[Congressional Record (Bound Edition), Volume 148 (2002), Part 11]
[Senate]
[Pages 14893-14909]
[From the U.S. Government Publishing Office, www.gpo.gov]




        GREATER ACCESS TO AFFORDABLE PHARMACEUTICALS ACT OF 2001

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
return to legislative session and resume consideration of S. 812, which 
the clerk will report.
  The legislative clerk read as follows:

       A bill (S. 812) to amend the Federal Food, Drug, and 
     Cosmetic Act to provide greater access to affordable 
     pharmaceuticals.

  Pending:

       Reid (for Dorgan) amendment No. 4299, to permit commercial 
     importation of prescription drugs from Canada.


                Amendment No. 4326 to Amendment No. 4299

         (Purpose: To provide for health care liability reform)

  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, I am about to send to the desk an 
amendment. I understand from discussions with the other side, we will 
be allowed to vote on or in relation to this amendment sometime Tuesday 
morning, with the time prior to that equally divided. I say to my 
friend from Nevada, what was he thinking of, a couple of hours equally 
divided on Tuesday morning before the vote or in relation thereto?
  Mr. REID. I say to my friend, we will probably come in at about 9:30, 
have an hour of morning business, with the vote to occur around noon, 
which would allow us to do our party conferences. So I suggest 90 
minutes equally divided.
  Mr. McCONNELL. That would certainly be agreeable to me. I thank the 
assistant majority leader.
  Mr. REID. Staff is putting that in writing. Before the day is out, we 
will try to iron out something like that. We will get it worked out 
between the two leaders.
  Mr. McCONNELL. I send an amendment to the desk and ask for its 
consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Kentucky [Mr. McConnell] proposes an 
     amendment numbered 4326 to amendment No. 4299.

  Mr. McCONNELL. Mr. President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  Mr. DURBIN. Reserving the right to object, and I will not object, if 
the Senator could give me a copy of his amendment.
  Mr. McCONNELL. I say to my friend from Illinois, I will be happy to 
do that. Of course, it will be out there from now until Tuesday morning 
so people will have ample opportunity to take a look at it. As soon as 
the clerk can Xerox a copy, I am sure he will be glad to give it to the 
Senator from Illinois.
  Mr. DURBIN. I do not object.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under ``Text 
of Amendments.'')
  The PRESIDING OFFICER. Who yields time?
  The Senator from Kentucky.
  Mr. McCONNELL. The Senate last voted on the issue of medical 
malpractice back in 1995. It was an amendment I offered at that 
particular time.

[[Page 14894]]

There were 53 votes in support of the amendment, including Senators 
Feinstein and Lieberman on the Democratic side who are still Members of 
the Senate. In addition, Senator Nunn, Senator Exon, and Senator 
Jeffords also supported that medical malpractice amendment back in 
1995, which was, as I said, the last time we had a vote on this issue.
  I will briefly describe what the amendment at the desk would do, and 
then I want to talk for a few minutes about the growing crisis. I know 
Senator Hatch is anxious to speak on judges, but I do want to at least 
describe what the amendment does and make a few observations about the 
growing crisis in the country.
  First, let me make it clear that the amendment at the desk is pro-
victim and pro-consumer. This amendment does not cap noneconomic--that 
is, pain and suffering--damages at all, not one penny. So compensatory 
damages--economic as well as pain and suffering--those kinds of damages 
are not in any way adversely impacted by a cap under the McConnell 
amendment.
  We do place reasonable caps on lawyers' fees. By doing so, it ensures 
that the injured victim, not the victim's lawyer, gets the majority of 
the award. After all, that is only fair. It is the victim who has 
suffered the injury and not the lawyer.
  This amendment also allows punitive damages, even though we know, all 
of us who understand punitive damages, that they are not designed to 
enrich the plaintiff but, rather, to punish the defendant. We allow 
punitive damages under a cap, a reasonable limit of twice compensatory 
damages. So no limits on compensation for pain and suffering, but a 
limit on punitive damages of twice compensatory damages, twice the 
economic and noneconomic damages.
  Essentially, what we are doing is guaranteeing the injured victim 
full compensation. In addition to guaranteeing the injured victim full 
compensation, we are also ensuring that they get more of the money to 
which they are entitled by providing a reasonable cap on the fee for 
the lawyer. In order to bring some certainty to the system and drive 
the costs of insurance down, the amendment caps punitive damages at 
twice the sum of the compensatory damages awarded. It provides some 
certainty. This is a very pro-victim, pro-consumer amendment.
  When we voted on this back in 1995, one of the arguments made, I 
recall, was that there was no crisis, what is the problem? Frankly, we 
thought it was a growing crisis at that point. Today, it is a perfectly 
apparent crisis. The Nevada Governor has called a special session 
beginning Monday on this very issue. This crisis is sweeping the 
country.
  We have a map that I think is useful. The red States are States that 
are currently experiencing a medical liability crisis; States such as 
Nevada that I mentioned, the State of Washington, the States of Oregon, 
Texas, Mississippi, Georgia, Florida, and the cluster in the 
Northeast--New York, Pennsylvania, West Virginia, and Ohio. My own 
State of Kentucky is a State with problem signs.
  To give an example, we have doctors moving to Indiana, across the 
Ohio River, because Indiana has reasonable caps on recovery, and 
therefore they do not have a medical malpractice crisis and the doctors 
are not bailing out. In States that have enacted a reasonable approach, 
the crisis does not exist.
  Another interesting chart gives a sense of what has happened since we 
last voted on this issue in 1995. The median jury award then was around 
$500,000; today it has gone up to $1 million. I don't think anybody 
believes that doctors and nurses and health care professionals are any 
more negligent today than they were then. I don't suppose anyone would 
suggest there has been some kind of dramatic deterioration in their 
behavior over the last 7 years, but in fact the awards have gone up 
dramatically, and of course, as we know, the insurance rates along with 
it, leading to an exodus from this field across America. The crisis has 
arrived. It is here.
  To give an example from my own State, a few weeks ago in Corbin, KY, 
the Corbin Family Health Center was forced to shut the doors because 
the doctors were unable to find an affordable insurance policy. Dr. 
Richard Carter and his four colleagues deliver about 250 babies a year 
and have never lost a malpractice claim. Yet when their insurance 
company, the St. Paul Companies, decided to leave the medical 
malpractice business, the Corbin Family Health Doctors lost their 
coverage--a group that had never lost a claim. The remaining few 
insurance companies that were willing to provide coverage were only 
willing to do so for $800,000 to $1 million, a whooping 465 percent 
increase.
  This is going on all across America. Tuesday we will have an 
opportunity to elaborate. There are a number of Senators on my side of 
the aisle who want to speak to this national crisis.
  I retain the remainder of my time.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, this amendment has nothing to do with the 
price of prescription drugs, the cost of health care, or even the 
insurance premiums of doctors. It has everything to do with the profits 
of the insurance industry. At a time when Americans want greater 
corporate accountability, in this time of Enron, WorldCom, and other 
corporate scandals, it is unbelievable that our Republican friends cozy 
up to big insurance corporations to give them a break.
  Let me remind my colleagues that the legislation before the Senate is 
about the high price of prescription drugs and providing a Medicare 
prescription drug benefit. Now the Republican side is trying to divert 
attention from this important debate by offering this amendment. It is 
an attack on the very people the underlying legislation was designed to 
help, those in need of quality medical care.
  The McConnell amendment is designed to shield health care providers 
from the basic accountability for the care they provide. While those 
across the aisle like to talk about doctors, the real beneficiaries 
will be the insurance companies. This amendment enriches the insurance 
industry at the expense of the most seriously injured patients--men and 
women and children whose entire lives have been devastated by medical 
negligence and corporate abuse. This proposal also shields HMOs that 
fail to provide needed care, drug companies with medicine that has 
toxic side effects, and manufacturers of defective medical equipment.
  In recent months, the entire Nation has been focused on the need for 
greater corporate accountability. The McConnell amendment does the 
reverse. It dramatically limits the financial responsibility of the 
entire health care industry to compensate injured patients for the harm 
they have suffered. When will the Republican Party start worrying about 
injured patients and stop trying to shield big business from the 
consequences of its wrongdoing? Less accountability will never lead to 
better health care.
  This amendment places major new restrictions on the right of 
seriously injured patients to recover fair compensation for their 
injuries. These restrictions only serve to hurt those patients who have 
suffered the most severe, life-altering injuries, and to have their 
cases proven in court. If we were to arbitrarily restrict the 
compensation which seriously injured patients can receive, as the 
sponsor proposes, what benefits would result? Certainly, less 
accountability for health care providers will never improve the quality 
of health care. It will never even result in less costly care.
  The cost of medical malpractice premiums constitutes less than two-
thirds of 1 percent. Do we understand that? The cost of medical 
malpractice premiums constitutes two-thirds of 1 percent of the 
Nation's health care expenditures each year. Malpractice premiums are 
not the cause of the high rate of medical inflation.
  Over the decade from 1988 to 1998, the cost of medical care rose 13 
times faster than the cost of malpractice insurance. This chart 
reflects that: The growth of health care costs plus 74 percent; and the 
medical malpractice costs, 5.7 percent.

[[Page 14895]]

  These restrictions are not only unfair to patients but an effective 
way to control medical malpractice claims. There is scant evidence to 
support the claim that enacting limits will lower insurance rates. 
There is substantial evidence to the contrary. There are other much 
more direct, effective ways to address the costs of medical malpractice 
insurance that do not hurt patients.
  The supporters of the McConnell amendment have argued that 
restricting an injured patient's right to recover fair compensation 
will reduce malpractice premiums. They cite a report released just 
yesterday by the Department of Health and Human Services. However, that 
data is neither comprehensive or persuasive. It looks at only 10 of the 
27 States that do not currently have a cap on malpractice damages, and 
it looks at the rate of increase in those States for only 1 year. In 
essence, that report cherry-picks the data to support a politically 
preordained conclusion.
  Let's look at the facts: 23 States currently have a cap on medical 
malpractice damages. Most have had those statutes for a substantial 
number of years. And 27 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 the data of medical liability monitored on all 50 
States, the average liability premium in 2001 for doctors practicing 
internal medicine was slightly less, 2.2 percent for doctors in States 
without caps on malpractice, $7,715; and in States with caps on 
damages, $7,887. Internists actually pay more for malpractice insurance 
in the States that have the caps.
  The average liability premium in 2001 for general surgeons was also 
slightly less. For doctors in States without caps, $26,144; in States 
with caps, it was $26,746. Surgeons are also paying more in States that 
have caps.
  The average liability premium on OB/GYN physicians in 2001 was only 
3.3 percent more for doctors in States without caps, $44,485; and 
States with caps, $43,000--a very small difference.
  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 bigger 
profits.
  This chart over here indicates the States without the cap on damages, 
States with a cap on damages. I think the proof is in the pudding.
  Since malpractice premiums are not affected 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 the States that do 
not. Do we understand that? We are talking about comparing the number 
of available physicians between the States that do have caps and the 
States that do not. AMA data show 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 of obstetrics and gynecology, 
States without caps have 29 OB/GYNs per 100,000 while States with caps 
have 27.4 per 100,000. Clearly, there is no correlation.
  California, the State that has the lowest caps the longest, set a 
$250,000 cap on noneconomic damages in the mid-1970s, which has not 
been adjusted for inflation since. If the tort reformers are correct, 
you would expect California to have had a smaller percent of growth in 
premiums since those caps were enacted. Between 1991 and 2000, premiums 
in California actually grew more quickly, 3.5 percent, than did the 
premiums nationwide.
  The State with the caps shows the malpractice insurance actually went 
up.
  If this amendment were to pass, it would sacrifice fair compensation 
for injured patients in a vain attempt to reduce medical malpractice 
premiums. Doctors would not get the relief they are seeking. Only the 
insurance companies, which created recent market's instability, would 
benefit.
  Even supporters of the industry acknowledge that enacting tort reform 
will not produce lower insurance premiums.
  Sherman Joyce, the president of the American Tort Reform Association, 
told the Liability Week publication:

       We wouldn't tell you or anyone that the reason to pass tort 
     reform would be to reduce insurance rates.

  This is the president of the American Tort Reform Association, 
telling Liability Week:

       We wouldn't tell you or anyone that the reason to pass tort 
     reform would be to reduce insurance rates.

  Victor Schwartz, the association's general counsel, told Business 
Insurance:

       . . . many tort reform advocates do not contend that 
     restricting litigation will lower insurance rates and ``I've 
     never said that in 30 years.''

  The American Insurance Association even released a statement earlier 
this year, March 13, 2002, acknowledging:

       [T]he insurance industry never promised that tort reform 
     would achieve specific premium savings.

  Listen to that. The American Insurance Association even released the 
statement on March 13:

       [T]he insurance industry never promised that tort reform 
     would achieve specific premium savings.

