[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.
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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.
____________________