[Congressional Record Volume 149, Number 40 (Wednesday, March 12, 2003)]
[House]
[Pages H1783-H1790]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MEDICAL MALPRACTICE INSURANCE CRISIS
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 2003, the gentleman from New Jersey (Mr. Pallone) is
recognized for 60 minutes as the designee of the minority leader.
Mr. PALLONE. Madam Speaker, I am here tonight to talk about the
medical malpractice insurance crisis which we face in New Jersey and in
many States around the country. My concern is that the legislation,
H.R. 5, which the Republican leadership intends to bring to the floor
of the House of Representatives tomorrow, will not solve the problem in
any way and in fact is another example of politics as usual where the
Republican leadership, in this case with the support of the President,
are bringing up a bill that they realize has no chance of passage. It
may pass here and then it will go over to the other body and fail
because it was not done on a bipartisan basis; it was not done in an
effort to try to bring the parties together and put together something
that would actually accomplish the purpose of bringing malpractice
premiums down. Rather, it is sort of a bone to special interests.
In other words, it is something that is being put out so the
Republicans can say and the Republican leadership can tell the doctor
groups, the hospital groups, the HMOs, the drug companies, the medical
device companies that somehow they are doing something to help them
when in reality they are not because it is not a bill that will
ultimately pass.
I want to talk a little bit about the crisis because it is real. In
my home State of New Jersey, we have major problems with increasing
malpractice premiums. Some of the doctors actually went out on strike
about a month ago because of their concerns; and it continues to be a
problem, particularly with certain specialty doctors. But in many
cases, it is an across-the-board problem in New Jersey.
What is happening now with this Republican bill, H.R. 5, is it is
essentially a one-size-fits-all approach that does not look at the
actual underlying issue of health care and medical malpractice. It is
really designed to put a cap on jury awards at $250,000, the theory
being if you do not allow large jury awards, that will bring down the
cost of malpractice insurance premiums. There is no evidence that is
true.
The Republican leadership often cites the State of California as an
example of where that kind of cap, a $250,000 cap, was put into place;
but we know when the cap was put into place in California, premiums did
not go down. The only time when premiums went down in California was
when there was an initiative passed by the voters that actually
addressed the cause and said that premiums could not rise a certain
amount. That did accomplish bringing the premiums down because they
were not allowed to increase significantly. But the $250,000 cap did
not accomplish that.
There are many factors that contribute to the malpractice crisis in
New Jersey and elsewhere. There is the changing face of health care in
our Nation, namely an increase in high-risk procedures with inherently
bad outcomes. There are also the recent problems we have seen in the
health care market, namely a shift to managed care, to HMOs which have
increasingly created bad outcomes. In addition, bad accounting or bad
business judgment on the part of insurance companies has to be taken
into consideration when discussing dramatic rises in medical
malpractice premiums.
Now, wherever there has been success in trying to reduce premiums for
malpractice insurance, it is because there has been some kind of
combination of maybe some tort reform, but also linked to trying to
actually address directly the effort to reduce the premiums themselves.
As I said, in California the premium increases were actually capped.
In my home State of New Jersey a few years ago in the 1970s when we
had a problem with rising malpractice insurance premiums, we set up a
reinsurance fund which basically said that the insurance companies had
to pay a certain amount of money into a fund, and that money would be
used to reduce premium costs when there was a crisis.
I actually proposed this in the Committee on Energy and Commerce in
the subcommittee that has jurisdiction over this issue. Last week when
we had a markup, I proposed H.R. 485, the Federal Medical Malpractice
Insurance Stabilization Act, that would create a national reinsurance
fund just like we had in New Jersey. The proposal mandates that the
Secretary of Health and Human Services establish a program where
insurance companies pay into a Federal fund. In time of crisis, these
funds are made available to the companies in an effort to provide
stability in the marketplace for medical malpractice coverage.
I mention this not because it is the cure-all, but when I tried to
raise it in the subcommittee, the Republicans said it was not germane.
They would not allow it to be considered as an amendment. Why?
Because they have this one-size-fits-all philosophy. They
[[Page H1784]]
want to cap damage awards by the jury, and they do not want to deal
with caps on premium costs that would actually bring down the cost of
malpractice insurance.
I have a lot of issues that I want to talk about in the context of
this malpractice reform issue, but I wanted to give an example because
I think it is important when we are on the floor and we talk about
legislation, we do not just talk about it in an abstract way; we give
specific examples of what it means.
I want to give some specific examples in New Jersey, two examples of
people who would be negatively impacted by the Republican proposal that
is coming up tomorrow, in particular because of the way the language in
that bill caps punitive damages, noneconomic damages, at $250,000; and
also the way it designs and limits liability for punitive damages. It
is a good way for me to illustrate the problems with that legislation
because what would happen in this legislation is many people that have
serious injuries or have even died, there would be very little
recovery. The cap on the $250,000 essentially is a huge limitation on
some of these people and their families that would suffer a great deal
if this legislation were passed. So let me give Members two examples.
One example is Jersey City, New Jersey, a Vietnam veteran who was
also a merchant marine barge captain was diagnosed with a carcinoid
benign bleeding tumor in his left lung which required that the lung be
removed. The diagnosing physician was part of a practice group that
also included other doctors, including a surgeon who was set to perform
the operation, although that surgeon had no contact with the patient
prior to the surgery. The physician mistakenly removed the healthy
right lung of the patient rather than the diseased left lung. They
could not then also remove the patient's remaining functioning lung
which contained the tumor.
Madam Speaker, after this error was discovered with this New
Jerseyan, the physicians in this case allegedly altered the medical
records and told the patient that after beginning surgery, they
determined that they needed to remove the other lung because of a
previously undiagnosed disease. However, the Vietnam veteran later
learned that the pathology report on the removed lung revealed it was a
completely healthy lung. Due to the extraordinary alleged coverup
attempted by the defendants and their efforts in seeking to convince
the patient that it was actually a good thing that they had removed the
wrong lung, the plaintiff added a count to his complaint for punitive
damages, not just for compensatory damages.
