory environment in each state at each point in time, 
     to test whether various factors that might influence reform 
     adoption influence our estimates of reform effects on either 
     expenditure or health outcomes. Since the main cause of the 
     tort reforms that are the focus of our study was nationwide 
     crisis in all lines of commercial casualty insurance, it is 
     unlikely that endogeneity of reforms is a serious problem 
     [Priest 1987; Rabin 1988]. However, Campbell Kessler, and 
     Shepherd [1996] show that the concentration of physicians and 
     lawyers in a state and measures of states' political 
     environment are correlated with liability reforms, and Danzon 
     [1982] shows that the concentration of lawyers in a state is 
     correlated with both the compensation paid to malpractice 
     claims and the enactment of reforms. Consequently, we control 
     for the political party of each state's governor, the 
     majority political party of each house of each state's 
     legislature, and lawyers per capita in all of the 
     regressions, and we tested the sensitivity of our results to 
     these controls.
       A third set of specification tests relied on other tort 
     reforms enacted in the 1980s which should have had a minimal 
     impact on malpractice liability cases in the elderly during 
     the time frame of our study. However, these reforms might be 
     correlated with relevant malpractice reforms if, for example, 
     general concerns about liability pressures in all industries 
     led to broad legal reforms. If such reforms were correlated 
     with included reforms, then our estimates might overstate the 
     impact of the malpractice law reforms that we analyze.
       Along these lines, we investigate the validity of our 
     assumption of no omitted variable bias by estimating the 
     impact of reforms to

[[Page H6714]]

     states' statuses of limitations. Statutes of limitations are 
     most relevant in situations involving latent injuries. 
     Malpractice arising out of AMI in the elderly would involve 
     an injury of which the adverse consequences would appear 
     before any statute of limitations would exclude an injured 
     patient. Nonetheless, statutes of limitations are the 
     potentially most important reform not included in our study 
     (23 states shortened their statutes of limitations 
     between 1985 and 1990, and Danzon [1986] finds that 
     shorter statutes of limitations reduced claims frequency). 
     If our models are correctly specified, then statute-of-
     limitations reforms sohuld have no effect on the treatment 
     intensity and outcome decisions that we analyze. If 
     omitted variable bias is a problem, however, statute-of-
     limitations reforms may show a significant estimated 
     effect.
       Finally, because all of our specifications control for 
     fixed differences across states, they do not allow us to 
     estimate differences in the baseline levels of intensive 
     treatment and adverse health outcomes. Thus, we also estimate 
     additional versions of all of our models with region effects 
     only, to explore baseline differences in treatment rates, 
     costs, and outcomes across legal regimes.

                                IV. Data

       The data used in our analysis come from two principal 
     sources. Our information on the characteristics, 
     expenditures, and outcomes for elderly Medicare beneficaries 
     with heart disease are derived from comprehensive 
     longtiudinal claims data for the vast majority of elderly 
     Medicare beneficaries who were admitted to a hospital with a 
     new primary diagnosis (no admission with either health 
     problem in the preceding year) of either acute myocardial 
     infraction (AMI) or ischemic heart disease (IHD) in 1984, 
     1987, and 1990. Data on patient demographic characteristics 
     were obtained from the Health Care Financing Administration 
     HISKEW enrollment files, with death dates based on death 
     reports validated by the Social Security Administration. 
     Measures of total one-year hospital expenditures were 
     obtained by adding up all reimbursement to acute-care 
     hospitals (including copayments and deductible not paid by 
     Medicare) from insurance claims for all hospitalizations in 
     the year following each patient's initial admission for AMI 
     or IHD. Measures of the occurrence of cardiac complications 
     were obtained by abstracting data on the principal diagnosis 
     for all subsequent admissions (not counting transfers) in the 
     year following the patient's initial admission. Cardiac 
     complications included re-hospitalizations within one year of 
     the initial event with a primary diagnosis (principal cause 
     of hospitalization) of either subsequent AMI or heart 
     failure. Treatment of IHD and AMI patients is intended to 
     prevent subsequent AMIs if possible, and the occurrence of 
     heart failure requiring hospitalization is evidence that the 
     damage to the patient's heart from ischemic disease has 
     serious functional consequencies. The programming rules used 
     in the data set creation process and sample exclusion 
     criteria were virtually identical to those reported in 
     McClellan and Newhouse [1995, 1996].
       We analyze cardiac disease patients because the choice of a 
     particular set of diagnoses permits detailed exploration of 
     the health and treatment consequences of policy reforms. 
     Cardiac disease and its complications are the leading cause 
     of medical expenditures and mortality in the United States. A 
     majority of AMIs and IHD hospitalizations occurs in hte 
     elderly, and both mortality and subsequent cardiac 
     complications are relatively common occurrences in this 
     population. Thus, this condition provides both a relatively 
     homogeneous set of patients and outcomes (to analyze the 
     presence of defensive medicine with reasonable clinical 
     detail), and medical expenditures are large enough and the 
     relevant adverse outcomes common enough that the test for 
     defensive medicine can be a precise one. Furthermore, because 
     AMI is essentially a severe form of the same underlying 
     illness as is IHD, we can assess whether reforms affect more 
     or less severe cases of a health problem differently by 
     comparing AMI with IHD patients.
       In addition, cardiovascular illness is likely to be 
     sensitive to defensive medical practices. In a ranking of 
     illnesses by the frequency of and payments to the malpractice 
     claims that they generate. AMI is the third most prevalent 
     and costly, behind only malignant breast cancer and brain-
     damaged infants [PIAA 1993]. AMI is also disinctive because 
     of the severity of medical injury associated with 
     malpractice claims: conditional on a claim, patients with 
     AMI suffer injury that rates 8.2 on the National 
     Association of Insurance Commissioners nine-point severity 
     scale, the second-highest severity rating of any 
     malpractice-claim-generating health problem [PIAA]. 
     Cardiovascular illnesses and associated procedures also 
     include 7 of the 40 most prevalent and costly malpractice-
     claim-generating health problems [PIAA].
       We focus on elderly patients in part because no comparable 
     longitudinal microdata exist for nonelderly U.S. patient 
     populations. However, there are other advantages to 
     concentrating on this population. Several studies have 
     documented that claims rates are lower in the elderly than in 
     the nonelderly population, presumably because losses from 
     severe injuries would be smaller given the patients' shorter 
     expected survival [Weller et al. 1993]. This hypothesis 
     suggests that physicians are least likely to practice 
     defensively for elderly patients. Thus, treatment decisions 
     and expenditures in this population would be the least 
     sensitive to legal reforms. Similarly, relatively low 
     baseline incentives for defensive practices and the 
     relatively high frequency of adverse outcomes in the elderly 
     imply that this population can provide the most sensitive 
     tests for adverse health effects of reforms. These 
     considerations suggest that analysis of elderly patients 
     provides a lower bound on the costs of defensive medicine. In 
     any event, trends in practice patterns over time have been 
     similar for elderly and nonelderly patients (e.g., intensity 
     of treatment has increased dramatically and survival rates 
     have improved for both groups [National Center for Health 
     Statistics 1994]). Thus, we would expect the findings for 
     this population to be qualitatively similar to results for 
     the nonelderly, if such a longitudinal empirical analysis 
     were possible.
       Table I describes the elderly population with AMI and IHD 
     from the years of our study. Between 1984 and 1990 the 
     elderly AMI population aged slightly, and the share of males 
     in the IHD population increased slightly, but the 
     characteristics of AMI and IHD patients were otherwise 
     relatively stable. The number of AMI patients in an annual 
     cohort declined slightly (from 233,000 to 221,000), while the 
     number of IHD patients increased (from 357,000 to 423,000). 
     Changes in real hospital expenditures in the year following 
     the AMI or IHD event were dramatic. For example, one-year 
     average hospital expenditures for AMI patients rose from 
     $10,880 in 1984 to $13,140 in 1990 (in constant 1991 
     dollars), a real growth rate of around 4 percent per year. 
     These expenditure trends are primarily attributable to 
     changes in intensity. Because of Medicare's ``prospective'' 
     hospital payment system, reimbursement given treatment choice 
     for Medicare patients actually declined during this period. 
     This growth in expenditures and treatment intensity was 
     associated with significant mortality reductions, from 39.9 
     percent to 35.3 percent for AMI patients (with the bulk of 
     the reduction coming after 1987) and from 13.5 percent to 
     10.8 percent for IHD patients (with the bulk coming before 
     1987). However, the AMI survival improvements--but not the 
     IHD improvements--were associated with corresponding 
     increases in recurrent AMIs and in heart failure 
     complications. This underscores that the role of changes in 
     intensity versus other factors--as well as any role of 
     changes in liability--is difficult to identify directly in 
     all of these trends.
       Second, building on prior efforts to collect information on 
     state malpractice laws (e.g., Sloan, Mergenhagen, and 
     Bovbjerg [1989]), we have compiled a comprehensive database 
     on reforms to state liability laws and state malpractice-
     control policies that contain information on several types of 
     legal reforms from 1969 to 1992(8). The legal regime 
     indicator variables are defined such that the level of 
     liability imposed on defendants in the baseline is at a 
     hypothetical maximum.
       Eight characteristics of state malpractice law, 
     representing divergences from the baseline legal regime, are 
     summarized in Table IIA. We divide these eight reforms into 
     two groups of four reforms each: reforms that directly reduce 
     malpractice awards and reform that only reduce awards 
     indirectly. ``Direct'' reforms include reforms that truncate 
     the upper tail of the distribution of awards, such as caps on 
     damages and the abolition of punitive damages, and reforms 
     that shift down the mean of the distribution, such as 
     collateral-source-rule reform and abolition of mandatory 
     prejudgment interest. ``Indirect'' reforms include other 
     reforms that have been hypothesized to reduce malpractice 
     pressure but only affect awards indirectly, for instance, 
     through restricting the range of contracts that can be 
     enforced between plaintiffs and contingency-fee attorneys. As 
     discussed in Section II above, we chose this division because 
     the previous empirical literature generally found the impact 
     of direct reforms to be larger than the impact of indirect 
     reforms on physicians' incentives through their effect on the 
     compensation paid and the frequency of malpractice claims. 
     Each of the observations in the Medicare data set was matched 
     with a set of two tort law variables that indicated the 
     presence or absence of direct or indirect malpractice reforms 
     at the item of their initial hospitalization.
       Table IIB contains the effective date for the adoption of 
     direct and indirect reforms for each of the 50 states. The 
     table shows that a number of states have implemented legal 
     reforms at different times. For example, 13 states never 
     adopted any direct reforms, 23 states adopted direct reforms 
     between 1985 and 1990, and 18 states adopted direct reforms 
     1984 or earlier (adoptions plus nonadoptions exceed 50 
     because some states adopted both before and after 1985). 
     Similarly, 16 state never adopted any indirect reforms, 23 
     states adopted indirect reforms between 1985 and 1990, and 18 
     states adopted indirect reforms 1984 or earlier. Adoption of 
     direct and indirect reforms is not strongly related: sixteen 
     states that never adopted reforms of one type have adopted 
     reforms of the other.

                          V. Empirical results

       Table III previews our basic difference-in-difference (DD) 
     analysis by reporting unadjusted conditional means for 
     expenditures and mortality for four patient groups, based on 
     the timing of malpractice reforms. Expenditure levels in 1984 
     (our base year) were slightly higher in states passing 
     reforms between 1985-1987 and lower in states passing reforms 
     between 1988-1990. Baseline

[[Page H6715]]

     mortality rates were slightly lower for AMI and higher for 
     IHD in the 1985-1987 reform states, and conversely for the 
     1988-1990 reform states. Thus, overall, reform states looked 
     very similar to nonreform states in terms of baseline 
     expenditures and outcomes. States with earlier reforms (pre-
     1985) had slightly higher base year expenditures but similar 
     base year mortality rates. The table shows that expenditure 
     growth in reform states was smaller than in nonreform states 
     during the study years. Altogether, growth was 2 to 6 percent 
     slower in the reform compared with the nonreform states for 
     AMI, and trend differences were slightly greater for IHD. 
     Although mortality trends differed somewhat across the state 
     groups, mortality trends on average were quite similar for 
     reform and nonreform states. These simple comparisons do not 
     account for any differences in trends in patient 
     characteristics across the state groups, do not account for 
     any effects of other correlated reforms, and do not readily 
     permit analysis of dynamic malpractice reform effects. 
     Nonetheless, they anticipate the principal estimation results 
     that follow.
       Table IV presents standard DD estimates of the effects of 
     tort reforms between 1985 and 1990 on average expenditures 
     and outcomes for AMI, that is, no dynamic reform effects are 
     included. In this and subsequent models, we include fully 
     interacted demographic effects--for patient age (65-69, 70-
     74, 75-79, 80-89, 90-99), gender, black or nonblack race, and 
     urban or rural residence--and controls for contemporaneous 
     political and regulatory changes described previously. For 
     each of the four outcomes--one-year hospital expenditures, 
     mortality, and AMI and CHF readmissions--two sets of models 
     are reported. The first set includes complete state and year 
     fixed effects. The second set, intended to illustrate the 
     average differences of states that had adopted reforms before 
     our study began as well as the sensitivity of the results to 
     a more complete fixed-effect specification, includes only 
     time and census region effects. As described in Section II, 
     both specifications are linear, the dependent variable in the 
     expenditure models is logged, all coefficient estimates are 
     multiplied by 100 and so can be interpreted as average 
     effects in percent (for expenditure models) or percentage 
     points (for outcomes models), and the standard errors are 
     corrected for heteroskedasticity and grouping at the state/
     zip-code level.
       The estimates of average expenditure growth rates in both 
     specifications are substantial showing an increase in real 
     expenditures of over 21 percent between 1984 and 1990. The 
     estimated DD effects show that expenditures declined by 5.3 
     percent in states that adopted direct reforms relative to 
     nonreforming states. The corresponding DD estimate of the 
     effect of indirect reforms, 1.8 percent, is positive but 
     small; these reforms do not appear to have a substantial 
     effect on expenditures. In the region-effect models, the 
     estimated DD reform effects are slightly larger but 
     qualitatively similar States that adopted reforms prior to 
     our study period had 1984-1990 growth rates in expenditures 
     that were slightly larger, by around 3 percent. The region-
     effect model shows that these states as a group also had 
     slightly higher expenditure levels in 1984. Because these 
     states generally adopted reforms at least five years before 
     our panel began, our results suggest that direct reforms do 
     not result in relatively slower expenditure growth more than 
     five years after adoption. However, lack of a pre-adoption 
     baseline for and adoption-time heterogeneity among the early-
     adopting states, as well as the sensitivity of the early-
     adopter/nonadopter differential growth rates to alternative 
     specifications (as discussed below), complicates interpreting 
     estimates of differential early-adopter/nonadopter growth 
     rates as a long-term effect. In any event, in no case 
     would the differential 1984-1990 expenditure growth rate 
     between adopters and nonadopters offset the difference-
     indifference ``levels'' effect. In total, malpractice 
     reforms always result in a decline in cost growth at least 
     10 percent.
       The remaining columns of Table IV describe the 
     corresponding DD estimates of reform effects on AMI outcomes. 
     Mortality rates declined, but readmission rates with cardiac 
     complications increased during this time period, confirming 
     the results of Table I. Outcome trends were very similar in 
     reform and nonreform states: the cumulative difference in 
     mortality and cardiac complication trends was around 0.1 
     percentage points. These small estimated mortality 
     differences are not only insignificantly different from zero, 
     they are estimated rather precisely as well. For example, the 
     upper 95 percent confidence limit for the effect of direct 
     reforms on one-year mortality trends between 1984 and 1990 is 
     0.64 percentage points. Coupled with the estimated 
     expenditure effect, the expenditure effect, the expenditure/
     benefit ratio for a higher pressure liability regime is over 
     $500,000 per additional one-year AMI survivor in 1991 
     dollars.
       Even a ration based on the upperbound mortality estimate 
     translates into hospital expenditures of over $100,000 per 
     additional AMI survivor to one year. The estimates in the 
     corresponding region-effect models are very similar. Indirect 
     reforms were also associated with estimated mortality effects 
     that were very close to zero. Results for outcomes related to 
     quality of life, that is, rehospitalizations with either 
     recurrent AMI or heart failure, also showed no consequential 
     effects of reforms. In this case, the point estimates (upper 
     bound of the 95 percent confidence interval) for the 
     estimated effected of direct reforms were -0.18 (0.21) 
     percentage points for AMI recurrence and -0.07 (0.28) 
     percentage points for the occurrence of heart failure. Again, 
     compared with the estimated expenditure effects, these 
     differences are not substantial.
       Table V presents estimated effects of malpractice reforms 
     on IHD expenditures and outcomes, with results qualitatively 
     similar to those just described for AMI. IHD expenditure also 
     grew rapidly between 1984 and 1990. Direct reform led to 
     somewhat larger expenditure reductions for IHD (9.0 percent) 
     and indirect reforms were again associated with relatively 
     smaller increases in expenditures (3.4 percent). The effects 
     of reform on IHD outcomes are again very small: the effect of 
     direct reforms on mortality rates was an average difference 
     of -0.19 percentage points (95 percent upper confidence limit 
     of 0.10), and the effects on subsequent occurrence of AMI or 
     heart failure hospitalizations were no larger. Estimates from 
     the models with region effects were very similar. Thus, 
     directly liability reforms appear to have relatively larger 
     effect on IHD expenditures, without substantial consequences 
     for health outcomes.
        As we noted in Section III, the simple average effects of 
     liability reforms estimated in the DD specifications of 
     Tables IV and V may not capture the dynamic effects of 
     reforms. Table VI presents results form model specifications 
     that estimate reform effects less restrictively. In these 
     specifications we use our seven-year panel to estimate short-
     term and long-term effects of direct and indirect reforms on 
     expenditures and outcomes, to determine whether the ``shift'' 
     effect implied by the DD specification is adequate. The 
     models retain our state and time fixed effects.
       We find the same general patterns as in the simple DD 
     models, but somewhat larger effects of malpractice reforms 
     three to five years after adoption compared with the short-
     term effects. In particular, Table VI shows that direct 
     reforms lead to short-term reductions in AMI expenditures of 
     approximately 4.0 percent within two years of adoption, and 
     that the reduction grows to approximately 5.8 percent three 
     to five years after adoption. This specification also shows 
     that the positive association between indirect reforms and 
     expenditures noted in Table IV is a short-term phenomenon: 
     the long-term effect on expenditures is approximately zero.
       As in Table IV, both direct and indirect reforms have 
     trivial effects on mortality and readmissions with 
     complications, both soon and later after adoption. For 
     example, the average difference in mortality trends between 
     direct-reform and nonreform states is -0.22 percentage points 
     (not significant) within two years of adoption, with a 95 
     percent upper confidence limit of 0.39 percentage points. At 
     three to five years the estimated effect is 0.12 percentage 
     points (not significant) with a 95 percent upper confidence 
     limit of 0.75 percentage points. These points estimates 
     translate into very high expenditures per reduction in 
     adverse AMI outcomes.
       The results for the corresponding model of IHD effects over 
     time are presented in the right half of Table VI. Direct 
     reforms are associated with a 7.1 percent reduction in 
     expenditures by two years after adoption (standard error 0.5) 
     and an 8.9 percent reduction by five years after (standard 
     error 0.5). In contrast, mortality tends for states with 
     direct reforms do not differ significantly by two years 
     (point estimate of -0.15 percentage points, 95 percent upper 
     confidence limit 0.18) or five years after adoption (point 
     estimate -0.11 percentage points, 95 percent upper confidence 
     limit 0.22). Direct reforms also have no significant or 
     substantial effects on cardiac complications, either 
     immediately or later. Indirect reforms are again associated 
     with small positive effects on expenditure growth (3.1 
     percent within two years), but these effects decline over 
     time to a relative trivial level (1.4 percent at three to 
     five years). Indirect reforms are also associated with 
     slightly lower mortality rates and slightly higher rates of 
     cardiac complications, but the size of these effects is very 
     small (e.g., the upper limit of the 95 percent confidence 
     interval around the estimated effect of indirect reforms 
     three to five years after adoption is 0.47 percentage points 
     for AMI recurrence and 0.29 percentage points for heart 
     failure occurrence). Thus, the pattern of reform effects for 
     IHD is again qualitatively similar to that for AMI, with 
     direct reforms having a somewhat larger effect on 
     expenditures.
       Taken together, the estimates in Tables IV through VI 
     consistently show that the adoption of direct malpractice 
     reforms between 1984 and 1990 led to substantial relative 
     reductions in hospital expenditures during this period--
     accumulating to a reduction of more than 5 percent for AMI 
     and 9 percent for IHD by five years after reform adoption--
     and that these expenditure effects were not associated with 
     any consequential effects on mortality or on the rates of 
     significant cardiac complications.
       We estimated a variety of other models to explore the 
     robustness of our principal results. We tested the 
     sensitivity of our results to alternative assumptions about 
     the excludability of state/time interactions. One set of 
     tests reestimated the models with random state/time effects 
     to determine whether correlated outcomes at the level of 
     state/time interactions might affect our conclusions. Our 
     estimated effects of reforms did not differ substantially or 
     significantly with these

[[Page H6716]]

     methods. Using the model presented in Tables IV and V, the 
     estimated difference-indifference effect of direct reforms on 
     expenditures for AMI patients, controlling for random state/
     time effects, is -4.9 percent (standard error 2.1), and for 
     indirect reforms, the estimated effect is -0.6 percent 
     (standard error 2.0). The estimated DD effect of direct 
     reforms on mortality for AMI patients, controlling for random 
     state/time effects, is 0.15 percentage points (standard error 
     0.32) and for indirect reforms, the estimated effect is -0.19 
     percentage points (standard error 0.32). We obtained similar 
     results for IHD patients: direct reforms showed a negative 
     and statistically significant effect on expenditures with an 
     insubstantial and precisely estimated effect on mortality, 
     and indirect reforms showed no substantial effect on either 
     expenditures or mortality. Estimated differential 1984-1990 
     expenditure growth rates between early-adopters and 
     nonadopters were insignificant in the random effects 
     specification. For AMI patients the differential growth 
     rate for early adopters of direct reforms is 0.61 percent 
     (standard error 3.1). For early adopters of indirect 
     reforms the differential growth rate is 0.61 percent 
     (standard error 2.3). For IHD patients the differential 
     growth rate for early adopters of direct reforms is -1.9 
     percent (standard error is 3.0). For early adopters of 
     indirect reforms the differential growth rate is -3.2 
     percent (standard error is 2.2). Another related 
     diagnostic involved estimating the models with Huber-White 
     [1980] corrections for state/time grouped errors instead 
     of corrections for zipcode/ time grouped errors. Standard 
     errors corrected for state/ time grouping were somewhat 
     larger than those corrected for zipcode/ time grouping but 
     smaller than those obtained under the random effects 
     specification.
       Although they did have a statistically significant 
     influence on expenditures in some models, the broad set of 
     political and regulatory environment controls that we used 
     did not change our results substantially. Using the models 
     presented in Tables IV and V but excluding controls for the 
     regulatory and legal environment, the estimated DD effect of 
     direct reforms on expenditures for AMI patients -9.1 percent 
     (standard error is 0.44). For indirect reforms the estimated 
     DD effect is 3.3 percent (standard error is 0.40). In 
     addition, the difference in 1984-1990 growth rates between 
     early-reforming and nonreforming states changes sign from 
     positive to negative for enacting direct reforms before 1985 
     (Table IV: 3.1 percent with legal environment controls, -3.1 
     percent without them). The difference in growth rates for 
     states enacting indirect reforms before 1985 remains about 
     the same (Table IV: 2.8 percent with legal environment 
     controls, 3.5 percent without them). These two specification 
     checks, taken together, underscore the points made by Tables 
     IV and V. Direct reforms reduce expenditure growth without 
     increasing mortality, indirect reforms have no substantial 
     effect on either expenditures or mortality, and differential 
     1984-1990 expenditure growth rates for early-adopting states 
     are not robust estimates of the long-term impact of reforms.
       Finally, we reestimated the models in Tables IV and V 
     including controls for statute-of-limitations reforms. 
     Statute-of-limitation reforms have a very small positive 
     effect on expenditures and no effect on mortality, which is 
     consistent with their classification as an indirect reform. 
     Using the models presented in Tables IV and V, statute-of-
     limitations reforms are associated with a 0.96 percent 
     increase in expenditures for AMI patients (standard error 
     is 0.46), and a 0.003 percentage point increase in 
     mortality (standard error is 0.28). Inclusion of statute-
     of-limitation reforms did not substantially alter the 
     estimated DD effect of either direct or indirect reforms: 
     for AMI patients the estimated effect of direct reforms 
     went from -5.3 percent (Table IV) to -5.5 percent, and the 
     estimated effect of indirect reforms remained constant at 
     1.8 percent (Table IV).
       To explore the sources of our estimated reform effects more 
     completely, we estimated additional specifications that 
     analyzed effects on use of intensive cardiac procedures such 
     as cardia catheterization, that used alternative 
     specifications of time-since-adoption and calendar-year 
     effects, and that estimated the effects of each type of tort 
     reform separately (see Table IIA). These specifications 
     produced results consistent with the simpler specifications 
     reported here for both AMI and IHD. Specifically, reforms 
     with a determinate, negative direct impact on liability led 
     to substantially slower expenditure growth, somewhat less 
     growth in the use of intensive procedures (but smaller 
     effects than would explain the expenditure differences, 
     suggesting less intensive treatments were also affected), and 
     no consequential effects on mortality.

                        VI. Policy implications

       We have developed evidence on the existence and magnitude 
     of ``defensive'' medical practices by studying the 
     consequences of reforms limiting legal liability on health 
     care expenditures and outcomes for heart disease in the 
     elderly. These results provide a critical extension to the 
     existing empirical literature on the effects of malpractice 
     reforms. Previous studies have found significant effects of 
     direct reforms on the frequency of and payments to 
     malpractice claims. Because the actual costs of malpractice 
     litigation comprise a very small portion of total health care 
     expenditures, however, these litigation effects have only a 
     limited impact on health care expenditure growth. To provide 
     a more complete assessment of malpractice reforms, we have 
     studied their consequences for actual health care 
     expenditures and health outcomes. Our study is the first to 
     use exogenous variation in tort laws not related to potential 
     idiosyncrasies of providers or small geographic areas to 
     assess the behavioral effects of malpractice pressure. Thus, 
     our analysis fills a crucial empirical gap in evaluating the 
     U.S. malpractice liability system, because the effects of 
     malpractice law on physician behavior are both a principal 
     justification for current liability rules and potentially 
     important for understanding medical expenditure growth.
       Our analysis indicates that reforms that directly limit 
     liability--caps on damage awards, abolition of punitive 
     damages, abolition of mandatory prejudgment interest, and 
     collateral-source-rule reforms--reduce hospital expenditures 
     by 5 to 9 percent within three to five years of adoption, 
     with the full effects of reforms requiring several years to 
     appear. The effects are somewhat smaller for actual heart 
     attacks than for a relatively less severe form of heart 
     disease (IHD), for which more patients may have ``marginal'' 
     indications for treatment. In contrast, reforms that limit 
     liability only indirectly--caps on contingency fees, 
     mandatory periodic payments, joint-and-several liability 
     reform, and patient compensation funds--are not associated 
     with substantial effects on either expenditures or outcomes, 
     at least by several years after adoption. Neither type of 
     reforms led to any consequential differences in mortality or 
     the occurrence of serious complications. As we described 
     previously, the estimated expenditure/benefit ratio 
     associated with direct reforms is over $500,000 per 
     additional one-year survivor, with comparable ratios for 
     recurrent AMIs and heart failure. Even the 95 percent 
     confidence bounds for outcome effects are generally under one 
     percentage point, translating into over $100,000 per 
     additional one-year survivor. While it is possible that 
     malpractice reforms have had effects on other outcomes 
     valued by patients, this possibility must be weighed 
     against the absence of any substantial effects on 
     mortality or the principal cardiac complications that are 
     correlated with quality of life. Thus, at the current 
     level of malpractice pressure, liability rules that are 
     more generous in terms of award limits are a very costly 
     approach to improving health care outcomes.
       Approximately 40 percent of patients with cardiac disease 
     were affected by direct reforms between 1984 and 1990. Based 
     on simulations using our effect estimates, we conclude that 
     if reforms directly limiting malpractice liability had been 
     applied throughout the United States during this period, 
     expenditures on cardiac disease would have been around $450 
     million per year lower for each of the first two years after 
     adoption and close to $600 million per year lower for each of 
     years three through five after adoption, compared with 
     nonadoption of direct reforms.
       While our panel is relatively lengthy for a DD study, it is 
     to long enough to allow us to reach equally certain 
     conclusions about the long-term effects of malpractice 
     reforms on medical expenditure growth and trends in health 
     outcomes. Plausible static effects of virtually all outcomes. 
     Plausible static effects of virtually all policy factors 
     cannot explain more than a fraction of expenditure growth in 
     recent decades [Newhouse 1992], and we have also documented 
     that outcome trends may be quite important. Whether policy 
     changes such as malpractice reforms influence these long-term 
     trends through effects on the environment of technological 
     change in health care is critical issue. Do reforms have 
     implications for trends in expenditures and outcomes long 
     after they are adopted, or do the trend effects diminish over 
     time? Preliminary evidence on the question from early-adopted 
     (pre-1985, mostly pre-1980) reforms suggest that long-term 
     expenditure growth is not slower in states that adopt direct 
     reforms. On the other hand, subsequent growth does not appear 
     to offset the expenditure reductions that occur in the years 
     following adoption. Moreover, we found no evidence that 
     direct reforms adopted from 1985-1990 had smaller effects in 
     states that had also adopted direct reforms earlier, 
     suggesting that dynamic malpractice policies may produce more 
     favorable long-term expenditure/benefit trends. In any event, 
     our conclusions about long-term effects are speculative at 
     this point, given the absence of baseline data on 
     expenditures and outcome trends in reform states. Follow-up 
     evaluations of longer term effects of malpractice reforms 
     should be possible within a few years, and might help confirm 
     whether liability reforms have any truly lasting consequences 
     for expenditure growth or trends in health outcomes.
       Hospital expenditures on treating elderly heart disease 
     patients are substantial--over $8 billion per year in 1991--
     but they comprise only a fraction of total expenditures on 
     health care. If our results are generalizable to medical 
     expenditures outside the hospital, to other illnesses, and to 
     younger patients, then direct reforms could lead to 
     expenditure reductions of well over $50 billion per year 
     without serious adverse consequences for health outcomes. We 
     hope to address the generalizability of our results more 
     extensively in future research. More detailed studies using 
     both malpractice claims information and patient expenditure 
     and outcome information, linking the analysis of the two

[[Page H6717]]

     policy justifications for a malpractice liability system, 
     should be particularly informative. Such studies could 
     provide more direct evidence on how liability rules translate 
     into effects on particular kinds of physician decisions with 
     implications for medical expenditures but not outcomes. Thus, 
     they may provide more specific guidance on which specific 
     liability reforms--including ``nontraditional'' reforms such 
     as no-fault insurance and mandatory administrative reviews--
     will have the greatest impact on defensive practices without 
     substantial consequences for health outcomes.
       Our evidence on the effects of direct malpractice reforms 
     suggests that doctors do practice defensive medicine. Given 
     the limited relationship between malpractice claims and 
     medical injuries documented in previous research, perhaps our 
     findings that less malpractice liability does not have 
     significant adverse consequences for patient outcomes but 
     does affect expenditures are not surprising. To our 
     knowledge, however, this is the first direct empirical 
     quantification of the costs of defensive medicine.