  A National Association of Insurance Commissioners study shows that in 
2000, the latest year for which data is available, 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? The insurance industry commissioners are 
now saying that the insurance industry profits, as a percentage of 
premiums for medical malpractice, are twice as high as overall casualty 
and property insurance profits.
  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 high profit margins despite sharply declining 
investment earnings.
  Insurance industry practices are responsible for the sudden, dramatic 
premium increases which have occurred in some States in recent months. 
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 recent months in a number of insurance lines, not just medical 
malpractice. In 2001, rates for small commercial accounts have gone up 
21 percent, rates for midsize commercial accounts have gone up 32 
percent, and rates for large commercial accounts have gone up 36 
percent. These increases were attributable to general economic factors 
and industry practices, not medical liability tort law.
  Insurers make much of their money from investment income. During the 
time when investments offer a high profit, companies compete fiercely 
with one another for market share. They often do so by underpricing 
their plans and insuring poor risks. When investment income dries up 
because interest rates fall, the stock market declines, or cumulative 
price cuts lower profit, the insurance industry then attempts to 
increase its premiums and reduce its coverage. This is a familiar cycle 
which produces a manufactured crisis each time their investments turn 
downward.
  For example, St. Paul, one of the largest medical malpractice 
insurers, which has been experiencing serious financial difficulties 
lately, actually released $1.1 billion in reserves between 1992 and 
1997 to enhance its bottom line and make those dollars available for 
investment. Some of the company's investments did not go well. It lost 
$108 million in the collapse of Enron alone. When claims became due, 
those reserves were not available to pay them.
  A recent study of the Consumer Federation of America, presented at a 
hearing of the Health Subcommittee of the House Committee on Energy and 
Commerce last week, documented this industry's trend:

       It is the hard insurance market and the insurance 
     industry's own business practices that are largely to blame 
     for the rate shock that physicians have experienced in recent 
     months.


[[Page 14896]]


  The Consumer Federation's findings are highly enlightening:

       Medical malpractice rates are not rising in a vacuum. 
     Commercial insurance rates are rising overall. The rate 
     problem is caused by the classic turn in the economic cycle 
     of the industry, sped up--but not caused--by terrorist 
     attacks. Insurers have underpriced malpractice premiums over 
     the last decade. It would take a 50 percent hike to increase 
     inflation-adjusted rates to the same level as 10 years ago. 
     Further limiting patients' right to sue for medical injuries 
     would have virtually no impact on lowering overall health 
     care costs. Medical malpractice insurance costs as a 
     proportion of the national health spending are minuscule, 
     amounting to less than 60 cents per hundred dollars spent. 
     Insurer losses for medical malpractice have risen slowly in 
     the last decade by just over the rate of inflation. 
     Malpractice claims have not exploded in the last decade. 
     Closed claims, which include claims where no payout was made, 
     have remained constant, while paid claims have averaged just 
     over $110,000. Medical malpractice profitability over the 
     last decade has been excellent, at just over 12 percent per 
     year despite a decline in profits in the last 2 years.

  That is the profit they have been making over the last decade.
  This analysis of why we are seeing a sudden spike in premiums was 
basically confirmed by a June 24, 2002, Wall Street Journal article 
describing what happened to the malpractice insurance industry during 
the 1990s:

       Some of these carriers rushed into malpractice coverage 
     because an accounting practice widely used in the industry 
     made the area seem more profitable in the early 1990s than it 
     really was.

  Does that have a ring to it, Mr. President? Carriers rushing in 
because an accounting practice widely used in the industry made the 
area seem more profitable in the early 1990s than it really was? And 
now we are going to take it out on the individuals who are most 
vulnerable and most severely hurt in our society?

       A decade of shortsighted price slashing led to industry 
     losses of nearly $3 billion last year.

  I continue the quote from the Wall Street Journal:

       I don't like to hear insurance company executives say it's 
     the tort system--it's self-inflicted--says Donald Zuk, chief 
     executive of SCPIE Holdings, Inc., a leading malpractice 
     insurer in California.

  This is what he said:

       I don't like to hear insurance companies say it's the tort 
     system--it's self-inflicted. . . .

  Zuk then continues:

  Then it continues:

       The losses were exacerbated by carriers' declining 
     investment returns. Some insurers had come to expect that big 
     gains in the 1990s from their bond and stock portfolios would 
     continue, industry officials say. When the bull market 
     stalled in 2000, investment gains that had patched over 
     inadequate premium rates disappeared.

  Let's look back at the type of severely injured patients who would be 
denied fair compensation under the McConnell amendment. These are the 
people who are being asked by those across the aisle to pay for the 
mismanagement of the insurance industry and the wrongdoing of health 
care providers:
  Leyda Uuam--from Massachusetts--underwent surgery to correct a 
protruding belly button when she was 5 weeks old. Leyda will never 
walk, talk, move, or have any normal function after she suffered brain 
injury due to a series of errors by anesthesiologists, nurses, and a 
transport team.
  When Mrs. Oliveira's unborn baby showed fetal distress her doctor 
failed to perform a timely caesarean birth as common sense would 
indicate. Instead, he attempted a forceps delivery. When this didn't 
work, he made three attempts at vacuum extraction, which were also 
unsuccessful. A different physician then attempted a second forceps 
delivery, which also failed. Finally, Olivera underwent a caesarean 
section, yet her son died within an hour of his birth. An autopsy 
report identified the cause of death asphyxia. The hospital, in an 
attempt to cover its negligence, amended the report falsely, listing 
the cause of death as probably fetal sepsis.
  Twelve year-old Steven Olsen is blind and brain damaged today because 
of medical negligence. When he was hiking, he fell on a stick in the 
woods. The hospital refused his parents' request for a CAT scan, and 
instead pumped Steven full of steroids and sent him home with a growing 
brain abscess. The next day, Steven Olson became comatose and wound up 
back in the hospital. Had he received the $800 CAT scan, which would 
have detected the brain mass growing in his skull, Steven would be 
perfectly healthy today. The jury awarded Steven $7.1 million in non-
economic damages for his life-sentencing of serious illness and 
disability.
  Harry Jordan, as man from Long Beach, underwent surgery to remove a 
cancerous kidney. The surgeon took out his healthy kidney instead. 
Jordan had been living for years on 10 percent kidney function, and he 
is now no longer able to work.
  Elizabeth, a former fashion model, went to the emergency room 
complaining of nausea, vomiting, and ``the worse headache of her 
life.'' The doctor misdiagnosed her as having an acute neck sprain and 
sent her home. Unfortunately, he failed to diagnose her symptoms as the 
warning leak of a brain aneurysm even though he had written a textbook 
which included an entire chapter on warning leaks. Ten days after her 
hospital visit, Elizabeth's aneurysm ruptured and she had a stroke. The 
bleeding destroyed brain tissue, requiring the removal of \1/3\ of the 
frontal lobe of her brain. Elizabeth was left paralyzed as a result of 
her misdagnosed aneurysm.
  Philip Lucy's nasal cancer was misdiagnosed by doctors as high blood 
pressure and nerve damage for 2 years, although he continued to 
complain of pain. It was finally discovered that his left sinus was 
completely filled with a cancerous mass. This necessitated the removal 
of his left palate, left cheek, left orbit and his left eye.
  LeVern Dostal, a recent retiree, died a slow and painful death after 
her surgeon failed to give her antibiotics before her gallbladder 
surgery. She developed sepsis and was hospitalized for a lengthy period 
of time, during which she underwent 3 more surgeries, as her condition 
slowly deteriorated.
  Ms. Keck, 63, was admitted to the hospital for pneumonia. She 
sustained brain injuries because a nurse failed to monitor her oxygen 
level as instructed, and failed to notify the doctors of her worsening 
condition. She now suffers from paralysis and cannot speak. The 
hospital was purposefully understaffed to increase profits.
  As we debate this amendment, let us all remember that we are dealing 
with people's lives--many of them have suffered life-altering injuries 
as a result of substandard medical care. The law is there to protect 
them, not to shield those who caused their injuries.
  I hope the Senate will not accept the McConnell amendment for the 
reasons I have outlined. As we have seen on so many different 
occasions, the neediest, the youngest, and the most vulnerable 
individuals in our society are often those who suffer the greatest 
kinds of neglect and negligence.
  If we are going to have accountability in our society, we ought to 
have accountability.
  One of the extraordinary things I heard was yesterday during the 
President's statement in North Carolina when he talked about 
accountability by victims, but not accountability by the insurance 
companies and not accountability by the others--not accountability by 
others even in the corporate world but accountability by 
schoolchildren. If they are not able to learn and be successful, then 
they are not included in terms of the completion of their studies. And 
now they are being held accountable. We are not getting the resources 
for them in order to give them the fair chance.
  It seems to me we are being asked to protect the strongest elements 
in terms of our society. We have seen that during the course of this 
whole debate. Now we see it with regard to an amendment to protect the 
insurance companies. When we look at any piece of legislation, we 
should ask: Who is going to benefit, and who is going to lose? The 
answer is very simple with this amendment. The people who are going to 
benefit are going to be the insurance companies themselves, and the 
people who are going to pay the price are going to be our most 
vulnerable in our society who need our protection.
  The PRESIDING OFFICER (Mr. Corzine). The Senator from Kentucky.

[[Page 14897]]


  Mr. McCONNELL. Mr. President, I listened with interest to the speech 
of my good friend from Massachusetts, although I must say that it must 
have been drafted to address a different amendment other than the one 
the Senator from Kentucky sent to the desk. None of the victims that 
Senator Kennedy recounted would have lost a penny of economic or 
noneconomic damages under the amendment that is at the desk--not a 
penny. We don't cap either pain and suffering, or economic damages. 
There is no cap at all.
  I did not hear my friend from Massachusetts talk about the legal 
fees.
  Let us go back and take a look at what this amendment does before 
yielding to my friend, the only doctor in the Senate, to address this 
issue.
  This is a pro-victim amendment. There are no caps on economic and 
noneconomic damages in this amendment. Two things are capped: Punitive 
damages, which are designed to punish the defendant and not enrich the 
plaintiff, are capped at twice the rest of the damages. There is a very 
reasonable cap on attorney's fees. And the reason for that is the 
plaintiffs--the victims--the senior Senator from Massachusetts is 
talking about are only getting about 52 percent of the money. Those 
grievously injured parties are not getting enough of the awards.
  Let us in this debate talk about the amendment that is before us--not 
the amendment that might have been before us.
  The AMA supports the amendment--frankly, somewhat tepidly. They would 
like to go further. But the AMA does support my amendment. Obviously, 
they think it would make a difference in being able to continue to 
provide health care for our American citizens.
  Mr. President, the amendment I offer would make needed reforms to 
medical malpractice litigation.
  There are few challenges facing this body that are more complex than 
improving the quality and affordability of health care in America. This 
week, we will have debated competing proposals to expand Medicare and 
create a prescription drug benefit. Over the past year, the Senate has 
passed legislation to strengthen our Nation's defenses against the 
threat of bioterrorism and provide new resources to the researchers at 
the National Institutes of Health, NIH. While all of these proposals 
are worthy of this body's consideration, the Senate has not yet 
addressed one of the fundamental problems limiting the accessability 
and affordability of quality care: reforming our Nation's flawed 
medical malpractice system.
  These reforms are essential to ensuring that quality health care is 
available and affordable to all Americans. After all, what good is a 
Medicare drug benefit if you can't find a doctor to write a 
prescription or a pharmacist to fill it? Our current medical 
malpractice system encourages excessive litigation, drives up costs, 
and literally scares care-givers out of the medical profession. All too 
often, these lawsuits result in exorbitant judgements that benefit 
personal injury lawyers more than they compensate injured patients.
  Enacting reasonable medical malpractice reforms will reduce health 
care costs and improve access to care, while allowing legitimate 
victims full access to the courts. My amendment would take a modest, 
but important, first step at reforming this flawed medical malpractice 
system in a manner which I believe will attract significant bipartisan 
support.
  I have long championed strong, medical malpractice reform 
legislation. I believe debate on the Greater Access to Affordable 
Pharmaceuticals Act, provides us not only the opportunity, but the 
obligation, to enact meaningful malpractice reforms.
  Much like the issue of a Medicare drug benefit, medical malpractice 
reform is not a new topic for the Senate. During debate on the Product 
Liability Fairness Act of 1995, I offered an amendment to enact 
reasonable reforms to our Nation's medical malpractice laws. After 
debating the amendment for several days, I was proud to have the 
support of 53 Senators and my amendment was agreed to by the Senate. 
Among those 53 supporters were some prominent Democrats and 
Independents: Senators Lieberman, Feinstein, Jeffords, Nunn and Exon.
  Today I offer the same amendment the Senate agreed to in 1995. For 
the benefit of my colleagues who have joined the Senate since we last 
debated this issue, my amendment would do the following: The McConnell 
amendment would limit punitive damages to two times the sum of 
compensatory damages, economic and non-economic. This provision would 
help end the litigation lottery, where punitive damages are awarded out 
of all proportion to the underlying conduct. The threat of being 
unreasonably held responsible for millions and millions of dollars in 
damages hangs like the sword of Damocles over the heads of our medical 
professionals.
  My amendment would eliminate joint liability for non-economic and 
punitive damages. As a result, defendants would only be liable for 
their own proportionate share for the harm that occurred. It is unfair 
for an injured person to be found 99 percent liable for his injury, and 
his doctor to responsible for only 1 percent, yet the doctor has to pay 
for all of the damages.
  The amendment places modest limits on attorneys' contingency fees in 
medical malpractice cases. Specifically, the amendment would only allow 
personal injury lawyers to collect 33 percent of the first $150,000 of 
an award and 25 percent of the award on all amounts above $150,000.
  My amendment encourages States to develop alternative dispute 
resolutions mechanisms to help resolve disputes before they go to 
court.
  As I noted earlier, the amendment I offer today is the same one that 
the Senate agreed to in 1995. Unfortunately, as we all know, it is 
impossible to pass contentious legislation in this body without the 60 
votes necessary to invoke cloture. Therefore, in the interests of 
preventing a filibuster against the larger product liability bill, I 
withdrew my medical malpractice amendment, and it has never been signed 
into law.
  In 1995, the Senate considered our medical malpractice system to be 
so flawed that it required the Federal Government to enact these exact 
reforms. In the period since then, the system has gotten dramatically 
worse, not better.
  I might not be so passionate about enacting medical malpractice 
reforms if these lawsuits were an accurate mechanism for compensating 
patients who had been truly harmed by negligent doctors. Unfortunately, 
the data shows just the opposite. In 1996, researchers at the Harvard 
School of Public Health performed a study of 51 malpractice cases which 
was published in the New England Journal of Medicine. In approximately 
half of those cases, the patient had not even been harmed, yet in many 
instances the doctor settled the matter out of court, presumably just 
to rid themselves of the nuisance. In the report's conclusion, the 
researchers found that, ``there was no association between the 
occurrence of an adverse event due to negligence or an adverse event of 
any type and payment.'' In everyday terms, this means that the 
patient's injury had no relation to whether or not they received 
payment in their malpractice case.
  While the research showing that litigation's effectiveness at 
compensating the injured hasn't stopped the personal injury lawyers 
from rushing to the courthouse to file more lawsuits, the jackpots in 
the personal injury lawyers' litigation lottery have increased 
dramatically since we considered this issue in 1995. As my first chart 
shows, the Jury Verdict Research Service reports that the median award 
made by a jury has more than doubled since 1996, from $474,000 to 
$1,000,000 in 2000. Not surprisingly, the increase in jury awards has 
led to a similar increase in the dollar value of settlements reached 
out of court. Since 1995, the median settlement has increased from 
$350,000 to $500,000 in 2000.
  These escalating settlements might make one wonder, ``Are our 
doctors, nurses and hospitals twice as negligent as they were just 6 
years ago?'' The answer is, of course, no: the doctors