Today, Madam Speaker, this Jersey City Vietnam veteran requires
oxygen 24 hours a day and has a host of medical problems as a result of
the operation. Meanwhile, the tumor in his remaining lung will likely
continue to grow. If it becomes cancerous, there is little that can be
done to treat it. His lawsuit is pending.
What would H.R. 5 that the Republicans have brought up do? H.R. 5
would harm this Vietnam veteran in two ways. First, it would virtually
eliminate meaningful economic compensation, limiting it to just
$250,000, as we discussed. This is a small amount to compensate a man
who has been an active professional and who now must have oxygen tanks
with him at all times for the rest of his life.
{time} 1830
Moreover, he has to live in fear that the tumor that his physicians
failed to remove will become cancerous and metastasize, spreading
cancer throughout his body, or will perhaps rupture, possibly drowning
him in his own blood.
Secondly, if you look at H.R. 5, which we are going to consider
tomorrow, the Republican bill, it sets standards for the award of
punitive damages that would protect the kind of after-the-fact
concealment of injury that is alleged in this case. So he cannot even
sue because they tried to cover up the malpractice. Because in the
bill, punitive damages would not be available unless the physician
acted with malice specifically to injure the patient, which was not the
case, or deliberately failed to avoid injuring the patient, which was
not the case, because in this case the conduct for which punitive
damages are claimed is not the malpractice or even the injury itself
but the cover-up of the malpractice and the harm and the doctors'
deliberate deceit of their patient and as a result removing this
healthy lung.
You can see how in this case, this patient basically would not be
able to recover what is needed. I am going to give another example
later, but I see one of my colleagues is here. I do not want to prolong
this, but I do want to say one other thing about this bill which I
think is so important. I had an amendment. In fact, the Committee on
Rules is considering it now, although I doubt that they will allow it
because I am sure the Republican majority is not going to allow these
various amendments since they have the one-size-fits-all bill and that
is what they want. But what the committee did and what the bill does
that we are going to consider tomorrow is it not only limit damages and
claims, if you will, for malpractice against a physician or a hospital,
which is what the crisis is all about in New Jersey and I am sure my
friend from Massachusetts would agree, the people that are concerned
about malpractice are physicians and hospitals. They are the ones who
have the premiums that are going up and that is where the crisis is.
But this bill is not limited to doctors or even hospitals. It limits
the liability or the claims, if you will, that can be recovered from
HMOs, from drug manufacturers and even from medical device
manufacturers.
The most egregious aspect of it is with regard to the HMOs. Because,
Madam Speaker, as I think you know, we here in this House over the last
few years have tried to pass a patients' bill of rights that would
essentially say that if a decision was made by your HMO to deny you
care, that you can appeal either through an administrative procedure or
go to court and sue the HMO because they denied you the care that you
were supposed to have. A number of the courts now in about 12 States,
including the Federal Second Circuit Court in New York which covers a
number of States, have now said that a person can sue an HMO. What this
bill does tomorrow that we are going to be considering is take away
your ability to sue the HMO in certain circumstances. It limits it
considerably. So while we in Congress have been trying, or at least
articulating the fact that we would like to expand people's ability to
appeal a denial of a decision with regard to an HMO that really
negatively hurt them or impacted their health, this bill would do the
opposite. This would take away whatever rights people now have to sue
their HMO or to recover from an HMO when they make a mistake through
denial of care.
It is incredible for me to think that not only is this not going to
work effectively to reduce premiums for malpractice, not only is this
going to limit the ability of many victims, as I used my New Jersey
example, to sue or to collect damages when they have been
seriously injured, but the bill even goes beyond the issue at hand,
which is rising premiums for doctors and hospitals and lets off HMOs
and drug companies and medical device companies, basically in my
opinion special interests who are helping the Republican leadership and
so now they have to get some kind of compensation for what they do.
I see my colleague from Massachusetts is here. I yield to him at this
time.
Mr. TIERNEY. I thank the gentleman from New Jersey and ask that he
stay nearby because I want to have a conversation with him if I can
eventually on this.
I have had some very interesting conversations with constituents in
my office for a period of time now about this issue, ever since the
bill was filed. Primarily the concept was that people come in and they
are upset because of what they think are the consequences of this bill
from whatever perspective they come.
Consumer groups come in on behalf of patients and talk about how
unjust it is for the limitations that it puts on patients. Lawyers come
in because they are concerned. They, of course, believe that they are
doing the right thing in representing victims of malpractice. They
believe that part of what they do that is noble and right is that they
try to get people recovery so that they can continue on with their
lives in some sort of respectable manner after some consequence or some
[[Page H1785]]
disaster has happened to them. And doctors come in because they think
that the bill may be helpful to them because they do not want to bear
the unlimited exposure to lawsuit damages and do not want their
premiums rising through the roof. So we have those three groups sort of
pitting against themselves, or some combination. But when you sit
people down and talk to them, it is really easy to see that this bill
is not about doctors, it is not about lawyers, it is not about
patients, it is about insurance companies. It is about insurance
companies and those others that you mentioned at the end of your
remarks who somehow managed to get into a bill that they are billing as
being a limitation on premiums for malpractice but managed to sneak in
there immunity for themselves and total absolution from any liability
for their malfeasance or their mistakes or their negligence or their
wrongful acts even if they are deliberate. The fact of the matter is
that that does not serve the American public at all. It does not serve
any of those other three groups that we talked about.
I have any number, as I am sure you do, a number of friends that are
doctors, physicians in different fields, ranging from those that have a
very high risk factor to those that have a very small risk factor.
There is not a one of them that when I engage them in conversation that
does not have compassion for their patient. When you say to someone, as
I did just the other day to a doctor, this particular doctor deals with
people with cerebral palsy, an absolutely dedicated physician. I said
to him, if one of your patients by virtue of your mistake was injured
at a very young age and the consequences were that they were going to
have this disaster for the rest of their lives, do you think that
$250,000 would fairly compensate them?
They say, well, no, of course not.