                            VII. Conclusion

       We have demonstrated that malpractice liability reforms 
     that directly limit awards and hence benefits from filing 
     lawsuits lead to substantial reductions in medical 
     expenditure growth in the treatment of cardiac illness in the 
     elderly with no appreciable consequences for important health 
     outcomes, including mortality and common complications. We 
     conclude that treatment of elderly patients with hear disease 
     does involve ``defensive'' medical practices, and that 
     limited reductions in liability can reduce these costly 
     practices. (*) We would like to thank Randall Bovbjerg, David 
     Genesove, Jerry Hausman Paul Joskow, Lawrence Katz, W. Page 
     Keeton, Gary King, A. Mitchell Polinsky George Shepherd, 
     Frank Sloan, seminar participants at Northwestern University, 
     the University of Michigan and the National Bureau of 
     Economic Research, and two anonymous referees for advice, 
     assistance, and helpful comments. Jeffrey Geppert and Mohan 
     Ramanujan provided excellent research assistance. Funding 
     from the National Institute of Aging, Harvard/MIT Research 
     Training Group in Positive Political Economy, and the John 
     M. Olin Foundation is greatly appreciated. All errors are 
     our own. Reforms requiring collateral-source offset revoke 
     the common-law default rule which states that the 
     defendant must bear the full cost of the injury suffered 
     by the plaintiff, even if the plaintiff were compensated 
     for all or part of the cost by an independent or 
     ``collateral'' source. Under the common-law default rule 
     defendants liable for medical malpractice always bear the 
     cost of treating a patient for medical injuries resulting 
     from the malpractice even if the treatment were financed 
     by the patient's own health insurance. Either the 
     plaintiff enjoys double recovery (the plaintiff recovers 
     from the defendant and his own health insurance for 
     medical expenses attributable to the injury) or the 
     defendant reimburses the plaintiff's (subrogee) health 
     insurer, depending on the plaintiff's insurance contract 
     and state or federal law. However, some states have 
     enacted reforms that specify that total damages payable in 
     a malpractice tort are to be reduced by all or part of the 
     value of collateral source payments. Estimates of the 
     impact of reforms on claim severity vary over time and 
     across studies. Based on 1975-1978 data, Danzon [1982, p. 
     30] reports that states enacting caps on damages had 19 
     percent lower awards, and states enacting mandatory 
     collateral source offsets had 50 percent lower awards. 
     Based on 1975-1984 data, Danzon [1986, p. 26] reports that 
     states enacting caps had 23 percent lower awards, and 
     states enacting collateral source offsets had 11 to 18 
     percent lower awards. Based on 1975-1978 and 1984 data, 
     Sloan, Mergenhagen and Bovbjerg [1989] find that caps 
     reduced awards by 38 to 39 percent, and collateral-source 
     offsets reduced awards by 21 percent. Again, because all 
     elderly patients with serious heart disease during the 
     years of our study are included, this consideration 
     applies only to extending the results to other patient 
     populations. Of course, if such state-time specific 
     effects exist, there is no reason to expect that they 
     would be normally distributed. Normality assumptions in 
     error structures generally have not performed well in 
     models of health expenditures and outcomes. However, 
     incorporating such random effects permits us to explore 
     the robustness of our estimation methods to possible 
     state-time specific shifts. According to Danzon [1982, 
     1986], urbanization is a highly significant determinant 
     both of claim payments to and the frequency of claims and 
     of the enactment of tort reforms. We control for 
     urbanization at the individual level, as discussed below. 
     Although we did not include controls for the number of 
     physicians per capita in the reported results because of 
     concerns regarding the exogeneity of that variable, 
     results conditional on physician density are virtually 
     identical. We include both a current and a one-year-lagged 
     effect to account for the possibility that past political 
     environments influence current law. Data on lawyers per 
     capita for 1980, 1985, and 1988 are from the American Bar 
     Foundation [1985, 1991]. Intervening years are calculated 
     by linear interpolation. Our data set is partially derived 
     from Campbell, Kessler, and Shepherd [1966]. The baseline 
     is defined as the ``negligence rule'' without any of the 
     liability-reducing reforms studied here and with mandatory 
     prejudgment. That is, (.063*$13,140)/.0064[nearly equal 
     to]$108,000 using the 95 percent upper bound of the 
     estimated mortality effect and (.053*$13,140)/.007[nearly 
     equal to]$1,000,000 using the actual DD estimate. Both of 
     these ratios are very large, the difference in absolute 
     magnitude of the two estimates results from the 
     denominator being very close to zero. Because we were 
     concerned that reforms might affect the rate of IHD 
     hospitalization as well as outcomes among patients 
     hospitalized, we estimated models analogous to the 
     specifications reported using population hospitalization 
     rates with IHD as the dependent variable. We found no 
     significant or substantial effects of either direct or 
     indirect reforms on IHD hospitalization rates. Models with 
     region effects only, analogous to the right halves of 
     Tables IV and V, again showed very similar effect 
     estimates. We also estimate separate time-trend effects 
     for early-reform (pre-1984) states. This approach may 
     permit the development of some evidence on ``longterm'' 
     effects of reforms on intensity growth rates. As noted 
     previously we find no evidence for such effects. Of 
     course, our lack of a pre-adoption baseline for the early-
     adopting states precludes DD identification and makes the 
     long-term conclusion more speculative. A follow-up study 
     using more recent expenditure and outcome data would 
     provide more convincing evidence on effects beyond five 
     years. In contrast to AMI, the slower rate of expenditure 
     growth between 1984 and 1990 for early-reform states (see 
     Table V) suggests that reforms may have longer term 
     effects on slowing IHD expenditure growth.


                               REFERENCES

       American Bar Foundation, The Lawyer Statistical Report 
     (Chicago, IL: 1985, 1991).
       Baldwin, L.M., et al., ``Defensive Medicine and 
     Obstetrics,'' JAMA, CCLXXIV (1995), 1606-10.
       Barker, D.K., ``The Effects of Tort Reform on Medical 
     Malpractice Insurance Markets: An Empirical Analysis,'' 
     Journal of Health Politics, Policy and Law, XVII (1992), 143-
     61.
       Bell, P.A., ``Legislative Intrusions into the Common Law of 
     Medical Malpractice: Thoughts about the Deterrent Effect of 
     Tort Liability,'' Syracuse Law Review XXXV (1984), 939-93.
       Campbell, T.J., D.P. Kessler, and G.B. Shepherd, 
     ``Liability Reforms' Causes and Economic Impacts'' in The 
     Mosaic of Economic Growth, R. Landau, et al. eds. (Stanford, 
     CA: Stanford University Press, 1996).
       Charles, S.C., C.E. Pyskoty, and A. Nelson, ``Physicians on 
     Trial-Self-Reported Reactions to Malpractice Trials,'' 
     Western Journal of Medicine, CXLVIII (1988), 358-60.
       Cooter, Robert D., and Thomas S. Ulen, ``An Economic Case 
     for Comparative Negligence,'' New York University Law Review, 
     LXI (1986), 1067-1110.
       Council of State Governments, Book of the States (Chicago, 
     IL: 1984 1990).
       Craswell, Richard, and John Calfee, ``Deterrence and 
     Uncertain Legal Standards,'' Journal of Law, Economics, and 
     Organization II (1986), 279-303.
       Danzon, P.M., ``The Frequency and Severity of Medical 
     Malpractice Claims,'' RAND R-2870-ICJ/HCFA, 1982.
       --Medical Malpractice: Theory, Evidence, and Public Policy 
     (Cambridge, MA: Harvard University Press, 1985).
       --, ``New Evidence on the Frequency and Severity of Medical 
     Malpractice Claims,'' RAND R-3410-lCJ, 1986.
       Farber, H.S., and M.J. White, ``Medical Malpractice: An 
     Empirical Examination of the Litigation Process,'' RAND 
     Journal of Economics, XXII (Summer 1991), 199-217.
       Harvard Medical Practice Study, Patients, Doctors, and 
     Lawyers: Medical Injury Malpractice Litigation, and Patient 
     Compensation in New York, a report of the Harvard Medical 
     Practice Study to the State of New York (Cambridge MA: The 
     President and Fellows of Harvard College, 1990).
       Keeton, W.P., et al., Prosser and Keeton on Torts, 5th. ed. 
     (St. Paul, MN: West Publishing Co., 1984).
       Leveno, K. J., et al., ``A Prospective Comparison of 
     Selective and Universal Electronic Fetal Monitoring in 34 995 
     Pregnancies,'' New England Journal of Medicine, CCCXV (1986), 
     614-i9.
       Localio, A. R., et al., ``Relationship between Malpractice 
     Claims and Ceasrean Delivery,'' JAMA, CCLXIX (1993), 366-73.
       Masters S. J., et al., ``Skull X-Ray Examinations after 
     Head Trauma: Recommendations by a Multidisciplinary Panel and 
     Validation Study, ``New England Journal of Medicine, CCCXVI 
     (1987).
       McClellan, Mark, ``Uncertainty, Health Care Technologies, 
     and Health Care Costs,'' American Economic Review, LXXXV 
     (1995), 38-44.
       McClellen, Mark, and Joseph P. Newhouse, ``The Marginal 
     Benefits of Medical Treatment Intensity: Acute Myocardial 
     Infarction in the Elderly,'' NBER Working Paper, 1995.
       McClellan, Mark, and Joseph R. Newhouse, ``The Marginal 
     Costs and Benefits of Medical Technology: Acute Myocardial 
     Infarction,'' Journal of Econometrics (1996), forthcoming.
       Moser, J., and R. Musaccio, ``The Cost of Medical 
     Professional Liability in the 1980s,'' Medical Practice 
     Management (Summer 1991), 3-9.
       National Center for Health Statistics, Health United States 
     (Washington, DC: U.S. Government Printing Office, 1994).
       Newhouse, J. P., ``Medical Care Costs: How Much Welfare 
     Loss?'' Journal of Economic Perspectives, VI (1992), 3-22.
       Physician Insurers Association of America (PIAA), Data 
     Sharing Reports (1993).

[[Page H6718]]

       Priest, George L., ``The Current Insurance Crisis and 
     Modern Tort Law,'' Yale Law Journal, XCVI (1987), 1521-89.
       Rabin, Robert L., ``Some Reflections on the Process of Tort 
     Reform, San Diego Law Review, XXV (1988), 13-48.
       Reynolds, R. A. J. A. Rizzo, and M. L. Gonzalez, ``The Cost 
     of Medical Professional Liability,'' JAMA CCLVII (1987), 
     2776-81.
       Rock, S. M., ``Malpractice Premiums and Primary Cesarian 
     Section Rates in New York and Illinois,'' Public Health 
     Reporter, CVIII (1988), 459-68.
       Shy, K. K., et al., ``Effects of Electronic Fetal-Heart-
     Rate Monitoring, as Compared with Periodic Auscultation, on 
     the Neurologic Development of Premature Infants,'' New 
     England Journal of Medicine, CCCXXII (1990), 588-93.
       Sloan, F. A., ``Experience Rating: Does It Make Sense for 
     Medical Malpractice Insurance?'' American Economic Review, 
     LXXX (1990), 128-33.
       Sloan, F. A., R. M. Mergenhagen and R. R. Bovbjerg, 
     ``Effects of Tort Reforms on the Value of Closed Medical 
     Malpractice Claims: A Microanalysis,'' Journal of Health 
     Politics, Policy and Law, XIV (1989), 663-89.
       U.S. Congress, Office of Technology Assessment, Impact of 
     Legal Reforms on Medical Malpractice Costs, OTA-BP-H-119 
     (Washington, DC: U.S. Government Printing Office).
       --, Defensive Medicine and Medical Malpractice, OTA-H-602 
     (Washington, DC: U.S. Government Printing Office, 1994).
       Weiler, R. C. et al., A Measure of Malpractice: Medical 
     Injury, Malpractice Litigation, and Patient Compensation 
     (Cambridge, MA: Harvard University Press, 1993).
       White, H., ``A Heteroskedasticity-Consistent Covariance 
     Martix Estimator and a Direct Test for Heteroskedasticity,'' 
     Econometrica, XLVII (1980), 817-38.
       Zukerman, S., R. R. Bovbjerg, and F. Sloan, ``Effects of 
     Tort Reforms and Other Factors on Medical Malpractice 
     Insurance Premiums,'' Inquiry, XXVII (1990), 167-82.

       Note.--Tables were not reproducible in the Record.

  Mr. REYNOLDS. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
West Virginia (Mrs. Capito).
  Mrs. CAPITO. Mr. Speaker, West Virginia's health care system and the 
health care system of many States are facing many challenges. But 
medical liability insurance has caused a mass exodus of doctors from my 
State of West Virginia.
  I live in Charleston, West Virginia, our capital city. We have one of 
the largest medical facilities in our State, the Charleston Area 
Medical Center, which was downgraded from a level one trauma center to 
a level three trauma center because we could not provide the 24 hour, 
7-day-a-week emergency care.
  Mr. Speaker, I challenge anybody to tell me about living in a capital 
city of any State in this Nation and you have to be air lifted out of 
your capital city, out of the largest medical facilities in your State 
if you have multiple injuries.

                              {time}  1245

  That is a sad story, but I can tell my colleagues what is going to be 
a sadder story if we do not fix this problem.
  Last week, a young boy 6 years old had a pen lodged in his windpipe. 
His parents rushed him to the emergency room. What happened, the 
emergency physician had to call all around to find somebody to treat 
him. Did they find anybody? No. He drives 3 hours to Cincinnati, Ohio, 
to find a specialist that can help this young man. What if he could not 
endure a 3-hour car ride?
  I challenge my colleagues, a tragedy is in the making. The perfect 
storm is created because of the high cost of medical liability 
insurance, and our doctors across the Nation and most especially in 
West Virginia are suffering, and the access and the quality care that 
we deserve as Americans is going to suffer as well.
  Without this Federal legislation, the exodus of our health care 
providers from the practice of medicine will continue, and patients 
will find it increasingly difficult to find the care. I urge all of my 
colleagues to recognize this critical and growing problem and to pass 
H.R. 4600. It will go a long way to helping the health care system in 
our State and our Nation rise and stay at the level that we expect.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield myself the balance of 
our time, and I probably will not take it all.
  I do ask a question, if this bill is supposed to be the end all, be 
all, then will someone please explain to me what would have been wrong 
with accepting the amendments that were very thoughtful, that were 
offered by Members of the House of Representatives, most of whom were 
Democrats? No, they did not get that opportunity.
  I do not know whether the gentleman from New York (Mr. Reynolds) 
cares to indulge in this particular colloquy or any other Republican or 
any Member of the House of Representatives. I ask my colleague from New 
York when he closes to point to the place in this legislation where 
savings are going to be passed to physicians.
  Let me give my colleagues what may not appear to be an exacting 
analogy. We pass a significant number of subsidies for farmers in the 
United States of America and I support those. We supported subsidies, 
for example, for the sugar industry and for wheat, but nowhere after 
those subsidies where sugar went down or wheat went down did we see 
Corn Flakes or candy go down. The consumer gets slapped every time, it 
does appear.
  Let me set the record straight. This is modeled on California, and we 
have more Members from California in this House of Representatives than 
from any other State in the Nation. We had the gentlewoman from 
California (Ms. Eshoo) come down here to talk about California. Let me 
tell my colleagues what they are not saying about MICRA, it is referred 
to.
  The California experience is perhaps in many respects the most 
telling fact having to do with this legislation since it is modeled on 
California. In 1975, California enacted into law the Medical Injury 
Compensation Reform Act, and this is the act after which many of the 
provisions of H.R. 4600 are modeled after, including caps on 
noneconomic damages, collateral source offsets and limitation on 
attorney's fees. Despite these reforms in California, premiums for 
medical malpractice in California grew more quickly between 1991 and 
2000 than in the Nation, 3\1/2\ percent versus 1.9 percent 
respectively, and between 1975 and 1993, California's health care costs 
rose 343 percent, almost double the rate of inflation.
  Not only does the evidence show that California's tort reform has 
failed to lower premiums for physicians, it also shows that 
California's insurance companies are reaping excessive profits in the 
aftermath of tort reform. In 1997, California's insurers earned more 
than $763 million, yet paid out less than $300 million to claims.
  Mr. Speaker, the gentleman from Massachusetts (Mr. Markey) offered an 
amendment yesterday that would direct insurers to use any savings 
received as a result of H.R. 4600 to reduce the premiums they charge 
their health care providers. If within 2 years of that enactment, his 
legislation called for insurers not realizing cost savings, then the 
provisions of H.R. 4600 relating to liability lawsuits and liability 
claims would not apply to any lawsuits and claims against providers 
insured by the insurance companies. That was defeated in the Committee 
on Rules by 2 to 8 and never will see the light of day here, a measure 
that would have given an opportunity for physicians to receive the 
benefits that would be saved.
  I want to harken back to 1993 when my colleagues on the other side of 
the aisle very skillfully built an infrastructure on radio and all I 
could hear, I was a new Member of Congress, all I could hear was the 
Democrats are having closed rules. People that did not even know what a 
rule was were calling in to the talk shows and saying those Democrats 
are horrible about closed rules. So little did I know that time would 
pass and I would become a member of the Committee on Rules, and what I 
am experiencing and what we experienced here today is a closed rule. If 
it was bad in 1993, it is bad in 2002.
  What closed rules have done and what they are doing is stopping the 
gentleman from Michigan (Mr. Stupak), who we heard from, the 
gentlewoman from California (Ms. Eshoo), the gentleman from 
Pennsylvania (Mr. Hoeffel) and the gentleman from New Jersey (Mr. 
Pascrell). Very thoughtful amendments, that if this body worked its 
will could have gone about the business of attending to.
  I am a lawyer for 40 years and I am proud of that, and what I learned 
in law school in torts, written by some of the more brilliant persons 
in the world, including those founders in England that gave us this 
great judicial system that we have, and that is that that process of 
punitive damages is embedded in our laws to make sure that people do 
not act grossly negligent.

[[Page H6719]]

  That said, most physicians, most health care providers are honest. 
There is nothing that is going to stop the bad physician from being bad 
in this particular measure, and punitive damages are what alerts the 
entire profession that they need to be careful. It is just that simple. 
I invite my colleague from New York to show me where the insurance 
companies are going to pass on to the physicians any savings and where 
H.R. 4600 does anything to lower insurance premiums.
  Mr. Speaker, I yield back the balance of my time.
  Mr. REYNOLDS. Mr. Speaker, I yield myself the remainder of my time.
  I thank the gentleman from Florida for some of his opportunity to 
share with passion his views on this legislation.
  First, both the Committee on the Judiciary, which passed the 
legislation out by voice vote, and the Committee on Energy and Commerce 
have had ample debate on this legislation before it came to the 
Committee on Rules and now on to the floor for consideration of by the 
entire body.
  Two Stanford University economists have conducted two extensive 
studies using national data on Medicare populations and concluded that 
patients from States that adopted direct medical care litigation 
reforms, and I will say that again for my Florida colleague, that the 
study which adopted and concluded that patients from States that 
adopted direct medical care litigation reforms, such as limits on 
damage awards, incur significantly lower hospital costs while suffering 
no increase in adverse health outcomes associated with the illness for 
which they were treated.
  Mr. Speaker, in public opinion, by a survey conducted by Wirthlin 
Worldwide for Health Care Liability Alliance, 71 percent of Americans 
agree that the main reason health care costs are rising is because of 
medical liability lawsuits; 78 percent of Americans say they are 
concerned about the access to care being affected because doctors are 
leaving the practices due to rising liability costs; 73 percent of 
Americans support reasonable limits on awards for pain and suffering in 
medical liability lawsuits; and more than 76 percent of Americans favor 
a law limiting the percentage on contingent fees paid by the patient.
  This legislation is intended to control escalation in lawsuit damage 
awards and slow the rising costs of medical malpractice insurance. The 
HEALTH Act would benefit patients because it will award injured 
patients unlimited economic damages. It will award injured patients 
noneconomic damages up to $250,000. It will award injured patients 
punitive damages of up to two times economic damages of $250,000 or 
whatever is higher. It establishes a fair share rule that allocates 
damage awards fairly and in proportion to a party's degree of fault, 
and it establishes a sliding scale of attorney's contingent fees, 
therefore maximizing the recovery for patients. It allows States the 
flexibility to establish or maintain their own laws on damage awards, 
whether higher or lower than those provided for in this bill.
  I hear my time is expiring. I urge a yes vote on the rule and on the 
underlying legislation, a yes vote for patients and families all across 
America.
  Mr. Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The previous question was ordered.
  The SPEAKER pro tempore (Mr. Isakson). The question is on the 
resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. HASTINGS of Florida. Mr. Speaker, I object to the vote on the 
ground that a quorum is not present and make the point of order that a 
quorum is not present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 221, 
nays 197, not voting 14, as follows:

                             [Roll No. 419]

                               YEAS--221

     Aderholt
     Akin
     Armey
     Baker
     Ballenger
     Barcia
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Cooksey
     Cox
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Pomeroy
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--197

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Duncan
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank
     Frost
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Harman
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Lynch
     Maloney (CT)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mollohan
     Moore
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Phelps
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Thompson (MS)
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--14

     Bachus
     Barr
     Bonior
     Buyer
     Callahan
     Maloney (NY)
     McDermott
     Meek (FL)
     Mink
     Paul
     Roukema
     Stump
     Thompson (CA)
     Thurman

                              {time}  1321

  Mrs. JONES of Ohio changed her vote from ``yea'' to ``nay.''

[[Page H6720]]

  So the resolution was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Mr. SENSENBRENNER. Mr. Speaker, pursuant to House Resolution 553, I 
call up the bill (H.R. 4600) to improve patient access to health care 
services and provide improved medical care by reducing the excessive 
burden the liability system places on the health care delivery system, 
and ask for its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Isakson). Pursuant to House Resolution 
553, the bill is considered read for amendment.
  The text of H.R. 4600 is as follows:

                               H.R. 4600

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Help Efficient, Accessible, 
     Low Cost, Timely Health Care (HEALTH) Act of 2002''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--
       (1) Effect on health care access and costs.--Congress finds 
     that our current civil justice system is adversely affecting 
     patient access to health care services, better patient care, 
     and cost-efficient health care, in that the health care 
     liability system is a costly and ineffective mechanism for 
     resolving claims of health care liability and compensating 
     injured patients, and is a deterrent to the sharing of 
     information among health care professionals which impedes 
     efforts to improve patient safety and quality of care.
       (2) Effect on interstate commerce.--Congress finds that the 
     health care and insurance industries are industries affecting 
     interstate commerce and the health care liability litigation 
     systems existing throughout the United States are activities 
     that affect interstate commerce by contributing to the high 
     costs of health care and premiums for health care liability 
     insurance purchased by health care system providers.
       (3) Effect on federal spending.--Congress finds that the 
     health care liability litigation systems existing throughout 
     the United States have a significant effect on the amount, 
     distribution, and use of Federal funds because of--
       (A) the large number of individuals who receive health care 
     benefits under programs operated or financed by the Federal 
     Government;
       (B) the large number of individuals who benefit because of 
     the exclusion from Federal taxes of the amounts spent to 
     provide them with health insurance benefits; and
       (C) the large number of health care providers who provide 
     items or services for which the Federal Government makes 
     payments.
       (b) Purpose.--It is the purpose of this Act to implement 
     reasonable, comprehensive, and effective health care 
     liability reforms designed to--
       (1) improve the availability of health care services in 
     cases in which health care liability actions have been shown 
     to be a factor in the decreased availability of services;
       (2) reduce the incidence of ``defensive medicine'' and 
     lower the cost of health care liability insurance, all of 
     which contribute to the escalation of health care costs;
       (3) ensure that persons with meritorious health care injury 
     claims receive fair and adequate compensation, including 
     reasonable noneconomic damages;
       (4) improve the fairness and cost-effectiveness of our 
     current health care liability system to resolve disputes 
     over, and provide compensation for, health care liability by 
     reducing uncertainty in the amount of compensation provided 
     to injured individuals; and
       (5) provide an increased sharing of information in the 
     health care system which will reduce unintended injury and 
     improve patient care.

     SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

       A health care lawsuit may be commenced no later than 3 
     years after the date of injury or 1 year after the claimant 
     discovers, or through the use of reasonable diligence should 
     have discovered, the injury, whichever occurs first. In no 
     event shall the time for commencement of a health care 
     lawsuit exceed 3 years, except that in the case of an alleged 
     injury sustained by a minor before the age of 6, a health 
     care lawsuit may be commenced by or on behalf of the minor 
     until the later of 3 years from the date of injury, or the 
     date on which the minor attains the age of 8.

     SEC. 4. COMPENSATING PATIENT INJURY.

       (a) Unlimited Amount of Damages for Actual Economic Losses 
     in Health Care Lawsuits.--In any health care lawsuit, the 
     full amount of a claimant's economic loss may be fully 
     recovered without limitation.
       (b) Additional Noneconomic Damages.--In any health care 
     lawsuit, the amount of noneconomic damages recovered may be 
     as much as $250,000, regardless of the number of parties 
     against whom the action is brought or the number of separate 
     claims or actions brought with respect to the same 
     occurrence.
       (c) No Discount of Award for Noneconomic Damages.--In any 
     health care lawsuit, an award for future noneconomic damages 
     shall not be discounted to present value. The jury shall not 
     be informed about the maximum award for noneconomic damages. 
     An award for noneconomic damages in excess of $250,000 shall 
     be reduced either before the entry of judgment, or by 
     amendment of the judgment after entry of judgment, and such 
     reduction shall be made before accounting for any other 
     reduction in damages required by law. If separate awards are 
     rendered for past and future noneconomic damages and the 
     combined awards exceed $250,000, the future noneconomic 
     damages shall be reduced first.
       (d) Fair Share Rule.--In any health care lawsuit, each 
     party shall be liable for that party's several share of any 
     damages only and not for the share of any other person. Each 
     party shall be liable only for the amount of damages 
     allocated to such party in direct proportion to such party's 
     percentage of responsibility. A separate judgment shall be 
     rendered against each such party for the amount allocated to 
     such party. For purposes of this section, the trier of fact 
     shall determine the proportion of responsibility of each 
     party for the claimant's harm.

     SEC. 5. MAXIMIZING PATIENT RECOVERY.

