[Congressional Record Volume 149, Number 99 (Tuesday, July 8, 2003)]
[Senate]
[Pages S9012-S9043]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PATIENTS FIRST ACT OF 2003--Motion to Proceed--Resumed
The PRESIDING OFFICER. The Senator from Arizona is recognized.
Mr. REID. Mr. President, if the Senator will yield just for a brief
second, it is my understanding the Senator from Arizona has authority
to speak up to 15 minutes, followed by a 25-minute speech by the
Senator from California. Is that true?
The PRESIDING OFFICER. That is correct.
Mr. REID. I ask unanimous consent that following the statement of the
Senator from California, Senator Cornyn be recognized for 30 minutes,
followed by Senator Hollings for 30 minutes, and following Senator
Hollings, I ask that Senator Voinovich be recognized for up to 30
minutes, and then he would be followed by a Democrat.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Arizona.
Mr. KYL. Mr. President, I am pleased to address one of the most
important issues I think we are going to be talking about all year. I
hope our colleagues will permit us to conclude our debate with a vote
so we can actually adopt some legislation to deal with this crisis of
lawsuit abuse in the United States. Some call it medical malpractice
reform. Whatever you call it, we have to deal with it.
Unfortunately, what we have heard is that some of our colleagues are
going to prevent us from having a vote on the bill that is before us,
S. 11. It is a bill that addresses one of the most fundamental problems
we have, and that is access to available quality medical care by a lot
of people in our society today. We need to reform this flawed medical
malpractice system which is prohibiting people from getting the quality
medical care they need and deserve.
We debated just before the Fourth of July recess Medicare reform to
provide prescription drug benefits to all of our senior citizens. We
took a lot of time talking about why our senior citizens needed access
to care and how we were going to improve that access. But all of that
will go for naught, it will do no good, if there are no hospitals and
there are no pharmacists, if there are no physicians and other health
care providers--or an insufficient number of those providers--to help
those people in need, whether they be senior citizens or others,
because of the high cost of malpractice premiums and therefore the
inability of these providers to continue to serve the people in their
communities.
Last year, the American Medical Association released a study on this
lawsuit abuse problem. It concluded that 12 States were having a full-
blown crisis and that 30 States were seeing serious problems in terms
of the ability of physicians and hospitals to stay in practice to take
care of their patients.
Today, just a year later, that study has been updated and the AMA has
now concluded that 19 States are having a full-blown crisis in dealing
with the medical malpractice insurance rates just for physicians. Let
me give some examples of how this is affecting different communities
around the country so you can see it is truly a nationwide problem.
In my State of Arizona, health care providers have experienced
dramatic increases in their insurance rates. Between 2001 and 2002, two
hospitals in Phoenix saw a threefold increase in their malpractice
premiums, paying more than $1.7 million. Meanwhile, in Winslow, AZ, the
hospital premiums have more than doubled, to $1.8 million.
Some of you know the town of Winslow, AR, from a famous song by the
Eagles. It is a town with great history and rich in tradition in
Arizona but it is not very big. It doesn't have the patient base to
support a hospital that has to pay almost $2 million a year in medical
malpractice premiums. It is not just in my State of Arizona. Methodist
Hospital in south Philadelphia recently closed its maternity ward and
prenatal program because of its medical liability insurance rates.
Greenwood Hospital in Mississippi was unable to keep its level II
trauma center rating because the neurosurgeons in the area had left
citing the high cost of liability insurance.
I spoke with a woman whose husband had been very seriously injured in
an automobile accident in Mississippi. She told the story of how--
because of the lack of physicians and because of the high cost of
premiums--her husband has suffered so terribly as a result of that
accident and the inability to get quick medical attention.
Back to my home State of Arizona, the Copper Queen Community Hospital
in Bisbee, AZ, was recently forced to close its maternity ward because
the family practitioners in that community were looking at a 500-
percent premium increase. Expectant mothers now must travel more than
60 miles to the closest hospital, which is either in Sierra Vista or in
Tucson. According to the recent news accounts, four women have since
had to deliver babies en route.
To cite the news accounts, Time magazine has a June 9 cover story
about the doctor being out and why so many patients are losing doctors
to the rising cost of malpractice.
This is now truly a national event.
In the Time magazine piece dealing with this question of physicians
having to leave the practice, there is a particularly interesting story
about a woman in Arizona whose name is Vanessa Valdez. The title of the
story is ``Taking the Highway to Have a Baby.'' The story points out
that Vanessa has to drive about 50 miles to see her OB/GYN and to have
a baby. She lives in the town of Douglas, which is on the Arizona-
Mexico border. But there is no obstetrician within an hour's drive to
deliver her child. There were six family practitioners in that
community but they couldn't afford the soaring malpractice premiums. As
a result, the hospital was forced to close its delivery room, and
suddenly rural Cochise County has but one delivery room for the 118,000
residents. That is in Sierra Vista, 50 miles from Valdez's home of
Douglas.
[[Page S9013]]
This is beautiful country. It is a great place to live. But it is no
place to live if you are going to get sick or you know you are going to
have a baby because you have an hour's drive to get to a doctor. That
is not right. It is not as if this is out in the middle of nowhere and
you chose to live there with all of the attendant risks involved. No.
There are a lot of communities in this area but none of them had
physicians able to continue to practice because of the medical
malpractice premiums they had to pay.
One other example: Nevada was very much in the news last year because
of the crisis in that State. Nevada's top level trauma center was
recently closed for 10 days after 58 orthopedic specialists in Las
Vegas temporarily quit because of the skyrocketing insurance costs.
Also, a lot of the physicians delivering babies and performing high-
risk surgeries have indicated that they won't be able to continue to
practice without some kind of relief.
Ultimately, this destructive lawsuit abuse hurts the patients. Yes.
The doctors can't make it, so they leave. But ultimately it is the
patients who are the ones who suffer.
Therefore, we are trying to deal with that through legislation that
will make it a little bit more difficult for this kind of lawsuit abuse
to occur so that the insurance companies won't have to charge quite as
high a rate, so the physicians and hospitals can stay in business, and
so the people of the communities can continue to be served.
Also, the threat of lawsuit abuse often forces doctors to perform a
lot more in the way of tests and surgeries and other kinds of
treatments than they otherwise would do simply to protect themselves
from a claim that they weren't doing enough for the patients--sometimes
expensive tests, sometimes invasive procedures.
All of this is called defensive medicine--trying to do everything
they can to make sure some smart lawyer out there doesn't try to pick
at what they did and find some kind of fault with it and find a client
who is willing and able to hire a lawyer to bring a lawsuit against the
doctor.
That is another effect of this lawsuit abuse. Another is the fact
that a lot of times doctors are no longer willing to perform risky
procedures that may be necessary to really help somebody or even save
somebody's life. Obviously, the more serious the condition, frequently
the more risky the procedure. You want to be served by a physician who
is willing to go to the mat for you in that case. But if the physician
is looking at a big medical liability suit, if the result doesn't
happen to work out right, then that physician is going to be less
likely to try to treat you.
All of this results in an inferior quality of medical care for
American citizens, which is wrong. It is not at all uncommon for these
lawsuits to be brought and the lawyers to get over half the settlement.
That is wrong. That is one of the issues with which this legislation
deals.
The Congressional Budget Office determined that the House bill, which
passed and which was pretty similar to S. 11, would reduce direct
Federal spending for Medicare, Medicaid, and other Federal health
programs by almost $15 billion over the next 10 years. Since the
Federal Government is a payer for many of the medical services,
particularly for our seniors who are indigent, it is a saving to the
Federal Government as well for this lawsuit abuse to be addressed.
Because employers will pay less for health insurance for their
employees and more of the employees' compensation will be in the form
of taxable wages and other fringe benefits, including, of course, money
that could be plowed back into greater health care for the employees,
the Congressional Budget Office estimated that enacting this
legislation would increase Federal revenues by about $3 billion over
the next 10 years as employees receive higher wages.
Just a note about the legislation itself, there are a lot of
different ways you can do this. I had actually cosponsored a bill
somewhat different than this. But the basic idea is the same, even
though we might want to change specific provisions of this legislation.
It basically sets sensible limits on the noneconomic damages that can
be obtained in these lawsuits. The noneconomic damages are those
damages that go above and beyond the bills that have to be paid. When
you get sick and the physician allegedly committed malpractice, you had
to go to another doctor to get the problem resolved. Those are economic
damages as you lost wages, and any other expenses that you have. And
those economic losses are fully compensated. But above and beyond that,
you are entitled and juries will award substantial damages for
noneconomic losses, mostly called pain and suffering because of what
you had to go through. Certainly people recover something for their
pain and suffering. The question is how much.
In order to avoid lawsuit abuse, some States--for example, the State
of California has put a $250,000 limit on those noneconomic damages.
That is precisely what this legislation does as well. However, states
with higher caps can keep those under this legislation too. It also
reserves punitive damages for cases that justify it. Part of lawsuit
abuse is very large punitive damage awards which have nothing
whatsoever to do with either the economic or noneconomic losses but
nevertheless help to enrich the lawyers.
There are some other features of the legislation as well. But the
point I wanted to make is whatever the specifics of the legislation, we
need to act.
I hope our colleagues will permit us to conclude the debate and have
a vote on this legislation so we can get together with the House of
Representatives, which also passed a bill, have a conference committee
work out any differences, all have a chance to vote on that, and then
hopefully have a bill we can send to the President.
If we are never able to have a vote on this, it is not just the
doctors, hospitals, and other providers that are going to suffer; it is
the American people because they will not have access to the quality of
medical care which they need and deserve. I hope we cannot only debate
this legislation but also permit it to come to a vote so we can address
this serious crisis in America today.
The PRESIDING OFFICER. The Senator from California is recognized.
Mrs. FEINSTEIN. Mr. President, I wanted to use 12 minutes of the
Senate's time to discuss my reaction to this bill and my general
thinking about the subject of medical malpractice insurance premiums.
I think it is pretty clear that medicine is at a crossroads. I think
it is pretty clear that something has to be done. My own State of
California was at the crossroads 28 years ago. A bill was passed
through the legislature called the Medical Injury Compensation Reform
Act, known as MICRA. MICRA had a rough road initially. It had a number
of court challenges. Finally, it was sustained by the California
Supreme Court.
What we saw--I will go into this in more detail later on--was that
premium costs began to settle down. In fact, I think it is fair to say
that the California medical profession is very pleased with the MICRA
bill as it stands today.
The problem I have--and I am probably one of the few on my side of
the aisle who is not opposed to the issue of caps because I think in
this situation they are helpful, but my problem is with the bill that
is before us today because that bill is nearly identical to the bill
passed out of the House and, frankly speaking, it is not one that I can
support.
This bill before us sets a $250,000 cap for noneconomic damages in
medical malpractice suits. Now, this can be applied not only to suits
against doctors but to suits against HMOs, nursing homes, and medical
product manufacturers. It is a very broad provision. This cap would
even apply for extraordinary cases. I will give you one: A youngster,
Jessica Santillan, a 17-year-old who died after doctors mistakenly
transplanted the wrong kidneys into her body.
So under this bill, suits against drug and device manufacturers also,
such as the makers of the weight loss drug Phen-Fen, the Dalkon shield
contraceptive device, faulty heart valves, and other products that have
caused innocent deaths, would be limited to $250,000 in noneconomic
damages. I find that unacceptable.
Secondly, this legislation would severely limit the availability of
punitive damages not only for doctors but
[[Page S9014]]
also for manufacturers. In general, punitive damages are capped at the
greater of $250,000 or twice economic damages in this bill. But the
bill also wipes out any punitive damages in several different types of
lawsuits against medical product manufacturers. It would immunize the
manufacturer or seller of drugs from punitive damages for any packaging
or labeling defect on their product. So, presumably, if a drug package
label had mistakenly directed a patient to take 10 pills a day instead
of 1 pill a day, a patient could not sue for punitive damages,
regardless of the harm caused or the basis of the mistaken direction.
It would also limit the availability of punitive damages against any
manufacturer or distributor of medical products if the product complied
with FDA regulations. Let me give you an example: a product such as the
Bjork-Shiley artificial heart valve. It originally received FDA
approval, but these valves broke in an estimated 619 patients and led
to hundreds of deaths. Under this bill, they would be immune from any
punitive damage case. I think that is wrong.
This FDA exemption, in a sense, sets a downward and unacceptable
course. If a company has an FDA-approved product on the market and then
learns of a dangerous complication presented by that product or a
failure of that product, it should have the incentive to remove that
product from the marketplace as soon as possible. I think to provide an
exemption if the product has FDA approval creates a disincentive to the
rapid removal of that product from the shelf.
So while I cannot support this proposal, there are, however,
proposals which I could support because I do believe that rising
premiums are creating a crisis all across this country in terms of
access to care. Others have placed before this body a number of
situations. Let me just repeat a few.
Obstetricians and gynecologists in Florida pay over $200,000 a year
for malpractice insurance as opposed to $57,000 a year in California.
And there is no more high-cost State than California. So OB/GYN
premiums in Florida, $200,000; in California, because of MICRA,
$57,000; surgeons in Michigan pay $110,000 for malpractice insurance.
Twenty percent of the OBs and GYNs in West Virginia and Georgia have
been forced out of their practice due to rising premiums.
Nine hundred doctors in Pennsylvania have left the State since 2001
to avoid annual premiums as high as $200,000. The Methodist Hospital in
Philadelphia discontinued its prenatal program for low-income women
because of high premium costs.
The neurosurgeons of Wheeling, WV, have left the area, and local
trauma patients requiring neurosurgery need to be airlifted out of the
State.
Not only are insurance premiums skyrocketing in some States, but
insurers are leaving the market, and that is a very dangerous signal.
There were 14 companies underwriting liability in Mississippi; today,
there is but one willing to write new policies. Texas had 17 insurance
carriers; today it has 4.
In California, we have nonprofits handling the insurance for
California's doctors, and that is one reason the system works.
I have spent a number of months taking a good look at the California
law to see what could be transferred to the national level. And I want
to say, here and now, this Senator would support reasonable caps on
noneconomic damages because I deeply believe they can lead to more
stable premium rates.
At the time MICRA was enacted in 1975, the cost of health insurance
in California was higher than any other market except New York City. In
the 6 years before 1975, the number of malpractice suits filed per 100
physicians in California more than doubled.
MICRA has kept costs down. In 1975, California's doctors paid 20
percent of the gross costs of all malpractice insurance premiums in the
country. Today, they pay 11 percent of the Nation's total malpractice
insurance premiums. Clearly, costs have dropped in comparison with
other States.
All over the United States, premiums have grown 505 percent in the
past 25 years. California's premiums have grown 167 percent. In other
words, premiums have grown three times slower in California than in
other States. That alone shows that MICRA is working, regardless of
what anyone might say.
Also, because of MICRA, patients get their money 23 percent faster
than in States without caps on noneconomic damages. Bottom line:
California's malpractice premiums today are one-third to one-half
lower, on average, than those in Florida or New York.
Because the California law has proven successful at keeping premiums
down--and I know there are those who do not want to believe it; they
will say it is some other reason; but I believe it has--I used the law
as a departure point for crafting a proposal which I believe is both
just and fair and which I believe should stabilize and, over time,
reduce premium costs.
I very much appreciate the efforts of Senator Frist and Senator
McConnell in working with me to explore this option. I am not going to
offer it on the floor today for one reason: Unfortunately, it would not
have the necessary votes.
Specifically, my proposal would do the following: It would create a
schedule for attorney's fees. It would create a strict statute of
limitations, requiring that medical negligence claims be brought within
1 year from the discovery of an injury or within 3 years of the
injury's occurrence. It would require a claimant to give a defendant 90
days' notice of his or her intent to file a lawsuit before a claim
could actually be filed. It would allow defendants to pay damage awards
in periodic installments. It would allow defendants to introduce
evidence at trial to show that claimants have already been compensated
for their injuries through workers compensation benefits, disability
benefits, health insurance, or other payments--that is only fair--and
it would permit the recovery of unlimited economic damages.
My proposal would differ from California's law in two key areas: One,
noneconomic damages and, two, punitive damages. The California MICRA
law has a $250,000 cap on noneconomic damages. In contrast, I would
propose a $500,000 general cap on noneconomic damages. Today 15 States
have caps of $500,000 or less for noneconomic damages. Twelve States
have a cap of $500,000 or less on noneconomic damages, and that
includes Alaska, Florida, Louisiana, Massachusetts, Michigan,
Mississippi, Nevada, Oregon, Texas, Hawaii, North Dakota, and South
Dakota. Three States have caps of $250,000-or-less and they include
Montana, New Hampshire, and California. Thus, 15 States already have
caps of $500,000 or lower.
In catastrophic cases, where a victim of malpractice was subject to
severe disfigurement, severe disability, or death--in other words, a
catastrophic exemption--the cap would be the greater of $2 million or
50,000 times the number of years of the life expectancy of the victim.
This really takes into consideration terrible morbidity done to a young
child whose life span might be 50 or 60 years more. Clearly, a cap of
$250,000 or $500,000 is really not fair to that youngster. Therefore,
the catastrophic exemption we would propose would provide the greater
of $2 million or 50,000 times the number of years of life expectancy of
the victim.
In addition, we would propose a less onerous punitive damages
standard than California law. California law is very strict today with
respect to a plaintiff's ability to prove punitives under the very high
standard of fraud, oppression, or malice. In other words, if you can't
prove fraud, oppression, or malice, you can't prove punitive damages.
If a doctor is in the middle of surgery and walks out to go to his bank
to make a deposit while the patient is under a general anesthetic, in
my view, that doctor should have punitive damages brought against him
because that clearly is not accepted medical procedure.
California's law is much stricter. You have to prove fraud,
oppression, or malice. Under this law, I am not aware of a single case
where a plaintiff has obtained punitive damages in California over the
past 10 years. So at least in my view, for situations such as the one I
just indicated, the California law is too strict in this regard.
Instead we would offer a four-part test where a plaintiff would have
to show by clear and convincing evidence--and this was put together
based on measures that have passed this Senate in the not too distant
past--that
[[Page S9015]]
the defendant, one, intended to injure the claimant unrelated to the
provision of health care; or two, understood that the claimant was
substantially certain to suffer unnecessary injury and, in providing or
failing to provide health care services, the defendant deliberately
failed to avoid such injury; three, the defendant acted with a
conscious flagrant disregard of a substantial and unjustifiable risk of
unnecessary injury which the defendant failed to avoid; or four, the
defendant acted with a conscious flagrant disregard of
acceptable medical practice in such circumstances.
Clearly, the doctor who walked out of a surgery and left a patient
under a general anesthetic would fall under this fourth plank. It
certainly is a flagrant disregard of acceptable medical practice which
would be, you don't go to your bank in the middle of an operation to
make a deposit when the patient is under a general anesthetic.
I firmly believe a variant of this type could lead to a compromise in
the proposal in the Senate. Why didn't I go ahead with it? Much to my
chagrin and, I think, surprise, both the American Medical Association
and the California Medical Association rejected this proposal. The AMA
contends that despite the fact 15 States have caps of $500,000 or less,
they believe that a $500,000 cap is too high and it would not stabilize
premiums.
The California Medical Association is opposed to it for a different
reason. Although we leave State law in place, whether that State law is
retroactively passed or prospectively passed, the CMA felt the State
legislature might--I say ``might''--change the $250,000 cap to
$500,000. So both of these associations have rejected that proposal
which meant I wouldn't have a chance to get the necessary votes on
either my side of the aisle or pick up a few votes on the other side of
the aisle.
They refused to move from a cap of $250,000 for noneconomic damages
in even catastrophic cases. To me this is wrong because a $250,000 cap
in 1975, when the California law set this cap, adjusted for inflation
was worth $839,000 in 2002. So last year a $250,000 cap, passed in
1975, would be worth $839,000, if passed today. If a figure of $250,000
was adequate in 1975, why couldn't a figure of $500,000, which is lower
than the 1975 cap adjusted for inflation, be acceptable this year?
Now if a victim receives $250,000 today, this is equal to $40,000 in
1975. So when California led the Nation by passing the Medical Injury
Compensation Reform Act and setting a cap for noneconomic damages of
$250,000 in 1975, everybody should know that that is worth $40,000
today. In my book, that is unacceptable.
There are many specific instances of why it is unacceptable. Let me
share one case. That is Linda McDougal. She is 46. She is a Navy
veteran. She is an accountant, a mother. She was diagnosed with an
aggressive form of cancer and underwent a double mastectomy. Two days
later she was told that a mistake was made. She didn't have cancer and
the amputation of both her breasts was not necessary.
A pathologist had mistakenly switched her test results with another
woman who had cancer. Is this Congress willing to say there should be a
cap of $250,000 on noneconomic damages for this kind of mistake? I
think not.
A cap on noneconomic damages must take into account severe morbidity
produced by a physician's mistake, such as amputating the wrong limb or
transfusing a patient with the wrong type of blood.
Unfortunately, because of the opposition of both the American Medical
Association and the California Medical Association, I am not proposing
an amendment at this time. My purpose was to help physicians and
patients, and I deeply believe that a $500,000 noneconomic damage cap,
coupled with the catastrophic exception I outlined, would accomplish
this, would accomplish it fairly, and would stabilize premiums over the
long term.
I also suggest that State laws, where they exist, should prevail. So
the California MICRA law, or any other State law, would prevail
regardless of whether that State law was already enacted or
retroactive.
So, bottom line, I could not get 60 votes for this proposal with the
opposition of physicians. So the result may well be an alternative
because I don't believe the House bill can pass in the Senate in its
present form.
Let me say this. I have given this bill a great deal of thought. I
really mean what I say--that I am prepared to support a reform bill. I
am prepared to support a cap on noneconomic damages. But it has to be a
cap that is realistic in view of today's time. It cannot be a cap that
was passed 28 years ago that has an actual value of $40,000 today. So I
am hopeful there will be another time and another place when a bill
such as the one I have tried to outline might be found to be
acceptable. In the interim, I will vote against S. 11. But, again, I
stand ready to participate in a solution along the lines I have
mentioned.
Mr. President, I yield the floor and I suggest the absence of a
quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CORNYN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Crapo). Without objection, it is so
ordered.
Mr. CORNYN. Mr. President, I wish to say a few words about the issue
of medical liability reform, a matter that cries out for a remedy from
the Congress because of its sheer scope and size.
When it comes to health care, I believe the proper role of the
Government is to protect the freedom of all people to act in their own
interests and in the interests of their health. I think it is
appropriate that we make sure their decisions are not made by the
Government but by themselves and their families. Patients and doctors,
rather than lawyers and bureaucrats, should be trusted to decide what
treatment is best for themselves and their patients.
I strongly believe that when people have good choices in a health
care system built upon free market principles, it ultimately translates
into high-quality care. One of the obstacles, though, to achieving
access to that high-quality care is the current crisis involving
medical liability litigation.
Today, America is experiencing a medical liability litigation crisis
that is increasing the cost of health care, it is decreasing access to
physicians and hospitals for many patients, and it is generally
lowering the quality of care. As a matter of fact, we could hardly call
our medical liability system a ``system'' because it is such a mess. In
recent years, average jury awards have more than doubled, from more
than $460,000 in 1996 to more than $1 million in the year 2000.
In the past year, medical liability insurance premiums in many States
have increased by more than 20 percent, on average, and more than 75
percent for certain specialties. That is just in 1 year. Between 1991
and 2001, the number of medical malpractice payments of $1 million or
more that were reported to the National Practitioners' Database
increased from 298 to 806. The overall result is sky-high costs for
liability insurance, increased costs for those who provide health
treatment, and costs that have really created a crisis of enormous
proportions, one that is threatening the quality of care, diminishing
access to care, and exploding the cost of care.
According to studies at the Department of Health and Human Services,
doctors across the country are closing their practices, they are
limiting the types of patients they see, or they are leaving
communities where they have long practiced because they cannot afford
the rapidly increasing costs of medical liability insurance or, worse
yet, insurance coverage is unavailable altogether.
Fear of liability suits--even frivolous litigation--also results in
the practice of defensive medicine.
A recent survey, for example, conducted by an organization known as
Common Good, revealed some disturbing trends: 79 percent of physicians
admit that the fear of litigation has caused them to order more tests
than they thought medically necessary, and 74 percent refer more
patients to specialists than their best medical judgment would
otherwise dictate. Half have recommended invasive procedures they do
not consider on a medical basis to be necessary, but they have done it
in an effort to protect themselves against the second-guessing that
goes
[[Page S9016]]
along with the medical liability regime.
Defensive medicine increases risks for patients and it raises health
care costs by as much as $126 billion per year. This is a crisis not
just for the Nation's physicians, it is a danger to America's
patients--in other words, every single one of us.
For example, pregnant women in Nevada, Mississippi, West Virginia,
and Florida must drive hours just to find an obstetrician who can care
for them, and many still cannot get the essential prenatal care they
desperately need. The only level 1 trauma center in Las Vegas had to
close temporarily last year because its surgeons could not afford
medical liability insurance. Some physicians' annual premiums had
increased from $40,000 to $200,000 in just a year.
In many States, physicians are retiring or moving their practices
because they either cannot afford the liability insurance or simply
cannot buy the liability insurance they need in order to protect what
they have worked a lifetime to achieve.
In Mississippi, physicians are actually moving across the river to
Louisiana to serve the same patients they would serve in Mississippi
because they can no longer afford to practice in that State, and most
cities in the State of Mississippi with populations under 20,000 no
longer have any physician who will even deliver a baby.
There are many more examples from my State, the State of Texas. The
city of Austin, for example, is suffering from a shortage of
neurosurgeons caused by retirements and relocation to avoid liability
coverage costs, a shortage so heavy that some patients have to travel
more than 65 miles away to find treatment.
In 100 of the 254 counties in the State of Texas, there is no
obstetrician; in other words, there is no medically trained specialist
who will deliver a baby in 152 Texas counties. After 44 years, Spring
Branch Medical Center near Houston has stopped delivering babies
altogether due to the soaring malpractice insurance costs and the
shrinking pool of physicians that will actually deliver babies.