I ask if they realize that in this bill that is the limitation that
is put on that. And that women that get injured that may not be
working, may be bringing up a family in a household, they do not have
economic earnings from which they can then generate a recovery but they
have the rest of their lives to go forward when they may then have to
go out and try and earn a living and they may be stopped from doing
that, do you think for someone in that consequence, that $250,000 is
enough?
Well, of course not, was the answer. And right on down the line,
example after example. I came in late, but I know you were giving some
examples earlier.
Their answer back to me was, why don't you engage and try to do
something that is reasonable? If you don't think $250,000 is
reasonable, why don't you engage them in that? I tell them that the
simple fact of the matter is that this is not about a conversation. We
are more than willing to sit down and talk about what is fair and what
is just. The problem is that the insurance industry and the HMOs and
the others that are driving this piece of legislation and I think using
the doctors as a tool in this by trying to get them to believe that
their premiums will go down when they will not, and history shows that
they have not and studies indicate that they are not intended to by
this bill, that they try to get them involved in that instead of
realizing that this is all about the insurance industry, all about the
HMOs, all about those other manufacturers that want to be absolved from
liability and they do not want a discussion. They want to try to
generate the heat high enough so that you are either for it or against
it. There seems to be a lot of that going on around here these days.
They make a bill very difficult and absolutely without any compromise.
You will find out that when the bill comes to the floor tomorrow,
they will not be asking for amendments to make it better or to improve
it. They will not be asking for any prolonged debate to talk about all
the aspects of this, not just premiums but how do we protect doctors
from unlimited liability, how do we protect patients to make sure they
get their just due without putting doctors out of business. None of
that will be open for debate. It will simply be a vehicle for people to
make a case, perhaps in the next election in 2004 or whatever or to
show themselves to their benefactors that they are out there waving the
flag on their behalf. That is unfair. It is unfair to patients, it is
unfair to doctors, it is unfair to lawyers and it is unfair to the
American public at large.
The fact of the matter is that if you couch it in terms that this is
all about keeping premiums down, it is something interesting to note
that in California, where this is supposedly the model for this whole
program, in the 1970s when they put in a cap on recovery, the fact of
the matter is premiums did not go down. The next 4 years they went up
considerably, and since that point in time, they have been pretty much
running the average of around the rest of the country. So that is a
fallacy. In Florida, when the Florida legislation said to the insurance
industry, well, then if we are going to pass a bill like this, you have
to certify to us that premiums will go down, the insurance industry
said, no, we won't do that. In Nevada the same thing happened out there
where they talked about enacting severe damage caps. The insurance
industry came out and said very clearly that they would still not lower
premiums. The studies indicate and history indicates that the insurance
industry makes its money primarily not from premiums so much as from
the investment of those premiums into other vehicles, whether they are
bonds and to a lesser extent stocks and other vehicles and generate
income from that. When the market is down, as it is now, and they are
not paying off as they are, when it goes down, then they have to jack
up the premiums to get the profits to which they think they need to go
on with their company. Then they have to tell somebody that it is not
about insurance companies and profit because they know that will not be
extremely profitable because everybody wants people to have a profit
but they do not want necessarily to be gouged. So they cannot go out
and tell people that we just want to get a higher profit and we are
going to do anything, we are not going to take any decrease in our
profits, but instead we are going to go out and get the doctors, they
cannot say that. They turn around and they say, you know what the
problem is here? The people that are subject to malpractice, the people
that have lost something in their lives, they are the problem. They are
getting too high a recovery. Obviously because they are represented by
lawyers helping them get that recovery, then lawyers are bad people,
too.
The fact of the matter is many times these are complicated cases.
Something happens, and if a doctor makes a mistake, it is complicated,
and it is difficult sometimes to find out just where that mistake
occurred, which part of the process, which doctor or other health care
person was involved in that. A suit might be filed to find out, to
discover where that was. Then the people that are not involved are let
out or the person who is responsible, their insurance company gets
engaged in the situation. You would hope that this is a system we have
structured to give that person a fair recompense for their injuries.
That is the way that it is supposed to work.
The problem is of course that now they are putting up there, they are
saying that this whole idea of somebody recovering is where the culprit
is. There has not been any great increase in huge recoveries across
this country. They cannot point to statistics showing that all of a
sudden we have had a spike in incredibly high recoveries for people.
And those few high recoveries are generally knocked down by appeals
courts to a much more realistic number. It just happens that there was
something in the course of that case that the jury got upset with,
whether it was somebody trying to cover up something that was done or
an insurance company failing to pay off on time, or something that
caused them to get an award up there and courts generally ratchet that
back.
But if we are not going to proceed on the basis that we have done in
the past of having a system where somebody who through no fault of
their own is seriously injured, looks to the person who was negligent,
to the person who conducted the malpractice for a contribution, which
they then in return insure against, then we have to find out what else
it is that we are going to put in place for a system. If we think that
we want somebody else to decide other than a jury as to what somebody's
fair recovery is, then let us hear what it is.
[[Page H1786]]
Let us have a debate about that. Who should replace a jury of your
peers in deciding that? If you think there should be a cap on the
amount of money that people recover, let us have some experts as well
as the general public engaged in the debate about what would a fair
amount be, because you certainly need to take care of these people. We
have decided as a society that the innocent part of that should not be
the one that suffers the burden and goes without having any ability to
sustain the rest of their lives. We have decided that we have to try
and share that blame by making the person who has been negligent
responsible and letting them insure for it.
Society has to have a replacement. We can complain about the system
that we have all we want, but we should be having a debate instead
about what changes in it we are going to make if we think that parts in
it are not working. As I said in the beginning of my remarks, I have
great sympathy for the doctors who feel they have to practice
defensively, for the doctors who feel that their exposure is unlimited,
for the doctors who insurance companies abuse by raising their premiums
on the false pretense that it is the situation where people are getting
too much for their injury. We have to sit down with people and say,
what else are we going to put in place, how else are we going to make
these decisions in a fair way so that people get fairly compensated for
their injuries and so that we understand that doctors have to remain in
practice and they have to remain in practice without the fear of being
put out of business either financially or because they were constantly
engaged in litigation.