       (a) Court Supervision of Share of Damages Actually Paid to 
     Claimants.--In any health care lawsuit, the court shall 
     supervise the arrangements for payment of damages to protect 
     against conflicts of interest that may have the effect of 
     reducing the amount of damages awarded that are actually paid 
     to claimants. In particular, in any health care lawsuit in 
     which the attorney for a party claims a financial stake in 
     the outcome by virtue of a contingent fee, the court shall 
     have the power to restrict the payment of a claimant's damage 
     recovery to such attorney, and to redirect such damages to 
     the claimant based upon the interests of justice and 
     principles of equity. In no event shall the total of all 
     contingent fees for representing all claimants in a health 
     care lawsuit exceed the following limits:
       (1) 40 percent of the first $50,000 recovered by the 
     claimant(s).
       (2) 33\1/3\ percent of the next $50,000 recovered by the 
     claimant(s).
       (3) 25 percent of the next $500,000 recovered by the 
     claimant(s).
       (4) 15 percent of any amount by which the recovery by the 
     claimant(s) is in excess of $600,000.
       (b) Applicability.--The limitations in this section shall 
     apply whether the recovery is by judgment, settlement, 
     mediation, arbitration, or any other form of alternative 
     dispute resolution. In a health care lawsuit involving a 
     minor or incompetent person, a court retains the authority to 
     authorize or approve a fee that is less than the maximum 
     permitted under this section.

     SEC. 6. ADDITIONAL HEALTH BENEFITS.

       In any health care lawsuit, any party may introduce 
     evidence of collateral source benefits. If a party elects to 
     introduce such evidence, any opposing party may introduce 
     evidence of any amount paid or contributed or reasonably 
     likely to be paid or contributed in the future by or on 
     behalf of the opposing party to secure the right to such 
     collateral source benefits. No provider of collateral source 
     benefits shall recover any amount against the claimant or 
     receive any lien or credit against the claimant's recovery or 
     be equitably or legally subrogated to the right of the 
     claimant in a health care lawsuit. This section shall apply 
     to any health care lawsuit that is settled as well as a 
     health care lawsuit that is resolved by a fact finder.

     SEC. 7. PUNITIVE DAMAGES.

       (a) In General.--Punitive damages may, if otherwise 
     permitted by applicable State or Federal law, be awarded 
     against any person in a health care lawsuit only if it is 
     proven by clear and convincing evidence that such person 
     acted with malicious intent to injure the claimant, or that 
     such person deliberately failed to avoid unnecessary injury 
     that such person knew the claimant was substantially certain 
     to suffer. In any health care lawsuit where no judgment for 
     compensatory damages is rendered against such person, no 
     punitive damages may be awarded with respect to the claim in 
     such lawsuit. No demand for punitive damages shall be 
     included in a health care lawsuit as initially filed. A court 
     may allow a claimant to file an amended pleading for punitive 
     damages only upon a motion by the claimant and after a 
     finding by the court, upon review of supporting and opposing 
     affidavits or after a hearing, after weighing the evidence, 
     that the claimant has established by a substantial 
     probability that the claimant will prevail on the claim for 
     punitive damages. At the request of any party in a health 
     care lawsuit, the trier of fact shall consider in a separate 
     proceeding--
       (1) whether punitive damages are to be awarded and the 
     amount of such award; and
       (2) the amount of punitive damages following a 
     determination of punitive liability.

     If a separate proceeding is requested, evidence relevant only 
     to the claim for punitive damages, as determined by 
     applicable State law, shall be inadmissible in any proceeding 
     to determine whether compensatory damages are to be awarded.
       (b) Determining Amount of Punitive Damages.--
       (1) Factors considered.--In determining the amount of 
     punitive damages, the trier of fact shall consider only the 
     following:
       (A) the severity of the harm caused by the conduct of such 
     party;

[[Page H6721]]

       (B) the duration of the conduct or any concealment of it by 
     such party;
       (C) the profitability of the conduct to such party;
       (D) the number of products sold or medical procedures 
     rendered for compensation, as the case may be, by such party, 
     of the kind causing the harm complained of by the claimant;
       (E) any criminal penalties imposed on such party, as a 
     result of the conduct complained of by the claimant; and
       (F) the amount of any civil fines assessed against such 
     party as a result of the conduct complained of by the 
     claimant.
       (2) Maximum award.--The amount of punitive damages awarded 
     in a health care lawsuit may be up to as much as two times 
     the amount of economic damages awarded or $250,000, whichever 
     is greater. The jury shall not be informed of this 
     limitation.
       (c) No Civil Monetary Penalties for Products That Comply 
     With FDA Standards.--
       (1) In general.--No punitive damages may be awarded against 
     the manufacturer or distributor of a medical product based on 
     a claim that such product caused the claimant's harm where--
       (A)(i) such medical product was subject to premarket 
     approval or clearance by the Food and Drug Administration 
     with respect to the safety of the formulation or performance 
     of the aspect of such medical product which caused the 
     claimant's harm or the adequacy of the packaging or labeling 
     of such medical product; and
       (ii) such medical product was so approved or cleared; or
       (B) such medical product is generally recognized among 
     qualified experts as safe and effective pursuant to 
     conditions established by the Food and Drug Administration 
     and applicable Food and Drug Administration regulations, 
     including without limitation those related to packaging and 
     labeling.
       (2) Liability of health care providers.--A health care 
     provider who prescribes a drug or device (including blood 
     products) approved by the Food and Drug Administration shall 
     not be named as a party to a product liability lawsuit 
     involving such drug or device and shall not be liable to a 
     claimant in a class action lawsuit against the manufacturer, 
     distributor, or product seller of such drug or device.
       (3) Packaging.--In a health care lawsuit for harm which is 
     alleged to relate to the adequacy of the packaging or 
     labeling of a drug which is required to have tamper-resistant 
     packaging under regulations of the Secretary of Health and 
     Human Services (including labeling regulations related to 
     such packaging), the manufacturer or product seller of the 
     drug shall not be held liable for punitive damages unless 
     such packaging or labeling is found by the trier of fact by 
     clear and convincing evidence to be substantially out of 
     compliance with such regulations.
       (4) Exception.--Paragraph (1) shall not apply in any health 
     care lawsuit in which--
       (A) a person, before or after premarket approval or 
     clearance of such medical product, knowingly misrepresented 
     to or withheld from the Food and Drug Administration 
     information that is required to be submitted under the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) 
     or section 351 of the Public Health Service Act (42 U.S.C. 
     262) that is material and is causally related to the harm 
     which the claimant allegedly suffered; or
       (B) a person made an illegal payment to an official of the 
     Food and Drug Administration for the purpose of either 
     securing or maintaining approval or clearance of such medical 
     product.

     SEC. 8. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO 
                   CLAIMANTS IN HEALTH CARE LAWSUITS.

       (a) In General.--In any health care lawsuit, if an award of 
     future damages, without reduction to present value, equaling 
     or exceeding $50,000 is made against a party with sufficient 
     insurance or other assets to fund a periodic payment of such 
     a judgment, the court shall, at the request of any party, 
     enter a judgment ordering that the future damages be paid by 
     periodic payments in accordance with the Uniform Periodic 
     Payment of Judgments Act promulgated by the National 
     Conference of Commissioners on Uniform State Laws.
       (b) Applicability.--This section applies to all actions 
     which have not been first set for trial or retrial before the 
     effective date of this Act.

     SEC. 9. DEFINITIONS.

       In this Act:
       (1) Alternative dispute resolution system; adr.--The term 
     ``alternative dispute resolution system'' or ``ADR'' means a 
     system that provides for the resolution of health care 
     lawsuits in a manner other than through a civil action 
     brought in a State or Federal court.
       (2) Claimant.--The term ``claimant'' means any person who 
     brings a health care lawsuit, including a person who asserts 
     or claims a right to legal or equitable contribution, 
     indemnity or subrogation, arising out of a health care 
     liability claim or action, and any person on whose behalf 
     such a claim is asserted or such an action is brought, 
     whether deceased, incompetent, or a minor.
       (3) Collateral source benefits.--The term ``collateral 
     source benefits'' means any amount paid or reasonably likely 
     to be paid in the future to or on behalf of the claimant, or 
     any service, product or other benefit provided or reasonably 
     likely to be provided in the future to or on behalf of the 
     claimant, as a result of the injury or wrongful death, 
     pursuant to--
       (A) any State or Federal health, sickness, income-
     disability, accident, or workers' compensation law;
       (B) any health, sickness, income-disability, or accident 
     insurance that provides health benefits or income-disability 
     coverage;
       (C) any contract or agreement of any group, organization, 
     partnership, or corporation to provide, pay for, or reimburse 
     the cost of medical, hospital, dental, or income disability 
     benefits; and
       (D) any other publicly or privately funded program.
       (4) Compensatory damages.--The term ``compensatory 
     damages'' means objectively verifiable monetary losses 
     incurred as a result of the provision of, use of, or payment 
     for (or failure to provide, use, or pay for) health care 
     services or medical products, such as past and future medical 
     expenses, loss of past and future earnings, cost of obtaining 
     domestic services, loss of employment, and loss of business 
     or employment opportunities, damages for physical and 
     emotional pain, suffering, inconvenience, physical 
     impairment, mental anguish, disfigurement, loss of enjoyment 
     of life, loss of society and companionship, loss of 
     consortium (other than loss of domestic service), hedonic 
     damages, injury to reputation, and all other nonpecuniary 
     losses of any kind or nature. The term ``compensatory 
     damages'' includes economic damages and noneconomic damages, 
     as such terms are defined in this section.
       (5) Contingent fee.--The term ``contingent fee'' includes 
     all compensation to any person or persons which is payable 
     only if a recovery is effected on behalf of one or more 
     claimants.
       (6) Economic damages.--The term ``economic damages'' means 
     objectively verifiable monetary losses incurred as a result 
     of the provision of, use of, or payment for (or failure to 
     provide, use, or pay for) health care services or medical 
     products, such as past and future medical expenses, loss of 
     past and future earnings, cost of obtaining domestic 
     services, loss of employment, and loss of business or 
     employment opportunities.
       (7) Health care lawsuit.--The term ``health care lawsuit'' 
     means any health care liability claim concerning the 
     provision of health care goods or services affecting 
     interstate commerce, or any health care liability action 
     concerning the provision of health care goods or services 
     affecting interstate commerce, brought in a State or Federal 
     court or pursuant to an alternative dispute resolution 
     system, against a health care provider, a health care 
     organization, or the manufacturer, distributor, supplier, 
     marketer, promoter, or seller of a medical product, 
     regardless of the theory of liability on which the claim is 
     based, or the number of claimants, plaintiffs, defendants, or 
     other parties, or the number of claims or causes of action, 
     in which the claimant alleges a health care liability claim.
       (8) Health care liability action.--The term ``health care 
     liability action'' means a civil action brought in a State or 
     Federal Court or pursuant to an alternative dispute 
     resolution system, against a health care provider, a health 
     care organization, or the manufacturer, distributor, 
     supplier, marketer, promoter, or seller of a medical product, 
     regardless of the theory of liability on which the claim is 
     based, or the number of plaintiffs, defendants, or other 
     parties, or the number of causes of action, in which the 
     claimant alleges a health care liability claim.
       (9) Health care liability claim.--The term ``health care 
     liability claim'' means a demand by any person, whether or 
     not pursuant to ADR, against a health care provider, health 
     care organization, or the manufacturer, distributor, 
     supplier, marketer, promoter, or seller of a medical product, 
     including, but not limited to, third-party claims, cross-
     claims, counter-claims, or contribution claims, which are 
     based upon the provision of, use of, or payment for (or the 
     failure to provide, use, or pay for) health care services or 
     medical products, regardless of the theory of liability on 
     which the claim is based, or the number of plaintiffs, 
     defendants, or other parties, or the number of causes of 
     action.
       (10) Health care organization.--The term ``health care 
     organization'' means any person or entity which is obligated 
     to provide or pay for health benefits under any health plan, 
     including any person or entity acting under a contract or 
     arrangement with a health care organization to provide or 
     administer any health benefit.
       (11) Health care provider.--The term ``health care 
     provider'' means any person or entity required by State or 
     Federal laws or regulations to be licensed, registered, or 
     certified to provide health care services, and being either 
     so licensed, registered, or certified, or exempted from such 
     requirement by other statute or regulation.
       (12) Health care goods or services.--The term ``health care 
     goods or services'' means any goods or services provided by a 
     health care organization, provider, or by any individual 
     working under the supervision of a health care provider, that 
     relates to the diagnosis, prevention, or treatment of any 
     human disease or impairment, or the assessment of the health 
     of human beings.
       (13) Malicious intent to injure.--The term ``malicious 
     intent to injure'' means intentionally causing or attempting 
     to cause

[[Page H6722]]

     physical injury other than providing health care goods or 
     services.
       (14) Medical product.--The term ``medical product'' means a 
     drug or device intended for humans, and the terms ``drug'' 
     and ``device'' have the meanings given such terms in sections 
     201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic 
     Act (21 U.S.C. 321), respectively, including any component or 
     raw material used therein, but excluding health care 
     services.
       (15) Noneconomic damages.--The term ``noneconomic damages'' 
     means damages for physical and emotional pain, suffering, 
     inconvenience, physical impairment, mental anguish, 
     disfigurement, loss of enjoyment of life, loss of society and 
     companionship, loss of consortium (other than loss of 
     domestic service), hedonic damages, injury to reputation, and 
     all other nonpecuniary losses of any kind or nature.
       (16) Punitive damages.--The term ``punitive damages'' means 
     damages awarded, for the purpose of punishment or deterrence, 
     and not solely for compensatory purposes, against a health 
     care provider, health care organization, or a manufacturer, 
     distributor, or supplier of a medical product. Punitive 
     damages are neither economic nor noneconomic damages.
       (17) Recovery.--The term ``recovery'' means the net sum 
     recovered after deducting any disbursements or costs incurred 
     in connection with prosecution or settlement of the claim, 
     including all costs paid or advanced by any person. Costs of 
     health care incurred by the plaintiff and the attorneys' 
     office overhead costs or charges for legal services are not 
     deductible disbursements or costs for such purpose.
       (18) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, the Trust Territory of the Pacific Islands, 
     and any other territory or possession of the United States, 
     or any political subdivision thereof.

     SEC. 10. EFFECT ON OTHER LAWS.

       (a) Vaccine Injury.--
       (1) To the extent that title XXI of the Public Health 
     Service Act establishes a Federal rule of law applicable to a 
     civil action brought for a vaccine-related injury or death--
       (A) this Act does not affect the application of the rule of 
     law to such an action; and
       (B) any rule of law prescribed by this Act in conflict with 
     a rule of law of such title XXI shall not apply to such 
     action.
       (2) If there is an aspect of a civil action brought for a 
     vaccine-related injury or death to which a Federal rule of 
     law under title XXI of the Public Health Service Act does not 
     apply, then this Act or otherwise applicable law (as 
     determined under this Act) will apply to such aspect of such 
     action.
       (b) Other Federal Law.--Except as provided in this section, 
     nothing in this Act shall be deemed to affect any defense 
     available to a defendant in a health care lawsuit or action 
     under any other provision of Federal law.

     SEC. 11. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

       (a) Health Care Lawsuits.--The provisions governing health 
     care lawsuits set forth in this Act preempt, subject to 
     subsections (b) and (c), State law to the extent that State 
     law prevents the application of any provisions of law 
     established by or under this Act. The provisions governing 
     health care lawsuits set forth in this Act supersede chapter 
     171 of title 28, United States Code, to the extent that such 
     chapter--
       (1) provides for a greater amount of damages or contingent 
     fees, a longer period in which a health care lawsuit may be 
     commenced, or a reduced applicability or scope of periodic 
     payment of future damages, than provided in this Act; or
       (2) prohibits the introduction of evidence regarding 
     collateral source benefits, or mandates or permits 
     subrogation or a lien on collateral source benefits.
       (b) Protection of States' Rights.--Any issue that is not 
     governed by any provision of law established by or under this 
     Act (including State standards of negligence) shall be 
     governed by otherwise applicable State or Federal law. This 
     Act does not preempt or supersede any law that imposes 
     greater protections (such as a shorter statute of 
     limitations) for health care providers and health care 
     organizations from liability, loss, or damages than those 
     provided by this Act.
       (c) State Flexibility.--No provision of this Act shall be 
     construed to preempt--
       (1) any State statutory limit (whether enacted before, on, 
     or after the date of the enactment of this Act) on the amount 
     of compensatory or punitive damages (or the total amount of 
     damages) that may be awarded in a health care lawsuit, 
     whether or not such State limit permits the recovery of a 
     specific dollar amount of damages that is greater or lesser 
     than is provided for under this Act, notwithstanding section 
     4(a); or
       (2) any defense available to a party in a health care 
     lawsuit under any other provision of State or Federal law.

     SEC. 12. APPLICABILITY; EFFECTIVE DATE.

       This Act shall apply to any health care lawsuit brought in 
     a Federal or State court, or subject to an alternative 
     dispute resolution system, that is initiated on or after the 
     date of the enactment of this Act, except that any health 
     care lawsuit arising from an injury occurring prior to the 
     date of the enactment of this Act shall be governed by the 
     applicable statute of limitations provisions in effect at the 
     time the injury occurred.

  The SPEAKER pro tempore. In lieu of the amendments recommended by the 
Committee on the Judiciary and the Committee on Energy and Commerce, 
the amendment in the nature of a substitute printed in House Report 
107-697 is adopted.
  The text of the amendment in the nature of a substitute printed in 
House Report 107-697 is as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Help Efficient, Accessible, 
     Low-cost, Timely Healthcare (HEALTH) Act of 2002''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--
       (1) Effect on health care access and costs.--Congress finds 
     that our current civil justice system is adversely affecting 
     patient access to health care services, better patient care, 
     and cost-efficient health care, in that the health care 
     liability system is a costly and ineffective mechanism for 
     resolving claims of health care liability and compensating 
     injured patients, and is a deterrent to the sharing of 
     information among health care professionals which impedes 
     efforts to improve patient safety and quality of care.
       (2) Effect on interstate commerce.--Congress finds that the 
     health care and insurance industries are industries affecting 
     interstate commerce and the health care liability litigation 
     systems existing throughout the United States are activities 
     that affect interstate commerce by contributing to the high 
     costs of health care and premiums for health care liability 
     insurance purchased by health care system providers.
       (3) Effect on federal spending.--Congress finds that the 
     health care liability litigation systems existing throughout 
     the United States have a significant effect on the amount, 
     distribution, and use of Federal funds because of--
       (A) the large number of individuals who receive health care 
     benefits under programs operated or financed by the Federal 
     Government;
       (B) the large number of individuals who benefit because of 
     the exclusion from Federal taxes of the amounts spent to 
     provide them with health insurance benefits; and
       (C) the large number of health care providers who provide 
     items or services for which the Federal Government makes 
     payments.
       (b) Purpose.--It is the purpose of this Act to implement 
     reasonable, comprehensive, and effective health care 
     liability reforms designed to--
       (1) improve the availability of health care services in 
     cases in which health care liability actions have been shown 
     to be a factor in the decreased availability of services;
       (2) reduce the incidence of ``defensive medicine'' and 
     lower the cost of health care liability insurance, all of 
     which contribute to the escalation of health care costs;
       (3) ensure that persons with meritorious health care injury 
     claims receive fair and adequate compensation, including 
     reasonable noneconomic damages;
       (4) improve the fairness and cost-effectiveness of our 
     current health care liability system to resolve disputes 
     over, and provide compensation for, health care liability by 
     reducing uncertainty in the amount of compensation provided 
     to injured individuals;
       (5) provide an increased sharing of information in the 
     health care system which will reduce unintended injury and 
     improve patient care.

     SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

       The time for the commencement of a health care lawsuit 
     shall be 3 years after the date of manifestation of injury or 
     1 year after the claimant discovers, or through the use of 
     reasonable diligence should have discovered, the injury, 
     whichever occurs first. In no event shall the time for 
     commencement of a health care lawsuit exceed 3 years after 
     the date of manifestation of injury unless tolled for any of 
     the following:
       (1) Upon proof of fraud;
       (2) Intentional concealment; or
       (3) The presence of a foreign body, which has no 
     therapeutic or diagnostic purpose or effect, in the person of 
     the injured person.

     Actions by a minor shall be commenced within 3 years from the 
     date of the alleged manifestation of injury except that 
     actions by a minor under the full age of 6 years shall be 
     commenced within 3 years of manifestation of injury or prior 
     to the minor's 8th birthday, whichever provides a longer 
     period. Such time limitation shall be tolled for minors for 
     any period during which a parent or guardian and a health 
     care provider or health care organization have committed 
     fraud or collusion in the failure to bring an action on 
     behalf of the injured minor.

     SEC. 4. COMPENSATING PATIENT INJURY.

       (a) Unlimited Amount of Damages for Actual Economic Losses 
     in Health Care Lawsuits.--In any health care lawsuit, the 
     full amount of a claimant's economic loss may be fully 
     recovered without limitation.
       (b) Additional Noneconomic Damages.--In any health care 
     lawsuit, the amount of noneconomic damages recovered may be 
     as much as $250,000, regardless of the number of parties 
     against whom the action is brought or the number of separate 
     claims or actions brought with respect to the same 
     occurrence.

[[Page H6723]]

       (c) No Discount of Award for Noneconomic Damages.--In any 
     health care lawsuit, an award for future noneconomic damages 
     shall not be discounted to present value. The jury shall not 
     be informed about the maximum award for noneconomic damages. 
     An award for noneconomic damages in excess of $250,000 shall 
     be reduced either before the entry of judgment, or by 
     amendment of the judgment after entry of judgment, and such 
     reduction shall be made before accounting for any other 
     reduction in damages required by law. If separate awards are 
     rendered for past and future noneconomic damages and the 
     combined awards exceed $250,000, the future noneconomic 
     damages shall be reduced first.
       (d) Fair Share Rule.--In any health care lawsuit, each 
     party shall be liable for that party's several share of any 
     damages only and not for the share of any other person. Each 
     party shall be liable only for the amount of damages 
     allocated to such party in direct proportion to such party's 
     percentage of responsibility. A separate judgment shall be 
     rendered against each such party for the amount allocated to 
     such party. For purposes of this section, the trier of fact 
     shall determine the proportion of responsibility of each 
     party for the claimant's harm.

     SEC. 5. MAXIMIZING PATIENT RECOVERY.

       (a) Court Supervision of Share of Damages Actually Paid to 
     Claimants.--In any health care lawsuit, the court shall 
     supervise the arrangements for payment of damages to protect 
     against conflicts of interest that may have the effect of 
     reducing the amount of damages awarded that are actually paid 
     to claimants. In particular, in any health care lawsuit in 
     which the attorney for a party claims a financial stake in 
     the outcome by virtue of a contingent fee, the court shall 
     have the power to restrict the payment of a claimant's damage 
     recovery to such attorney, and to redirect such damages to 
     the claimant based upon the interests of justice and 
     principles of equity. In no event shall the total of all 
     contingent fees for representing all claimants in a health 
     care lawsuit exceed the following limits:
       (1) 40 percent of the first $50,000 recovered by the 
     claimant(s).
       (2) 33\1/3\ percent of the next $50,000 recovered by the 
     claimant(s).
       (3) 25 percent of the next $500,000 recovered by the 
     claimant(s).
       (4) 15 percent of any amount by which the recovery by the 
     claimant(s) is in excess of $600,000.
       (b) Applicability.--The limitations in this section shall 
     apply whether the recovery is by judgment, settlement, 
     mediation, arbitration, or any other form of alternative 
     dispute resolution. In a health care lawsuit involving a 
     minor or incompetent person, a court retains the authority to 
     authorize or approve a fee that is less than the maximum 
     permitted under this section.

     SEC. 6. ADDITIONAL HEALTH BENEFITS.

       In any health care lawsuit, any party may introduce 
     evidence of collateral source benefits. If a party elects to 
     introduce such evidence, any opposing party may introduce 
     evidence of any amount paid or contributed or reasonably 
     likely to be paid or contributed in the future by or on 
     behalf of the opposing party to secure the right to such 
     collateral source benefits. No provider of collateral source 
     benefits shall recover any amount against the claimant or 
     receive any lien or credit against the claimant's recovery or 
     be equitably or legally subrogated to the right of the 
     claimant in a health care lawsuit. This section shall apply 
     to any health care lawsuit that is settled as well as a 
     health care lawsuit that is resolved by a fact finder. This 
     section shall not apply to section 1862(b) (42 U.S.C. 
     1395y(b)) or section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) of 
     the Social Security Act.

     SEC. 7. PUNITIVE DAMAGES.

       (a) In General.--Punitive damages may, if otherwise 
     permitted by applicable State or Federal law, be awarded 
     against any person in a health care lawsuit only if it is 
     proven by clear and convincing evidence that such person 
     acted with malicious intent to injure the claimant, or that 
     such person deliberately failed to avoid unnecessary injury 
     that such person knew the claimant was substantially certain 
     to suffer. In any health care lawsuit where no judgment for 
     compensatory damages is rendered against such person, no 
     punitive damages may be awarded with respect to the claim in 
     such lawsuit. No demand for punitive damages shall be 
     included in a health care lawsuit as initially filed. A court 
     may allow a claimant to file an amended pleading for punitive 
     damages only upon a motion by the claimant and after a 
     finding by the court, upon review of supporting and opposing 
     affidavits or after a hearing, after weighing the evidence, 
     that the claimant has established by a substantial 
     probability that the claimant will prevail on the claim for 
     punitive damages. At the request of any party in a health 
     care lawsuit, the trier of fact shall consider in a separate 
     proceeding--
       (1) whether punitive damages are to be awarded and the 
     amount of such award; and
       (2) the amount of punitive damages following a 
     determination of punitive liability.
     If a separate proceeding is requested, evidence relevant only 
     to the claim for punitive damages, as determined by 
     applicable State law, shall be inadmissible in any proceeding 
     to determine whether compensatory damages are to be awarded.
       (b) Determining Amount of Punitive Damages.--
       (1) Factors considered.--In determining the amount of 
     punitive damages, the trier of fact shall consider only the 
     following:
       (A) the severity of the harm caused by the conduct of such 
     party;
       (B) the duration of the conduct or any concealment of it by 
     such party;
       (C) the profitability of the conduct to such party;
       (D) the number of products sold or medical procedures 
     rendered for compensation, as the case may be, by such party, 
     of the kind causing the harm complained of by the claimant;
       (E) any criminal penalties imposed on such party, as a 
     result of the conduct complained of by the claimant; and
       (F) the amount of any civil fines assessed against such 
     party as a result of the conduct complained of by the 
     claimant.
       (2) Maximum award.--The amount of punitive damages awarded 
     in a health care lawsuit may be up to as much as two times 
     the amount of economic damages awarded or $250,000, whichever 
     is greater. The jury shall not be informed of this 
     limitation.
       (c) No Civil Monetary Penalties for Products That Comply 
     With FDA Standards.--
       (1) In general.--No punitive damages may be awarded against 
     the manufacturer or distributor of a medical product based on 
     a claim that such product caused the claimant's harm where--
       (A)(i) such medical product was subject to premarket 
     approval or clearance by the Food and Drug Administration 
     with respect to the safety of the formulation or performance 
     of the aspect of such medical product which caused the 
     claimant's harm or the adequacy of the packaging or labeling 
     of such medical product; and
       (ii) such medical product was so approved or cleared; or
       (B) such medical product is generally recognized among 
     qualified experts as safe and effective pursuant to 
     conditions established by the Food and Drug Administration 
     and applicable Food and Drug Administration regulations, 
     including without limitation those related to packaging and 
     labeling, unless the Food and Drug Administration has 
     determined that such medical product was not manufactured or 
     distributed in substantial compliance with applicable Food 
     and Drug Administration statutes and regulations.
       (2) Liability of health care providers.--A health care 
     provider who prescribes a drug or device (including blood 
     products) approved by the Food and Drug Administration shall 
     not be named as a party to a product liability lawsuit 
     involving such drug or device and shall not be liable to a 
     claimant in a class action lawsuit against the manufacturer, 
     distributor, or product seller of such drug or device.
       (3) Packaging.--In a health care lawsuit for harm which is 
     alleged to relate to the adequacy of the packaging or 
     labeling of a drug which is required to have tamper-resistant 
     packaging under regulations of the Secretary of Health and 
     Human Services (including labeling regulations related to 
     such packaging), the manufacturer or product seller of the 
     drug shall not be held liable for punitive damages unless 
     such packaging or labeling is found by the trier of fact by 
     clear and convincing evidence to be substantially out of 
     compliance with such regulations.
       (4) Exception.--Paragraph (1) shall not apply in any health 
     care lawsuit in which--
       (A) a person, before or after premarket approval or 
     clearance of such medical product, knowingly misrepresented 
     to or withheld from the Food and Drug Administration 
     information that is required to be submitted under the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) 
     or section 351 of the Public Health Service Act (42 U.S.C. 
     262) that is material and is causally related to the harm 
     which the claimant allegedly suffered; or
       (B) a person made an illegal payment to an official of the 
     Food and Drug Administration for the purpose of either 
     securing or maintaining approval or clearance of such medical 
     product.