According to the Texas Medical Association's physician survey last
year, more than half of all Texas physicians, including those in the
prime of their professional career, are considering early retirement
because of the State's medical liability insurance crisis, and earlier
this year the Fort Worth Star-Telegram reported about one story that
illustrates the way this problem affects patients who need care the
most. The story said:
Last summer, a pregnant woman showed up at Dr. Lloyd Van
Winkle's Castroville office in south Texas, less than 10
minutes from delivery. Her family doctor in Uvalde had
recently stopped delivering babies, citing malpractice
concerns, and the woman was trying to drive 80 miles to her
San Antonio doctor and hospital. ``She made it as far as
Castroville and decided she wasn't going to make it any
further,'' Van Winkle said.
We all want to prevent disease and injury. When patients get sick, we
all want to prevent medical errors, and when errors do happen, we can
all agree that a patient should be compensated fairly. But if you can
find some goal hidden somewhere within the current dysfunctional
medical liability system, that goal would not be either the prevention
of errors or the fair compensation for injury. Very clearly, the
current medical liability crisis operates for the benefit of a few at
the expense of the many.
Personal injury trial lawyers should not be able to drive good
doctors out of medicine or to reduce patients' access to health care.
This system undermines the ability of physicians to treat their
patients without fear, and it destroys the trust and the important
relationship between patients and their physicians, and it truly
abandons the American patient--that is, every one of us--when we need
the help the most.
I am proud to say that in my home State of Texas, the State
government has stepped up in the legislative session just ended and
passed some needed reforms in this and other areas. This year, despite
overwhelming pressures from special interest groups, the State passed
historic liability reform which makes it possible for doctors to
practice in Texas without fear of unwarranted and frivolous lawsuits.
The law puts caps on punitive damages while allowing for patients who
are truly hurt to be fairly compensated. Judgments will be based on the
amount of involvement in the act caused in the suit without
consideration of who has the deepest pocket.
I must add, though, that even in my State of Texas, there will be a
vote of the people on whether the Texas Constitution will be amended to
provide a means to achieve this historic reform and much needed reform,
and that vote remains to be given and taken. Yet there is still little
recourse for patients in States without meaningful reform, and this is
truly a nationwide crisis and not one that should be addressed by
individual States, given the sheer magnitude of the crisis, its
geographic expanse and, frankly, the amount of Federal taxpayers'
dollars to go in to paying for the current dysfunctional system.
Our health care system is still burdened with frivolous lawsuits and
outrageous jury awards. According to a Health and Human Services study,
premiums in States without meaningful liability reform went up 39
percent in the year 2001 and an additional 51 percent in 2002. An out-
of-control system in one State can have an effect on malpractice
premiums in other States, even those States that have made some
incremental step toward reform.
This is a national problem, and it demands a national solution. This
legislation is comprehensive reform that will enact several critically
needed components. For example, it caps noneconomic damages awarded in
medical malpractice cases at $250,000. It will eliminate joint and
several liability; in other words, the person at fault will pay for
their percentage or their share of fault and no more. It will create a
uniform statute of limitations; in other words, a period of time in
which a lawsuit can be filed and pursued in court in a way that will
preserve both the rights of the patient, as well as make sure that so
much time does not pass that memories dim, records are destroyed, and
the facts are difficult to discern.
It will reform the collateral source rule, another arcane rule of our
legal system that says that even if someone has already been paid from
one source they can still keep that information from the jury and seek
to be paid yet again for the same loss.
Finally, it will create reasonable limits and court approval of
attorney contingency fee awards. In many places, the amount of money
that a lawyer will receive, and others will receive, in terms of costs
of expert witnesses and the like routinely exceeds the amount of money
that an injured patient will receive, somewhere on the order of out of
every dollar that is awarded by a jury the injured patient only gets 40
cents. It is the lawyer and the bureaucracy in our litigation system
that absorb the rest.
If this were truly about what is best for the patients, we would see
reform. We would see it in the Senate. Unfortunately, this is about the
60 cents on the dollar that goes to people, other than the patient, who
are obstructing true reform.
This legislation is a comprehensive reform and is modeled after the
highly successful MICRA law in California, one that has been very
successful both in making sure injured patients are fairly compensated
while at the same time holding down the escalating costs of medical
liability insurance in a way that allows most physicians to practice
their chosen profession and which provides better access to good
quality health care.
This act will help protect our critical care hospitals and provide
needed relief for nursing homes and medical specialists. The cost of
health care will be reduced as the need for high premiums for liability
insurance will become a thing of the past.
We must remember that this crisis is not, in the end, about what is
best for doctors, hospitals, insurance companies, or personal injury
trial lawyers. What this bill is about is what is best for patients--in
other words, what is best for the American people.
This crisis is threatening the quality of care, jeopardizing access
to care, and escalating the costs of care. In my own State, one can
travel to the gulf coast and Corpus Christi where emergency room
physicians live in fear that they will be called to answer to a patient
in a hospital emergency room, someone who they know they have never
seen before and will never perhaps see again
[[Page S9017]]
after treating them in the emergency room, and for a patient visit that
they will likely not get paid or will get paid only pennies on a dollar
for their usual fee, but yet because of the medical liability crisis
they will put at risk everything they have worked a lifetime to build
and achieve for themselves and for their family. That is even when they
can buy insurance.
The truth is, the costs of medical liability insurance have escalated
so dramatically because of this crisis that many physicians cannot even
buy adequate amounts of coverage. If they can, it is at such a cost
that they figure why bother, why bother to practice, and so they simply
leave.
I reiterate that in the end this is not about doctors, lawyers,
hospitals, or insurance companies. This is about who gets access to
quality health care, and in many parts of my State, and in many States
across the Nation, access to health care is simply not there because of
this crisis.
I believe we should end the liability lottery, where select patients
and some trial lawyers receive astronomical awards, while others pay
more--all of us really--for health care and many suffer access problems
because of it. We should pass meaningful medical liability reform that
includes real and lasting change and bring the lessons of Texas and
other States that have done so to the Nation's Capital and the American
people.
I yield the floor.
The PRESIDING OFFICER. Under the previous order, the Senator from
South Carolina is recognized.
Mr. HOLLINGS. I thank the distinguished Presiding Officer.
My most respected colleague from Texas said it is not about doctors
and it is not about insurance companies. I would have to dissent from
that view from the standpoint of my experience over some 30 years
dealing with this particular problem.
We started in the early 1970s with my good friend Victor Schwartz.
Product liability was the style of the day, the crisis. The Little
Leaguers could not play anymore at the playgrounds. Football was going
to have to be abolished because they could not buy safe helmets. They
were all being sued because of the helmets. We faced down the situation
of so-called product liability and tort reform with the help of the
National Legislative Association, the National Governors Association,
and some others.
We went to Y2K. We would go to terrorism insurance. I resisted, being
an old States righter. I have an unusually good insurance commissioner
in South Carolina. In fact, we have low rates as a result of his
administration. But from a studied view of this particular situation,
the problem is, yes, the doctors and, yes, the insurance companies.
Why do I say that? Well, according to the Secretary of Health and
Human Services, Mr. Thompson, there are 100,000 deaths a year in
America as a result of medical malpractice. That is people killed. That
is casualties. We had 58,000 people killed over 10 years, just about,
in Vietnam.
Now, the doctors have to get ahold of themselves in the State of West
Virginia, for example. There are some 40 doctors, I think it is, who
account for some 25 percent, one-fourth, of the 2,300 malpractice
claims.
Incidentally, they are moving down to South Carolina because I have
talked to some of my doctor friends. There is no better friend of
medicine than this Senator from South Carolina. I have worked with them
closely over the many years I have been in the National Government, and
as their Governor. We have a very disciplined, one might call it,
medical practice in South Carolina. In fact, they have always told me,
and again recently affirmed, that if we had the average licensed
doctors of some of the other States we would immediately add 1,000
doctors. In other words, it is not easy to practice medicine in the
State of South Carolina.
So we go immediately to the doctors disciplining themselves like the
lawyers, and I can get example after example of us at the bar
association disciplining the lawyers. Unfortunately, the doctors just
recently returned now to that particular practice and they are
beginning to see that they are having to pay for the whole thing.
Otherwise, it is not tort reform; it is insurance reform.
The distinguished Senator from Texas mentioned California. I have
heard, and it is true, that California has brought down the malpractice
insurance rates for the doctors there. That was done with caps in the
beginning, but it did not work--in 1975. And it wasn't until 1988 that
they had Proposition 103, to institute insurance reform--not tort
reform but insurance reform, where they had an immediate rollback of
the rates of some 25 percent, regulation written by the insurance
commission, and anyone who wanted to question any rate increase had a
right before the commission to petition and be heard.
So, yes, there is a way to do it. But you will see, as I speak here
this afternoon, it is not this tort reform. In fact, tort reform is
being taken care of in the States. They are moving fast. They are
already moving in the State of Illinois, as the distinguished Senator
Durbin has been pointing out, with respect to that, and other States
have not waited.
The only trouble with the cap is that it has not brought down the
rates. The cap States--I mentioned Illinois that has no cap. The rates
are up there. But four of the first five--Florida, Michigan, Texas,
West Virginia--these four of the five top States with the highest
premiums have caps on damages.
So the proof of the pudding is in the eating. We have experienced
this with caps. I have other examples to show. Time and again, the
insurance executives say: Pass the caps, we are not going to lower the
rates.
But the majority leader, the distinguished Senator from Tennessee, is
one of the most eminent physicians. And I don't say that just speaking
on the floor in a right fashion. He saved the life of a good friend of
mine with a lung transplant back in Tennessee. She has been getting
along extremely well as a result of the expertise, the touch, the
sensitivity, the bedside manner of Dr. Frist. So there is no question
in this body that we have a very valued doctor friend as a Senator from
Tennessee.
But Tennessee doesn't have that problem. Of course, there are no caps
there. They are below the median in premiums, and they do not have
damage caps. I am sure the distinguished doctor/Senator would long
since have asked that his State move in that direction if that were the
problem.
No, the problem is a political one. We have the doctors in town. It
is almost like the computer crowd who came to town with Y2K, and the
sky was going to fall--we had to immediately pass Y2K to make sure at
the first of the century the world wouldn't end.
We have a similar situation now where we look for the needs of the
campaign rather than the needs of the country. We call this bill, right
in the middle of the energy bill, appropriations bill, and all the
other important matters that we have, tort reform, medical malpractice,
because the doctors are in town.
I guess instead of $2,000, those doctors could give $4,000 to
political campaigns, so you might call this the $4,000 bill we will be
voting on tomorrow morning, as to whether or not we should have
cloture. I hope we do have cloture because we ought to nail this
buzzard quickly and get rid of it.
You never hear anybody who has been represented as a result of
medical malpractice complain about the fee. It is always the loser who
complains about a plaintiff's fee. I never have found a plaintiff yet
who complained about lawyers' fees.
That gets me right into lawyers because that is the pollster cancer
we have in Government in Washington today. You get the pollsters--and
they don't know. I never have found a pollster, incidentally, who ever
served in government or public office. So they do not know the
questions to ask, What about lawyers? Shouldn't we have tort reform? Of
course, the Chamber of Commerce has us behaving like toadies for
corporate America, doing everything they want because we want their
money in order to run for office. So we only pay attention to the money
needs and the campaign needs and not the needs of the country.
As far as tort reform is concerned, it is being taken care of at the
State level. The big problem, of course, is the losses that have been,
not from medical malpractice, incidentally, but from their investments.
Let's say a word about those lawyers because, after all, we just had
the
[[Page S9018]]
Fourth of July. I saw a program about the forefathers. They were all
mentioning the different ones who brought us this 227 years of freedom.
Is life so dear or peace so sweet as to be bought at the
price of chains of liberty and freedom? I know not what
course others may take, but as for me, give me liberty or
give me death.
A lawyer said that.
I can see that 34-year-old Jefferson, with the quill in hand:
We hold these truths to be self-evident, that all men are
created equal.
Equal justice under law, with the Declaration of Independence.
What is government itself, but the greatest of all reflections on
human nature? If men were angels, no government would be necessary. If
angels were to govern men, neither external nor internal controls on
government would be necessary. In framing a government which is to be
administered by men over men, the great difficulty lies in this: You
must first enable the government to control the governed; and in the
next place oblige it to control itself.
We are out of control: We have a $428 billion budget deficit, after
talking about the surplus, surplus, and surpluses for 2 years. The
public debt to the penny is $428 billion, and we have not finished the
fiscal year.
Madison, the lawyer, the Emancipation Proclamation--Abraham Lincoln,
the lawyer.
The only thing we have to fear is fear itself.
Franklin Delano Roosevelt, the lawyer.
You go right on down the line, giving meaning to equal justice under
law.
Thurgood Marshall, the lawyer.
These were eminent lawyers and not jury fixers. We have 60,000
lawyers working on K Street. I am one of the 60,000 licensed to
practice in the District of Columbia. There are 60,000, and 59,000 will
never see the courtroom of law. They are supposed to fix the 535 of us
lawmakers here in Government. They are salesmen. I delight in seeing
them. They are a big help because we have to have the proceedings, and
I listen to both sides and I make up my mind.
But they are, under the bill at hand that has been introduced, not
limited in their fees. They sit there claiming frivolity. If you are a
trial lawyer, you get the client who comes in. You have to perhaps get
the doctor for him, get the medicine. Then if you get the case, get out
on the highway, get some pictures and everything else like that, get
the experts, draw up the pleadings. After the pleadings are drawn, make
all the motions, the interrogatories, and discoveries. Still you
haven't gotten a red cent. Time passes on, and what happens is you get
to the trial and, after all the trial and the motions in the trial, you
have to win all 12 jurors. And after the 12, you have to make the
motions on appeal, you have to print up the briefs, you have to go and
make the arguments before the appellate court. Then, if you finally
win--if you finally win, yes, you get a good fee. But you probably
spent a couple of years or more waiting around. And that is the
practice of the trial bar.
I have been in it. I have also defended. And they are lazy. Man, they
are lazy. I have seen them. They just absolutely sit there and let the
runners and investigators do all the work, call that doctor and do this
and do that, and then if it is inconvenient, they say: We have a
witness who is sick, and we will move for a continuance--because, why?
The clock runs. The clock runs, and they get, what, $450 an hour?
I remember when I passed the first textile bill here, a Senator on
the other side of the aisle came and said: I know a lawyer downtown who
has been paid $1 million to get that bill passed, and he didn't do
anything. Here you are, a freshman Senator, and you passed it.
I said: Yes, and I passed it for free because I believe in it.
But you have big fees down here. The clock runs with this corporate
crowd, just look at the bill. They say: Oh, no, no--they have no
control over their fees. Just control the trial lawyers--with tort
reform. You have the biggest myth on the courts we have ever
experienced.
Let's go, since my time is limited, to the truth about malpractice
premiums. According to the National Association of Insurance
Commissioners:
Total profits as a percentage of premiums for 1999 [that is
the most recent year for which data is available] are nearly
twice as high in the medical malpractice line than the
casualty and property insurance industry coverage. Recent
price increases are merely an attempt by the insurance
industry to maintain the extremely high level of
profitability for malpractice coverage.
If that is all the profits, where are the losses? This is Enron. This
is Kenny Boy. The Justice Department spent 2\1/2\ years and they can't
get him. They have gotten everybody in the world. They have gotten
WorldCom all the way through the courts up to the SEC and reaffirmed
their bankruptcy plan, but you haven't heard any more about Kenny Boy.
Listen to what this says:
When terrorists slammed airplanes into the World Trade
Center in 2001, the Donaldson Co. in Bloomington felt the
blow almost immediately. The manufacturer's property
insurance renewed just days later, with nasty surprises.
Our premium quadrupled from $500,000 to $2 million.
I ask unanimous consent to have this article from the Metro edition
of the Star Tribune in Minneapolis printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Star Tribune, Mar. 9, 2003]
Few Spared as Insurance Rates Soar; Corporate, Household Budgets Feel
Same Pain
(By Dee DePass)
When terrorists slammed airplanes into the World Trade
Center in 2001, the Donaldson Co. in Bloomington felt the
blow almost immediately. The manufacturer's property
insurance renewed just days later, with nasty surprises.
``Our premium quadrupled from $500,000 to $2 million'' and
suddenly excluded $150 million worth of terrorism coverage,
said Marty Kohne, Donaldson's safety, environment and
insurance manager.
After Enron imploded, Donaldson's cost to insure its
directors and officers tripled to $300,000 a year.
``You get very frustrated because all these events affect
you, but you have no control,'' Kohne said.
It's a common sentiment among insurance buyers of every
kind, both corporate and consumer. Pushed by events as
divergent as Enron's collapse, terrorism, natural disasters,
and health care inflation, insurance costs are spiraling
industrywide unlike anything seen in more than a decade. The
insurance inflation is part of what's stifling corporate
profits and eating into household budgets, and experts
believe it could be at least another two years before prices
stabilize.
Insurance executives contend they've had little choice but
to make major adjustments in premiums. Paul Bridges, senior
vice president of Marsh USA, the nation's largest insurance
broker, explained the increases this way:
``We had an insurance industry that used to make all of its
money off of investment returns on Wall Street. But with the
death of the dot.bombs, those stopped,'' he said. ``Then,
with recent losses, margins reversed and [insurers] weren't
making money for stock holders.''
``We started ratcheting up prices partly on the backs of
disasters'' last year, added Bridges, noting that premiums
are still on the rise. Commercial policies ``started off
rising 30, 40 and 50 percent and some even 100 percent.''
There's no escaping
The burden is being felt at firms of all sizes.
Minneapolis CPA Barry Rogers runs his own firm with six
employees. There have been no major illnesses among his
workers, so he was shocked when his agent announced last year
that his premiums were ``only going up 12 percent.''
``We had one person who had outpatient surgery done, and
that was the extent of it,'' Rogers said of the firm's
previous claims.
The firm's health care premiums jumped from $145 per worker
to $163, with the co-pay from $15 per office visit to $25.
Rogers and his agent eventually worked out a plan to reduce
the co-payment back to $ deductibles for hospitalization
climbed from $300 to $500.
Statewide, commercial health insurance premiums rose 12
percent in 1999, 16 percent in 2001, according to the
Minnesota Department of Health. Estimates are that rates
will go up again around 12 percent this year.
Health care companies reported their costs rose 9, 13 and
10 percent in 1999, 2000 and 2001, respectively.
In many cases, the rising health care costs are being
partly passed along by employers, effectively canceling out
workers' cost-of-living raises. Workers are then finding that
their personal insurance costs also take more money. Last
year, homeowner premiums rose 10 percent nationwide. This
year, homeowners' rates are expected to rise again.
``There's no doubt about it, '02 had lots of premium
increases,'' said Kenneth Ciak, president of American Express
Property Casualty, which collected $260 million in premiums
last year.
[[Page S9019]]
corporate coverage
``Frankly, it's about time,'' Ciak said. ``On the personal
lines side, we have not had a 9/11 catastrophe, but there are
a fair number of storms that have occurred and the
homeowners' product has just been underpriced. We have not
made money for the last four or five years.''
While homeowners paid $37 million nationwide to protect
their homes against storms, fire and other disasters in 2001,
insurers reported losses and expenses equal to 114 percent of
all home premiums collected last year.
Even corporate coverage, which for years was predictably
and modestly priced, has exploded in cost, thanks to recent
events. The accounting scandals at Enron, WorldCom and other
companies have erased an change for reasonable directors and
officers insurance or cheaply priced surety bonds.
The recent $1.4 billion settlement by investment banks with
regulators over allegations of misleading stock
recommendations also has increased the pricing pressures on
such policies, as insurers brace for investor lawsuits
alleging biased stock research. Directors and officers
insurance protects companies if their executives are sued by
shareholders or other plaintiffs.
A 2001 survey by Tillinghast-Towers Perrin found that
insurance claims against executives averaged $5.7 million for
each of its 2,037 corporate respondents that year, up 75
percent from 2000. Shareholder lawsuits alone leaped 178
percent to cost insurers $17 million on average in 2001.
paying for enron's sins
Companies that haven't been sued aren't escaping the
fallout.
Apogee Enterprises of Minneapolis manufactures and installs
exterior building glass. The company has 5,500 workers, 12
directors and no directors and officer claims in its history.
Nevertheless, it is paying or Enron's sins.
``Last year we paid about $150,000 [in premiums]. Now we
can expect it to go way up, maybe triple . . . even though
[four underwriter groups] are very comfortable with Apogee
and our governance,'' said Michael Clauer, Apogee's chief
financial officer.
``That's the reality of Enron. If you want the coverage,
you pay the price,'' Clauer added.
Marcy Korbel, a Marsh vice president of financial
professional services, recently shared similar bad news with
risk managers from General Mills Inc., 3M Co. and other
firms.
Industrywide, directors and officers ``premiums average 50
to 300 percent increases and that's only if there are no
claims,'' she said. ``We are seeing increases of more than
300 percent if there is claims activity and even more for
companies with market caps over $1 billion.''
Policy prices have to reflect reality, said Bob Hartwig,
senior economist for the Insurance Information Institute.
``The end of 2001 and all of 2002 were horrific years for
this country in terms of corporate governance. We have had
some of the worst scandals in the history of this country,''
Hartwig said.
premiums going up
Enron alone hit 11 insurance companies for $350 million in
director and officers claims. Enron's bankruptcy also cost
the St. Paul Companies $10 million in surety bond losses and
$12 million in unsecured debt the insurer held in the energy
company. AIG has announced a $1.8 billion charge in part to
deal with claims for both Enron and WorldCom.
All of this was on top of 9/11, which brought insurers $40
billion in losses.
The St. Paul Companies, which lost $941 million in 9/11
claims, hoisted commercial premiums 32 percent in 2001, and
27 percent last year to squeak back into the black after a
dismal 2001. The company lost nearly $1 billion in 2001. It
earned $290 million in 2002, about half the $567 million it
earned in 2000.
St. Paul CEO Jay Fishman has said premium increases will
continue this year.
At Apogee, the company's property premiums have risen 40
percent, while its general liability premiums doubled. To
compensate, it has adopted higher property deductibles and is
self-insuring for workers compensation claims.
``Not only did we assume more of claims but we also
incurred even more costs because premiums keep going up. It's
been a very challenging year for us,'' Clauer said.
On top of that, the company is still waiting for some
projects to get going because of the lack of terrorism
insurance, a product that is only beginning to be offered
again now and is likely to add another cost equal to about 10
percent of the property's regular insurance costs.
``We still have projects on hold because of the developers'
inability to get terrorism insurance,'' Clauer said.
surging premiums
After going through a long period of subdued prices in the
`90s, premiums for business and homeowners insurance are
rising fast, pushed by a confluence of events including
terrorism, corporate crimes and natural disasters.
Percentages for 2002 are estimated, percentages for 2003 are
forecast.
Premium percent change from prior year--'90 4.5 percent;
'02 14.0 percent; and '03 12.2 percent.
Mr. HOLLINGS. Mr. President, Enron alone hit 11 insurance companies
for $350 million in director and officer claims. Enron's bankruptcy
also cost St. Paul $10 million in surety bond losses and $12 million in
unsecured debt insurers held in the energy company. AIG has announced a
$1.8 billion charge in part to deal with claims for both Enron and
WorldCom.
All of this was on top of 9/11 which cost insurers $40 billion in
losses. Now, we find 9/11 and Enron. Kenny Boy is responsible for the
losses. It is not medical malpractice. In fact, in all of the cases,
only 1 out of 9, or 12 percent, of the cases actually go to court. Some
26 percent of that small percentage actually are tried. The verdicts
are up instead of down. But now we find out from where they come.
I have another article in the final edition of the Gannett
Corporation on Friday, January 3, 2003. I ask unanimous consent that it
be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From USA Today, Jan. 3, 2003]
J.P. Morgan, Insurance Firms Settle Legal Dispute
(By Edward Iwata)
Hoping to cut loose the Enron albatross, J.P. Morgan Chase
early Thursday settled a legal dispute with 11 insurance
firms that had accused the Wall Street bank of engaging in
sham financial deals with the collapsed energy-trading firm.
Later in the day, J.P. Morgan Chase said it will take $1.3
billion in fourth-quarter charges to cover losses on its
dealings with Enron and to create a $900 million reserve for
related but unresolved legal claims.
J.P. Morgan Chase had sued the insurers last year, after
the companies refused to cover $1.1 billion in losses on
several failed energy trades in the late 1990s involving
Enron and Mahonia, an offshore company associated with J.P.
Morgan Chase.
The insurers--plus congressional investigators who have
looked into Enron's ties with Wall Street banks--alleged that
the deals between Enron and J.P. Morgan Chase were fake
accounting transactions designed to hide debt and boost
revenue.
Under the complex settlement submitted in court, the
insurance companies could pay from $520 million to $660
million to J.P. Morgan Chase.
Neither side admitted wrongdoing, and both claimed a legal
victory.
John Callagy, an attorney at Kelley Drye & Warren in New
York who represents J.P. Morgan Chase, says the settlement
bolsters the bank's contention that the Enron deals were
legitimate. ``There was absolutely no evidence of fraud,'' he
says.
Alan Levine, a lawyer at Kronish Lieb Weiner & Hellman in
New York and the lead attorney for the insurers, says,
``We're very satisfied with the economics of the
settlement.''
J.P. Morgan Chase's troubles relating to Enron haven't
ended, though. The bank still faces the giant Enron
bankruptcy case, a shareholders' class-action lawsuit against
Enron and several Wall Street banks and federal
investigations into the Enron scandal.
The insurers' settlement should have no legal impact on the
other legal fights, says one attorney close to the cases.
However, lawyers often use settlements as leverage in talks
in related cases.
In the insurers' case, the settlement came early Thursday
morning, near the end of a monthlong trial in New York before
U.S. District Judge Jed Rakoff. The jury was ready to start
its deliberations Thursday.
As part of the settlement, Travelers Property Casualty
could pay up to $159 million; Chubb's Federal Insurance, $110
million; Lumbermens Mutual Casualty, $94 million; Allianz's
Fireman's Fund, $93 million; St. Paul Fire & Marine
Insurance, $80 million; CNA Financial's Continental Casualty
and National Fire Insurance, $47 million; Safeco, $33
million; Hartford Financial Services, $25 million; and
Liberty Mutual Insurance, $13 million.
Mr. HOLLINGS. Mr. President, it says:
Hoping to cut loose the Enron albatross, J.P. Morgan Chase
early Thursday settled a legal dispute with 11 insurance
firms that had accused the Wall Street bank of engaging in
sham financial deals with the collapsed energy-trading firm.