[[Page 14898]]

haven't gotten worse, but the system has. In fact, plaintiffs only won 
38 percent of the medical malpractice claims that went to trial, 
essentially the same as it was in 1995, 35 percent.
  I think this bears repeating. In 1995, the Senate considered our 
medical malpractice system to be so flawed that it required the federal 
government to enact limits on the contingency fees charged by personal 
injury lawyers and punitive damages. In the period since then, the 
system has gotten worse, not better.
  This litigation explosion is manifested in the premiums which doctors 
pay for their malpractice insurance. In the 7 years since we last 
debated medical malpractice reform on the Senate floor, doctors on Main 
Street USA have seen dramatic increases in their insurance premiums. 
Since 1995, obstetricans, OB-GYN's, have seen their premiums increase 
an average of almost 12 percent a year, each and every year. The same 
is true for the general surgeons who have seen their malpractice 
premiums increase 13 percent each year. Let me be perfectly clear, I am 
not talking about a thirteen percent increase over seven years, these 
premiums are increasing 13 percent every year.
  This may make people wonder, ``Why should I care about how much 
doctors pay for malpractice insurance premiums?'' The answer is access. 
Doctors are less likely to provide those services for which they are 
likely to be sued.
  This is particularly true in rural areas of this Nation. While many 
doctors are willing to set up practices in rural areas, they cannot 
forgo malpractice insurance. Therefore, many doctors are forced to 
establish practices in more urban and suburban areas where they can 
earn the fees necessary to cover their malpractice premiums.
  This has certainly been the case in Kentucky this year. Just a few 
weeks ago, the Corbin Family Health Center in Corbin, KY was forced to 
shut its doors because its doctors were unable to find an affordable 
insurance policy. Dr. Richard Carter and his four colleagues at Corbin 
Family Health deliver about 250 babies a year and have never lost a 
malpractice claim. Yet when their insurance company, The St. Paul Cos., 
decided to leave the medical malpractice business, Corbin Family 
Health's doctors lost their coverage. The remaining few insurance 
companies that were willing to provide coverage will only do so for 
$800,000 to $1 million a whopping 465 percent increase.
  This is a tragedy. Fifty of the clinic's patients are due to give 
birth in the next 2 months, and 130 more are due by the end of this 
year.
  Fortunately for the families of Corbin, KY, the clinic's doctors were 
able to secure coverage last week, and the clinic reopened. However, 
their premium is twice what they paid previously. In addressing his 
clinic's predicament, the clinic's director, Steven Sartori, noted, 
``Even though you're relieved, it's not over because this malpractice 
problem is not going to go away . . . There's more doctors who are 
going to be in the same predicament I was in.''
  This problem is not limited to Kentucky. On July 1 of this year, 
Atmore Community Hospital in Atmore, AL, was forced to close its 
obstetrics program because it could not afford the 282 percent increase 
in malpractice insurance from $23,000 to $88,000. Now, expecting 
mothers must travel either to the hospital in Brewton, AL, 30 miles 
away, or to the big city hospitals in Mobile or Pensacola. That's more 
than an hour and a half drive.
  Nor is the problem limited to the South. The administrators at Copper 
Queen Community Hospital in Brisbee, AZ were recently forced to close 
their maternity ward because their family practitioners were looking at 
a 500 percent premium increase. Expectant mothers must now travel more 
than 60 miles to the closest hospital in Sierra Vista or Tucson. 
According to a recent article in Forbes magazine, four women have since 
delivered babies en route.
  In New Jersey, the director of Obstetrics and Gynecology at Holy Name 
Hospital was forced to lay off six employees from his practice when his 
malpractice premiums doubled. He told the New York Times ``The issue 
is, we can't stay open. It's going to restrict access to care. It's 
going to change the way OB is delivered to the population, and they're 
not going to like it.''
  While our flawed medical malpractice system may be hitting 
obstetricians particularly hard, it is negatively impacting nearly 
every aspect of the medical profession. Many radiologists in Georgia 
are no longer reading mammograms, Atlanta Business Chronicle, 6/21/
2002, because of the liability associated with the service. These 
lifesaving mammograms may only make up 5 percent of a radiologist's 
practice, but are responsible for a whopping 75 percent of their 
insurance liability. Officials at Memorial Hospital and Manor in 
Bainbridge, GA faced a staggering 600 percent increase in premiums 
despite a ``nearly spotless claims history,'' Modern Healthcare, 
4/1/2002.
  However, no one should be fooled into thinking that this medical 
malpractice crisis is limited to the small hospitals of rural America. 
Perhaps the most publicized case involves the closure of the trauma 
unit at the University of Nevada Medical Center, UMC. Trauma centers 
are frequently referred to as ``super emergency rooms'' because they 
are staffed with highly trained surgeons and specialists who are 
qualified to treat the highest risk cases. Nearly all of the highly 
skilled surgeons and orthopedists who worked in the UMC unit decided 
they could no longer risk the liability exposure and resigned. UMC's 
director Dr. John Fildes explained that, ``We want to be here, that's 
the sad thing. These physicians want to take care of patients, but they 
are withdrawing from high-risk activities to protect their families and 
livelihoods'', Washington Post 7/4/2002.
  What does the closing of UMC's Trauma Center mean to the people of 
southern Nevada? It means that those patients who are most seriously 
injured in car accidents must either be treated at less prepared 
emergency rooms or transferred out of state to the nearest trauma 
center. Fortunately, UMC has reached a temporary arrangement that will 
allow the unit to re-open by classifying its physicians as State 
employees for the next 45 days.
  Pennsylvania has faced a similar crisis. I would like to read from a 
recent article that appeared in the Allentown Morning Call:
  Thomas DiBenedetto is a marked man.
  He feels the bull's-eye on his back every time someone is wheeled 
into Lehigh Valley Hospital's emergency room with broken, mangled 
bones.
  It's his job to put people back together. DiBenedetto is an 
orthopedic surgeon in the Level One trauma center, and he loves what he 
does. Or, at least, he did.
  Large medical malpractice awards and increasingly litigious patients 
have made it difficult for him to enjoy the job he's been doing for 13 
years. He has been sued four times.
  He won all four cases. Yet, his malpractice insurance costs this year 
went up nearly a third, to $44,000. Even though his record is clean, he 
expects the bill to continue to climb.
  Now, I am tempted to take issue with the AMA's finding in that I 
think some of these States have crossed the line from having serious 
problems to being in a crisis. I know how bad the situation is in 
Kentucky, and I think Kentucky ought to be listed as a crisis State. I 
noted the closure of the Corbin Family Health Center earlier, and we 
see daily reports of how Kentucky physicians are packing their medical 
bags and heading to Indiana, which has more reasonable tort laws.
  For those doctors who choose to stick with the profession they love, 
they will inevitably be forced to pass these higher malpractice costs 
along to consumers in the form of higher fees. Several years ago the 
Hudson Institute conducted a study in which it estimated that liability 
costs added $450 to the cost of each patient admission to a hospital 
and accounted for 5.3 percent of their medical expenditures. In 1994, 
the Towers-Perrin Research firm estimated that malpractice expenses 
added $12.7 billion to the cost of health care in America. To put that 
into terms

[[Page 14899]]

many Senators can understand, that is more money that Medicare spent on 
nursing home care in 1994 and almost as much as was spent on the 
Medicare Home Health benefit. I don't think anyone would argue that 
these dollars would be better spent improving patient care rather than 
lining the pockets of the personal injury lawyers.
  I will be the first person to admit that the reforms I propose today 
are modest. As many of my colleagues know, I have authored even 
stronger reforms contained in free-standing legislation, the Common 
Sense Medical Malpractice Reform Act of 2001. Our Nation's health care 
is staring down the barrel of a medical malpractice crisis, and it must 
be addressed soon. Therefore, I have chosen to offer this amendment 
which the Senate already agreed to in 1995. At its heart, this 
amendment merely assures that patients, not personal injury lawyers, 
receive the vast majority of any jury award or settlement. By 
establishing proportional liability, the amendment ensures that damages 
are paid by those parties who actually inflict the harm. I believe 
these are common sense steps the Senate can take to address, and I urge 
my colleagues to support it.
  I yield 20 minutes to the distinguished Senator from Tennessee, the 
only physician in the Senate who is well versed on this issue.
  Mr. DURBIN. Mr. President, parliamentary inquiry: As I understand it, 
we have a time agreement in terms of the allocation of time.
  The PRESIDING OFFICER. We are under a time agreement. The time is 
limited and under the control of the Senator from Kentucky and the 
Senator from Massachusetts.
  The Senator from Tennessee.
  Mr. KENNEDY. Mr. President, I think we were trying to go back and 
forth. I know the Senator has to leave. I don't know what the Senator's 
time limitation is. Could he take 7 minutes?
  Mr. FRIST. Mr. President, I have a time constraint. I have been on 
the floor since last night waiting to make my opening statement.
  I would be happy to yield 3 minutes, if the Senator has to make an 
airplane or something.
  Mr. KENNEDY. Mr. President, I want the record very clear--then we are 
not going from side to side? I thought we were going from side to side. 
I withdraw that.
  (Laughter)
  Senator McConnell had two speeches.
  We have followed the side-to-side rule. Now we are making it clear 
that on this legislation we no longer have to follow it. If that is the 
way it is going to be--we have respected that since the start of this 
debate. This is the first time I have been on the floor for 7 days that 
we have not done that.
  I am prepared to yield to the Senator.
  The PRESIDING OFFICER. The Senator from Tennessee has the floor.
  Mr. FRIST. How much time has been used by each side?
  The PRESIDING OFFICER. The Senator from Massachusetts has used 23 
minutes. The Senator from Kentucky has used 11 minutes.
  The Senator from Tennessee.
  Mr. FRIST. Mr. President, I want to change the topic and focus where 
I believe the impact is most being felt today. It really has not been 
discussed on the floor thus far; and that is, at the level of the 
doctor-patient relationship, at the level where care is actually 
delivered. We heard a lot about the budget numbers and the insurance 
companies and the like, but what I would like to do is focus on where 
the impact actually is.
  Yesterday, I was at a hospital, not as a physician, but I was there 
with someone in my family. I was in an emergency room 2 nights ago and 
then yesterday. Again, I was not there as a doctor or as a U.S. 
Senator. It was a local hospital, George Washington University 
Hospital.
  On a side table, I picked up a newsletter. Again, it was not intended 
for me. The newsletter is called the ``GW Medicine Notes.'' I have it 
in my hand. It is written by their medical staff for their medical 
staff and, I guess, for people in the hospital. The letter is from the 
chairman, Dr. Alan G. Wasserman. The whole front page really tells the 
story that much of the debate will be about today and on Tuesday.
  I will open with just one sentence or two sentences from this letter, 
again not intended for me, but to really express the sentiment, the 
impact of what is happening all across America because what we are 
seeing today is, indeed, a crisis.
  The words, again, from Dr. Wasserman, in what is called the ``GW 
Medicine Notes,'' a monthly publication of GW, the George Washington 
Department of Medicine:
  What we have is a runaway train that isn't stopping. The malpractice 
problem is not just a physician problem. It is beginning to affect the 
ability of patients to get proper care in a timely manner.
  I may refer back to this letter because I found it fascinating, 
sitting there yesterday waiting for an MRI scan, just to see the 
sentiment that patients are actually being hurt. When I saw the words: 
``What we have is a runaway train that isn't stopping,'' the imagery, I 
think, is very appropriate.
  We cannot do little things. This train is barreling through, and 
patients are being hurt. Forget all the rhetoric, the dollars and 
cents, the bad insurance companies and the profits. Patients are being 
hurt by the current tort system that we have in effect today. The good 
news is, there is something we can do about it, and it starts right 
here with the McConnell amendment that is on the floor today.
  I want my colleagues to listen very carefully. I hope, in the 
expanded reach, people are listening, because we have an opportunity, 
in this amendment, to improve patient care, and to reverse this runaway 
train, which is hurting patients today.
  How can I say so definitively that patients are being hurt? You can 
look in the media. You can go into hospitals. I encourage everybody to 
ask their doctor. The next time you see your doctor or see a nurse or 
go into a hospital or interact with your health care system, just ask: 
What are these malpractice premiums doing?
  We will talk a little bit about why premiums are going up.
  What is being said around the country? Pick up the newspaper any day 
all across the country. Allentown, PA; Beckley, WV; New York, NY; 
Kansas City, KS; Jackson, MS.
  Jackson, MS, November 23, 2001:

       Costs Lead Rural Doctors to Drop Obstetrics.