     SEC. 8. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO 
                   CLAIMANTS IN HEALTH CARE LAWSUITS.

       (a) In General.--In any health care lawsuit, if an award of 
     future damages, without reduction to present value, equaling 
     or exceeding $50,000 is made against a party with sufficient 
     insurance or other assets to fund a periodic payment of such 
     a judgment, the court shall, at the request of any party, 
     enter a judgment ordering that the future damages be paid by 
     periodic payments in accordance with the Uniform Periodic 
     Payment of Judgments Act promulgated by the National 
     Conference of Commissioners on Uniform State Laws.
       (b) Applicability.--This section applies to all actions 
     which have not been first set for trial or retrial before the 
     effective date of this Act.

     SEC. 9. DEFINITIONS.

       In this Act:
       (1) Alternative dispute resolution system; adr.--The term 
     ``alternative dispute resolution system'' or ``ADR'' means a 
     system that provides for the resolution of health care 
     lawsuits in a manner other than through a civil action 
     brought in a State or Federal court.
       (2) Claimant.--The term ``claimant'' means any person who 
     brings a health care lawsuit, including a person who asserts 
     or claims a right to legal or equitable contribution, 
     indemnity or subrogation, arising out

[[Page H6724]]

     of a health care liability claim or action, and any person on 
     whose behalf such a claim is asserted or such an action is 
     brought, whether deceased, incompetent, or a minor.
       (3) Collateral source benefits.--The term ``collateral 
     source benefits'' means any amount paid or reasonably likely 
     to be paid in the future to or on behalf of the claimant, or 
     any service, product or other benefit provided or reasonably 
     likely to be provided in the future to or on behalf of the 
     claimant, as a result of the injury or wrongful death, 
     pursuant to--
       (A) any State or Federal health, sickness, income-
     disability, accident, or workers' compensation law;
       (B) any health, sickness, income-disability, or accident 
     insurance that provides health benefits or income-disability 
     coverage;
       (C) any contract or agreement of any group, organization, 
     partnership, or corporation to provide, pay for, or reimburse 
     the cost of medical, hospital, dental, or income disability 
     benefits; and
       (D) any other publicly or privately funded program.
       (4) Compensatory damages.--The term ``compensatory 
     damages'' means objectively verifiable monetary losses 
     incurred as a result of the provision of, use of, or payment 
     for (or failure to provide, use, or pay for) health care 
     services or medical products, such as past and future medical 
     expenses, loss of past and future earnings, cost of obtaining 
     domestic services, loss of employment, and loss of business 
     or employment opportunities, damages for physical and 
     emotional pain, suffering, inconvenience, physical 
     impairment, mental anguish, disfigurement, loss of enjoyment 
     of life, loss of society and companionship, loss of 
     consortium (other than loss of domestic service), hedonic 
     damages, injury to reputation, and all other nonpecuniary 
     losses of any kind or nature. The term ``compensatory 
     damages'' includes economic damages and noneconomic damages, 
     as such terms are defined in this section.
       (5) Contingent fee.--The term ``contingent fee'' includes 
     all compensation to any person or persons which is payable 
     only if a recovery is effected on behalf of one or more 
     claimants.
       (6) Economic damages.--The term ``economic damages'' means 
     objectively verifiable monetary losses incurred as a result 
     of the provision of, use of, or payment for (or failure to 
     provide, use, or pay for) health care services or medical 
     products, such as past and future medical expenses, loss of 
     past and future earnings, cost of obtaining domestic 
     services, loss of employment, and loss of business or 
     employment opportunities.
       (7) Health care lawsuit.--The term ``health care lawsuit'' 
     means any health care liability claim concerning the 
     provision of health care goods or services affecting 
     interstate commerce, or any health care liability action 
     concerning the provision of health care goods or services 
     affecting interstate commerce, brought in a State or Federal 
     court or pursuant to an alternative dispute resolution 
     system, against a health care provider, a health care 
     organization, or the manufacturer, distributor, supplier, 
     marketer, promoter, or seller of a medical product, 
     regardless of the theory of liability on which the claim is 
     based, or the number of claimants, plaintiffs, defendants, or 
     other parties, or the number of claims or causes of action, 
     in which the claimant alleges a health care liability claim.
       (8) Health care liability action.--The term ``health care 
     liability action'' means a civil action brought in a State or 
     Federal Court or pursuant to an alternative dispute 
     resolution system, against a health care provider, a health 
     care organization, or the manufacturer, distributor, 
     supplier, marketer, promoter, or seller of a medical product, 
     regardless of the theory of liability on which the claim is 
     based, or the number of plaintiffs, defendants, or other 
     parties, or the number of causes of action, in which the 
     claimant alleges a health care liability claim.
       (9) Health care liability claim.--The term ``health care 
     liability claim'' means a demand by any person, whether or 
     not pursuant to ADR, against a health care provider, health 
     care organization, or the manufacturer, distributor, 
     supplier, marketer, promoter, or seller of a medical product, 
     including, but not limited to, third-party claims, cross-
     claims, counter-claims, or contribution claims, which are 
     based upon the provision of, use of, or payment for (or the 
     failure to provide, use, or pay for) health care services or 
     medical products, regardless of the theory of liability on 
     which the claim is based, or the number of plaintiffs, 
     defendants, or other parties, or the number of causes of 
     action.
       (10) Health care organization.--The term ``health care 
     organization'' means any person or entity which is obligated 
     to provide or pay for health benefits under any health plan, 
     including any person or entity acting under a contract or 
     arrangement with a health care organization to provide or 
     administer any health benefit.
       (11) Health care provider.--The term ``health care 
     provider'' means any person or entity required by State or 
     Federal laws or regulations to be licensed, registered, or 
     certified to provide health care services, and being either 
     so licensed, registered, or certified, or exempted from such 
     requirement by other statute or regulation.
       (12) Health care goods or services.--The term ``health care 
     goods or services'' means any goods or services provided by a 
     health care organization, provider, or by any individual 
     working under the supervision of a health care provider, that 
     relates to the diagnosis, prevention, or treatment of any 
     human disease or impairment, or the assessment of the health 
     of human beings.
       (13) Malicious intent to injure.--The term ``malicious 
     intent to injure'' means intentionally causing or attempting 
     to cause physical injury other than providing health care 
     goods or services.
       (14) Medical product.--The term ``medical product'' means a 
     drug or device intended for humans, and the terms ``drug'' 
     and ``device'' have the meanings given such terms in sections 
     201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic 
     Act (21 U.S.C. 321), respectively, including any component or 
     raw material used therein, but excluding health care 
     services.
       (15) Noneconomic damages.--The term ``noneconomic damages'' 
     means damages for physical and emotional pain, suffering, 
     inconvenience, physical impairment, mental anguish, 
     disfigurement, loss of enjoyment of life, loss of society and 
     companionship, loss of consortium (other than loss of 
     domestic service), hedonic damages, injury to reputation, and 
     all other nonpecuniary losses of any kind or nature.
       (16) Punitive damages.--The term ``punitive damages'' means 
     damages awarded, for the purpose of punishment or deterrence, 
     and not solely for compensatory purposes, against a health 
     care provider, health care organization, or a manufacturer, 
     distributor, or supplier of a medical product. Punitive 
     damages are neither economic nor noneconomic damages.
       (17) Recovery.--The term ``recovery'' means the net sum 
     recovered after deducting any disbursements or costs incurred 
     in connection with prosecution or settlement of the claim, 
     including all costs paid or advanced by any person. Costs of 
     health care incurred by the plaintiff and the attorneys' 
     office overhead costs or charges for legal services are not 
     deductible disbursements or costs for such purpose.
       (18) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, the Trust Territory of the Pacific Islands, 
     and any other territory or possession of the United States, 
     or any political subdivision thereof.

     SEC. 10. EFFECT ON OTHER LAWS.

       (a) Vaccine Injury.--
       (1) To the extent that title XXI of the Public Health 
     Service Act establishes a Federal rule of law applicable to a 
     civil action brought for a vaccine-related injury or death--
       (A) this Act does not affect the application of the rule of 
     law to such an action; and
       (B) any rule of law prescribed by this Act in conflict with 
     a rule of law of such title XXI shall not apply to such 
     action.
       (2) If there is an aspect of a civil action brought for a 
     vaccine-related injury or death to which a Federal rule of 
     law under title XXI of the Public Health Service Act does not 
     apply, then this Act or otherwise applicable law (as 
     determined under this Act) will apply to such aspect of such 
     action.
       (b) Other Federal Law.--Except as provided in this section, 
     nothing in this Act shall be deemed to affect any defense 
     available to a defendant in a health care lawsuit or action 
     under any other provision of Federal law.

     SEC. 11. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

       (a) Health Care Lawsuits.--The provisions governing health 
     care lawsuits set forth in this Act preempt, subject to 
     subsections (b) and (c), State law to the extent that State 
     law prevents the application of any provisions of law 
     established by or under this Act. The provisions governing 
     health care lawsuits set forth in this Act supersede chapter 
     171 of title 28, United States Code, to the extent that such 
     chapter--
       (1) provides for a greater amount of damages or contingent 
     fees, a longer period in which a health care lawsuit may be 
     commenced, or a reduced applicability or scope of periodic 
     payment of future damages, than provided in this Act; or
       (2) prohibits the introduction of evidence regarding 
     collateral source benefits, or mandates or permits 
     subrogation or a lien on collateral source benefits.
       (b) Protection of States' Rights.--Any issue that is not 
     governed by any provision of law established by or under this 
     Act (including State standards of negligence) shall be 
     governed by otherwise applicable State or Federal law. This 
     Act does not preempt or supersede any law that imposes 
     greater protections (such as a shorter statute of 
     limitations) for health care providers and health care 
     organizations from liability, loss, or damages than those 
     provided by this Act.
       (c) State Flexibility.--No provision of this Act shall be 
     construed to preempt--
       (1) any State statutory limit (whether enacted before, on, 
     or after the date of the enactment of this Act) on the amount 
     of compensatory or punitive damages (or the total amount of 
     damages) that may be awarded in a health care lawsuit, 
     whether or not such State limit permits the recovery of a 
     specific dollar amount of damages that is greater or lesser 
     than is provided for under this Act, notwithstanding section 
     4(a); or
       (2) any defense available to a party in a health care 
     lawsuit under any other provision of State or Federal law.

[[Page H6725]]

     SEC. 12. APPLICABILITY; EFFECTIVE DATE.

       This Act shall apply to any health care lawsuit brought in 
     a Federal or State court, or subject to an alternative 
     dispute resolution system, that is initiated on or after the 
     date of the enactment of this Act, except that any health 
     care lawsuit arising from an injury occurring prior to the 
     date of the enactment of this Act shall be governed by the 
     applicable statute of limitations provisions in effect at the 
     time the injury occurred.

     SEC. 13. SENSE OF CONGRESS.

       It is the sense of Congress that a health insurer should be 
     liable for damages for harm caused when it makes a decision 
     as to what care is medically necessary and appropriate.

  The SPEAKER pro tempore. The gentleman from Wisconsin (Mr. 
Sensenbrenner) and the gentleman from Michigan (Mr. Conyers) each will 
control 20 minutes and the gentleman from Pennsylvania (Mr. Greenwood) 
and the gentleman from Ohio (Mr. Brown) each will control 10 minutes.
  The Chair recognizes the gentleman from Wisconsin (Mr. 
Sensenbrenner).


                             General Leave

  Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and to include extraneous material on the bill, H.R. 
4600, currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, a national insurance crisis is ruining the Nation's 
essential health care system. Medical professional liability insurance 
rates have soared, causing many insurers to either drop coverage or 
raise premiums to unaffordable levels. Doctors and other health care 
providers are being forced to abandon patients and practices, 
particularly in high-risk specialties such as emergency medicine and 
obstetrics and gynecology. This trend has had a particularly negative 
impact upon women, low-income neighborhoods and rural areas, and in 
medical schools large and small.
  When California faced a similar crisis over 25 years ago, Democratic 
Governor Jerry Brown, following the recommendation of the gentleman 
from California (Mr. Waxman), then chairman of the California 
Assembly's Select Committee on Medical Malpractice, enacted the Medical 
Injury Compensation Reform Act, known as MICRA.
  MICRA's reforms include a $250,000 cap on noneconomic damages, limits 
on the contingency fees lawyers can charge, and provisions that prevent 
double recoveries. According to the Los Angeles Times, ``Because of the 
1975 tort reform, doctors in California are largely unaffected by 
increasing insurance rates. But the situation is dire in other 
States.'' Exhaustive research by two Stanford University economists has 
confirmed that direct medical care litigation reforms, including caps 
on noneconomic damage awards, generally reduce malpractice claims 
rates, insurance premiums and other stresses upon doctors that may 
impair the quality of medical care.
  The HEALTH Act includes MICRA's reforms, while also creating a fair 
share rule by which defendants are only liable for the percentage of 
damages for which they are at fault. Additionally, H.R. 4600 sets 
reasonable guidelines, but not caps, on punitive damage awards. Under 
this legislation, a punitive damage award cannot exceed the greater of 
$250,000, or two times the amount of economic damages that are awarded.
  The HEALTH Act will accomplish reform without limiting compensation 
for 100 percent, or all of plaintiffs' economic losses, meaning any 
loss which can be quantified and to which a receipt can be attached. 
These include their medical costs, lost wages, future lost wages, 
rehabilitation costs, and any other economic out-of-pocket loss 
suffered as a result of a health care injury.
  Additionally, although this legislation places a cap on noneconomic 
damages, it also allows deserving victims to keep more of their jury 
awards by limiting the percentage that lawyers can take. This is 
accomplished according to a sliding scale that caps legal fees down to 
15 percent of awards exceeding $600,000. Without such reforms, lawyers 
can take their standard one-third to 40 percent cut from whatever 
victims recover. Enactment of this bill will allow victims to keep 
roughly 75 percent of awards under $600,000 and 85 percent of awards 
over that amount. Under the HEALTH Act, the larger the demonstrable, 
real-life economic damages are, the more the victims will get to keep.
  A recent survey conducted for the bipartisan legal reform 
organization Common Good, whose board of advisers includes former 
Clinton administration Deputy Attorney General Eric Holder and former 
Democratic Senator Paul Simon of Illinois, reveals the dire need for 
regulating the current medical tort system in America. According to the 
survey, which was conducted by the reputable Harris organization:
  First, more than three-fourths of physicians feel that concern about 
malpractice litigation has hurt their ability to provide quality care 
in recent years; second, 79 percent of physicians report that fear of 
malpractice claims causes them to order more tests than they would 
based only on the professional judgment of what is medically needed.
  As former Democrat Senator and Presidential candidate George McGovern 
and former Republican Senator Alan Simpson have written, ``Legal fear 
drives doctors to prescribe medications and order tests, even invasive 
procedures, that they feel are unnecessary. Reputable studies estimate 
that this defensive medicine squanders $50 billion a year. The Common 
Good survey also asked physicians the following question: Generally 
speak, how much do you think that fear of liability discourages medical 
professionals from openly discussing and thinking of ways to reduce 
medical errors?

                              {time}  1330

  An astonishing 59 percent of physicians replied ``a lot.''
  Americans want to see their friends and loved ones receive the best 
and most accessible health care available, but, with greater and 
greater frequency, doctors are not there to deliver it because they 
have been priced out of the healing profession by unaffordable 
professional liability insurance rates.
  Sound policy does not favor supporting one person's abstract ability 
to sue a doctor for unlimited and unquantifiable damages when doing so 
means that health care will become less accessible and less affordable 
to all Americans, particularly to women, to the poor and to those who 
live in rural areas.
  The American Bar Association estimates that there are 1 million 
lawyers in the United States, but all of us, all 287 million Americans, 
are patients, and as patients and for patients, I urge my colleagues to 
support the HEALTH Act.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I begin by commending the gentleman from Florida (Mr. 
Hastings) for conducting a very important and substantive debate on the 
rule governing this measure that is before us.
  Now, let us begin with the fact that this medical malpractice reform 
bill, except for the fact that there are no caps on attorneys, is the 
same bill, amendment, brought forward by the gentleman from California 
(Chairman Thomas) to the Patients' Bill of Rights last July, and it was 
turned down, for good reason.
  The next thing I should point out is that there is a serious 
constitutional problem that the American Bar Association has written to 
me and members of the committee about, a letter that I have for those 
who still have that reverence for that document, that I am sure we all 
do.
  Now, there has been constant reference to the Medical Injury 
Compensation Reform Act of 1975 in California. May I point out to all 
of those who assume that it has been enormously successful that the 
Consumers Federation of America in their report, which reinforces 
another California report, makes two points: That the per capita health 
expenditures in California have exceeded the national average every 
year between 1975 and 1993 by an average of at least 9 percent per 
year; and that the California health care costs have continued to 
skyrocket at a rate faster than inflation since the

[[Page H6726]]

passing of the Medical Injury Compensation Reform Act.
  Inflation, as measured by the Consumer Price Index, rose 186 percent 
between 1975 and 1993, yet California's health care costs grew by 343 
percent during the same period. Moreover, California's health care 
costs have grown at almost twice the rate of inflation since 1985.
  Now, the problem with this bill is that rather than help doctors and 
victims, this bill really does a great favor to insurance companies, 
HMOs and the manufacturers of defective medical products and the 
pharmaceuticals, as usual.
  In addition, it also is clear that a legislative solution focused on 
limiting victims' rights available under our State tort system will do 
little other than increase the incidence of medical malpractice, 
already the third leading cause of preventible deaths in the United 
States of America.
  Finally, you should be aware that the drug companies have somehow 
gotten into this, as well as the producers of the infamous Dalcon 
Shield, the Cooper 7 IUD, high absorbancy Tampons, linked to toxic 
shock syndrome, and silicon gel implants, all of whom would have 
completely avoided billions of dollars that they have paid out in 
damages had this bill been law.
  So, Mr. Speaker, I refer you finally to the Consumers Union Report, 
which points out in detail all of the basic things that have been 
reviewed here.
  Please let us stick to our guns. This is too important a thing to let 
something as blatantly political go through in the name of helping the 
victims of medical malpractice in this country.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself 1 minute.
  Mr. Speaker, the gentleman from Michigan (Mr. Conyers) I think was in 
error when he was saying that all of these people would have avoided 
billions and billions of dollars of liability. The fact is that this 
bill does not limit liability for proven economic damages, such as lost 
wages, lost future wages, rehab expenses, medical expenses and the like 
by one penny for anybody. The economic damages that are suffered are 
unlimited under this legislation. What it does limit is noneconomic 
damages that cannot be quantified.
  What the gentleman from Michigan says is that we all should pay more 
in doctors' fees and the taxpayers should pay more in Medicare expenses 
simply because we do not want to limit noneconomic damages for maybe 
one plaintiff or a couple of plaintiffs.
  So here is something where the interests of a few completely wipe 
away the interests of the greater good, particularly those people in 
rural areas that are looking for OB-GYNs.
  Mr. Speaker, I yield 3 minutes to the gentleman from Pennsylvania 
(Mr. Gekas).
  (Mr. GEKAS asked and was given permission to revise and extend his 
remarks.)
  Mr. GEKAS. Mr. Speaker, I thank the gentleman for yielding me time.
  We on the Committee on the Judiciary have been wrestling with this 
issue for many years and have had many different proposals cross our 
desks on this very same theme. What brings us to the floor now is that 
when we were first considering it the problems were terrible. Now the 
problems are more than terrible, almost unbearable.
  Every day in Pennsylvania, just like in your home States, you hear 
anecdotes about the giving up of a practice by a physician or the 
constriction of services to be rendered at a hospital or actually the 
closing of a hospital, all due to the rising cost of insurance premiums 
and the awards granted on behalf of plaintiffs across the board.
  What is so good about the plan we have in front of us is, as the 
gentleman from Wisconsin was able to articulate, that this puts no caps 
at all on the economic damages. As a matter of fact, the testimony that 
we had from the Californians who testified as to the system that is 
extant in their State was that even though health care costs are rising 
and that they must consider that in the awards that are granted in 
California, the rising health care costs, even though they go up, are 
going up incrementally, and the cap on the noneconomic damages remains 
the same, thus preserving the very root of this kind of legislation. It 
is to allow physicians and hospitals to remain in place across the 
spectrum of medical services. Why? Because their economic damages of 
their own, caused by the high insurance premiums and high awards 
visited against them, would be retarded by this legislation. It would 
not cure the matter, but it would retard their financial difficulties.
  If we can retard their financial difficulties, we give them reason to 
stay in place, to leave their practice thriving in a particular sector 
in my State and in yours. It would allow hospitals to be able to budget 
in such a way, with the shrinking cost of insurance that we hope that 
this brings about, to be able to extend services or remain in place 
over a long period of time, where otherwise, with the high costs now 
seen across the Nation, they are incapable of maintaining their own 
level of services. So this is the time to bring about a great reform.
  I remember in 1995 we were on the floor with a different version of 
this bill and many of us thought we had a great chance of passing it. 
But, for one reason or another, it did not occur. All I do now is 
repeat that that was then when the situation was very bad; today it is 
much worse, and we have a chance to strike a blow at this emergency 
right now.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, before I yield to my friend from Massachusetts, I think 
we ought to make sure we are all talking about the same bill.
  On page 5 of this bill we eliminate the doctrine of joint and several 
liability, meaning that if one person does not have enough money, then 
nobody else is responsible for them paying for the damages.
  Number two, the statute of limitations is reduced to 3 years, and 
that is on page 3. What that means then is if a person with AIDS 
discovers it in 6 years, they just missed out, because the statute of 
limitations would now be 3 years.
  For my friend from Pennsylvania's information, this bill does cap 
noneconomic and punitive damages.
  Mr. Speaker, I am pleased to yield 2 minutes to the distinguished 
gentleman from Massachusetts (Mr. Markey), from the Committee on Energy 
and Commerce.
  Mr. MARKEY. Mr. Speaker, I thank the gentleman for yielding me time.
  So the Republicans say that they have identified a big problem: 
Insurance premiums for physicians are skyrocketing, and we have to do 
something about it.
  What is their solution? Just what the insurance companies ordered for 
a solution: A cap on noneconomic damages at $250,000; pain and 
suffering, all that, $250,000. The juries are not even told that the 
limit is $250,000, so they could come back with a $1 million verdict, 
but only $250,000 to the victim.
  But their bill does not say that the savings goes to physicians. No. 
They have all the money go to the insurance company executives.
  Now, last night I made a request to the Republicans that I be allowed 
to make an amendment that says that any amount of money that a jury 
renders above $250,000, let us say $1 million, that the court would 
then give that money over to a court-appointed trustee and the court-
appointed trustee would then ensure that the insurance premiums for the 
physicians inside that area would be lowered.
  The Republicans prohibited that from coming out here because that 
would guarantee that the physicians would be the beneficiaries, not the 
insurance industry. And what is the problem? Well, the insurance 
company executives have a fiduciary relationship to their shareholders, 
to their wives, to their children, to maximize profits for themselves. 
That is a legal responsibility.
  If we are going to pass this bill and limit the ability for victims 
to recover, then the only justification should be that physicians' 
premiums go down, and that is the one big missing link in the 
Republican bill. There is no requirement that the insurance companies 
lower the premiums for doctors, and that is what the Democrats are 
trying to do, to help the patients, to help the doctors. And what is 
the Republican Party doing once again? They are bringing out the agenda 
of the insurance industry.
  If we have learned anything from the accounting practices across this 
country, it is that it is impossible to know where those savings would 
have gone.

[[Page H6727]]

                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Isakson). The Chair would appreciate it 
if Members would recognize the gavel.

                              {time}  1345

  Mr. SENSENBRENNER. Mr. Speaker, I yield myself 2 minutes.
  The gentleman from Massachusetts (Mr. Markey) thunders away about the 
Republican solution to the problem of escalating medical liability 
insurance premiums. He is entitled to his opinion. But the Democrats 
have no solution at all. They would like to continue the present 
system. They would like to see these rates skyrocket. They would like 
to see physicians close their practices or go into other specialties. 
They would like to see OB-GYNs be priced out of the market. They would 
like to see clinics in rural areas closed, and they would like to see 
the affordability and the accessibility of health care to poor people 
shrink.
  I figured out how much the patient ends up having to pay. In the 
State of Mississippi, an OB-GYN can be charged as much as $110,000 a 
year this year for professional liability insurance, based upon 2,000 
billable hours per year. Based upon 2,000 billable hours per year, a 
half an hour visit to that OB-GYN, the first $27.50 of whatever that 
doctor charges the patient goes for that patient's share of the 
doctor's professional liability insurance premium, and everything else 
that the doctor charges ends up being used to pay the doctor's other 
expenses as well as to allow the doctor to take some money home to 
support himself or herself and their families. So all of these costs 
end up getting passed on to the patients, and if you want to complain 
about the high cost of health insurance, the way to start doing 
something about it is to pass this bill so that doctors do not have to 
pay through the nose for professional liability insurance.
  Mr. Speaker, I yield 3 minutes to the gentlewoman from Pennsylvania 
(Ms. Hart).
  (Ms. HART asked and was given permission to revise and extend her 
remarks.)
  Ms. HART. Mr. Speaker, I rise in support of the legislation. Many of 
my colleagues today have made claims that this bill is bad, as we just 
heard, that this is just what the insurance companies order. Actually, 
if my colleagues will look at this map, they will see it is actually 
just what the doctors ordered.
  The States in red, my home State of Pennsylvania, are the States 
where we are in a crisis. Doctors are leaving my State in droves, 
leaving patients with nowhere to go for health care. Those in 
opposition say they dislike caps on damages and limits on lawyers' 
contingency fees. Let us start with that cap on damages. It is a 
$250,000 cap, and it is on punitive damages. It has nothing to do with 
the actual recovery that the injured plaintiff is due. It is the 
additional damages that are being limited.
  Let us talk about the limit on lawyer contingency fees. The lawyer 
who actually suffered no injury at all is being limited on how much in 
fees he can take from that plaintiff's award. That is the award that is 
due to the plaintiff because of the actual injury. The bill helps the 
injured person retain more of the award that she is due. The lawyer 
would be limited to, listen, 40 percent of the first $50,000; one-third 
of the second $50,000; one-fourth of the next $500,000; and 15 percent 
of any amount over $600,000. Do the math. The lawyer gets plenty of 
money under this plan. I do not believe we will have a shortage of 
lawyers taking on cases as a result of this; but if we do not get this, 
we will continue to have a shortage of doctors who are willing to take 
on patients. Without this rule, we will continue the mass exodus in 
these States in red, and the States that are not in red are soon to 
follow.
  This past weekend I visited with a physician friend of mine. Both she 
and her husband are practicing medicine in my home State of 
Pennsylvania. She gave me the bad news of her firsthand experience and 
how she and her husband are interviewing out of State to practice 
medicine out of State because they can no longer afford the insurance 
that they need to be able to continue to practice to provide good 
service to their patients.
  In Pennsylvania over the last 4 years, rates have increased 125 
percent, according to the ``Medical Liability Monitor.'' The American 
Medical Association has statistics that are similar. If we do not pass 
this HEALTH act, we are saying to the people of America we are not 
concerned about their health. I believe that we are, and I believe that 
the majority of us will support the HEALTH act, a wonderful bill by the 
gentleman from Pennsylvania (Mr. Greenwood) and a bill that we should 
all support to make sure that our constituents get the health care they 
need.
  Mr. CONYERS. Mr. Speaker, I yield 30 seconds to the distinguished 
gentleman from Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  We are going to see many crocodile tears shed this afternoon on 
behalf of physicians and their high premiums. But the Republicans 
refuse to allow the Democrats to make an amendment that ensures that 
all of the savings that come from the limits on how much a patient can 
recover goes to lower insurance premiums. They refuse to allow us to 
even make the amendment because they are going to allow the insurance 
industry to pocket this money. That is what this time is all about. It 
is about the insurance companies, not about the physicians. We support 
the physicians.
  Mr. CONYERS. Mr. Speaker, I am sorry I corrected the other side in 
connection with their understanding of their bill which may have 
brought about an overreaction about what Democrats do not want to 
happen to the health system in America. I apologize for that.
  Mr. Speaker, I yield 2 minutes to our very distinguished colleague, 
the gentleman from North Carolina (Mr. Watt), on the Committee on the 
Judiciary.
  Mr. WATT of North Carolina. Mr. Speaker, I have to say with respect 
to all my colleagues that I think we have lost sight of what this is 
all about. When we start debating the merits or demerits of this bill, 
we miss the point. The point is that in North Carolina if I walk into a 
physician's office, all of that treatment takes place right there in 
North Carolina, and historically the tort law and medical negligence 
law has been determined State by State; and were I in the State 
legislature of North Carolina, all of this discussion that we are 
having would probably be a very appropriate debate.
  But for people who came to Congress saying that they believed in 
States' rights and the federalist form of government that we have, this 
debate is totally misplaced. It would be like us saying, well, we are 
very dissatisfied with schools all across the country; therefore, we 
are going to federalize the whole education system in America. That is 
what this debate reminds me of.
  My Republican colleagues, in 1995, told me that they believed in 
States' rights. And ever since then, they have been trying to 
federalize the standards on everything that has traditionally been done 
at the State level, and this is just another one of those examples.
  When I raise this point, nobody seems to care. Well, my Constitution 
says that unless there is some interstate commerce connection, and I 
have not seen any medical practice take place across State lines since 
I have been going to doctors; unless there is some kind of Federal 
nexus here, why are we debating tort reform here, rather than having 
the gentlewoman from Pennsylvania (Ms. Hart) go back and tell her State 
legislators that they need to address this problem? If they are losing 
doctors in Pennsylvania, then they ought to address the problem in 
Pennsylvania and solve the problem there, not federalize the issue.
  Mr. CONYERS. Mr. Speaker, I am pleased to yield 1 minute to the 
gentleman from Maine (Mr. Allen).
  Mr. ALLEN. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise in opposition to H.R. 4600, a bill to protect 
doctors, other health care providers, drug companies, and manufacturers 
of medical devices from the consequences of their own negligence. It 
reduces compensation for severely injured people in order to save money 
for negligent providers and their insurers.
  This is a congressional power grab to take over tort law from the 
States. Many States, including Maine, have

