[Congressional Record (Bound Edition), Volume 150 (2004), Part 2]
[Senate]
[Pages 2218-2239]
[From the U.S. Government Publishing Office, www.gpo.gov]




 HEALTHY MOTHERS AND HEALTHY BABIES ACCESS TO CARE ACT OF 2003--MOTION 
                               TO PROCEED

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of the motion to proceed to 
consideration of S. 2061.
  Mr. ENSIGN. Mr. President, I wish to make a few opening comments on 
the medical liability bill. Last year we had a debate in the Senate on 
proceeding--not voting on but proceeding--to an overall medical 
liability reform bill. That vote was 49 to 48 in favor of going to the 
bill. Unfortunately, the rules of the Senate provide that one needs 60 
votes. Otherwise, a filibuster, as it is commonly referred to, is 
continued. You cannot proceed to debating the legislation or to votes 
or amendments.
  There are currently 19 States, according to the American Medical 
Association, that are in crisis. Nineteen States are experiencing some 
kind of crisis with their medical system because of problems with 
medical liability insurance. All but 5 States of the remaining are 
showing some problems, the type of problems that have led to those 19 
States being in crisis.
  We had the vote last year and couldn't get it done. Senator Gregg and 
I have introduced the bill before us today, the Healthy Mothers and 
Healthy Babies Access to Medical Care Act. This bill limits the scope 
of reform of the medical liability system to the practice of obstetrics 
and gynecology and the doctors involved in those practices.
  Using my own State as an example, at the University of Nevada School 
of Medicine there has been a dramatic decrease in the number of medical 
students deciding to go into obstetrics. This is happening at a time 
when Nevada is the fastest growing State in the country. Southern 
Nevada--Las Vegas, in particular--is by far the fastest growing 
metropolitan area in the Nation. Not only are we not adding the OB/GYNs 
we need, we are actually losing them.
  The other side will argue that the General Accounting Office did a 
study and determined that doctors are not giving up their licenses. 
They said that doctors are not leaving their States.
  The problem with what the General Accounting Office did is, they went 
to the State boards and only did a survey of licenses. I was a 
practicing veterinarian and still have a license in veterinary 
medicine. Once you have a license, you never give it up because you 
never want to take the exam again. So when the General Accounting 
Office asked the State board of medical examiners how many doctors have 
given up their licenses, and they found out nobody had given up their 
licenses, that should not surprise anybody because they are not going 
to give them up. That does not mean these doctors are not quitting 
practice in Nevada and other States--Pennsylvania, West Virginia, 
Washington State, Mississippi, and many others around the country. It 
means they haven't given up their licenses because they don't want to 
take the exam again. But they are limiting their practices. And many of 
them are leaving those States that are affected.
  Several years ago, California gave us a good model. California is 
right next to my State of Nevada. California passed what is known as 
MICRA. It is a medical liability reform bill. Luckily, they passed it 
back then because

[[Page 2219]]

the trial lawyers have become so powerful across the United States that 
you could never get the same piece of legislation passed in California. 
That would be a shame because it has worked so well. It is the model 
around which we built the legislation on the Senate floor today.
  In California--Los Angeles, for example--OB/GYN medical liability 
insurance is somewhere a little over $50,000 a year. In Las Vegas, 
where we don't have and haven't had this wonderful MICRA law on the 
books, premiums can run anywhere from $110,000 up to $200,000 a year. 
Not only that, they are telling the doctors in Las Vegas, you have to 
limit the number of deliveries you do, especially if you are practicing 
on high-risk deliveries.
  If you are a woman who has a high-risk pregnancy, you want the best 
possible doctor you can get. Unfortunately, those doctors are having to 
limit their practice or retire or leave the State because they cannot 
afford medical liability coverage any longer.
  This is a crisis--a crisis of access to health care for women who 
need the health care, women who are in search of gynecological services 
or women who are about to deliver babies. The stories--there are many 
of them--are tragic in many circumstances.
  This is, by the way, only one area of our health care system that is 
in crisis. Trauma is another place, and we are going to address that 
later this year--emergency rooms. As a matter of fact, the level I 
trauma center in Las Vegas closed a couple of years ago because the 
doctors could not afford to practice there because of the liability. 
There were so many lawsuits--not lawsuits that actually had merit to 
them; some of them did but most of them did not. Because of the 
potential liability, the doctors said we cannot afford to work here. So 
the level I trauma center that serves a four-State region had to close. 
That is the same level I trauma center, for those who followed the 
national news this last year, where Roy Horn of Siegfried and Roy was 
treated after the tiger had attacked him. It is an excellent level I 
trauma center. It saves many lives.
  We had a press conference last year where a woman whose father was in 
Las Vegas and had an accident while the level I trauma center was 
closed. He had to be transferred to another hospital, and because of 
the delay in treating him, we could definitely argue that this man 
would be alive today if the trauma center had not closed. That trauma 
center was only closed for 1 week, and it was closed for that reason. 
The State of Nevada stepped up; our Governor stepped up and said we 
will cover that trauma center under the laws of the State of Nevada.
  What are the laws of the State of Nevada? It has a $50,000 cap of 
liability--total cap. Not $50,000 for pain and suffering but a total 
cap of $50,000. That is not even close to what this bill says. This 
bill has a $250,000 cap on noneconomic, nonmedical damages. You can 
still get all the economic damages you would have incurred; for 
instance, loss of income or other types of economic damages. You can 
get all of the medical coverage you would need. It is just that 
$250,000 cap on pain and suffering awards. Those are the awards we have 
seen that are getting outrageous all across America.
  That level I trauma center, luckily for Roy Horn, was open. Without 
the type of intense care you can receive in a trauma center, Roy Horn, 
I think it could be argued, would not be with us today.
  Mr. President, even though we have limited this bill to the practice 
of obstetrics and gynecology, we do have a much bigger problem in this 
country, a problem that must be addressed. We are in a political season 
today. We know that. It is an election year for the President, the 
Senate, and the House, and there is a lot of politics going on. Some 
people say: You guys are just doing this with OB/GYNs to make a 
political issue out of it.
  If people want to stand up and say that they don't want to fix the 
problem happening with access to care for women and children, then I 
guess that is a political issue. I think it is a legitimate political 
issue. People need to know where Senators stand. They need to know 
where our Presidential candidates stand on issues of this importance. I 
believe that when they find out where candidates stand, whether they 
are incumbents or challengers, this issue will make a difference in 
their vote come November.
  It is that important to our overall quality of life in America. I 
believe it is wrong that we have to have people moving, or not moving, 
from State to State because they cannot get access to quality care 
because the medical liability costs are too high--one reason versus 
another reason.
  Some States have enacted good reform. Colorado and California are the 
best examples. My State enacted a bill, but, unfortunately, it will 
take several years before we know whether that bill will withstand 
challenge in the courts. Also, there were two huge loopholes in that 
bill that the trial lawyers were able to get in that you will be able 
to drive a truck through. That is why many in the medical community in 
Nevada are trying to close those loopholes.
  We need enactment at the national level. Sixty percent of all medical 
bills are paid by the Federal Government between Medicare, Medicaid, 
and veterans. It is a national priority. We must get this medical 
liability crisis under control so that our trauma centers are not 
closing, so that women have access to their OBs, gynecologists, and 
nurse midwives, who are also covered under this bill. They sometimes 
get left out of the discussion, but they are a very important part of 
our health care delivery system in this country and delivering healthy 
babies.
  The ACTING PRESIDENT pro tempore. The Senator from Illinois is 
recognized.
  Mr. DURBIN. Mr. President, I thank the Senator from Nevada. I know of 
his personal interest in this issue. He has offered legislation before. 
Today we are considering S. 2061, which has been offered initially by 
Senator Gregg of New Hampshire and Senator Ensign.
  It is important to note that this bill, which was brought directly to 
the floor, has not been the subject of any committee hearings. In fact, 
there has been no effort, to my knowledge, to sit down and find a 
bipartisan compromise or sponsorship for this legislation. This bill 
was presented to the Senate a few days before we went into recess, and 
now it is being called this day.
  What is interesting, as well, is that there are announcements from 
the Republican leadership that we will quickly move after the vote on 
this bill to other issues, and they have been enunciated.
  The point I want to make is this: I don't believe this is a 
constructive effort that leads us to a solution to a national problem. 
This, instead, is a bill being called for one reason only: To get a 
rollcall. It is a bill being called today to put Senators on the spot. 
Vote yes; vote no. Why? Because, frankly, there are some on one side of 
the issue who want to demonstrate that they are concerned. So they are 
bringing a bill to the floor. They want a rollcall so they can say to 
those who are looking for some change and for some legislative 
progress: See, we moved quickly on this. We brought a bill to the floor 
and, darn it, it didn't pass. We will try to get to it later in the 
session.
  From my point of view, that is not the way to approach this. We 
should have dealt with this in good faith and constructive, bipartisan 
effort to try to find a solution to a serious national problem. But 
that is not the case. Instead, we are having a head-on collision 
between the trial lawyers on one side and the doctors on the other 
side.
  I come to this debate as someone who had a little bit of experience 
in this issue a long time ago. Before I was elected to Congress 21 
years ago, I was a practicing lawyer. I used to defend doctors who were 
sued for medical malpractice. I did that for 5 or 6 years. I came to 
understand the nature of these lawsuits and how complicated and painful 
many of them are. Then I was on the other side of the table, 
representing patients who went into a doctor's office or a hospital and 
were injured and they sought compensation because of these injuries. So 
I have

[[Page 2220]]

seen both sides of the issue. I come to this debate with the belief 
that we need to bring all of the parties together to find a solution. 
What we have with this bill, I am afraid, does not come close to 
addressing a serious national issue.
  Mr. President, I see that the Democratic leader, Senator Daschle, has 
taken to the Senate floor. I planned on giving a rather lengthy speech. 
At this point, I would like to yield the floor to the Senator from 
South Dakota and then I can resume after he is finished.
  The ACTING PRESIDENT pro tempore. The minority leader is recognized.
  Mr. DASCHLE. Mr. President, I thank the distinguished Senator from 
Illinois for his courtesy, and I appreciate very much the leadership he 
has provided. He has said on many occasions that it is imperative we 
address this issue in a meaningful, comprehensive way. Senators on both 
sides of the aisle recognize that this situation will not resolve 
itself; that it must be addressed. But like him, I share the concern 
that the bill before us just doesn't do that.
  Last year, the Senate was asked to consider a bill that promised to 
reduce insurance premiums for doctors by restricting the legal rights 
of injured patients. That bill was rejected by a strong bipartisan 
margin in the Senate for one simple reason: It was a sham. It put the 
profits of insurers ahead of the rights of patients, while offering 
doctors no real relief whatsoever.
  Today we are being asked to consider yet another bill that seeks to 
close the doors of the courthouse to victims of malpractice, this time 
under the guise of expanding health care access for women and infants.
  Once again, the Senate should reject this bill for what it is: a 
maneuver designed to protect nothing but the profits of insurance 
companies, HMOs, pharmaceutical companies, and medical device 
manufacturers.
  Democrats and Republicans agree that skyrocketing malpractice 
insurance premiums are a serious challenge. Too many doctors, 
especially obstetricians and gynecologists, are being forced to pay 
exorbitant premiums because of the arbitrary actuarial formulas of 
insurance companies. This is a national problem, and it demands our 
attention. But like last year, this bill actually does nothing to help 
doctors. Despite the claims of the insurance companies, every piece of 
available evidence shows that capping damages has absolutely no impact 
on the cost of malpractice insurance.
  According to the Medical Liability Monitor in a sampling 
representative of all States with caps on damages, malpractice 
insurance premiums for OB/GYNs actually increased by as much as 54 
percent in 2003. In States without caps on damages, OB/GYN premiums 
increased no more than 14 percent in 2003. Many States without caps saw 
no increases whatsoever.
  We have a situation, again documented by the Medical Liability 
Monitor, that States with caps saw increases of as much as 54 percent 
last year. States with no caps saw increases of no more than 14 percent 
last year.
  A recent study by the Weiss rating organization found that caps on 
noneconomic damages failed to result in lower premiums for doctors, 
despite the fact they did reduce the amount insurers had to pay out to 
victims. Insurers merely kept the savings for themselves and left 
doctors to fend for themselves.
  In the months since we last discussed this issue, the GAO and the CBO 
both released reports demonstrating that the primary factor driving 
insurance premiums higher is not malpractice awards, but the insurance 
companies' desire to recover their investment losses. After trying to 
pass on the cost of their bad investments to doctors, they are now 
trying to do the same thing by limiting the rights of injured patients.
  Even the insurance industry admits that caps will not protect doctors 
from higher insurance premiums. A press release published on March 13, 
2002, by the American Insurance Association stated:

       Insurers never promised that tort reform would achieve 
     specific premium savings. . . .

  Just last year, Bob White, president of the largest medical 
malpractice insurer in Florida, stated:

       No responsible insurer can cut its rates after a [medical 
     malpractice tort ``reform''] bill passes.