  That is because of the cost of the malpractice insurance. OB/GYNs are 
refusing to deliver babies and are dropping obstetrics.
  Allentown, PA:

       CARE CRISIS: Malpractice premiums crippling doctors. The 
     emergency has stricken physicians in southeastern 
     Pennsylvania, forcing some to leave their practices and 
     patients behind.

  Beckley, WV:

       The situation may be more acute in West Virginia than 
     anyplace else, but doctors across the board and around the 
     country are facing double-digit hikes in malpractice 
     premiums, something many hadn't seen since the 1980s.

  Kansas City, KA:

       Insurance rates reach crisis level for doctors. Some 
     physicians have been forced to leave practices.

  Again, we are talking about access to health care and costs of health 
care.
  Dayton, OH:

       WOMEN'S HEALTH CARE CRISIS LOOMS. . . . Rising malpractice 
     premiums may force some doctors to stop delivering babies.

  Buffalo, NY:

       Soaring costs of medical malpractice insurance have caused 
     fears among doctors that they will be forced to either quit 
     their profession or practice in another state.

  We all recognize this problem. I think both sides are going to state, 
again and again, that medical liability insurance premiums are 
skyrocketing. Why? The facts are there. We know it. We see it. Our 
physicians tell us why. We can look at what our insurance companies are 
having to charge today. The question is, why?
  Medical liability claims and damage awards are exploding, and when 
they explode, that ends up being translated into increased premiums. 
People think

[[Page 14900]]

those increased premiums are paid for by the doctor. When the doctor 
pays $50,000 or $100,000 in malpractice insurance, it is not really 
paid by the doctor, because the doctor is going to pass that straight 
back to the patients.
  When you go to a doctor for a particular procedure part of that 
procedure is going just to buy the insurance. These costs ultimately 
increase premiums. First of all, increased jury awards increase 
premiums. They are eventually passed back to the patient.
  We saw a chart earlier today. Let me just show it again. It is not 
just in George Washington Hospital, where I happened to find this 
newsletter and talked to the doctors and nurses there, and not just at 
Vanderbilt but all throughout the local and national medical community. 
The problem is all over the United States of America.
  This is from the AMA. Basically, it outlines, in red, those States 
that are in crisis. You can see, it is not just on the east coast, and 
it is not just in the South, and it is not just in the Northwest. Shown 
in red are States in crisis: New York, Pennsylvania, Texas, Nevada, and 
Washington. Shown in yellow, including my home State, are States with 
problem signs. As these rates increase 15, 16, 17 percent, sometimes 20 
percent, sometimes 30 percent, they will force more states into the 
red, unless we act.
  The end product of all this, all those articles, the end product of 
the newsletter--this is what is circulating in hospitals and clinics 
all over the United States of America--is that patients are suffering.
  Why do I say that? No. 1, access to care. It is not just a matter of 
the costs, but it is access to care. If you are in a motor vehicle 
accident and you need a trauma center, we have seen trauma centers 
close because of these escalating, out-of-sight, skyrocketing premiums, 
which no longer can be tolerated. If you are one of those individuals 
who needs that care, the access is not there, and you are going to be 
hurt.
  If you need an obstetrician--in many ways, it is a woman's issue--and 
your former gynecologist-obstetrician is one who gave up that interest 
in delivering babies because the malpractice insurance was so high, 
your access to obstetrics care, the delivery of babies, and the 
prenatal and perinatal care all of a sudden disappears.
  Why? Ask your obstetrician. It is because the malpractice insurance 
has gone sky-high, from $10,000, $20,000, $30,000, $50,000, $100,000 up 
to $150,000, and it can no longer be sustained over time.
  So physicians are dropping services. They have no choice. They are 
moving away from procedures that have a higher challenge rate because 
of the risk of the procedures. But if you are one who needs that 
procedure, you suffer from a lack of access to care. Those procedures 
that are a little bit higher risk, physicians are beginning to leave 
and not do them.
  We have had letters read about malpractice insurance. All of us 
understand that malpractice insurance needs to be addressed. It is the 
only way to improve the system itself. Malpractice does occur. There is 
nothing in the McConnell amendment that in any way lowers the standards 
on malpractice. You will have the other side reading a whole series of 
letters from people who have been injured. And as the Senator from 
Kentucky pointed out, there is nothing in his amendment that lowers the 
standards in any way in addressing true malpractice.
  My colleagues who are physicians are now demanding action by 
Congress. Why? Because they took that Hippocratic oath to take care of 
patients, to do no harm. To illustrate this runaway train concept that 
Dr. Wasserman mentioned in his newsletter, things are at a crisis, we 
have level 1 trauma centers closing. Thank goodness they are not 
closing permanently but closing for this very reason--not for a whole 
broad range of reasons of cost increases but for this very reason--the 
high costs of liability insurance.
  A level 1 trauma center is a big deal. It is not just an emergency 
room, and emergency rooms are terribly important, but it is not just an 
emergency room that sutures cuts or takes care of serious headaches. 
This is where you go if you are in a severe motor vehicle accident, 
have severe head trauma, multiple injuries, bleeding in the abdomen. 
This is where you go where you have trained specialists 24 hours a day 
to save your life. That is what a level 1 trauma center is.
  The only level 1 trauma center facility at the University of Nevada 
Medical Center closed on July 3 after 57 orthopedic surgeons basically 
resigned because medical malpractice insurance rates made it too costly 
for them to treat high-risk patients.
  Luckily, fortunately, the trauma center reopened when the surgeons 
agreed to return for at least 45 days. People can look at that case and 
say it was for this reason or that. The bottom line is, we have a group 
of people in a community who took an oath to take care of patients, but 
basically said this is such a severe, fast-moving, heavy, runaway train 
that we can't sustain what we do professionally because of this crisis.
  This particular trauma center is one of the 10 busiest in the country 
and is the only one in Las Vegas. When it closed, the nearest trauma 
center was roughly an hour and 20 minutes away.
  Therefore, when we talk dollars and cents and insurance companies 
making money, we need to address all of that. But let's recognize that 
we have to fix the system which has now gotten so bad, so severe that 
premiums are skyrocketing. That increase is passed on to patients. 
Patients cannot afford increases in health care costs. We have known 
that for a long time.
  Now what is happening, the actual care expected by the American 
people and that the American people deserve is less available. We call 
it less access. But whether it is a trauma center closing, whether it 
is a woman who wants to keep her obstetrician, but the obstetrician 
says he can't afford to keep delivering babies because of these 
premiums, because of these excessive lawsuits, these frivolous lawsuits 
today, he can't afford his old specialty that he was trained to do. 
Then there is the third component of access. You have physicians 
leaving parts of the country. Basically, some parts of the country, 
these red areas where you have this crisis level, malpractice insurance 
has gotten so high that a physician can either quit--and they are doing 
that; they have no choice. Ask your physicians.
  Mr. McCONNELL. Will the Senator yield?
  Mr. FRIST. I am happy to yield.
  Mr. McCONNELL. In response to his observation, what is happening in 
my State is they are going across the river to Indiana which, as you 
will note, is a State which has modest caps on recovery; therefore, 
affordable rates.
  Mr. FRIST. I thank the Senator from Kentucky. He is exactly right. We 
have people moving from a yellow State, such as Kentucky, to a white 
State. The white means States that are currently OK. You see 
California. I will come back to California and comment on that. We have 
people from Mississippi, that already has fewer physicians, moving up 
to Tennessee. And who knows, they may end up moving to Wisconsin or 
Indiana or out to California for the same reason.
  What is important, in response to the Senator from Kentucky's 
question, is that physicians are making decisions not on places they 
either like to practice to deliver the care they are trained to do, but 
now they are making decisions because of this exorbitant, runaway 
train. It is almost like a litigation lottery, malpractice lawsuit 
premiums that they are having to pay. They tell you that. That is the 
reason they are moving.
  So we have the cost issue. We have the specialty issue. We have 
physicians changing specialties, not because of their individual 
practice, what kind of care they are giving, but because the premiums 
are that higher for obstetricians versus gynecologists. Obstetricians 
deliver the baby; the gynecologists takes care of many other women's 
issues. Then you have the geographic movement to other States.
  There is a reason for all of this. It is a litigation problem. We 
need to fix the problem, and it can be fixed. The numbers are 
staggering. Between 1995 and

[[Page 14901]]

the year 2000, the average injury award jumped over a 5-year period 
more than 70 percent to $3.5 million. That is the average. More than 
half of all injury awards today top $1 million of all the awards. The 
payouts aren't the only problem.
  Simply defending a malpractice claim, whatever the claim is, is more 
than $20,000, whether or not the doctor is at fault or the hospital is 
at fault. So there is an incentive through these exorbitant contingency 
fees where the trial lawyers, the personal injury lawyers, may make 40 
percent. If there is a jury award, the trial lawyer, the personal 
injury lawyer gets 40 percent of the cut. Thus the personal injury 
lawyer has the incentive, the economic incentive to go out and engage 
in lawsuits, in frivolous lawsuits.
  Each one of those which comes forward, no matter what, just to defend 
costs at least $20,000. In 2001, physicians in many States saw their 
liability premiums for these frivolous lawsuits, excessive lawsuits 
that go to the millions and millions of dollars, with the trial lawyers 
taking off 40 percent--and Senator McConnell's amendment addresses this 
contingency fee very directly to put some sort of control on the 
incentive that trial lawyers have to dig up these cases, then the 
physicians, because of the tremendous cost, whether the case is 
frivolous or not, they tell their insurance company to settle the case. 
They don't want to be tied up in a court. They want to deliver care. 
That is what physicians are trained to do. That is what they are 
obligated to do.
  The solution: Intelligent, reasonable tort reform, sensible reform 
with fair and equitable compensation for those negligently injured. 
California has addressed this. Hopefully, over the next several days or 
hours we will address their experience. We have seen California put 
very reasonable controls and caps and incentives addressing things 
broadly, and they have been able to control their costs. So we know it 
can be done.
  I see my time is about over. I look forward to coming back Monday to 
talk a little bit more about this issue. The bottom line is, the 
McConnell amendment will help patients. That is what it is about. 
Patients are suffering today. We know sensible tort reform works. We 
have seen it in California, in those States that have been progressive 
enough to do that. Now we have a duty to make sure these red States 
become yellow States and eventually become white States where we don't 
have this crisis today.
  Sensible tort reform works. Let's act now to protect patients, their 
accessibility to quality care, the premiums that physicians have to pay 
which are ultimately translated down to cost to that individual 
patient.
  I urge support of the underlying amendment.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. I thank the Senator from Tennessee. He has a unique 
perspective as the only physician in the Senate for lending his voice 
to this most important cause. I might say to my friend, to those on the 
other side of the aisle, we may or may not win Tuesday morning, but 
this is not going away. We will be back, and we will some day address 
this problem because it is a national problem. Some on the other side 
will argue for States rights, which I always find interesting coming 
from very liberal Members of the Senate, that somehow this is not a 
Federal problem. I intend to outline in my full remarks exactly why it 
is a national problem and can only be corrected at the national level. 
I thank my friend for his outstanding comments this morning and look 
forward to continued discussion next week.
  Mr. FRIST. Mr. President, I ask the Senator from Kentucky to allow me 
to enter three sentences in the Record, and then I will close.
  First, I thank the Senator for his comments. This does give us an 
opportunity to point to the fact that this is a national crisis that 
has to be addressed. We have an obligation to address this crisis.
  Dr. Frank Boehm, who is a good friend of mine, writes a newspaper 
article in the Nashville Tennessean. Though I do not have one of his 
articles, he keeps a really good feel of what is going on around the 
State of Tennessee and around the country and is also one of the 
preeminent high-risk obstetrical doctors in the United States of 
America. I communicated with him the other day.
  I close with two or three sentences of what he said. He sees a lot of 
these high-risk cases coming through and reviews a lot of cases. He 
says:

       What this has taught me is that doctors, hospitals and 
     nurses are being sued in large numbers, in large part because 
     of the possibility of a settlement or trial judgment of a 
     large amount of money.