[[Page H6728]]

held down malpractice premiums without stripping compensation from 
severely injured plaintiffs. Maine requires a review of malpractice 
claims by an independent panel within 90 days of the plaintiff's filing 
a claim. I served on two of those panels before I left the practice of 
law, and the result is more cases are settled early without an 
arbitrary cap on damages.
  I believe that we here in the Congress should deal with our issues 
and leave the State law issues to the States. We do not need to take 
over State legislative responsibility.
  We are now in the fourth week since the August recess, and not one 
single appropriations bill that we ought to be dealing with has come to 
the floor of this House; instead, we are spending our time dealing with 
matters more appropriate for State legislators.
  Mr. CONYERS. Mr. Speaker, I yield 1 minute to the gentleman from 
Washington (Mr. Inslee).
  (Mr. INSLEE asked and was given permission to revise and extend his 
remarks.)
  Mr. INSLEE. Mr. Speaker, I would just like to tell my colleagues 
about a woman, I will call her Jane, and she is a citizen of the State 
of Washington. She went in for a routine test, a mammography, a biopsy 
was done, she was diagnosed as having breast cancer. She had a double 
radical mastectomy because of that diagnosis. She then developed a 
blood clot that went into her bowel and she required her bowel to be 
removed. She then developed another blood clot that caused gangrene in 
her leg, and they had to cut off her leg.
  Some time later, a subsequent review, a quality control assurance 
review, found that the diagnosis was inaccurate. The pathology report 
was flat dead wrong. She never had cancer, she never had anything that 
required significant surgery. She is a woman without breasts, without a 
bowel, and without a leg due to a failure, either of a physician or of 
a medical device, both of which would be affected by this legislation.
  Now, I do not know what is just to do in Jane's situation, but I do 
know this: the first people that should be making that decision are 12 
of her peer citizens sitting in a jury box looking at the evidence, the 
second should be the State legislature, and the last should be the U.S. 
Congress. We should reject this legislation.
  Mr. CONYERS. Mr. Speaker, I yield 2 minutes to the gentleman from New 
York (Mr. Nadler), one of our ranking members of the Committee on the 
Judiciary.
  Mr. NADLER. Mr. Speaker, this bill is a cruel attempt to protect 
insurance companies by trampling the rights of consumers.
  We are told today the bill is necessary to drive down insurance rates 
because juries award too much money to plaintiffs. But that is a 
diversion from the real problem, which is very simple: mismanagement by 
the insurance companies. Insurance companies make their money by 
investing the premiums they collect in the stock market. When the 
market is strong, they keep premiums artificially low, because they can 
make plenty of money in the markets. When the market turns sour, they 
must dramatically increase premiums to cover their costs. It is a 
predictable cycle, and that is why once about every 10 years when the 
market goes south, we hear of a great crisis which is then blamed on 
out-of-control lawsuits and the consumer has to get it in the neck.
  Mr. Speaker, lawsuits account for the same minuscule fraction of 
health care costs as they always have. Studies have shown the average 
jury award has not changed at all in the last decade, so why the sudden 
crisis? Because the market is in a tailspin and the insurance companies 
need to recoup their losses because they kept the rates too low during 
the good years. But why should injured patients pay to bail out the 
failed management of these companies? And who seriously believes that 
premiums will go down if this bill is passed?
  As Debora Ballen, executive vice president of the American Insurance 
Association said, ``Insurers never promised that tort reform would 
achieve specific premium savings,'' just savings to their bottom line, 
I guess. And, of course, the Republican Committee on Rules refused to 
allow an amendment on the floor that would say that they have to pass 
on the savings to the doctors, to the consumers.

                              {time}  1400

  In pursuit of this giant bailout, what we have here is a breathtaking 
assault on the rights of consumers and patients. Take the $250,000 cap 
on noneconomic damages, a figure that might have been reasonable in 
1975 when the MICRA law was passed in California; it is woefully 
inadequate today. The equivalent today would be $1.5 million.
  Again, the Republican Committee on Rules refused to allow an 
amendment to even say, okay, $250,000, we will put in an inflation 
amount to adjust it, so it does not decrease to nothing with inflation. 
If we maintain this cap now, it will be impossible for consumers to 
hold doctors accountable for malpractice in the future.
  Not content merely to cap malpractice suits, this bill also guts, 
guts State HMO laws, protects big drug companies and medical product 
manufacturers, makes punitive damages almost impossible to assess, and 
places an unreasonable statute of limitations on injured patients.
  Mr. Speaker, we should not be misled by the bill's supporters. Do not 
believe for a second that insurance rates will go down as a result of 
this bill. This cruel bill should be seen for what it is: another gift 
from the Republican majority to the big insurance companies at the 
expense of patients, consumers, and, I might add, doctors.
  This irresponsible bill should be disapproved.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 3 minutes to the gentleman 
from California (Mr. Cox).
  Mr. COX. Mr. Speaker, I thank the gentleman for yielding time to me.
  Mr. Speaker, we are here because of patients. Patients are not 
getting care. Trauma centers are closing. Emergency rooms are closing. 
OB-GYNs are leaving their practice. Women are without health care. That 
is why we are here.
  On June 30 of this year, Methodist Hospital in south Philadelphia, 
which had been delivering babies since 1892, closed its doors. They 
closed their maternity ward and they stopped delivering babies. This is 
going on all over the country.
  In Nevada, in all of southern Nevada, now, there is no trauma center. 
Southern Nevada's only trauma center closed its doors in July. Las 
Vegas is now the only city of its size without any care for such people 
in these circumstances. Our intention is to ensure that no more 
patients are denied the care they deserve.
  We have heard there was a Democratic amendment that should have been 
made in order that would have ensured that savings from this bill, 
which the Congressional Budget Office estimates at $14 billion, $14 
billion more available to go into health care, into hospitals, into 
Medicare givebacks, into quality of care, that we should have had this 
amendment that guaranteed that savings went to doctors.
  Somebody should ask whether the doctors supported that amendment, 
because they did not. The way this amendment was written, the premiums 
would still have been high because the awards still would have had to 
be paid, this time to a trustee instead of to the trial lawyers, but 
the premiums would not have come down. That is why doctors did not 
support the amendment.
  Somebody made the claim that the Dalkon shield case, bringing up the 
old horribles of the past, that damages would not have been awarded in 
that case had this bill been law. That is completely false. In 1976 
Congress changed the law, post-Dalkon shield, to require pre-market 
approval for devices. The House and Senate reports on that legislation 
specifically mentioned Dalkon shield as something that would have been 
kept off the market if we had had pre-market approval in the law.
  What this bill says is if a device has been approved by the FDA, then 
there will not be punitive damages; in other words, if people comply 
with the pre-market approval requirements, why should the lawyers be 
able to claim that there was some kind of willful, egregious, and so on 
kind of injury committed.
  In California, we have had this system a long time. I have heard some 
people say that California's premiums have gone up faster than 
inflation. Of

[[Page H6729]]

course they have, they have gone up 150 percent since this law has gone 
on the books. But at the same time, we have to tell the whole story, 
malpractice premiums in the rest of the country have gone up 500 
percent. This has saved a great deal of money for us in California.
  Medical liability insurance premiums in constant dollars have 
actually fallen in California by more than 40 percent, and injured 
patients are receiving compensation more quickly in California than in 
the United States as a whole. Injured patients receive a larger share 
of the awards.
  This is all about patients; it is all about making sure that their 
doctors can serve them. That is why doctors support this bill. That is 
why patients support this bill. It is why it is high time that we pass 
this bill.
  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, to my friend, the gentleman from California (Mr. Cox), I 
say, please check the punitive damages that the Dalkon shield Cooper 7 
IUD, the hundreds of millions that they would have not had to pay had 
this bill been in effect.
  Mr. Speaker, I yield 2 minutes to my friend, the distinguished 
gentleman from Texas (Mr. Sandlin).
  Mr. SANDLIN. Mr. Speaker, someone needs to stand up for American 
physicians. Somebody needs to stand up for the American health care 
system.
  What is the problem? Malpractice premiums have skyrocketed. What is 
the answer proposed by our friends on the other side? It is H.R. 4600. 
Let us make no mistake about it, H.R. 4600 is a hoax, it is a sham, and 
our friends know it. It is a sham on the American medical establishment 
by the insurance carriers, who want to limit their exposure but will 
not commit to reducing premiums.
  Please read the bill. H.R. 4600 limits the amount that carriers pay 
for legitimate claims, but it has absolutely no provision requiring 
reducing premiums; none, zero, zilch, nada, nothing, and they know it. 
It is a scam.
  In fact, Mr. Speaker, in States that have enacted caps, in States 
that have enacted caps, the malpractice premiums are higher than in 
States that have no caps. But the carriers do not want to tell us that. 
Why? That is because their interests are in conflict with the medical 
community.
  I want to ask a question: Do the words ``Patients' Bill of Rights'' 
ring a familiar note? What causes the problems? It is not physicians, 
it is not patients, it is not even the lawyers they are talking about; 
the problem is the market. St. Paul recently, in announcing it was 
exiting the market, said they paid too much in claims; but, oh, yes, 
they forgot to mention they lost $108 million in Enron. Every time the 
market goes down, they claim a medical liability crisis. How convenient 
is that?
  The truth is that the carriers are asking doctors, hospitals, and 
patients to pay for their bad investment decisions. It is as simple as 
that. They know it. We have asked the insurance carriers to put in this 
bill a requirement to reduce premiums. They will not do it. They will 
not talk about it. That is because they know they are going to raise 
the premiums. It is a scam on the entire system.
  There are a lot of other problems. At least 31 States have found 
portions of this bill to be unconstitutional. It does limit economic 
damages because it gets rid of joint and several liability. They know 
that. They know it limits economic damages.
  Let us just get right back to it. It boils down to this point: It 
helps the insurance carriers; it does nothing for the physicians and 
nothing for the patients, and they know it.
  Mr. CONYERS. Mr. Speaker, I yield the balance of my time to the 
distinguished gentlewoman from Texas (Ms. Jackson-Lee) to concluded the 
debate on our side of the aisle.
  The SPEAKER pro tempore (Mr. Gutknecht). The gentlewoman from Texas 
(Ms. Jackson-Lee) is recognized for 2 minutes.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the distinguished 
gentleman from Michigan (Mr. Conyers), the ranking member, for yielding 
time to me.
  Mr. Speaker, time is short for an important step for America, and 
that is, of course, something that probably we have not debated on this 
floor. We do not make light of the horrific tragedy of 9/11, but what 
it caused Americans to do is to reinforce their commitment to our 
values. Part of that is the judiciary system, which allows Americans to 
go into a courthouse and address their grievances, away from violence 
and intimidation.
  It is interesting that we would come in that backdrop to begin to 
tell Americans that they cannot go into the courthouse when they have 
been injured and begin to find relief. Why we are promoting this kind 
of bill that denies and equalizes justice for all Americans I cannot 
give an answer.
  Many people criticize lawyers. I remember Shakespeare saying, the 
first thing you should do is to kill all the lawyers. I am one, but I 
serve the American people as a Representative for the 18th 
Congressional District in Texas.
  Mr. Speaker, let me tell the Members, I supported reform in the State 
of Texas. I believe the President of the United States supported it. 
But can Members imagine that the legislation that we have on the floor 
today goes overboard, goes way beyond the idea of allowing poor people 
to get into the courthouse and lawyers to represent them when tragedy 
has befallen them.
  For example, a 50-year-old woman who earned about $12,500 annually 
settled her malpractice claim during trial for $12 million because her 
surgeon had impaired her spine; a spear, if you will, went through her 
spine. With this particular health act, she would be severely limited 
by the $250,000 cap, a woman who makes $12,500.
  Let me tell the Members why this is bogus, Mr. Speaker, with respect 
to the idea that this bill will help prevent hospitals from closing and 
doctors' offices from closing.
  I am their friend. We cannot survive without a medical profession. 
Doctors will tell us that they are being shut down because of these 
premiums. They are not angry at lawyers, they are being made to be 
angry at lawyers.
  When we had this bill in Texas, the premium went up from $26,000 to 
$45,000. This is a bogus bill and we should vote it down because it 
denies the American people the opportunity to get into the courthouse. 
This is a bill against poor people.
  Mr. Speaker, I oppose H.R. 4600, the so-called ``HEALTH'' Act of 
2002. I do this with somewhat mixed emotions, because I agree with the 
bill's stated purpose: to Help get Efficient Accessible Low Cost Timely 
Health care to all Americans. I agree that one of the obstacles to 
accessible low cost health care is the outrageous liability insurance 
premiums charged to health care providers. I also feel that some 
approaches to litigation contribute to the cost of our Nation's health 
care by encouraging professionals to use tests, procedures, and 
treatments that may not be necessary. I agree with supporters of this 
bill that high malpractice insurance premiums charged by insurance 
companies have led some physicians to abandon high-risk specialties and 
patients.
  Unfortunately, H.R. 4600 does not address any of these problems. The 
bill does not discourage lawsuits. This bill does not decrease 
liability insurance premiums, the real problem. The bill does place a 
cap on noneconomic damage awards, but there is no reason to think that 
limiting awards to suffering people with legitimate claims will 
translate into decreased premiums for providers.
  In California, where tort reform has been the strictest and has had 
almost three decades to work, premiums are still 8 percent higher than 
premiums in States without noneconomic damage caps. Medical malpractice 
insurers in California pay out less than 50 cents in claims on every 
dollar they bring in through premiums. Obviously tort reform is lining 
the coffers of insurance companies and not getting to doctors or their 
patients.
  It is surprising that supporters of this bill are presenting it as a 
means to decrease premiums, when those in the know, such as the 
executive vice president of the American Insurance Association, and 
American Tort Reform Association president, both have stated that 
limitations like those in this bill will not necessarily decrease 
premiums.
  I am also confused about where this arbitrary cutoff of $250,000 for 
noneconomic damages comes from. It happens to be the same number used 
in similar legislation passed 27 years ago in California, with no 
adjustment for inflation or changes in costs of living. Due to 
skyrocketing health care costs, $250,000 will only get an injured 
person about $40,000 worth of care.
  The bill does not cap economic damages--which is good news for those 
with high incomes. Rich people will be able to stay rich

[[Page H6730]]

and perhaps that is appropriate. But what about mothers who work at 
home raising their children, or the elderly on fixed incomes? They will 
not be able to claim large economic damages due to losses in income. If 
they are crippled or blinded by a negligent HMO, or pharmaceuticals 
company, they may get their $250,000--but maybe they will receive 8 or 
9 thousand dollars per year. That is a pittance for someone working 
through the tough times after a catastrophic injury.
  Perhaps that would be a fair sacrifice if the funds would go to our 
hospitals or public health clinics, but to increase revenues of 
insurance companies? I say no.
  Furthermore, since we do not have a bill before us today that would 
limit liability insurance, or would decrease the number of frivolous 
lawsuits, perhaps we should leave it to the States to decide how to 
address these issues. California is not the only State in the Union 
that is working to tackle these problems; Texas has worked to solve 
this problem and has put forward a better solution. H.R. 4600 would 
override such local efforts and compromise the rights of States, and 
probably not help improve the health of a single American, except maybe 
a few insurance company CEOs.
  I encourage my colleagues to vote against H.R. 4600.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself the balance of my 
time.
  The SPEAKER pro tempore. The gentleman from Wisconsin is recognized 
for 1 minute.
  Mr. SENSENBRENNER. Mr. Speaker, the gentlewoman from Texas (Ms. 
Jackson-Lee) is dead wrong. This bill will not close the courthouse to 
anybody who has a legitimate claim. It does not restrict anybody's 
right to sue. What it does do is it puts some sense in the 
compensation. It puts some sense in the compensation in a manner that 
allows affordable and accessible health care to be available 
nationwide. We will not be pricing doctors out of their practice by 
high professional liability insurance premiums. We will not force 
maternity wards and trauma centers to close their doors for the same 
reason.
  The time has come to put some sense in this system. California did 
that. They do not have a crisis there because their State legislature 
did that. We now have to step up to the plate and work for the 
patients, particularly in the States that are listed in red and in 
yellow on the map that was referred to by the gentlewoman from 
Pennsylvania (Ms. Hart).
  Pass the bill.
  The SPEAKER pro tempore. All time for the Committee on the Judiciary 
has expired.
  The gentleman from Pennsylvania (Mr. Greenwood) and the gentleman 
from Ohio (Mr. Brown) each will control 10 minutes.
  The Chair recognizes the gentleman from Pennsylvania (Mr. Greenwood).
  Mr. GREENWOOD. Mr. Speaker, I yield myself 2\1/4\ minutes.
  Mr. Speaker, as usually happens at this time in the debate, the 
rhetoric gets hotter and we tend to find ourselves at our most cynical 
attitudes. But let us see if we can do a little better than that in the 
next 20 minutes.
  The fact of the matter is that we do not accuse the Democratic Party 
of being the lackeys of the trial lawyers, and they should not accuse 
us of being the lackeys of the health care industry. But what we all 
should care about is our constituents. We should care about the 
pregnant woman, we should care about an individual harmed in an 
automobile accident, we should care about their access to health care.
  Also, we should care about them if they cannot find a doctor. We 
should care about them if the trauma center is closed and cannot save 
their lives. We should care about them if they are injured by a doctor. 
It is not either/or.
  We have a crisis in this country right now. It is nearly countrywide. 
The crisis is that the cost of medical malpractice insurance has 
skyrocketed to the point where obstetricians cannot deliver babies 
anymore, where neurosurgeons are leaving trauma centers, where trauma 
centers are closing their doors. We are very close, if we are not there 
already, to Americans dying because they cannot get emergency care and 
the quality of our health care system deteriorating across-the-board.
  There is a solution. There is a solution here that enables us to care 
about our constituents when they are struggling to find care or 
emergency care, and care about them when they are hurt by a physician 
and they have a legitimate claim. That has been modeled in California.
  I have heard my constituents argue erroneously that capping 
noneconomic damages will not affect premium rates. That is dead wrong. 
Let us settle that. There is the chart. The source here is the National 
Association of Insurance Commissioners.
  This chart tells the whole story. While California's rates have 
stayed flat for the last 25 years, the rest of the country's rates have 
soared. This is the solution. We all ought to work on it together, get 
it over to the Senate, and save America's health care system.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1415

  Mr. BROWN of Ohio. Mr. Speaker, I yield myself 2 minutes.
  Mr. Speaker, I support medical malpractice reform but I oppose this 
bill. H.R. 4600 lays the blame for rising medical malpractice premiums 
solely on individuals whom a court and jury determine have been injured 
by medical malpractice. Apparently Congress knows better than judges, 
juries and patients; but we do not know better than insurers.
  This bill does not have a single provision acknowledging the 
insurance industry's accountability for skyrocketing premiums. Insurers 
have tripled their investment in the stock market over the past 10 
years. Of course, now they are trying to recoup their losses.
  Democrats have tried to negotiate with the majority to even look at 
this issue. But the majority rejected every attempt to force the 
insurance industry to assume any responsibility for its dramatic 
premium increases. There are avenues we could take to stabilize medical 
malpractice premiums, loss ratio requirements, reinsurance pools, 
transparency to help us see exactly why insurers are raising their 
rates. But no, in this billing the insurance industry is held harmless. 
It is the patients' fault.
  California has the most stringent liability caps in the country. 
Premiums are higher in California than the average for the rest of the 
country. Premiums have grown faster in California than the average for 
the rest of the country. Still somehow the solution to the medical 
malpractice crisis is to cap jury awards. And by the way, to cap them 
in a way that promises wealthier patients larger rewards than other 
patients. This bill apparently says those who are more wealthy suffer 
more than those who are not.
  H.R. 4600 will also shield HMOs that fail to provide the needed care. 
It would shield drug companies whose medicine has toxic side effects. 
It would shield manufacturers of defective medical equipment. In this 
bill, businesses are never at fault. Patients are greedy. Jurors are 
misguided. It is the patients' fault. That is the problem.
  At a time when the public is calling for greater corporate 
accountability, this bill turns on the public itself and holds injured 
patients, not the insurance industry, accountable. I ask for a ``no'' 
vote.
  Mr. GREENWOOD. Mr. Speaker, I yield 1 minute to the gentleman from 
Louisiana (Mr. Tauzin), the chairman of the Committee on Energy and 
Commerce.
  Mr. TAUZIN. Mr. Speaker, I rise in strong support of the bill and on 
behalf of the Committee on Energy and Commerce recommend it to my 
colleagues in the House.
  When injured patients in this country have to wait on average 5 years 
before a medical injury case is complete, our system is failing. When 
an injured patient loses up to 58 percent of the awards to attorneys 
and the courts, something is wrong. And when 60 percent of malpractice 
claims against doctors are dropped or dismissed, you can imagine the 
unnecessary costs to the system that all of us pay into.
  Now, I want to do something we do not do around here enough. I want 
to admit to being wrong once in my life. I was in the legislature of 
Louisiana. I voted wrong. I voted against these reforms as a young 
State legislator. They were passed over my objections and they worked.
  Doctors and hospitals in Mississippi are streaming into Louisiana 
because they do not have those protections in

[[Page H6731]]

Mississippi and people in Mississippi are losing access to quality 
health care. Let me tell you, I do not care whether you have insurance 
or not. You can have all the insurance in the world; if there is no 
doctor to serve you, if there is no emergency room to go to, if there 
is no hospital to take care of you, you are in trouble. This bill makes 
sure we have doctors and hospitals and emergency rooms in America.
  Mr. Speaker, I rise in strong support of H.R. 4600, legislation to 
ensure that patients have access to high quality health care.
  When injured patients have to wait, on average, 5 years before a 
medical injury case is complete, our judicial system has failed. When 
injured patients lose 58 percent of their compensation to attorneys and 
the courts, our judicial system has failed. When 60 percent of 
malpractice claims against doctors are dropped or dismissed, but the 
fear of litigation still forces doctors with 25 years or more of 
experience to retire early, our judicial system has failed.
  What my home State has in place and what California have benefited 
from for over 27 years are commonsense guidelines for health care 
lawsuits. These guidelines ensure that injured patients receive greater 
compensation and that frivolous lawsuits--that extort health care 
professionals and drive doctors from the practice of medicine--are 
limited.
  The reforms in this bill will work. According to the Congressional 
Budget Office, ``H.R. 4600 would lower the cost of malpractice 
insurance for physicians, hospitals, and other health care providers 
and organizations. That reduction in insurance costs would, in turn 
lead to lower charges for health care services and procedures, and 
ultimately, to a decrease in rates for health insurance premiums.'' 
Even better, ``CBO estimates that, under this bill, premiums for 
medical malpractice insurance ultimately would be an average of 25 
percent to 30 percent below what they would be under current law.''
  That means that Congress really has an opportunity to pass 
legislation that will have a direct impact on patient access to care. 
With these reforms, patients will have greater access to health 
insurance. With these reforms, doctors will stay in business and not be 
forced to move to another State, or even worse, drop a specialty 
practice altogether. With these reforms, patients will have greater 
access to providers so they will actually receive ``health care.''
  The issue at hand today is fundamental to all of the deliberations we 
make with regard to health care policy. We all recognize that health 
care costs money, and that high health care costs are a barrier to 
health care. But, even if a patient has health insurance, what is that 
insurance coverage worth if there are few doctors available to treat 
you?
  This bill before us will have a tremendous impact on patients' lives. 
I encourage all of my colleagues, on both sides of the aisle, to 
support the legislation.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1 minute to my colleague, the 
gentlewoman from northeast Ohio (Mrs. Jones).
  Mrs. JONES of Ohio. Mr. Speaker, I would like to thank my colleague 
for yielding me time.
  You know what, I am really tired of people not telling the truth on 
the floor of the House. Hospitals are not going to stay open any longer 
because of this bill. People are not going to get any better health 
care because of this bill.
  What is going to give them better health care is if this Congress 
will go ahead and give people universal health care. The fact is that 
H.R. 4600 introduced under the guise of fixing the problem of rising 
costs of malpractice insurance does not say anywhere that insurance 
companies will be required to reduce premiums. Nowhere does it assure 
that any savings that the insurance companies get will be passed along 
to the doctors.
  The shame of it all is it is taking away the ability of judges who 
served, like me, the ability to determine when punitive damages ought 
to be awarded. It is taking away the ability of people who are injured 
to have the ability to bring their claim in court. The reality is that 
this bill does none of the things that have been claimed by the other 
side.
  Now, the hospitals are going to be open in Cleveland, Detroit, New 
York as a result of this; and nobody is going to get better health 
care. I say to my colleagues vote against this legislation. It does 
nothing to help our patients.
  Mr. GREENWOOD. Mr. Speaker, I yield 1 minute to the gentleman from 
Georgia (Mr. Norwood).
  Mr. NORWOOD. Mr. Speaker, I thank the gentleman for yielding me time.
  Mr. Speaker, unlimited liability is an unacceptable drain on our 
health care system today. It is about access to care. It is about 
unruly costs from defensive medicine. We have got to make a change 
before it begins to truly affect our patients any more than it already 
has.
  Now, I understand that people who have been injured by medical 
malpractice deserve redress. I also know people on the other side of 
the issue believe you can never match a value to a human life. But when 
is it enough? Is it enough when a sick patient cannot find a doctor 
because too many doctors have closed down their practices over rising 
malpractice premiums? Is it enough when an emergency trauma center 
closes its doors? Is it enough when nurses and support personnel in 
that trauma center are put out of work, Mr. Speaker?
  There has got to be a figure out there somewhere that is enough. 
Saying that no figure is enough and that we can never place a limit, 
some reasonable limits on noneconomic awards, is to condemn the 
American patients to lesser care as this reckless liability system 
takes its toll on our health care system today.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1 minute to the gentleman 
from California (Mr. Waxman), my friend on the committee.
  Mr. WAXMAN. Mr. Speaker, I thank the gentleman for yielding me time.
  Mr. Speaker, 1 minute. There is not a lot I can say in 1 minute, but 
let me say the following: the Republicans seem to think that Washington 
has all the answers right here, and we ought to take it away from the 
States to make their own decisions, and I think that is a wrong 
approach.
  They would impose a bill to be in place for all of this country when 
there are a lot of differences and a lot of different approaches to 
issues like tort liabilities, licensures of professionals and how to 
handle those matters. But supporters of this bill claim it is modeled 
after the California Medical Injury Compensation Reform Act, but the 
liability limits in this bill go far beyond medical malpractice. They 
extend to any lawsuits relating to any health care or medical product 
including the manufacturers and distributors of drugs and medical 
devices. This is far beyond the liability limits adopted in California 
or, as far as I am aware, any other State. So I oppose this bill.
  I know that they are trying to do something about the medical 
malpractice problem, but I do not think it answers the problem; and I 
think it makes it one-size-fits-all, and it is not the best approach.
  Mr. GREENWOOD. Mr. Speaker, I yield 1 minute to the gentleman from 
Florida (Mr. Bilirakis), the chairman of the Subcommittee on Health of 
the Committee on Energy and Commerce.
  (Mr. BILIRAKIS asked and was given permission to revise and extend 
his remarks.)
  Mr. BILIRAKIS. Mr. Speaker, today I rise in strong support of H.R. 
4600, the HEALTH act. Since other speakers, Mr. Speaker, have 
effectively described the extent of our problem and the need for a 
solution, I want to emphasize one feature of the bill that is very 
important to me, and this is actually somewhat in response to what the 
gentleman from California (Mr. Waxman) has just shared with us.
  While H.R. 4600 does cap noneconomic damages, which I believe will 
help bring stability and predictability to the medical liability 
insurance market, it also does protect States' rights, since any State 
cap on noneconomic punitive damages, up or down, will supersede the 
Federal limits. And that is why I feel this bill strikes the right 
balance between the need for Federal action and the States' traditional 
role of the primary regulator of insurance markets.
  Mr. Speaker, I believe I can stabilize our out-of-control medical 
liability system without harming the ability of patients to recover 
adequate compensation when they have been harmed. We can do this by 
passing H.R. 4600 today.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1 minute to my friend, the 
gentleman from Pennsylvania (Mr. Doyle).
  (Mr. DOYLE asked and was given permission to revise and extend his 
remarks.)