I do not hear that kind of conversation coming from the other side of
the aisle, from the majority. I frankly do not hear anybody saying we
are going to sit down and try to iron this out. Did it go to committee?
It went to committee, but people should not feel that there was an open
dialogue in committee, that there was any deliberation and honest
debate and suggestions about what changes might be made. It went to
committee so that the majority who put forward the bill could ram it
through on a straight party line vote and get it to the next level so
we could do the same thing so that they would have some talking points
to go back to their benefactors with and to campaign against and say
like, oh my God, other people that don't vote for this bill want to put
the doctors out of business, and we are the ones who want to save the
doctors when in fact the premiums will not go down a stitch, the
insurance companies will not allow the bill to be amended to put a
requirement that if the recoveries go down, the premiums go down, and
the fact of the matter really is it is all about the insurance
companies, the HMOs and the others that are going to be shielded from
liability and it is not about the doctors, not about the lawyers and,
shamefully, it is least about the people that are really the ones that
we should be focusing on here, the people that are injured through
malpractice.
The best thing these insurance companies could do, one of the best
things they could do is help doctors put in place some way to police
those 5 percent of the medical profession that are responsible for 54
percent of the claims. It seems to me and I think others that that is
one area to look at that would take care of a large part of the problem
of legal actions and a large part of the problem with that small
percentage of the premium increase that may be attributable to claims.
{time} 1845
My recollection of reports and data shows that it is about half a
percentage point on those premiums. But that would make sense. Find
ways to hold accountable that 5 percent of doctors that have 54 percent
of the claims, and make sure they are either reeducated so they are no
longer guilty of malpractice, or move them out of the profession to
someplace else where they are happy, to a less risky end of the
business.
Then let us make sure we take a look at the insurance companies. If
they are going to jack up prices every time their investment returns go
down, then we have to look at the company industry and say something is
wrong here. Doctors should not be subjected to these spikes in premiums
just because the economy has gone down and that is where you invested
all of your eggs, and now you are suffering a loss and you want to
maintain your high profits, you are not satisfied with a lesser profit.
Then we have to find a way to deal with that through insurance
regulation.
Short of that, and if they are going to insist on putting that bill
through, we would at least hope they would have provided some
discussion about what is a fair amount; and $250,000, even by doctors
accounts, is not a fair amount of a cap. We would have had some
discussion about what are we going to do about policing those 5 percent
of the medical profession that create 54 percent of the incidents that
end up in lawsuits. And we would have done something with the fact of
trying to work our way around so that doctors did not feel they were
subject to legal suit in order for people to get discovery as to who is
responsible, find some way earlier in the process for the facts to be
known so that people could move forward, and have a good public debate
about this so that everybody's interests were resolved.
That is not happening, my colleague from New Jersey, you know that
very well; and I would just say to you that I would be happy to have a
conversation with you on it if you want, but I think you would agree
that we could have done a much better job sitting down as a full House,
with a full complement of the committee, with all three parties, the
Independents, the Republicans and the Democrats, and people
representing the consumers, patients, the doctors, and the insurance
companies, and talked about what is needed to be done in order for this
to really be done correctly.
I think it is shameful we started out with this yelling and screaming
contest, that it is all or nothing, there cannot be any reasonable
conversation. Doctors feel they are put in the position of, gee, in
order to save ourselves, we have to go along with this low cap, and we
have to go along with the provisions of the bill that effectively make
it difficult for people injured to even find legal representation,
because it is going to be so expensive to proceed on that suit; and
there will not be any compensation because the amounts have been capped
and lawyers will not come on, and they will be without a lawyer.
Only one in eight people that are subject to malpractice now file a
claim anyway, and I guess the insurance companies would like to collect
those premiums from the doctors and have that one in eight number be
even less. Their profits would be that much higher, but society would
not benefit from it. People that were injured would still have to go
through their lives with those egregious situations and without help;
and I think that we should focus on making the situation better, not
having a political battle here that does not allow for debate.
Mr. PALLONE. I want to thank my colleague from Massachusetts for
bringing up the reality of what is happening here politically. I know
neither one of us wants to talk about politics. We would rather talk
with the substance of this issue and what could be done to bring
premiums down, because that is where the crisis is.
But what is happening with the Republican leadership, and even the
President on this, is totally political. I mean, I have to tell you, I
will just give you the background in the Committee on Energy and
Commerce. This came up just before the election, I think it was
sometime in October, that the Republican leadership on the Committee on
Energy and Commerce decided to bring this up. There may have been a
hearing, I do not even remember if there was; if there was, maybe there
was one. And they quickly brought this up in the committee, wanted to
bring to the floor, just before the election in October, just to make
the political point that they were trying to accomplish something.
Mr. TIERNEY. If the gentleman will yield, I think you take it back a
step further. If you remember the debates about the Patients' Bill of
Rights, where doctors and consumer-patients, consumer groups and others
were together on this issue, understood that we needed to have
protections against HMOs and the like, needed to be able to
[[Page H1787]]
file an appeal to an egregious situation, I think a lot of it stemmed
from the insurance companies and HMOs at that point in time saying we
have to get back the equation here, and the way we will do it is we
will improve our financial situation, and we will try to drive a wedge
between those patients and their doctors.
Where they finally have come together and have focused the light on
us and we are losing ground on the Patients' Bill of Rights, we have to
again drive that wedge, and the way we will do it is by telling doctors
that their premiums are going up, because patients that are subject to
malpractice are getting too much compensation for their injuries, which
they cannot justify and cannot move in that direction.
It is shameful. As I say, the doctors, in my view, are good people
with the right mind, the right heart on this thing. When you sit down
and talk with them, they understand that they are being used.
Their first comment always is, well, why do the Members of Congress
not talk about what would be the right amount, if any amount, to talk
about fair compensation? Why do they not talk about what should have to
happen before a claim is filed? Why do they not talk about reining in
the insurance companies?
I said we are perfectly willing, but conversation needs two parties,
and there is one party here. We are listening. We would be more than
willing to talk. The other side is not willing to have anybody listen,
and they are only willing to ram things through; and unfortunately,
that is what you are going to see tomorrow, and I do not think anybody
is going to be served by it.