  Take it from the insurers themselves, no doctor should expect lower 
insurance rates as a result of this bill, and no woman should expect 
greater access to health care for themselves or their babies.
  What women should expect, on the other hand, is a two-tiered legal 
system that restricts their rights in the courthouse if they are hurt 
by the negligence of a doctor, HMO, drug company, or medical device 
manufacturer.
  This bill is unjust. It restricts women's access to the legal system 
while preserving it actually for men.
  Under this bill, if a man shows signs of lung cancer and his illness 
is misdiagnosed due to the negligence of his doctor, he can recover 
damages to compensate him fully for his injuries. But if a woman with 
cervical cancer suffers the same negligence, her damages will be 
arbitrarily capped. If a man is prescribed defective blood pressure 
medication by an internist, he can recover full damages. But if a woman 
is prescribed blood pressure medication during pregnancy that causes 
blood clots, her damages will be capped.
  The real problem with this bill is not merely that it values the 
injuries of men and women differently, as troubling as that is, the 
real problem is that it presumes that politicians in Washington are 
better able to determine how to compensate injured patients.
  Every year, tens of thousands of women and infants are injured at the 
hands of OB/GYNs.
  Nine years ago, Colin Gourely of Nebraska suffered complications at 
birth due to his doctor's negligence. Today, he has cerebral palsy and 
is confined to a wheelchair. In his short life, he has needed five 
surgeries to correct bone problems and sleeps in a cast every night to 
prevent further orthopedic problems.
  Shannon Hughes from South Carolina was in the middle of a difficult 
labor. Despite repeated calls, the doctor wouldn't come until her 35th 
hour of labor. It turned out that the umbilical cord was wrapped around 
her baby's neck cutting off oxygen. Today, Shannon's son, Tyler, is 
severely brain damaged and bedridden. He requires constant medical care 
and is fed through a tube.
  When Alexandra Katada was born in McKinney, TX, the doctor stretched 
her spine, destroying her nerves, leaving her partially paralyzed. The 
baby's elbow was pulled from its socket and broken. She died 8 months 
later from her spinal injuries.
  Let us be clear: No amount of money can compensate a parent for their 
child's pain, but malpractice awards are not simply about money. They 
are about offering victims a sense of justice, a way to hold 
accountable those responsible for their injuries or the death of their 
loved ones.
  Some have said that without limits, the legal system looks more like 
a lottery. But no jury award could ever make the parents of Colin 
Gourely or Tyler Hughes or Alexandra Katada feel that they were holding 
a winning ticket.
  Malpractice awards are decided by juries and approved by judges. This 
is the same system on which we rely to decide life and death issues in 
capital cases. Why would we not trust our citizens to fairly evaluate 
how to deliver justice for the victims of medical malpractice?
  Democrats are eager to work together with our colleagues to craft a 
real solution to the problem of rising malpractice premiums. But, once 
again, rather than working with us to craft a true compromise that 
would address the problems of increasing insurance premiums, the 
Republican leadership has decided to bring this bill to the floor with 
the same level of problems, the same concerns we had 7 months ago.
  If our colleagues were serious about combating the rising cost of 
malpractice premiums, they would join us in supporting bipartisan 
legislation that includes both long-term and

[[Page 2221]]

short-term solutions that directly address the rising premiums without 
harming injured Americans--solutions such as individual tax credits to 
offset costs when premiums rise sharply; reasonable limits to punitive 
damages; prohibitions against commercial insurers engaging in 
activities that violate Federal antitrust laws; sensible ways to reduce 
medical errors; and direct assistance to geographic areas that have a 
shortage of health care providers due to dramatic increases in 
malpractice premiums.
  The Senate faced a similar situation discussing concerns about the 
rising terrorism insurance rates. Some thought then that the only 
solution was to undo the jury system. Instead, the Senate worked 
together and developed a bipartisan solution that fixed the problem and 
brought down insurance rates dramatically.
  We should pursue the same model for addressing this problem as well.
  There is no question that malpractice rates are a serious problem. 
Doctors and patients deserve a real answer. This bill is not it. I urge 
my colleagues to reject cloture.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Santorum). The Senator from Illinois.
  Mr. DURBIN. Mr. President, I thank the Senator from South Dakota 
because I think he has raised an important issue of concern in this 
debate and that is one I have initiated in my opening remarks. We need 
to have a constructive bipartisan conversation about a serious national 
problem. Instead, this bill, S. 2061, was introduced just a few days 
ago without a committee hearing, reference to committee, without any 
attempt to find common ground and find a solution. In fact, it is being 
called today so there will be a vote on record and nothing else. It is 
anticipated the bill will not go forward.
  I spoke to doctors in Illinois over the weekend, doctors who share my 
concern about the medical malpractice premium situation in our State. I 
have told them what we are doing today is frankly a political exercise. 
It is an exercise to come up with a roll call vote so those on one side 
of the issue can go to their supporters and say, we have worked hard. 
We brought this bill to the floor, we have been stopped, and we cannot 
get back to it because we are so busy. Frankly, that is no solution. In 
State after State, including my State, there are areas where there are 
serious medical malpractice premium problems. They arise for a variety 
of reasons. Memorial Hospital in Belleville, IL, has lost numerous 
obstetricians and gynecologists in the last year due to rising 
malpractice premiums. Community leaders in that town, which I am 
familiar with--it is an area I grew up in--have come to me and said, 
this is a real source of concern. We are losing doctors. They are 
doctors who are leaving the practice to retire early, and I met one 
doctor in that circumstance. There are some who are moving to rural 
counties where the malpractice premiums are lower and they are further 
away, of course, from the people they originally served. Some are 
moving across the river to Missouri where they are finding malpractice 
premiums are a fraction of what they are in Illinois.
  There is no doubt in my mind there is a serious problem that needs to 
be addressed. It is not just in the obstetrical/gynecological area. The 
OB/GYN issue is an important one, but there are other areas of need 
relative to trauma care, neurosurgery, and orthopedic surgery. The list 
is long and we need to address it in a serious and responsible way.
  This bill, however, is being brought to us on a moment's notice. This 
bill is being brought to us in an effort to really check off the box 
that says, yes, we considered medical malpractice and now we are going 
to move on. That is unfair and it is unfortunate, and we can do better.
  I will tell my colleagues a story about some of the situations I know 
of in my State. Eduardo Barriuso, who is a physician in the Humboldt 
Park area of Chicago, pays $104,000 a year for malpractice insurance. 
He earns about $175,000 because the patients he sees are poor patients, 
Medicaid and Medicare patients. Doctors who depend on Medicaid and 
Medicare are not wealthy individuals, but they perform a valuable 
function because if they are not there to serve the poorest of the 
poor, then who will?
  This doctor says that faced with $104,000 in annual premiums and a 
$175,000 annual income, he cannot continue his practice, and he 
certainly cannot pass on the higher costs of medical malpractice 
insurance to his patients who are poor people.
  Another Chicago area OB/GYN has announced he is going to study to 
obtain his pharmacist license. Right now he is paying $115,000 a year 
for liability insurance.
  Let's go to the root cause of the issue. Why are we even debating 
this issue of medical malpractice? There are several reasons. First, 
the men and women who are engaged in the medical profession are some of 
the most important people in our lives, some of the most important 
people in America. These are men and women who at great personal 
sacrifice go to medical school so that they are trained and skilled to 
be there when we need them, when our families need them. Time and 
again, my family and most who are following this debate have turned to 
a doctor in the hopes that he or she can cure an illness, provide some 
hope, give people some reason to believe they can overcome a disease, 
disability, or an injury.
  Doctors are so critically important to all of us and yet when one 
takes a look at a doctor's practice, at a doctor's skills, there is a 
human side to the equation. They are human beings. They do make 
mistakes. Some are simple negligence. Some are far worse. When these 
mistakes occur, when a patient is in a hospital or a doctor's office 
and the wrong thing is done and that patient is injured, what should 
happen? In most walks of life in America, we are held accountable for 
our actions.
  If I decide this evening to take my car and go out speeding on a 
highway, strike another car and injure someone, I will be held 
accountable. I was negligent. I did not reach the standard of safety 
that is expected of me as a driver and I must pay the price. That is 
true for businesspeople, for individuals, for virtually everyone in 
America. It is certainly true for medical professionals. When they make 
a mistake by negligence or intentional misconduct, they can and should 
be held accountable. I think that is part of our system of justice. 
Very few, if any, people argue that is not a reasonable thing to do.
  How serious then are the number of medical errors and medical 
malpractice cases that occur across the United States? Well, the most 
far-reaching study of the extended cost of medical errors in hospitals 
and doctors' offices was published by the Journal of the American 
Medical Association last October. This is a dispassionate, objective 
analysis of the likelihood of medical errors and medical negligence in 
America. The authors of the study analyzed 7.4 million patient records 
from 994 hospitals in 28 States, representing some 20 percent of all 
the hospitals in America. This was an exhaustive study.
  They concluded medical injuries in hospitals ``pose a significant 
threat to patients and incur substantial costs to society,'' and ``are 
a serious epidemic confronting our health care system.''
  A study in the Journal of the American Medical Association has told 
us as we go into this debate the first thing we can acknowledge is we 
have an epidemic of medical negligence in America. Now this was not the 
Journal of the American Trial Lawyers. This was the Journal of the 
American Medical Association. They published a study that told us and 
warned us we have a serious problem in America.
  The study found injuries in U.S. hospitals in the year 2000, for just 
one year, led to approximately 32,600 deaths, at least 2.4 million 
extra days of patient hospitalization, and additional costs of up to 
$9.3 billion. These injuries did not include adverse drug reactions or 
malfunctioning medical devices.
  Dr. Carolyn Clancy, Director of the Agency for Health Care Research 
and

[[Page 2222]]

Quality, called medical errors ``a national problem of epidemic 
proportions.''
  This was at a hearing before the Government Affairs Committee last 
June. She said Congress and the Bush administration need to make sure 
health care professionals work in systems that are designed to prevent 
mistakes and catch problems before patients are injured.
  According to the Institute of Medicine, the medical errors epidemic 
has caused more American deaths per year than breast cancer, AIDS, and 
automobile accidents combined. It is the equivalent to a jumbo jetliner 
crashing every 24 hours for an entire year.
  More than 70 studies of the past decade have documented serious 
quality problems in medical treatment, yet this bill before us today, 
S. 2061, does absolutely nothing to address this underlying problem of 
patient safety. How can we in good conscience talk about a medical 
malpractice problem and conclude the only place we need look is to the 
courtroom, to the patient once injured who goes to the courthouse 
seeking some compensation, some accountability for an injury that was 
absolutely no fault of their own? Yet the bill before us is absolutely 
silent when it comes to making doctors' offices, hospitals, and patient 
treatment safer.
  This last Sunday in the New York Times, an interesting article on 
patient safety was published. I ask unanimous consent that the article 
be printed in the Congressional Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Feb. 22, 2004]

            Running a Hospital Like a Factory, in a Good Way

                           (By Andrea Gabor)

       On the face of it, SSM St. Joseph Health Center, a small 
     hospital in suburban St. Louis, does not seem very 
     revolutionary in business terms. The hospital is a nonprofit 
     institution run by the Franciscan Sisters of Mary. The chief 
     executive, Alan Kevin Kast, is a former seminarian who begins 
     his meetings with prayer and refers to his hospital as a 
     ministry. A crucifix hangs in every room.
       Yet St. Joseph is also guided by worldly objectives. The 
     364-bed hospital, part of SSM Health Care, which has 20 
     hospitals in four states and is led by Sister Mary Jean Ryan, 
     is in the vanguard of health care change. By using the 
     quality and productivity techniques that helped strengthen 
     American industry in the 1980's, the hospital has improved 
     patient care and reduced medication errors, waiting time in 
     the emergency room and infection rates. It has even sharply 
     reduced nursing turnover, which prevents many hospitals from 
     delivering consistent care.
       Other hospitals are also starting to use some of the 
     techniques that have made industry more efficient in its 
     quest to improve quality and save money. Every year, 
     preventable medical errors cost $9 billion, and tens of 
     thousands of lives, according to a recent study by the Agency 
     for Healthcare Research and Quality, part of the Department 
     of Health and Human Services, and Johns Hopkins University.
       Whether in industry or in health care, a quality strategy 
     ``gives a unified vocabulary for thinking about production as 
     a system with a focus on customers,'' said Donald Berwick, 
     founder of the Institute for Healthcare Improvement, an 
     advocacy organization based in Boston.
       Many hospitals are using a road map provided by General 
     Electric, which has been selling its productivity-enhancing, 
     cost-cutting elixir known as Six Sigma, along with medical 
     imaging equipment, to hospitals around the country. Six Sigma 
     is a statistical measure that can be applied to any industry 
     and refers to a goal of reducing errors to 3.5 parts per 
     million. Two years ago, for example, the North Shore-Long 
     Island Jewish Health System contracted with GE Medical 
     Systems and the Harvard School of Public Health to help start 
     a leadership training center. Similarly, after close to a 
     decade of cost-cutting, the Yale New Haven Hospital also 
     recently signed up with GE.
       New devotees of quality are beginning to measure and 
     analyze everything from waste and waiting time to infection 
     rates and the narrow avoidances of mistakes in treatment, as 
     well as organizational barriers to improvement.
       In a culture ruled by a fear of malpractice, the focus on 
     quality involves a shift from secrecy to transparency--
     including reporting and dissecting mistakes.
       That shift may be helped by a provision of the Medicare 
     legislation passed in December that withholds a small part of 
     Medicare payments if a hospital refuses to disclose quality 
     data. ``It's not a lot of money, but it's incredibly 
     historic,'' said Robert Galvin, director for global health 
     care of G.E. and a founder of the Leapfrog Group, an industry 
     consortium aimed at improving health care.
       A few hospitals, including Dartmouth Hitchcock Medical 
     Center in New Hampshire and the nine hospitals that form the 
     Wisconsin Collaborative for Healthcare Quality, have begun to 
     publish comparative quality data on their Web sites, 
     including statistics like mortality rates.
       At St. Joseph, where a quality strategy was first embraced 
     in the late 1980's, measurement, standardization and analysis 
     are obsessions.
       ``When I came here, everything was done differently,'' said 
     Filippo Ferrigni, who has led the hospital's intensive care 
     unit since 1987. ``We didn't even measure blood pressure the 
     same way in everyone. We decided we needed to have internal 
     standards for measurement of at least blood pressure, 
     pulmonary artery pressure, temperature, the fundamental 
     building blocks of medicine.''
       The quality push at St. Joseph and the other hospitals in 
     the group has led to systemwide benefits. In 1999, the 
     company was in the red, but in 2002 it had net income of $17 
     million, on revenue of $1.8 billion. Amid nationwide nursing 
     shortages, it lowered annual turnover to about 10 percent in 
     2002 from 15 percent in 2000. The national average turnover 
     rate is more than 20 percent.
       At St. Joseph, the zeal for quality improvement is helping 
     the sickest patients. When Dr. Ferrigni read an article in a 
     recent issue of The New England Journal of Medicine linking 
     high glucose levels to an increased chance of infections, he 
     knew that he had found his next big opportunity for improving 
     patient care. Infections acquired in hospitals and intensive 
     care units are common, according to a report released in 
     December by the government's Agency for Healthcare Research 
     and Quality; about two million patients are infected each 
     year at a cost of more than $4.5 billion.
       The stress of illness results in higher gluclose levels for 
     most patients--not just those with diabetes. Dr. Ferrigni 
     decided to see if lowering glucose levels in the intensive 
     care unit by giving patients intravenous insulin would lower 
     infection levels. Initially, the project ran into 
     ``tremendous resistance,'' he said. Doctors were concerned 
     that giving patients insulin might result in brain injury and 
     seizures. Dr. Ferrigni, however, persuaded his colleagues to 
     allow him to gradually reduce blood sugars of patients in the 
     intensive care unit. As blood sugars declined among the 
     patients, overall mortality in the unit declined by 40 
     percent.
       The results were so astonishing that the hospital decided 
     to make the reduction of glucose levels for all patients, not 
     just those in intensive care, a quality goal. Today, all 
     patients are given glucose tests and, if necessary, get 
     insulin. Hospitalwide, that change is credited with reducing 
     deaths over all, not just from infections, by 28 percent from 
     the average recorded from 1998 to 2001.
       Because each serious infection costs about $35,000, the 
     savings are also huge. ``This is the single most important 
     leverage point for reducing mortality that's available to 
     hospitals,'' Dr. Ferrigni said. ``This is incredibly powerful 
     stuff.''
       The effort, however, also demonstrated a major 
     organizational challenge. ``Doctors write the orders, but 
     nurses have to make it work,'' Dr. Ferrigni said, explaining 
     that the glucose initiative significantly increased nurses' 
     workloads.
       Blood sugar, once measured four times a day, now must be 
     measured 12 times a day in intensive care. Once nurses saw 
     the impact of the glucose testing, however, ``they got all 
     over it,'' Dr. Ferrigni said.
       Some of the greatest quality challenges involve persuading 
     employees in various departments to cooperate. Consider the 
     effort, known as 30/30, to cut waiting time in emergency 
     rooms. The goal is to evaluate patients with life-threatening 
     illnesses or injuries in just 30 seconds and to reduce the 
     time needed to admit patients to a hospital bed from the 
     emergency room to 30 minutes.
       Improvements in the emergency room involved a number of 
     departments. When X-rays were needed, it often took an hour 
     for an X-ray technician to get to the emergency room. To 
     solve the problem, one X-ray technician was permanently 
     transferred there. Or, in admitting psychiatric patients, the 
     hospital had to wait for an evaluation by an outside 
     psychological social worker before moving patients out of the 
     emergency room, a process that averaged 90 minutes. To reduce 
     the wait, the hospital hired a psychological social worker.
        Within two years, SSM St. Joseph has met its objectives in 
     the emergency room 94 percent of the time, up from about 65 
     percent when the project began. To help keep the organization 
     from becoming complacent, patients receive a coupon for $10 
     of groceries when SSM misses its 30/30 target. The hospital 
     spent $14,450 in 2003 on coupons.
        The hospital now spends about $200,000 more each year on 
     increased emergency-room staffing. But a jump in admissions 
     has more than made up for that cost. In 2002, St. Joseph 
     garnered about 68 percent of all new emergency room 
     admissions in St. Charles County. After years without growth, 
     the hospital also had a 7 percent increase in patient 
     admissions in general in 2001, and the same increase in 2002.