[[Page H6732]]

  Mr. DOYLE. Mr. Speaker, I rise in opposition to H.R. 4600. We do have 
a problem with physicians and hospitals paying too much for malpractice 
insurance, but H.R. 4600 is not the answer. The cap on H.R. 4600 is 
based on a 1975 California law that when adjusted for inflation would 
have a value of slightly more than $40,000 today. This 1975 base cap 
penalizes the most vulnerable victims of medical malpractice: children, 
homemakers, the elderly and minorities, society members who have 
limited incomes and thus will benefit less from future economic 
earnings.
  Nearly 12 percent of Americans currently live in poverty and would 
depend on noneconomic damages to live on if injured.
  In my home State of Pennsylvania the people have decided against caps 
by including a prohibition on caps in our State constitution. Like 
them, I do not believe a cap on damages will do anything to reduce 
insurance premiums or ensure the quality of health care. But I realize 
the issue of a cap is a good starting point for discussion. Members 
like myself want to compromise and work on real solutions for the 
problems. Let us vote against this bill and start to work on a 
compromise that truly will reduce premiums.
  Mr. GREENWOOD. Mr. Speaker, I yield 1 minute to the gentleman from 
Iowa (Mr. Ganske).
  Mr. GANSKE. Mr. Speaker, I am pleased to announce that the chairman 
of the Senate Finance Committee has just endorsed the Medicare 
provision for low-reimbursement States like Iowa that we passed in our 
House prescription drug bill.
  What does that have to do with this bill? Well, Iowa ranks dead last 
on Medicare reimbursements. When we have increased premiums for 
malpractice and our physicians and other practitioners are already dead 
last in terms of Medicare reimbursements, the increase in the 
malpractice premiums means that many patients may not have a doctor in 
the State of Iowa. What is the situation in Iowa? Well, when St. Paul 
went out of business, some physicians in Iowa were able to pick up 
coverage from Wisconsin; but it would be my prediction that in the next 
12 to 18 months, unless there is some fix in terms of the malpractice 
premium situation, Iowa is going to be facing the same type of crisis 
that many of the States that have been talked about already today will 
be facing. So these are two inter-related issues. I am very pleased to 
support this bill.


                announcement by the speaker pro tempore

  The SPEAKER pro tempore (Mr. Gutknecht). The Chair would admonish all 
Members that references to legislative positions of Senators must be 
confined to their factual sponsorship of bills, resolutions or 
amendments.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1 minute to the gentlewoman 
from the Virgin Islands (Mrs. Christensen).
  Mrs. CHRISTENSEN. Mr. Speaker, I thank the gentleman for yielding me 
time.
  Mr. Speaker, I rise in strong opposition to H.R. 4600. At first blush 
this bill sounds great. That is why some medical groups are supporting 
it. We definitely need to do something about skyrocketing malpractice 
costs that are driving good doctors out of their offices and away from 
their patients, but this is not the way.
  As a physician myself, I have thought about this bill until I 
realized it exempted manufacturers of drugs, products and HMOs from 
liability. Once again, the doctors are the only ones liable. Everyone 
else, those who put the products in our hands, those who dictate what 
we do, would be off the hook.
  This bill does nothing to guarantee that medical malpractice premiums 
will actually be reduced. In California, which the Republicans cite, 
doctors' premiums have grown 3.5 percent from 1991 to 2000 compared 
with the national increase of 1.9 percent. This is not the kind of tort 
reform we need. This is a terrible bill, and I urge my colleagues to 
oppose it.
  The SPEAKER pro tempore. The Chair would advise that the gentleman 
from Pennsylvania (Mr. Greenwood) has 3-3/4 minutes remaining. The 
gentleman from Ohio (Mr. Brown) has 4 minutes remaining.
  Mr. GREENWOOD. Mr. Speaker, I yield 1 minute to the gentleman from 
Indiana (Mr. Buyer).
  Mr. BUYER. Mr. Speaker, I rise in support of H.R. 4600 because it 
strikes an appropriate balance between the needs of patients who have 
been harmed to seek redress and the needs of all patients to have 
access to health care.
  I note my colleague from the Committee on Energy and Commerce, the 
gentleman from Massachusetts (Mr. Markey), was concerned about whether 
premiums would go down or not. I would welcome him to read the 
Congressional Budget Office's report that was ordered by the Committee 
on the Judiciary. CBO estimates that under this bill premiums for 
medical malpractice ultimately would go down on an average of 25 to 30 
percent. So I would welcome the gentleman to read that.
  I also particularly support section 11 that provides flexibility to 
the States. I think that is smart to do that. Indiana has a very good 
law that has been in place for over 3 decades. It is comprehensive 
medical malpractice reform. The system works well. It has a medical 
review panel.

                              {time}  1430

  It also limits recovery from lawyers. The total recovery is capped. 
Attorney's fees are capped. We have a compensation fund managed by the 
State, and injured patients receive compensation in a timely fashion. I 
would like to thank the chairman for permitting this flexibility in the 
bill.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1 minute to the gentleman 
from New Jersey (Mr. Andrews).
  (Mr. ANDREWS asked and was given permission to revise and extend his 
remarks.)
  Mr. ANDREWS. Mr. Speaker, I thank the chairman and ranking member, 
soon to be chairman, my friend, for yielding me the time.
  There is a malpractice insurance crisis in our country. The woman who 
delivered my two daughters no longer delivers babies these days because 
of that crisis, and I understand it. I also understand the way to end 
that problem is not to enact the greatest transfer of income in history 
from victims of medical malpractice to insurance companies, and that is 
what this underlying legislation does.
  What it says is that people who have been the victims of medical 
mistake, medical malpractice and medical error will see an arbitrary 
ceiling on what they can recover when something has happened to them. 
What the bill does not say is that the savings that would no doubt 
accrue to the benefit of insurance companies must accrue to the benefit 
of the physicians who paid in malpractice premiums.
  The iron rule of insurance law in America is when insurance companies 
get the money they keep it. They do not share it with the doctors. They 
do not share it with the patients. They keep it. This is an insurance 
company relief act at a time when our physicians and patients need 
relief.
  Mr. GREENWOOD. Mr. Speaker, I yield 1 minute to the gentleman from 
Mississippi (Mr. Pickering).
  Mr. PICKERING. Mr. Speaker, I rise in support of this act. In my home 
State we now have a crisis. Our legislature cannot reach agreement. It 
cannot enforce or enact any type of boundary or set of limits that will 
give us some protection and stability and predictability and certainty 
for our medical community. We have acute shortages of nurses, of OB/
GYNs, of neurosurgeons. Our trauma care, if there is a car accident, 
this is becoming a matter of life and death in Mississippi.
  We needed to do something here so that we can help in Medicare and 
Medicaid and for our veterans so that we can help have the nursing and 
the physician professions stay in business and stay in a very noble 
calling to heal the sick and to make well those who are hurt and 
injured.
  If we do not do this, we will see health care in places like 
Mississippi diminish. It will not be affordable. It will not be 
accessible. I know from personal experience.
  My mother just had open heart surgery. My sister just had her eighth 
child. On one day we had new life in our family. On the next day my 
mother got a new heart. We must have the medical care and we need this 
act to contain the costs and to keep those who heal in business.
  Mr. BROWN of Ohio. Mr. Speaker, how much time is remaining and who 
actually is going to close?

[[Page H6733]]

  The SPEAKER pro tempore (Mr. Gutknecht). The gentleman from Ohio (Mr. 
Brown) has 3 minutes remaining and the gentleman from Pennsylvania (Mr. 
Greenwood) has 1-3/4 minutes remaining. The gentleman from Pennsylvania 
will close.
  Mr. GREENWOOD. Mr. Speaker, I yield 1 minute to the gentleman from 
Kentucky (Mr. Fletcher).
  Mr. FLETCHER. Mr. Speaker, I thank the gentleman from Pennsylvania 
(Mr. Greenwood) for the work he has done on this. What this bill is 
really about, it is about affordable, accessible, available and quality 
health care. Whatever else is said really makes very little difference 
if we cannot have health care access in all of America.
  Some are saying this may limit the particular damages individuals 
injured may get, but in fact, the truth of this bill, the damages that 
a patient incurs are not limited in this bill, and it has proved very 
effective. The economic damages are unlimited. The punitive damages are 
up to twice the economic damages, which makes those unlimited 
virtually.
  Let me say this. I do not begrudge personal lawyers having seven 
digit incomes. That is not the issue here. The issue is the siphoning 
of money out of the health care system that goes somewhere else, money 
that could be used to deliver health care.
  The other issue is accessibility. There are some in rural America, if 
we do not pass legislation like this, either on the Federal level in 
many States, that are going to have to drive an extra mile to get 
looked at. That means that a patient is going to be injured, a child is 
going to be lost or another individual will not receive the health 
care.
  I think it is imperative that we pass this legislation. I want to 
thank the leadership on this.
  Mr. BROWN of Ohio. Mr. Speaker, I yield our final 3 minutes to the 
gentlewoman from Colorado (Ms. DeGette), who has been a leader for 
patient's rights.
  Ms. DeGETTE. Mr. Speaker, as a former State legislator, I am 
continually amazed how this Congress seems to think that we are the 
'super' State legislature and that we should solve all the problems 
that we in our cynicism do not think the States can solve. The truth is 
regulation of medicine is a State issue and regulation of medical 
malpractice is a State issue. Every State has a malpractice statute, 
and right now the majority of the States are reviewing those statutes 
to see if they are adequately addressing this issue. I think we should 
leave it up to the States, and that is one reason I oppose this bad, 
bad bill.
  I know there is a malpractice insurance crisis in this country. I 
talk to my doctors just like everybody else, but I want to ask my 
colleagues this, why should the patients suffer twice because we want 
to reward the insurance companies? The patients are being asked to 
sacrifice their rights under this legislation. The doctors are still 
going to have to pay high insurance premiums because nothing in this 
legislation stops the insurance companies from continuing to rack up 
the rates, and the ones that are going to suffer are the patients.
  In California, they have had a statute for many, many years. The 
malpractice insurance rates are higher than the States that do not have 
these kind of caps, and why? We are putting no limitations on these 
out-of-control insurance rates. In the meantime, here is what this 
terrible bill does to the patients, to people who are actually injured 
by medical malpractice.
  The first one is the $250,000 cap on noneconomic damages. As I said 
in committee, I think people misunderstand what noneconomic damages 
are. They are not punitive damages. They are very real damages that 
patients suffer. They are things like loss of a leg, disfigurement, 
pain and suffering and the loss of fertility. Under common law, 
noneconomic damages would not be capped, but when we cap them at 
$250,000, victims who do not work outside the home like women, 
children, others with very low economic damages will not be able to be 
adequately compensated.
  There is a case in Colorado where a child fell on a stick and his 
doctor did not adequately diagnose it, and that child, if he were 
limited to $250,000, his mother had to quit her job. He has been 
limited to a wheelchair. His chance to succeed as a citizen in our 
society is gone, and we are not going to adequately compensate him for 
that all because the insurance companies want to charge excessive 
rates. That is wrong. That is wrong for that kid, that is wrong for his 
family, and that is wrong for every single patient who suffers at the 
hands of malpractice.
  The second problem with this bill, well, there are many problems, but 
the second I want to talk about is the elimination of joint and several 
liability. Under common law, defendants are jointly and severally 
liable. When we eliminate it, victims will not receive compensation.
  Please defeat this bad bill.
  Mr. GREENWOOD. Mr. Speaker, the previous speaker and most of the 
opponents of this bill have acknowledged that we have a crisis, a 
crisis that has to be resolved, and unfortunately, they have not 
articulated an alternative to our proposal, only their criticisms of 
it.
  The fact of the matter is that this bill tips the scales back so that 
they are in balance. This bill allows 100 percent of economic damages, 
millions and millions of dollars of damages available to plaintiffs for 
their health care and their lost wages and many, many other economic 
damages. It puts a cap as a floor of $250,000 for noneconomic, 
noncalculable economic damages and allows every State in the union that 
wants to raise that to wherever they see fit.
  This is the opportunity now to decide whether this House will stand 
up to the crisis and solve it or turn its head and let it fester for 
another 20 years.
  Mr. CHAMBLISS. Mr. Speaker, the American Medical Association has 
declared Georgia one of twelve states with a medical malpractice 
crisis. About four in every ten hospitals in Georgia are now facing 
liability insurance premiums that have increased by more than 50 
percent, and one of every four of those facilities has been hit hard 
with increases that exceed 200 percent. The St. Paul Company was the 
second largest health care underwriter in Georgia. When it ceased 
writing medical malpractice insurance policies last December, around 
42,000 physicians nationwide had to scramble for coverage and 
protection. Some still have not found new insurance. Radiologists, OB/
GYN specialists, and surgeons are among the groups hardest hit by these 
rising rates.
  Many of Georgia's 178 hospitals already are struggling financially 
from staffing shortages and financial pressures. Some hospitals in 
Georgia will either have to look at closing or offer fewer services to 
patients who are in desperate need of care. The problems in Georgia 
highlight a national challenge for both hospitals and physicians. 
Physicians are threatening to relocate or retire in the wake of 
dramatic increases in malpractice insurance premiums. Patients cannot 
afford to lose care because doctors cannot afford premiums. This is 
outrageous and a sad commentary on the state of our health care system.
  Litigation costs have premiums which are forcing doctors to scale 
back services, retire early, and reduce care to the poor. Like 
physicians, hospitals are having a difficult time finding medical 
malpractice insurance because with the skyrocketing cost of litigation 
several providers have ceased writing coverage altogether.
  I would like to share some examples to demonstrate the severity of 
this problem in Georgia:
  There is an 80 bed hospital in Alma, Georgia, which is in the 8th 
Congressional district, that was forced to take out a bank loan to 
cover a medical malpractice insurance premium that more than tripled in 
one year (rising from $118,000 to $396,000). Memorial Hospital and 
Manor in Bainbridge, Georgia was faced with a staggering 600 percent 
increase on its existing policy (increasing from $140,000 to $970,000).
  According to WebMD Medical News, Dr. Sand Reed in Thomasville, 
Georgia, an OB/GYN, said her medical malpractice insurance increased 30 
percent just this year. She is considering giving up delivering babies. 
She should not be forced to make these choices and her patients will 
suffer when they lose her expertise and experience in this area.
  According to the Atlanta Journal Constitution, Ty Cobb Health, a 
consortium of three rural Northeast Georgia Hospitals and nursing 
homes, received a bill by fax this summer just 24 hours before a check 
was due. Not only did the insurance company increase his deductible ten 
fold, but the premium jumped from $553,000 to $3.15 million--a 469 
percent increase. They eventually got an extension but can no longer 
plan for expansions or renovations of their emergency room.
  In Fitzgerald, Georgia, Dr. Jim Luckie, has quit delivering babies 
because his premium

[[Page H6734]]

was so high. His liability insurance expired in April and it took him 
six weeks to get a new policy. When his insurance premium more than 
doubled, the family practitioner decided to discontinue the OB portion 
of his medical practice.
  Dr. Edmund Wright, also of Fitzgerald, is a family practitioner who 
performed Caesarean sections and has had to give up that part of his 
practice. His premiums quadrupled to $80,000 this year and would have 
been $110,000 had he continued the surgical delivery procedure, which 
insurance companies consider ``high risk.''
  In 2000, Georgia physicians paid more than $92 million to cover 
injury awards. That amount was 11th highest in the nation despite 
Georgia ranking 38th in total number of physicians in the U.S. It's 
clear Georgia is in a medical malpractice crisis.
  Substantial medical malpractice reform is critical. The current 
system is destroying the doctor-patient relationship. I have talked 
extensively with the members and leadership of the Medical Association 
of Georgia, and have met with hospital and physician groups, as well as 
with patients and it is clear that we need to reform our current system 
for the sake of our patients, physicians, and hospitals. We need a 
system that allows any patient the right to pursue any cause where 
injury is the result of negligence. At the same time, we need a system 
that provides reasonable protection to hospitals and physicians.
  Without the important reforms included in H.R. 4600, physicians and 
hospitals will continue to struggle to keep their doors open. I urge my 
colleagues to fight for all who deserve and need quality, affordable 
healthcare and to vote for this important legislation.
  Mr. PAUL. Mr. Speaker, as an OB-GYN with over 30 years in private 
practice, I understand better than perhaps any other member of Congress 
the burden imposed on both medical practitioners and patients by 
excessive malpractice judgments and the corresponding explosion in 
malpractice insurance premiums. Malpractice insurance has skyrocketed 
to the point where doctors are unable to practice in some areas or see 
certain types of patients because they cannot afford the insurance 
premiums. This crisis has particularly hit my area of practice, leaving 
some pregnant woman unable to find a qualified obstetrician in their 
city. Therefore, I am pleased to see Congress address this problem.
  However this bill raises several question of constitutionality, as 
well as whether it treats those victimized by large corporations and 
medical devices fairly. In addition, it places de facto price controls 
on the amounts injured parties can receive in a lawsuit and rewrites 
every contingency fee contract in the country. Yet, among all the new 
assumptions of federal power, this bill does nothing to address the 
power of insurance companies over the medical profession. Thus, even if 
the reforms of H.R. 4600 become law, there will be nothing to stop the 
insurance companies from continuing to charge exorbitant rates.
  Of course, I am not suggesting Congress place price controls on the 
insurance industry. Instead, Congress should reexamine those federal 
laws such as ERISA and the HMO Act of 1973, which have allowed insurers 
to achieve such a prominent role in the medical profession. As I will 
detail below, Congress should also take steps to encourage contractual 
means of resolving malpractice disputes. Such an approach may not be 
beneficial to the insurance companies or the trial lawyers, but will 
certainly benefit the patients and physicians which both sides in this 
debate claim to represent.
  H.R. 4600 does contain some positive elements. For example, the 
language limiting joint and several liability to the percentage of 
damage someone actually caused, is a reform I have long championed. 
However, Mr. Speaker, H.R. 4600 exceeds Congress' constitutional 
authority by preempting state law. Congressional dissatisfaction with 
the malpractice laws in some states provides no justification for 
Congress to impose uniform standards on all 50 states. The 10th 
amendment does not authorize federal action in areas otherwise reserved 
to the states simply because some members of Congress are unhappy with 
the way the states have handled the problem. Furthermore, Mr. Speaker, 
by imposing uniform laws on the states, Congress is preventing the 
states from creating innovative solutions to the malpractice problems.
  The current governor of my own state of Texas has introduced a far 
reaching medical litigation reform plan that the Texas state 
legislature will consider in January. However, if H.R. 4600 becomes 
law, Texans will be deprived of the opportunity to address the 
malpractice crisis in the way that meets their needs. Ironically, H.R. 
4600 actually increases the risk of frivolous litigation in Texas by 
lengthening the statute of limitations and changing the definition of 
comparative negligence.
  I am also disturbed by the language that limits liability for those 
harmed by FDA-approved products. This language, in effect, establishes 
FDA approval as the gold standard for measuring the safety and 
soundness of medical devices. However, if FDA approval guaranteed 
safety, then the FDA would not regularly issue recalls of approved 
products later found to endanger human health and/or safety.
  Mr. Speaker, H.R. 4600 also punishes victims of government mandates 
by limiting the ability of those who have suffered adverse reactions 
from vaccines to collect damages. Many of those affected by these 
provisions are children forced by federal mandates to receive vaccines. 
Oftentimes, parents reluctantly submit to these mandates in order to 
ensure their children can attend public school. H.R. 4600 rubs salt in 
the wounds of those parents whose children may have been harmed by 
government policies forcing children to receive unsafe vaccines.
  Rather than further expanding unconstitutional mandates and harming 
those with a legitimate claim to collect compensation, Congress should 
be looking for ways to encourage physicians and patients to resolve 
questions of liability via private, binding contracts. The root cause 
of the malpractice crisis (and all of the problems with the health care 
system) is the shift away from treating the doctor-patient relationship 
as a contractual one to viewing it as one governed by regulations 
imposed by insurance company functionaries, politicians, government 
bureaucrats, and trial lawyers. There is not reason who questions of 
the assessment of liability and compensation cannot be determined by a 
private contractual agreement between physicians and patients.
  I am working on legislation to provide tax incentives to individuals 
who agree to purchase malpractice insurance, which will automatically 
provide coverage for any injuries sustained in treatment. This will 
insure that those harmed by spiraling medical errors receive timely and 
full compensation. My plan spares both patients and doctors the costs 
of a lengthy, drawn-out trial and respects Congress' constitutional 
limitations.
  Congress could also help physicians lower insurance rates by passing 
legislation that removes the antitrust restrictions preventing 
physicians from forming professional organizations for the purpose of 
negotiating contracts with insurance companies and HMOs. These laws 
give insurance companies and HMOs, who are often protected from 
excessive malpractice claims by ERISA, the ability to force doctors to 
sign contracts exposing them to excessive insurance premiums and 
limiting their exercise of professional judgment. The lack of a level 
playing field also enables insurance companies to raise premiums at 
will. In fact, it seems odd that malpractice premiums have skyrocketed 
at a time when insurance companies need to find other sources of 
revenue to compensate for their recent losses in the stock market.
  In conclusion, Mr. Speaker, while I support the efforts of the 
sponsors of H.R. 4600 to address the crisis in health care caused by 
excessive malpractice litigation and insurance premiums, I cannot 
support this bill. H.R. 4600 exceeds Congress' constitutional 
limitations and denies full compensation to those harmed by the 
unintentional effects of federal vaccine mandates. Instead of 
furthering unconstitutional authority, my colleagues should focus on 
addressing the root causes of the malpractice crisis by supporting 
efforts to restore the primacy of contract to the doctor-patient 
relationships.
  Mr. DeLAY. Mr. Speaker, we're facing a growing crisis in our health 
care system.
  In a number of states, there's a continuing exodus of doctors and 
talented specialists that's drawing down the quality of health care 
available to many Americans.
  The reason for it is simple. The plaintiff's bar has been working for 
years and years to undermine, weaken, and strip-away the legal 
protections for practicing physicians.
  Their reckless pursuit of ever-growing legal judgments is placing 
affordable insurance coverage out of reach for doctors in far too many 
states.
  The raw greed motivating plaintiff's lawyers is driving good doctors 
out of states like Florida, Illinois, New York, North Carolina, Ohio, 
Pennsylvania, Texas, and West Virginia, to pick only a few.
  These states are in crisis. And if anyone doubts if, they can test my 
assertion by trying to schedule an appointment with a neurosurgeon in 
one of these states. You'd better not need help in a hurry.
  Doctors are confronting an awful choice: Abandon the communities and 
patients they trained to heal or be broken over the unacceptable costs 
of rising medical insurance premiums.
  All of this raises a dangerous question. The medical liability 
insurance crisis creates liabilities for us beyond the practical 
problems of routine care.
  What happens in states with over-burdened medical systems if there's 
a terror attack that produces mass casualties? What happens to the 
people when doctors have been driven across the border to neighboring 
states?

[[Page H6735]]

  Mr. Speaker, we need real common-sense reforms and we need them 
today. The HEALTH Act delivers that relief and I ask Members to support 
it.
  Mr. KNOLLENBERG. Mr. Speaker, we must act now to address the 
malpractice insurance crisis facing our nation. Medical providers 
across the country are turning away new patients or simply closing 
their doors because they can no longer afford the skyrocketing 
malpractice insurance premiums. This is particularly true in high-risk 
specialties such as obstetrics/gynecology and emergency medicine.
  An American Hospital Association survey released this June found that 
more than 1,300 health care institutions have been affected by 
increasing malpractice costs. It further reported that 20 percent of 
the association's 5,000 member hospitals and other health care 
organizations had cut back on services and 6 percent had eliminated 
some units.
  And the AMA today designated 19 states as ``Medical Liability Crisis 
State.'' Fortunately, my home state of Michigan is not on that list, 
but if things continue as they are, all of our home states will be on 
that list.
  This is unacceptable. Patients do not have time to wait for care or 
travel long distances to find a provider when they are in emergency 
situations. We cannot allow people to die because emergency rooms 
cannot afford to insure the necessary specialists. Women should also be 
able to receive prenatal care without worrying that their doctors might 
not be able to continue providing care throughout their entire 
pregnancy.
  Moreover, fear of litigation leads many doctors to prescribe 
medicines and order tests that they feel are unnecessary. Studies 
estimate that this defensive medicine costs billions of dollars a year, 
enough to provide medical care to millions of uninsured Americans.
  I believe we must work to eliminate medical errors and patients 
should be able to seek redress when medical mistakes are made but our 
health care system should serve patients, not lawyers. I have strong 
concerns with any endless, frivolous, and costly personal injury-like 
litigation. Today's system is skewed toward enterprising plaintiff's 
attorneys but the focus should be toward expanding health care access.
  The causes of the liability crisis are complex but legislation we are 
considering today is a significant step in ensuring health care 
providers will be able to continue serving patients. The HEALTH Act 
would help stabilize liability premiums as well as help patients get 
awards and settlements faster and ensure that patients, not lawyers, 
receive the majority of the awards.
  This is common-sense legislation modeled after California's twenty-
five year-old, highly successful litigation reforms. I encourage my 
colleagues to support this bill because Americans do not have the time 
to wait for assurance that health care practitioners can maintain their 
practices and continue to serve patients.
  Mr. BLUMENAUER. Mr. Speaker, it is clear that a crisis exists 
relating to the costs of medical malpractice liability insurance 
premiums. This bill is no a solution, and I will not vote for it. The 
problem deserves an effective solution based on a real causal 
evaluation, which this bill lacks. Even insurers and their lobbyists 
reject the notion that tort reform would achieve any specific premium 
reduction.
  I am particularly concerned that the model for this bill, 
California's Medical Injury Compensation Reform Act (MICRA), does not 
appear to have made any improvement at all in the battle against high 
malpractice insurance premiums. MICRA included a $250,000 cap on non-
economic damages as well as arbitration and attorney fee provisions, 
yet doctors still pay premiums that are higher than the national 
average.
  Furthermore, the caps on damages in this bill are arbitrary, and 
based on a scale established in 1975. In Oregon, the Supreme Court has 
repeatedly ruled that even looser caps are a clear violation of state 
law, and Oregon voters have resisted efforts to change this. This bill 
would overturn their decisions, as well as patients' rights laws in 11 
other states.
  Since Congress is very unlikely to enact this tort reform, we ought 
to look into the effect that poor investments, the legislative 
framework, and other insurance industry-side elements might have in 
this crisis. Until we achieve a greater level of transparency in the 
accounting practices of insurers who hold the strings to these 
premiums, we will be unable to truly provide the relief that the 
medical system needs. I am committed to working with all parties to 
solve the malpractice premium crisis.
  Ms. GRANGER. Mr. Speaker, today in my district, doctors are being 
forced out of practice because of the skyrocketing cost of medical 
malpractice insurance. In fact, a very close friend of mine who his a 
practicing in physician in Fort Worth, doctor Susan Blue, has recently 
been notified that her insurance carrier will terminate her policy on 
December first of this year. Since 1990, doctor Blue has had nine 
malpractice claims filed against her. However, most of the claims were 
frivolous and without merit, and her insurance company only paid out on 
one of these claims. And in that instance, $5,000 was paid to simply 
avoid spending tens of thousands of dollars in defense.
  Unfortunately, because doctor Blue has been unable to find 
malpractice insurance, she may be forced to retire in December--after 
29 years of practicing quality medicine.
  I wish I could say that doctor Blue's story is an isolated incident. 
But we all know it's not. Every Member of Congress here today has a 
doctor Blue in their district. Every Mmember of Congress has 
experienced doctors that are, right now, deciding whether or not to 
retire because of the high cost of malpractice insurance. As a nation, 
we cannot afford to lose one more doctor.
  With one less doctor, patients wait longer, diseases progress 
further, and health insurance costs continue to spin out of control.
  Let's hold on to the skilled community physicians and ensure patients 
have the doctor choice that they deserve and desire.
  Today I will be voting for doctors like Susan Blue, and I will 
support common sense malpractice reform. I will be supporting H.R. 
4600.
  Mr. EHRLICH. Mr. Speaker, I am pleased that the House today is 
debating public policy options to help contain the growth of medical 
care costs in our nation. Patients across the country continue to see 
increases in their insurance premiums and health costs, and it is 
critical for Congress to find solutions to make health care more 
affordable for physicians to practice and patients to access.
  Proponents of H.R. 4600, The Help Efficient, Accessible, Low Cost, 
Timely Health Care (HEALTH) Act, argue that this bill, which would 
create national tort reform, would contain or lower medical malpractice 
insurance costs for physicians and by extension lower health costs for 
consumers. I understand the many arguments in favor of this 
legislation, including the need to limit excessive medical insurance 
costs which physicians face in many states and often pass on to their 
patients. Also, like my fellow House members, I too feel a need to help 
my constituents back home.
  I agree that our society has become excessively litigious and that 
reasonable tort reform can be enacted to reduce medical malpractice 
insurance premiums, keep doctors in areas of medical need, and help 
patients. Supporters of this legislation argue that many states are 
incapable of enacting tort reform because of the restrictions of their 
state constitutions or other barriers. Supporters also argue that a 
federal remedy is reasonable because this bill allows for state limits 
on damages to supersede the federal caps. I understand that the 
majority of my party, our leadership, and the President support this 
bill.
  I believe, however, the proper venue for this debate should not be 
the U.S. Congress but rather the many state legislatures whose 
constitutions forbid tort reform or where there is no political will to 
limit damages from medical malpractice. This is a state matter--not a 
federal one.
  States can and do enact reasonable, successful tort reform. In 
Maryland, for example, our tort reform law has generally worked well. 
As a state delegate who served on the Judiciary Committee in Annapolis 
and as a Member of Congress, I strongly support Maryland's tort law, 
which differs significantly from H.R. 4600 on a number of important 
matters, including caps on noneconomic damages, attorneys' fees caps, 
statutes of limitation on claims, and joint and several liability. One 
of the notable features of the Maryland law is the cap on noneconomic 
damages at $620,000 this year, with a built-in adjuster for inflation 
of $15,000 annually. I believe this cap allows for working-class 
victims of medical malpractice to reap reasonable damages. Creating an 
inflation adjuster allows for the removal of politics from tort laws 
which would otherwise call for frequent political intervention to 
update damage caps or risk the erosion of their value to compensated 
victims.
  Mr. Speaker, I opposed similar caps on damages during the Patients 
Bill of Rights debate on the floor of the House in 2001 because I have 
come to the conclusion that states can regulate tort reform best--if 
they only choose to do so. I understand that many states have 
experienced problems with increasing costs of medical liability 
insurance for physicians. I respectfully believe, however, that the 
proper area for that debate is not in