As part of the settlement, Travelers Property Casualty
could pay up to $159 million; Chubb's Federal Insurance, $110
million; Lumbermens Mutual Casualty, $94 million; Allianz's
Firemen's Fund, $93 million; St. Paul Fire & Marine
Insurance, $80 million; CNA Financial's Continental Casualty
and National Fire Insurance, $47 million; Safeco, $33
million; Hartford Financial Services, $25 million; and
Liberty Mutual Insurance, $13 million.
Let us talk about those losses. Where do we go?
I quote from an article dated June 30 in U.S. News and World Report.
The case of Samuel Desiderio, while tragic, seems to give
perfect voice to the complaints of many doctors who see a
legal system gone wild. As a 4-year-old, he suffered brain
damage following surgery at a New York City
[[Page S9020]]
hospital. A state court jury awarded him a hefty $80 million
for medical expenses and pain and suffering. In April, just
two months ago, an appeals court approved boosting the award
against his doctors and the hospital to an astonishing $140
million.
But as Joan Butsko's modest award suggests, caps may not be
the answer. Insurance costs are up, but it's not clear that
juries or the courts are the culprits, or even that the
crisis is as dire as it's being portrayed. The statistics
don't line up as neatly as doctors and insurers would have
them, and left out of the argument is recognition that
ordinary market forces may be at work instead.
For starters, there's no explosion of cases that might
drive up legal costs. The number filed each year has remained
fairly steady during the past decade, according to the
National Center for State Courts. Further, most malpractice
plaintiffs never even see a jury--two thirds of their cases
are dropped or dismissed--and when they do, it often isn't a
sympathetic one. Only a tiny sliver of cases filed--just 0.9
percent of some 5,500 cases surveyed for 2002--produce jury
verdicts for patients claiming injury. And even the size of
that small wedge is down by half since 2000, according to the
Physicians Insurers Association of America, the trade group
for malpractice insurers owned or operated by doctors, which
account for about 60 percent of the market.
Within that wedge, the number of payments that doctors'
insurers make following jury verdicts has held steady in
recent years, at around 400 annually, according to a U.S.
News review of hundreds of thousands of payments of all kinds
reported to the federal National Practitioner Data Bank.
These payments total about $143 million each year.
Malpractice insurers are required by law to report their
payouts to the system.
Doctors and insurers say that frequency of claims aside,
the prime issue is the size of awards. Indeed, the size of
insurer payments stemming from jury verdicts has been
increasing in recent years, U.S. News has found; in 2002 it
reached a median of $295,000. But, that's far below the
median jury award of $1 million the AMA and others often
cite. Even assuming two defendants per case--a number
insurers say is typical--plus other adjustments, the median
payment remains hundreds of thousands of dollars short of the
$1 million figure.
But it's not clear that verdicts are really the whip behind
settlements. Over time, the size of a typical settlement
payment has grown somewhat faster than a typical jury verdict
payment. And while the sum from jury awards has remained
stable over the past decade, the total of payouts from
settlements has soared, especially recently, when doctors say
the crisis has emerged.
Mr. President, that is what punitive damages do. They really set the
pace.
Dickie Scruggs and Ron Motley, the trial lawyers in the tobacco case,
did more to cure people of cancer or prevent people from getting cancer
than Dr. Koop and Dr. Kessler.
I have been in the vanguard since Warren Magnuson had me have cancer
hearings all the way back in 1967 and 1968. And over the years, we have
tried everything in the world to stop people from smoking.
If my time is up, I ask unanimous consent for 10 additional minutes,
Mr. President.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. HOLLINGS. I thank the distinguished Presiding Officer.
People talk about those two lawyers and say, ``Look at all the fees
they got.'' I say look at all the good they did. Over the many years,
we have had the American Cancer Society, we have had fundraisers, we
have had cancer institutes, we have had all kinds of research and
everything else like that, but how do you stop people from smoking?
When they got that 360-some-billion-dollar settlement with the
Government, the Attorney General, the medical community, and everybody
concerned, and the State attorneys general, that failed to pass the
Senate, so it was taken up, and I think it was $232 billion that the
States settled for. That money is being paid out. In many States they
have programs to teach youngsters to avoid smoking. I go to the heart
of the Pee Dee in South Carolina where they grow tobacco, and you will
see a big sign on the courthouse that says: ``No smoking.''
Now, that really got me. Those two lawyers really deserve every dime
they get out of the legal fees. They had been bringing cases upon cases
upon cases, and I think their average victory was some 4 in 100 cases.
They just lost another case down in Charleston last year. Of course,
there have been ridiculous verdicts, like in Florida, where the
punitive damages is somewhere around $27 million, but had been $145
billion. Well, that was a six-man jury and a judge who did not know
what they were doing. That was just a seven-man conspiracy. I agree, it
was wild and unjustified.
My point is, these trial lawyers are really doing a wonderful
service. I can go to the class actions, I can go to the asbestos cases.
The onslaught has got to be stopped here on this so-called tort reform
because it is totally political. It is totally campaign funds. It is
totally the election next year and not the needs of the country.
Mr. President, that is what is going on, and colleagues have to wake
up and realize we have a President who runs off to Africa, who has not
settled Afghanistan, who does not know where he is in Iraq. All he
knows is the election is next year, in November. So there we are. We
are being put upon with not the needs of the country but, frankly, with
the needs of the campaign.
I have an article here dated September 7 of last year from the New
York Times. I ask unanimous consent to have that article printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the New York Times, Sept. 7, 2002]
Insurers Scale Back Corporate Liability Policies
(By Jonathan D. Glater and Joseph B. Treaster)
Shellshocked by corporate scandals and fearful of the hefty
payments they will have to make to settle shareholder
lawsuits, the big commercial insurance companies are cutting
back sharply on liability coverage for American corporations,
their directors and senior executives.
The cutbacks are taking the form of higher deductibles and
lower limits on overall coverage. But the insurance companies
are also demanding that corporations pay part of any court
settlements or jury awards out of their own pockets. As a
result, corporations in telecommunications, energy, financial
services and pharmaceuticals--where the risk of being sued is
thought to be highest--could face payments of up to half of
the cost of any settlement.
The three leaders in this line of coverage--the American
International Group, the Chubb Group and Hartford Financial
Services--have already begun requiring some customers to
share the expense of settlements.
The cutbacks effectively limit the size of policies
insurance companies will sell to any one company, said Andrew
Marcell, who is in charge of insurance for directors and
corporate officers at Guy Carpenter, a New York reinsurance
broker and a unit of the Marsh & McLennan Companies.
``Companies that until recently were willing to provide $50
million in coverage are now offering $25 million, and
companies that offered $25 million are now providing $10
million to $15 million,'' Mr. Marcell said.
Enron had $350 million in this kind of coverage and some
corporations had been buying up to $1 billion worth. But now,
Mr. Marcell said, ``$250 million in coverage is pretty hard
to come by.''
The sharing of the burden of settlements may also leave
directors' and officers' personal assets exposed, lawyers
said.
``This is very bad news for directors and officers,'' said
Michael Young, a partner at the law firm of Willkie Farr &
Gallagher in New York who often represents directors and
officers. ``The insurance industry is sending out the word
that for outside directors, insurance that provides 100
percent protection is going to be increasingly difficult to
get and companies are going to have to pay through the nose
for it.''
John Keogh, a unit president of the American International
Group, said that some corporations could avoid sharing the
costs of lawsuits with insurance companies and get full
coverage up to limits of their policies by paying higher
premiums. But David H. McElroy, who is in charge of this kind
of insurance at Hartford Financial Services, said the
riskiest clients could not get full coverage at any price.
The insurers say they are merely acting in self-defense as
they watch corporate giant after corporate giant collapse as
they come under fire for deceptive accounting and management
abuses that have drained companies like WorldCom, Global
Crossing and Tyco of hundreds of millions in corporate money.
As share prices of these companies have plunged,
shareholders have turned to lawsuits in an attempt to recover
at least some of their losses.
Combining the expected costs from some of the latest
lawsuits, which are still in their early stages, and scores
of others that have been working their way through the courts
over the last few years, insurers estimate that they will
have to pay out $7.5 billion this year on liability
policies for directors and officers--but they collected
only $4.5 billion in premiums.
``The expected claims paid out are going to be multiples of
the premiums that have been collected,'' said Mr. Keogh of
A.I.G. He would not comment on specific numbers. Some
insurers said that they expected the actual losses to be
lower, but that the industry would still lose money this
year. Quietly, several insurers have also begun trying to
cancel certain policies, arguing that corporate fraud makes
them void--a nightmare for executives.
The cutback in liability coverage and increases in premiums
are hitting corporations
[[Page S9021]]
hard. Bruce S. Zaccanti, an insurance consultant at Ernst &
Young, said a nationwide real estate management company he
had been advising paid $3 million for $100 million in
coverage last year. This year, the company's premium jumped
to $4.5 million for $70 million in coverage. On top of that,
he said, the deductible has jumped to $15 million from $5
million.
By forcing the companies to share the cost of settlements,
the insurers also hope to prod them to fight harder to keep
those costs down. When all the costs have been covered, the
insurers said, the corporations are often eager to settle
quickly--rather than work for a smaller settlement.
``There is no doubt in our minds that insureds' settlement
behavior has been less reluctant than maybe it once was when
there was an economic alignment,'' said Tony Galban, vice
president and manager of directors and officers liability
insurance underwriting at Chubb Specialty, a subsidiary of
Chubb & Son.
In recent years, the average size of settlements in
securities lawsuits has increased drastically, rising to $16
million in 2001, according to the Securities Class Action
Clearinghouse, an organization at Stanford University that
tracks securities litigation. Before 1995, when a law was
passed making it tougher to bring securities fraud claims,
the average settlement was less than half that amount.
The possibility that individual directors and officers
could be forced to dip into their own wealth may make it
harder to recruit executives to serve on corporate boards,
said Brooks Chamberlain, head of the global insurance
practice at Korn/Ferry International, an executive search
firm. Fearful of personal liability, more and more recruits
are conducting their own due diligence on prospective
employers, he said.
Smaller companies, companies with financial problems,
companies in certain industries perceived to have a higher
incidence of fraud, and companies with fewer hard assets but
sizable market capitalizations will have more trouble, Mr.
Chamberlain said.
According to Mr. Young of Willkie Farr & Gallagher,
directors want some assurance that somebody else will be able
to pay any settlement or damage award.
``What if the company goes into bankruptcy? Then who
covers?'' he asked rhetorically. ``Or what if the company's
just not wealthy enough?
The changes have already had the odd effect of leading to
the creation of a new type of policy that will protect only
independent directors. A.I.G. will sell the policies that
cannot be canceled even in the case of management fraud, Mr.
Keogh said.
But Gregory M. Schmidt, general counsel at the LIN TV
Corporation, an owner of television stations in several
states, wondered whether companies might choose not to take
on the additional cost of these policies and instead promise
to cover any settlement costs owed by the directors. ``The
question is whether that's going to be satisfactory'' to the
directors and officers, he said.
LIN's policies are not up for renewal until March, he said,
but executives at the company are monitoring changes the
insurers are announcing.
``We're worried,'' he added.
Mr. HOLLINGS. We really are in trouble. I have in my own State the
widow of a physician who worked at a hospital in Columbia, where her
husband died after surgery. They had to sue as a result of his death.
How can we, the Congress, solve this problem? Let the doctors
discipline the doctors. They are going to have to do it on the one
hand. And let's have insurance reform. Yes, the Durbin-Graham approach
is salutary in that it does away with the fixing of rates. That ought
to be done away with. But the only way to really get at the problem
itself is what they did in California with proposition 103 that passed
in 1988 and that is to regulate the rates themselves.
You can get the information only then from the insurance companies,
and I have tried my best as a member of the Commerce Committee, subject
to insurance jurisdiction, to try to again and again, year in and year
out. And the insurance companies won't tell you anything because they
say they are State regulated and we have no jurisdiction whatsoever
over them. If there is one thing that is engaged in interstate
commerce, it is insurance.
Let's don't just go with terrorism insurance, and just tax credits to
pay the premiums, and patchwork little Band-Aids on this problem. Let's
get to the real heart of the problem. The insurance companies lost
money. They lost it on Kenny Boy. And now the officers and directors of
these corporations are being sued, and the rates have gone up with
respect to corporate bad practice. The only way to get at it is
insurance reform itself.
We are just acting like a dog chasing its tail when we go on about
tort reform, and the lawyer's fees, and joint and severable liability,
and product liability. If they are real problems, every State has a
legislature and they are subject to that jurisdiction. They can do it.
But as far as insurance goes, I have worked with them. I have seen
them, after 50 years of governmental service at every level. I had to
clean up my own insurance department as Governor of South Carolina. I
know it intimately.
I can tell you that we have an insurance reform bill, and I want to
work with my colleagues on this, for this is how to take care of the
medical malpractice increase in premiums.
I yield the floor.
The PRESIDING OFFICER. Under the previous order, the Senator from
Ohio is recognized.
Mr. VOINOVICH. Mr. President, I rise today in strong support of S.
11, the Patients First Act, of which I am an original cosponsor.
Throughout my career in public service, health care has been one of my
top legislative priorities. We all want access to quality, affordable
health care. And when the quality is not there, when people die or are
truly sick due to negligence or other medical error, they should be
compensated. But when healthy plaintiffs file meaningless lawsuits to
coerce settlements or to shake the money tree to get as much as they
can get, there's a snowball effect and all of us pay the price.
For the system to work, we must strike a delicate balance between the
rights of aggrieved parties to bring lawsuits and the rights of society
to be protected against frivolous lawsuits and outrageous judgments
that are disproportionate to compensating the injured and made at the
expense of society as a whole.
I have been concerned about this issue since my days as Governor of
Ohio. I wish we had the outpouring of support for medical liability
reform 6 years ago that I see now. In 1996, I essentially had to pull
teeth in the Ohio Legislature to pass my tort reform bill. I signed it
into law in October 1996. Three years later, the Ohio Supreme Court
ruled it unconstitutional, and if that law had withstood the Supreme
Court's scrutiny, Ohioans wouldn't be facing the medical access
problems they are facing today: doctors leaving their practice,
patients unable to receive the care they need and costs of health
insurance going through the roof.
During my time in the Senate, I have continued my work to alleviate
the medical liability crisis. To this end, I worked with the American
Tort Reform Association to produce a study that captured the impact of
this crisis on Ohio's economy in order to share these findings with my
constituents and colleagues. Guess what we found? In Ohio, the
litigation crisis costs every Ohioan $636 per year, and every Ohio
family of four $2,544 per year. These are alarming numbers! In these
economic times, families can not afford to pay $2,500 for the lawsuit
abuse of a few individuals.
It is not just the individuals but the lawyers who bear some of the
responsibility. I recently received my yellow and white pages. Look
what I found on the front and back covers, advertisements for personal
injuries. This is the yellow pages of the Cleveland phonebook and the
white pages, advertisements on the front cover and on the back cover.
One of them says: Medical malpractice. It talks about wrongful death,
quadriplegic/paraplegic. They have pictures, birth injuries, nursing
home negligence, Erb's palsy, cerebral palsy, heart attacks/late
treatment, cancer late diagnosis, emergency room negligence.
It goes on to say, ``Our firm will advance expenses for our clients
in most cases,'' and ``Clients do not have to repay expenses unless
there is a successful outcome.'' This kind of stuff is in the yellow
pages and on television every night.
When I got out of law school, solicitation was a violation of the
canons of professional ethics of lawyers. That has all changed today. I
think unfortunately so.
Next to the economy and jobs--the most important issue facing our
country today is health care. In fact, it is a major part of what is
wrong with the economy. We have too many uninsured, employers face
spiraling costs, and those who have insurance face soaring premiums
every year. The impact on
[[Page S9022]]
businesses is great. It affects their ability to offer health insurance
to employees. Too many times, they pass on the added costs to their
employees, whose family budgets are often already stretched razor thin.
And then there are those who lose their jobs and can't afford COBRA,
assuming their company is still in business and COBRA is available.
This issue is a personal one for me. My daughter-in-law, who is
expecting her fourth child, recently learned from her obstetrician that
after her delivery, she is no longer going to deliver any more babies.
Her doctor is in a four-physician group, all of them obstetricians.
They have never had any lawsuits against them, yet their insurance
premiums have skyrocketed from $81,000 three years ago to over $381,000
today. That's $75,000 per person over a period of 3 years. How can
physicians be expected to afford rate hikes like these? And how many
babies do they have to deliver in order to pay for medical insurance.
Think of somebody getting out of medical school that is an OB/GYN and
being told: Before you open the door, you will have to pay a premium of
$75,000 to $80,000 to practice medicine.
This crisis is out of control, and when you listen to the statistics,
you will be astounded:
From 1994 to 2000, the median award for medical negligence in
childbirth cases, $2.05 million, was the highest for all types of
medical malpractice cases analyzed.
The median medical liability award jumped 43% in one year, from
$700,000 in 1999 to $1 million in 2000; it has doubled since 1995.
Medical liability reform could produce $12.1 billion to $19.5 billion
in annual savings for the Federal Government and increase the number of
Americans with health insurance by up to 3.9 million people.
There are some who say the Federal Government doesn't have a dog in
the fight. We certainly have, when medical liability reform could
produce $12.1 billion to $19.5 billion in annual savings and increase
the number of Americans covered by insurance.
Seventy-six percent of physicians in Ohio, surveyed by the Ohio State
Medical Association, said rising professional liability premiums have
impacted their willingness to perform high-risk procedures.
Over half said they are considering early retirement as a result of
rising costs.
There has also been an immense jump in million-dollar verdicts. In
1995-97, a little over 36 percent of cases resulted in an award of $1
million or more. By 1998-99, the rate of million dollar awards reached
43 percent. By 2000-01, it was at 54 percent, with one quarter of all
awards exceeding $2.7 million. It is going up like a rocketship.
These numbers are shocking, and they continue to grow. We feel this
crisis very strongly in Ohio. Medical Liability Monitor ranked Ohio
among the top five states for premium increases in 2002. OHIC Insurance
Co., among the largest medical liability insurers in the State, reports
that average premiums for Ohio doctors have doubled over the last 3
years. But don't listen only to the statistics. Let's talk about
doctors--human beings who have practices and patients:
Dr. Perm Jawa, a Cleveland urologist, says that soaring liability
premiums leave him in perpetual fear of career-ending lawsuits. ``I shy
away from major cases now. Sometimes you know what the best thing is
but you don't want to be doing it because there are potential
complications with it,'' Jawa said. ``You're not as aggressive as you
should be.''
In Columbus, Dr. David Stockwell has seen coverage for his two-
physician OB-GYN practice climb to over $100,000 a year. And he
expected his premiums to rise 20 to 25 percent in May.
Dr. Robert Norman, a geriatrician in Cuyahoga Falls, saw his annual
medical liability premium jump $5,700 to $34,000 last year. He had been
warned that it could reach $100,000 this year if he continued treating
patients in nursing homes. But in May he received an unexpected
ultimatum from his insurer and every other carrier he queried: agree to
stop seeing nursing home patients or lose liability coverage
altogether. As a result, 150 of Dr. Norman's patients had to find a new
doctor.
Dr. Stephen Cochran lost his hospital privileges at Akron General
Medical Center when his insurer's financial stability rating was
downgraded recently. He is seeking another insurer, but meanwhile, he
says, ``We receive daily phone calls from the patients: `Why aren't you
here? Why aren't you seeing me? I want my doctor.' '' He says. ``It's
been very stressful to a lot of the patients, particularly the
geriatric patients . . . This [the malpractice crisis] has probably
changed the nature of our practice more than anything that has happened
in the last 10 to 20 years.''
After practicing for 15 years--their entire careers--in Cleveland,
Dr. Christopher Magiera and his wife, surgeon Patricia Galloway,
decided to leave Ohio to seek refuge from overwhelming liability
premiums. Their insurance agent warned them that both would soon be
paying $100,000 in annual premiums, up from $30,000 this year. Magiera
and his wife decided to ``get out before the situation became
hopeless,'' he said. They resettled in Wisconsin. Good for Wisconsin.
This is disgraceful. This crisis is forcing doctors to close their
doors and greatly affecting patient access to care.
I want to commend the physicians' grassroots efforts--they are really
starting to get attention for this issue. On May 3, 2003, I spoke in my
home State of Ohio at the annual conference of the Ohio State Medical
Association. I also participated in a physicians rally last October in
Columbus, OH which was sponsored by the Ohio State Medical Association.
I was impressed with all of the speakers, in particular, Dr. Evangeline
Andarsio, an OB-GYN from Dayton, who described the changes in the
profession and the effect of the litigation cloud:
The professional liability crisis is creating a barrier to
patients' access to good medical care, especially pregnant
women. . . . a paradigm shift needs to occur in our society.
Our laws must change to begin to reflect this paradigm shift.
After speaking at this rally, I received a letter from a young
doctor, telling me that he was leaving Ohio because he couldn't afford
his medical liability insurance premiums. Dr. Cly had received a notice
from his insurance carrier that his premiums would be increased by
$20,000-30,000. This, plus the $20,000 increase from last year, forced
him to make the difficult decision of uprooting his family and his
practice to another State. Dr. Cly was unable to make the insurance
premiums and still take care of his student loan obligations and his
family. Even though he has never had a malpractice claim or judgment
against him during his residency training or his private practice
years, his rates continued to skyrocket to the point where he could no
longer afford them. His move to Fort Wayne, IN, will save him $50,000
per year in liability insurance.
In his letter to me, which I would like to submit for the record, Dr.
Cly writes:
I represent young physicians in Ohio. Most young physicians
I speak with are all considering relocating to a place where
the ability to practice medicine is better and the liability
situation is more stable. I do not want to leave. I have
developed close relationships with many patients, families,
nurses, physicians, and staff here in Dayton, Ohio. I always
planned to retire here and raise my children here. It saddens
me greatly to have to make this decision. I feel as if I am
giving up and ``throwing in the towel'' by leaving, but I
believe my decision is the right one for my family.
I ask unanimous consent that this entire letter be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
May 16, 2003.
Hon. George V. Voinovich,
Hart Senate Office Building,
Washington, DC.
Dear Senator Voinovich: Thank you for you listening to the
challenges Ohio physicians are facing regarding the medical
malpractice insurance premiums. As you may recall, I was the
young physician from Dayton, Ohio who spoke with you after
your speech to the Ohio State Medical Association May 3,
2003, while you were walking to another meeting. I work
alongside Dr. Evangeline Andarsio at Miami Valley Hospital.
I too, am an obstetrician/gynecologist here in Dayton,
Ohio. I have been in Dayton since 1988 when I attended the
University of Dayton. I later went to Wright State University
School of Medicine in 1992. After graduating from medical
school, I did my residency training at Miami Valley Hospital
from 1996
[[Page S9023]]
until 2000. I have been in private practice for the past 3
years.
In order to attend college and medical school I had to take
out educational loans and work during those years. As a
result, I have accumulated $150,000 in student loans. With
the decreasing reimbursement and increasing medical liability
insurance premiums I am not able make much effort in paying
off my student loans. In addition, I am married with a set of
5 year old boy and girl twins. I haven't been able to afford
to save for their future college educations yet, nor have I
been able to put away much money in a retirement plan for me
and my wife.
Unfortunately, the liability insurance rates are being
unfairly and significantly increased once again this July by
our carrier, OHIC. I am expecting another $20,000-30,000
increase from the $20,000 increase last year. Currently,
prior to the July increase, I am paying $55,000 for my
insurance premium. It is important to know that I have never
had a malpractice claim or judgment during my residency
training or private practice years.
I no longer afford to stay in Dayton or Ohio to practice
medicine. I am leaving the state, in July, 2003, and I will
be moving to Fort Wayne, Indiana to practice medicine. I will
save approximately $50,000 per year in liability insurance
alone. In addition, the managed care penetrations is much
less and the reimbursement is better. These factors will
allow me to begin eliminating my debt and saving for my
family's future.
I represent young physicians in Ohio. Most young physicians
I speak with are all considering relocating to a place where
the ability to practice medicine is better and the liability
situation is more stable. I do not want to leave. I have
developed close relationships with many patients, families,
nurses, physicians, and staff here in Dayton, Ohio. I always
planned to retire here and raise my children here. It saddens
me greatly to have to make this decision. I feel as if I am
giving up and ``throwing in the towel'' by leaving, but I
believe my decision is the right one for my family.
I am extremely thankful of your willingness to help
physicians with this crisis. I am genuinely concerned about
the future of medicine for our patients. If these issues
aren't corrected soon, many patients will suffer due to the
lack of access to care.
If I can be of any assistance please contact me. My home
phone is xxxxxxxxxxxx. My cell phone is xxxxxxxxxxxx. My 24
hr pager is xxxxxxxxxxxx. My office numbers, until June 27,
2003, are listed above. My email is [email protected].
Sincere Thanks,
Geoffrey Cly, MD.
Mr. VOINOVICH. For those of my colleagues who think medical liability
reform is a State issue, I ask them to read this letter and see how the
medical liability crisis transcends State lines--particularly my
friends from the neighboring State of West Virginia. Our Ohio
physicians who practice along the border are feeling the effects of
their proximity to West Virginia and its favorable plaintiff's
verdicts. They are feeling these effects in their increasing insurance
premiums.
This is a nationwide crisis. And it's not only doctors crossing State
borders to find better insurance rates--it's patients as well. Citizens
living along the thousands of miles of State borders very often obtain
their medical care across that line. Federal action is appropriate and
critically necessary. Even more so because this crisis affects Federal
health care programs, including Medicare and Medicaid, and costs the
Federal Government billions of dollars every year.
In fact, the cost of this crisis to the economy is quite staggering.
With over 41 million Americans without health insurance, including an
estimated 1.25 million Ohioans at some time in 2001, we have to look at
a new system--because this crisis is not only bad for doctors and
patients, it also affects our competitiveness in the global
marketplace. Many of our company's insurance costs have skyrocketed
because of medical lawsuit abuse costs that their competitors just do
not have.
The Nation's medical schools and students feel the effects of the
medical liability crisis. According to the National Resident Matching
Program, a private, nonprofit corporation, the number of American
medical students applying to general surgery residency programs
declined by 30 percent from 1992 to 2002. If this trend continues, less
than 5 percent of medical school graduates will choose a career in
surgery by 2005, and only 75 percent of general surgery residency
positions will be filled by graduates of medical schools in the United
States.