[[Page 2223]]

        Some major health care institutions, like Johns Hopkins 
     and the Mayo Clinic, have been pursuing quality initiatives 
     for years, but generally the mantra has been slower to 
     penetrate big institutions.
        Large teaching hospitals, which juggle teaching, research 
     and patient care, have special challenges. Because of their 
     residency programs, many of their doctors are temporary. At 
     Yale-New Haven, one big question is whether a hospitalwide 
     quality effort can succeed when only 10 percent of the 
     hospital's 2,600 physicians are full-time. The rest are 
     community physicians or professors at the School of Medicine.
        The hospital began its Six Sigma effort in the intensive 
     care unit, which had its own staff of nurses. The project 
     involved reducing a relatively high rate of blood-stream 
     infections that occur in patients who have catheters.
        When management broached the subject with Heidi Frankel, 
     director of surgical critical care at the hospital and a 
     doctor at the Yale School of Medicine, she was skeptical. 
     ``This isn't an assembly line; it's an I.C.U.,'' Dr. Frankel 
     recalled saying. ``But it turned out to be a brilliant and 
     inspired thing to use rigid corporate improvement techniques 
     in a patient model because there are many things we do that 
     are repetitive, and that we could standardize.''
        After winning over fellow doctors and residents, Dr. 
     Frankel standardized the catheterization procedure and 
     created a training video for the regular influx of new 
     residents. During the last year, the surgical intensive care 
     unit cut its catheter-related infection rates by about 75 
     percent. A rigorous quality strategy appeals to many 
     hospitals not only because it controls costs, but also 
     because it can improve care. But the process can take years 
     to master. That is why, at St. Joseph, the true believers 
     would also recommend a little prayer.

  Mr. DURBIN. Let me just note a few things about it. It is entitled 
``Running a Hospital Like a Factory, in a Good Way.''
  The article tells a story of a hospital in suburban St. Louis, the 
SSM St. Joseph Health Center. It is a very complimentary article. The 
hospital is a nonprofit institution run by the Franciscan Sisters of 
Mary and the chief executive, a former seminarian, has really decided 
to make St. Joseph's Hospital different. They have decided they are 
going to go after quality control and the reduction of patient injuries 
and accidents at their hospital. They are using techniques that are 
used by private industry. I will quote from the article:

       Other hospitals are also starting to use some of the 
     techniques that have made the hospital industry more 
     efficient in its quest to improve quality and save money. 
     Every year, preventable medical errors cost $9 billion, and 
     tens of thousands of lives, according to a recent study by 
     the Agency for Healthcare Research and Quality, . . .

  So this hospital, St. Joseph's, in suburban St. Louis, decided to 
consult with General Electric, a major corporation, to find a way to 
make the services they offer to their patients better. They are using a 
process called Six Sigma. It is a statistical measure and refers to the 
goal of reducing errors to 3.5 parts per million. What they found is 
this:

       New devotees of quality are beginning to measure and 
     analyze everything from waste and waiting time to infection 
     rates and the narrow avoidances of mistakes in treatment, as 
     well as organizational barriers to improvement.

  The article says:

       In a culture ruled by a fear of malpractice, the focus on 
     quality involves a shift from secrecy to transparency--
     including reporting and dissecting mistakes.

  Let me go on in the article. They noted here one specific example. 
The New England Journal of Medicine had linked high glucose levels to 
an increased chance of infection, so this hospital decided, 
particularly in the emergency room and for critical patients, to 
continue to monitor their glucose levels to avoid the incidence of 
infection. The blood sugars declined among patients when they started 
monitoring them and administering insulin to keep blood sugars down. 
Simply by using this quality approach to reduce the likelihood of 
infection, this hospital reduced the overall mortality in the intensive 
care unit by 40 percent. The results were so astonishing that the 
hospital--and I quote again:

       . . . decided to make the reduction of glucose levels of 
     all patients, not just those in intensive care, a quality 
     goal. Today, all patients are given glucose tests and, if 
     necessary, get insulin. Hospitalwide, that change is credited 
     with reducing deaths overall, not just from infection, by 28 
     percent from the average recorded from 1998 to 2001.
       Blood sugar in this hospital, once measured four times a 
     day, now is measured 12 times a day.

  Those who follow this debate and will read this article in the 
Congressional Record I think will understand the point I am trying to 
make. If we are going to reduce the likelihood of doctors being sued 
for malpractice, the first stop in that conversation should be the 
reduction of medical errors. If we do that, we are serving two goals: 
reducing doctors' exposure to malpractice and we are making certain 
that patients will go through their medical experience with a much 
better outcome.
  You would think that would be the first title in this bill, 
``Reducing Medical Accidents, Reducing Medical Errors.'' This bill does 
not even address that. This bill says that after you are injured, after 
you have gone to court, after you have successfully been given a 
verdict, this bill is going to restrict and reduce the amount of money 
you can recover.
  From an insurance company's point of view and the view of some 
doctors, that is good enough. But from the viewpoint of making American 
hospitals and medical practice safer, that is hardly the place to 
start. Frankly, this bill does not address the core issue.
  Mr. CORNYN. Will the Senator yield for a question?
  Mr. DURBIN. I am happy to yield for a question.
  Mr. CORNYN. In my own State of Texas, that passed a constitutional 
amendment along with implementing legislation to reduce the cost of 
medical liability insurance, we have seen reductions offered by medical 
liability carriers of 12 percent in one case and projected to be as 
much as a 19 percent reduction in medical liability insurance costs.
  While I certainly would agree with the Senator from Illinois that 
reduction of errors is an important goal, would he not find a reduction 
of medical liability insurance rates of 12 to 19 percent one way to 
reduce the cost of health insurance and health care generally, in a way 
that would benefit the public generally?
  Mr. DURBIN. I thank the Senator from Texas. I am aware of his State's 
experience. I am not an expert on it, but I read a little bit about it.
  I will say to him I will be citing some statistics in the course of 
my remarks that will show that the caps on recovery for victims of 
medical negligence have reduced premiums in some States but not in 
others. It is an unpredictable outcome, when you reduce the exposure of 
a doctor for his malpractice, as to whether or not the cost of medical 
malpractice premiums goes down.
  I would further say to the Senator from Texas, if our goal is simply 
to reduce medical malpractice premiums, frankly, we could stop people 
from suing in court. We could basically say you can't go to a 
courthouse if you are a victim. Malpractice insurance would cease to 
exist in that case.
  What we are trying to do here is find a balance, a balance that is 
just and fair and says if you are an innocent victim of medical 
negligence, you are entitled to a day in court and a reasonable 
recovery. That doesn't mean you can come in and expect punitive damages 
in every instance, or some enormous verdict in every instance, but we 
should be able to say that if you are a victim, you will be able to 
recover a reasonable amount for your injuries.
  I say to the Senator from Texas, in this bill, this jury of the 
Senate has decided that we know the maximum amount any woman or baby 
should be entitled to recover in a medical malpractice action for 
noneconomic losses. We are saying here that, regardless of the facts, 
regardless of the culpability of the doctor, regardless of the 
circumstances, regardless of how serious the injury is, the maximum 
amount which the jury of the Senate will render in verdict for the 
victim is $250,000 for pain, suffering, and disfigurement.
  I say to my friend from Texas, there are some who say that is just 
the price you have to pay; if you want to keep malpractice premiums 
down, you are

[[Page 2224]]

going to have to say in some circumstances there is going to be an 
outcome that makes us feel a little uncomfortable. I am going to give 
examples of specific cases where $250,000 in pain and suffering is not 
even close to compensating the family and the child who are the victims 
of malpractice in these OB/GYN circumstances.
  Mr. CORNYN. Will the Senator yield for a further question?
  Mr. DURBIN. I am happy to yield without yielding the floor.
  Mr. CORNYN. The Senator from Illinois makes an important point, and 
that is there will invariably be one or two, perhaps, cases, or a 
handful of cases, or an example you can point to where a $250,000 limit 
on noneconomic damages might seem to be too low. But would the Senator 
agree that what we are trying to do is use a rather indirect means to 
try to accomplish a greater good for the patients who are denied access 
to health care?
  For example, in 154 of the 254 counties in my State, a woman cannot 
find a baby doctor to deliver her baby because of the cost of 
malpractice insurance. Many obstetricians simply decide to give up and 
retire or to move someplace else where malpractice liability rates are 
lower.
  While the Senator no doubt can find an example where the amount is 
lower than a jury perhaps might award, why shouldn't we take a step in 
the direction of bringing some predictability and thus bringing some 
reasonableness in reducing the rates for liability insurance so people 
can have access to doctors where they live?
  Mr. DURBIN. The Senator from Texas makes an excellent point. I think 
that is the reason, I would say to my colleague, why once this bill is 
defeated--and I hope it is defeated--once it is defeated, we really 
have a responsibility here.
  We come from different sides of the political spectrum. We are about 
as far apart as they come in this Chamber in terms of our political 
philosophy, but I think we both can see there has a been problem. The 
medical malpractice premiums in parts of your State and parts of my 
State have reached record high levels. These premiums are forcing my 
good doctors in Illinois to retire, move away to another State or to an 
area that is friendlier when it comes to the cost of the premiums. 
There is a denial of coverage. There is a denial of services to a lot 
of poor people in Texas, Illinois, and a lot of other States.
  Shouldn't we come together instead of a take it or leave it bill that 
has never been referred to the Senate Judiciary Committee, never been 
the subject of a hearing, does not address issues of medical safety and 
other issues we can agree should be part of this conversation? 
Shouldn't we at the end of this debate on this bill sit down and 
honestly try, on a bipartisan basis, to find common ground and 
compromise that would serve the goal the Senator is suggesting, the 
greater good, to make sure these good doctors across America will be 
there when we need them?
  I thank the Senator from Texas.
  Mr. CORNYN. If the Senator will yield for a final question.
  Mr. DURBIN. I am happy to yield.
  Mr. CORNYN. I appreciate the spirit in which the comments are offered 
by the Senator from Illinois, because this is a subject where we do 
need to have a rational debate. Unfortunately, because we cannot get 60 
votes to allow the floor debate and actually vote, we are engaging in a 
hypothetical exercise.
  Wouldn't the Senator from Illinois deem it important for this body to 
have a realistic, rational debate and ultimately vote to see what the 
will of this body and the people we represent is when it comes to 
trying to get some handle on reducing the costs of liability insurance 
so more mothers can have access to obstetricians and more people can 
have access to health insurance by reducing health insurance costs?
  Mr. DURBIN. I agree with the Senator from Texas. I thank him for his 
comments which I believe are good-faith comments.
  In my rank on this side, I do not set the calendar of how bills are 
determined; your leader, Senator Frist, does that. I suggest the best 
place to start is not on the floor of the Senate but for a group, on a 
bipartisan basis, to try to come up with an honest answer to this issue 
and bring it to the floor and stand together to try to pass this bill 
in a responsible way. Simply bringing a bill, take it or leave it, a 
few days, no committee hearings, does not serve the needs we are 
addressing.
  I see a few other colleagues on the floor so I will go through a few 
points quickly and return to the Senate later in the day if there is an 
opportunity.
  This particular bill does not address the problems of malpractice 
premiums in an honest fashion. The problem with malpractice premiums is 
a cyclical insurance problem. We have had crises before with high 
premiums in the 1970s and 1980s. Many States passed changes in the law 
to address this, some in tort reform and some in insurance reform.
  This bill does not even look at the insurance companies that are 
offering medical malpractice insurance. What it is basically saying is 
that we are not even going to ask the question as to whether these 
companies are overcharging doctors and hospitals. Instead, we are going 
to say that the only culprits, the only people who are at fault in this 
conversation, are the victims of medical malpractice. They are the ones 
who have to tighten their belt, take fewer dollars. We will not even 
consider in 2061 asking that the insurance companies be held 
accountable for their own conduct and ask whether they are gouging us 
when it comes to prices.
  How can we have an honest discussion of the medical malpractice issue 
without addressing medical safety, without asking these important 
questions of the insurance company?
  This bill does not address frivolous lawsuits. The proponents of tort 
reform claim frivolous lawsuits are at the root of the problem. This 
bill does not do anything to cut down on the number of such suits but 
only punishes those who make it to court.
  Keep this in mind: If a lawsuit is worth $250,000 in noneconomic 
losses, which is the maximum under this bill, this is a lawsuit where 
the plaintiff clearly has a cause of action which a jury or judge has 
decided is a worthy cause of action worth compensation. These are not 
frivolous lawsuits that would have $250,000 in noneconomic losses. 
Something happened. A patient went to a hospital or to a doctor and was 
injured wrongly.
  This bill is saying we are not going to address frivolous lawsuits. 
We will basically say those who are entitled to recover are limited in 
the amount they can recovery.
  One of the worst parts of this bill, we will hear arguments in the 
Senate that we need OB/GYNs across America and without these doctors to 
deliver babies we will be at a disadvantage. Frankly, no one can argue 
with that. But when we read the bill, it is about more than doctors. 
This bill, like the last one we considered last year, has been expanded 
to provide protection against lawsuits filed against pharmaceutical 
companies and medical device companies.
  We are finding, time and again in the Senate, whatever the issue, the 
Republican side of the aisle insists there be at least one provision in 
every bill that is going to benefit the drug companies of America. In 
this situation they are saying these drug companies should not be held 
accountable for the damages and injuries caused by their products 
involved in OB/GYN practice.
  Why would we do this? Why would we decide we are going to exempt them 
from exposure, liability, and accountability for some of the drugs and 
devices that are being used across America that cause injury to 
innocent people? That is exactly what they do.
  Let me give some examples of the types of litigation that would have 
been eliminated by this bill, had it been in law. The Dalkon Shield was 
an IUD on the market in the early 1970s and caused thousands of women 
to suffer miscarriages, loss of their female organs, and infertility. 
It took eight punitive damage awards to force the manager of the Dalkon 
Shield to finally recall the product. It was not a law passed by 
Congress. It was a lawsuit filed against the company because