[[Page H6736]]

Washington, DC but in state capitals where tort systems clearly need to 
be addressed and regulated as they have been in the past.
  Accordingly, I oppose H.R. 4600.
  Mr. HAYES. Mr. Speaker, I rise today in strong support of H.R. 4600, 
the Health Act.
  Skyrocketing insurance premiums are debilitating our nation's health 
care delivery system.
  In April I visited hospitals in the 8th District of North Carolina to 
talk about workforce issues such as the nursing shortage. At every 
stop, the number one concern of these talented health professionals was 
resoundingly the dramatically escalating cost of liability insurance.
  Last year, NorthEast Medical in Concord, North Carolina paid 
approximately $600,000 for professional liability/general liability 
insurance for the hospital. This year they will pay approximately $1.7-
1.9 million for the same coverage. They have one of the best loss rates 
in North Carolina. Other hospitals that aren't so fortunate are paying 
even more.
  Scoltland Memorial, a rural hospital with only 124 acute beds, 50 bed 
nursing home, and minimal claims history, has seen an increase of over 
$545,000 this year with most of their insurance quotes over $1 million. 
Many of the potential insurers left in the industry are not willing to 
cover nursing homes or only at an even greater premium.
  First Health Richmond, another rural hospital, paid $836,810 in 2001 
for liability premiums. But this past year, they paid over $2 million! 
This hospital submitted 14 requests for bids, and only one company was 
even able to offer a quote. Lack of competitive insurers means even 
higher costs for our hospitals.
  However, the problem is not isolated to hospitals.
  Many obstetricians/gynecologists have stopped delivering babies. 
Physicians are retiring or moving because they no longer can afford to 
serve their communities or are simply unable to even purchase 
insurance. Annual increases in malpractice insurance for doctors of 30-
70 percent are common today.
  Just this month, three sub-specialist groups have informed Union 
Regional Medical Center in Union County, North Carolina that they will 
have to discontinue serving the hospital's patients because of huge 
increases in liability coverage, or threats from their carrier of such.
  Smaller community hospitals, like most of those in my district need 
these sub-specialists from our larger cities such as Charlotte and 
Fayetteville. Their availability adds to the quality of health services 
available in our communities.
  In 1994, the average medical malpractice jury award was $1.14 
million. In 2000, just 6 short years, the average award rose to $3.4 
million.
  We must reign in run-away jury verdicts and the greed of trial 
lawyers who search for deep pockets. Taxpayers and seniors are the 
leading victims of a systemic trial lawyer-driven litigation explosion 
that siphons federal dollars out of the nation's healthcare system, 
threatens seniors' access to quality health care, and costs taxpayers 
billions of dollars. The system is broken, and we need to fix it.
  Without federal legislation, the exodus of providers from the 
practice of medicine will continue, and patients will find it 
increasingly difficult to obtain needed health care.
  This crisis is a threat for all Americans. We must safeguard 
patients' access to care through common sense reforms. Vote ``yes'' on 
H.R. 4600.
  Mr. STARK. Mr. Speaker, I rise in strong opposition to H.R. 4600, 
legislation that would undermine the right of patients and their 
families to seek appropriate compensation and penalties when they, or a 
loved one, are harmed or even killed by an incompetent health care 
provider.
  At best, this bill is a wrong-headed approach to the problem of 
rising malpractice health insurance costs. At worst, it is a bill 
designed to protect bad doctors and other health care providers from 
being held accountable for their actions. Under any scenario, the bill 
is harmful to consumers and should be defeated.
  The Republican Leadership has once again brought us a bill that 
favors their special interests at the expense of quality health care. 
Doctors, hospitals, HMOs, health insurance companies, nursing homes, 
and other health care providers would all love to see their liability 
risk reduced. This bill meets that need. Unfortunately, it does so 
solely on the backs of America's patients.
  Supporters of this bill would have you believe that medical 
malpractice lawsuits are driving health care costs through the roof. In 
fact, for every $100 spent on medical care in 2000, only 56 cents could 
be attributed to medical malpractice costs--that's one half of one 
percent. So, supporters are spreading false hope that reducing the cost 
of medical malpractice would reduce the cost of health care in our 
country by any measurable amount. It won't.
  What supporters of this bill do not want you to understand is how bad 
this bill would be for consumers. The provisions of this bill would 
prohibit juries and courts from providing awards they believe are 
appropriate relative to the harm done.
  H.R. 4600 caps non-economic damages. By setting an arbitrary cap on 
this portion of an award, the table is tilted against seniors, women, 
children, and people with disabilities. Medical malpractice awards 
break down into several categories. Economic damages are awarded based 
on how one's future income is impacted by the harm caused by medical 
malpractice. There are no caps on this part of the award. But by 
capping non-economic damages, this bill would result in someone, 
without tremendous earning potential--a housewife or a senior for 
example--finding their award much lower than that of a young, 
successful businessman for identical injuries. Is that fair? I don't 
think so.
  The limits on punitive damages are severe. Punitive damages are 
seldom awarded in malpractice cases, but their threat is an important 
deterrent. And, in cases of reckless conduct that cause severe harm, it 
is irresponsible to forbid such awards.
  The bill prohibits the requirement of a lump sum payment to an 
injured party which allows the defendants to continue to reap interest 
benefits while holding the award. And, this prohibition on lump sum 
awards could mean that injured victims who can no longer work do not 
have the funds available to meet their needs. Why should the decision 
of how to award the penalty be taken from the court which is in the 
best position to make that determination since they know the details of 
the particular case?
  Republicans claim to be advocates for states rights. Yet, this bill 
directly overrides the abilities of states to create and enforce 
medical malpractice laws that meet the needs of their residents.
  The issue of rising malpractice insurance costs is a very legitimate 
concern for America's health care providers. I would happily work with 
colleagues to develop legislation to help change that. For example, we 
could look at better ways of spreading the risk of medical malpractice 
insurance across a wider spectrum of doctors. Another option that has 
been discussed is to experience rate malpractice insurance so that 
providers' premiums better reflect their own professional experience. 
These are just a few examples of steps that could be taken. But, the 
important difference between those proposals and the one before us 
today is that those changes don't harm patients.
  Medical malpractice costs are an easy target. My Republican 
colleagues like to simplify it as a fight between America's doctors and 
our nation's trial lawyers. That is a false portrayal. Our medical 
malpractice system is a vital consumer protection. The bill before us 
drastically weakens the effectiveness of our nation's medical 
malpractice laws. I urge my colleagues to join me in voting against 
this wrong-headed and harmful approach to reducing the cost of 
malpractice premiums. It's the wrong solution for America's patients 
and their families.
  Mr. SMITH of Michigan. Mr. Speaker, a national insurance crisis is 
ravaging the nation's essential health care system Medical professional 
liability insurance rates have skyrocketed, causing major insurers to 
drop coverage or raise premiums to unaffordable levels.
  Doctors and other health care providers have been forced to abandon 
patients and practices, particularly in high-risk specialties such as 
emergency medicine, neurology, and obstetrics and gynecology. Low-
income neighborhoods and rural areas are being particularly hard hit.
  H.R. 4600 is, modeled after California's quarter-century old and 
highly successful health care litigation reforms (MICRA). MICRA was 
signed into law by Governor Jerry Brown, and has proved immensely 
successful in increasing access to affordable medical care. Overall, 
according to data of the National Association of Insurance 
Commissioners, the rate of increase in medical professional liability 
premiums in California since MICRA was enacted in 1976 has been a very 
modest 167 percent, whereas the rest of the United States have 
experienced a 505 percent rate of increase.
  Economists have concluded that direct medical care litigation 
reforms--including caps on non-economic damage awards--generally reduce 
the growth of malpractice claims rates and insurance premiums, and 
reduce other stresses on doctors that may impair the quality of medical 
care.
  By incorporating MICRA's time-tested reforms at the Federal level, 
the HEALTH Act will make medical malpractice insurance affordable 
again, encourage health care practitioners to maintain their practices, 
and reduce health care costs for patients. MICRA remains the only 
proven legislative solution to the current crisis, yet many state 
courts in states other than California have nullified legislative 
reforms. Congressional action is required.
  The current, unregulated medical tort system can force doctors to 
practice defensive

[[Page H6737]]

medicine. It also discourages improvements in the delivery of medical 
care by deterring doctors from freely discussing errors or potential 
errors due to a fear of litigation. The HEALTH Act will also save 
billions of dollars a year in taxpayer dollars by significantly 
reducing the incidence of wasteful defensive medicine in federally-
funded programs.
  Mr. MORAN of Virginia. Mr. Speaker, I rise today in support of H.R. 
4600 which safeguards patients' access to medical care by implementing 
common sense reforms.
  Skyrocketing liability insurance has forced some physicians, 
hospitals, and other health care providers to cut back or end 
practicing medicine. Our best and brightest doctors are curtailing 
their medical practice or leaving the profession altogether because of 
the ballooning cost of medical malpractice insurance caused by an 
onslaught of frivolous, yet damaging, lawsuits.
  At the most basic level, this is an access to care issue. As the 
former ranking member of the D.C. Appropriations Subcommittee, I saw 
first-hand the lack of access to decent health care for the 
disadvantaged and under-served population.
  The District of Columbia is the only state or territory that has not 
made any changes to its civil liability system resulting in D.C. 
ranking number one in the country in terms of the average size of 
payments that juries award in malpractice suits.
  One of the nation's premier pediatric hospitals located in the 
District of Columbia, Children's Hospital, over the last two years has 
had the total cost for malpractice insurance increase by 200 percent 
for less coverage. That is an additional $3 million a year going to 
insurance costs instead of going to treat sick patients. Howard 
University Hospital has been its malpractice insurance increase by 300 
percent this year alone.
  An Anacostia, OB-GYNs are terminating their practice because of the 
astronomical cost of medical malpractice insurance. Women are being 
denied access to critical prenatal care, gynecological services, and 
preventative treatment.
  Congress must pass this common-sense legislation and put a stop to 
the costs of the runaway litigation system paid by all Americans, I 
urge my colleagues to vote in favor of this legislation.
  Mr. PITTS. Mr. Speaker, in the Commonwealth of Pennsylvania, we have 
a crisis on our hands. Last year, there were more than $1.2 billion in 
medical malpractice suit payouts. That's a thousand dollars for every 
man, woman, and child in the Keystone State. That's a huge drain on our 
economy. Worse than that, it's hurting patients.
  In my Congressional district, one hospital recently closed its trauma 
center and another canceled plans to build a center city clinic to 
serve the poor. A third hospital is about to close its maternity ward 
and fourth hospital nearby is on the verge of cutting back on emergency 
room services.
  Why? Because they can't find medical malpractice insurance.
  Insurance companies literally can't charge enough for their policies 
to stay in business, so they're leaving the Commonwealth. And that 
means doctors and hospitals can't get insurance. Doctors are leaving 
the profession or leaving the state.
  One doctor in my district says there were thirty companies offering 
malpractice policies when he started his practice 30 years ago. Now 
there is only one, and he's not sure they'll give him a policy.
  This is a crisis, Mr. Speaker. And Pennsylvania is not the only state 
in the Union that's in trouble.
  It's time for Congress to act. And we need to act now.
  I urge my colleagues to pass this bill.
  Mr. DINGELL. Mr. Speaker, like many of my colleagues here today, I am 
concerned about the rising cost of malpractice insurance. It is a very 
real problem for doctors and patients and something we should address. 
But, I have serious reservations about this bill, H.R. 4600. And the 
closed rule under which it is being considered is an outrage--
confirming that this bill is a political ploy that will not help 
doctors and patients.
  High insurance rates have left doctors with few options. Those who 
can afford it will pay the increased costs, but those who cannot will 
either be forced to assume significant personal liability, leave high 
risk specialities, or leave the profession altogether. But, this 
legislation doesn't guarantee any reduction or abatement in increases 
that doctors are facing for their malpractice premiums. Instead, it 
focuses on drastic reforms of the judicial system that extend beyond 
malpractice, hurt injured consumers' access to redress, and provide a 
windfall to insurance companies.
  What has caused the increase in malpractice premiums is not easily 
identified. Many factors completely unrelated to jury verdicts and the 
civil justice system affect insurance rates: pricing of malpractice 
insurance; practices of accounting for income and expenses while 
planning for downturns; investment choices. Yet, this legislation 
addresses none of these issues. In fact, neither of the two Committees 
of jurisdiction ever explored these issues and their relation to 
malpractice premiums. Instead, we are voting today on a bill that won't 
do anything to lower doctors' premiums but will disproportionately hurt 
women, low-income families, and seniors.
  The legislation severely restricts non-economic damage awards. Yet, 
evidence shows no relation between caps and lower malpractice premiums. 
Four out of the top five most expensive states for medical malpractice 
premiums cap damages in medical malpractice cases. Michigan doctors pay 
far above the national average for medical malpractice insurance, in 
spite of Michigan's $280,000 cap on non-economic damages. Such limits 
sever only to enrich insurance companies at the expense of the most 
vulnerable, women, children, the elderly and low income families.
  The legislation also sets a nearly impossible standard for awarding 
punitive damages and then limits such damages based on the level of 
economic loss, again unfairly penalizing those with lower earnings. An 
egregious act that severely injures or disfigures Ken Lay, former CEO 
of Enron, could be punished more severely than if that same act had 
hurt a child, a stay-at-home mother, or an elderly woman in a nursing 
home.
  The legislation also goes well beyond the realm of medical 
malpractice and provides immunity from punitive damages to 
manufacturers of drugs and devices that are approved or cleared by the 
Food and Drug Administration (FDA) as well as those that are not FDA 
approved but are ``generally recognized as safe and effective.'' This 
is like arguing that because someone drives at the speed limit, they 
can not be negligent or reckless. It is clearly possible to obey the 
speed limit, yet still act in a negligent or reckless manner. The bill 
that was brought to the floor purports to address this criticism, but 
the change is mostly cosmetic. The FDA statue and regulations, like FDA 
approval, should not be a shield for liability from injury caused by 
egregious acts.
  The legislation also sets a stringent federal statute of limitations 
on state tort cases. In no event shall the time for commencement of a 
lawsuit exceed three years. Here again, last minute changes were made 
to the bill that are cosmetic rather than meaningful. The time should 
toll from discovery, not manifestation. Such a definition only invites 
more, not less, litigation. This issue is a well settled one with 
plenty of examples in case law and statute, and would be quite easy to 
fix correctly. The majority chose otherwise, leaving many injured 
patients whose claims would fall subject to this bill shut off from 
recourse.
  One more item I should mention is the sense of the Congress on 
holding insurance companies liable for damages when their medical 
decisions cause harm. This provision is all bark and no bite. Democrats 
and a handful of moderate Republicans have tried for more than five 
years to enact a Patients' Bill of Rights that would allow injured 
patients to hold HMOs accountable under state law. Time and time again, 
however, such legislation has been blocked by Republicans who 
ultimately wish to shield insurance companies from liability. This last 
minutes cosmetic change cannot hide that fact.
  In sum, instead of help for doctors with their malpractice premiums 
and fair compensation for injured patients, this bill puts more money 
in the pockets of insurance companies, and combines broad liability 
protections for industry with restrictions on patients who are harmed. 
The rising cost of malpractice insurance is a real problem requiring 
careful, balanced, and targeted legislation. Sadly, efforts to address 
this problem have become the vehicle for all manner of anti-patient 
provisions. I urge my colleagues to reject H.R. 4600.
  Mr. MOORE. Mr. Speaker, I rise in opposition to H.R. 4600.
  Like my colleagues, I am concerned about medical malpractice premiums 
and their effect on the availability of physicians, especially 
obstetricians and specialty physicians to practice in certain states. I 
am not at this time convinced, however, that H.R. 4600 is the complete 
answer to the medical malpractice insurance premium problem. The 
concentration of excessively high premiums in certain states shows that 
this is a regional, not national problems.
  I believe that Congress should address the medical malpractice 
insurance system as a whole. The pricing and accounting practices of 
medical malpractice insurers may have contributed to this problem. 
There are indications that imprecise accounting practices have inflated 
the bottom line of companies and price wars in the early 1990s led 
insurers to sell malpractice coverage at rates that were inadequate to 
cover anticipated claims. Recent stock market declines have further 
exacerbated the financial difficulties of these companies, which have 
raised premiums or gone out of business in response.
  I believe that a solution to the problem of rapidly rising medical 
malpractice insurance

[[Page H6738]]

premiums must address all of the factors that contribute to premium 
cost. Earlier this year, I sent a letter with several of my colleagues 
asking that the General Accounting Office conduct a study on the effect 
of market conditions and insurance company practices on medical 
malpractice insurance premiums. I am introducing into the Record a copy 
of that letter as well as a July 3, 2002, article from the Wall Street 
Journal.
  I expect to have preliminary results from the GAO in December. Once 
we know the full scope of the problem, I hope that we can work together 
to find a comprehensive solution to this problem.

                                               Washington, DC,

                                                     July 2, 2002.
     Hon. David M. Walker,
     Comptroller General of the United States, General Accounting 
         Office, Washington, DC.
       Dear Mr. Walker: We are writing to request your assistance 
     in evaluating the extent to which current market conditions 
     and insurance company practices are contributing to an 
     increase in medical malpractice premiums.
       It has been reported that insurance companies have been 
     raising the medical malpractice premiums which doctors must 
     pay in certain regions of the country. Congress has begun to 
     investigate this issue, and many in Congress have already 
     proposed legislation. However, thus far the focus of debate 
     in Washington has been limited. As Congress attempts to 
     balance the rights of patients with the interests of doctors 
     and insurers, we believe that a thorough analysis of 
     insurance industry practices is necessary. Medical 
     malpractice is an important issue that must be examined 
     thoroughly and deliberately from all perspectives.
       In this regard, we ask that you examine the financial 
     statements and information submitted to regulators by 
     insurance companies that offer medical malpractice insurance, 
     as well as any other information maintained by regulators 
     that may be relevant to this issue. In particular, we would 
     like to know how reductions in the investment income of 
     insurers may be adversely affecting the financial outlook of 
     these companies, thus increasing physician premiums to 
     compensate for any declines. To the extent feasible, you 
     should also analyze the underwriting history of medical 
     malpractice insurance to determine whether premiums have 
     historically experienced similar increases and also determine 
     whether current market conditions are in some way unique.
       We would also like you to examine the competitiveness of 
     markets, particularly in those areas experiencing the 
     sharpest premium increase. For example, has the lack of 
     competition in the medical malpractice insurance market 
     adversely affected physician premiums? In addition, we are 
     interested in having a better understanding of how 
     malpractice settlements and judgements compare to premiums 
     earned for medical malpractice lines of insurance. In 
     particular, we would like to know how incurred but not yet 
     reported holdings have affected the reserve practices of 
     medical malpractice insurers.
       As your examination proceeds, please provide us with a 
     status report no later than September 3, 2002. We thank you 
     for your assistance and look forward to your ultimate 
     findings on this important issue for patients and doctors.
           Sincerely,
         John Conyers, Jr., John J. LaFalce, Joseph M. Hoeffel, 
           Nick J. Rahall II, Alan B. Mollohan, John D. Dingell, 
           Max Sandlin, Ronnie Shows, Dennis Moore, Marion Berry.
                                  ____


             [From the Wall Street Journal, June 24, 2002]

    Insurers' Price Wars Contributed to Doctors Facing Soaring Costs

              (By Rachel Zimmerman and Christopher Oster)

       As medical-malpractice premiums skyrocket in about a dozen 
     states across the country, obstetricians and doctors in other 
     risky specialties, such as neurosurgery, are moving, quitting 
     or retiring. Insurers and many doctors blame the problem on 
     rising jury awards in liability lawsuits.
       ``The real sickness is people sue at the drop of a hat, 
     judgments are going up and up and up, and the people getting 
     rich out of this are the plaintiffs' attorneys,'' says David 
     Golden of the National Association of Independent Insurers, a 
     trade group. The American Medical Association says Florida, 
     Nevada, New York, Pennsylvania and eight other states face a 
     ``crisis'' because ``the legal system produces multimillion-
     dollar jury awards on a regular basis.''
       But while malpractice litigation has a big effect on 
     premiums, insurers' pricing and accounting practices have 
     played an equally important role. Following a cycle that 
     recurs in many parts of the business, a price war that began 
     in the early 1990s led insurers to sell malpractice coverage 
     to obstetrician-gynecologists at rates that proved inadequate 
     to cover claims.


                             Price Slashing

       Some of these carriers had rushed into malpractice coverage 
     because an accounting practice widely used in the industry 
     made the area seem more profitable in the early 1990s than it 
     really was. A decade of short-sighted price slashing led to 
     industry losses of nearly $3 billion last year.
       ``I don't like to hear insurance-company executives say 
     it's the tort [injury-law] system--it's self-inflicted,'' 
     says Donald J. Zuk, chief executive of Sepie Holdings Inc., a 
     leading malpractice insurer in California.
       What's more, the litigation statistics most insurers 
     trumpet are incomplete. The statistics come from Jury Verdict 
     Research, a Horsham, Pa., information service, which reports 
     that since 1994, jury awards for medical-malpractice cases 
     have jumped 175%, to a median of $1 million in 2000. During 
     that seven-year period, the median award for negligence in 
     childbirth was $2,050,000--the highest for all types of 
     medical-malpractice cases, Jury Verdict Research says. (In 
     any group of figures, half fall above the median, and half 
     fall below.)


                            Gaps in Database

       But Jury Verdict Research says its 2,951-case malpractice 
     database has large gaps. It collects award information 
     unsystematically, and it can't say how many cases it misses. 
     It says it can't calculate the percentage change in the 
     median for childbirth-negligence cases. More important, the 
     database excludes trial victories by doctors and hospitals--
     verdicts that are worth zero dollars. That's a lot to ignore. 
     Doctors and hospitals win about 62% of the time, Jury Verdict 
     Research says. A separate database on settlements is less 
     comprehensive.
       A spokesman for Jury Verdict Research, Gary Bagin, confirms 
     these and other holes in its statistics. He says the numbers 
     nevertheless accurately reflect trends. The company, which 
     sells its data to all comers, has reported jury information 
     this way since 1961. ``If we changed now, people looking back 
     historically couldn't compare apples to apples,'' Mr. Bagin 
     says.
       Some doctors are beginning to acknowledge that the 
     conventional focus on jury awards deflects attention from the 
     insurance industry's behavior. The American College of 
     Obstetricians and Gynecologists for the first time is 
     conceding that carriers' business practices have contributed 
     to the current problem, says Alice Kirkman, a spokeswoman for 
     the professional group. ``We are admitting it's a much more 
     complex problem than we have previously talked about,'' she 
     says.


                         Scrambling for Doctors

       The upshot is beyond dispute: Pregnant women across the 
     country are scrambling for medical attention. Kimberly 
     Maugaoteg of Las Vegas is 13 weeks pregnant and hasn't seen 
     an 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. 
     Maugaotega says she called 28 obstetricians but couldn't find 
     one who would take her.
       Frustrated, she called the office of Nevada Gov. Kenny 
     Guinn. A staff member gave her yet another name. She made an 
     appointment to see that doctor today but says she is 
     skeptical about the quality of care she will receive.
       In the Las Vegas area, doctors say some 90 obstetricians 
     have stopped accepting new patients since St. Paul Cos., 
     formerly the country's leading provider of malpractice 
     coverage, quit the business in December. St. Paul had insured 
     more than half of Nevada's 240 obstetricians. Carriers still 
     offering coverage in the state have raised rates by 100% to 
     400% physicians say.
       Dr. Wilbourn says his annual malpractice premium was due to 
     jump to $108,000 next month, from $33,000. The 41-year-old 
     solo practitioner says the increase would come straight out 
     of his take-home pay of between $150,000 and $200,000 a year. 
     In response, he is moving to Maine this summer.
       Dr. Wilbourn mourns having ``to pick up and leave the 
     patients I cared for and the practice I built up over 12 
     year.'' But in Maine, he has found a $200,000-a-year position 
     with an insurance premium of only $9,800 for the first year, 
     although the rate rises significantly after that. Premiums in 
     Maine are relatively low because a dominant doctor-owned 
     insurance cooperative there hasn't pushed to maximize rates, 
     the heavily rural population isn't notably litigious and its 
     court system employs an expert panel to screen out some 
     suits, says Insurance Commissioner Allessandro Iuppa.
       Until the 1970s, few doctors faced big-dollar suits. 
     Malpractice coverage was a small specialty. As courts 
     expanded liability rules, malpractice suits became more 
     common. Dozens of doctor-owned insurance cooperatives, or 
     ``bedpan mutuals,'' formed in response. Most stuck to their 
     home states.
       St. Paul, a mid-sized national carrier named for its base 
     in Minnesota, saw an opportunity. An insurer of Main Street 
     businesses, St. Paul became the leader in the malpractice 
     field. By 1985, it had a 20% share of the national market. 
     Overall, the company had revenue of $8.9 billion last year, 
     with about 10% of its premium dollars coming from malpractice 
     coverage.
       The frequency and size of doctors' malpractice claims rose 
     steadily in the early 1980s, industry officials say. St. Paul 
     and its competitors raised rates sharply during the 1980s.
       Expecting malpractice awards to continue rising rapidly, 
     St. Paul increased its reserves. But the company 
     miscalculated, says Kevin Rehnberg, a senior vice president. 
     Claim frequency and size leveled off in the late 1980s, as 
     more than 30 states enacted curbs on malpractice awards, Mr. 
     Rehnberg says. The combination of this so-called tort

[[Page H6739]]

     reform and the industry's rate increases turned malpractice 
     insurance into a very lucrative specialty.
       A standard industry accounting device used by St. Paul and, 
     on a smaller scale, by its rivals, made the field look even 
     more attractive. Realizing that it had set aside too much 
     money for malpractice claims, St. Paul ``released'' $1.1 
     billion in reserves between 1992 and 1997. The money flowed 
     through its income statement and boosted its bottom line.
       St. Paul stated clearly in its annual reports that excess 
     reserves had enlarged its net income. But that part of the 
     message didn't get through to some insurers--especially 
     bedpan mutuals--dazzled by St. Paul's bottom line, according 
     to industry officials.
       In the 1990s, some bedpan mutuals began competing for 
     business beyond their original territories. New Jersey's 
     Medical Inter-Insurance Exchange, California's Southern 
     California Physicians Insurance Exchange (now known as Scpie 
     Holdings), and Pennsylvania Hospital Insurance Co., or Phico, 
     fanned out across the country. Some publicly traded insurers 
     also jumped into the business.
       With St. Paul seeming to offer a model for big, quick 
     profits, ``no one wanted to sit still in their own 
     backyard,'' says Scpie's Mr. Zuk. ``The boards of directors 
     said, `We've got to grow.' '' Scpie expanded into 
     Connecticut, Florida and Texas, among other states, starting 
     in 1997.
       As they entered new areas, smaller carriers often tried to 
     attract customers by undercutting St. Paul. The price 
     slashing became contagious, and premiums fell in many states. 
     The mutuals ``went in and aggravated the situation by saying, 
     `Look at all the money St. Paul is making,' '' says Tom Gose, 
     President of MAG Mutual Insurance Co., which operates mainly 
     in Georgia. ``They came in late to the dance and undercut 
     everyone.''
       The newer competitors soon discovered, however, that ``the 
     so-called profitability of the `90s was the result of those 
     years in the mid-80s when the actuaries were predicting the 
     terrible trends,'' says Donald J. Fager, president of Medical 
     Liability Mutual Insurance Co., a bedpan mutual started in 
     1975 in New York. Except for two mergers in the past two 
     years, his company mostly has held to its original single-
     state focus.
       The competition intensified, even though some insurers 
     ``knew rates were inadequate from 1995 to 2000'' to cover 
     malpractice claims, says Bob Sanders, an actuary with 
     Milliman USA, a Seattle consultancy serving insurance 
     companies.