Thank God we have foreign doctors who have come to the United States
of America. In Ohio, one out of six doctors is an Asian Indian.
And, in its 2003 biennial survey of medical residents in their final
year of training, the firm of Merritt, Hawkins & Associates, MHA,
noticed a disturbing trend. When asked if they would study medicine or
select another field if they had their education to begin again, one
quarter of all residents surveyed indicated they would select another
field--this compared with only 5 percent in 2001. It is sweeping across
the country and everybody is getting hit. It is going to have a
disastrous effect--it already is--and we have to do something about it.
When asked to identify what factors caused them a significant level of
concern, sixty-two percent of residents indicated that malpractice is a
significant area--compared to just 15 percent of residents surveyed 2
years ago.
Specific medical specialties feel the crisis more than others. A
September 25, 2002 report by the American Association of Neurological
Surgeons, Congress of Neurological Surgeons, and Council of State
Neurological Societies, entitled ``Neurosurgery in a State of Crisis''
found that professional liability costs among Ohio neurosurgeons have
skyrocketed since 2000. For a $5 to $7 million coverage policy, in
2000, a physician would have paid $75,000. By 2002, this number had
jumped to $168,000.
Not only in Ohio, but across the nation, between 2000 and 2002, the
average premium increase was 63 percent. As a result, of those
neurosurgeons polled: 14 percent said they plan to, or are considering
moving; 25 percent said they either plan to, or are considering,
retiring; 34 percent said they already do, or are considering,
restricting their practices.
In my hometown of Cleveland, OH, at one of our hospitals, the
neurosurgeons just left. There was no one there to take care of
emergency patients, although just recently because of something the
Cleveland Clinic did, they agreed to step in, but there were four
neurosurgeons serving about 15 hospitals, and they just decided they
were getting out. Who is going to pick that up for them? What is going
to happen to those patients?
Patients cannot get emergency medical treatment because fewer
neurosurgeons are covering ERs, and trauma hospitals are shutting their
doors and diverting patients with serious head and spinal cord injuries
to other locations.
Patients cannot find a neurosurgeon close to home because
neurosurgeons are moving to States where insurance costs are relatively
stable.
Further exacerbating this problem is the high retirement rate.
According to the American Board of Neurological Surgery, in 2001 alone,
over 300 neurosurgeons retired. This is 10 percent of our Nation's
neurosurgical workforce. And for the first time in over a decade, there
are now fewer than 3,000 board certified neurosurgeons practicing in
the U.S.
Earlier this year, I participated in a press conference with my
distinguished colleague from Pennsylvania, Senator Santorum, and my
distinguished colleague from Nevada, Senator Ensign. During this
conference, I met a doctor from Florida who had rushed his son to the
hospital with his head hemorrhaging, only to find that there were no
pediatric neurosurgeons there. He asked if a regular neurosurgeon could
help, but they could not because pediatric neurosurgeons require
special liability insurance. Due to the exorbitant costs of insurance
for pediatric neurosurgeons, only seven were practicing in the State of
Florida and the nearest one was 150 miles away. Fortunately, the boy
survived, but this type of scenario does not need to happen.
I was recently speaking with some doctors in Cleveland who told me
that the nephrologists practicing there will not even look at a baby
facing kidney problems, because adding pediatric work to their existing
practices will cause their premiums to skyrocket.
The effects of the medical liability crisis can also be felt by the
obstetrics-gynecologists community. In fact, obstetrics-gynecology is
among the top three specialties in the cost of professional liability
insurance premiums. Nationally, insurance premiums for OB-GYNs have
increased dramatically: the median premium increased 167 percent
between 1982 and 1998. The median rate rose 7 percent in 2000, 12.5
percent in 2001, and 15.3 percent in 2002 with increases as high as 69
percent, according to a survey by Medical Liability Monitor, a
newsletter covering the liability insurance industry.
[[Page S9024]]
According to Physicians Insurance Association of America, OB-GYNs
were first among 28 specialty groups in the number of claims filed
against them in 2000. OB-GYNs were the highest of all specialty groups
in the average cost of defending against a claim in 2000, at a cost of
$34,308. In the 1990s, they were first--along with family physicians-
general practitioners--in the percentage of claims against them closed
with a payout of 36 percent. They were second, after neurologists, in
the average claim payment made during that period.
Although the number of claims filed against all physicians climbed in
recent decades, the phenomenon does not reflect an increased rate of
medical negligence.
That is something we should point out. It does not reflect an
increased rate in negligence.
In fact, OB-GYNS win most of the claims filed against them. A 1999
American College of Obstetrics and Gynecology survey of its membership
found that over one-half of claims against OB-GYNS were dropped by
plaintiffs' attorneys, dismissed or settled without a payment. Of cases
that did proceed, OB-GYNS won seven out of ten times. Enormous
resources are spent to deal with these claims, only 10 percent of which
are found to have merit. The costs to defend these claims can be
staggering and often mean that physicians invest less in new
technologies that help patients. In 2000, the average cost to defend a
claim against an OB-GYN was the highest of all physician specialties:
$35,000.
According to an ACOG survey of its members, the typical OB-GYN is 47
years old, has been in practice for over 15 years, and can expect to be
sued 2.53 times over his or her career. Over one-fourth of ACOG fellows
have even been sued for care provided during their residency. In 1999,
76.5 percent of ACOG fellows reported they had been sued at least once
so far in their career. The average claim takes over 4 years to
resolve.
Practicing medicine and having lawsuits hanging over your head, and
only 10 percent are well taken, can you imagine, Mr. President, how it
is to practice medicine under those conditions?
How does all of this affect patients' access to care?
As premiums increase, women's access to general health care--
including regular screenings for reproductive cancers, high blood
pressure and cholesterol, diabetes, and other serious health risks--
will decrease. OB/GYNs are disappearing.
It leads to more uninsured women. Last year, 11.7 million women of
childbearing age were uninsured. Without medical liability reform, a
greater number of women ages 19 to 44 will move into the ranks of the
uninsured.
The legislation we are debating today gets us on our way to enacting
meaningful medical liability reform.
There are going to be a lot of excuses. We are going to hear from
some colleagues as to why this is not a good thing, and they are going
to get into specific caps and so forth.
The fact is, this legislation provides a commonsense approach to our
litigation problems that will help keep consumers from bearing the cost
of costly and unnecessary litigation, while making sure those with
legitimate grievances have recourse to the courts.
That is what we want to do. We want to make sure those who are
legitimately harmed have recourse to the courts and are compensated.
The bill sets sensible limits on noneconomic damages to help restrain
medical liability premium increases, while ensuring unlimited economic
compensation for patients injured by negligence.
In other words, there is no cap on economic compensation. All of
those issues that can be documented, you can be reimbursed for. It
limits attorney's fees so the money awarded in the court goes to the
injured parties, who are the people who really need it. It mandates
that relevant medical experts testify in malpractice trials, as opposed
to highly paid ``expert witnesses'' who are often used to influence
juries and foster abuses in the legal system. It also allows physicians
to pay any large judgments against them over a period of time in order
to avoid bankruptcy, and requires all parties to participate in
alternative dispute resolution proceedings, such as mediation or
arbitration, before going to court.
It is a sensible way of handling a problem in our country and, at the
same time, looking at the societal costs that are being paid today by
all Americans.
Providing this commonsense approach to our medical liability premiums
is a win-win situation. Patients would not have to give away large
portions of their judgments to their attorneys, truly injured parties
can recover 100 percent of their economic damages, punitive damages are
reserved for those cases that are truly justified, doctors and
hospitals will not be held liable for harms they did not cause, and
physicians can focus on doing what they do best: practicing medicine
and providing health care.
I end with the words of Dr. Andarsio, whom I quoted earlier:
Help us to maintain an ability to have a practice that
offers patients excellent access to care--to continue one of
the most important relationships in our lives--the doctor-
patient relationship--thus maintaining individualized and
compassionate care.
In my own particular case--and it may be why I am probably more fired
up about this than some people in the Senate--when I was about 2 years
old, I contracted osteomyelitis.
It is a disease in the marrow of the bone. There was a lot of
controversy among a couple of doctors on how I should be treated for
that osteomyelitis. There was one physician who had the courage to try
some new things. His name was Dr. Holloway. Dr. Holloway saved my life.
I will not ever forget going to his funeral.
There are a lot of other people around this country like George
Voinovich who are in need of access to orthopedic surgeons and other
types of medical care. I want them to have the same opportunity I had,
to have a life. That is what this is about.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. McCONNELL. Mr. President, I also understand we are under an
agreement that we go back and forth. It could be that a Democratic
speaker might have been next. Therefore, I ask unanimous consent that I
be allowed to go ahead and speak since I am in the Chamber and prepared
to speak.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. McCONNELL. Mr. President, I have heard colleagues on the other
side of the aisle extol the virtues of the Weiss report to justify
opposing limits on noneconomic damages. Some of our colleagues on the
other side of the aisle seem to view this report as the end all and be
all of reports on the effect of damage caps.
This Weiss report makes the rather bold and somewhat astonishing
assertion that States with caps on damages actually have higher
premiums than States without caps on damages. I never heard of such a
conclusion. Indeed, it flies in the face of common sense, common
experience, and the expertise of actuaries and insurance commissioners.
As one can imagine, I was intrigued by this report and wanted to
learn more about it. Upon reviewing the report, it reminded me of the
saying by Mark Twain, or Will Rogers, who said: There are lies, there
are damn lies, and then there are statistics.
I am wondering how Weiss calculated the median premiums found in his
report. No one can seem to figure that out because the report never
really explains how the median premium was established.
The Weiss report uses data over a decade-long period. We are talking
about the cost of something, in this case insurance coverage, over a
substantial amount of time. Inflation is a pretty basic statistical
variable for which one should account. Does the Weiss report take
inflation into account in reaching its conclusion regarding caps? It
looks as if the Weiss report knows that to do a proper analysis one
should take inflation into account. After all, it does so in analyzing
insurance company payoffs.
[[Page S9025]]
For some inexplicable reason the Weiss report fails to do so in its
analysis of the increase in insurance company premiums. There is no
indication Weiss took inflation into account, despite the fact it does
so in making a similar calculation for insurance company payoffs in
other parts of the report. If I didn't know better, I would say such a
glaring and telling omission was part of an effort to arrive at a
predetermined conclusion.
The publication from which the Weiss report obtained its data is
something called the Medical Liability Monitor. It is one of the best
sources for medical malpractice premium information. Many legitimate
reports use the data found in this publication to help explain the
crisis. The most recent comprehensive rate survey in the Medical
Liability Monitor, dated October 2002, had a headline that reads ``2002
rate survey finds malpractice premiums are soaring. Hard market wallops
physicians. Average rate increase more than double those in 2001.''
It seems to me the methods the Weiss report uses are not only wrong
but, in fact, misleading. The Weiss report is so seriously flawed,
according to the Medical Liability Monitor, the experts who collect the
data that Weiss manipulated, actually had to print the following
disclaimer in a June 2003 issue to ensure this report was not used to
mislead the public.
Let me read the most salient parts.
The Weiss ratings analysis of medical malpractice caps
cites Medical Liability Monitor as the source of data Weiss
uses to calculate average and median premiums for physicians
during the last 12 years.
While we are an independent news publication and take no
position on tort reform or other proposals to improve the
medical liability climate, we feel it necessary to comment
on the use of our statistics because some readers have
expressed concern.
The medians and averages in the Weiss report are not the
numbers we report in our annual rates surveys. Weiss may have
taken our numbers--the amounts and increases of premiums paid
by doctors State by State--and used them to arrive at their
statistics, but it is impossible from their report to say
definitely how our numbers have been used.
It is our view that it is impossible to calculate a valid
``average'' premium for physicians or for physicians in a
particular State or territory, and we state that clearly in
the executive summary of our rate survey.
But the editor of the Medical Liability Monitor goes further,
advising the leaders it is misleading to use median annual premiums
compiled from data from the Medical Liability Monitor to demonstrate
the effect of noneconomic damage limits on medical liability rates.
This is exactly what Weiss does. The report uses median annual premiums
compiled with data from the Medical Liability Monitor to try to
demonstrate the effect of noneconomic damage limits on liability rates.
Not only is this wrong, it down right misleads the public.
I would be the first to confess I am not an expert on the subject but
according to many experts, including the PIAA, it is impossible to
calculate a valid and useful median premium using the numbers found in
the Medical Liability Monitor for many reasons. One of the obvious
reasons is a median is not a weighted average. Thus, the Weiss
methodology, as far as we can tell, actually inflates the insurance
carrier's premium increase by not weighing premiums according to market
share. This is critically important because the highest rate probably
has the lowest market share.
In fact, the Medical Liability Monitor does not report how many
doctors have a particular premium, so a helpful weighted average is
impossible to calculate based upon that data as the authors of the
Weiss report will tell you.
In short, according to the very experts upon whom the Weiss report
relies, the conclusion of the Weiss report on the effective economic
damages are wrong, misleading, and should be avoided.
I think it is better to look at some legitimate studies. While folks
should question the Weiss study, we can generally trust CBO. So let's
look at some highlights from CBO.
Reading from pertinent parts, States with limits of $250,000 or
$350,000 on noneconomic damages have an average combined highest
premium increase of 15 percent compared to 44 percent to States without
caps on noneconomic damages. In California, where the State has placed
a cap on noneconomic damages, punitive damages, or rewards for pain and
suffering at a quarter of a million, insurance rates have not shown the
sharp increase experienced in other States.
Looking at my next chart which has been used by a number of
proponents of the underlying legislation, it is very clear that major
cities in States which have adopted some kind of caps on noneconomic
damages are experiencing lower malpractice insurance rates for
physicians. California and Colorado, where there are sensible
restraints on noneconomic damages, whether you look at a specialty of
internal medicine or general surgery or obstetrics, there is a dramatic
difference between the rates in California and in Colorado compared to
States such as New York, Nevada, Illinois, and Florida where there are
no such caps.
The most dramatic example, I suppose, is in the area of obstetrics
where in California the annual premium is $54,000; in Colorado,
$30,000; compare these figures to a premium for obstetrics in Florida,
which is $200,000 a year, Illinois is $100,000 a year, Nevada is
$107,000 a year, and New York is just under $90,000 a year. These are
actual 2002 premium survey data looking at selected specialties in
States where there are caps versus States where there are no caps.
I repeat, once again, this legislation does not deny the victim a
full recovery for all economic damages, plus on top of that, a quarter
of a million dollars for pain and suffering, plus on top of that,
punitive damages at twice the amount of economic damages or a quarter
of a million, whichever is greater.
This is a bill that does provide for victims. In addition to that, it
provides some reasonable restraint on lawyer's fees, which of course
also benefit the victim because the dollars the lawyers don't get, the
victims do.
We can have many legitimate arguments. I know my colleagues on the
other side of the aisle seem to be terribly concerned about States'
rights as it applies to this issue. I think that is certainly a
reasonable argument to make. But it seems to me it borders on
nonsensical to argue that caps on noneconomic damages have not had an
impact on premiums, because clearly they have. The facts speak for
themselves. All you have to do is look at the premiums for these
specialists in States where there are caps on noneconomic damages and
compare them to premiums in States where there are not. Clearly it
makes an enormous difference.
Taking a look at California again, their underlying legislation,
which is commonly referred to as MICRA, is the model for the bill which
we hope to be able to proceed to. California has had very stable rates
over the years going back to 1976 when MICRA was adopted, going right
up to the present. If you look at the rest of the United States,
California has had a 182 percent increase in medical malpractice
liability insurance premiums over this quarter of a century period, but
if you compare that to the rest of the country, there has been a 573
percent increase. Any way you look at it, the California law obviously
has had a positive impact on making it possible for physicians to
afford their liability insurance and therefore continue to offer health
services for their people.
That takes us back to where I started yesterday. A year ago when the
underlying bill was offered as an amendment, or a portion of it was
offered as an amendment, we had a number of States in crisis. Today we
have more States in crisis. Wyoming just yesterday changed from a state
with problem signs to a state in crisis. Also, in the year since we
last debated this issue, my own State of Kentucky, which was a State
with problems a year ago, is now a State in crisis. We have to add both
states to the red State list.
Connecticut. A year ago Connecticut was a State in trouble. Today, it
is a State with a genuine crisis. So it will have to be added to the
crisis State list today.
North Carolina. A year ago North Carolina was a State with problem
signs. Today it is a State that is in crisis over this issue.
Arkansas. One year ago when we were considering legislation similar
to this, Arkansas was a State with problems. Today, Arkansas is a State
in crisis.
Missouri. A year ago, Missouri was in trouble. But today it is in
crisis.
[[Page S9026]]
Finally, Illinois would have to be added today as a State in crisis.
So let's take a look at the map, where we stand today. As I can count
them, there are only six States in America that are currently OK
according to the AMA; that is, physicians are not avoiding choosing
certain specialties or retiring early or closing their shops over the
cost of their medical malpractice premiums. We now have 19 red States.
Red States are States in crisis. I think we had 11 this time a year
ago. Now we are up to 19. Then the rest of America is yellow. That is,
States with problem signs. At the rate we are going, many of these
yellow States will become red States in the coming months if we do not
act to deal with this truly national problem.
I think the argument of States' rights occasionally makes sense, but
this is a national issue, affecting health care for all Americans. This
is really largely about the patients. Some people have described this
as sort of a titanic struggle with doctors and insurance companies on
one side and lawyers on the other. Frankly, I am not particularly
interested in that struggle. I am sure it exists in a number of
different ways. The real issue is whether or not patients are going to
be cared for, whether or not there is going to be a medical
professional within reasonable proximity of patients in order to
deliver a service all Americans are entitled to. That is no longer the
case in a significant part of our country.
In my State in eastern Kentucky we have had a number of horrendous
occurrences as a direct result of medical professionals not being
available because they went out of business. They simply could not
afford to pay their medical malpractice insurance premiums and still be
in business. So this is a national crisis.
Let me just say in closing, we are debating a motion to proceed.
Reasonable people can differ about how to do something about this
crisis, but I don't think there are many Senators coming out here,
saying this is not a crisis. It is a crisis. Even those who are
opposing the motion to proceed, I would expect most of them think we
have a major problem here. One of the advantages of voting for the
motion to proceed is to get us onto the bill so amendments can be
considered. I would not even rule out the possibility that by the time
we came to final passage of this legislation, it might look quite
different. I might not like that, but I am not sure where the votes are
unless we get onto the bill and have a chance to consider amendments
and options to deal with this measure about the national health care
crisis.
Two weeks ago we added a prescription drugs benefit to a reformation
of Medicare. The House has acted. A conference will unfold in the
coming weeks and we will on a bipartisan basis deal with one of the
major health care issues confronting senior citizens, that is how to
afford prescription drugs and whether or not they are going to have
choices under the Medicare program.
Now we need to turn our attention to another major health care
crisis, and that is the unavailability of health care in major portions
of the country simply because physicians can no longer afford to pay
their medical liability insurance premiums and still provide health
care for patients. That is why we call this the Patients First Act of
2003.
I hope tomorrow, late morning, when we have the vote on cloture on
the motion to proceed, that cloture will be invoked, that we will move
on to this legislation, consider the various suggestions that have been
made by Senators on both sides of the aisle as to how we ought to deal
with this crisis. But let's act. Let's act. Let's make an effort to
tackle one of America's great health care problems of the 21st century.
I yield the floor.
The PRESIDING OFFICER. The Senator from Nebraska.
Mr. HAGEL. Mr. President, I ask unanimous consent that I be allowed
to address the underlying bill for no more than 10 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Illinois.
Mr. DURBIN. Mr. President, I will not object, but I would like to
amend that to be recognized after the Senator from Nebraska.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HAGEL. Mr. President, rapid increases in the cost of medical
liability insurance are forcing many physicians to stop performing
high-risk procedures, limiting the kind of patients they will see,
moving to another State where the liability climate is more favorable,
or, simply, they take the option of early retirement. When this occurs,
who wins? Who benefits? No one. Everyone loses.
Twenty-six States, including my State of Nebraska, have instituted
some sort of cap on noneconomic damages. However, some States have had
their caps overturned by the courts and other States are barred by
their State constitutions from enacting a cap. Medical liability and
access to quality health care are national problems. Medical liability
reform is needed to help preserve the ability of health care providers
to obtain affordable malpractice insurance so we can remain in practice
and deal with the health care needs of America. At the same time, we
must ensure that victims of medical malpractice continue to have access
to the courts and jury awards.
This is not an either/or issue. S. 11, the Patients first Act of
2003, is a responsible solution. It is a balanced approach to
maintaining access to quality care while preserving the rights of both
patients and providers.
S. 11 does not cap actual damages. S. 11 caps non-economic damages
but defers to current or future state caps. It limits punitive damages
to two times actual damages, or $250,000, whichever is greater, but
does not preempt existing state caps. It does not preempt State law
with respect to compensatory or punitive damages, regardless of the
limit.
S. 11 limits attorney contingency fees so that awards go to victims,
not to trial lawyers.
No provisions in the House-passed bill or in S. 11 would limit awards
for actual damages.
This legislation is important to ensuring access to quality health
care for our citizens, and retaining our healthcare workforce.
As an example of what providers face and the impact on patients,
consider the fact that annual medical liability insurance premiums for
OB-GYNS range from a low of $12,000 a year in Nebraska, to a high of
$208,000 in certain areas of Dade and Broward Counties in Florida.
Women in rural areas have historically been particularly hard hit by
the loss of obstetric providers.
Practicing obstetrics is already economically marginal in rural areas
due to sparse population, low insurance reimbursement for pregnancy
services and growing managed care constraints. An increase in liability
insurance rates will force rural physicians to stop delivering babies.
This is happening now. With fewer obstetric providers, women's access
to early prenatal care will be reduced.
This is happening now.
Greater availability of prenatal care over the last several decades
has resulted in this country's lowest infant mortality rates ever.
Providers' ability to maintain this standard will be threatened
because the cost of insurance places a major additional strain on our
maternal health care system.
Dr. Daniel Rosenquist, family practitioner in Columbus, NE who has
been in practice 16 years, has delivered babies across Nebraska.
However, if Nebraska's medical liability cap is overturned, he may have
to give up that part of his practice. In the months before the cap was
finally upheld, Dr. Rosenquist had to tell his patients that he wasn't
sure if he would be able to continue seeing them.
Dr. Rosenquist is not alone. The Harris Interactive for Common Good
Poll of April 11, 2002 states that 432 percent of physicians said they
have considered leaving the medical profession because of changes
brought about by the threat of malpractice liability.
Because of a liability cap, Nebraska is able to recruit physicians
into rural areas by keeping medical malpractice insurance premiums at
the fifth lowest in the Nation. It is important to note that even with
a cap in place, medical liability premiums in Nebraska rose 36 percent
in 2002.
Dr. Christopher Kent, one of four neurosurgeons in Lincoln, NE, who
has come to view Nebraska as a great place
[[Page S9027]]
to practice medicine, initially came to Nebraska to practice because of
its reasonable medical liability structure.
If Nebraska's cap were to be overturned, he says he would have to
leave the State, probably within a year. One of his partners would also
leave Nebraska and another would retire. This is equivalent to losing
75 percent of the neurosurgeons in Lincoln, and 15 percent of the
neurosurgeons statewide. Dr. Kent and his colleagues have already begun
restricting their practice, and worry that they will have to restrict
care further if the cap is overturned.
According to a study by the Department of Health and Human Services'
Agency for Healthcare Research and Quality, States that have enacted
limits on non-economic damages in medical lawsuits have about 12
percent more physicians per capita than states without such caps.
Medical liability reform is about quality of care and access to care.
Caps on non-economic damages help keep premiums down, and keep
doctors in practice all over our State. S. 11 will provide security to
States like Nebraska facing the uncertainty of legal challenges to
existing caps, and will result in a faster, fairer, simpler medical
liability system that protects both patients and doctors.
The economic benefits of medical lability reform are substantial.
CBO estimates that if legislation such as S. 11 is signed into law,
Medicare, Medicaid and the Federal Employees Health Benefits Programs
would save $14.9 billion in Federal spending over the next 10 years.
State and local governments would save about $8.5 billion. State
spending for Medicaid would decrease by $2.5 billion over that period--
again putting that money where we need it the most, where health care
is most urgent.
The Joint Economic Committee in a May, 2003 report, estimates an
additional $16.7 billion will be saved over 10 years due to reductions
in the practice of defensive medicine. According to a July 2002 Health
and Human Services report, States with reasonable caps on noneconomic
damages saw premium increases of 12 to 15 percent in 2002 compared to
44 percent in States without caps on noneconomic damages.
Dr. Daniel Kessler, a professor at the Stanford Business School, and
Dr. Mark McClellan, a former Stanford University economist who is
currently FDA Commissioner, in a February 2000 study, looked at
spending cuts after tort reform, beyond claim payouts and insurer
expenses.
They concluded that States adopting direct reforms exhibited
reductions in hospital expenditures of 5 percent to 9 percent, but this
did not result in higher patient mortality rates or an increase in
serious medical complications.
If these savings were generalized to all medical spending, a $50
billion reduction in national health spending could be achieved through
such reforms, in addition to that sense of confidence that would be
increased across America because these dollars would be focused in
areas that need the health care the most--productive uses for $50
billion.
I am proud to be an original cosponsor of this responsible
legislation, S. 11, the Patients First Act of 2003. I urge my
colleagues to give it serious consideration and support S. 11.
Thank you and I yield the floor.
The PRESIDING OFFICER (Mrs. Dole). The Senator from Illinois.
Mr. DURBIN. Madam President, I thank my colleagues on the other side
of the aisle and on the other side of this issue for coming to the
floor because I hope the tone we have set in this debate indicates that
regardless of which side of the aisle you are on, regardless of which
side of the bill you are on, we understand that we are facing a
national challenge.
There is entirely too much medical malpractice in our country today.
The best doctors concede that. However, the insurance that is being
charged to even good doctors is too unreasonable in many areas,
depending on the specialty and where they choose to live. Frankly,
there are a lot of people who will suffer if we don't do something
about that. Obviously, the doctors themselves who have dedicated their
lives to the medical profession want to see some solution to this. I do
as well. But the patients who are served by them are also looking for
us to do something constructive and positive to make certain that
quality health care is available across America.