[[Page 2225]]

of their dangerous product; 400,000 claims were eventually filed 
against A.H. Robins, the manufacturer of Dalkon Shields. Evidence 
established that Robins, the device company, knew that its IUD was 
associated with high rates of pelvic disease and septic abortion and 
that this company had misled doctors about the device's safety and had 
dropped or concealed studies on the device.
  Why in the world we would protect this brand of reckless, 
irresponsible corporate behavior with this bill? The honest answer is 
because politically the pharmaceutical companies and the medical device 
companies have a death grip on this Congress. They get what they want. 
We saw that when we considered the prescription drug bill for seniors 
and we are seeing it again. There is not a bill that comes through 
here, not one that passes through the traffic in the Senate, where 
somebody is not looking for a way to increase the profits and reduce 
the liability of pharmaceutical companies. This is a further 
illustration of it.
  There are other things I could point out, drugs or devices that have 
been used. Let me give one from the State of Georgia. A&A Medical, a 
Georgia-based manufacturer of OB/GYN devices such as forceps, failed to 
sterilize tens of thousands of devices from 1999 to 2002, posing life-
threatening injuries to women. Former staff of this company told FDA 
investigators that sterile and nonsterile devices were routinely 
shipped in the same batches. A month after urging the company to 
voluntarily recall its products, the FDA seized and destroyed the 
company's inventory. The owners of A&A Medical left the country after 
the seizure.
  These are the kinds of companies we are trying to protect with this 
bill? This is not a question about whether a doctor could deliver a 
baby in Texas, Connecticut, Ohio, or Alabama. It is a question about 
whether or not these companies will be held accountable for their 
wrongdoing.
  There is an approach that can be used and should be used that can 
bring a positive outcome. Senator Lindsey Graham from the State of 
South Carolina and I have introduced bipartisan legislation. We have 
worked to try to include in this legislation the key elements that we 
think are necessary for medical malpractice reform. Let me tell you 
what they include.
  First, dealing with medical safety, establish a voluntary system to 
share medical error information among providers and patient safety 
organizations. The information shared will be immune from legal 
discovery so there is some transparency in what occurs but no 
liability, so a greater likelihood they would exchange information.
  Also, consistent with the Institute of Medicine, the bill creates a 
new center for quality improvement. We provide immediate relief for 
doctors and hospitals.
  If there is one point I make, it is this: If Senators are hearing 
back home that medical malpractice premiums are too high and that you 
should vote for this bill, keep in mind what Senator Ensign of Nevada 
said in the debate we had a few months ago on a similar bill. Capping 
noneconomic losses will not reduce medical malpractice premiums for 
doctors for 4 to 6 to 8 years. Why? Because there is a long tail of 
liability. Doctors' acts today that constitute negligence can result in 
court suits tomorrow, next year, and for years to come when those 
injuries are finally discovered. If we cap noneconomic losses today, 
there will not be a relief for doctors in their medical malpractice 
premiums for years to come.
  Senator Graham and I considered that and said we have to deal with 
this directly. And dealing with it directly means offering a tax 
credit, particularly to those doctors in specialties where the premiums 
have gone too high. Doctors today deduct the cost of medical 
malpractice premiums from their business expenses.
  We would go further and offer to doctors and hospitals a tax credit 
when their premiums skyrocket. That is the only reasonable way to 
provide immediate relief. We have given tax breaks to a lot of wealthy 
people across America under this Bush administration. Why can't we, 
when it comes to the medical professionals, say they should have a tax 
credit so that skyrocketing premiums do not force them out of business 
into retirement or to move their practice?
  In our legislation, we reduce frivolous lawsuits. We put in the 
Durbin-Graham bill penalties for attorneys who file frivolous lawsuits: 
The first time, damages; the second time, even more expense; and the 
third time we would subject them to losing their license to practice 
law for a frivolous lawsuit. There is no reason any doctor or any 
person, for that matter, should be subjected to a lawsuit which ties 
them up at great expense, costs their insurance company money, and 
raises their premiums when, in fact, that lawsuit is frivolous. There 
are few of these, but there should be none. We think there should be a 
penalty for those who take advantage.
  We also stop any competitive activities by insurers under the 
McCarran-Ferguson Act, and we provide resources to help hard-hit areas 
of doctor shortages, particularly rural and inner-city areas, through 
the Department of Health and Human Services.
  We also address the issue of reinsurance. This is a topic we never 
talk about. Most medical malpractice premiums are charged against the 
initial liability which is usually in the range of $1 million, and then 
the umbrella policy which covers all the damages which might exceed $1 
million. Then companies are brought in, reinsurance companies, that 
sell the original insurance policy. These are the areas where we 
believe there is a need for reform.
  Reinsurance costs are about 28 percent of medical malpractice 
premiums. Their prices swing widely. They are mainly international 
corporations subjected to little regulation. Frankly, since September 
11, reinsurance costs have gone up dramatically across America.
  As this chart illustrates, this is Hurricane Andrew; reinsurance 
costs spiked in America. Then they went back down again. This is 9/11. 
After 9/11, reinsurance costs have gone up. So why are these medical 
malpractice insurance companies charging higher premiums? Part of it is 
the cost of reinsurance. Senator Graham and I address this and believe 
that we should create a Federal fund which deals with reinsurance, 
where there would be contributions from doctors, hospitals, and health 
care professionals, and we can see some stability in the amount that is 
charged.
  This situation we have before us is clear. Caps don't work. This 
chart shows the percentage increase in median premiums for medical 
malpractice from 1991 to 2002, the States without caps, no limitations 
on recoveries in verdicts, and the States with caps are shown in red. 
You can see that Arizona, New York, Georgia, and Washington, with no 
caps, had very modest increases in malpractice premiums.
  Take a look at California, which has a $250,000 cap, Kansas, Utah, 
and Louisiana. In this period of time, malpractice premiums went up 
dramatically in the States with the caps. There is little or no 
correlation between the caps and the fact that malpractice premiums are 
going up.
  Look at these OB/GYN insurance premiums in damage cap States versus 
noncap States in 2003: In California, a State with caps, there was a 
54-percent increase in OB/GYN premiums with caps in place at the State 
level; in Oregon, zero percent increase; against the State of 
Washington, California, 15 percent, State of Washington, zero percent; 
Colorado, 29 percent with caps, Georgia, only 10 percent without caps; 
New Mexico, 52 percent increase in OB/GYN medical malpractice premiums 
with caps, and in the State of Arizona, 14 percent. It is an 
illustration that you just can't rely on these caps to bring down 
malpractice premiums for many years, if at all, and in many cases not 
at all.
  Look at the percentage increase in median premiums: States with caps, 
48 percent between 1991 and 2002; States without caps, 36 percent.
  This is an important issue that needs to be addressed. I see my 
colleagues waiting. I will yield the floor but return later in the 
debate.

[[Page 2226]]

  I hope my colleagues will understand that we have a serious national 
problem that needs to be addressed, but we should not address it in a 
way that is partial, that does not do justice to the serious challenges 
we face. We need to reduce medical errors. We need to hold insurance 
companies accountable. We need to bring about tort reform which stops 
frivolous lawsuits. We need to move into the area of tax credits for 
doctors now--not 4, 6, and 8 years from now--so they can pay their 
malpractice premiums and do it in a fashion that is fair--fair to the 
people who have been injured and fair to the medical professionals who 
are so important to all of our communities.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Brownback). The Senator from Alabama.
  Mr. SESSIONS. Mr. President, we are, indeed, losing physicians in the 
practice of medicine throughout America. Senator Durbin expressed 
concern in the conversations he has been having with doctors in his 
State, even though he opposes this bill. I traveled to Alabama this 
past week and visited five or six hospitals. I was at Fayette and 
Wedowee and Gadsden and Alexander City. As I traveled the State talking 
to doctors, to hospitals about their insurance premiums, it is a very 
real problem.
  This is not a new issue. We have been talking about it for a number 
of years. The reform of litigation of malpractice cases in California 
is the model for this legislation. It has worked very well in 
California.
  The people who are paying the premiums, people who are subjected to 
lawsuits, people who care about this every day, people who are giving 
up their practice every day as a result of abusive lawsuits, they 
support this legislation. Do they not know what this is all about? Do 
they not know what they are asking for? These are matters that are 
quite serious.
  I believe capping noneconomic damages has a good effect. When you 
look at a doctor who delivers a baby, is that doctor a guarantor of a 
healthy baby? They can't do that. They cannot be the guarantor that 
every birth they preside over will result in a healthy baby. They are 
responsible if they are negligent and that negligence causes damage to 
a child. There is no doubt about that. So that is what we need to focus 
on.
  The limit on damages does not limit damages for injuries in care for 
a child who lives many years with a great disability. They can recover 
unlimited amounts for that.
  Under California law, these are some of the verdicts that have been 
rendered to compensate families for children who were born with serious 
disabilities: In December, an $84 million verdict was rendered because 
of a 5-year-old with cerebral palsy after a mishandled birth; $25 
million in San Diego County because a boy had severe brain damage; $27 
million in San Bernardino for a woman who was a quadriplegic because of 
failure to diagnose a spinal injury; $21 million in Los Angeles for a 
newborn girl with cerebral palsy and mental retardation as a result of 
a birth-related injury. They go on.
  These are real recoveries to compensate people for economic losses 
they will have in the future and to allow them every possibility to see 
that the child or the person who is injured can be taken care of with 
the best conditions we can make. We are concerned about the explosion 
of punitive damages. Some people say the person who did wrong ought to 
be punished.
  As a matter that we need to think about, the system is out of whack. 
The person who commits malpractice is not the one who is punished. The 
person who commits malpractice--for the most part, hopefully, 
certainly, all of them doctors--has insurance. They don't pay the 
verdict. The insurance company pays the verdict. How do they get the 
$21 million or whatever they have to pay out in the verdict? How do 
they get that money to compensate the victims? They raise the rates on 
everybody; the innocent and those who commit errors. It is driving up 
the cost to practice.
  I have a wonderful friend, an OB/GYN, in my hometown of Mobile. We go 
to church together. He was telling me about a doctor that just gave up 
his practice. He handled 60 or 80 births a year. His insurance was 
$60,000 a year. That is almost $1,000 per birth. This week, I was in a 
hospital in Alabama. They told me 3 years ago they gave up deliveries--
there were 200 deliveries a year in this small town, and the hospital 
had less than 50 beds--because they could not afford the insurance. The 
hospital quit doing it. The physician in the community also quit 
delivering. This is a fact, a reality, and it is driving good 
physicians out of health care.
  No group of doctors in America has the hammer falling harder on them 
than the doctors who deliver our babies. They are getting hit with 
extraordinary increases. They are getting sued to an extraordinary 
degree. We need to do something about it. We have bills here, and 
whatever the bill is, they say ``we need to do something, but this 
isn't the way to do it; but we want to do something.'' They say ``there 
are problems, I will admit, Senator, but this isn't the right bill.'' 
They say ``you have not done this or that,'' and on and on. The result 
of that is we never pass anything. I believe it is time to do something 
about this issue. We can do something about this.
  When you look at the cost of delivering babies in America today, the 
liability cost is a very significant portion of it. Not only that, 
doctors--particularly those who have been practicing for a number of 
years--do not like the agony of going through a lawsuit. There is the 
combination of premiums and the threat of being dragged through court 
for long periods of time, and that is not good. That is why they are 
quitting.
  I was at one of the hospitals in Gadsden this week. One of the nurse 
supervisors came up to me after I had been asked in the meeting whether 
we were going to do anything about the liability problem. She said she 
and the hospital had been in litigation. She had been away from the 
hospital for 10 days during the trial of this case. They were not 
negligent and they won the lawsuit, but millions of dollars were spent 
on that litigation. This is happening all over America. Most of the 
cases are defendants' verdicts, but many cases are coming in with 
extraordinarily high verdicts. The BMW case out of Alabama, decided by 
the Supreme Court, raised real questions about how do you decide what 
punitive damages ought to be. Does the jury just feel bad this day or 
look at the victim and feel sympathetic, or are they more sympathetic 
to one person than another? They come up with $50 million for one 
person, and maybe in a similar situation they would come up with 
$500,000. These are aberrational verdicts in the country.
  We are saying that there should be a limit for compensating 
noneconomic damages. It is modeled on a successful program in 
California. I believe we are facing a national crisis in health care. 
It is a crisis that ought to be confronted. It is not going to go away. 
A big part of it is litigation. If you don't believe it, ask any doctor 
or hospital you know. They sue everybody, including the nurses, 
doctors, the aides, the hospital, the manufacturer of the hospital bed, 
or whatever, that might be possibly construed as being connected. All 
of that adds up to a tremendous burden, a tremendous cost on our health 
care system.
  The truth is health care costs are continuing to go up. One of the 
factors is litigation costs, which are going up even faster than other 
costs. We need to contain that and bring some rationality into it. I am 
willing to listen to other ideas. I am not sure California is perfect, 
but I will say it is working there. I believe it will work for our 
country. I thank our majority leader, Dr. Bill Frist, for bringing this 
up. It is time to debate this. We need to pass something soon to 
protect the availability of health care. We need to make sure hospitals 
and doctors are not quitting delivering babies. That hurts us in 
America and hurts health care in America.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut is recognized.