  Then he talks about some of the things we can do, many of which are 
in the underlying McConnell amendment.
  He closes with this:

       Doctors need tort reform and so do our patients. With many 
     physicians leaving States to practice elsewhere, or just 
     closing up shop, patients are suffering from a lack of access 
     to medical care in many parts of our country.

  That was in an e-mail in response to my question of what is the lay 
of the land.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, I thank the Senator from Tennessee 
particularly for his fine observation. There has been an effort on the 
part of some--and I am sure we will hear it again Tuesday--to say this 
is about insurance companies. This is not about insurance companies. It 
is about doctors, and it is about patients.
  The AMA does support the McConnell amendment. I ask unanimous consent 
that a letter indicating their support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 American Medical Association,

                                 Chicago, Illinois, July 25, 2002.
     Re Medical Liability Reform Amendment.

     Hon. Mitch McConnell,
     U.S. Senate, Washington, DC.
       Dear Senator McConnell: The American Medical Association 
     (AMA) commends you for your leadership and initiative in 
     offering an amendment to S. 812 (``Greater Access to 
     Affordable Pharmaceuticals Act of 2001'') that would bring 
     several common-sense reforms to our nation's broken medical 
     liability litigation system.
       Many states in our nation are experiencing an emerging 
     medical liability insurance crisis. Due to large jury awards 
     and the burgeoning costs of defending against lawsuits 
     (including frivolous claims), medical liability insurance 
     premiums are skyrocketing. In many cases, physicians are 
     finding that liability insurance is no longer available or 
     affordable. The media now reports on almost a daily basis 
     that the situation has become so critical in some states that 
     physicians are forced to limit services, retire early, or 
     move to another state where the medical liability system is 
     more stable.
       The most troubling aspect of our unrestrained medical 
     liability system is the effect on patients. Access to care is 
     seriously threatened in states such as Florida, Mississippi, 
     Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, 
     Texas, Washington, and West Virginia. In other states, 
     including Kentucky, a crisis is looming. Emergency 
     departments are losing staff and scaling back certain 
     services such as trauma care. Many OB/GYN's have stopped 
     delivering babies, and some advanced and high-risk procedures 
     are being postponed because surgeons cannot find or afford 
     insurance.
       Your amendment includes key building blocks to effective 
     reforms, such as allowing injured patients unlimited economic 
     damages (e.g., past and future medical expenses, loss of past 
     and future earnings, cost of domestic services, etc.), 
     establishing a ``fair share'' rule that allocates damage 
     awards fairly and in proportion to a party's degree of fault, 
     preventing double recovery of damages, allowing periodic 
     payment of future damages, and preventing excessive attorney 
     contingent fees (thereby maximizing the recovery of 
     patients).
       In addition to these necessary reforms, we urge you to 
     include a reasonable limit of $250,000 for non-economic 
     (e.g., pain and suffering) damage awards, while allowing 
     states the flexibility to establish or maintain their own 
     laws limiting damage awards that have proven effective as 
     stabilizing the medical liability insurance market. Multiple 
     studies have shown that a limit on non-economic damages is 
     the most effective reform to contain run-away medical 
     liability costs. Such reform has also been proven effective 
     at the state level. We also urge you to include a reasonable 
     cap on punitive damages, such as the greater of 2 times 
     economic damages or $250,000.
       By enacting meaningful medical liability reforms, Congress 
     has the opportunity to increase access to medical services, 
     eliminate

[[Page 14902]]

     much of the need for medical treatment motivated primarily as 
     a precaution against lawsuits, improve the patient-physician 
     relationship, help prevent avoidable patient injury, improve 
     patient safety, and curb the single most wasteful use of 
     precious health care dollars--the costs, both financial and 
     emotional, of health care liability litigation.
       The proposals in your amendment are an important step in 
     the right direction to strengthen our health care system. The 
     AMA looks forward to working with you regarding a reasonable 
     reform on non-economic damages.
           Sincerely,
                                        Michael D. Maves, MD, MBA.

  Mr. McCONNELL. Mr. President, I see the Senator from Ohio in the 
Chamber. I will be happy to yield him such time as he may need.
  Mr. VOINOVICH. Mr. President, about 10 minutes will do it.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. VOINOVICH. Mr. President, I rise today as a Senator from a State 
that is on the edge of becoming one of those red areas on that national 
map. This Senator does not want his State to become one of those red 
States. I rise in strong support of Senator McConnell's medical 
liability amendment.
  The litigation tornado that continues to sweep the Nation does not 
seem to be losing strength. In fact, at the rate lawsuits continue to 
be filed, the only entity that stands to lose strength is our economy.
  The cost of malpractice insurance has had an enormous impact on the 
rising costs of health care and the cost of health care insurance to 
the extent that more and more of my constituents are complaining that 
the cost of insurance is so high that they can no longer afford to buy 
it.
  In particular, the effect of rampant litigation has really had a 
disastrous impact on the health care industry. When a pharmaceutical 
company decides not to develop and produce a new drug because the cost 
of possible litigation could erase any profit, who really loses?
  When physicians choose not to perform certain procedures, such as 
delivering babies, because malpractice insurance rates are too high, 
who loses?
  Even worse, when a physician stops practicing medicine because he or 
she no longer can afford the insurance premiums or is so fearful of 
malpractice being filed against them, who loses?
  Recently, the American Medical Association released an analysis which 
found that medical liability has reached crisis proportion--I 
underscore ``crisis proportion''--in 12 States. One of those 12 States 
is Ohio.
  In addition, the American College of Obstetrics and Gynecology, the 
ACOG, issued a red alert and warned that without State and Federal 
reforms, chronic problems in the Nation's medical liability system 
could severely jeopardize the availability of physicians to deliver 
babies in the United States of America.
  The good news for Ohioans is that Ohio did not make the ACOG's list 
of nine hot States, those in which a liability insurance crisis 
currently threatens the number of physicians available to deliver 
babies.
  The bad news is that Ohio is only one step short of that mark. It is 
one of three States where a crisis is brewing. In fact, signs of the 
crisis are already beginning to show.
  Currently, in Hancock County in northwest Ohio, they have only one 
physician to deliver babies. Think about it, a county with a population 
of over 70,000 people has 1 physician to deliver babies. He has 
indicated that if his insurance premiums continue to climb at the 
current rate, he will have to close up shop.
  That sounds like a crisis to me, and I am sure it sounds like a 
crisis to the women in Hancock County who need someone there to deliver 
their babies.
  I believe this amendment that Senator McConnell has before us gets us 
on our way to enacting meaningful medical liability reform. It limits 
attorney's fees so that the money awarded in court goes to the injured 
parties, who are the people who really need the money. It also allows 
physicians to pay any large judgments against them over a period of 
time to avoid bankruptcy and requires all parties to participate in 
alternative dispute resolution proceedings, such as mediation or 
arbitration, before going to court. It limits punitive damages to twice 
the sum of compensatory damages. These are all reasonable limitations.
  One of the growing areas in the legal profession is mediation and 
arbitration. In fact, the Michael Moritz School of Law at Ohio State 
University, of which I am a graduate, is one of the leaders of that 
initiative in the legal profession.
  When I was Governor of Ohio, I joined the chief justice of the 
supreme court and wrote to all the businesses in our State encouraging 
them to agree to a mediation and arbitration in order to reduce 
litigation costs and, frankly, improve the economic environment in our 
State.
  Why shouldn't we do this in medical malpractice cases? Doesn't it 
make sense? Providing a commonsense approach to our medical liability 
problems is certainly a win-win situation. Patients would not have to 
give away large portions of their judgments to their attorneys and 
physicians could focus on doing what they do best: practicing medicine 
and providing health care.
  I know there are differences of opinion about how to approach this, 
but we do have a crisis in this country. If those who are opposed to 
Senator McConnell's amendment are concerned about this problem, then it 
would serve us well to sit down and figure out some way we can address 
this problem. We need to do it now, not tomorrow, not next month. I can 
tell you, if we do not do something about this problem, we are going to 
see more and more people in this country do without medical care. We 
are going to see a lot more of our physicians dropping out of the 
practice of medicine. And we truly will have something we never 
experienced in this great country, and that is a health care crisis.
  I thank the Chair. I yield back any time to the Senator from 
Kentucky.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, I thank the Senator from Ohio, who 
represents one of those red States in crisis, for his important 
contribution to this debate. I thank him so much.
  Mr. President, I ask unanimous consent that Senator Frist be allowed 
to control the remainder of the time we have for the morning on this 
issue.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Tennessee.
  Mr. FRIST. Mr. President, how much time is remaining on our side?
  The PRESIDING OFFICER. The Senator has 50 minutes under his control.
  Mr. FRIST. And the other side?
  The PRESIDING OFFICER. Sixty-seven minutes.
  Mr. FRIST. Mr. President, I mentioned in comments a few minutes ago 
the fact that I was in the hospital yesterday and two nights ago with a 
family member and I will go there in a few minutes. Being there as a 
patient's family is a different perspective than being there as a 
physician or Senator.
  As one walks those halls and sees people working hard, day in and day 
out, 24 hours a day, as one watches the shift change at 7 or 8 at 
night, fresh people coming in and starting, and see physicians coming 
in at 9, 10 at night, starting early in the morning, seeing the 
emergency room and trauma centers going on around-the-clock, when one 
sees that and recognizes that we can do something that will make that 
better when the trends, especially in the last 3 to 4 years, are 
getting worse, it makes one feel very passionately about that.
  When I see doctors leaving the practice of medicine for this reason, 
these exorbitant, skyrocketing, out of control--this runaway train 
which I mentioned earlier, such good imagery--it makes me want to 
passionately come to this body and make sure that people understand, 
make sure that my colleagues understand, that physicians are leaving 
the practice of medicine because of these exorbitant malpractice suits.
  A physician who gets up every morning to take care of patients who 
come through that door is being charged $100,000 not for what they do 
but to

[[Page 14903]]

cover the legal system and these out-of-control malpractice suits, 
which I will say are in many cases driven by the trial lawyers, there 
is no question in my mind, and if you talk to people broadly they will 
say lawyers have the incentive.
  When one sees that happening and sees that patients are going to 
suffer, they want to act. That is what this McConnell amendment allows 
us to do, to do something that does not solve the problem; it does not 
go as far as I want to go. As the Senator from Kentucky said, does not 
go so far as the American Medical Association, which represents so many 
tens of thousands of doctors, would go, but it is a first step. It puts 
the issue back on the table, and we ought to talk about this issue in 
this body.
  It has been 7 years since we have actually addressed this issue, an 
issue that patients are being hurt by, that is driving physicians out 
of the practice of medicine, that is driving physicians from Kentucky 
to Indiana, from Mississippi to Tennessee, out of New York City, out of 
New York, out of Texas, out of Florida, that is driving the price of 
health care up unnecessarily. It is unnecessary. In fact, it is hurting 
patients unnecessarily; it is not helping patients.
  If there is malpractice, there needs to be appropriate punishment. 
There needs to be appropriate economic compensation. It needs to be 
fair. It needs to be equitable. But these skyrocketing lawsuits, many 
of them frivolous, need to be brought under some sort of moderation and 
some sort of control.
  I mentioned that Dr. Wasserman, who is chairman of the Department of 
Medicine at George Washington University, who is in the hospital 
working right now--we did not even really talk about this specifically 
in any detail, but in the newsletter that I quoted earlier, which is 
pretty good reflection of what is going on in every hospital around the 
country, it is important for my colleagues to know that sentiment.
  In that same newsletter, I read one sentence earlier saying that what 
we are facing, in terms of this lack of tort reform, a medical 
liability crisis being a runaway train, a beautiful analogy. He said, 
and I quote from the second paragraph of the letter:

       Malpractice rates are increasing at a rapid rate across 
     this nation. Insurance companies are going out of business, 
     refusing to write new policies, or raising rates 50 to 200 
     percent.