I don't personally believe S. 11 is up to that challenge. I am not
even certain it is a step in the right direction. There has been
lengthy debate about whether or not putting a limitation on the amount
that can be awarded to a person who has been a victim of medical
malpractice is going to bring down malpractice insurance premiums.
This bill, S. 11, suggests that rather than giving that decision to a
jury--whether it is in Rhode Island or Illinois or Nebraska--that
decision on how much an injured patient should receive will be made by
a jury of 100 U.S. Senators. We will pass a bill that says: Regardless
of what has happened to you, what happens to your family as a result of
medical negligence and medical malpractice, you will be unable to
recover anything more than $250,000 for your pain and suffering. Oh,
yes, they will pay the medical bills. And if you have lost wages, those
will be paid, too. But when it comes to pain and suffering, regardless
of whether you are 6 years old, 60, or 96, there will be a limitation
of $250,000 which can come your way.
Now, $250,000 in the abstract sounds like a large sum of money--until
you sit down and consider the cases, the actual people who have been
affected by medical malpractice.
In a few moments, I am going to talk about a number of them, some of
whom I met for the first time today. When you hear their stories, I
hope those who are following the debate will step back for a second and
say: Wait a minute--as I have--is this right for the Senate, for those
of us elected from 50 States across the Nation, to decide in each and
every case what the maximum recovery will be for medical malpractice
injuries? I think the answer is clearly no. That is why I am
encouraging my colleagues to vote against the cloture motion, which is
a motion which tries to bring this bill before the Senate.
What I believe--and others, I think, share this belief--is that we
have a national challenge and a problem when it comes to medical
malpractice. But it is a problem that will not be resolved until we
deal with it responsibly and completely, until we look at all the
facets of the problem.
This bill says it comes down to one thing: Injured victims of medical
malpractice are recovering too much money for their injuries. If we can
limit the amount of money they recover, then the system is going to be
so much better.
I think that oversimplifies it. In fact, I think it really is an
abuse of the situation rather than an effort to rectify it. That is why
I am opposing it.
We had testimony a few weeks ago from the Bush administration, a
doctor from the Department of Health and Human Services, saying that
medical malpractice in America has reached epidemic proportions--
epidemic proportions. There are those who estimate that as many as
100,000 Americans lose their lives each year because of medical
malpractice--not because they are destined to die because of God's
choice but, rather, because someone has made a very serious and fatal
mistake in their medical treatment--100,000 a year.
We also have studies that have come out from Harvard University that
suggest that only 1 out of every 50 cases of medical malpractice ends
up in a lawyer's office with a claim against a doctor or hospital--1
out of 50. So I say to those who support this bill, if you do not look
at the underlying incidence of medical malpractice in this country,
simply limiting the amount that an injured person can recover is no
guarantee you will not face an avalanche of cases coming at you for
medical malpractice. We have to go to the underlying issues in how to
deal with it.
It is interesting to me, as well, how many elements are being
overlooked during the course of this debate. All the debate on the
floor has been about doctors: States that do not have doctors,
communities that do not have obstetricians to deliver babies, red maps
brought before us to show State after State where doctors are facing
problems.
But read this bill. This bill isn't just about doctors. This bill is
about protecting HMOs, managed care insurance companies, pharmaceutical
companies, medical device companies, and nursing
[[Page S9028]]
homes. So in all of this debate about the sad situations many doctors
do face in America, no one has come to the floor to justify why, within
this bill, there is protection for these special interests: HMOs,
managed care insurance companies, which many times make decisions which
can be as lethal and fatal as any decision made by any doctor.
I think most Americans know of what I am speaking. When an HMO that
you are a part of or a managed care insurance company that your family
is a part of makes a decision as to whether or not they will pay for a
diagnostic test, a laboratory procedure, your hospitalization, or a
surgery, when they decide how many days you can stay in the hospital,
they are, in fact, dictating medical care in the name of profitability.
They want to make more money. They would like to keep you out of the
hospital as much as possible, reduce your costs as much as possible,
and they make medical decisions.
It is interesting that today a report came out. It is a report that
was published by Health Affairs, and those who prepared it are people
from the American Medical Association based in Chicago: Matthew Wynia,
Jonathan VanGeest, Deborah Cummins, and Ira Wilson. This report is
entitled ``Do Physicians Not Offer Useful Services Because Of Coverage
Restrictions?''
They surveyed doctors across America and asked them the question: How
often have you decided not to offer a useful service to a patient
because of health plan rules?
I have talked to doctors who have told me many times that is
happening more often than they would like to admit.
Let me show you a chart which tells you what they found in asking
doctors across America that question. They were asked this question:
How often have you, as a doctor, decided not to offer a useful service
to a patient because of health plan rules, insurance rules? In this
case, ``very often,'' 2 percent; ``often,'' 6 percent; ``sometimes,''
23 percent; ``rarely,'' 27 percent. Even if you take the ``very
often,'' ``often,'' and ``sometimes,'' you have 31 percent of the
cases. Almost a third of the time doctors are saying they are making
decisions not to provide a useful service to a patient because the
health insurance company tells them they will not pay for it and they
cannot do it.
Now, that isn't part of this debate. No one has brought into this
conversation the question as to whether or not HMOs, in the way they
are treating doctors, are having some impact on medical malpractice and
injuries to patients. No. What we are doing for HMOs is not holding
them accountable but, rather, saying we are going to give them even
more privileges under law. We are going to insulate them from the
liability of these bad decisions. So the insurance companies,
particularly the HMOs, are running rampant across the Senate when it
comes to malpractice instead of being held accountable, as they should
be, for their restrictions on good doctors making sound medical
decisions.
This is another question asked of these doctors in this Health
Affairs study that came out today: If ``sometimes'' or ``more often''
you decide not to offer a useful service because the insurance company
tells you you can't, are you doing so more often, less often, or about
as often as you were 5 years ago? Most of them say unchanged: 55
percent. But 35 percent say ``more often.''
So you have doctors who are increasingly finding insurance companies
making decisions on what you, your mother and father, your wife or
husband or child is going to receive in terms of medical care. Is that
the answer to this issue, that we are going to say that HMOs will make
these decisions, and when they are wrong, and people are injured, and
these poor people then turn to a court and ask for some compensation
for their injury, they will be limited not only in what they can
recover from the doctor or the hospital but even the HMO insurance
company? That is what this bill says. That is what this bill is
designed to do: to insulate from liability even HMO insurance companies
which are responsible for more and more doctors making medical
decisions which they believe, based on their training and experience,
are not the right decisions for their patients. I do not think that is
fair. I do not think it treats people as they should be treated.
Let me mention a couple other items. We have a nursing shortage in
America. It worries me. I am reaching an age when I am thinking about
the day when I want to punch a button at a hospital or some other place
to call a nurse and hope that someone shows up. But the likelihood that
is going to occur is diminishing because we have a nursing shortage,
and it is a serious shortage.
As America's population ages, we need more nurses to take care of us
in convalescent homes and nursing homes and hospitals and other places.
Sadly, those nurses are not as plentiful as they once were.
Let me tell you about a report from the Journal of the American
Medical Association that relates to the issue of malpractice and the
shortage of nurses. This is a report from October of 2002 from the
Journal of the American Medical Association. They published the results
of a study that, for the first time, showed that the number of patients
who die in the hospital increases when nurses are assigned to care for
too many patients. An estimated 20,000 people die each year in
hospitals from medical mistakes attributed to nurses caring for more
patients than they can handle.
This accounts for 20 percent of the nearly 100,000 deaths annually
from medical mistakes. While a link between nurse staffing and quality
of care seems like common sense, many hospitals downplayed the link
until the study was published.
This is a troubling report as well. I read from a book entitled ``The
Wall of Silence,'' written by Rosemary Gibson and Janardan Singh. This
is a quote from the book:
Experienced nurses as well as newly-minted nurses are
leaving patient care at the bedside at a time when other job
opportunities exist. Their knowledge and skills are valued in
pharmaceutical companies, managed care organizations and
information technology firms. How many are leaving? It is
hard to say precisely. The Federal Government's Bureau of
Health Professions issued a report showing that about 50,000
fewer nurses were using their licenses in 2000, as compared
with 1996.
As our population ages, as the demand for nurses increases, the
number of nurses in America diminishes. We have seen that when there
are fewer nurses in a hospital, there is more likelihood of medical
mistakes, medical malpractice, and medical injuries. Has that even been
mentioned in the course of this debate? Has anyone talked about the
HMOs and their impact on medical practice? Has anyone talked about the
shortage of nurses and the fact that it is leading to more medical
mistakes, leading to more lawsuits filed against doctors and hospitals.
Instead what we have had in this debate is a strict debate, limited to
the question of how much injured parties can recover once they face
medical malpractice, once the injuries have occurred.
I would like to introduce in the debate now some real-life stories
about people who have been victims of medical malpractice. As I
mentioned earlier, some of them were kind enough to join Senator
Lindsey Graham and myself earlier this morning when we held a press
conference and introduced our version of a bill which we think is a
more reasonable approach to dealing with the medical malpractice
challenge we face in America.
The first person is Colin Gourley. Colin is on your left as you view
this picture here in the striped shirt. This is his twin brother
Connor. Nine-year-old Colin Gourley, from the State of Nebraska,
suffered a terrible complication at birth as a result of a doctor's
negligence. Colin has cerebral palsy. He cannot walk. He could not
speak until he was 5 years old. He has irregular brain waves and the
amount of time he has spent in a wheelchair has affected his bone
growth. He has had five different surgeries, and he needs to sleep in a
cast every night to prevent further orthopedic problems. His twin
brother Connor survived birth without any injury.
A jury ruled that Colin was a victim of medical negligence. They
decided that because of that medical negligence the Gourley family was
entitled to receive $5.6 million. That was what was needed to
compensate him for his medical care and for the lifetime of suffering
and problems which
[[Page S9029]]
he will face. Last month, the Nebraska Supreme Court upheld a Nebraska
law that severely cut this jury verdict to about one-fourth of the
award. As a result, Colin will have to rely on the State of Nebraska
and the Federal Government for assistance for the rest of his life.
The jury understood what the case was worth. The jury got to meet
Colin, his brother, his two sisters, and mom and dad. The jury heard
what happened that led to this terrible medical malpractice, and the
jury decided in fairness that he and his family were entitled to $5.6
million. Yet the law came in and said: I am sorry. We have to limit
you--a law similar to the one we are considering in the Senate this
evening, a law which will say no jury in Nebraska nor Illinois nor
North Carolina is going to make that decision. This decision will be
made by a jury of 100 United States Senators, and we will decide, in
the case of Colin, that no matter what his life may be, whether it is
5, 10, 20, 50, or 80 years, the maximum amount we will pay for his pain
and suffering is $250,000.
What may have sounded like a large amount of money at the beginning
of this conversation, as we understand as we consider each and every
case, becomes an amount which is hardly adequate to take care of what
Colin is going to face, as well as his family.
Let me introduce you now to Kim Jones. This is a picture taken before
Kim's medical malpractice. As you can see, she is a lovely, proud
mother from King County, WA. She was 30 years old and she remains
severely brain damaged and in a comatose state today after undergoing
routine tubal ligation surgery following childbirth at the Washington
State Medical Center. After the operation, the hospital staff failed to
notice that Kim had stopped breathing since her vital monitors had been
improperly removed. Though successfully resuscitated, Kim suffered
multiple seizures and was given seizure control medication that
actually worsened her condition. She was later taken by helicopter to
another medical facility.
Today Kim is unable to control her bodily functions. She has no
discernable mental function and is being cared for at a convalescent
center. Kim's father filed a lawsuit against the hospital and the
anesthesiologist. The case is still pending.
Kim is standing there at a better time before the medical injury with
her daughter. Now she is in a nursing home or convalescent home for the
rest of her natural life. What is it worth? After the medical bills are
paid, after her lost income is paid, what is it worth to her, to her
daughter, to her parents? According to this bill, we know exactly what
it is worth. It is worth no more than $250,000 for the pain and
suffering she will endure for the rest of her life.
Now let me introduce you to a young lady who made quite an impact on
us this morning. She told her terrible story. This is Sherry Keller
from Conyers, GA. Sherry is shown in her wheelchair. That is where she
was today when she came to speak to us. She stood up and said: I am
from Conyers, GA, and I am a registered Republican. I want to make that
clear.
I said: We have Republicans and Democrats and Independents. Then she
told her story.
Sherry Keller received a complete hysterectomy. Her surgeon relied
upon staples rather than sutures to hold her incision closed. Upon
having the staples removed, Sherry's incision began to bleed. The
surgeon began cleansing the wound. Unfortunately, the incision opened.
I won't go into the graphic details. But the doctor in that situation--
this happened at the doctor's office--apparently panicked and left her
alone in the room for 35 minutes when the doctor went to call a wound
specialist. She left her lying on an examination table. The doctor
continued to see other patients while the specialist was on the way and
left Sherry in that examining room for 35 minutes. Sherry went into
shock from loss of blood, lost consciousness, and fell off the exam
table. There was no one with her. Her head hit the counter as she fell.
She came to but in the process damaged her spinal cord and rendered her
an incomplete quadriplegic. She dragged herself out in that condition
into the hallway to get the attention of a nurse or doctor to come to
her aid. The doctor called for an ambulance but gave directions that
she should be transported only. She, the doctor, left instructions that
a doctor would go to the emergency room to dress the wound later.
Sherry was then left in the emergency room for 2\1/2\ hours waiting
for a doctor to treat her wound. As a result of that fall in the
office, Sherry will never walk again. As she was not employed outside
the home, she has no lost income for her injury. Her damages were
virtually all medical bills and pain and suffering. Here she is, a
woman, some 35 years of age, who faces a lifetime in a wheelchair now
because of malpractice.
This law we are considering would pay her medical bills but say that
the total amount of compensation for her for the pain and suffering she
and her family will go through is limited to $250,000. Some Senators as
jurors have decided that in her case $250,000 is adequate, thank you.
I think a jury has a right to consider that case. A jury has a right
to consider whether that doctor is guilty of malpractice and whether
this woman and her family are entitled to more than $250,000. The fact
that she was at home raising her children, because of this bill, will
be used against her. She has no job where she earns a paycheck, but she
has a real job as far as America is concerned; she was raising her
family.
And now look at this situation. This bill will actually penalize her
for being a stay-at-home mother with her family. For a Senate that is
supposed to be dedicated to family values, it is hard to understand how
Sherry's case tells that story.
The next person I would like you to meet is Evelyn Babb of Tyler, TX.
This case is similar to many you may have read about. She is a bright,
happy-looking person in this picture. She needed arthroscopic surgery
on her right knee for a torn lateral meniscus. Her doctor marked her
right knee to be operated on with an X. However, the hospital staff
negligently prepared her left knee for surgery. Without verifying
whether the staff had properly prepared the patient, the doctor
proceeded to operate on the knee which the staff had prepared. He began
performing the partial lateral meniscectomy before he realized he was
operating on the wrong knee. The staff then prepared the other knee,
and the doctor performed the operation as previously planned.
Due to the unnecessary surgery on the one knee, Mrs. Babb's recovery
was considerably longer and more painful than it would have been. She
has severe pain and swelling in her left knee and a lingering
infection. She continues to suffer from pain, has difficulty walking,
and has a markedly decreased range of motion in her knee.
As an elderly woman of 75, Mrs. Babb will suffer no loss of income,
however, and there will be few, if any, additional medical expenses
because there is nothing that could be done to improve her condition.
Virtually all of the damages she could recover for this obvious
malpractice would relate to the pain and suffering she would endure.
This bill has decided how much her case is worth: no more than
$250,000, period.
When you look at that situation, a person who is retired, with no
active income, and with limited medical bills, but a serious medical
outcome, it is an indication of the unfairness of this underlying bill.
This case I will tell you about now involves Heather Lewinsky from
Pittsburgh, PA. Seventeen-year-old Heather Lewinsky's face remains
scarred for life after a Pittsburgh plastic surgeon performed radical
surgery to correct a skin disorder near the left corner of her mouth
when she was 8 years old.
The doctor claimed to have done this procedure on children many times
before when, in fact, neither he nor any doctor in the United States
had ever done the surgery to treat a condition such as Heather's.
Following the operation, Heather was left with horrific facial scarring
and a terrible stroke-like tugging at the corner of her mouth.
The doctor attempted to fix the problem with two additional
surgeries, which made it even worse, forcing her to undergo 10 more
operations with other doctors between the third and tenth grades.
The pain, swelling, and recuperation with each procedure were
excruciating. Heather and her family filed a lawsuit
[[Page S9030]]
against the doctor who only paid a small fraction of the jury verdict
because he had insufficient insurance coverage.
This is an indication of a young lady who is scarred for the rest of
her life. What is permanent disfigurement worth if it is the result of
medical malpractice? A point will be reached when no more surgeries
will be indicated; they won't add much to her improvement. She may not
have lost wages, but she is scarred for life. As far as this bill is
concerned, permanent disfigurement because of medical malpractice
is worth $250,000, not one penny more.
The last case I want to talk to you about is a case that involves
Alan Cronin of California. In the year 2000, Alan Cronin, then 42 years
old, went into the hospital for a routine hernia surgery. Alan was
married with three children at the time--two of them still at home. He
goes in for a routine hernia surgery. After the surgery, two doctors
failed to diagnose an acute infection following the routine hernia
repair. The doctors treated him as though he had the flu rather than
inspecting the surgery site. He became septic and suffered toxic shock.
Once the doctors finally opened the surgery site, the pus and sepsis
were so overwhelming that they told Alan's family that he had a 98-
percent chance of dying. Gangrene had set in and all of Alan's limbs
were amputated. When he awoke from his coma, he no longer had arms or
legs.
Alan was a customer service representative for a medical equipment
manufacturer. Workers' compensation paid for all of his medical bills,
including future expenses. He also had a private disability policy that
was used as an offset against future economic damages.
In speaking with Alan about the cap on noneconomic damages, he says
that there are so many things that you don't think of as necessities,
and $250,000 could not begin to cover those expenses. Alan, 42 years
old, has had the amputation of his arms and legs from medical
malpractice. How much is the suffering and pain that he will endure in
the next 30, 40 years of his life worth? We know in the Senate. It is
worth $250,000 and not one penny more.
Incidentally, there is another provision in the bill. Because Alan
had the foresight to work for a company that provided him with health
insurance that covered some of his medical bills after the medical
malpractice, and because he also had a private disability policy that
will help him with some of his expenses as he tries to struggle through
rehabilitation and rebuilding his life, that information, according to
the bill, should be brought up in the trial. As a former trial lawyer,
I can tell you it is being brought out so as to encourage the jury to
diminish any award they are going to give to Alan Cronin. Because he
had the foresight to pay for health insurance and a private disability
policy, he would be penalized in a court of law by the disclosure of
this insurance and this disability policy.
That isn't done today in any court in America, but it would be done
under this bill. S. 11 has decided that is a fair way to deal with
medical malpractice. I think most Americans would disagree. What they
believe is, if you put a cap or limit on the recovery of a person who
is a victim of medical malpractice, the malpractice insurance premiums
may come down. They hope if they come down, the threat to the lifestyle
and future careers of doctors is going to be diminished. Yet when you
look at the studies--the Weiss study, for example--you find the
opposite is true.
States with limitations on what can be recovered in court had a
higher percentage increase in malpractice premiums between 1991 to 2001
than States without caps. So not only is this proposal in S. 11
fundamentally unfair, it is totally ineffective. What we are doing is
seeing, frankly, this battle between the White House and the people who
are gearing up for some Presidential campaign and the American trial
lawyers. That is what this is about. It is not about malpractice
premiums, bringing them down. It is not about the incidence of
malpractice and reducing it. Frankly, it is about a political battle
which should be secondary to the more important issues before us.
S. 11, as it has been brought to us today, is a bill against which I
have led the fight. I am sorry I have to do it in one respect, but I am
proud to do it in another. I am sorry because this should not be the
bill we are considering. We ought to be coming before the American
people with a bill that addresses this problem in its entirety and in a
fair way. We ought to bring into this conversation medical providers
across America. We should sit down and have an honest and open
conversation about how to reduce medical injuries and medical errors.
That would be good for everyone. I am sure doctors could tell us ways
to do that.
Let me give you an example of what we have tried to do in the past.
We decided at one point that we would create a national registry to try
to find out how often we have these incidents of problems. With that
national data bank, we would say to hospitals that before you hire a
doctor on your staff, you can check to see whether he has had his
license suspended or has been sued successfully for malpractice. In the
1980s, we established that--my colleague, Ron Wyden from Oregon, was
then a Congressman who proposed the legislation. He thought if this
data bank were present, we could find the limited number of doctors who
are most responsible for malpractice and make certain that they either
change their ways or get out of the practice of medicine. It was
certainly a good idea.
Sadly, there haven't been many people who have used it. Consider this
fact:
The data bank is an effective information tool only if
hospitals and other health organizations actually report
adverse actions involving a health care professional. Federal
law requires this information to be reported. But hospitals
are not complying. Since the data bank was established, more
than 60 percent of hospitals have never reported any adverse
action [against a doctor that occurred on the premises.] It
was expected that hospitals would report more than 1,000
disciplinary actions every month, yet fewer than 1,000 are
reported in a year.
Managed care organizations, which are protected by this bill from
liability--the HMOs and managed care organizations which, again,
receive preferred treatment by the Senate under this bill--are not
doing much better.
From September 1, 1990, to September 30, 1999, [the managed
care organizations in America] reported only 715 adverse
events to the data bank. Eighty-four percent of them have
never reported any adverse action. The investigative arm of
the Federal Department of Health and Human Services, the
Office of the Inspector General, notes that ``with close to
100 million individuals enrolled in [managed care
organizations and HMOs] and hundreds of thousands of
physicians and dentists associated with them, fewer than a
thousand adverse action reports over nearly a decade of
service, for all practical purposes, are reported.
So the efforts we put in place to track medical malpractice, to try
to weed out the bad actors, to try to take the doctors away who perform
some of these acts of malpractice have been in vain.
Hospitals, HMOs, managed care organizations, have refused to report
the bad actors. Yet our answer on how to deal with that situation is S.
11. We are going to limit the amount of money victims can recover. Is
this totally upside down?
Should we not start with the premise that we want to limit the amount
of malpractice itself and medical error in America and then follow
through to the next and obvious question: When doctors are going to buy
insurance, how can we help them secure reasonably priced malpractice
insurance policies? That, of course, would mean bringing in the
malpractice insurance companies and reinsurance companies.
Incidentally, there is one thing I said yesterday that we are going
to look into. It was my understanding from reports we received that
there were five reinsurance companies available to U.S. insurers. A
call today to the Illinois State Medical Society said they work with 9
or 10. I want to make sure the record is corrected and reflects the
fact that at least we are trying to come to the right number of
reinsurance companies. Regardless of whether it is 5 or 50, the
reinsurance companies have to be part of this conversation as to how we
are going to reduce the cost of malpractice insurance for doctors and
hospitals across America.
The third point, and equally important, and I speak to this one as a
[[Page S9031]]
former trial lawyer myself, is that the legal profession has to be part
of this conversation. We have to say those lawyers who would consider
filing a frivolous lawsuit are going to face severe penalties. They
will have to pay compensation of cost and fees associated with those
cases, and if, in fact, they are found to have done it repeatedly, we
can prohibit them from that field of practice completely.
I add, based on my personal experience, it would take an absolute
fool as a lawyer to entertain a medical malpractice case that really
did not have a chance of success and that could be considered
frivolous. Those cases in my State of Illinois are extremely expensive.
You start with a certification by a doctor that you actually have a
justifiable cause of action before you file your complaint. An
important consideration in taking these cases up is whether or not you
can move them forward to recover for the plaintiff who is injured. If
you do not think you have a chance, you have to tell that sad news to
the client who sits in your office, and I have done that.
Frankly, you have to honestly tell many people who are seriously
injured: I do not think you have a case on which you can recover.
We have to bring together, if we are serious about medical
malpractice, the doctors who can speak for their profession, nurses who
can help us understand how we can bring more medical professionals to
the job to reduce the likelihood of medical injuries, HMO insurance
companies that have to be told they can no longer dictate sound medical
practice, where doctors are told what they have to do regardless of
whether they think it is right professionally. We have to bring in the
insurance companies to make certain the rates they charge are
reasonable, and lawyers have to be brought in as well so they are
involved in responsible conduct which is focused more than anything
else on recovery for the patient or claimant involved. That is what
this is about.
The idea that by limiting recovery for the victims we have talked
about here is going to solve the problem just will not work.
Let me use this chart as an illustration as well. Here are two States
in the Midwest: One I am very familiar with, my State of Illinois, and
a neighboring State, Michigan. They are comparable States in makeup of
the population in rural areas and urban areas. They are big States by
most standards.
Michigan has caps and limitations on how much a person can recover in
court. Illinois does not. Here we take a look at the professional
liability insurance that is being paid in these two States as of
October of last year. We will see in the State of Michigan, OB/GYNs on
average are paying more than in the State of Illinois that does not
have caps. With surgery, it is the same story. With internal medicine,
it is the same story. Michigan, with caps, has higher medical
malpractice insurance rates than the State of Illinois without caps.
The belief that in passing this bill and establishing caps across
America we are going to bring down malpractice insurance premiums I do
not think is a reasonable conclusion, which is borne by the evidence
presented here, and this comes from an analysis of the medical
liability monitor data, the same monitor data used by both sides of the
debate.
I understand the Senator from Utah is here and would like to speak. I
close at this point by saying what I said at the outset, and I repeat
today, I value very much the medical profession. They have meant so
much to me and my family. I have entrusted the care of my greatest
treasures on Earth--my wife and children--to great doctors, and I thank
God they were there when we needed them.
I want them to continue in practice. I want them to feel good about
what they do for a living. I do not want them looking over the
shoulders at lawyers who are filing frivolous lawsuits. I do not want
them facing 35-percent increases in malpractice premiums they cannot
cope with, that they cannot pass on to patients, that force them to
make decisions that, frankly, are not in the best interest of good
medicine.
Today, during the course of our press conference with these victims
of medical malpractice, one of the staff in the back of the room
fainted. When he fainted, we stopped everything and somebody said: Call
a doctor. How many times have we heard that said? We say it because we
all know in those dire emergency situations and in everyday situations,
we need the medical profession.