Hopefully, the other body in this institution will have the wisdom to
stop that and force it back; and then maybe, maybe if there is enough
pressure from other groups, we can have a conversation trying to
improve the situation for everybody's benefit.
Mr. PALLONE. The gentleman is right on point. Let me tell you how
much on point you are. Not only was this same bill essentially rammed
in just a few weeks before the election through the committee, but, of
course, it had to be the first order of business when we came back.
When we on the Committee on Energy and Commerce asked the Republican
leadership on the committee to sit down with us and talk about a
bipartisan bill that did not just deal with capping damages at
$250,000, but actually dealt with all different aspects of the crisis,
reinsurance, giving money, capping premiums or whatever, essentially
what we were told, informally, was well, we cannot do that now. We
cannot sit down. We have to bring this to the floor fast. Then it will
go over to the Senate, and, do not worry, it will not pass there. Then
we will sit down and talk with you about what we are really going to
do.
This is essentially what we were told. This came in the subcommittee.
Two weeks ago there was a hearing on Thursday. It was marked up in the
subcommittee last Tuesday, it was voted out of the full committee last
Thursday, and it was brought to the floor. Everybody understood that
this had to go to the floor and there was not any opportunity to talk
about what really could be accomplished, and we had to pass it in the
House as a political measure for the reasons you said; and then when it
gets to the Senate, okay, they will not pass it, we will have to sit
down and talk.
This is the politics of it. There is no question about it.
Mr. TIERNEY. I just want to thank the gentleman for taking the time
this evening to allow for some debate, probably much more than we will
get tomorrow on this, so we could have a full discourse on what is
going on and what the content of the bill is and what the effects are
going to be on people. I think tomorrow we will hear a lot of the
standard positions that people are taking, one side or another.
This discourse hopefully allowed us to broaden that out a little bit
and talk about some the specifics. I thank the gentleman again for
taking the time to do it and showing his leadership.
Mr. PALLONE. I appreciate the gentleman coming down.
Let me say another thing. This bill is primarily based, this bill
that we are going to vote on tomorrow, is primarily based on the notion
that damages, punitive and noneconomic damages, have to be capped at
$250,000. What I have said over and over again to the Republican
leadership in our committee, in the Committee on Energy and Commerce,
is where is this magic $250,000 figure coming from? I hear over and
over again, I guess because it was used in California, but there is
absolutely no reason to believe that $250,000 is somehow some magical
term to cap damages.
I think there are many on the Democratic side of the aisle, including
myself, that do not have a philosophical problem with a cap on damages,
but $250,000 is too low. Why is it not $1 million? Why is it not $1.5
million? Nobody on the Republican side of the aisle will give us an
answer for that. They just insist that it has to be $250,000.
As my colleague from Massachusetts said, any effort to deal with this
issue, other than capping damages, the Republicans completely reject.
They say that the only thing we are really trying to do here is tort
reform. We are not trying to deal with lowering premiums or addressing
premium costs, other than through the vehicle of capping damages and
tort reform. That is it.
Now, I just wanted to use another example, if I could, Madam Speaker,
of how this legislation, this Republican bill that is coming up
tomorrow, would be unfair to specific individuals.
I have another example in my home State in Newark, New Jersey, which
is New Jersey's largest city, of a 12-year-old in Newark. I would just
like to run through the case, explain what the case is, and why H.R. 5
would be very damaging.
This is a 12-year-old 8th grader who developed flu-like symptoms in
September 2001. His mother took him to their family doctor, who gave
him a prescription for antibiotics. When he showed no improvement, the
boy and his mother returned and a different doctor changed the
prescription. The boy seemed to be getting worse, continued vomiting
and became dehydrated.
After 2 more weeks, his mother took her son to the emergency room. A
blood test revealed there was something seriously wrong. Further
testing determined that he had leukemia. However, he was informed he
had a 95 percent chance of complete recovery.
Madam Speaker, the boy's pediatric oncologist prepared him for four
chemotherapy protocols. After three administrations of the chemotherapy
protocol, his progress chart noted that his leukemia was considered in
remission.
The 12-year-old Newark boy went in for the final chemotherapy
treatment at that point. The order for this administration should have
been for one 60 milligram dose of a drug called doxarubicin. Instead,
the written order called for three doses instead of one, and the
chemistry department at the hospital reviewed the protocol but did not
notice the overdose.
After the third dose, the boy had a violent reaction. The head
oncology nurse reviewed the chart and said, ``There has been a terrible
mistake,'' and called the doctor. The doctor said, ``Oh, no, how could
this have happened?''
The boy's mother was informed that her son had received a massive
overdose and he would be very sick. The most serious problem, she was
informed, would be an overproduction of mucous throughout his body.
Now, Madam Speaker, the boy's health deteriorated, forcing him to
stay in the hospital. He developed inflammation and ulceration of the
linings of his mouth, throat and gastrointestinal tract. He experienced
cardiac dysfunction, began vomiting blood and finally had swelling all
over his body.
He transferred to a different hospital that began aggressive bone
marrow transplants, but, unfortunately, too much damage had been done;
and in April of last year this young boy died of severe adult
respiratory distress syndrome, ARDS, caused by excessive mucous in the
lungs.
Again, I use the example, because I want to show what the impact
would be with H.R. 5, the Republican bill that we are going to consider
tomorrow. The impact of this legislation would be very severe.
Being a 12-year-old, he did not have any income. The total amount of
his economic loss would be the cost of medical treatment for his cancer
treatment. The total available amount of
[[Page H1788]]
noneconomic damages, compensation to his mother for the poisoning of
her son, for his lingering, painful death, and her for permanent loss,
would be capped at $250,000.
Now, again, what is the magical $250,000? Where does it come from? I
do not know. Nobody will give me an answer.
I have had some people who I consider somewhat heartless say to me,
well, you know, a boy dies, a young person dies, a minor dies. Why
should we pay the parents any more than $250,000? In other words, they
were not dependent on him economically. He did not have a wife, he did
not have children, he did not have a job. He was too young for all
that. But I think that is a very heartless approach.