  People say, why? Some say it is the bad insurance companies that are 
making profits and taking advantage of people broadly, and that is 
where the problem is. Well, I disagree. It may be part of the problem 
that may need to be addressed, but the fundamental problem is the 
frivolous lawsuits, with no sort of restraint, with out-of-control 
incentives for the personal injury lawyers to take a 40 percent cut, to 
increase the number of cases, to bring these suits, again with no 
limits, no caps, not a $100,000 cap, a $500,000 cap, a $1 million cap, 
$5 million cap or $10 million--it does not matter what it is, they take 
away 40 percent of whatever it is so they are going to drive it high.
  The McConnell amendment stops short of what I would really like to 
do, and it does not have any sort of limitation of payments. It looks 
at limits on attorney's fees, establishes proportional liability, looks 
at both scopes, such as collateral service reform, which we will be 
able to talk about, but it is a good first step.
  Dr. Wasserman, in his newsletter--and this will be the last time I 
will quote from it, but it captures it--says: Be patient. There is a 
coming crisis. Already, there is a shortage of physicians in certain 
medical specialties in certain areas. Do not try to have a baby in Las 
Vegas. There are no obstetricians. Try to find a rheumatologist in 
Florida in the winter with less than a 3-month wait.
  At some point, this will be politically important when more people 
are denied immediate access to health care, and then maybe change will 
come.
  That hurts me in many ways, because it basically says we do not have 
the guts to face an issue that is not just dollars and cents and 
profits and all of this class warfare that we hear about, but an issue 
that is hurting patients, where the patients suffer.
  The example is right before our eyes, and I do not see how we cannot 
address it. The example I mentioned earlier in the great State of 
Nevada, where physicians actually had to close down a trauma center, a 
level-1 trauma center, which is sophisticated care that can be 
delivered adequately in no other way, and if you are in that automobile 
accident, your care is in jeopardy. It does not have to be this way if 
we can pass this amendment, continue the discussion, again, hopefully 
improve and strengthen this amendment in the future.
  This is not going to go away. It is getting worse. It is getting 
worse before our eyes. We last talked about it on this floor 7 years 
ago. This is the first time since then. That is inexcusable. I 
mentioned the level 1 trauma center having to close, leaving patients 
for that period of time if they were in an accident having to go an 
additional hour and a half for proper care.
  Let's look at the obstetricians and gynecologists. Again, as I 
mentioned earlier, an obstetrician/gynecologist is trained to do 
gynecology, women's health issues. An obstetrician's practice is to 
deliver babies. It is a good example because as these doctors' 
insurance premiums go sky high, and when they go sky high, the 
obstetricians are saying: I cannot deliver babies anymore. I am going 
to change to the field of gynecology.
  Then the mom, who has been going to that obstetrician for 5 years, 10 
years or 15 years, goes to see their physician who says: I am not 
delivering babies anymore, and the reason I am not is because I cannot 
afford that malpractice insurance. So then all of a sudden there is 
this problem with access to care affecting the individual. We talked a 
little bit about costs; we talked about physicians moving.
  I again ask women all over this country to ask their obstetrician 
what is happening to obstetrics care today because of malpractice 
insurance.
  Nationwide, 1 out of 10 OB/GYNs no longer deliver babies because of 
this high cost of liability insurance. Obstetricians are not just 
geographically moving but are leaving the practice altogether. Again, I 
can say that. I can go to a hospital and say that. I can say that as a 
Senator and as a physician. The best thing is for people to talk to 
their obstetricians and ask how this malpractice insurance impacts on 
them.
  Earlier today we heard some comments about insurance companies, and I 
think on Tuesday we will have the opportunity to come back to that as 
well. Much of my focus is on the individual patient and on the impact 
on the practice of medicine, which is very real. I do want to at least 
introduce the fact that these insurance companies, many of which are 
not-for-profit in the sense that they are mutual funds--and I will use 
the example of the State Volunteer Mutual Insurance Company in 
Tennessee. It is owned by the physicians in Tennessee.
  Again, it is not a red State yet. It is on the verge of being a 
crisis State. Eighty percent of the physicians in Tennessee come 
together and have a mutual insurance company because they can have the 
input and they can try to keep the rates down in the very best way 
possible.
  I will read from a letter, and I ask unanimous consent to have this 
printed in the Record, dated July 25, from the State Volunteer Mutual 
Insurance Company.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                            State Volunteer Mutual


                                            Insurance Company,

                              Brentwood, Tennessee, July 25, 2002.
     Hon. William H. Frist, MD,
     U.S. Senate,
     Washington, DC.
       Dear Senator Frist: I am writing to urge you to support 
     tort reform legislation currently being considered by the 
     Congress.
       According to recent news reports, doctors and hospitals in 
     a number of states are currently facing a true crisis in the 
     cost and availability of professional liability insurance. 
     These states include West Virginia, Pennsylvania, New Jersey, 
     Florida, Nevada and Mississippi and several other states. 
     Access to patient care in those states is being adversely 
     impacted, especially in the area of pre-natal and obstetrical 
     care.

[[Page 14904]]

       While our situation in Tennessee has not yet reached the 
     crisis experienced in those states, there are many 
     indications that our state could well face the same sort of 
     problems in coming years if we do not act now to make some 
     changes in our civil justice system.
       St. Paul Insurance Company, the nation's largest writer of 
     health care professional liability insurance, experienced 
     such losses that it announced last December that it was 
     completely withdrawing from the market, adversely affecting 
     tens of thousands of physicians who carried coverage with 
     that company, some of whom were in Tennessee.
       Professional liability premiums for doctors in Tennessee 
     have been steadily rising in recent years. According to State 
     Volunteer Mutual Insurance Company, which covers most 
     practitioners in Tennessee, premiums have increased by 45 
     percent over the past three years, in order to keep up with 
     rapidly escalating losses in medical malpractice lawsuits. 
     Only approximately 4 percent of this 45 percent increase was 
     related to lower investment yield, with the remainder being 
     due to increasing medical malpractice losses. State Volunteer 
     Mutual Insurance Company is a policyholder owned mutual 
     company with no outside investors.
       In recent years both juries and judges in Tennessee have 
     made multi-million dollar awards for non-economic type 
     damages, over and above a plaintiff's actual economic losses. 
     (According to State Volunteer, in one recent case a jury 
     awarded only $25,000 in economic damages but awarded non-
     economic damages of $1,600,000. Another case resulted in a 
     jury award of $100,000 economic loss and $1,900,000 non-
     economic damages. A judge in another case awarded $1,062,080 
     in economic loss and gave $4,500,000 non-economic damages. 
     Another judge awarded $687,691 economic loss and gave 
     $3,000,000 in non-economic damages. One jury awarded $7,811 
     in economic loss but gave $2,650,000 non-economic damages.)
       Awards in personal injury and wrongful death cases in 
     Tennessee are dramatically increasing, according to the 
     latest statistical report of the state's Administrative 
     Office of the Courts. In fiscal year 2001, even though fewer 
     cases were disposed of in our courts than in the previous 
     year, damages awarded statewide were more than $94 million. 
     This represented an increase of more than $51 million over 
     the previous year. The total was the largest since the courts 
     began reporting these statistics. According to the same 
     report, the average award for fiscal year 2001 was $209,284, 
     up $95,064 from the previous year, the largest average since 
     awards have been reported.
       Senator Frist, doctors and hospitals in Tennessee are 
     dedicated to providing excellent care to our state's 
     population but at a time when health care reimbursements are 
     shrinking, and professional inability costs are dramatically 
     increasing, doctors in Tennessee believe that the Congress 
     should enact some common sense tort reform that will preserve 
     citizens' access to health care and compensate them for their 
     actural economic damages caused by negligence, while 
     modifying the current system of unlimited liability that 
     doctors and other health care professionals and institutions 
     currently face. Reforms modeled after California's ``MICRA'' 
     law make sense to me. California passed legislation in 1975 
     that helped solve a crisis in that state. It is my 
     understanding that key provisions in California's civil 
     justice reform included the following:
       $250,000 cap on non-economic damages;
       reasonable sliding scale for lawyers' contingency fees;
       collateral source payment offsets;
       periodic payment of future damages.
       I believe similar reforms on a national basis will go far 
     toward alleviating the health care crisis now facing much of 
     the country and will help avoid such a crisis from coming to 
     pass in Tennessee.
       Thank you for your attention and concern regarding this 
     important issue.
           Sincerely,
                                               Steven C. Williams,
                            President and Chief Executive Officer.

  Mr. FRIST. The State Volunteer Mutual Insurance Company is a 
policyholder owned mutual company with no outside investors.
  So I think they don't have a huge incentive to go out and gouge the 
communities or patients. It is mutually owned by physicians throughout 
the State.
  In the letter to me, I read further:

       Senator Frist, doctors and hospitals in Tennessee are 
     dedicated to providing excellent care to our state's 
     population. But at a time when health care reimbursements are 
     shrinking, and professional liability costs are dramatically 
     increasing, doctors in Tennessee believe that Congress should 
     enact some common sense tort reform that will preserve 
     citizens' access to health care and compensate them for their 
     actual economic damages caused by negligence, while modifying 
     the current system of unlimited liability that doctors and 
     other health care professionals and institutions currently 
     face.

  This letter was written by Steven C. Williams, president and CEO of 
the insurance company, but also representing 80 percent of the 
physicians in Tennessee, calling for sensible reform, for moderate 
reform, reform that does not go overboard. That is what the McConnell 
medical malpractice amendment indeed does.
  What is most important is what is happening to patients. Patients are 
suffering under the current system. It is a runaway train. We all know 
it is a problem. We have seen it in Las Vegas at the trauma center. We 
see it in various States. We go in our physician's offices and hear it. 
The problem is getting worse. It is increasing in its impact and not 
getting better. That is why we call for action now.
  The Tennessee Medical Association, in a letter dated July 24, 2002, 
to me:

       We have a storm brewing here in Tennessee. While the waves 
     are not yet crashing in on us, as in many states, including 
     our next-door-neighbor, Mississippi, it most certainly is 
     coming. Over the last two years, medical malpractice 
     insurance rates have gone up 32 percent.

  Of additional concern is that in Tennessee there is a very clear 
trend of increasing awards in medical malpractice cases. This, we 
believe, is fueled in large part by a growing public perception and 
environment that likens the courtroom to a casino where there appears 
to be no limit.

  That was Michael A. McAdoo, president, Tennessee Medical Association.
  The medical liability premiums are skyrocketing. It is because the 
medical liability claims are exploding. It is because the awards are 
exploding. The problem is not limited to just the Northeast or the 
Southeast. But as you can see from this map, the medical liability 
crisis is all over the United States of America. It has to do with cost 
and access to care and physicians leaving their profession.
  The response to what we do means we have to identify the underlying 
problem and not just worry around the edges or tinker around the edges. 
I mentioned earlier, an average jury award over a 5-year period jumped 
more than 70 percent on average. When more than half of all jury awards 
top $1 million, we have this field of defensive medicine. That means 
physicians in the emergency room that I was in two nights ago, 
attending to a patient, are going to err in going a little bit too far 
in terms of tests. Why? Because if that headache, which to your exam is 
just a routine frontal headache treatable by a doctor, if you do not 
get the CAT scan or MRI scan, the risk, although it is beyond the 
normal bounds of routine accepted medical practice, a physician, a 
nurse, or a hospital is going to err on getting the expensive tests, 
although in your clinical judgment and using the practiced guidelines 
out there today, you do not need the tests. But you will get that 
series of more expensive tests that unnecessary testing.
  Again, the American people pay for it. Those costs are unnecessary. 
They are there because of the fear of skyrocketing lawsuits, numbers of 
lawsuits, awards themselves. No one wants to be in that category. The 
best protection is to get the range of tests, although you may think 
they are unnecessary.
  What is the effect on the doctor? In 2001, physicians in many States 
saw their rates rise by 30 percent, and even more. That is just 
physicians, generally. If you look at the specialists, such as 
obstetricians or possibly neurosurgeons or neonatal specialists, 
malpractice insurance is rising by as much as 200 percent, and in some 
cases 300 percent.
  In New York and in Florida, obstetricians--the ones who deliver 
babies--gynecologists, and surgeons pay more than $100,000 for $1 
million in coverage. That $100,000 they pay comes out of their pocket 
initially, but for them to stay in business and continue what they do, 
they take that $100,000 and pass it on to the people who are listening 
to me, the people all across America. That is why this issue is so 
powerful today.
  People for the first time realize one doctor out there, who took an 
oath to do no harm, to help patients, who trained 4 years in medical 
school, a year in internship, 5 years in surgical residency, 2 years in 
specialty training, and a year of fellowship, just to be able to help 
people, are having to pay

[[Page 14905]]