I said at the outset of this debate, and I repeat, I stand ready to
sit down with anyone in good faith who wants to deal with the medical
malpractice crisis facing America. Let us deal with this in its
entirety and in an honest fashion. Let us ask everyone to make a
sacrifice--the doctors, the lawyers, and the insurance companies--and
then I think we can come up with a bill that is worthy of the Senate.
For us to deliberately limit the amount of money available to these
victims with tragic stories, which I have brought to the Senate today,
is fundamentally unfair. It is as unfair to those victims as those
malpractice premiums are unfair to many of the doctors who are paying
them today.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Madam President, I rise to speak about the medical
liability and medical crisis threatening our great Nation. Over the
years, I have pressed for legislation to protect our health care
delivery system from the ravages of an out-of-control medical liability
system.
Many times we have come close to enacting legislation, and a giant
opportunity stands before us today. I hope we do not let it slip
through our fingers once more.
I remember as a young lawyer in the early days of my practice in
Pittsburgh, PA, the law basically was, if you met the standard of
practice in the community, there was no case because everybody knew
that medical science is not an exact science. Once they adopted the
doctrine of informed consent in its various forms, it meant that every
case goes to the jury, regardless; every case that has a bad result,
even though the doctor did everything in his or her power to effectuate
a decent result. And we have had this medical liability catastrophe
upon our hands ever since.
I can remember as a defense lawyer, my advice to some doctors was
that they needed to do everything they possibly could to make sure
there was absolutely no way they overlooked anything with regard to any
person's complaint. If a person came in to them with a common cold,
they could no longer say: Take two aspirin every 6 hours, drink all the
liquids you can, and in 7 days you will be better. Or: Don't do
anything and in 7 days you will be better. No, they have to give
vascular and respiratory examinations, blood tests, et cetera. As a
result, what used to be a $5 bill in those days, or at most $15 or $20,
is far more today. Of course, I believe unnecessary defensive medicine
such as that has driven our country to its knees from a medical
liability standpoint.
Today, defensive medicine increases health care costs by $60 to $108
billion per year according to the Department of Health and Human
Services report of last year.
As I have noted previously, out-of-control medical liability
litigation is needlessly increasing the cost and decreasing the quality
of health care for every American. It is preventing patients from
accessing high-quality health care or, in some cases, any care at all
because doctors are being driven out of practice.
I was pleased that President Bush announced his desire to address
medical liability legislation reform last summer when he spoke of the
need for reform in his State of the Union Address and when he called on
us to pass meaningful medical liability reform legislation in this
Congress. I am pleased that our majority leader, Dr. Frist, has brought
the Patients First Act forward to be debated today.
Our colleagues, Senator Ensign from Nevada, who introduced this bill,
and Senator McConnell from Kentucky, deserve special recognition and
thanks for their work on this bill as well.
Of course, this was not the first time we have addressed this issue.
As many of us will recall, we passed medical litigation relief language
with the Commonsense Product Liability and Legal Reform Act in 1995.
Unfortunately, it was stripped from that bill in conference.
[[Page S9032]]
I am sorely disappointed that in the ensuing 8 years we have not
addressed this problem. As a result, the problem has continued to
fester like an infection that will not heal. Worse yet, this infection
is spreading to all parts of our country.
This map which has been utilized throughout this debate, and I think
properly so, with data supplied by the American Medical Association,
shows the States that currently are experiencing a medical liability
crisis and those that are showing signs of a developing crisis. The 19
red States are crisis States. Nineteen of the 50 States are crisis
States. The 26 yellow States are showing problem signs. Only 5 States
are currently OK. The red ones are in crisis. The yellow ones are about
to be in crisis. The white States are currently OK generally because
they have passed medical liability litigation reform legislation like
S. 11.
To contrast this for my colleagues, I must note that on a map with
last year's data, only 12 States were in crisis. In March, it was up to
18. Now it is 19. The problem is growing and it reaches from coast to
coast.
There are very unfortunate consequences to this crisis--doctors
forced to quit practicing, trauma centers closing, babies being born by
the roadside, and, yes, people dying. These are all due to out-of-
control litigation and soaring medical liability insurance premiums.
The crisis is particularly acute in the farming and ranching
communities of rural America where obstetricians and family
practitioners, some of whom have been delivering babies for 25 years,
are quitting their obstetrical practice. As a result, there is an
increased shortage of obstetricians in the rural west, including in my
home State of Utah.
Studies by both the Utah Medical Association and the Utah chapter of
the American College of Obstetricians and Gynecologists underscore the
problem. According to the Utah Medical Association:
50.5 percent of family practitioners in Utah have already
given up obstetrical services or never practiced obstetrics.
Of the remaining 49.5 percent who still deliver babies, 32.7
percent say they plan to stop providing OB services within
the next decade. Most plan to stop within the next five
years.
The Utah study examined the causes of the crisis also:
Professional liability concerns were given as the chief
contributing factor in the decision to discontinue
obstetrical services. Such concerns include the cost of
liability insurance premiums, the hassles and costs involved
in defending against obstetrical lawsuits and a general fear
of being sued in today's litigious environment.
Although many blame out-of-control litigation, others believe that
the downturn in the economy caused the crisis. In an attempt to
identify the cause, in February Senator Gregg and I held a joint
hearing of the HELP and Judiciary Committees. We heard from a lawyer
who believes the downturn in the economy and problems with State
insurance regulations are responsible. But, in addition, we heard from
the Texas State insurance commissioner and from the president of
Physician Insurance Association of America, representing provider-owned
or operated insurance companies that provide insurance for the majority
of American doctors.
One reason they do is not because the insurance companies are so
awful. It is because the insurance companies will not handle this type
of coverage any more. The reason they will not is because of the
exposures they are facing. So they have turned now to provider-owner
and operated insurance companies.
These gentlemen face this crisis and its consequences every day.
Their data and their studies, as well as those from the Department of
Health and Human Services, show that increasingly frequent frivolous
lawsuits and skyrocketing awards are responsible for rapidly rising
premiums.
Have the recent downturns in the economy and the stock market
affected medical liability premiums? Possibly. But this does not appear
to be a major cause of the current crisis.
Look at this chart. This is a chart showing how insurance companies
that offer medical liability coverage allocate their assets. As this
chart shows, between 1997 and the year 2001, insurance companies
invested conservatively, primarily in bonds--that is corporate in red,
Government in green, which is the middle line, and municipal bonds in
purple. A minority of funds, only about 10 percent, happens to be
invested in equities, which is shown in the yellow.
This conservative investment strategy minimizes the effect that
changes in the stock market have on insurance premiums. In fact, there
is good evidence that increasing medical liability awards are
responsible for increasing premium costs.
This pie chart with data from the Physicians Insurance Association of
America shows the outcome of medical liability cases. The area in the
orange, almost 68 percent of the pie, represents medical liability
cases that were dropped or dismissed. In other words, a vast majority
of cases are frivolous to begin with. In those cases, the plaintiff
received no award because no harm was found. Yet these frivolous
lawsuits cost money, an average of at least $25,000 per case, and those
costs increase the costs of medical liability insurance.
This next chart shows the growth in median--that is the blue line and
the average in red--medical liability claim payments between 1989 and
the year 2001. Prior to 1995, median and average claim payments
increased readily, as we can see. But the rate of growth for both
increased dramatically after 1995.
Finally, this next chart shows the growth in million dollar ``mega
verdicts'' claim payments equal to or greater than $1 million between
1985 and 2001.
In 1985, less than 1 percent of all awards exceeded $1 million. In
2001, over 8 percent of awards were $1 million or higher. The data is
very clear. A high percentage of medical liability claims are
frivolous. Average and median claim payments are increasing rapidly and
the percentage of mega awards, those greater than $1 million, increased
dramatically as shown on this particular chart.
It seems clear to me that out-of-control medical liability litigation
is driving the increase in premiums, not the economy and not a problem
with the insurance industry which some would try to make it. It is not
just the doctors but all Americans who are paying the price. This is a
national problem and one that requires a national solution.
In my letter of March 12 to Budget Committee Chairman Nickles and
Ranking Democrat Conrad, I emphasized the important implications of
medical liability litigation on the Federal budget. In that letter, I
wrote:
The Federal Government pays directly for health care for
members of the armed forces, veterans, and patients served in
the Indian Health Service. The Federal Government provides
reimbursement for the Medicare and Medicaid programs.
According to the Department of Health and Human Services'
March 3, 2003, report . . . the Federal Government spends
$33.7 billion-$56.2 billion per year for malpractice coverage
and the costs of defensive medicine.
That is $33.7 billion to $56.2 billion a year just for malpractice
coverage in these areas of Federal Government medicine.
That report states:
reasonable limits on noneconomic damages would reduce the
amount of taxpayers' money the Federal Government spends by
$28.1 billion to $50.6 billion per year.
Now I continued to write:
In my view, Federal legislation that would decrease costly
frivolous medical liability lawsuits and limit awards for
noneconomic damages is necessary, not only to ensure patient
access to health care, but to curb increasing Federal health
care costs. Because of the substantial and important
budgetary implications, particularly to the Medicare and
Medicaid Programs, we request that the budget resolution
include language calling for medical liability legislation
reform.
I am pleased to report the budget resolution we passed in the Senate
recognized the tremendous impact of medical liability costs. The budget
resolution included $11.3 billion in savings over 10 years as a result
of medical liability reform based on CBO calculation. The Medicare
Program alone would save $7.9 billion while Medicaid would save $2.9
billion. The remaining savings would occur in the Federal Employees
Health Benefits Program and the Department of Defense.
What if we had that money to help with the poor? It would certainly
do a lot of good, more good than is being done by spending it on
medical liability.
[[Page S9033]]
But it is not only the Federal Government that is affected. Medical
liability litigation directly and dramatically increases health care
costs for all Americans.
What is more, skyrocketing medical litigation costs increase health
care costs indirectly by changing the way doctors practice medicine. In
an effort to avoid frivolous suits, doctors often feel compelled to
perform diagnostic tests that are costly and unnecessary. This
defensive medicine is wasteful. Unfortunately, for doctors, it has
become a necessity.
I hate to admit it, but I am partly responsible for that myself
because, knowing that many doctors are going to be sued unnecessarily
and improperly, I advised them to do what they can to protect
themselves. Consequently, this defensive medicine is leading to a lot
of unnecessary defensive medicine. And they have to do it or they face
unnecessary litigation.
According to a recent Harris poll, fear of being sued has led 79
percent of doctors to order more tests than are medically needed; 74
percent refer patients to specialists more often than necessary; 51
percent recommend invasive procedures that they thought were
unnecessary; 41 percent prescribe more medications, including
antibiotics, that they did not think were necessary.
Defensive medicine increases health care costs. But the real problem
inherent in the current medical liability system and the resulting
process of defensive medicine is that it also puts Americans at risk.
Every test and every treatment poses a risk to the patient. Every
unnecessary test, procedure, potentially puts a patient in harm's way.
According to the Harris poll, 76 percent of the physicians are
concerned that malpractice litigation has hurt their ability to provide
quality care for their patients.
That brings us to the main question. What can we do to address this
crisis today? The answer is, plenty. There are excellent examples of
what works. The March 2003 Department of Health and Human Services
report describes how reasonable reforms in some States have reduced
health care costs and improved access to, and the quality of, care.
According to this report, over the last 2 years the States with limits
of $250,000 or $300,000 on noneconomic damages premiums have increased
an average of 18 percent compared to 45 percent in States without such
limits.
In 1975, California enacted the Medical Injury Compensation Reform
Act, MICRA. Again, I will refer to this chart. This graph shows that
MICRA slowed the rate of increase in medical liability premiums
dramatically, and it did so without affecting negatively the quality of
health care received by the State's residents.
The red on the chart is States that have gone up 573 percent from
1976 to the year 2000. In California they have increased by only 182
percent. As a result of MICRA, California has saved billions of dollars
in health care costs, and Federal taxpayers have saved billions of
dollars in the Medicare and Medicaid Programs.
The March 2003 report goes on to state:
A leading study estimates that reasonable limits on non-
economic damages such as California has had in effect for 25
years, can reduce health care costs by 5-9% without
``substantial effects on mortality or medical
complications.'' With national health care expenditures
currently estimated to be $1.4 trillion if this reform were
adopted nationally, it would save $70-$126 billion in health
care costs per year.
Now, in our joint HELP and Judiciary Committee hearings in February,
we heard from those who believe insurance reform is a cure for this
crisis. These individuals believe the Federal Government rather than
the States should regulate insurance. Those who advocate Federal
insurance regulation apparently believe the States and the State
insurance commissioners are not able to accomplish this alone. They
suggest that insurance companies are colluding to increase premiums. In
all honesty, some of them are getting out of the business because of
the risks and exposure they face.
There has been little, if any, evidence during or after our hearing
to support these allegations. In fact, we heard that the State
insurance commissioners monitor and regulate insurance business
practices very closely. The State laws are based on the National
Association of Insurance Commissioners model rating laws that include
the following language:
No insurer or advisory organization shall attempt to
monopolize or combine or conspire with any other person to
monopolize an insurance market or engage in a boycott . . .
of an insurance market.
And:
No insurer . . . shall make any arrangements with any other
insurer . . . which has the purpose or effect of unreasonably
restraining trade or lessening competition in the business of
insurance.
Moreover, insurance companies are precluded from increasing premiums
to make up for past losses. It seems to me insurance reforms that some
have proposed not only miss the mark badly, they would do nothing to
address the cause of the crisis and would prevent State insurance
commissioners from performing their jobs.
I have to say I came away from the hearing convinced, and I remain
convinced, that out-of-control medical litigation is the major cause of
the crisis and we have to do something to stop it. The current medical
litigation system represents and resembles a lottery more than a
justice system. This system harms patients in many ways. All Americans
deserve the access to care, the cost savings, and the legal protections
that States such as California provide their residents. This problem
has reached crisis proportions, and it is high time we end it.
The task before us is to design a system that protects both the
patient and the provider. S. 11, the Patient First Act of 2003, which I
am proud to cosponsor, includes provisions that have been shown to work
that are fair to all concerned. So S. 11 would encourage speedy
resolution of claims by providing a reasonable statute of limitations.
The bill provides for unlimited awards for economic damages, and it
limits awards for noneconomic damages to $250,000.
Moreover, S. 11 does not preempt State limits on awards for damages,
noneconomic or otherwise, even if the State limits are higher than
those imposed by S. 11. The Patient First Act limits attorney's fees,
thereby reducing the costs of medical liability litigation and
channeling award money to where it belongs, the injured patient.
Normally I am against that, limiting the attorney fees, but in this
particular case we have to do something. Women are going to be without
obstetricians. Many people are going to be without surgeons and many
will be without specialists. Young people are not going to go into the
profession. Young outstanding geniuses who would make great doctors do
not want to go into the profession.
In addition, S. 11 provides for evidence of collateral source
payments to be introduced in any health care lawsuit. Juries would be
made aware of existing health insurance or other sources that
compensate individuals for injuries. No longer would Americans
compensate an individual twice for the same injury.
While there is much to commend S. 11, one provision we should
consider adding is the carefully crafted catastrophic exception to the
limit on awards for noneconomic damages. A carefully worded
catastrophic exception can provide that individuals who have
particularly severe injuries as a result of extremely egregious acts of
negligence receive an award for noneconomic damages that would be
greater than the limit. Nine States have included such a provision in
their statutes.
Having said that, I must say that S. 11 is a very good bill and I
believe that it will accomplish our primary goal of ensuring that
Americans have access to health care.
What I like most about the ``Patients First Act'' is that it is true
to its name.
The bill puts the patient first.
Not the doctor.
Certainly not the lawyer.
You see, it is the patient who is threatened the most by the medical
liability litigation crisis.
It is the patient who eventually pays for the increased health care
costs and it is the patient that suffers most when he or she cannot
access needed care.
The medical liability litigation crisis threatens the economic health
of our country and the personal health of every American. It is like a
festering
[[Page S9034]]
wound, spreading like an infection throughout the country. It is time
that we cured this infection by treating it with a proven remedy. S.
11, the Patients First Act of 2003 is the proven remedy Americans need
and deserve. I urge my colleagues to join me in supporting this very
important legislation.
Madam President, I began these remarks by stating that, as someone
who had experience in this field, I have witnessed an unfortunate
transition; a transition from the days when the standard of practice in
the community was the rule in most communities, which seemed to me to
be a fair rule, to a rule of the doctrine of informed consent, which
means the doctor has to so inform the patient that the patient knows
all of the risks involved. Well, the patient would have to go to
medical school to know all of the risks and it would take so much of
the doctor's time to advise a patient of those risks that none of us
could afford it.
There are always risks in surgery and there are always risks in a
number of clinical procedures. Consequently, because no doctor can ever
really meet those standards, every one of those cases go to trial. In
this country, jurors don't realize by giving outrageous awards that are
not justified in these medical liability cases, they are basically
spreading that cost to everybody in society.
If we do not act, babies will not be delivered with the utmost care
in the future. Americans will not have access to trauma care. Americans
will not have access to the top surgeons.
And if we do not act, unnecessary and costly defensive medicine will
continue. I have to say, I have witnessed the increased use of costly
CAT scans and MRIs in cases where patients could very easily have been
treated at a very low cost in comparison. You can go right on down the
line in almost everything else. It is getting so that young people in
this country cannot afford to have children because it costs so much,
and it is all driven by this medical liability situation. I think that
is pathetic. I think it is pathetic for anybody to stand on the floor
and say this is not a problem of tremendous concern and, literally, say
that it is the insurer's fault.
That just is not the case. In all honesty, it doesn't take a rocket
scientist to figure out what the problem is. I hate to say it, being a
lawyer and having been a trial lawyer. The problem is caused by many in
our profession who are bringing these frivolous suits. I have to tell
you that I have seen lawyers bring frivolous medical liability suits
for one reason and that is because it costs between $50,000 and
$100,000 to defend those suits. Many of these insurance companies,
rather than take the risk of a runaway jury or a forum shopping
situation, even within in a state, will pay the defense costs to get
out of the case even though the case has no merit.
Settling 20 of these frivolous cases per year, makes a pretty good
living for an attorney, just forcing the insurance companies to pay
defense costs because the insurance company doesn't want to take the
risk of a runaway jury verdict in a runaway community.
I think what jurors need to know is that in many respects, by
allowing outrageous verdicts in some of these cases where there has
been no negligence, they are basically running this system right into
the ground. That is what has happened.
As I say, I would have a catastrophic provision in this bill if I
could, that basically would take care of particularly egregious, gross
negligence type cases. There are reasons for bringing litigation from
time to time. There are good reasons to weed out those doctors who
should not be in the operating room, those doctors who really are
incompetent, those doctors who do not do what is right.
But those are the exceptions, not the rule. We are finding that far
too many good doctors are leaving the profession because they cannot
stand this intolerable situation anymore. The country cannot stand it,
either.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Madam President, this legislation, S. 11, is not a
serious attempt to address a significant problem being faced by
physicians in some States. It is the product of a party caucus rather
than a bipartisan deliberation of a Senate committee. It was designed
to score political points, not to achieve a bipartisan consensus which
is needed to enact major legislation. For that reason, it does not
deserve to be taken seriously by the Senate.
We must reject the simplistic and ineffective responses proposed by
those who contend that the only way to help doctors is to further hurt
seriously injured patients.
Unfortunately, as we saw in the Patients' Bill of Rights debate, the
Bush administration and congressional Republicans are again advocating
a policy which will benefit neither doctors nor patients, only
insurance companies. Caps on compensatory damages and other extreme
tort reforms are not only unfair to the victims of malpractice, they do
not result in a reduction of malpractice insurance premiums. Not only
does this legislation fail to do what it claims but it would do many
things that its authors are attempting to conceal.
In reality, this legislation is designed to shield the entire health
care industry from basic accountability for the care it provides. While
those across the aisle like to talk about doctors, the real
beneficiaries will be the insurance companies and large health care
corporations. This amendment would enrich them at the expense of the
most seriously injured patients, men and women and children whose
entire lives have been devastated by medical neglect and corporate
abuse.
This proposal would shield HMOs that refuse to provide needed care,
drug companies whose medicine has toxic side effects, and manufacturers
of defective medical equipment.
In the last 2 years, the entire Nation has been focused on the need
for greater corporate accountability. This legislation does just the
reverse. It would drastically limit the financial responsibility of the
entire health care industry to compensate injured patients for the harm
that they have suffered. When will the Republican Party start worrying
about the injured patients and stop trying to shield big business from
the consequences of its wrongdoing? Less accountability will never lead
to better health care.
According to professor Sara Rosenbaum, a nationally respected expert
on health care law at the George Washington University School of Public
Health:
This measure is so vast in scope that it reaches every
conceivable health care claim against every health care
corporation or manufacturer of health care products . . . In
this sense the measure extends far beyond its popular billing
as one related to the crisis facing physicians and other
medical professionals in individual practice.
In testimony on the companion bill to S. 11 before the House Commerce
Committee, she stated that the bill was written so broadly that it
would shield health care companies from claims as varied as billing
fraud, providing tainted blood to patients, fixing the prices of drugs,
deliberately overcharging Medicare or Medicaid for health services,
making defective implants and violating nursing home safety rules. This
legislation is attempting to use the sympathetic family doctor as a
Trojan horse concealing an enormous array of special legal privileges
for every corporation which makes a health care product, provides a
health care service, or insures the payment of a medical bill. Every
provision of this bill is carefully designed to take existing rights
away from those who have been harmed by medical neglect and corporate
greed.
This legislation would deprive seriously injured patients of the
right to recover fair compensation for their injuries by placing
arbitrary caps on compensation for noneconomic loss in all of these
cases. These caps only serve to hurt those patients who have suffered
the most severe, life-altering injuries and who have proven their cases
in court.
They are the paralyzed, the brain-injured, and the blinded. They are
the ones who have lost limbs, organs, reproductive capacity, and in
some cases even years of life. These are life-altering conditions which
deprive a person of the ability to engage in many of the normal
activities of day to day living. It would be terribly wrong to take
their rights away. The Bush administration talks about deterring
frivolous cases, but caps by their nature apply only to the most
serious cases which have been proven in court.
[[Page S9035]]
A person with a severe injury is not made whole merely by receiving
reimbursement for medical bills and lost wages. Noneconomic damages
compensate victims for the very real, though not easily quantifiable,
loss in quality of life that results from a serious, permanent injury.
It is absurd to suggest that $250,000 is fair compensation for a person
paralyzed for life.
Caps are totally arbitrary. They do not adjust the amount of the
compensation ceiling with either the seriousness of the injury, or with
the length of years that the victim must endure the resulting
disability. Someone with a less serious injury can be fully compensated
without reaching the cap. However, a patient with severe, permanent
injuries is prevented by the cap from receiving full compensation for
their more serious injuries. Is it fair to apply the same limit on
compensation to a person who is confined to a wheelchair for life that
is applied to someone with a temporary leg injury?
Caps discriminate against younger victims. A young person with a
severe injury such as paralysis must endure it for many more years than
an older person with the same injury. Yet that young person is
prohibited from receiving greater compensation for the many more years
he will be disabled. Is that fair?
Caps on noneconomic damages discriminate against women, children,
minorities, and low-income workers. These groups do not receive large
economic damages attributable to lost earning capacity. Women who are
homeowners and caregivers for their families sustain no lost wages when
they are injured, so they only receive minimal economic damages.
Noneconomic damages are particularly important to these vulnerable
populations.
In addition to imposing caps, this legislation would place other
major restrictions on seriously injured patients seeking to recover
fair compensation. At every stage of the judicial process, it would
change long-established judicial rules to disadvantage patients and
shield defendants from the consequences of their actions.
It would abolish joint and several liability noneconomic damages.
This means the most seriously injured people may never receive all of
the compensation that the court has awarded to them. Under the
amendment, health care providers whose misconduct contributed to the
patient's injuries will be able to escape responsibility for paying
full compensation to that patient.
The bias in the legislation could not be clearer. It would preempt
State laws that allow fair trdatment for injured patients, but would
allow State laws to be enacted which contained greater restrictions on
patients' rights than the proposed federal law. This one-way preemption
contained in Section 11(b) shows how result-oriented the legislation
really is. It is not about fairness or balance. It is about protecting
defendants.
The amendment preempts State statutes of limitation, cutting back the
time allowed by many States for a patient to file suit against the
health care provider who injured him. Under the legislation, the
statute of limitations can expire before the injured patient even knows
that it was malpractice which caused his or her injury.
It places severe limitations on when an injured patient can receive
punitive damages, and how much punitive damages the victim can recover.
Under the bill, punitive damages can only be awarded if the defendant
acted ``with malicious intent to injure'' or ``deliberately failed to
avoid unnecessary injury.''
This is far more restrictive than current law. It prohibits punitive
damages for '`reckless'' and ``wanton'' misconduct, which the
overwhelming majority of States allow. In the very small number of
cases where punitive damages would still be allowed, it would cap them
at twice the amount of economic damages, no matter how egregious the
defendant's conduct and no matter how large its assets.
It imposes unprecedented limits on the amount of the contingent fee
which a client and his or her attorney can agree to. This will make it
more difficult for injured patients to retain the attorney of their
choice in cases that involve complex legal issues. It can have the
effect of denying them their day in court. Again the provision is one-
sided, because it places no limit on how much the health care provider
can spend defending the case.
If we were to arbitrarily restrict the rights of seriously inured
patients as the sponsors of this legislation propose, what benefits
would result? Certainly less accountability for health care providers
will never improve the quality of health care. It will not even result
in less costly care. The cost of medical malpractice premiums
constitutes less than two-thirds of 1 percent--66 percent--of the
Nation's health care expenditures each year. For example, in 2001,
health care costs totaled $1.42 trillion, while the total cost of all
medical malpractice insurance premiums was $7.3 billion. Malpractice
premiums are not the cause of the high rate of medical inflation.
This chart clearly reflects that we spend $1.42 trillion a year in
total personal health care expenditures. It is a very large amount per
individual. If we are ever able to get the cost of health care per
individual down to a reasonable amount there would be real savings. But
that isn't what this is about. This is about $7.3 billion, and that
amounts to just one-half of 1 percent of all medical costs. Medical
malpractice premiums do not contribute to the overall rise. We ought to
address the cost of health care. That isn't what this bill is about.