It also begs the question of the fact that if there is very little
penalty and very little consequence of negligence or medical mistakes,
then one could argue that there is not much of an incentive to not keep
making them on the part of the hospital or certain physicians maybe
that should not be out there practicing.
I do not say that because I think that most doctors make mistakes or
are negligent. I certainly do not. But there always are some, like in
every profession, that do.
One of the reasons we have punitive damages and that we do not have a
cap is because we want to make sure that there is a certain amount of
punishment, so that people do not continue to practice and they are
more cautious and do not make these mistakes. Otherwise, why would the
mistakes not continue to be made?
I have other examples, Madam Speaker; but before I get to some of the
other examples, I want to talk a little bit about the fact that this
bill goes beyond just malpractice premiums, insurance premiums, for
doctors and hospitals, and deals with drug companies and deals with
HMOs and deals with medical device manufacturers, because I think the
fact that this Republican leadership legislation goes way beyond the
order of the day, way beyond the issue of premiums for doctors and
hospitals is a strong indication, maybe the strongest indication, that
it is really nothing but special interest legislation designed to help
some friends of the Republican leadership.
I offered an amendment in committee, which is also being considered
in the Committee on Rules, and was, of course, voted down in committee
strictly on partisan lines and probably the same will happen in the
Committee on Rules. I cannot imagine that we would be able to consider
it tomorrow. But basically it would have struck the provisions in the
bill that deal with the issue other than doctor and hospital premium
costs.
I just want to talk a little bit about the amendment, because I
think, again, it brings forth why this bill is really not meant to
accomplish the goal of addressing the malpractice crisis.
{time} 1900
The amendment that I proposed strikes the language that includes
liability protections on punitive and noneconomic damages for these
industries; in other words, medical device manufacturers, HMOs, drug
companies, and other health insurance companies. These are industries
outside the scope of medical practitioners and, therefore, medical
malpractice.
The limitations in the bill on liability covering defective medical
products, dangerous prescription drugs, and claims against HMOs and
health insurance companies I think are appalling, Madam Speaker.
Shielding all of these additional industries from liability has no
effect on medical malpractice insurance premiums which only affect
doctors and hospitals and would only harm the current product liability
system.
What H.R. 5 does, as written, is to leave victims with little
recourse. These additional protections, the ones that I mentioned that
go outside of the doctors and the hospitals, render victims completely
unable to hold pharmaceutical companies, makers of defective medical
products, and insurance companies accountable, even when they are
proven negligent. Even if they are proven negligent, one cannot
recover, other than based on a small amount.
In essence, what the bill does that we are going to be considering
tomorrow is really a bill designed to reduce the consequences of the
mistakes and wrongdoing of large corporations at the expense of victims
of those harmful actions.
So here we are. Traditionally in our system, in our Anglo-American
jurisprudence system that we are so proud of, it has lasted over 1,000
years, the effort was to protect the victim. Now, what we are doing
with this bill is protecting the large corporations who do not need any
protection. It is certainly not in the circumstances that are
delineated here.
But the worst aspect of it, Madam Speaker, in my opinion, is with
regard to HMOs. Because as I said, on a bipartisan basis, there were
different bills; there was a Democratic bill and there was a Republican
bill and the Republican bill passed and it was not, in my opinion, as
good as the Democratic bill. But the bottom line is there were efforts
on both sides of the aisle in the last 4 years in this body to try to
deal with HMOs and reform HMOs so that patients had some rights. If
they were denied care, they could go to some sort of a board or
commission, administrative appeal, or they could go to court to
overturn a wrongful decision that denied them care or caused them
damages.
But what H.R. 5 does that we are going to consider tomorrow is it
preempts State law and it amends Federal law far beyond, again,
relating to doctors and hospitals, and it says that it applies to any
``health care lawsuit brought in a Federal or State court.'' Now, that
is where we get to the HMOs. Eleven States have laws that provide that
HMOs may be held liable for refusing to authorize payment for
appropriate care. These laws would be completely preempted by H.R. 5 if
it passes and becomes law. And, in particular, what is happening is the
courts in the States and even at the Federal level are expanding
victims' rights because Congress has not acted. We never passed, Madam
Speaker, the Patients' Bill of Rights. It passed in the House, but it
never passed in the Senate. It was never signed by the President. So in
the absence of having Federal law that would protect patients who are
in an HMO, States have passed laws and now the courts have even stepped
in and said that one can sue and seek grievances for HMO action.
In fact, one of the most important Federal courts, the United States
Court of Appeals for the Second Circuit, which covers New York,
Vermont, and Connecticut, recently held that Americans can sue HMOs and
other insurers for injuries resulting from their cost-minimizing
decisions. Now, this ruling, if it is upheld by the Supreme Court,
would essentially make the Patients' Bill of Rights the law of the
land. We would not even have to pass it. It would essentially make the
Patients' Bill of Rights apply to the entire country. But these kinds
of lawsuits, the Second Circuit opinion, State law, either enacted by
the legislature or by the State courts, would all be preempted and
severely limited by H.R. 5.
To me, to hear my colleagues on the Republican side spend the last 2
or 3 years saying that they want to protect patients' rights in HMOs
and then have them vote on this tomorrow, which I am sure is going to
be voted on by most of my Republican colleagues, that would take away
all of those rights or at least severely limit them I think is just
incredibly hypocritical. Even the President, the President said that he
supported the Patients' Bill of Rights too and now he is saying that he
favors this malpractice bill, which would essentially limit one's
ability to sue and take action against an HMO. I really do not
understand where my Republican colleagues are coming from on this.