[[Page 2227]]


  Mr. DODD. Mr. President, I have been listening to the arguments posed 
by our colleague from Illinois, Senator Durbin, and our colleague from 
Alabama, Senator Sessions. I find myself sort of agreeing with both of 
these individuals. Clearly, this is an area that cries out for some 
solution. We have been back at this issue over and over again. Like my 
colleague from Alabama, and I suspect my colleague from Illinois as 
well, I was home in Connecticut over the past week and I have received 
letters from radiologists, and I have talked to OB/GYNs and others. My 
State ranks third in the country in the rate of premiums for OB/GYNs, 
which I will address in a minute. This is an area that clearly needs to 
be addressed. So I appreciate the comments of my colleague from 
Alabama, that is, to see if we cannot find solutions to this.
  As the Senator may recall, I have not been shy when it comes to tort 
reform issues, having authored the securities litigation reform bill, 
uniform standards legislation; and I have dealt with the issue of 
terrorism insurance, and Y2K legislation with Bob Bennett. I am someone 
who wishes we were debating class action reform now. There, we have an 
agreement. It is not going to satisfy everybody, but I have agreed with 
Bill Frist and others. Senators Schumer and Landrieu and I have worked 
across party lines to come up with a compromise solution on class 
action reform. That is a bill I believe we could actually adopt.
  Here we are going to spend 2 days debating a cloture motion we both 
recognize is probably going to fail this evening. But we have a class 
action reform bill we can get done. I regret I am not arguing on behalf 
of that proposal, rather than standing here and reluctantly disagreeing 
with this particular bill; although I am agreeing with my colleague 
from Alabama that we cannot allow year after year to go by without 
addressing this issue. I regret we didn't make the effort here we did 
on class action. On class action, once the cloture motion was defeated 
on the motion to proceed, people reached out and said let's see where 
we can find common ground on this. I think we have done that. Only time 
will tell if the compromise will work. That is how you have to function 
in this body, when you have 100 Members representing different 
constituencies and ideas and proposals, where there is a commonality 
and purpose to try to arrive at an answer to a staggering problem. One 
of the problems--not all, but one of the problems--is associated with 
health care. I will go into that in a minute. It seems to me we should 
pause and reach out and see if we cannot find that common answer. It 
may not satisfy everybody, but certainly it will come up with some 
intelligent responses to this problem.
  So I say to my constituency in Connecticut, and elsewhere, I am 
listening to you and I hear you. I know we have to answer this. The 
question is, is this particular proposal the answer to the problem we 
face, with the rising increase in malpractice premiums. What actually 
could be done that may address the issue?
  As my colleagues know, this legislation is similar to the one the 
Senate rejected last year. It would place, as we all know, a $250,000 
cap on noneconomic damages that can be awarded to a plaintiff in a 
medical malpractice case. The bill we are considering today has been 
narrowed, but in narrowing it, its defects have not been remedied. Like 
S. 11, the previous bill, this bill would apply to claims brought by 
health care professionals, health care organizations, such as HMOs, 
insurance companies, as well as product liability claims brought 
against medical device and drug manufacturers, by and on behalf of 
pregnant women and children. However, it would only apply to claims 
relating to obstetrics and gynecological services. We are dealing with 
a reduced universe of people in this area, much narrower from the 
proposal of last year.
  Once again, this legislation would cap noneconomic damages at 
$250,000. It would put the same cap on punitive damages while imposing 
a stiffer evidentiary standard. It would also reduce economic damages a 
victim could collect by subtracting benefits paid by health insurance, 
life insurance, disability insurance, and Social Security benefits. In 
short, it would make it much harder for the victims of medical 
malpractice in this narrow area to receive fair and just compensation, 
in my view.
  This legislation would not affect all victims of malpractice. We 
pointed out the bill we are dealing with seeks to limit the legal 
rights of a specific segment of our society, women and newborns.
  It is important to remember that this bill is going to affect those 
who have actually been injured by malpractice. We are not debating 
whether there has been a judgment. There has been a decision that 
malpractice has occurred. A jury has already, in these cases, decided 
the victims are eligible to collect noneconomic damages. Furthermore, 
it will hurt the most seriously injured, those who might receive a 
noneconomic damage award of more than $250,000 were it not for the 
arbitrary cap.
  We are essentially telling women and infants that the injuries and 
suffering they experience are not worth as much as injuries and 
suffering of others.
  The assumption is if we just do this in this one area, we are then 
going to be able to bring down the costs of these premiums. In fact, I 
suggest that if the empirical evidence made that case, I would be very 
tempted to support this bill. I say that to my colleagues who are the 
authors of this legislation. But, in fact, the data and information, 
unfortunately, does not substantiate the claim that by establishing a 
cap, you will achieve the desired results of lesser premiums on 
malpractice insurance.
  The argument used by supporters of this bill is OB/GYNs are 
particularly hit by rising medical premiums. I want to make it clear 
that I am not insensitive to that claim. As I said earlier, I have 
heard from many in my own State. In Connecticut, we face the third 
highest premiums in the country for OB/GYNs. My doctors pay an average 
of $102,000 every year in medical liability premiums. I have heard from 
them on numerous occasions about the difficulties they face in the 
current environment. The vast majority are good doctors who are working 
to provide the best possible care they can for their patients. They are 
doctors on whom families in Connecticut and newborns can rely. It is 
the same across the country. I know, having had a newborn in my own 
household, a child born to my wife Jackie and me a little over 2 years 
ago, the tremendous care and attention we received from our OB/GYN in 
Virginia, where Grace was born.
  The question is not whether these people are paying higher premiums. 
The question is, Is the solution being proposed by this legislation 
actually going to address this problem? Again, if I thought it would do 
that, I would be very tempted to support this legislation, as someone 
who has offered legislation dealing with frivolous lawsuits and other 
claims. I am not adverse to tort reform. In fact, I am disappointed. We 
are discussing tort reform in this instance, and we are also going to 
be talking about the tort liability of gun manufacturers. It is going 
to be interesting to hear people on that issue.
  We had language included in the Energy bill to deal with MTBE. 
Senator Schumer of New York eloquently made the case, asking why we 
should be eliminating the liability of a product that was causing such 
damage. I am frustrated to know that we are protecting people from 
liability because of the political pressures that occur.
  I am prepared to support intelligent tort reform, but this problem, 
as serious as it is, is not addressed by this solution. Will this 
legislation do anything to reduce premiums? Let me tell you why I don't 
think it does.
  If we are limiting the ability of women and young children to hold 
accountable doctors, nurses, insurance companies, and others for harm 
resulting from a mistake, we certainly must make sure we are doing so 
for a very good reason.
  The answer to the question posed above is a resounding no, in my 
view. The suggestive link between jury awards and rising premiums has 
not

[[Page 2228]]

been established at all. In fact, to the contrary. Nor is there a link 
between insurance premiums and access to health care. In fact, the 
evidence suggests quite the opposite.
  The two pillars upon which this bill is based are deeply flawed, in 
my view. First, some would suggest jury awards have exploded in both 
numbers and dollar amounts. That is something we will hear over and 
over, that victims are winning more and more so-called jackpot 
malpractice cases. But the facts are quite different.
  The amount defendants and insurers are paying for medical malpractice 
claims, including jury awards and settlements, has increased in a 
manner that is consistent with and even lags behind medical inflation. 
Over the 10-year period from 1992 to 2001, the mean payout in medical 
malpractice cases rose by 6.2 percent per year, while medical inflation 
was rising at 6.7 percent annually over the same period of time. In 
other words, malpractice awards are rising exactly in the manner we 
would expect. They are tracking health care costs.
  Of course, a rise in premiums might also be explained by an increase 
in the number of malpractice claims. That is also an argument we are 
hearing. Again, this is not the case. Between 1995 and 2000, the number 
of claims filed actually decreased by 4 percent, and the number of 
medical malpractice payouts decreased by 8.2 percent between 2001 and 
2002. So we are not seeing these numbers go up financially, nor are the 
actual numbers of malpractice cases increasing. Both are the two 
pillars upon which this bill is based. It is the reason people are 
saying we need to have the cap on these noneconomic awards.
  The case made by supporters of this legislation is further damaged, 
in my view, when we compare States that currently have caps on 
noneconomic damages with States that have no such caps. As I mentioned 
previously, my home State of Connecticut has the third highest average 
premium for OB/GYNs. Connecticut has no cap. However, seven of the 10 
States with the highest premiums do have caps. Last year, premiums 
actually increased by 17.1 percent for OB/GYNs in States with caps 
compared to a 16.6 percent increase in States without caps.
  In the year 2003, the average premium for an OB/GYN in States with 
caps was $63,000. The average premium in States without caps was 
$59,000. So if anything, the evidence suggests caps on patient damages 
actually correspond to higher insurance premiums for doctors.
  I said that rather quickly. Let me run by it again and make the case. 
The argument, again, is if you don't have caps, then these premiums go 
up. But if you look at places that have caps, seven of the 10 States 
with the highest premiums for OB/GYNs do have caps--seven of the 10. 
Last year, premiums actually increased by 17.1 percent in States with 
caps--an increase of 17.1 percent--compared to 16.6 percent in States 
without caps.
  Again, if anything, the evidence suggests caps on patient damages 
actually correspond to higher insurance premiums for doctors.
  The ineffectiveness of caps is illustrated by the experience in the 
State of California. Ironically, supporters of caps point to California 
as the model for limiting noneconomic damages. The State does, in fact, 
have a $250,000 cap and premiums have remained stable relative to the 
rest of the country. However, California adopted the cap in 1975, and 
over the next 13 years in California, with a cap of $250,000, premiums 
increased by 450 percent. This is comparable to a nationwide trend 
during that same period.
  Then in 1988, California did something else. It passed comprehensive 
insurance reform. Only at that point did insurance premiums stabilize, 
decreasing 2 percent between 1988 and 2001. So for 13 years, when they 
had caps on the awards, they actually had premiums go up 450 percent, 
tracking the national average. In 1988, they put a cap on insurance 
premiums. Then they began to see the decline.
  California is very worthwhile to look at, but we have to look at it 
in its totality. Don't disregard what happened in 1988. If we only look 
at 1975 to 1988, for that 13 years, there is nothing to brag about at 
all. The numbers went up as much as they did all across the country. It 
is only from 1988 up to now that we begin to see the real changes as a 
result of the insurance reforms in that State.
  So California is a good example, but look to all of California. I 
could continue to quote numbers to underscore my point, but I do not 
want to bore my colleagues with recitations of data. I think it is 
important because without knowing what the facts are and understanding 
the argument, we cannot understand how best to deal with a very 
legitimate problem of trying to get these premium costs down. Does this 
solution meet that problem? One has to look at the data and the facts, 
and the facts are not holding this point up very well, in my view.
  The point is very simple: The number of medical malpractice claims is 
not rising. The amount awarded to victims is consistent with inflation. 
The story in States with caps is similar to that without caps. Based on 
this evidence, we are being asked to limit the rights of pregnant 
mothers and infants. I do not think we ought to do that. The facts fail 
utterly to dictate such a conclusion.
  If neither the number nor the amount of malpractice awards can 
explain rising premiums, then what is the explanation? Something is 
going on that is causing these premiums to continue to skyrocket as 
they are in my State and others across the country. According to 
several analyses that have been done, the increase in premiums does in 
fact correlate with the stock market and interest rates.
  One recent study showed that premiums very closely tracked the 
insurers' economic cycle. During good economic times, insurers slash 
premiums in order to attract as much business as possible. Insurance 
companies receive their money from two sources. They get it from 
premium payments as well as investments. So when there is a good, 
healthy market going on, then they will reduce premiums because the 
cycles in the market are allowing them to sustain their economic 
growth. When there is a downturn in the economy and the stock market is 
not doing as well, the insurance industry is faced with only one other 
solution and that is to raise the premiums in order to keep the 
cashflow coming in.
  So it is not complicated. As someone who comes from a State with a 
lot of insurance companies, I know that is how this is done. There is 
not some great magical secret out there. This is exactly how it occurs. 
So, obviously, during good economic times, insurers will cut the 
premiums in order to attract as much business as possible, which makes 
sense. This is because every new policy brings in additional float, 
money to invest in a booming market so they bring in the dollars. 
However, when the market turns and investment returns are weak, as has 
happened in the last few years, insurers raise their rates or, in some 
cases, leave the market altogether. When this happens, the result is 
often a crisis in the availability and affordability of insurance, and 
that is exactly what we are seeing today.
  I will take a moment to address one other claim made by the 
supporters of this bill, and that is that rising premiums have reduced 
access to care for women and infants. Again, this is a very significant 
claim and needs to be addressed. Once again, I do not think the facts 
support that argument.
  Between 1999 and the year 2002, the number of OB/GYNs across the 
country actually increased by 1,700 people. Only 6 States out of 50 saw 
a decrease in the number of OB/GYNs. That is not good news for those 
six States, but the argument that across the country this is occurring 
is not borne out by the facts. Actually, there were 1,700 new OB/GYNs 
in 44 States, so the number is stable or increasing, and in 6 States 
the number is going down. We ought to be conscious of that because that 
could be a trend that needs to be addressed.
  Again, I underscore what I said at the outset. This is a serious 
problem but a serious problem demands a serious solution. 
Unfortunately, this bill is not that answer.

[[Page 2229]]

  As an interesting note, by the way, where we are losing OB/GYNs, half 
of those six States have caps on the amount that can be collected in 
noneconomic terms. So we are talking about a bill that places caps on 
noneconomic awards, and in six States the number of OB/GYNs is 
declining, and yet three out of the six States have actual caps. One 
has to ask oneself: If this is failing in half of the States in terms 
of attracting or keeping OB/GYNs, is this bill or this idea the right 
solution to this problem? I think the conclusion is no, it is not, 
unfortunately, if those are the facts.
  A GAO report from August of last year identified access to care as a 
problem--and I am quoting--``in scattered, often rural areas where 
providers identified other long-standing factors that also affect the 
availability of services.''
  The question was asked: Why is this happening? The General Accounting 
Office comes back and said there are a lot of other factors that are 
causing a decline in the number of OB/GYNs. In addition, the GAO 
found--and I am quoting them again--``that many of the reported 
provider actions were not substantiated or did not affect access to 
health care on a widespread basis.''
  Unfortunately, this bill is a misguided attempt to solve a health 
care problem with a tort reform solution. I am disappointed that we are 
not using this time today to discuss the real issues. One issue I wish 
we were discussing is class action reform because I think we have come 
up with an answer that a majority of us could support. Regrettably, we 
are not spending two days debating that issue. We are debating a bill 
that is not going to go anywhere because the solution that is being 
called for does not do the job.
  So instead of taking the few valuable days we have in this Chamber to 
deal with some issues before we adjourn for elections and conventions, 
we are not debating class action reform, we are debating a bill that is 
going nowhere. That does not make any sense to me at all in terms of 
this agenda. So this is a waste of our time.
  Let me get into other areas of health care because there are health 
care problems that need addressing. I am disappointed, though, that we 
are not going to debate class action reform but instead these tort 
reform issues. We do have problems with access to care in our country. 
We do have a patient safety problem in our country. We do have a health 
care quality issue in this Nation of ours. We do have a problem with 
rising health care costs in the Nation. This bill does not answer any 
of those problems.
  Why are we not discussing real solutions to the issue of access to 
health care, to patient safety, to health care quality in this country, 
and to the problem of rising health care costs? The American people 
have a right to expect from this body better answers than the ones we 
are giving them on this bill dealing with the issue of rising premium 
costs.
  Supporters of this bill are right about one thing: Far too many in 
this country have little or no access to health care. The latest Census 
Bureau figures released in September are alarming, to say the least. 
Forty-four million of our fellow countrymen, more than one out of every 
seven people in our great Nation, were without health care in the year 
2002. This figure represents a 10 percent increase in the number of 
uninsured since the year 2000.
  Numerous studies have shown that being uninsured has a drastic impact 
on the amount and quality of care individuals receive. Put very simply, 
the uninsured receive less care, lower quality care, and are at a 
greater risk of dying. The Institute of Medicine has estimated that 
every year 18,000 of our fellow citizens die prematurely in this 
country as a result of the effects of being uninsured.
  Our country has a growing health care underclass. The Bush 
administration's response to this crisis has been woefully inadequate. 
Tax credits and health savings accounts will do little or nothing to 
help the vast majority of the 44 million people who are uninsured, such 
as low-income working families. By the way, the majority of the 
uninsured work every day on one, two, three, and four jobs. These are 
not people sitting around doing nothing. They are working. And we have 
nothing to say to them.
  We are debating an issue of tort reform when we ought to be dealing 
with how to provide some health care coverage for these people and 
explain why 18,000 lives a year are being lost prematurely because of 
the lack of health insurance. We should be talking about creative ideas 
to offer meaningful assistance to the uninsured. There are a variety of 
ideas out there that are worth discussing.
  We also have a health care quality and patient safety problem in the 
country. Again, according to the Institute of Medicine, as many as 
98,000 Americans are killed every year as a result of medical errors. A 
study conducted by the Rand Corporation and published in the New 
England Journal of Medicine last year came to a similar conclusion. 
Individuals received the recommended treatment for their condition in 
only 55 percent of the cases, according to that study. In other words, 
nearly half the time patients did not receive the appropriate care. Why 
are we not debating that and discussing that issue today?
  There are a variety of proposals to address this real threat to the 
American public. I am currently working with our colleagues on both 
sides of the aisle on issues that would have some real impact on the 
quality of care in our country. One meaningful step we can take almost 
immediately is to encourage the use of information technology in the 
health care setting.
  The Senator from New York, Mrs. Clinton, is deeply interested in this 
subject matter, as are several other colleagues. Improving quality is 
the best tool we have to address rising health care costs. Supporters 
of this legislation we are debating today would have you believe 
medical liability costs are the main driver of rising health care 
costs. But that is simply not the case. The Congressional Budget Office 
has estimated that malpractice costs represent, at most, only 2 percent 
of the overall health care costs in our country.
  We ought to address this issue, but let's talk about it in the 
context in which it is really a problem. Furthermore, while health care 
costs more than doubled between the years 1987 and 2001, the total 
amount spent on medical liability premiums rose by only 52 percent over 
that same period. The real drivers of health care costs are 
prescription drugs and hospital spending. We should be using the time 
to pursue proposals to address these issues, including expanding the 
use of inexpensive generic prescription drugs, better chronic disease 
management and preventive medicine, and improving health care quality 
and efficiency.
  Let me finish by saying, as ranking member of the Subcommittee on 
Children and Families, improving the health of women and children has 
been a priority of mine and many others who serve on that committee, 
including the Presiding Officer. If my colleagues are genuinely 
interested in healthier mothers and healthier babies, I can suggest any 
number of pieces of legislation that are pending here that would 
represent real steps towards achieving that goal. I am the coauthor of 
two bills, the Newborn Screening Save Lives Act and the Prematurity 
Research Expansion and Education for Mothers who Deliver Infants Early 
Act, the PREEMIE legislation, that I believe would go a long way 
towards improving the health and well-being of newborns. During the 
107th Congress, Senator Harkin introduced the Safe Motherhood Act a 
comprehensive bill to ensure safe pregnancy for all women. Senator 
Bingaman introduced legislation to expand health care coverage for 
pregnant women under Medicaid and the State Children's Health Insurance 
Program.
  There are a variety of such bills out there, offered on a bipartisan 
basis. The Senator from Ohio, Mr. DeWine, and I have worked very hard 
on a number of these bills. I am not going to suggest they solve all 
the problems, but they are designed to deal with some of the very 
issues pregnant women and infants face every day. The