Over the last 15 years, medical costs increased by 113 percent. The
total amount spent on medical malpractice insurance rose just 52
percent over that period, less than half the rate of inflation for
health care services. The increase is rising at virtually one-half of
what other health care services are rising.
The White House and other supporters of caps have argued that
restricting an injured patient's right to recover fair compensation
will reduce malpractice premiums. But there is scant evidence to
support their claim. In fact, there is substantial evidence to refute
it.
In the past year, there have been dramatic increases in the cost of
medical malpractice insurance in States that already have damage caps
and other restrictive tort reforms on the statute books, as well as in
States that do not. No substantial increase in the number or size of
malpractice judgments has suddenly occurred which would justify the
enormous increase in premiums which many doctors are being forced to
pay.
Comprehensive national studies show that the medical malpractice
premiums are not significantly lower on average in States that have
enacted damage caps and other restrictions on patient rights than in
States without these restrictions. Insurance companies are merely
pocketing the dollars which patients no longer receive when ``tort
reform'' is enacted.
Let's look at the facts. Approximately half of the States have a cap
on medical malpractice damages. Most have had those statutes for a
substantial number of years. The other half of the States do not have a
cap on malpractice damages. The best evidence of whether such caps
affect the cost of malpractice insurance is to compare the rates in
those two groups of States.
Based on data from the Medical Liability Monitor on all 50 States,
the average liability premium in 2002 for doctors practicing in States
without caps on malpractice damages was $31,926, virtually the same as
the average premium for doctors practicing in States with caps, which
was $30,521.
There are many reasons why insurance rates vary substantially from
State to State. This data demonstrates that it is not a State's tort
reform laws which determine the rates. Caps do not make a significant
difference in the malpractice premiums which doctors pay. This is borne
out by a comparison of premium levels for a range of medical
specialties.
The average liability premium in 2002 for doctors practicing internal
medicine was less--2.8 percent--for doctors in States without caps on
malpractice damages--$9,552--than in States with caps on damages--
$9,820. Internists actually pay more for malpractice insurance in the
States that have caps.
The average liability premium in 2002 for general surgeons was almost
identical for doctors in States without caps--$33,016--than States with
caps--$33,157. Surgeons are paying the same regardless of the State's
tort laws.
[[Page S9036]]
The average liability premium for OB/GYN physicians in 2002 in States
without caps--$53,163--exceeded the rate for doctors in States with
caps--$48,586--by less than 10 percent, a relatively small difference.
Shown on this chart are the figures for: internal medicine, general
surgery, OB/GYN, and the physicians in States without caps on damages
and the physicians in States with caps on damages. A fair reading of
that would indicate there is virtually little that would reflect itself
in lower malpractice insurance rates for those States with caps.
This evidence clearly demonstrates that capping malpractice damages
does not benefit the doctors it purports to help. Their rates remain
virtually the same. It only helps the insurance companies earn even
bigger profits. As Business Week Magazine concluded after reviewing the
data ``the statistical case for caps is flimsy.'' That is from their
March 3, 2003 issue.
Since malpractice premiums are not significantly effected by the
imposition of caps on recovery, it stands to reason that the
availability of physicians does not differ between States that have
caps and States that do not. AMA data shows that there are 233
physicians per 100,000 residents in States that do not have medical
malpractice caps and 223 physicians per 100,000 residents in States
with caps. Looking at the particularly high cost speciality of
obstetrics and gynecology, States without caps have 29 OB/GYNs per
100,000 women while States with caps have 27.4 OB/GYNs per 100,000
women. Clearly there is no correlation.
If a Federal cap on noneconomic compensatory damages were to pass, it
would sacrifice fair compensation for injured patients in a vain
attempt to reduce medical malpractice premiums. Doctors will not get
the relief they are seeking. Only the insurance companies, which
created the recent market instability, will benefit.
A National Association of Insurance Commissioners study shows that in
2000, total insurance industry profits as a percentage of premiums for
medical malpractice insurance was nearly twice as high--13.6 percent--
as overall casualty and property insurance profits--7.9 percent. Do we
understand that now? This is the National Association of Insurance
Commissioners. Their study showed, in the year 2000, that the insurance
industry profits as a percentage of premiums for medical malpractice
insurance was twice as high as casualty and property insurance profits.
The profits from the premiums for medical malpractice insurance were
twice as high. This is the National Association of Insurance
Commissioners study.
In fact, malpractice was a very lucrative line of insurance for the
industry throughout the 1990s. Recent premium increases have been an
attempt to maintain the high profit margins despite sharply declining
investment earnings. That is what is at the root cause here.
Insurance industry practices are responsible for the sudden, dramatic
premium increases which have occurred in some States in the past 2
years. The explanation for these premium spikes can be found not in
legislative halls or in courtrooms, but in the boardrooms of the
insurance companies themselves.
There have been substantial increases in the last 2 years in a number
of insurance lines, not just medical malpractice. Insurers make much of
their money from investment income. Interest earned on premium dollars
is particularly important in medical malpractice insurance because
there is a much longer period of time between receipt of the premium
and payment of the claim than in most lines of casualty insurance.
The industry creates a ``malpractice crisis'' whenever its
investments do poorly. The combination of a sharp decline in the equity
markets and record low interest rates in the last 2 years is the reason
for the sharp increase in medical malpractice insurance premiums. What
we are witnessing is not new. The industry has engaged in this pattern
of behavior repeatedly over the last 30 years. When ``tort reform
laws'' are enacted, the insurance companies pocket the resulting
savings to bolster their profits.
Last month, Weiss Ratings, Inc., a nationally recognized financial
analyst, conducted an in-depth examination of the impact of capping
damages in medical malpractice cases. This is a nationally recognized
financial analyst. Their conclusions sharply contradict the assumptions
on which this legislation is based. Weiss found capping damages does
reduce the amount of money that malpractice insurance companies pay out
to injured patients. However, those savings are not--those savings are
not--passed on to doctors in lower premiums. That is the conclusion.
This is what the Weiss report, issued on June 3 of this year, states:
Since the insurers in the states with caps reaped the
benefit of lower medical malpractice payouts, one would
expect that they would reduce the premiums they charged
doctors.
At the very minimum, they should have been able to slow down the
premium increases. Surprisingly, the data show they did precisely the
opposite. Between 1991 and 2002, the Weiss analysis shows that premiums
rose by substantially more in the States with damage caps than in the
States without caps. The 12-year increase in the median annual premium
was 48.2 percent in the States that had the caps, and only 35.9 percent
in the States that had no caps. In the words of the report:
On average, doctors in states with caps actually suffered a
significantly larger increase than doctors in states without
caps. . . . In short, the results clearly invalidate the
expectations of caps proponents.
There it is. Those States with the caps, 48.2 percent median premium
increase; States without caps, 35.9 percent. That is from the study by
Weiss Rating, Inc. It is not a study that is made up by those of us who
are expressing opposition.
Doctors, especially those in high-risk specialties, whose malpractice
premiums have increased dramatically over the past 2 years, do deserve
premium relief. That relief will only come as a result of tougher
regulation on the insurance industry.
When insurance companies lose money on their investments, they should
not be able to recover those losses from the doctors they insure.
Unfortunately, that is what is happening.
Doctors and patients are both victims of the insurance industry.
Excess profits from the boom years should be used to keep premiums
stable when investment earnings drop. However, the insurance industry
will never do that voluntarily. Only by recognizing the real problem
can we begin to structure an effective solution that will bring an end
to unreasonably high medical practice premiums.
I conclude with a quotation from the analysis of medical malpractice
premiums by Weiss Ratings, Inc. Weiss Ratings, as I said, is not
speaking from the perspective of a trial lawyer or a patient advocate,
but as a hard-nosed financial analyst that has studied the facts of
malpractice insurance ratings. Here are their recommendations to us
based on those facts:
First, legislators must immediately put on hold all
proposals involving non-economic damage caps until convincing
evidence can be produced to demonstrate a true benefit to
doctors in the form of reduced med mal costs. Right now,
consumers are being asked to sacrifice not only large damage
claims, but also critical leverage to help regulate the
medical profession--all with the stated goal that it will end
the med mal crisis for doctors. However, the data indicate
that similar state legislation has merely produced the worst
of both worlds: The sacrifice by consumers plus a
continuing--and even worsening--crisis for doctors.
Neither party derived any benefit whatsoever from the
caps.
Mr. DURBIN. Will the Senator yield for a question?
Mr. KENNEDY. I also reference a really excellent article in U.S. News
and World Report from June 30 that shows on a chart what has been
happening with premiums going from $2.9 billion to $4.9 billion and, on
the other hand, points out insurers' payments after the jury verdict
was $147 billion in 1993 and in the year 2001, $172 billion--so
basically a fairly flat line across almost a 10-year period, a dramatic
increase in the premiums and virtually flat in terms of the payments.
I am glad to yield.
Mr. DURBIN. If the Senator from Massachusetts would yield for a
question, I would ask him, since he has been our leader in the Senate
on the issue of a Patients' Bill of Rights to ensure that patients
across America have their rights against HMOs and managed care
companies--I ask the Senator from Massachusetts, is he aware
[[Page S9037]]
that despite the copious debate on the floor about the crisis facing
physicians across America, S. 11 provides a limitation on liability not
just for doctors and hospitals but also for HMO insurance companies,
managed care organizations, pharmaceutical companies, and manufacturers
of medical devices?
Mr. KENNEDY. The Senator is exactly right. It is not only limited to
those groups the Senator has cited, but there is a strong belief that
it would also apply protection for billing fraud, tainted blood to
patients, fixing of prices of drugs, deliberately overcharging Medicare
and Medicaid for health services, as well as making defective implants,
and violating nursing home safety standards.
We don't hear much from those who are supporting this about why all
of these various groups need this kind of protection. It is a catch
all, not dealing with what was stated by many of those who were
speaking in favor. This is a catch all for anything to do in any way,
under any pretense, with the health care industry.
Mr. DURBIN. May I ask the Senator from Massachusetts another question
through the Chair. There is a section in this bill I would like to call
to his attention, section 13. I would like to read it to the Senator
and ask him to respond, since he has been the sponsor of a Patients'
Bill of Rights, so that once and for all HMOs and managed care
companies will be held responsible and accountable for medical
decisions they make that injure patients. I ask the Senator if he would
respond and tell the Senate on the record what it means to include in
S. 11 a section 13, with the following language--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.
I ask the Senator from Massachusetts, does this sense of Congress
language guarantee that those who are harmed by health insurers who
make bad decisions about diagnostic procedures, stays in the hospital,
necessary surgery--is this language some refuge and comfort for them
that finally now they will have their day in court and now, with this
sense of Congress, they can hold these health insurance companies
accountable?
Mr. KENNEDY. It really insults the intelligence of the average
family, and the average family is far too bright and smart not to
understand what this says and what it does not. As implicated in the
Senator's question, this is a sense of the Senate of something we
should be doing by legislation which we have attempted to do with the
Patients' Bill of Rights.
This sense of the Senate is meaningless. It isn't even worth the
paper it is written on, because of all the other provisions included in
the legislation which the Senator has spoken to so effectively during
the course of the debate.
This is sort of a catch all, a ``make them feel good,'' section, for
some to be able to say: Look, they have language in here that it is the
sense we all feel this way. But, of course, it says this in a piece of
legislation which will effectively undermine the protections for
working families, for their parents, and for their children.
We have many things that can be done to provide help to some of those
who have the particular specialties which need attention, but the idea
that you have these two lines of a sense of the Senate to effectively
say: We have done all of these bad things, and we have put them in law,
but we want a sense of the Senate to make you feel good and show that
we are actually protecting the average family in this country--as the
Senator well knows, it isn't worth the paper it is printed on.
Mr. DURBIN. If I may ask one last question of the Senator?
Mr. KENNEDY. If I may just add, as the Senator remembers--I hope the
American people do--we had weeks of debate on the floor on the
Patients' Bill of Rights. As the Senator remembers, what underlined
that whole debate was that we ought to put the well-being and the
health care interests of the patients of this country ahead of the
bottom line of the HMOs. This was a debate in which the American people
really participated. It was sidetracked because the administration
refused to allow States to make the ultimate decision about
compensation for individuals. That was in the final compromise which
this administration refused.
So for all those who want to talk about States rights issues on this
and the States know best--all those who make that argument--they
somehow miss the importance of the real protections for people.
Mr. DURBIN. My last question to the Senator: If this sense of the
Congress is not worth the paper it is written on, as the Senator has
said, is it fair to conclude that since the HMOs and managed care
companies prevailed before when the Senator from Massachusetts offered
his Patients' Bill of Rights to protect individuals from insurance
companies making medical decisions, is it fair to conclude that if S.
11 were enacted as written, limiting the liability of these HMO and
insurance companies, these companies would win again, that we would
reward them again for bad conduct, despite the sense of the Senate,
sense of Congress, section 13 of this bill?
Mr. KENNEDY. I think what you could say is that this is the anti-Bill
of Rights for the American consumer because it goes in just the
opposite way. Rather than guaranteeing protections, it undermines
whatever protections are out there. This is a battle we have been
fighting over and over again in recent years, making sure the most
basic protections for our consumers and families in the health care
area are not undermined.
As the Senator has pointed out, this is going in the opposite
direction.
Mr. DURBIN. I thank the Senator.
Mr. KENNEDY. I thank the Senator.
The PRESIDING OFFICER (Mr. Alexander). The Senator from Nevada.
Mr. ENSIGN. Mr. President, I wish to respond to a few of the items
just laid out in the Senate and try to point out what I think are
glaring inaccuracies.
First of all, the Weiss report we have heard so much about from the
last two speakers uses numbers from the Medical Liability Monitor. The
Medical Liability Monitor just provides the numbers. They are not a
group that is pro tort reform or anti tort reform. This is what the
editor, Barbara Dillard, says about the numbers that the other side of
the aisle is using to somehow skew what the premiums are doing in those
States that have enacted tort reform. Let me read some of the most
salient parts:
The Weiss ratings analysis of medical malpractice caps
cites the Medical Liability Monitor as the source of data
Weiss uses to calculate ``average'' and ``medium'' premiums
for physicians during the last 12 years. While we are an
independent news publication and take no position on tort
reform, or other proposals to improve the medical liability
climate, we feel it is necessary to comment on the use of our
statistics because some readers have expressed concern. The
median and averages in the Weiss report are not the numbers
we report in our annual rate surveys. Weiss may have taken
our numbers, the amounts and increases of premiums paid by
doctors State by State, and used them to arrive at their
statistics. But it is not possible from the report to say
definitely how our numbers have been used. It is our view
that it is impossible to calculate a valid ``average''
premium for physicians, or for physicians in a particular
State or territory, and we state that clearly in the
executive summary of our rate survey.
But the editor of the Medical Liability Monitor goes further. She
advised the leader's office that:
It is misleading to use median premiums compiled with data
from the Medical Liability Monitor to demonstrate the effect
of noneconomic damage limits on liability rates.
This is exactly what Weiss does. That is the report they have been
quoting here. The report uses median annual premiums compiled with data
from the Medical Liability Monitor to try to demonstrate the effect of
noneconomic damage limits on liability rates. Not only is this wrong,
it downright misleads the public.
Let me refer to some of the other issues they were talking about.
Half of the States have enacted medical liability reform. My State did
that a year ago. It has caps. If you look at my State, as far as the
numbers, it would look like it hasn't worked. It takes a minimum of
probably 8, 10, 12, or 15 years to go through the courts to find out
whether the caps are going to be upheld. If the insurance companies are
unsure whether the caps are going to be upheld or not, there is no
predictability there because they can reach way back--once it is held
unconstitutional, they can go back and try those cases and get those
awards.
That is why in California it took so long--from 1975 until the mid-
1980s--to
[[Page S9038]]
find out whether the law was going to work. Colorado and California
have now had their laws in place long enough to stabilize rates. Let's
look at those two States, in major cities, compared to other cities
around the country.
Here are Los Angeles and Denver. We will start with the general
surgery. It is almost $37,000 in Los Angeles for the medical liability
premiums for the year; that is for a general surgeon. In Denver, it is
around $34,500. New York is about $51,000. Las Vegas was $70,000. It is
a lot higher this year in Las Vegas. In Chicago, it is $68,000. In
Miami, it is $174,000. The cities in the gray on the chart are States
without medical liability reform. The two in the white have had medical
liability reform in place long enough for them to have predictability.
This whole debate isn't about hurting patients; it is about helping
them to have access to quality care. In my State, we had a level I
trauma center close for 10 days because of a crisis, where the
specialists who were treating patients there could not afford the
medical liability insurance anymore. So they had to say: We cannot come
in there and practice because we cannot afford the insurance. The
Governor of our State, within a week, called a special session of the
legislature. They enacted, in a bipartisan way, caps. Unfortunately,
like a lot of the caps in the country--and they use a lot of these
statistics--they are similar to the caps in my State where they have
loopholes that you can drive a truck through, which makes the
legislation pretty much, as far as a court of law is concerned,
ineffective. That is why there is a move in my State to close those
huge loopholes down to where just the most serious cases actually have
unlimited pain and suffering type of awards.
In our State, the way they reopened the level I trauma center in that
special session of the legislature--not only did they enact a $350,000
cap for the general population but for the level I trauma center they
put it under the State. Guess what. Our State has $50,000 caps total--
economic, pain and suffering, medical, the whole thing. That is the
only way they could get the level I trauma center back open. Why did
they do it? They knew there was a crisis. People had died, and more
would die if they didn't reopen the trauma center.
Well, how bad does it have to get in the U.S. for us to say there is
a crisis? When will the other side realize how bad the situation is in
America? We are losing specialists. People are leaving the practice of
medicine--especially those specialties and subspecialties in which we
already have a shortage in many areas; and new people are not going
into these areas because they see the writing on the wall. They see it
is going to be too expensive for them to go out and practice.
I have a good friend from Las Vegas, Dr. Spoon. We were talking a
couple months ago. One of his favorite things to do in his practice--he
is an obstetrician--is to deliver babies, especially those high-risk
pregnancies. He got so much enjoyment from bringing them to the point
where they were successful. His insurance company made him stop
performing high-risk deliveries, and they also cut him down from 250 or
300 deliveries a year, and he can deliver no more than 125 babies a
year.
Southern Nevada is the fastest growing metropolitan area in the
country. Yet we are losing OB/GYNs and new ones are not coming in. So
what happens in that area is women are having serious trouble locating
OB/GYNs to deliver their babies.
I want to try to talk a little bit about the bill and what it really
does do and try to clear up some of these issues. First, to go back to
premiums. It was said that in places such as California premiums and
caps on economic damages--caps on pain and suffering don't work.
According to the CBO, they do work. H.R. 5, which is virtually
identical to the bill we have today, would significantly lower premiums
for medical malpractice insurance from what they would otherwise be
under current law. Premiums for medical malpractice insurance
ultimately would be an average of 25 to 30 percent below what they
would be under current law.
The Congressional Budget Office is nonpartisan, and everybody is
supposed to respect the numbers they put out around here. They
certainly don't have any pro or con as far as tort reform is concerned.
There are others such as the U.S. Department of Health and Human
Services that say States with limits of $250,000 or $350,000 on
noneconomic damages have average combined highest premium increases of
12 to 15 percent--that is average combined highest premium increases--
compared to 44 percent in States without caps on noneconomic damages.
The Joint Economic Committee of the Congress says that tort reform
will reduce overall spending on health care savings by between $67
billion and $106 billion over the next 10 years.
I wish to talk a little bit about what kinds of economic damages.
That has been criticized. We don't cap economic damages. What can you
get in economic damages under this bill? You can get all lost wages and
benefits. Lost earning capacity. They say it hurts children. You get a
child who gets hurt because of malpractice and you can calculate what
that child would have had over the next 60, 70 years.
Mr. DURBIN. Will the Senator yield for a question?
Mr. ENSIGN. They may not have the education to know what their total
potential was but it is 60 or 70 years' worth of earnings they can get
in economic damages. That can be significant. I will freely admit it is
not what Barry Bonds would get if he got hurt, or LaBron James, the new
basketball player. They would obviously get a lot more money because
they have the potential of making so much more money. But this child
would still get a significant amount.
Let me go through these points, and then I will yield for a question.
All medical expenses would be covered under this bill: long-term
care, assisted living devices, child care, household services, lost
time, special medical damages, value of care, counsel, advice, aid,
comfort, counsel for children, parents, and spouses. All of those are
possible under economic damages in this bill.
The final point I wish to make is this: Does this capping hurt
patients? We just have to look at Colorado and California and ask: Are
there people out there being hurt? I submit there are a lot more people
being hurt and going to be hurt in States such as Nevada where the
doctors are leaving, where the doctor will not be in that emergency
room or will not be able to deliver a baby, especially in those high-
risk pregnancies.
This one case in Florida is a very good example. I actually met this
gentleman. He is a physician himself. He was not performing duties as a
physician at this time, he was a parent of an injured child. His name
is Dr. Frank Shwarin. His 4-year-old child in Naples, FL, fell and hit
his head on the side of the swimming pool. This was in July of 2002.
The father is named Frank and Craig is the son. He rushed him to the
nearest hospital only to find that none of the neurosurgeons on call
would treat patients under 18 years of age. Why? Because they could not
get medical liability coverage to treat, even in an emergency
situation, a pediatric neurosurgery case. They had to medevac his son a
couple hours away. Fortunately, because the father is a doctor, he was
able to keep his son alive during that time.
A woman testified before the Senate that when the level I trauma
center crisis happened in my State, her father died when that trauma
center was closed because he had to be sent to another emergency room,
and an emergency room is not a trauma center. They do not have the kind
of expertise to treat severe trauma. As a result, her father died.
We cannot guarantee he would not have died in the trauma center, but
we can guarantee he would have had the best possible care and the best
chance of living. That is what I believe this debate has come down to:
The system is out of balance now. It is not working. To correct this
imbalance, we have to start reining in some of these frivolous,
outrageous jury awards.
I yield for a question.
Mr. DURBIN. Mr. President, I thank the sponsor of the legislation for
coming to the Chamber. I want to give him an opportunity to complete
his statement, and perhaps at the end of that statement, if he and I
can engage in dialog or debate, that would be fair. I do
[[Page S9039]]
not want to interrupt his train of thought during his presentation.
Mr. ENSIGN. That would be fine. I have a couple other issues to go
through. There are a few other cases I would like to bring to the
attention of our colleagues.
First, because we need to put a real face on this issue--we need to
put a face on the patients, and I think it is legitimate to put a face
on the other way. I think it is legitimate to put a face on somebody
who has had a claim of malpractice and actually had malpractice
committed against them, and it is also fair to put faces on those
people who now are having trouble finding the kind of health care they
need.
This is a balancing act, there is no question about it. There is no
perfect answer to this situation. I wish there were. The fact is, the
current system is driving health care providers out of the practice of
medicine, hospitals are closing down, and we need to correct the
situation so that when we seek health care in an emergency situation or
in a nonemergency situation, we will have the kind of care we need.
A friend of mine in Las Vegas has Parkinson's disease and goes down
to Loma Linda--I told this story earlier today--to see his
subspecialist in neurology to treat this disease. He had some fairly
radical surgery where they actually separate parts of the brain. He has
had very good success with it. He had a specialist talked into moving
his practice to Las Vegas shortly before the medical malpractice crisis
hit in Las Vegas. Once that hit the news, the guy said: Sorry, I live
in California where we have caps. I cannot go to Las Vegas and pay
$250,000 a year for my practice for medical liability coverage. I
cannot afford to do it. Why would I do that when I have a good practice
here, we have caps, and it is working well in California?
He wanted to move to Las Vegas. He was ready to go with his family.
He liked the quality of life in Las Vegas. He did not go simply because
he cannot afford to take that kind of economic hit. So people in Las
Vegas have to drive down there.
Most of the time those are not emergency cases, but for those cases
that are an emergency, it is just a shame.
People say this is a State issue. I would counter that this is the
United States of America, and we are supposed to be able to live where
we want to live, and now we are saying to people: No, you cannot go
there because of medical liability premiums, you cannot afford to open
up your practice because of medical liability premiums. People should
be able to find the kind of health care they need wherever in the
United States and live the quality of life and obtain the best health
care they can possibly get based on what is available in the area. I do
not think outrageous premiums should be the limiting factor.
Let me close with this point, Mr. President. Earlier there was debate
about punitive damages and that we are protecting big companies. Under
this bill, we do protect companies that make medical devices if they
have followed FDA regulations. In other words, the manufacturer would
not be liable for punitive damages if it satisfied FDA's rigorous
approval process and if the harm to the patient did not result from the
company's violation of an FDA regulation. If they played by the rules
that the Government set down, we protect them in this bill from
noneconomic--we do not protect them from economic or from medical
expenses. But if they violate the FDA rules, then they are not
protected. I think that is fairly reasonable. That is why we think this
bill is a reasonable compromise, is a reasonable approach to solving
what I believe is an out-of-control system.
I will be happy to yield for questions.
Mr. DURBIN. Mr. President, I thank the sponsor of the legislation. I
would like to ask him this question. Virtually every example the
Senator has given, every compelling example he has given for this
legislation involves doctors paying malpractice premiums. Yet as he has
written this legislation, it goes far beyond providing limitation of
liability for doctors. It includes limitation of liability for HMOs,
managed care, pharmaceutical companies, medical device manufacturers,
and nursing homes.
Can the Senator from Nevada explain to me why he has not come before
us and argued on behalf of HMOs and why their exposure to liability for
wrongdoing is a source of concern and leads to, he thinks, the need for
legislation?
Mr. ENSIGN. Mr. President, we know we live in a litigious society. We
are sue happy today. Everything is somebody else's fault, and we
immediately go to court. Because of the nature of our courts, it is
easier to settle. When we settle, it drives up the cost for all of us.
A lot of the cases never make it because it is too expensive to take
the case all the way to court.
A lot of companies especially are self-insured for certain amounts of
money. It is easier for them to calculate the cost of going to court,
and what happens in the long run is that all of us pay for that in
higher premiums. When we have higher premiums, it is pretty simple. We
end up with a situation where employers cannot afford it. A lot of
small employers especially are dropping their health insurance coverage
and we are ending up with 41 million uninsured in this country and a
big part of that is the cost, not only of the premiums to doctors but
just the whole cost of defensive medicine that we have to practice
today because of the fear of being sued.