Now, I just wanted to mention, there is a Democratic substitute to
H.R. 5, which hopefully the Committee on Rules will put it in order but
if they do not, I guess we can do it on a motion to recommit tomorrow
so we would have some opportunity to bring it up. Basically what the
Democratic substitute does is the opposite of most of the negative
aspects of H.R. 5 that I talked about tonight. It tries to look at the
malpractice issue in a much broader context, not only for tort reform
dealing with lawsuits and damages, but also for insurance reform. In
fact, it has a commission that would evaluate the cause and the scope
of the recent and dramatic increases of medical malpractice insurance
premiums and, most
[[Page H1789]]
importantly, actually establishes a grant program, if you will. It is
similar, I suppose, to the kind of reinsurance program that I mentioned
where grants could actually be given to States or, in certain
circumstances, where premiums go up. I really maintain that the only
way that we are going to reduce premiums is not through any kind of a
cap on damages in court, but rather by addressing it directly, by
either having a reinsurance program that gives money back to the States
or to the insurance companies so that the premiums go down, or
providing some sort of grant program to reduce premiums. Again, it was
the capping of premiums in California that made the difference, not the
$250,000 in damages.
I see the gentleman from Texas is here, and I would like to yield to
him at this time. I thank the gentleman for coming down.
Mr. SANDLIN. Madam Speaker, I thank the gentleman from New Jersey
(Mr. Pallone) for yielding time and I thank him for his important
efforts in this regard.
We can say that H.R. 5 was filed in that it calls attention to a very
serious problem we are facing in the United States of America, and that
problem is that the insurance carriers are absolutely gouging America's
physicians and hospitals and other health care providers. The irony is
that H.R. 5, while calling attention to that problem, does absolutely
nothing to solve the problem.
We hear much coming from the other side about frivolous lawsuits.
There is not a Member of this House that supports frivolous lawsuits
and, in fact, if the other side was interested in getting rid of
frivolous lawsuits, they would have put something in this legislation
to take care of it. The Democrats support putting in specific
provisions that say, if a suit and a claim has absolutely no basis in
fact, no basis in law, no reasonable extension of law, that suit should
be dismissed, the plaintiffs should pay the costs, and the plaintiff
and the plaintiff's attorney should be sanctioned by the court for
filing a suit without merit, period. If the other side was that
interested in getting rid of frivolous lawsuits, they would have that
in their legislation. However, they have ignored that.
Also, I think it is quite unusual that the claim is: Malpractice
premiums are skyrocketing; we have to do something to help the doctors.
Madam Speaker, the only people that are not at the table in this
debate, the only people that are not affected by this law, the only
people who are not subjected to any restrictions by H.R. 5, and that is
the insurance carriers. The insurance carriers will get everything they
want. It is a great payday for them, because they want a cap of
$250,000 to limit what they will pay to aggrieved parties. However,
they will not agree, they will not discuss, they will not even consider
the possibility of lowering premiums.
That is absolutely outrageous. This is not a debate between doctors
and lawyers; this should be doctors, lawyers, patients, consumers,
pointing the finger at the insurance companies and saying, if you want
this relief, you have to do something when you get it. But we know they
are not going to do it. Do we know why we know? We know because we look
at history. Historically, in the States that have caps their premiums
are higher than in the States without caps. Now, go figure. That is
because when the insurance carriers know that they have a limit, it is
carte blanche. When they lost money, as the gentleman from New Jersey
mentioned, in the stock market, they have a way for the government to
help them get that money back or a quasi-government function; they just
send a letter to our doctors. They send a letter and they say, you need
to pay us more money.
Now, oftentimes we will hear folks on the other side of the aisle
talk about MICRA in California. MICRA has not been a success, and MICRA
is not what limited the cost of malpractice premiums in the State of
California. MICRA was passed in 1975. Rates continued to go up. Doctors
continued to have problems. Do we know what happened? In 1988, the
voters of California, who do not support MICRA by the way, the voters
of California passed Proposition 103. Proposition 103 was not
malpractice reform. Proposition 103 did not say we have to limit what
families get for the death of their children. Proposition 103 said we
are going to regulate insurance and we are going to roll back the rates
20 percent.
Well, it is no surprise when we say we are going to roll back the
rates 20 percent that rates go down. That is what it was designed to
do. That is what happened in California. That is the only thing that
has been a success. MICRA has had nothing to do with it. Do not be
misled in this House either. MICRA is not H.R. 5. There are many, many
significant differences between MICRA and H.R. 5. MICRA limits only,
and puts a cap only on personal injury damages as a result of
malpractice. The Health Act protects HMOs, it protects manufacturers of
defective products, it protects; in fact, anyone engaged in any stretch
of the imagination in the health care industry will be protected from
civil rights violation claims, anti-fraud violation claims, anti-
consumer claims. You name it, they are protected. It is just payola to
the carriers and the HMOs.
The HMOs did not get the protection they wanted in the Patients' Bill
of Rights. They have not gotten that deal done yet. So now they are
back. Now they are back. Let us make no mistake about it: $250,000 is
not pain and suffering. Madam Speaker, $250,000 is what the other side
says that you get for the loss of your child. How much is the loss of
your child worth? How much is the loss of a limb worth? How much is
going blind worth? I do not know, but my friends on the other side
somehow looked into a ball and they said, we know how much it is worth.
If your child is dead, like Miss Santillan, that is worth $250,000
minus the cost and attorneys fees, thank you very much, next case. We
have case after case after case.
I yield now to the gentleman from New Jersey, because he might want
to talk about some of these specific cases that I know he has some
information about, or maybe the gentlewoman from Texas (Ms. Jackson-
Lee) has some information she would like to share.
Mr. PALLONE. Madam Speaker, I will yield to the gentlewoman from
Texas, but I think what the gentleman said in particular about the fact
that this amount of damages, the $250,000 has no basis in fact. During
the Committee on Commerce hearing last week, I asked many times, where
does the $250,000 come from? What is it based on? The reply: the
California statute. And that was passed years ago. So we can argue that
just based on inflation alone, that that is no longer relevant. But
then again, the Republicans just want to move ahead, steamroll it, and
they are just not really interested in the reality of this and what
really matters to the victims. So I appreciate the gentleman's
comments.
I yield to the gentlewoman from Texas.