                             alleged fraud

       In at least one case, aggressive pricing allegedly crossed 
     the line into fraud. Pennsylvania regulators last year filed 
     a civil suit in state court in Harrisburg against certain 
     executives and board members of Phico. The state alleges the 
     defendants misled the company's board on the adequacy of 
     Phico's premium rates and funds set aside to pay claims. On 
     the way to becoming the nation's seventh-largest malpractice 
     insurer, the company had suffered mounting losses on policies 
     for medical offices and nursing homes as far away as Miami.
       Pennsylvania regulators took over Phico last August. The 
     company filed for bankruptcy-court protection from is 
     creditors in December. A trial date hasn't been set for the 
     state fraud suit. Phico executives and directors have denied 
     wrongdoing.
       In the late 1990s, the size of payouts for malpractice 
     awards increased, carriers say. By 2000, many companies were 
     losing money on malpractice coverage. Industrywide, carriers 
     paid out $1.36 in claims and expenses for every premium 
     dollar they collected, says Mr. Golden, the trade-group 
     official.
       The losses were exacerbated by carriers' declining 
     investment returns. Some insurers had come to expect that big 
     gains in the 1990s from their bond and stock portfolios would 
     continue, industry officials say. When the bull market 
     stalled in 2000, investment gains that had patched over 
     inadequate premium rates disappeared.
       Some bedpan mutuals went home. Scpie stopped writing 
     coverage in any state other than California. ``We lost money, 
     and we retreated,'' says the company's Mr. Zuk.
       New Jersey's Medical Inter-Insurance Exchange, now known as 
     MIIX, had expanded into 24 states by the time it had a loss 
     of $164 million in the fourth quarter of 2001. The company 
     says it is now refusing to renew policies for 7,000 
     physicians outside of New Jersey. It plans to reformulate as 
     a new company operating only in that state.
       St. Paul's malpractice business sank into the red. Last 
     December, newly hired Chief Executive Jay Fishman, a former 
     Citigroup Inc. executive, announced the company would drop 
     the coverage line. St. Paul reported a $980 million loss on 
     the business for 2001.
       As carriers retrench, competition has slumped and prices in 
     some states have shot up. 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.
       Last year, Dr. Friedman says he paid $50,000 for coverage. 
     If he gets a policy for next year, it will cost $90,000, he 
     predicts, based on his broker's estimate. ``I can't pass a 
     single bit of that off to my patients,'' because managed-care 
     companies don't allow it, he says.
       Dr. Friedman says he is considering dropping the obstetrics 
     part of his practice. Generally, delivering babies is seen as 
     posing greater risks than most gynecological treatment. As a 
     result insurers offer less-expensive policies to doctors who 
     don't do deliveries.
       Mr. Golden of the insurers' association argues that 
     whatever role industry practices may play, the current 
     turmoil stems from lawsuits. The association says that from 
     1995 through 2000, total industry payouts to cover losses and 
     legal expenses jumped 52%, to $6.9 billion. ``That says there 
     are more really huge verdicts,'' Mr. Golden says. Even in the 
     majority of cases in which doctors and hospitals win--the 
     zero-dollar verdicts--there are still legal expenses that 
     insurers have to pick up, he adds.
       Industry critics point to different sets of statistics. Bob 
     Hunter, director for insurance at Consumer Federation of 
     America, an advocacy group in Washington, prefers numbers 
     generated by A.M. Best Co. The insurance-rating agency 
     estimates that once all malpractice claims from 1991 through 
     2000 are resolved--which will take until about 2010--the 
     average payout per claim will have risen 47%, to $42,473. 
     That projection includes legal expenses and suits in which 
     doctors or hospital prevail.
       While the statistical debate rages, pregnant women adjust 
     to new limits and inconveniences. 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 matter what the distance.''
       Dr. Krauss, 53, left Philadelphia last year only after his 
     malpractice premium rose to $54,000, from $38,000, and then 
     was canceled by a carrier getting out of the business, he 
     says. After getting quotes of about $80,000 on a new policy, 
     he moved. New Jersey hasn't been a panacea, however. His 
     policy there expires July 1, and the carrier refuses to renew 
     it. The doctor says he hopes to go to work for a hospital 
     that will pay for his coverage.

  Mr. BERMAN. Mr. Speaker, I've heard many arguments against H.R. 4600, 
but there is one that I've not heard mentioned yet today. I suspect 
that the drafters did not intend the bill to have this effect, but as 
drafted the HEALTH Act endangers the effectiveness of the most 
successful anti-fraud tool that the government has at its disposal--the 
False Claims Act.
  In 1986, Congress passed and President Reagan signed legislation 
strengthening the False Claims Act, a law originally signed by 
President Lincoln in 1863. The amendments passed in 1986 have made it 
possible for the government to recover close to $9 billion that would 
otherwise have been lost to health care fraud and abuse.
  The definitions of ``health care lawsuit'' and ``health care 
liability action'' in this bill are very broad. Broad enough to 
encompass fraud cases brought under the False Claims Act. If a False 
Claims Act case was determined to fall under the HEALTH Act, it would 
be devastating to the effectiveness of this anti-fraud tool. Under 
False Claims the government can recover up to treble damages. In a 
decision 2 years ago, the Supreme Court determined that these 
recoveries constitute punitive damages. The Health Act would cap 
punitive damages at $250,000 or twice the amount of economic damages, 
whichever is greater.
  Let's use as an example the 1996 case against Laboratory Corporation 
of America, a fraud case based upon false claims for medically 
unnecessary ``add-on'' tests submitted to Medicare, Medicaid, and 
CHAMPUS. The government recovery in this case was $182 million. These 
are not small cases. The treble damages serve as a deterrent--a very 
effective deterrent. By some estimates the deterrent effect of the 
False Claims Act amendments was between 150 and 300 billion dollars 
during their first ten years of existence. By blocking punitive damages 
in these cases, the bill could make the False Claims Act useless to the 
government as a tool against fraud.
  In a report released last year, Taxpayers Against Fraud estimated 
that using the False Claims Act, the government was recovering $8 for 
each tax dollar spent fighting health care fraud. There are very few 
government efforts that can claim this level of efficacy.
  I encourage my colleagues to reject this bill and permit the 
government to continue to protect itself from health care fraud.
  Mr. GOODLATTE. Mr. Speaker, I rise in strong support of H.R. 4600, 
which makes health care delivery more accessible and cost-effective in 
Virginia and throughout America by curbing medical malpractice abuse.
  In recent years, Americans have witnessed a dramatic rise in the 
costs of malpractice insurance for doctors and hospitals. This cost is 
ultimately passed along to patients. Skyrocketing insurance premiums 
are debilitating

[[Page H6740]]

America's health care system. Liability insurers are either leaving the 
market or raising rates to astronomically high levels. This has led 
physicians, hospitals and other health care providers to severely limit 
their practices or to leave the practice of medicine all together. 
Women, low-income neighborhoods and rural areas are among the hardest 
hit.
  Fearing bankruptcy or the possibility of endless litigation, some 
doctors have turned to ``defensive medicine''--which consists of 
wasteful prescription of medically unnecessary medicine and the 
performance of unnecessary tests with the intent of limiting liability 
exposures. These ``defensive medicine'' practices ultimately cost 
taxpayers billions of dollars. In addition, fearing litigation, some 
doctors may hesitate to discuss a potential misdiagnosis or medical 
error, thereby compounding the harm done to patients. A recent survey 
released by the Department of Health and Human Services revealed that 
over 76 percent of physicians are concerned that malpractice litigation 
has hurt their ability to provide quality care to patients.
  This bill safeguards patient's access to care by limiting the number 
of years a plaintiff has to file a healthcare liability action. This 
ensures that claims are brought while evidence and witnesses are 
available. The legislation allocates damages fairly in proportion to a 
party's degree of fault, allows patients to recover economic damages 
such as future medical expenses and loss of future earnings, while 
establishing a cap of $250,000 on non-economic damages, such as pain 
and suffering. The bill also places reasonable limits on punitive 
damages.
  American health care is still the envy of the world, but unless we 
act now to curb rapidly rising health care costs, we threaten the 
future availability of high quality affordable health care. One way to 
cut costs and improve quality is by curbing excessive lawsuits. This 
bill is a big step in the right direction to improving patient safety 
and doctor accessibility.
  Mr. SMITH of Texas. Mr. Speaker, the cost of malpractice insurance 
has steadily risen, which has caused many insurers to drop coverage or 
raise premiums. Doctors and others have been forced to abandon 
patients, particularly in high-risk specialties such as emergency 
medicine and obstetrics and gynecology.
  H.R. 4600, the HEALTH Act, will cap noneconomic damages at $250,000, 
and limit the contingency fees lawyers can charge. This will reduce the 
number of medical malpractice claims and make medical malpractice 
insurance affordable again. Patients will receive better and less 
expensive health care.
  By improving the medical malpractice system, the HEALTH Act will 
enhance the quality of care for all patients.
  I urge my colleagues to support this legislation.
  Mr. STENHOLM. Mr. Speaker, I rise in strong support of the HEALTH Act 
of 2002 (H.R. 4600), which will improve health care quality and help 
ensure the availability of health care services and coverage.
  The failure of the medical liability system is compromising patient 
access to care. Liability insurers are leaving the market or raising 
rates to astronomical levels. In turn, more physicians and other health 
care providers are severely limiting their practices or are simply 
unable to afford to practice medicine. Physicians in Texas as well as 
Florida, Mississippi, Nevada, New York, Ohio, Pennsylvania, Washington, 
West Virginia and other states are already in crisis.
  Skyrocketing medical malpractice insurance premiums are debilitating 
the nation's health care delivery system in communities across the 
country. Physicians in Texas have experienced a 51 percent increase in 
malpractice claims between 1990 and 2000, and according to the Texas 
Medical Association, increases in physician malpractice insurance rates 
in 2002 ranged from 30 percent to 200 percent.
  Increasing numbers of physicians, hospitals, and other providers are 
curtailing their services, relocating to other states, or simply 
ceasing to offer medical services altogether. For example, 
obstetricians/gynecologists and surgeons in these states routinely pay 
more than $100,000 a year for $1,000,000 coverage. Some are paying more 
than $200,000. A physician facing these premiums is more likely to 
practice defensive medicine, order extra tests and use only procedures 
that limit risk. For some, it goes to the heart of their practice. For 
instance, many OB/GYN physicians have stopped delivering babies. The 
problem also has spread to emergency rooms where the crisis takes on 
life-or-death proportions.
  Especially in rural areas, health care services are likely to be 
unevenly distributed. Many rural residents do not even have access to a 
local doctor, primary care provider, or hospital. Increases in medical 
malpractice insurance have resulted in a further loss of patient access 
to health care. Without access to local health care professionals, 
rural residents are frequently forced to leave their communities to 
receive necessary treatments. Not only is this a burden to rural 
residents, who are often older or lack reliable transportation, but it 
drains vital health care dollars from the local economy--further 
straining the financial well-being of rural communities.
  Without federal legislation, the exodus of physicians from the 
practice of medicine will continue, especially in high-risk 
specialities, and patients will find it increasingly difficult to 
obtain health care.
  It is for these reasons that I joined my fellow colleagues as an 
original cosponsor of the HEALTH Act, which safeguards patients' access 
to care, promotes speedy resolution of claims, fairly allocates 
responsibility, compensates patient injury, maximizes patient recovery, 
and puts reasonable limits, not caps, on punitive damages. This bill 
alone will not resolve our health care costs or access challenges but 
it is one part of the solution.
  I urge my colleagues, especially those who represent rural America, 
to support H.R. 4600, stabilizing the nation's shaky medical liability 
system.
  Mr. SHUSTER. Mr. Speaker, I rise today in support of H.R. 4600, the 
Help Efficient, Accessible, Low-cost, and Timely Healthcare Act, and 
ask my colleagues to support this common sense measure.
  This legislation, modeled after California's 25 year old reforms, 
contains a tested package of reforms that will help lower medical 
liability premiums across the country is important for both physicians 
and patients.
  In my great state of Pennsylvania, five commercial carriers that 
insured more than half of the hospitals and health systems have left 
the market or are not renewing policies for this year. Pennsylvania 
hospitals and physicians continue to face skyrocketing premiums. The 
cost of primary coverage has increased as much as 450% for some 
hospitals, and on average by 70 percent for all hospitals.
  Further, the medical liability crisis is hindering the ability of our 
academic medical schools to recruit and retain students. According to 
the American College of Obstetricians and Gynecologists, one in ten 
obstetricians have already stopped delivering babies due to 
skyrocketing premiums. A shortage in radiologists willing to read 
mammograms has increased the wait time for screening mammograms at most 
major hospitals from two to three months. The current system is forcing 
our doctors to quit, encouraging them to seek other employment and 
jeopardizing the health care of our women.
  In rural Pennsylvania this issue hits home. Many doctors are 
relocating to big cities where they can be part of a larger practice, 
specifically because they can't afford the insurance premiums on their 
own. In rural areas we have to travel farther and farther for quality 
health care--this dramatically affects our quality of life. Who wants 
to move to an area where they can't get health care?
  It becomes more worrisome when it is an emergency. it is common 
knowledge that the sooner you get to the doctor the better chance you 
have in surviving a serious medical emergency. In rural areas, 
emergency medical personnel have to travel to the patient, diagnose the 
problem and then transport them to the nearest facility that can treat 
them. The further they have to travel the less likely they will 
survive.
  Mr. Speaker, by passing H.R. 4600, we will take significant steps 
toward stabilizing the medical liability system by both safeguarding 
patients' access to care while helping to address skyrocketing health 
care costs. Congress needs to work for the betterment of the whole 
nation and pass this common-sense well tested package of reforms.
  Mr. CROWLEY. Mr. Speaker, I rise in opposition to H.R. 4600. This 
bill's proponents say the legislation helps curb the costs of 
healthcare and helps doctors stay in business by reducing their 
insurance rates. However, they are wrong. I would like to illustrate 
why they are wrong and why I will oppose this legislation.
  First, the $250,000 cap on non-economic damages will impede the right 
of patients and victims of gross negligence. Under this legislation, 
victims would not be allowed to sue for pain and suffering. That is 
wrong. Consider the cases of the patient who has the wrong leg 
amputated or who finds surgeon's initials carved into her skin or the 
recent example in Massachusetts where a surgeon left in the middle of 
surgery to go cash a check at the bank. Who would dare look these 
victims in the eye and say they should not be allowed to sue for 
anything beyond what this cap allows. Under current law, the onus is on 
the victims to prove they are deserving of a particular award. If they 
succeed in making their case, then they deserve to be awarded the 
appropriate amount by a jury of their peers in accordance with the law. 
This legislation leaves victims isolated without assistance and without 
the tools to protect themselves and their families.
  Second, the bill takes power away from jurors and judges. Our 
constitution provides for trial by jury to ensure fair trials for all. 
Now the

[[Page H6741]]

Republican majority believes that the Constitution is wrong and people 
are not trustworthy; that power should be in the hands of the insurance 
companies not the American public. This bill is a one-size-fits-all 
approach to ruling on legislation. It says that even if jurors, who 
have conscientiously listened to every fact presented by both sides, 
want to award a plaintiff an amount beyond the cap, they are unable to 
do so. This bill says that judges, who are trained to listen to the 
specifics of a case and to understand the specifics of the law, cannot 
award damages as they see fit. This bill ties the hands of those who 
are expected to know the most about the law and about individual cases.
  Third, the bill, which was drafted under the auspices of trying to 
lower malpractice insurance costs, offers no guarantees that medical 
malpractice costs will fall. Proponents claim the bill's intent is to 
reduce malpractice insurance rates, yet malpractice insurers can easily 
choose to price gauge. A June 24, 2002 Wall Street Journal article 
discusses the direct impact of insurers' ``pricing and accounting 
practices'' on increased malpractice rates. If we want to limit the 
burden on doctors, we need to limit their insurance rates, not limit 
victims' rights.
  Finally, this bill places caps on suits due to negligent doctors who 
shouldn't be practicing, dangerous HMOs that should be shut down, and 
faulty pharmaceuticals and faulty devices that should be off the 
market. Unfortunately there are bad pharmaceuticals and bad devices in 
this country. Consider the Dalcon Shield, the inter-uterine device that 
used to be on the market. This device caused many women to develop 
serious uterine infections or worse, and the company knew it was 
faulty. Their negligence was punished by crushing lawsuits that caused 
the corporation to go bankrupt--and they should have gone bankrupt 
because they were killing women. This bill would allow manufacturers of 
devices like the Dalcon Shield to pay off small awards by their 
insurance company to their victims and continue to kill.
  Additionally, this bill exempts all HMOs from litigation for denials 
of care. So many of my Congressional colleagues talk about wanting to 
protect Americans against HMOs, yet here we are discussing a bill that 
would do precisely the opposite. This bill is protection for HMOs. This 
bill saves HMOs from paying victims whatever amount the judicial 
systems finds is just. Patients need and deserve stronger protections 
against their HMOs than this bill permits.
  This bill simply takes power away from judges, jurors, and victims 
while guaranteeing no relief for hospitals and physicians. My 
constituents have been waiting for Congress to pass a serious Patients 
Bill of Rights, protect patients and their families, and lower medical 
costs. This bill will accomplish none of these goals.
  Therefore, I will be opposing this vote and urge all Members who care 
about their constituents and about health care costs to oppose this 
bill as well.
  The SPEAKER pro tempore. Pursuant to House Resolution 553, the 
previous question is ordered on the bill, as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered By Mr. Conyers

  Mr. CONYERS. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. CONYERS. Mr. Speaker, I am.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. Conyers moves to recommit the bill H.R. 4600 to the 
     Committee on the Judiciary and the Committee on Energy and 
     Commerce with instructions to report the same back to the 
     House forthwith with the following amendment:
       In section 11--
       (1) in the first sentence of subsection (a), strike 
     ``subsections (b) and (c)'' and insert ``subsections (b), 
     (c), and (d)''; and
       (2) add at the end the following new subsection:
       (d) Patients' Bill of Rights.--Notwithstanding any other 
     provision of this Act, if a State has in effect a law that 
     provides for the liability of health maintenance 
     organizations (as defined in section 2791(b)(3) of the Public 
     Health Service Act (42 U.S.C. 300gg-91(b)(3))) with respect 
     to patients, or sets forth circumstances under which actions 
     may be brought with respect to such liability, this Act does 
     not preempt or supersede such law or in any way affect such 
     liability, circumstances, or actions.

  Mr. CONYERS (during the reading). Mr. Speaker, I ask unanimous 
consent that the motion be considered as read and printed in the 
Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Michigan is recognized for 5 minutes in support of his motion.
  Mr. CONYERS. Mr. Speaker, I ask that the gentleman from New Jersey 
(Mr. Andrews) join me in the motion to recommit, and I offer this 
motion on behalf of myself and him.
  As currently drafted, this bill guts HMO reform laws that States have 
already passed because it creates broad new caps on damages when HMOs 
deny coverage to patients, and so what we do is to add a safe harbor 
provision to specify that these State patient's bills of rights laws 
are not preempted by this bill. Nothing more.
  It goes without saying that these limits are far less friendly to 
consumers injured by HMOs than the patient protection laws already 
enacted by the States, and I would love to refer to the former Governor 
of Texas George W. Bush, who had a similar view in mind. They enacted 
an HMO law in Texas, and that law, still on the books, has a higher cap 
on punitive damages than this bill and no caps on noneconomic damages 
for suits against HMOs.
  Mr. Speaker, I yield to the gentleman from New Jersey (Mr. Andrews).
  Mr. ANDREWS. Mr. Speaker, I thank the gentleman for yielding.
  There is a serious disagreement about the underlying bill and whether 
or not it poses the right solution to the malpractice crisis. Aside 
from that, there should be no dispute over what this bill should and 
should not do with respect to State laws that many of our States have 
passed to protect patients against abuses by the managed care industry. 
This bill should have no effect on those underlying State laws.
  If this motion to recommit is not adopted, I believe the best 
analysis is that this bill would have the effect of repealing or 
substantially neutralizing and weakening those State law protections. 
The purpose of the motion to recommit is to make it explicit in the 
statute that this bill, if enacted into law, would not preempt State 
patient protections laws.
  So, for example, there are States that have laws that say that if a 
person went to their primary care provider and she suggested that a 
person needed a series of tests regarding possible malignancy and the 
managed care company refused to pay for the tests regarding the 
possible malignancy and they developed a malignancy, developed cancer, 
got sick as a result of it, under these State patient protection laws 
there are certain remedies that that patient and her family would now 
have, the ability to get a review before the decision was made by an 
external objective body and the ability, if the decision were not 
reversed, the ability to recover damages resulting from the arbitrary 
medical malpractice by the managed care company.
  This has been a principle embraced by Republicans and Democrats in 
State legislatures around the country. In fact, as the gentleman from 
Michigan (Mr. Conyers) mentioned, the President of the United States 
embraced such a bill when he was chief executive of the State of Texas.

                              {time}  1445

  The good work that the Texas legislature has done, and other 
legislatures have done around the country, would be imperiled and put 
at risk if this motion to recommit is not adopted.
  Mr. Speaker, I disagree with the underlying bill; but even those who 
agree with the underlying bill, I believe, did not set out with the 
intention of repealing State patient protection statutes. I know that 
the majority has added a sense of Congress provision to the underlying 
bill that says it is not really our intention.
  Frankly, there is a better way for us to express our intention than 
simply expressing the sense of Congress. It is to write a statute or to 
write a provision in the statute that says that State patient 
protection provisions are not repealed as a result of the adoption of 
this bill.
  Mr. Speaker, I think Members should support the motion to recommit 
whether they are for the underlying bill, or whether they are joining 
those of us who oppose the underlying bill. If

[[Page H6742]]

Members respect and support the right of their State legislature to 
enact State laws that would protect Members' constituents against 
abuses by managed care companies and State laws, Members should vote 
for the motion to recommit. I would urge Republicans and Democrats to 
vote for the motion to recommit.
  Mr. SENSENBRENNER. Mr. Speaker, I claim the time in opposition to the 
motion to recommit.
  The SPEAKER pro tempore (Mr. Gutknecht). The gentleman from Wisconsin 
(Mr. Sensenbrenner) is recognized for 5 minutes.
  Mr. SENSENBRENNER. Mr. Speaker, this is a very craftily drafted 
motion. The effect of its adoption will be to increase health care 
costs and further restrict availability of health care to people all 
around the country.
  First, it will increase health care costs in that patients of HMOs 
and the employers that sponsor the HMO-type coverage will not be able 
to benefit from what the Congressional Budget Office estimates will be 
a reduction of somewhere between 25-30 percent of professional 
liability insurance. So there will be higher professional liability 
insurance premiums paid by the doctors who practice in the HMOs which 
will be passed on to their patients and which will be passed on to 
their employers.
  This is an incentive for doctors to leave practicing with HMOs. And 
as we know, HMOs generally save money. Every Member who gets these 
statements from our insurance company that says ``This is not a bill'' 
on it, there are negotiated savings that would not be there if the 
doctor left the HMO as a result of this motion to recommit passing, and 
thus qualifying for the lower insurance premiums available, or where 
the protections of this bill would be available to doctors practicing 
outside of HMOs.
  By increasing the cost of HMOs, more and more employers will decide 
that it is too expensive for them to continue to provide health 
insurance coverage. So the protections to patients will go down as 
fewer and fewer employers can afford the coverage through the HMOs.
  But I think also the availability of quality health care will go down 
whether one is in an HMO or not in an HMO because the market works. If 
health care becomes more expensive, then there will be less health care 
that will be available. I do not think anybody who supports this motion 
to recommit can ever come to the floor of this House of Representatives 
with a straight face and sincerely complain about increased health care 
costs because that is exactly what the motion to recommit will 
accomplish should it pass.
  Mr. Speaker, I yield to the gentleman from Pennsylvania (Mr. 
Greenwood).
  Mr. GREENWOOD. Mr. Speaker, this motion to recommit is, I fear, a 
wolf in sheep's clothing. The fact of the matter is while it purports 
to be a small carve-out for the Patient Bill of Rights as they apply to 
HMOs, the fact of the matter is it would insulate and take away the 
protections for all of the physicians who work for HMOs, and I believe 
for the hospitals that contract with HMOs. It is very much a gutting 
amendment.
  The fact of the matter is that we in this House have to decide which 
side we are on here. We are either on the side of providing adequate 
care to our patients, to our constituents, making sure that our 
physicians can stay in practice, stop retiring early, keeping the 
trauma centers open; or we are on the side of doing nothing, which is 
about what this bill would do with a motion to recommit with 
instructions.
  The Congressional Budget Office has said that this bill will reduce 
premiums by 25-30 percent. Despite all of the railings against it, the 
fact of the matter is when we limit liability, as California has seen 
and the statistics are crystal clear there, when we limit noneconomic 
damages, the rates go down. The rates go down because there is 
competition in the system, and the insurance companies will have to 
lower their premiums in order to compete with others in the same 
market.
  The fact of the matter is, until we do that, we will remain on this 
head-long path towards crisis, in which case the traumas centers will 
close, the obstetrician offices will close, and patients, our 
constituents, will have third world health care if we do not pass this 
bill today.
  Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. CONYERS. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  Pursuant to clause 9 of rule XX, the Chair will reduce to 5 minutes 
the minimum time for any electronic vote on the question of passage.
  The vote was taken by electronic device, and there were--yeas 193, 
nays 225, not voting 14, as follows:

                             [Roll No. 420]

                               YEAS--193

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Borski
     Boswell
     Boucher
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Condit
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Duncan
     Edwards
     Engel
     English
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank
     Frost
     Ganske
     Gephardt
     Gonzalez
     Gordon
     Graham
     Green (TX)
     Gutierrez
     Harman
     Hastings (FL)
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson (IL)
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Lynch
     Maloney (CT)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mollohan
     Moore
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Phelps
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Thompson (MS)
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NAYS--225

     Aderholt
     Akin
     Armey
     Baker
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Boyd
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Collins
     Combest
     Cooksey
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Dunn
     Ehlers
     Ehrlich
     Emerson
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo

[[Page H6743]]


     McCrery
     McHugh
     McInnis
     McKeon
     McKinney
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Pomeroy
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stenholm
     Sullivan
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Upton
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--14

     Bachus
     Barcia
     Bonior
     Callahan
     Hilliard
     Israel
     Maloney (NY)
     McDermott
     Mink
     Roukema
     Slaughter
     Stump
     Thompson (CA)
     Thurman

                              {time}  1513

  Messrs. CAMP, KIRK, BAKER, HORN, CRAMER, EHLERS, SHAYS, TIBERI, 
ISTOOK, MORAN of Virginia, Ms. ROS-LEHTINEN, and Mrs. KELLY changed 
their vote from ``yea'' to ``nay.''
  Mr. LIPINSKI, Mr. LAMPSON, Ms. WOOLSEY, and Mrs. CLAYTON changed 
their vote from ``nay'' to ``yea.''
  So the motion was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Gutknecht). The question is on the 
passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 217, 
nays 203, not voting 12, as follows:

                             [Roll No. 421]

                               YEAS--217

     Aderholt
     Akin
     Armey
     Baker
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Boyd
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Collins
     Combest
     Cooksey
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Dooley
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Emerson
     English
     Everett
     Ferguson
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall (TX)
     Hansen
     Harman
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Jenkins
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Moran (VA)
     Murtha
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Pomeroy
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stenholm
     Sullivan
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--203

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Borski
     Boswell
     Boucher
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (IN)
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Condit
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart
     Dicks
     Dingell
     Doggett
     Doolittle
     Doyle
     Ehrlich
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Flake
     Ford
     Frank
     Frost
     Gephardt
     Gilman
     Gonzalez
     Gordon
     Graham
     Green (TX)
     Grucci
     Gutierrez
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson (IL)
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Lynch
     Maloney (CT)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mollohan
     Moore
     Morella
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Phelps
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tanner
     Tauscher
     Terry
     Thompson (MS)
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Wilson (SC)
     Woolsey
     Wu
     Wynn

                             NOT VOTING--12

     Bachus
     Barcia
     Bonior
     Callahan
     Israel
     Maloney (NY)
     McDermott
     Mink
     Roukema
     Stump
     Thompson (CA)
     Thurman

                              {time}  1528

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________