Mr. DURBIN. So if the Senator from Nevada will yield for another
question, through the Chair, is the Senator from Nevada going to bring
for us then more evidence, as he has when it comes to doctors, as to
the insurance crisis facing drug companies in America, which as I
understand are the most profitable corporations in America with an
average annual return of 18 percent on capital, about 6 times the rate
of return of the Fortune 500? Is he going to tell us about the
liability exposure of HMOs that really necessitate this protection
which he is building into his proposed law, S. 11? Is he going to tell
us about the medical device corporations that have made faulty products
which are causing problems across America and how their exposure and
liability necessitate this need to limit their accountability and cap
the recovery of innocent people who are victims of their misconduct?
Mr. ENSIGN. If the Senator would vote for us to go forward with the
bill tomorrow when we have a cloture vote, we will have a lot of time
to debate this. We can amend it and go forward with this debate. So I
hope he will join us in voting for cloture because I do have a lot of
evidence to justify the various provisions in the bill.
The bottom line is we all know that today it costs around $900
million to bring a single new drug to the market. I am not here to
defend the pharmaceutical companies or any other company.
Mr. DURBIN. That is what the bill of the Senator does.
Mr. ENSIGN. No. What I am here to say is we have a problem with our
health care system today and we need to fix it. If we can go forward
with this bill, if there are amendments the Senator thinks can improve
this bill, let's at least move to it so that we can amend it, put the
amendments forward, and have a healthy debate. We can take a week, or
whatever it takes, to do that so that we can go forward and try to fix
some of the glaring problems. If the Senator thinks there are some
problems with the bill, let's bring forth amendments and try to fix it.
Mr. DURBIN. If the Senator will yield for another question, I am
curious. What the Senator has just suggested is a good basis for
establishing what we might even call a Senate committee where we could
have Members of the Senate come together, consider evidence, and offer
amendments before the bill comes to the floor. If I am not mistaken,
the Senate bill already provides for committees. Why is it that this
bill, of such consequence, should not go through a Senate committee
system so that the very aspects that we have just discussed can be
openly debated and amended and come up with a work product that might
be of real value to this country?
Mr. ENSIGN. I say to my friend and colleague that it is obvious why.
We could not get a bill to the floor. The Senator knows that and
everybody here knows that. It is just like last year when the Senator
was in the majority, there were at least two bills that I remember, the
Energy bill, as, well as the prescription drug bill, that were brought
to the floor that were not brought through committee. They were
[[Page S9040]]
brought directly to the floor by the majority leader at the time. It is
not a common procedure, but it is a procedure that has to be done every
once in a while to bring up important legislation that cannot go
through committee and my colleagues know cannot get through committee.
The way the Senate works is so different than the House, and the
Senator knows that. We both served in the House of Representatives. The
House of Representatives does almost all their work in the committee.
We can do a lot of our work on the floor and produce a pretty darn good
product by bringing it to the floor, amending the bill on the floor,
and that is what I think we should do.
Mr. DURBIN. If I could ask the Senator from Nevada, the sponsor of
this legislation, another question, he has spoken about his own home
State of Nevada and the problems they have faced. In the last 2 days,
there has been a lot of discussion on the Senate floor about the
medical malpractice crisis in this country that involves an increasing
incidence of medical malpractice. In fact, the Bush administration says
it has reached epidemic proportions.
I ask the Senator from Nevada, what in his bill, S. 11, would deal
with the problem in his home State of Nevada, reported by Business Week
on March 3 of this year, in which they reported that in his home State
of Nevada, which adopted a $350,000 cap on recovery last year, it was
discovered that two doctors in his State were responsible for $14
million of the $22 million in claims awarded in Nevada in 1 year? What
in this legislation would make certain that those doctors, guilty of
malpractice, would be held accountable for their wrongdoing and would
be removed from practice if, in fact, they are not meeting the
standards of professional conduct?
Mr. ENSIGN. Mr. President, I say to my colleague that it is a great
point. I practiced veterinary medicine and I understand how
professional boards work. I understand that with professional boards
there is a self-policing that is assumed. It is supposed to happen with
lawyers. It is supposed to happen with accountants. It is supposed to
happen with veterinarians. It is supposed to happen with physicians.
The big problem today with professional boards is they are afraid to do
something with somebody's license because if they do, they can be held
personally liable. That happens time and time again.
All of the professional boards go through this; that as badly as they
would love to jerk somebody's license, unless it is so clear and the
evidence is so outrageous of what they have done to deserve their
license being jerked, it just does not happen. Frankly, it should
happen more. There are incompetent doctors. There are incompetent
lawyers. There are incompetent veterinarians. More of them should have
their license jerked in that case, and I wish they were empowered a
little more and maybe protected a little more to do that.
Mr. SESSIONS. Will the Senator from Nevada yield for a question?
Mr. ENSIGN. I am happy to yield for a question.
Mr. SESSIONS. I say to Dr. Ensign, we appreciate his leadership on
this matter and know that he is a professional himself, and he is
familiar with these liability issues. The Senator talked about two
doctors in Nevada being responsible for $14 million of the $22 million
in punitive damages. I guess what I want to ask the Senator is that in
this way we operate with punitive damages, is not the real truth that
when two doctors get hit with big verdicts that the premiums from all
the innocent doctors in Nevada go up? It is not just the bad doctor who
pays--it is supposed to punish him--but the insurance company pays it,
does it not, and then they pay for that by raising the premiums on
everybody else?
Mr. ENSIGN. The Senator from Alabama brings up a very true point, but
also the Senator from Illinois is correct in that we do need to do a
better job of policing the physicians. They need to do a much better
job of that. That is why I brought up the point of the boards. The
point is, though, if we vote for cloture tomorrow, maybe we can work
this out. Maybe we can come up with something that could be addressed,
or at least give suggestive language to the States to be able to work
this out. It is so clear that if we can invoke cloture--for the general
public, that means that we can proceed to the bill. The vote tomorrow
is just whether we can proceed to the bill. All of this is just pre-
debate on whether we are going to proceed to a bill that is so critical
to the future health care in this country.
Mr. SESSIONS. The Senator is exactly correct. I certainly agree, as a
Federal prosecutor--and I prosecuted some physicians and other
professionals in the medical business for bad behavior, but the odd
thing about the way our tort system works, people think the doctor who
gets sued is being punished, but really the doctor has insurance which
he is required to have in order to practice in a hospital--virtually
everybody has to have some, no matter how much it costs--and they do
not end up being punished. Every physician in the community is
punished, are they not? Is that not an odd thing that we are dealing
with in current law?
Mr. ENSIGN. I do not know if the Senator can see this chart--maybe we
can have that chart turned just slightly so the Senator from Alabama
can see it, but it brings up the exact point. The States that have
capped noneconomic damages in the white, California and Colorado,
represented by Los Angeles and Denver, in those States let's go down to
the OB/GYNs, $54,000 in Los Angeles for the annual premiums for the
medical liability insurance, $30,000 in Denver. Go over to New York; it
is almost $90,000; in Las Vegas, $108,000. I guarantee that number in
Las Vegas is old because friends of mine who are OB/GYNs say they are
paying anywhere from $130,000 to $150,000 a year. Chicago, $102,000 and
Miami is over $200,000 a year. The cities in gray, representing the
states in gray, have no tort reform that has been on the books. Nevada
has it but it has not been on the books long enough. It will take 6, 8,
10 years. Los Angeles and Denver have had their laws on the books long
enough to work.
Because they have enacted what we want to do today, we see these
premiums.
I yield the floor.
The PRESIDING OFFICER (Mr. Talent.) The Senator from Alabama.
Mr. SESSIONS. I will share my thoughts. I believe this bill is a good
way to go about at the present time dealing with what is a health care
crisis in America--the surging costs of insurance and liability. I wish
we were not in the Senate having to deal with it. I have some great
friends in the tort business, good lawyers, and they have learned over
the years how to utilize the system to maximize verdicts and maximize
recoveries. They have been successful.
Things have gotten out of sync. They need to be brought into sync. We
can do it a number of different ways. We can do it State by State. The
truth is over half of the medical care in hospitals in America today,
and a very large percentage of what doctors do every day, is paid for
by the Federal Government in Medicaid. It is our tax money. We are
paying it. Part of the need they have for higher pay and higher
reimbursement rates is because of the malpractice insurance they must
pay.
Caps on damages have worked. Last week I was in the small town of
Russellville in Alabama where I practiced law for a year or so. It is
pretty far off the beaten path. A bright young doctor gave me a couple
of ideas about reforming medical care unrelated to this issue. He told
me he had come from California. His premiums in Alabama were
substantially higher, and growing each year, than his colleagues he
left in California. He did not expect that. We have little or no caps.
We have some caps in Alabama, but not the kind in California.
I talked to a physician friend of mine, a wonderful person I go to
church with, Dr. Conrad Pierce, former president of the OB/GYN
Association. And he talked about the $100,000 liability premiums that
OBs pay. He said, Jeff, you can get by in a city if you are delivering
a couple hundred babies a year, but if you deliver 50 or 100 babies,
this is $1,000 per delivery. It represents your health care premium.
That is a big deal.
Mr. ENSIGN. If the Senator will yield, is the Senator aware that, for
instance, in Las Vegas, they are limiting
[[Page S9041]]
the number of babies they are allowed to deliver to 125. What your
friend was talking about is right, they used to deliver 250 to 300. Now
they limit how many they can deliver.
Mr. SESSIONS. That is the result we are dealing with. All kinds of
factors are occurring that are impacting adversely health care as a
result of the premiums.
As my friend pointed out, in some rural areas you only deliver 50 or
60. It is not precisely how many babies delivered by a doctor that
determines the premiums paid. You pay a basic premium if you deliver
any at all. So the low numbers drive out physicians in rural areas who
do not deliver that many babies.
It is a big deal. We have seen medical malpractice insurance jump by
81 percent over the past 2 years alone. It has driven people out of
business.
The Physicians Insurance Association of America shows a fourfold
increase from the period of 1991 to 2002 in the percentage of jury
awards that exceed $1 million. We have a fourfold increase in the
percentage of jury awards that exceed $1 million. Some say the reason
these premiums have gone up is because insurance reserves are not
producing the returns they used to produce. I don't think it is
disputed that we have a substantial increase in the large verdicts
around the country. That does drive the market.
In West Virginia, Charleston Area Medical Center lost its Level I
Trauma Center status, leaving West Virginia University Ruby Memorial
Hospital as the only Level I Trauma Center in the State. The inability
of this facility to find neurosurgeons and orthopedists created a
situation in which critically injured patients had to be medevac'ed out
of the State.
Open the newspaper and you will read of similar crises in
Pennsylvania, Nevada, Mississippi, and other areas. Rural areas are hit
hardest by the increasing costs. This places additional burdens on
those who can least afford it.
In my home State, I was in the town of Atmore, not too far from where
I grew up. The Atmore Community Hospital was forced to close its
obstetrics unit because it could not afford the 282 percent increase in
malpractice insurance from $23,000 to $88,000. When you deliver a
limited number of children, $88,000 is a substantial cost against you.
Now expectant mothers must travel either to the hospital in Brewton, 30
miles away, or to Mobile or Pensacola, FL, an hour away, eliminating
availability of health care.
Another rising crisis in my State has been brought to my attention
involving the nursing home industry. It was a stunning statistic. At
the request of the American Health Care Association, Aon Risk
Consultants conducted an actuarial analysis that found there was a
substantial increase in premiums, an extraordinary increase from 1995
to 2002 for nursing homes, meaning that the cost for settling and
defending malpractice claims increased from $320 a bed in a nursing
home to $4,410 per bed, over a tenfold increase in the insurance
premiums paid. This was first brought to my attention by an individual
I know in my hometown of Mobile who shared those numbers with me. It is
consistent with his personal experience. I was shocked. We are looking
at $4,000 per-bed cost annually for liability insurance per nursing
home bed. That is very significant.
I hope as we go forward we can move beyond obstruction and a
filibuster to be able to offer amendments, if people think they can
make it better, that we can do things that would be realistic and
effective. I think we can do that. This bill has a good core right now.
I intend to support it and I intend to vote for it and I intend to vote
to move it up for debate.
The odd thing about malpractice in America today and the lawsuits
that get filed are, as I suggested to my able friend from Nevada,
Senator Ensign, we think we are punishing doctors who make a mistake
and we sue them for punitive damages. This historically was not a big
part of litigation in America, but in the last 20 or 30 years punitive
damages have become a staple in litigation. If a doctor makes a
mistake, they sue him for the mistake, they sue him for the
compensation, damages, pain and suffering of the patient, and they
invariably add it was done recklessly, wantonly, or without due regard
of care and that he is, therefore, responsible for punitive damages.
Those punitive damages are added on to it as a punishment to that
doctor. But already the doctor in the basic recovery is above the
deductible he had on his insurance policy. He has already paid that out
of his pocket. So whether it is $1 million or $10 million or $500,000
in punitive damages, that is paid for by the insurance system that we
set up. And who pays into that insurance system? All the doctors in the
community.
I absolutely agree with Senator Ensign that we need tighter controls
on physicians by the medical associations, just as I believe--and have
believed for a long time--we need tighter controls by the legal
professional community, of which I have been a part. We do not do
enough there.
But, regardless of that, you are still going to have negligence. You
are still going to have these kinds of recoveries. If not capped, they
continue to shift the payment from the person who did wrong to the
innocent doctors and physicians out there who will all see their
premiums increase substantially.
I have visited hospitals in my State on a regular basis. I visited
probably 30 hospitals in the last 3 or 4 years. I ask them about how
their liability insurance premiums are doing. They tell me they tripled
in the last several years, invariably--more than double consistently,
they tell me, over the last 3 or 4 years. Each one is somewhat
different but the premiums have gone up at an extraordinary rate.
I think this Congress, faced with a demand for improving health care
and health care delivery to more people, and at the same time trying to
do so with contained cost, ought to look at one aspect of the medical
system that produces little or no benefit and that is the amount of
money paid out through this system.
Yes, I do believe that lawsuits make some physicians more careful. I
do think it has led to the altering of practices for better health
care. I do not believe all lawsuits are bad. I do not believe all
recoveries are bad. I think it is good sometimes if physicians get hit
and popped and sent a message. I think the embarrassment of the lawsuit
itself has a substantial impact on this physician and other physicians
in the community. But whether the recovery is $500,000 in punitive
damages, $250,000 or $2 million is not the point. That physician is not
really going to be paying it. The other physicians in the community
will be paying it.
I think we will get the same impact in terms of improving health care
if we allow lawsuits to go forward but we don't allow them to turn into
jackpot justice where one patient, one victim, one injured patient who
sues gets $10 million and another one gets $500,000 or zero for
virtually the same circumstance. Too often that has happened. This is
not a systematic way we are dealing with malpractice in America. And
who is paying for it? John Q. Citizen, the Federal Government, in terms
of Medicare and Medicaid moneys we send out.
I think we can do better. I think this bill is a step in the right
direction. My friend from Illinois is a skilled lawyer. There is no
doubt in my mind his remarks on this bill will represent the best
comments that can be made in opposition to it. But overall I think it
is a net plus. It is the right step to take. We are going to need to do
something about these costs. I do not believe the benefits in improved
health care are anything like the costs that are being incurred by
physicians. They do not consider the amount of care being denied
American citizens as a result of physicians choosing another course.
Finally, I read in the newspaper about Dr. Sumpter Blackman from
Camden, AL, a small town I grew up in of not much more than 1,000
people with a small hospital with about 20-some-odd beds. Dr. Blackman
is the main physician there.
It was reported that he may have to give up his practice; that he
could not get insurance. One of the companies had changed and he was
not able to get other insurance. The rates were extraordinarily high.
He was wondering whether or not he should stay in the business.
I could say to the Members of this Senate, with no doubt, if you took
a poll of the people in Camden, AL, and the environs and asked who was
the
[[Page S9042]]
most important person in that community to them, Dr. Sumpter Blackman
would win that hands down.
He was my mother's physician. He takes care of people there. He knows
them. He is an excellent physician. He is talking about retiring early
as a result of lawsuits. I think this has gone beyond just talk and
debate and big insurance companies and rich companies and poor victims
and doctors. I think it is a health care issue. We cannot afford to
lose people such as Dr. Sumpter Blackman from the medical profession.
He has saved the lives of thousands in his long career there in Camden,
AL, and there are a lot more like him. They are thinking maybe this
business just isn't worth it; I put aside some money and maybe I will
just go off somewhere and do something else and not have to worry about
this and worry about getting insurance.
I yield the floor.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Mr. President, I thank the Senator from Alabama for his
kind words. He and I disagree on many issues but respect one another
very much. I am sure there will be an issue somewhere along the way on
which we agree. We are both waiting, and after 6 or 7 years the day may
come. We will announce it.
Mr. SESSIONS. If the Senator will yield, I think we do agree we need
to work to improve our legal system to make it the best we possibly
can. How do we do that? Sometimes we disagree but I respect the Senator
from Illinois and his skill.
Mr. DURBIN. I consider that a rhetorical question but I respect the
Senator from Alabama.
Let me say there was a statement made earlier by the sponsor of this
legislation that tells the whole story. When he came to illustrate the
savings in malpractice premiums from States with caps and States
without caps, he said to us, I think the Congressional Record will
reflect what I am about to say is accurate, that the reason he only
chose Los Angeles and Denver to illustrate that States with caps lower
malpractice premiums was because it takes a long period of time for the
caps to be reflected in the premiums charged to doctors. In his words,
he said 8 to 12 to 15 years before premiums come down.
I think perhaps he may be right. Perhaps he may not be right. Over a
period of 8 to 15 years it is hard to measure what is going to have an
impact on malpractice premiums. It could be the investment success of
the insurance company as much as a cap or any other thing. But it tells
an important part of the story. If we are facing a medical
malpractice insurance crisis today in America, what is being proposed,
limiting the recovery of medical malpractice victims, putting a cap on
the amount of money they can take home from a lawsuit, is, in fact, not
going to provide relief to doctors or hospitals facing these high
premiums today. In fact, it may be 8, 10, 12, or 15 years, according to
Senator Ensign, the sponsor of this legislation. I think that should
give pause to every Senator who believes they can vote for this
legislation, see it enacted, go home to doctors in their community and
say we have met our obligation. I do not think that is a fact.
There is another side of the story here that is worth at least
pointing to. When I asked the Senator from Nevada why he included more
than just doctors in this bill, more than just hospitals in this bill,
why did he go on to include health care organizations such as insurance
companies, HMOs, managed care organizations, why did he include
pharmaceutical companies, medical device manufacturers, nursing homes,
why are all of them being brought into the debate if our concern is
whether or not there will be enough doctors around to deliver babies,
he basically said we are trying to reduce the cost to the health care
system. I assume if you limited recovery to zero dollars, you could
reduce it even more. This bill limits it to $250,000 in noneconomic
losses. He gave an illustration of the fact that economic losses
include lost wages. Then he went on to say that if a child were injured
and would be unable to be employed, for example for the rest of his
life, they would have to try to make some calculation as to the lost
wages.
I might remind my friend from Nevada that his bill requires objective
verifiable losses. How do you calculate that for a 6-year-old boy, such
as the one I talked about yesterday, who will literally have no work
life, no work experience the rest of his life on Earth? How do you
calculate that in objective verifiable ways, as to his future lost
wages?
The importance of that, of course, is that is only one of two things
he can be compensated for--medical losses as well as loss of income. So
the calculation is very difficult under the exact language of the bill
written by the Senator from Nevada.
I take exception to a comment made during the course of this debate
by my friend from Alabama. He has made this comment before. He referred
to what he called ``jackpot justice.'' He referred to verdicts that
really are of little or no benefit, as he said, to society.
I suggest to him that we have statistics. Virtually both sides
inundated the record with statistics. But these come from the National
Association of Insurance Commissioners. Here is what they tell us.
The number of new medical malpractice claims declined by 4 percent
between 1995 and 2000. During that 5-year period of time, new medical
malpractice claims declined by 4 percent.
If we were talking about a proliferation of claims or lawsuits, the
record suggests it is not the number. But, of course, some will argue
how much is being awarded to those that are being filed. I would
concede that the general awards have gone up. It reflects a number of
things. It reflects inflation in medical care, and the cost of medical
care. Everybody knows that is a fact. The cost of prescription drugs,
the cost of doctors' care, and the costs of hospitals have all gone up.
That is reflected when a verdict or an award is given to someone who
has been injured. You would expect under normal circumstances for a
person who is aggrieved or injured by medical malpractice on a year-to-
year basis to see that award going up, understandably so. But how about
the big awards, ones over $1 million?
According to Business Week, and their March 3, 2003, issue, which I
quoted earlier--Business Week is hardly a liberal publication--in 2001
there were only 895 out of 16,676 payouts exceeding $1 million, about 1
percent. That is up from 506 in 1996.
In a 5-year period of time, the number of awards over $1 million went
from 506 to 895.
From the debate on the floor you would conclude that the number was
much larger.
I take exception especially to a reference to these awards and
settlements in larger numbers as ``jackpot justice.''
I will not bring out the photographs. But earlier I mentioned some of
the people who have been victims of medical malpractice.
Heather Lewinsky of Pittsburgh, PA, a 17-year-old who has gone
through a series of plastic surgeries and will be deformed and scarred
for the rest of her life by medical malpractice--would a verdict in her
case be a jackpot? I don't think so.
Evelyn Babb, a 75-year-old woman from Tyler, TX, went in for a simple
knee surgery and the surgeon operated on the wrong knee. As a result,
this 75-year-old lady lost her mobility and will be suffering with pain
for the rest of her natural life. Would a verdict in her case be
``jackpot justice''?
Sherry Keller from Conyers, GA, a graphic case which I talked about
earlier, a lady who went into her doctor's office after a hysterectomy
and had a terrible situation where her womb was reopened because of
bleeding and she went into shock--the doctor left her alone in the
room, she fell off the examination table striking her head as she fell
to the floor, eventually leading to a situation of being a
quadriplegic. If she received an award, this mother and homemaker, of
$500,000, has she hit the jackpot?
I don't think so.
Colin Gouley from Nebraska came with his family to see us today. This
little 9-year-old boy, whose life has been compromised dramatically,
will have a difficult time doing things we pray that every child can
do, such as read, write, engage in conversation, walk, and run. He will
never have that chance. A jury in Nebraska thought that his damages
from malpractice committed against him was worth
[[Page S9043]]
more than $5 million. So did Colin Gouley hit the jackpot with a $5
million verdict if he has a lifetime of being in a wheelchair because
of medical malpractice? Is this ``jackpot justice''?
Kim Jones, 30 years old, went in for a simple tubal ligation and
ended up in a comatose state in a nursing home for the rest of her
life. Is an award in her case a jackpot? Did she hit it big if they
gave her enough money for someone to care for her the rest of her life?
Frankly, she will never be able to care for her daughter again.
Or Alan Cronin, 42 years of age, who went into a hospital in
California for a routine hernia surgery and ended up with an infection
so serious that it lead to gangrene in all of his limbs and amputation
of both arms and legs--Alan Cronin, would he be the winner of a jackpot
if those who were responsible for his losing his arms and his legs had
to pay and compensate him not only for his medical bills and lost wages
but also for his pain and suffering?
That is the part of the calculation which those who bring the bill to
the floor have not spoken of. They talked about the challenges facing
doctors. We conceded that. In some areas of the country, malpractice
insurance is too high. Don't overlook what this bill does. It closes
the door and removes the jury from the decision about fair compensation
for people who have been injured through no fault of their own.
That is why I think those who are pushing this bill will probably be
unsuccessful tomorrow. People on this side of the aisle, and
Republicans as well, believe this bill, S. 11, goes too far. This is
excessive. This is not setting out to simply solve the problem. This is
setting out to make a political point--that we are going to go after
those who would be so bold as to file a lawsuit.
In the pages of this bill, you will see a limitation on what
attorneys can be paid if they represent one of these clients or one of
these patients I have mentioned--people who have lost their limbs,
people who are no longer able to function as normal human beings. If
they go to hire a lawyer to represent them in a case of malpractice,
this law will restrict how much their lawyer can be paid.
If you believe in justice, wouldn't you also argue that those who
defend the doctors and defend the hospitals should have their
attorney's fees limited as well? Wouldn't that be fair? Isn't that
justice with a blindfold? No. The blindfold is raised on one side. It
is a wink and a nod to the defense industry representing the doctors
and the hospitals. But when it comes to these poor people with limited
economic resources fighting for compensation for injuries that are no
fault of their own, this bill limits the amount of money that can be
paid to those lawyers.
I will tell you that without the contingency fee system, most of
these poor people I have described today will never ever have their day
in court. No attorney will be able to represent them.
Do you recall not too many months ago that sad story in North
Carolina, I believe at a major university, where there was supposed to
be a heart-lung transplant and they mistakenly brought the wrong blood
and tissue type organs to be transplanted and a mistake was made? It
was clearly not the mistake of the family or the little girl who was
involved. Discovering this error, they tried to implant an additional
set of organs--heart and lung--to save her after this serious mistake
was made.
I can tell you that this little girl, who sadly died because of that
malpractice, would have recovered little or nothing for that wrongful
death under this legislation.
Where do you point to in terms of lost wages for a little girl who
died during the course of the surgery? Where is the pain and suffering
in a wrongful death lawsuit? Yet that is what it comes down to.
Those sponsors of this bill are prepared to close the courthouse door
and say that for her family, they do not have the opportunity to get a
lawyer because the contingency fee is limited, and once they have that
lawyer there is little or nothing they can recover despite clear
evidence of medical malpractice.
That isn't fair. It isn't American. It isn't just. We are talking
about rewarding people who have been seriously and egregiously injured.
I hope my colleagues will join me tomorrow in voting against the
motion for cloture. We should not proceed to this bill. This bill
should proceed to a committee. It should go to a committee for a long
period of study of compromise, of amendment, of a good-faith effort on
both sides involving the medical profession, and the insurance industry
which gets a windfall from this bill, as they do virtually every bill
that comes through here, as well as the legal profession; and a bill
that will end up in a resolution of the problems facing our doctors and
medical providers whom we value very much, but I don't believe they
would stand behind such a product that is so fundamentally unfair.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BROWNBACK. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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