$100,000, not to help people, but to protect themselves. That is 
absurd.
  Ultimately, for them to stay in business it gets passed all the way 
back through the system to that individual patient. It may come in 
taxes. It may come for those who do not have insurance, and pay retail, 
who do not have any insurance when the overall prices in health care go 
up. If you do not have insurance, you are in trouble today because the 
overall price of health care has skyrocketed. This is an area where 
through commonsense tort reform we can lower this escalating cost of 
health care across the board.
  For annual premiums, some doctors in Florida and New York pay, again, 
above $100,000. That is one individual doctor. This is not a big 
corporation that pays this. It is not a big hospital paying it. These 
are individual doctors paying this money so they can fulfill that 
Hippocratic oath of doing no harm.
  In Tennessee, which is not yet in the crisis mode, and is not 
considered to be in crisis, but it has problem signs today, the 
premiums rose 17.3 percent last year in 1 year. They will rise anywhere 
from 15 percent to 17 percent this year. What we need to do is ask why. 
Is there more malpractice today? Are physicians not as well trained 
today as they were a year ago, or 5 years ago, or 10 years ago? Are 
they not using the tests appropriately today in order to take care of 
patients?
  If so, we need to debate that issue and look at it and look at the 
data that is out there.
  No, I think the dynamics are because of frivolous lawsuits, because 
the personal injury trial lawyers have a huge incentive, a huge 
financial incentive for themselves in order to bring cases forward, 
which puts physicians in a position where it is easier to settle these 
cases rather than to spend a year or 2 years, if you have the 
insurance. So there is this huge settlement, even if you don't have 
malpractice, even if you know that you are absolutely innocent. It is 
easier to settle for $1 million or $2 million so you can go back to the 
practice of medicine.
  The system is broken, and it is getting worse.
  Can it be fixed? Yes. The McConnell amendment makes a first step 
there--intelligent, reasonable, balanced tort reform. It will help 
address it, but it will not solve the entire problem. It is not going 
to make it go away, but I can tell you, it will help patients because 
they will not have to be driven to the ranks of the uninsured; because 
that obstetrician, with whom they have the first baby and second baby, 
will not have left practice because of that malpractice insurance; 
because they will be able to see the neurosurgeon for their brain tumor 
in their region because he or she did not move from Texas to Wisconsin 
because of these exorbitant malpractice rates.
  I mentioned earlier that today is different than 6 years ago when we 
last addressed it. It is in a lot of different ways because the problem 
is getting worse. Ask the physicians, ask the people in the hospitals 
who are working there every day. Read the newspaper, and you will see 
that every newspaper is going to address this in a direct way. I think 
we need to go back and look at hard data that is out there today, in 
terms of what certain States have done and been able to accomplish and 
what other States have tried, and learn from that.
  In California there is what is called MICRA, which is the Medical 
Injury and Compensation Reform Act. It became law in the mid-1970s. It 
is a good example of what works. When you look at States, other big 
States, you see a lot of them are in trouble. You see New York City is 
in trouble. If you are in New York City, talk to the physicians, talk 
to the medical community, ask them what has happened in terms of these 
tort issues recently.
  Look at Pennsylvania; it is in trouble. Look at Florida, look at 
Texas, where there is trouble. This is California in white, meaning 
they do not have a huge problem there. You do not hear it. I was in 
California this past weekend and probably talked to six or seven people 
in the medical profession at academic health care centers, and it is 
not No. 1 on their list for reform because they say it is not a big 
issue there.
  Why? In the 1970s, California passed MICRA--Medical Injury and 
Compensation Reform Act. California doctors and patients have been 
spared much of the medical liability crisis that we see across the 
country today. I think it is a good surrogate measure, that 
California's premium, the premiums they are paying today, are among the 
lowest medical malpractice insurance premiums in the country. MICRA is 
the reason.
  I have used this example of obstetricians and gynecologists, so I 
will keep going back to that. It is the reason that the obstetrician, 
the one who delivers babies in California, may pay about $40,000 for 
medical liability insurance where, if you took that same obstetrician--
same training, same medical school, had done the same number of 
procedures, delivered the same number of babies--and you put them in, 
let's say Florida or let's say New Jersey, or you put them in New York, 
the premiums--here, say, $40,000 for that insurance--it will be above 
$100,000, maybe up as high as $150,000. The same person, same training, 
same number of babies, same Hippocratic Oath--"Do no harm''--here 
paying around $40,000; in these red States, paying upwards to $150,000.
  My colleagues have to ask why, but more important, the American 
people have to ask why. Is there less malpractice in California? I 
don't think so. Better trained doctors in California? I don't think so. 
The reason goes back to the tort system, the liability system.
  In other States it has been allowed to run out of control, and that 
is why this McConnell amendment comes in. Again, we have not really 
talked about all the things that are in the amendment. We will have the 
opportunity to do that. But that is why it is important to go back and 
look at what is in the amendment. It doesn't go very far. It doesn't go 
far enough for me or, I think, for most of my colleagues in the medical 
profession.
  But why does MICRA work? Why does this doctor with the same training 
pay so much less than these other States?
  Let's look at MICRA. What does MICRA do? This is not the McConnell 
amendment. I don't want to confuse the two, but it shows what 
commonsense reform in a State that was way ahead of the curve can 
accomplish. MICRA does limit attorney's contingency fees to a sliding 
fee scale. This allows the patient, when there is an award, to keep the 
money.
  If it is malpractice and you are trying to compensate the patient, to 
have the lawyer walk away with 40 percent of the money doesn't make 
sense to me. I don't think it makes sense to the American people once 
they really understand that. With this limiting of how much the 
attorney can take out of what is sent home by the jury to the patient, 
by limiting that in some way, you have some element of control of this 
runaway train which is hurting patients.
  It is pretty simple. In my mind it is simple. If you look at how much 
a lot of these personal injury trial lawyers make today, especially in 
the environment where we are looking a lot more at the corporate world, 
the numbers are incredible. Ask, if you take the top 50 personal injury 
trial lawyers in America, what is their take? What do they make? The 
incentive is there.
  If you are in the field of law, you would like to say, I am out just 
to save the world and do good. But when you take 40 percent of the take 
after a multimillion malpractice injury--first of all, the patient 
doesn't get it. That is who it is really about--or that is who it is 
about in the medical profession. It needs to be about the patient. That 
is whom you take the oath to serve.
  It is hard for me to understand how you could have the huge 
contingency fees today when you hear physicians are leaving, they are 
not taking care of patients, they are being forced to close down trauma 
centers.
  MICRA places a statute of limitations on bringing a suit 1 year from 
discovery or 3 years. This is the California law. This ensures that a 
suit would be brought in a reasonable amount of time. It protects 
evidence,

[[Page 14906]]

and it also keeps people from sort of searching in the bowels of a 
hospital or advertising for cases 5 years ago, or 20 years ago, or 30 
years ago. Again, malpractice occurs at a certain point in time, and we 
need to punish it, and punish it hard. But to go out and stir up these 
cases so you can be paid for it, I think is inappropriate.
  What MICRA does--and again this is not in the McConnell legislation, 
and this I hope will come back to the floor again and again and again 
until we fix it--MICRA, California law, caps future noneconomic damages 
at $250,000. These are not the economic damages. There is full 
compensation there. So, under MICRA, patients are fully compensated for 
their economic loss due to medical malpractice, and they are 
compensated for lost wages, and they are compensated for the medical 
care and the future costs of medical care.
  I use California as an example because we have not talked about it on 
the floor of the Senate. We haven't talked about it in committee, 
because this whole issue has not been addressed. The bottom line is you 
can have reforms--which the majority of States do not have today, and 
that is the reason there is a role for this body to act--because the 
problem is well identified, and the problem is getting worse. The 
problem has not been adequately addressed by States--California and a 
handful of others have addressed it--so that we have an obligation to 
the patients.
  The reforms in California have helped the patients. Injured patients 
receive a larger share of whatever award. If there is malpractice and 
there is an award, the patient can walk--hopefully, can walk--home with 
more of that award. In addition, these reforms have helped slow down 
the overall rising cost of medicine.
  There is no question in my mind that physicians are practicing 
defensive medicine, which the physicians have to practice, and this 
drives up the overall cost of health care today.
  We talk a lot about prescription drugs, about the importance of 
generics, about the importance of coverage within Medicare, and about 
having a competitive system--all of which we hope will actually slow 
down the skyrocketing costs of medical care today. Indeed, the cost of 
health care in California has been slowed by the slowing and the 
restraining of these out-of-control, skyrocketing, runaway train costs 
in liability that other States have.
  Mr. EDWARDS. Mr. President, will the Senator yield for a time 
question?
  Mr. FRIST. I would be happy to yield.
  Mr. EDWARDS. Does the Senator have an idea how much more time he will 
take?
  Mr. FRIST. Probably 5 minutes, and then I would be happy to yield the 
floor.
  Madam President, how much time do we have on either side?
  The PRESIDING OFFICER (Ms. Stabenow). Eighteen and one-half minutes.
  Mr. FRIST. Madam President, let me take a couple of minutes, and then 
I would be happy to sit down and look forward to the opportunity to 
talk about all of this on Tuesday, which I believe is when we will come 
back to this.
  The McConnell medical malpractice amendment does the following:
  It limits punitive damages. It limits punitive damages to two times 
the sum of what are called compensatory damages. Again, this gets sort 
of technical. We talk about economic damages and noneconomic damages. 
It allows punitive damages in those cases where the award has been 
proven by clear evidence and by convincing evidence.
  I mentioned attorney fees. I am critical of that because I don't 
understand in this day and time why personal injury trial lawyers walk 
away with so much money that has been awarded to the person who has 
been injured. But it does limit attorney fees.
  The McConnell amendment places very modest limits on attorney's 
contingency fees and medical malpractice cases. Specifically, the 
amendment allows personal injury lawyers to collect 33 percent, or a 
third, of a $150,000 award, and about $25 percent of the award on all 
amounts above $150,000.
  Again, that is pretty modest from my standpoint. The fact that an 
award to somebody who has been injured is $150,000, it was malpractice, 
and the fact that a trial lawyer will take away a third of that for 
their pocket, again, to me--that is what is in the amendment--that is 
an improvement over today. But, again, in the future I hope we come 
back and address that.
  The statute of limitations--I mentioned California's law--the 
amendment requires that a medical malpractice complaint must be filed 
within 2 years of discovering the injury and the cause. Again, that is 
when it should be filed.
  The McConnell amendment is modest. It identifies the problem. It 
gives us the opportunity to talk about the problem on both sides of the 
aisle. It does not include all of the measures I think are necessary to 
address this problem eventually. But it is a good first step in the 
right direction.
  We have evidence that reasonable tort reform--and we can debate what 
reasonable tort reform is. I think, again, the McConnell amendment is 
the first step. It doesn't go quite far enough, but it is a good first 
step.
  We know that by addressing this we are going to hold down health care 
costs which are skyrocketing. The premiums are going up 15 percent, 17 
percent, and 20 percent--last year, this year and next year. That 
translates down to the patient. Those premiums are eventually going to 
be passed down to the patient. To my mind, there is no question but 
that we will put them in the ranks of the uninsured.
  On the access issue, the McConnell amendment is a simple amendment. I 
am convinced. Ask your physician, if you have the opportunity over the 
weekend. I am absolutely convinced it will improve access when we know 
that access overall is deteriorating.
  We need to look at Las Vegas, and we need to look at the many 
examples which are in newspapers all across the country of physicians 
leaving a specialty practice because of malpractice insurance, or 
leaving a State.
  We have an opportunity to do something which protects patients and 
which improves their access and clearly stops the deteriorating access 
to quality care before this problem gets worse.
  I urge support of this amendment and look forward to coming back to 
it over the next several days.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. EDWARDS. Madam President, I yield myself such time as I may use.
  Let me say, first, from the discussion that we have been having all 
over America, and on the floor of the Senate for the last few weeks 
about trying to reinsert some responsibility and accountability because 
of the fundamental notion we believe in this country that everybody--
every person, every company, big business, small business, and 
everybody in America--should be responsible and accountable for what 
they do, one of the reasons we have had such a downslide in Wall Street 
lately is people have lost confidence in the responsibility of people 
who run some--I emphasize ``some''--of the companies that have been on 
the front pages of the newspapers for the last several months. What 
they want us to do is reimpose some of that corporate responsibility. 
So we work very hard on that.
  At a time when the focus is on trying to make sure we have real 
responsibility and real accountability in this country, the President 
yesterday went to my home State to do exactly the opposite. The 
President went to North Carolina to say: I am going to side with big 
insurance companies and against victims. I am going to say if a child 
who has been severely hurt as a result of bad care is trying to get 
some help for him and his family over a long period of time, I am going 
to put a limit on that. I am going to put a limit for a very simple 
reason: The big insurance companies of America will have to pay.
  Unfortunately, there is a pattern with this administration. Every 
time they have a choice between the interests of average Americans, 
kids, families, and people who do not have lobbyists in Washington, DC, 
representing

[[Page 14907]]