Ms. JACKSON-LEE of Texas. Madam Speaker, I thank the distinguished
gentleman from New Jersey. I am also delighted to join my good friend,
the gentleman from Texas (Mr. Sandlin), and I appreciate his leadership
on this issue. Both of our committees have been working intently, the
Committee on Commerce and the Committee on the Judiciary have been
working very, very hard on this legislation. I think we have had the
same quest and the same theme; that is, to strike at the
misinterpretation by our physicians and hospitals, our friends that
believe that H.R. 5 is going to solve their premium problem. That is
really the crux of this legislation. It really is not insurance
legislation which really should be relegated to the States.
It is interesting that my good friends would share their States
rights positions over and over again when we go to the floor to talk
about problems that should be solved by the national government, and
then my good friends on the other side of the aisle are constantly
chiding at the idea of rights to the States, rights to the States, the
10th amendment. But clearly, H.R. 5 abrogates, usurps, takes away,
preempts States' jurisdiction on this question dealing with protecting
victims and helping doctors.
So I want to say to my good friends across the Nation, and
particularly my friends in Texas, that this legislation does nothing
for you as it relates to those high premiums on your insurance.
My neighbor is the President of the National Medical Association. I
realize
[[Page H1790]]
the pain of knowing that a doctor has had to close his or her practice
because they have been shocked, shocked or shot, or hit with a premium
increase of $10,000, $50,000, $100,000.
{time} 1915
What this legislation does, H.R. 5, and I am glad the gentleman from
New Jersey (Mr. Pallone) has gathered us for this Special Order to be
able to say, it does not hit the point of the premiums. It hits at the
time of the decision. So what you are doing is undermining juries when
victims have been adjudged to have been a victim. This does not have
anything to do with frivolous lawsuits; 61 percent of the cases are
dismissed. This says when children like Nathaniel come into the
courthouse, Nathaniel is blind and paralyzed because physicians that he
went to and a nurse that he went to noticed that he was not eating and
that he was jaundiced, he was yellow, and failed to diagnose what
Nathaniel had. Did not tell his parents, You needed to hospitalize him,
after seeing a number of pediatricians.
So we now have a little boy who has no income, no way to discern what
his income might have been. He has no income to be able to have you
assess what he needs to care for him for the rest of his life because
he has never worked. And you are going to suggest that if he went to a
court and got a judgment that he should have a cap on noneconomic
damages and, likewise, he should have a cap on punitive damages?
Madam Speaker, this does not make any sense. And so I have offered
amendments that would induce the insurance companies to take their
profits, put them back into the physicians and reduce the premiums by
50 percent. Fifty percent of the savings go to the doctor. And I would
move to strike the noneconomic damages, move to strike the limits on
the cap on punitive damages, and I also asked that 2 percent of the
savings would go to help our doctors who are alcohol and drug dependent
only, a few just like there were only a few percentage of our doctors
who, in fact, perpetrate these acts that would warrant such severe
litigation.
We want good health care in rural and urban America, suburban
America. H.R. 5 does nothing but blow up HMOs and insurance companies.
It does not do anything. I encourage my insurance companies, my
friends, the pharmaceuticals, physicians, doctors, let us sit down and
get at the core of the problem, the small percentage of these doctors
that need help, the American Medical Association can do with us and
work with us to do that. The national association can do that. Let us
work together to ensure that we have good patient care, a good
Patients' Bill of Rights, good strong Medicare and Medicaid, and good
strong resources for our doctors to do the job that they need.
I am delighted the gentleman from New Jersey (Mr. Pallone) gave me
this opportunity. I just want to hold this sheet of California up to
make sure that everyone really knows that their medical malpractice
legislation did nothing. They had to actually do insurance reform much
later to actually get the doctors' premiums down. My understanding is
the California Medical Association is not supporting this legislation
because they saw what happened in their State.
So I would hope that tomorrow we would be of good sense and good mind
and defeat this legislation on the floor on behalf of our doctors and
our hospitals and our patients.
Mr. PALLONE. Madam Speaker, I appreciate the gentlewoman for coming
down. I know she was up in the Committee on Rules trying to get one of
her amendments that she described passed. I doubt they will pass it
because they are doing everything on a partisan basis.
We only have maybe a minute or two left. I just wanted to thank the
gentlewoman for bringing up the fact that traditionally when you are
dealing with insurance regulation it is done by the States. It is
tremendously unprecedented to take an issue that has primarily been
dealt with by the States where there are State laws on medical
malpractice and tort reform and all of the sudden put it under this
huge Federal rubric and think we are going to solve all these problems.
Particularly when something is so complex like this, the States are
traditionally the laboratories where we see what can be done to make
things work and maybe the Federal Government copies it later if it
works.
That I think is just another indication that this is just being for
special interests. This is just being done by the Republicans tomorrow
for politics because they want to take this one-size-fits-all solution,
knowing it is never going to pass the Senate, knowing it is never going
to become law, just so they can say to the drug companies and to the
HMOs and to the doctors, we have done something to try to deal with
your problem. Not even caring whether or not it is actually going to
accomplish the goal because otherwise they would wait and see what is
working in the States or they would wait and they would take a more
comprehensive view before we moved ahead with Federal legislation.
I think that was a very good point the gentlewoman made, and it is
one of the points that we need to continue to make.
We are not going to win this one tomorrow, but we have to bring up
the debate. If what happens is that it does go over to the Senate and
then we are allowed to sit down as Democrats and Republicans and come
up with a solution that goes beyond just a cap on damages, then so be
it. I welcome that opportunity. I do not understand why we have to wait
for it to pass the House to do that. But hopefully that opportunity
will be there, and we will be up front making sure we can come up with
a solution.
Ms. JACKSON-LEE of Texas. Just for a moment, I know our time is
ending. I think the statement we are making on the floor tonight, and I
will be an eternal optimist, one, that we get 2 hours of debate and an
open rule and the gentleman's amendments are allowed in and mine are
allowed in, because this is such a historic and important decision that
the Congress will be making in the backdrop of the number of young men
and women who are now on the frontlines fighting for our freedom. It
could be one of their relatives that would be subjected to this; but
the point should be made, as I close, that we are not against doctors.
We are not against hospitals, my friends. We are trying to help you
make this legislation right.
____________________