[[Page 2230]]

idea that you are going to put a cap on noneconomic recoveries here and 
that is somehow going to address these other issues is ludicrous on its 
face. We ought to be spending the valuable time of this institution in 
debating and discussing and getting some of this legislation passed 
that could make a difference to these people.
  I am not shy when it comes to tort reform. I have spent a good deal 
of time in my Senate career authoring bills dealing with tort reform. 
This is not one of them. This is not tort reform. This is not 
addressing the issue that people face every day and doctors face with 
rising premiums. There is a way of addressing that problem. When we get 
around to doing it and working on it, then we can take some pride in 
passing something that does something meaningful in this area. This 
bill doesn't do it.
  I hope cloture will be denied. I yield the floor.
  The PRESIDING OFFICER (Mr. Enzi). The Senator from Ohio.
  Mr. VOINOVICH. Mr. President, I rise today in strong support of S. 
2061, the Healthy Mothers and Healthy Babies Access to Care Act, and I 
strongly encourage my colleagues to vote for cloture on the motion to 
proceed on this very important legislation.
  I would like to point out in the beginning of my remarks, in response 
to some of the statements that have been made on the floor this 
morning, that there has to be a reason the American College for 
Obstetrics and Gynecology, the American Medical Association, and just 
about every medical group in the United States of America is supportive 
of this legislation. We would not be talking about it unless they 
really believed the passage of this legislation would have a dramatic 
impact on the liability costs that OB/GYNs are experiencing, causing so 
many of them to leave their practices.
  This is a personal issue for me. Last summer when my daughter-in-law 
was expecting her fourth child, she learned that after the delivery, 
her doctor would no longer deliver babies. At the time, her doctor was 
in a four-physician group, all of them obstetricians. They never had 
any lawsuits against them. Yet their insurance premiums had skyrocketed 
from $81,000 to over $381,000 in just 3 years. That is $75,000 per 
person over a period of 3 years. How could physicians be expected to 
afford rate hikes such as these?
  We need to be doing something about it. This legislation is going to 
help. This legislation is so important because the effects of the 
medical liability crisis can be felt acutely by the obstetrics/
gynecology community. Data from the American Medical Association 
indicates that 19 States currently face a medical liability crisis and 
25 States show problem signs. Women of childbearing age have been 
impacted the most because 1 out of 11 obstetricians nationwide has 
stopped delivering babies and, instead, has scaled back their practice 
to gynecology only or just gotten out of the practice. In addition, one 
in six has begun to refuse high-risk cases.
  How does this affect a patient's access to care? As premiums 
increase, women's access to general health care, including regular 
screenings for reproductive cancers, high blood pressure, cholesterol, 
diabetes, and other serious health risks, will decrease. It leads to 
more uninsured women because of health care costs that have gone up as 
a result of the fact that malpractice costs have gone up so 
astronomically in the last couple of years.
  In 2002, 11.7 million women of childbearing age were uninsured. 
Without medical liability reform, a greater number of women ages 19 to 
44 will move into the ranks of the uninsured. With fewer health care 
providers offering full services, the workload has increased 
significantly for those who still do. Wait times increase, putting 
women at risk. A physician facing higher premiums is likely to practice 
defensively, ordering more tests than medically necessary, seeking more 
opinions, and giving more referrals.
  Women receive less prenatal care in our current environment. Improved 
access to prenatal care has resulted in record low infant mortality 
rates, an advance now threatened as OB/GYNs drop obstetrics. As some of 
you may have read, for the first time since 1958, the U.S. infant 
mortality rate is up. According to preliminary data released this month 
by statisticians from the CDC, the Nation's infant mortality rate in 
2002 was 7 per 1,000 births. That is up from 6.8 in 2001. Some experts 
are attributing this to poor access to prenatal care, that that is the 
cause of this problem. Women have less preventive care. Women's general 
health care is routinely provided by community clinics and OB/GYNs. 
Women receive fewer screenings for reproductive cancers, high blood 
pressure and cholesterol, diabetes, and other serious health risks as 
OB/GYNs and community clinics reduce care.
  The ramifications of this medical liability crisis on women's health 
care are shocking, and we feel this crisis very strongly in Ohio. The 
Medical Liability Monitor ranked Ohio among the top five States for 
premium increases in 2002. The OHIC Insurance Company, among the 
largest medical liability insurers in the State, has reported that 
average premiums for Ohio doctors have doubled over the last 3 years.
  I would like to point out that the argument that the insurance 
industry is ripping off doctors and raising rates to make up for 
investment losses, as some contended here on the floor of the Senate 
this morning, is preposterous.
  I invite those Members who believe this to read an article from Brown 
Brothers Harriman Insurance Asset Management Group.
  I ask unanimous consent that the article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       [From BBH & Co. Insurance Asset Management, Jan. 21, 2003]

          Did Investments Affect Medical Malpractice Premiums?

                        (By Raghu Ramachandran)

       It's deja vu all over again in the medical malpractice 
     arena.
       Last July, the only trauma center in Las Vegas was forced 
     to close. At the beginning of this year, doctors in 
     Pennsylvania threatened to go on strike but relented when the 
     incoming governor promised to support legislative reforms to 
     limit jury awards in malpractice suits. Also in January, 
     doctors in Weirton, West Virginia went on strike, forcing 
     patients to travel up to 40 miles to find medical care. 
     Doctors in neighboring areas of West Virginia considered 
     joining the strike, threatening a near complete shutdown of 
     the medical delivery system in the region. Doctors and 
     hospitals around the country are suspending their practices 
     and closing their doors because they can no longer afford the 
     huge and increasing cost of medical malpractice insurance. 
     The situation is increasingly reminiscent of the malpractice 
     crisis of the 1970's. What is causing this controversy and 
     what can be done about it?
       According to Americans for Insurance Reform (AIR), 
     ``insurance companies raise rates when they are seeking ways 
     to make up for declining interest rates and market-based 
     investment losses.'' Mainstream media, such as The New York 
     Times, have picked up this argument: ``The steep drop in bond 
     yields and the stock market has also fueled the crisis.'' 
     These arguments are both misleading and inaccurate. The root 
     causes of the problem are quite different from what is often 
     suggested by the media, and their resolution is far less 
     simplistic than the pundits imply.
       In this paper, we will analyze several variables to 
     demonstrate that asset allocation and investment returns have 
     had little, if any, correlation to the development of the 
     current malpractice problem. The crisis is rather the result 
     of a generally unconstrained increase in losses and, over 
     several years, inadequate premium income to cover those 
     losses.
       Given that conclusion, we will then examine several 
     possible solutions and attempt to gauge the magnitude of 
     changes necessary to resolve this problem.
       AIR uses the following graph to demonstrate that losses 
     have tracked inflation and that premiums vary because of the 
     economy. The graph attempts to compare two key trends 
     underlying the medical malpractice controversy: premiums per 
     doctor (DPW/MD) and paid losses per doctor (DLP/MD). Both of 
     these variables are expressed in constant medical dollars.\1\
---------------------------------------------------------------------------
     \1\Graphs not reproducible in the Record.
---------------------------------------------------------------------------


                             loss inflation

       AIR claims this shows ``that since 1975, medical 
     malpractice paid claims per doctor have tracked medical 
     inflation very closely.'' In fact, the graph and the 
     underlying data suggest exactly the opposite. First, they 
     make an erroneous comparison. Since AIR uses real (or 
     constant) medical dollars, they have already factored out the 
     effect of

[[Page 2231]]

     medical inflation. So, any increase is a ``real'' increase in 
     excess of medical inflation. One cannot compare real 
     increases to inflation.
       Second, the data show loss costs have increased 
     significantly faster than inflation. Using data from the AIR 
     report, we plotted medical inflation (CPI-U), premiums, and 
     losses to show how each has grown since 1975.
       One sees that the losses per doctor have grown at a much 
     higher rate than either medical inflation or premiums per 
     doctor. In order for losses in 2001 to have equaled the build 
     up created by inflation in medical care during the period 
     1975-2001, companies would have to reduce the amount of paid 
     losses by approximately 60%. Therefore, losses, not 
     inflation, are the problem.


                            economic effect

       The other claim made by AIR is that ``insurance premiums 
     (in constant dollars) increase or decrease in direct 
     relationship to the strength or weakness of the economy, 
     reflecting the gains or losses experienced by the insurance 
     industry's market investments and their perception of how 
     much they can earn on the investment `float'.'' 
     Unfortunately, they make this claim without any supporting 
     analysis. Using the premium data from AIR, we found no 
     correlation between premiums and the economy.
       The standard measure of the effect one variable has on 
     another is the coefficient of determination (r\2\); this 
     value shows how consistently two variables move in the same 
     direction. The coefficient of determination has values 
     between 0 and 1. A value of 1 means that if the first 
     variable moves up the second will move up at the same time; a 
     value of zero means that there is no similarity in the 
     movement of the two variables. The correlation coefficient 
     has to be greater than 0.75 for us to claim the observed 
     effect between the two variables is significant.
       As a measure of the economy, we used the year-over-year 
     change in GDP; as a measure of investment yield, we used the 
     yield on a 5-year Treasury note. In our analysis, neither the 
     direct premiums written nor the direct premiums per doctor 
     showed any significant correlation to either the investment 
     yield or GDP variable. The table lists the coefficients of 
     determination generated by the regression analysis between 
     the economy, investment yield, and medical malpractice 
     premiums.

------------------------------------------------------------------------
                                                    GDP         Yield
------------------------------------------------------------------------
DPW...........................................       0.0001       0.1255
DPW/MD........................................       0.0104       0.0318
------------------------------------------------------------------------

       Several other analyses also failed to show a correlation 
     between premiums and the economy. To test if the premium 
     increases are related to the economy or bond market, we 
     analyzed the correlation of the change in premiums to GDP and 
     investment yield. To test whether premiums go up when the 
     investment yield goes down, we analyzed the correlation 
     between premiums and the change in yield as well as the 
     correlation between the change in premiums and the change in 
     yield.
       One could reasonably claim that the premiums (or increases 
     in premiums) are dependent not upon the company's performance 
     this year but upon the company's performance in the previous 
     year. To test this hypothesis, we regressed both premiums and 
     change in premiums to both the economy and investment yield 
     in the previous year. For thoroughness, we also analyzed the 
     correlation between both premiums and change in premiums with 
     the change in yields in the prior year.
       We also considered alternate measures for GDP and yield. We 
     used industrial production as an alternate measure of the 
     economy and the 10-year Treasury note as an alternate measure 
     of yield. We also analyzed the effect the slope of the yield 
     curve and the change in slope had on premiums. We performed 
     all of the analyses above on these new variables.
       In 64 different regressions between the economy, yield, and 
     premiums, the highest coefficient of determination was 
     0.1505. Therefore, we can state with a fair degree of 
     certainty that investment yield and the performance of the 
     economy and interest rates do not influence medical 
     malpractice premiums.


                          Stock Market Effect

        But what about the stock market? How did the drop in the 
     equity markets affect insurance company performance? Are 
     companies raising premiums because they lost money on Enron 
     or WorldCom?
        Obviously, the market decline affects insurance companies 
     like every other investor, but the magnitude of the losses 
     gets lost in the media hype. We analyzed the equity exposure 
     in two stages. Stage one: Did medical malpractice companies 
     have an unusually large amount of equities in their 
     portfolio? Stage Two: Given their level of equity exposure, 
     did they invest prudently in the market or did they gamble by 
     investing in technology or telecom stocks?
        Using NAIC filings, we can determine the amount of assets 
     invested in equities.
        Over the last five years, the amount medical malpractice 
     companies have invested in equities has remained fairly 
     constant. In 2001, the equity allocation was 9.03%. We can 
     also compare how the medical malpractice sector compares to 
     other P&C sectors.
       This graph shows that medical malpractice companies have 
     less invested in equities than other sectors of the industry.
       Even if the equity allocation is not large relative to the 
     industry or other insurance sectors, is 10% the correct 
     amount for medical malpractice insurers to invest in 
     equities? Insurance companies invest their assets as a 
     fiduciary of the policyholders. As such, they must invest 
     according to a ``prudent investor'' standard. This requires 
     the company not only to consider the risk in an individual 
     security, but also the risk to the portfolio as a whole. 
     Prudent investors know that diversifying across asset classes 
     can enhance return and reduce volatility. A simple analysis 
     shows a conservative investor will have at least 10% invested 
     in equities. Thus, a prudent insurance company should have 
     some allocation to equities.
       If the degree of equity exposure was not unusual, was the 
     investing? Again using NAIC filing data, we can analyze the 
     distribution of equity investments for medical malpractice 
     companies and compare it to S&P performance.