them, on the one hand, and on the other hand, the interests of big 
HMOs, big oil companies, big energy companies, the drug industry, the 
pharmaceutical drug industry, and big insurance industry in this case--
whenever those interests come into conflict with the interests of 
ordinary Americans, this administration consistently sides with the big 
interests. They have done it on the Patients' Bill of Rights.
  They have prevented us from having a real and meaningful Patients' 
Bill of Rights. While we try to protect families and patients, they 
side with the big HMOs. I think we are going to overcome it.
  On preventing us from having a meaningful prescription drug benefit 
for senior citizens and doing something about the costs of prescription 
drugs in this country, on which the Presiding Officer has worked so 
hard, we know that is a fight between ordinary Americans and ordinary 
families who need these prescription drugs and the pharmaceutical 
industry. The President has stood with the big pharmaceutical industry.
  On trying to do something about clean air in this country, the 
President and his administration have proposed weakening our clean air 
law--all in the interest of protecting his friends in the oil industry, 
in the energy industry, and against the interests of ordinary 
Americans.
  So now he adds to that list, going to my home State of North 
Carolina, to say to the victims: I am going to make sure the big 
insurance companies of America are protected. At the end of the day, 
that is all this is about.
  The proposal the President made is different from this amendment--
which I will talk about in a minute--which is to impose a limit of 
$250,000 on some of the damages for children can be recovered against 
these big insurance companies.
  For example, in the case of a child who may be born blind or crippled 
for life or a child who has to be taken care of by his or her parents 
every single day, 7 days a week, every day of the year for the rest of 
their lives, the President says: I am going to make sure the insurance 
companies don't have to pay what they are obligated to pay to that 
family, to that child.
  It is wrong. It is no more complicated than that. And the children 
and the families, who have been the victims, know it is wrong.
  The President held a roundtable yesterday in North Carolina on this 
subject. How many victims participated in that roundtable? How many 
people whose lives have been destroyed and who need the help that the 
insurance company is obligated to provide for them participated? 
Everybody else was well represented. What about the people who don't 
have lobbyists? What about the people who aren't represented here in 
Washington by lobbyists? The families, the kids who are hurt by all 
this, were they at the roundtable? Were their voices heard?
  I invite the President to come back to North Carolina, and this time, 
instead of talking to these powerful interests, I hope he will sit down 
with regular folks who have been the victims and listen to what they 
have to say, listen to what their lives are like.
  One of the phrases that was used in the administration proposal was: 
You have these families who have won the lottery.
  Well, I can tell you what the parents of a child who was a victim 
said yesterday from North Carolina. I know these people because I 
represent them. The parents said: Our little girl was born, and because 
of the type of care she got, she couldn't see, she couldn't hear, she 
couldn't walk. Every day of her life--7 days a week, 24 hours a day--we 
took care of her. And we loved her so much. There is nothing we 
wouldn't have done for her. And then she died. And when we go to visit 
her at her grave, we don't feel much like we won the lottery.
  These are the people whom these kinds of proposals affect. These are 
real people with real lives. We have to look at the consequences, even 
though they are not up here with powerful, fancy lobbyists representing 
them. They are the people we have to look out for. And they are the 
people who expect their President to look out for them. Unfortunately, 
he continues to stand with big insurance companies, with big 
pharmaceutical companies, with big HMOs. These people need his help. It 
is no more complicated than that.
  Now, as to this amendment and the purpose of it, first, medical 
malpractice premiums constitute less than 1 percent of health care 
costs in this country. So think about the logic. The argument is, we 
are going to do something about health care costs in this country, and 
the way we are going to do it is to try to do something misguided--we 
are going to try to do something about medical malpractice premiums, 
which constitute about two-thirds of 1 percent of health care costs in 
this country.
  First of all, it is the wrong place to start if you are going to do 
something about health care costs in this country. If you want to do 
something about health care costs, you ought to do what the Presiding 
Officer and I and so many of us have tried to do--bring the cost of 
prescription drugs under control in this country, because that will 
have a real effect on health care costs. They are a driving force in 
rising health care costs in this country.
  This is minuscule by comparison. So, No. 1, it is a misguided effort 
in terms of what it is focused on. No. 2, it will not work because 
these kinds of proposals--the President's proposal yesterday in North 
Carolina, and this amendment, which is different--are proposals that 
impose limitations on recoveries for victims, for families, to try to 
get rid of some concepts in the law. They have been used in many places 
around the country. They do not work. They do not, in fact, have the 
kind of impact on insurance premiums that these people who are 
proposing them say they have.
  If you look at medical malpractice premiums in this country, and you 
look at the States that have these provisions that impose limits on the 
families, and then you look at the States that do not have them, the 
costs of medical malpractice insurance--I am looking for the year 2001 
for internal medicine, for general surgery, for obstetrics and 
gynecology--are virtually identical.
  This all sounds logical. If you impose limits on what the victims and 
the families can recover, why does that not help bring the cost of the 
insurance down? Why does it not have an effect on premiums? Because 
logic would tell you it would because insurance companies have to pay 
less, theoretically. So as a result, why don't they lower the premiums? 
Because the insurance company premiums have nothing to do with this. 
That is the reason.
  The insurance company takes the money that they receive in premiums, 
and they invest it. Where do they invest it? They invest it in that 
same stock market in which most of the people in America are invested.
  You can look at every time they start raising premiums. They come to 
Washington and say: There is a crisis; we have to do something about 
this; this is a serious problem; we have these outrageous awards for 
children and families; we have to stop it. And the way to stop it is to 
cut off the rights of the victims. That is the way to stop it.
  So why? Because they are not doing well in their investments. Every 
single time, when the stock market falls, and the insurance companies' 
money that is invested is not bringing back a good return--in fact, 
they are losing money--they raise premiums.
  Who has to pay those higher premiums? The health care providers. They 
are just as much a victim of this as the kids and the families who are 
victims of the bad medical care. The insurance companies are the ones 
that are responsible. You can look at it. It is as sure as the Sun is 
going to come up tomorrow, if they are doing well on their investments, 
the premiums stay relatively stable. When they are not doing well on 
their investments, the premiums go up. That is what this is all about.
  While these kinds of proposals are aimed at reducing the rights of 
victims--which is what they are--instead, what we ought to be doing is 
looking at

[[Page 14908]]

what the big insurance companies are doing when they get unhappy with 
the results of their own investments. That is what drives this.
  If you look at what has happened in these States--the Senator from 
Tennessee talked about California at great length. California has some 
of the most severe limitations in the country on what victims can 
recover--severe limitations. They have been in place a long time.
  So let's look at what has happened in California.
  Between 1991 and 2000, over that about 10 years--a little less than 
10 years--the premiums in California went up more than the national 
premiums. Why? Why in the world, if they have got these serious 
limitations on recoveries--and they have been in place for years in 
California--why would their premiums go up? And why would they go up 
faster than in the rest of the country, many places which do not have 
these kinds of limitations? Because the rise in premiums, and what is 
happening in what insurance companies charge people around the country, 
is in direct relation to how they are doing in their own investments.
  In some cases, it is an insurance company or the insurance industry 
that exists in a region, in some cases it is national, and in many 
cases, of course, it is connected to the international and the 
reinsurance markets, but it is clear as day that it is directly related 
to how they are doing in their investments in the stock market.
  So this effort is misguided. Besides that, I do want to point out, 
though, that the Senators who are proposing this amendment to put 
limits on what victims can receive, even they are not willing to go as 
far as the administration is. The administration proposes a $250,000 
limit on some damages for children, among others, who have a lifelong 
disability as a result of bad medical care.
  This amendment does not make that proposal. They are not willing to 
go that far. They know that when you put a limit on those kinds of 
recoveries, on those kinds of damages, it is like a laser directed at 
the most severely injured, and usually the youngest, because young 
children who have severe injuries for life, which they and their 
parents are going to have to carry for the rest of their lives--and you 
are limiting them to $250,000 in those kinds of damages--$250,000--
nobody in America thinks that makes sense. That is why that is not 
part, I suspect, of this proposal.
  Instead, this proposal goes about it in a different kind of way. What 
this proposal suggests is a couple things: One, that we get rid of 
something called joint and several liability. Without going into too 
much detail about this, we believe in this country--and it has been the 
law of the land for many years--that if you have a victim, whether it 
is a victim of criminal conduct or bad medical care, or somebody who 
has behaved wrongly, and you have a victim, the victim should not be 
the one held responsible. If you have several people who caused it, 
they share the responsibility.
  What this proposal says is, all right, somebody got hurt as a result 
of the bad behavior of a group of people. Always remember, you have an 
amount that has been lost by the victim. Let's say it is $100,000 that 
has been lost by the victim. If that money has been lost, it is shared 
among the defendants. What we have always said in America is, as part 
of our law, the victim should never be the one held responsible for 
that loss. The loss doesn't go away. The loss is always there; the 
damages are always there.
  This proposal says, if you have five people who are responsible, then 
among those five people, none of them can be required to pay more than 
whatever a jury determines is their percentage responsibility. But 
remember, these are all wrongdoers. So on one side of the equation you 
have a child who is innocent. On the other side of the equation you 
have the group of wrongdoers. The amount that has been lost does not 
change. Somebody has to be responsible for that. So are we going to say 
that the wrongdoers are responsible or are we going to shift some of 
that responsibility to the innocent victim?
  That is what this proposal does. It says we are going to get rid of 
what is called joint and several liability, which means you can collect 
against any one or all of the wrongdoers, and says instead, if there is 
a wrongdoer you can't get to, for whatever reason, that part of the 
responsibility goes back to the victim. It violates what we believe in 
this country. It violates our fundamental notion of responsibility and 
accountability that the people who ought to be held accountable for 
they are the people who did wrong, not the innocent victim. That is 
what is wrong with this specific proposal.
  There are other proposals. The next proposal says if there is an 
award of something called punitive damages, then half of that money 
will go to the Government. Now, let's talk about that in a real case. 
Let's explain what the effect of that is.
  To get punitive damages, the conduct has to be either criminal or 
very close to criminal. That is what is required in order for punitive 
damages to be awarded. So let's say you have a teenage girl who is the 
victim of this kind of criminal conduct. The jury awards these damages 
to that young girl. This is what this amendment says to that victim of 
essentially criminal conduct: We are going to impose a 50 percent tax 
on you. That is what we are going to do. We are going to say to the 
victim of this conduct: There is a 50 percent tax on the damages that a 
jury, after hearing the whole case, has decided you are entitled to, 50 
percent. That is going to go to the Government.
  Is that the signal we want to send as a Congress, as the U.S. Senate? 
Do we want to say to the American people that we as a body want to 
impose a 50 percent tax on a child who has been the victim of what is 
essentially criminal conduct? This is crazy. It doesn't make any sense. 
It also violates our basic notions of fairness and responsibility and 
accountability.
  We have talked a great deal on the floor about doing things about the 
victims of criminal conduct. This essentially falls in the same 
category. It makes no sense for the government to impose a 50 percent 
tax on a child who has been the victim of what amounts to criminal 
conduct.
  These provisions--and there are others--are wrong: getting rid of 
what is called joint and several liability, which means the wrongdoers 
don't necessarily have to pay for all of what has happened, while some 
of it gets shifted to the victim. That is wrong.
  Second, to say we are going to impose a 50 percent tax on a victim, a 
child who has been essentially the victim of criminal conduct, that is 
wrong.
  More important than all of that, this whole effort is misguided. If 
what we want to do is do something about health care costs, we should 
not focus on what is well less than 1 percent of health care costs. We 
ought to focus on the things that really make a difference, such as the 
rising cost of prescription drugs.
  More importantly, the people who need us to look out for them are the 
very people that this amendment is aimed at--the kids, the families, 
the victims. We need to stand up for them. They need us to be willing 
to stand up for them no matter who is outside the floor of the Senate 
representing the most powerful interests in America.
  No matter how many lobbyists the insurance industry has, no matter 
how many lobbyists the HMOs have, the big energy companies, the big oil 
companies, who is going to stand up for these kids and these families? 
If they don't have us to stand up for them, they have nobody.
  On all of these fronts, whether we are talking about doing something 
about the high cost of prescription drugs for people, whether we are 
talking about kids and families who are the victims of bad medical 
care, whether we are talking about trying to protect our air for our 
children and for our families, on all these fronts, we have to stand up 
for them. The people who voted for us and sent us to the Congress are 
counting on us because they don't have lobbyists up there. They have 
nobody here outside the halls of Congress representing them. They count 
on us to stand up for them.

[[Page 14909]]

  As we go through these fights, we will stand up for them. This is one 
of them.
  How much time do we have remaining?
  The PRESIDING OFFICER. Forty-five and a half minutes.
  Mr. EDWARDS. Madam President, I reserve the remainder of my time and 
yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Before the Senator from North Carolina leaves, I would like 
to ask him a question or two. I am sorry I was not able to hear all of 
his remarks. Having tried a few cases in my day, one of the concerns I 
have about this tort debate is the fact that the insurance industry is 
the only one that I know of, other than baseball, that can sit down in 
a restaurant in sight of everybody or in some dark room, wherever they 
want, and knowingly and openly conspire to set prices. There is nothing 
wrong with that. That is because of the McCarran-Ferguson law passed 
during the depths of the Depression. They can do this.
  Let me say to my friend, to show how unnecessary the debate is here 
in the Senate, first of all, this is something the States should be 
doing, as is happening in Nevada.
  This coming Monday, the Nevada State legislature is convening in a 
special session to deal with medical malpractice. I may not agree with 
what the State legislature does or doesn't do, but that is where this 
should be settled.
  The State of Nevada is different than the State of North Carolina. We 
have all kinds of different problems with our torts than the Senator 
does.
  I have two questions for my friend. First of all, do you think it 
would be a good idea for the Congress, after some 70 years, to take a 
look at McCarran-Ferguson to find out if insurance companies should be 
exempt from fixing prices, be exempt from the Sherman Antitrust Act? 
That is my first question.
  The second question is, don't you think that tort liability, whether 
it is medical devices, medical malpractice, or products liability, 
should be settled by State legislatures?
  Mr. EDWARDS. The Senator asked two very good questions. First, I 
think it is a terrific idea for us to look at the insurance industry, 
its practices in general, and what effect McCarran-Ferguson has on 
those practices. The Senator describes a large part of the problem.
  The Senator knows as well as I do, you can't move in Washington 
without bumping into some lobbyist representing the insurance industry. 
They are so well heard and so well represented. I think it is a very 
good idea.
  As to the second question, we have differences between North 
Carolina, my State, and the State of Nevada, and differences between us 
and California. These are the kinds of issues that ought to be resolved 
at the State level. We have always believed that. There is a little bit 
of an inconsistency for the administration that normally says these are 
matters that ought to be left to the States, we trust the States to 
make these decisions; but in the case where they want to do something 
on behalf of the insurance industry, which is what this is, they want 
to take it away from the States; they want to do it at the national 
level.
  What has historically been done in this area is the way it should be 
done, which is these are matters about State courts, how State courts 
handle these kinds of cases. They are in touch with it. They know what 
is happening in their individual States, what the problems are, and 
they can address them in a responsible and equitable way.
  I thank the Senator for his questions.
  We reserve the remainder of our time, Madam President.
  The PRESIDING OFFICER. Who yields time?
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  The PRESIDING OFFICER (Mr. Reid). In my capacity as a Senator from 
the State of Nevada, I ask unanimous consent that the order for the 
quorum call be rescinded.
  Without objection, it is so ordered.
  In my capacity as a Senator from the State of Nevada, I ask unanimous 
consent that the quorum call that will shortly be called for be charged 
equally against both sides for the time remaining.
  Without objection, it is so ordered.
  I suggest the absence of a quorum, and the clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BENNETT. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Sarbanes). Without objection, it is so 
ordered.

                          ____________________