                             [In percentage]
------------------------------------------------------------------------
                                              Medical
                 Sector                     malpractice     S&P sector
                                             companies        return
------------------------------------------------------------------------
Energy..................................             5.6           -11.0
Materials...............................             1.9            -5.4
Industrials.............................            11.9           -26.2
Consumer Discretionary..................            15.9           -23.7
Consumer Staples........................             7.3            -4.3
Healthcare..............................            14.1           -18.8
Financials..............................            17.8           -14.5
Technology..............................            17.9           -37.4
Telecom.................................             6.3           -34.0
Utilities...............................             1.4           -29.5
                                         -------------------------------
                                                  100.0%  ..............
                                         ===============================
      Total Return......................          -22.4%
      S&P Return........................          -22.2%
------------------------------------------------------------------------

       We see that medical malpractice companies had returns 
     similar to the market as a whole. This indicates that they 
     maintained a diversified equity investment strategy.
       As medical malpractice companies did not have an unusual 
     amount invested in equities and since they invested these 
     monies in a reasonable market-like fashion, we conclude that 
     the decline in equity valuations is not the cause of rising 
     medical malpractice premiums.


                       where do we go from here?

       In order for any form of insurance coverage to be viable, 
     the insurance company must receive more in premium dollars 
     and investment income than they pay in losses and expenses. A 
     simple measure of this is the ratio of paid losses to 
     premiums Over the last 27 years, and especially over the last 
     16, the paid loss ratio in medical malpractice coverage has 
     steadily increased. Without some form of relief, this is not 
     a good sign.
       Although the paid loss ratio is a good starting point, that 
     metric excludes other expenses such as incurred losses, loss 
     adjustment expenses, general operating expenses, etc. as well 
     as income from investments. A.M. Best provides the combined 
     loss ratio (paid loss + change in reserves + expenses) for 
     the medical malpractice industry. By subtracting the paid 
     loss ratio, from the AIR report, from the combined ratio, we 
     can get an estimate of the other expenses for an insurance 
     company. The average expense ratio for medical malpractice 
     companies was 43% when investment income is included and 74% 
     when investment income is excluded.
       Over the last 27 years, the average paid loss ratio was 47% 
     and the minimum paid loss ratio was 16%. In 2001, the 
     industry paid loss ratio was nearly 75%. In other words, for 
     every dollar that comes in the door, 75 cents is paid out. 
     When combined with the expense ratios cited earlier, it is 
     clear that it has been extremely difficult--if not 
     impossible--for insurance companies to earn a profit writing 
     medical malpractice insurance. Further, at this rate of 
     expenditure, after the company pays its losses and expenses, 
     there is very little ``float'' on which they can earn 
     investment income.

             Medical malpractice paid loss ratio 1975-2001


                                                             In percent
Average loss ratio.................................................46.8
Minimum loss ratio.................................................15.9
2001 loss ratio....................................................74.4

       To increase profitability, companies must effect one of 
     three changes: reduce their losses, increase their premiums, 
     or increase their investment income. As the industry, in 
     aggregate, cannot control return on investments, they have 
     only two choices. Using the methodology above, we can 
     estimate the magnitude of the change required to restore 
     profitability to the industry.
       If losses are held constant--i.e., no change in loss and 
     expense trends, then we are left with increasing premiums to 
     restore the industry to profitability. For premiums to have 
     kept up with medical inflation for the period 1975 to 2001, 
     they would have to increase by 41%. For premiums to have kept 
     up with the increases in paid losses since 1975, they would 
     have to increase by 325%. For the industry's average loss 
     ratio to drop back to its 27-year average, premiums would 
     need to

[[Page 2232]]

     rise by 59%. For the loss ratio to drop to its nadir during 
     that period, premiums would have to increase by 368%.

------------------------------------------------------------------------
                                                  Dollars     % Increase
------------------------------------------------------------------------
2001 DPW/MD...................................       $9,719
Premium required for:
  Average Loss Ratio..........................       15,448           59
  Minimum Loss Ratio..........................       45,478          368
------------------------------------------------------------------------

       Clearly, increases of this magnitude are intolerable, for 
     both the industry and state regulators. In this regard, St. 
     Paul's experience is noteworthy. Prior to its withdrawal from 
     the market, the company was granted 31% less in rate 
     increases than indicated. It is little wonder that they 
     responded as they did!

                                              ST. PAUL RATE FILINGS
                                                 [In percentage]
----------------------------------------------------------------------------------------------------------------
                                                                            Indicated     Increase
                            State                                 Date       increase      filed      Difference
----------------------------------------------------------------------------------------------------------------
1...........................................................     1/1/2001        76.10        25.00        40.90
2...........................................................     3/7/2001       -34.30       -43.00        15.30
3...........................................................     1/1/2001        54.50        35.00        14.40
4...........................................................     6/1/2000        39.20         5.00        32.60
5...........................................................    11/1/1999        28.70         5.00        22.60
6...........................................................     1/1/2001        55.20        10.00        41.10
7...........................................................     2/1/2001        18.90       -21.00        50.50
8...........................................................     1/1/2001        90.80        35.00        41.30
9...........................................................     1/1/1999        18.50         5.00        12.90
10..........................................................     1/1/2002        73.00        35.00        28.10
11..........................................................     1/1/2001        26.80        12.50        12.70
12..........................................................     1/1/2002        70.20        45.00        17.40
13..........................................................     1/1/2002        67.30        40.00        19.50
14..........................................................     1/1/2001        49.30        10.00        35.70
15..........................................................    10/1/1999        88.10         5.00        79.10
16..........................................................     1/1/2002        71.00        10.00        55.50
17..........................................................     1/1/2002        82.60        45.00        25.90
18..........................................................     7/1/2000        12.50         0.00        12.50
19..........................................................    7/15/2000        57.00         7.50        46.00
20..........................................................     7/1/2000        17.10         5.00        11.50
21..........................................................     1/1/2000        40.90         5.00        34.20
22..........................................................     7/1/2000        58.90         8.50        46.50
23..........................................................     1/1/2001        50.70        15.00        31.00
Average.....................................................  ...........        48.40        13.00        31.60
Average excluding #2........................................  ...........        52.20        15.60        32.40
----------------------------------------------------------------------------------------------------------------

       St. Paul had the luxury of falling back on other lines of 
     business. Unfortunately, many special medical malpractice 
     companies, such as state PIAA companies, do not have other 
     lines of business to fall back on.


                         rating agency response

       The reaction of rating agencies to these trends is another 
     important ingredient in the medical malpractice landscape. 
     Principal concerns of the agencies are ``solvency'' and the 
     ``leverage'' built into the premium and surplus structure of 
     the industry. While agencies usually express the benchmarks 
     for the measurements (ratios) in ranges, trends are also 
     important. Either level or trend can result in a downgrade in 
     a company's rating, a serious event in the corporate life of 
     an insurer.
       In 2001, medical malpractice companies had an average 
     premium-to-surplus ratio of 0.72. As premiums are increased, 
     this ratio will rise. If premiums rise too quickly, we would 
     observe a spike in this ratio as it takes time for the 
     increased premiums to show up in surplus. Unless rating 
     agencies account for this, a company could find they cannot 
     raise their rates by the required amount for fear of 
     impairing their rating. In fact, several companies have been 
     downgraded recently, with premium leverage given as the 
     primary reason. (The situation is exacerbated by the fact 
     that with the industry suffering from reduced capacity as a 
     result of the St. Paul type experiences, companies are adding 
     to their number of insureds. This puts further strain on 
     their leverage ratios.) Fortunately, the rating agencies seem 
     to be aware of the problem.


                             taming losses

       If companies cannot increase their premiums, then they must 
     be able to control the burgeoning increase in losses. Our 
     analysis suggests that the level of losses would have to 
     decrease by 37% to achieve the average loss ratio and by 79% 
     to obtain the minimum loss ratio observed over the past 27 
     years. Such reductions would require significant change in 
     the tort environment.

------------------------------------------------------------------------
                                                  Dollars     % decrease
------------------------------------------------------------------------
2001 DLP/MD...................................       $7,232  ...........
Losses required for:
  Average Loss Ratio..........................        4,549          -37
  Minimum Loss Ratio..........................        1,545          -79
------------------------------------------------------------------------

       The paid loss number cited above includes both jury awards 
     and settlements. Large jury awards have the pernicious effect 
     of enticing more lawsuits, most of which are settled out of 
     court but with an expense to the company. Prudent reforms, 
     such as MICRA, reduce not only the jury awards but also 
     reduce the amount of lawsuits filed.


                                Summary

       The magnitude of these changes suggests that the eventual 
     solution to the current malpractice problem will be a blend 
     of premium increases and tort reform. Since the financial 
     shortfall compounds itself over time, it is imperative that 
     the solution set be developed as quickly as possible. Without 
     significant relief in fairly short order, the country may 
     find itself facing an accelerating loss of available medical 
     care.
  Mr. VOINOVICH. The subject of the article is ``Did Investments Affect 
Medical Malpractice Premiums?'' It concluded:

       . . . asset allocation and investment returns have had 
     little, if any, correlation to the development of the current 
     malpractice problem.

  The article goes on to say:

       The crisis is rather the result of a generally 
     unconstrained increase in losses and, over several years, 
     inadequate premium income to cover those losses.

  The article also goes on to say:

       We see that medical malpractice companies had returns 
     similar to the market as a whole. This indicates that they 
     maintained a diversified equity investment strategy. As 
     medical malpractice companies did not have an unusual amount 
     invested in equities and since they invested these moneys in 
     a reasonable market-like fashion, we conclude the decline in 
     equity valuations is not the cause of rising medical 
     malpractice premiums.

  Finally, I will finish up with a summary:

       The magnitude of these changes suggests that the eventual 
     solution to the current malpractice problem will be a blend 
     of premium increases and tort reform. Since the financial 
     shortfall compounds itself over time, it is imperative that 
     the solution set be developed as quickly as possible. Without 
     significant relief in fairly short order, the country may 
     find itself facing an accelerating loss of available medical 
     care.

  And I contend that acceleration is well underway not only in OB/GYN 
but in other aspects of the medical profession.
  According to a November 2000 study of the American College of 
Obstetricians and Gynecologists, 59 percent of responding Ohio OB/GYNs 
have been forced to make changes to their practice such as quitting 
obstetrics, retiring, relocating, decreasing gynecological surgical 
procedures, no longer performing gynecologic surgery, decreasing the 
number of deliveries, and/or decreasing the amount of high-risk 
obstetric care because of unaffordable and unavailable medical 
liability insurance. Of the respondents, 86 percent no longer practice 
obstetrics, which forces a potential of some 14,000 pregnant Ohio women 
to find new OB/GYNs to provide their obstetric care.
  This is not the statistics. I have received dozens of testimonials 
from doctors saying they are quitting their practice because of the 
rising cost of medical liability insurance. A friend of mine shared 
with me a letter from an OB/GYN in Dublin, OH, who decided to retire 
from his practice.
  He wrote the following to his patients:

       On June 17, 2003, I received my professional liability 
     insurance rate quote for the upcoming year, and it is 64% 
     higher than last year's rate. I have seen my premiums almost 
     triple during the past two years, despite never having had a 
     single penny paid out on my behalf in twenty-seven years as a 
     physician. Even worse, during this time the insurance company 
     has reduced the amount of coverage that I can purchase from 
     $5 million to only $1 million, while jury verdicts have 
     skyrocketed, often exceeding $3-4 million. If I were to 
     purchase this policy, I would be putting all of my family's 
     personal assets at risk every time that I delivered a baby or 
     performed surgery. I refuse to do that.
       I have therefore decided to retire from private practice on 
     July 31, 2003, the final day of my current liability 
     insurance policy. This is not a decision that I take lightly, 
     but unfortunately it has become necessary. For many of you, I 
     have been part of your life for years. I have delivered your 
     babies, and helped you through some of life's most difficult 
     challenges. It has truly been an honor.

  I received another letter from Dr. Ben Alvarez. He worked for 
Beachwood OB/GYN. He sent a letter informing his patients he was 
relocating to Minnesota this March. He says, in part:

       The decision to leave Ohio is the direct result of the 
     medical malpractice crisis: with a clean record, my annual 
     premium will reach well over $100,000 this July. I cannot, 
     and will not, in good conscience play the insurance company's 
     game--it's just that simple. What's not simple is saying 
     good-bye to a town and people that have given me so much. Ob/
     Gyn is so different from other medical specialties due to the 
     emotional and personal relationships that exist between us. I 
     have been blessed to have experienced with so many of you the 
     joy of a new baby's arrival; prayed about the outcome of 
     surgery; and also shared the painful moments.

  I ask unanimous consent to have the complete letter printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                       Beachwood OB/GYN, Inc.,

                                   Lyndhurst, OH, January 4, 2004.
       My Dearest Patients: It is with a heavy heart that I inform 
     you that I shall be relocating to Minnesota in March. The 
     decision to leave Ohio is the direct result of the medical 
     malpractice crisis: with a clean record, my annual premium 
     will reach well over

[[Page 2233]]

     $100,000 this July. I cannot and will not, in good conscience 
     play the insurance company's game--it's just that simple.
       What is not simple is saying good-bye, to a town and people 
     that have given me so much. Ob/Gyn is so different from the 
     other medical specialities due to the emotional and personal 
     relationships that exist between us. I have been blessed to 
     have experienced with so many of you the joy of a new baby's 
     arrival; prayed about the outcome of a surgery, and also, 
     shared the painful moments. Indeed, it is I who thank God for 
     having met you, for, because of you, I have become a better, 
     more complete, human being.
       Do not despair over the continuity of your care. My 
     colleagues in the practice will keep the ball rolling. From a 
     practical standpoint, I would encourage you to set up follow-
     up appointments with any one of the doctors. Drs. Varyani and 
     Goldshmidt have schedules that allow for more flexibility, 
     but Drs. Bellin, Evans, Klein and Vexler are also available 
     to continue your care. They are all excellent doctors and 
     have my complete confidence.
       Farewell, my friends, and the best to you and your 
     families.
           With sincere affection and melancholy.
                                                      Ben Alvarez,
                                                               MD.

  Mr. VOINOVICH. After speaking at a physicians' rally in Ohio, I 
received a letter from a young doctor, Geoff Cly. Dr. Cly received a 
notice from the insurance carrier that the premiums would increase by 
20 percent, $30,000, this plus the $20,000 increase from the year 
before, forcing him to make a difficult decision of uprooting his 
family and practice to go to another State. Doctor Cly was unable to 
make the insurance premiums and still take care of his student loan 
obligations and his family. He moved to Fort Wayne, IN. He said to me: 
Senator, I am going to Indiana. My liability insurance will be less 
there. But the practice has gotten so much different than what I 
anticipated it to be that I am seriously thinking, after I pay off my 
college loans, I am going to get out of medicine.
  It is a tragedy what is happening today in my State and other States 
throughout this country. For those of my colleagues who think medical 
liability reform is a State issue, I ask them to read this letter and 
see how the medical liability crisis transcended State lines, 
particularly my friends from the neighboring State of West Virginia. 
Our Ohio physicians who practice along the border are feeling the 
effects of their proximity to West Virginia and its favorable 
plaintiffs' verdicts. They are feeling these effects in their 
increasing insurance premiums.
  It is amazing the number of counties along the West Virginia border 
and eastern Ohio where they have no more OB/GYNs. They just left. These 
counties go bare, with no OB/GYN to provide services to protect women.
  I could go on and give more and more examples of Ohio physicians who 
had to leave the practice of medicine. Dr. Komorowski of Bellevue 
stopped delivering babies after 20 years when he found out the day 
after Christmas last year that his liability insurance was tripling to 
more than--listen to this--$180,000. Dr. Komorowski, the only 
obstetrician in Bellevue, figured it would cost him nearly 11 months of 
his salary to pay the premium increase in addition to taxes and other 
expenses.
  It is out of control. We need to do something now, not just for Ohio 
but for the rest of the country as well. Obstetrics/gynecology is among 
the top three specialties in the cost of professional liability 
insurance premiums. Nationally, insurance premiums for OB/GYNs have 
increased dramatically. The median premium increased 167 percent 
between 1982 and 1998. The median rate rose 7 percent in 2000, 12\1/2\ 
in 2001, 15.3 in 2002, with increases as high as 69 percent according 
to a survey by the Medical Liability Monitor, a newsletter covering the 
liability insurance industry.
  According to the Physicians Insurance Association of America, OB/GYNs 
were first among 28 specialty groups in the number of claims filed 
against them in 2000. OB/GYNs were the highest of all the specialty 
groups in the average cost of defending against a claim in 2000 at a 
cost of almost $35,000. In the 1990s they were first, along with family 
physicians, general practitioners, in the percentage of claims against 
them closed with a payment of 36 percent. They were second after 
neurologists in the average claim payment made during that same period.
  Although the number of claims filed against all physicians climbed in 
recent decades, the phenomena do not reflect an increased rate of 
medical negligence. In fact, OB/GYNs win most of the claims filed 
against them. In 1999, an American College of Obstetricians and 
Gynecologists survey of its membership found that over one-half, 54 
percent of claims against OB/GYNs were dropped by plaintiff attorneys, 
dismissed or settled without payment; 54 percent of the cases that did 
proceed. OB/GYNs won 7 of 10 times. Enormous resources are spent to 
deal with these claims, only 10 percent of which are found to have 
merit.
  The cost to defend these claims can be staggering and often mean that 
physicians invest less in new technologies that help patients. In 2000, 
the average cost to defend a claim against the OB/GYN was the highest 
of all physicians.
  According to the American College of Obstetricians and Gynecologists, 
the typical OB/GYN is 47 years old, has been in practice for 15 years 
and can expect to be sued 2.53 times over his or her career. Over one-
quarter of the residents have been sued for care provided during their 
residency. And that is another problem we are seeing in this country: 
Many residencies are going unfulfilled because of the medical 
malpractice lawsuit abuse growth in this country. Medical school 
enrollments have been impacted by what young people are seeing 
happening in the medical profession in this country.
  In 1999, 76 percent of the American College of Obstetricians and 
Gynecologists fellows reported they had been sued at least once so far 
in their career. The average claim takes over 4 years to resolve. I 
know from anyone who has been the subject of a lawsuit that 4 years is 
4 years of stress as they worry about what is going to happen as a 
result of the outcome of that litigation.
  The legislation we are debating today gets us on our way to turning 
these statistics and stories around. It provides a commonsense approach 
to our litigation problems that will help keep consumers from bearing 
the cost of costly and unnecessary litigation while making sure that 
those with legitimate grievances have recourse through the courts.
  Throughout my career in public service, health care has been one of 
my top legislative priorities. We all want access to quality, 
affordable health care. We do have a problem in this country in terms 
of access to quality health care. In my State, I have conducted eight 
listening sessions. The result from all those sessions, regardless of 
who was there, is that the system is broken, and we need to plow new 
ground.
  When the quality is not there, when people die or are truly sick due 
to negligence or other medical error, they should be compensated. We 
want that. But when healthy plaintiffs file meaningless lawsuits to 
shake the money tree to get as much as they can get, there is a 
snowball effect and all of us pay the price.
  The last time I spoke on this subject, I had the front and back cover 
of the white pages and the yellow pages of the Cleveland phonebook. The 
front cover and back cover of both of them were advertisements for 
personal injury lawyers giving specific examples of encouraging people 
to file suits based on the information they had in their advertisement.
  For the system to work, we must strike a delicate balance between the 
rights of aggrieved parties to bring lawsuits and the rights of society 
to be protected against frivolous lawsuits and outrageous judgments 
that are disproportionate to compensating the injured and made at the 
expense of society as a whole.
  I have been concerned about this issue since my days as Governor of 
Ohio. In 1996, I essentially had to pull teeth in the Ohio Legislature 
to pass a tort reform bill. I signed it into law in October of 1996. 
Three years later, the supreme court ruled it unconstitutional. If that 
law had withstood supreme court scrutiny--and it should

[[Page 2234]]

have; we now have what I call a balanced supreme court in Ohio--Ohioans 
would not be facing the medical access problems they face today: 
Doctors leaving their practice, patients unable to receive the care 
they need, and the cost of health insurance going through the roof.
  During my time in the Senate, I have continued my work to alleviate 
the medical liability crisis. To this end, I have worked with the 
American Tort Reform Association to produce a study in August of 2002 
that captured the impact of this crisis on Ohio's economy in order to 
share these findings with my constituents and colleagues. Guess what we 
found. What we have in this country today, in my opinion, not only in 
this area but in a lot of areas, is a litigation tornado that is 
ripping through the economy. We found in Ohio that the litigation 
crisis costs every Ohioan $636 per year and every Ohio family of four 
$2,544. These are alarming figures, and the numbers are from 2 years 
ago. Which family do you know that can pay $2,500 for the lawsuit abuse 
of a few individuals?
  Next to the economy and jobs, the most important issue facing our 
country today is health care. In fact, it is a major part of what is 
wrong with the economy. We have too many uninsured, and those who have 
insurance face soaring premiums every year, making it less likely they 
can continue to pay them. In addition, employers are facing spiraling 
costs and in some cases don't even provide insurance.
  I have talked to one employer after another. They say: I want to 
provide health insurance for my workers, but I cannot afford to do it 
at $10,000 for a family of four. I am asking my employees to pay more 
of the premiums. In many instances my employees cannot afford to pay 
the premiums so they are going without health insurance.
  We have a real problem. Medical malpractice lawsuit abuse reform is 
having a dramatic impact on the cost of health insurance, in spite of 
what some of my colleagues have said. Providing the sort of commonsense 
approach found in the Healthy Mothers and Healthy Babies Access to Care 
Act is a win-win situation. The bill will help decrease the rising cost 
of health care. It will give patients access to care and it will 
curtail the rising cost of medical liability insurance for those 
physicians who provide prenatal delivery and postpartum care to mothers 
and babies.
  Patients will not have to give away large portions of their judgments 
to their attorneys. Truly injured parties can recover 100 percent of 
their economic damages. Punitive damages are reserved for those cases 
where they are truly justified. Doctors and hospitals will not be held 
liable for harms they did not cause and physicians can focus on what 
they do best--practicing medicine and providing health care.
  I urge my colleagues to vote for cloture so we can debate this issue 
and have an up-or-down vote on this legislation impacting on our most 
important patients: Pregnant women and their newborn babies.
  There was some mention made of the General Accounting Office study of 
the medical liability crisis and access to care. I ask unanimous 
consent to have printed in the Record the response of the American 
Medical Association to that General Accounting Office report. It is 
very important.
  There being no objection, the material was ordered to be printed in 
the Record, as follows;

  Medical Liability Crisis and Access to Care--AMA's Response to the 
               General Accounting Office, September 2003

        The U.S. General Accounting Office (GAO) recently released 
     two reports related to America's medical liability crisis. 
     [U.S. General Accounting Office, Medical Malpractice 
     Insurance: Multiple Factors Have Contributed to Increased 
     Premium Rates, GAO-03-702 (June, 2003); and Medical 
     Malpractice: Implications of Rising Premiums on Access to 
     Health Care, GAO-03-836 (August, 2003)]. The first report 
     (June 2003) confirms that, since 1999, medical liability 
     premiums skyrocketed in some states and specialties--and 
     increasing settlements and jury awards (``paid claims'') are 
     the primary drivers for these increases. The second report 
     (August 2003) confirms that America's medical liability 
     crisis is causing access to health care problems in high-risk 
     medical specialties and in select locations throughout 
     America.
        The GAO reports also confirm what the American Medical 
     Association (AMA) has long held to be true--tort reform 
     works. Medical liability premiums in states with strong caps 
     on non-economic damages grew at a slower rate than states 
     without caps on non-economic damages.
        We appreciate the GAO's efforts and recognize that it is 
     difficult to quantify the medical liability crisis. Among its 
     findings, the GAO confirmed that:
        Increased losses on claims are the primary contributor to 
     higher medical liability premium rates (GAO 03-702, p. 15);
        Premiums were higher (GAO 03-702, p. 14) and grew more 
     quickly (GAO 03-836, p. 30) in states without non-economic 
     damage caps than in states with non-economic damage caps;
        Physician responses to medical liability pressures in the 
     five crisis states have reduced access to services affecting 
     emergency surgery and newborn deliveries (GAO 03-836, p. 5);
        Similar examples of access reductions attributed to 
     medical liability pressures were not identified in the four 
     non-crisis states without reported problems (GAO 03-836, p. 
     5);
        Insurers are not charging/profiting from excessively high 
     premium rates (GAO 03-702, p. 32); and
        None of the insurance companies studied experienced a net 
     investment loss (GAO 03-702, p. 25).
        However, the GAO's August report fails to accurately 
     reflect the severity of the current crisis. Numerous changes 
     to the GAO methodology would strengthen the basic findings of 
     this report. Among the data sources, measures, or analytical 
     methods that could be improved:
        Examine all crisis states. To date, the AMA, in 
     conjunction with its federation of state medical 
     associations, has identified 19 states in a medical liability 
     crisis. The GAO investigated access problems in only five of 
     those states. In each of those states it found examples of 
     reduced access to care. The GAO would have found similar 
     access problems if it had examined the other 14 crisis 
     states. In fact, the GAO did not identify any access problems 
     in the four non-crisis states it examined. Therefore, the 
     GAO's conclusion that access problems are not widespread is 
     not substantiated.
        Recognize increased impact on rural areas. Health care 
     access problems do not have to affect every part of a state 
     to create crisis conditions. Health care by its nature is 
     local, where a loss of just one or a few physicians or other 
     health care providers in a community can have a traumatic 
     impact on the availability of health care services in that 
     community. Many rural areas suffered from physician shortages 
     prior to the recent escalation in liability premiums. It is 
     precisely in those areas where access is already threatened 
     that one would first notice the impact of physician's 
     relocation or curtailment of certain services.
       Appropriately measure physician mobility. Physician counts 
     were based on state licensure data, which do not accurately 
     reflect the number of physicians practicing in a given 
     location. Actual physician practice location information must 
     be used instead.
       Relying on the total number of licensed physicians is a 
     state to track physician mobility is inappropriate. According 
     to James Thompson, MD, President and CEO of the Federation of 
     State Medical Boards of the U.S. (FSMB) in September 2003: 
     ``The number of licensed physicians in a state is not an 
     accurate measure of whether patients have adequate access to 
     health care. Physicians may reduce their practice, stop 
     treating high-risk patients, or stop practicing altogether 
     and still maintain their license. Also, the number of 
     licensed physicians is not an accurate indicator of the 
     distribution of those physicians in underserved areas. 
     Licensed physicians may work in administrative, academic or 
     other settings where they may not have a clinical practice. 
     Also, many retired physicians maintain a license. Information 
     in the Federation of State Medical Boards' database shows 
     that approximately 60% of physicians are licensed in more 
     than one state which indicates that they are licensed in 
     states where they do not maintain a full-time or part-time 
     practice.''
       Accurately count physicians by specialties and local 
     markets. The GAO's method of measuring physician supply and 
     potential access to care is not appropriate. Physician/
     population ratios that aggregate physicians across local 
     markets and specialties obscure the significant market-
     specific or speciality-specific changes in the supply of 
     physicians and availability of critically important medical 
     services. Similarly, the number of high-risk sub-specialists 
     that depart from any locality would likely account for only a 
     small percentage of physicians in the state.
       Use multi-payor data to accurately measure access to health 
     care services that Medicare data alone do not capture. 
     Utilization statistics based exclusively on data from a 
     single payor (Medicare) exclude data for obstetric and 
     emergency care, and fail to capture the impairment of access 
     among other vulnerable populations, such as Medicaid 
     patients. Medicare data are inadequate to identify changes in 
     obstetric services because a vast majority of Medicare 
     eligible beneficiaries are beyond reproductive age. 
     Limitations in the data also preclude an assessment of 
     changes in emergency room services.

[[Page 2235]]

     Therefore, the report significantly understates the impact of 
     rising liability insurance premiums because it does not 
     examine two clinical areas in which impairment of patient 
     access has been the most severe--obstetric and emergency room 
     services.
       The AMA will continue to advocate on behalf of patients and 
     physicians for national reforms similar to those already 
     passed by the U.S. House of Representatives. America's 
     patients are the ones who will suffer if Congress does not 
     act soon. This is a crisis. It is not waning, and without 
     real reforms more patients will be unable to find a doctor to 
     deliver a baby, perform life-saving trauma surgery, or 
     provide other critical care to high-risk patients who need it 
     most.

  Mr. VOINOVICH. I will summarize quickly some of the conclusions. It 
says: The GAO August report fails to accurately reflect the severity of 
the current crisis. Numerous changes in the GAO methodology would 
strengthen the basic findings. Among the data sources, measures, 
analytical methods that could be improved: Examine all crisis States. 
To date, the AMA, in conjunction with its federation of State medical 
associations, has identified 19 States that have a medical liability 
crisis.
  They also suggest recognizing the increased impact on rural areas, 
which GAO did not do; approximately measure physician mobility. 
Physician accounts were based on State licensure data which do not 
accurately reflect the number of physicians practicing in a given 
location. Actual physician practice location information must be used 
instead.
  They should accurately count physicians by specialties and local 
markets and use multi-payor data to accurately measure access to health 
care services that Medicare data alone do not capture.
  I can tell you I have not completely read the GAO report, but I have 
read portions of it. Its connection to reality in my State is not 
there. I have talked to David Walker about it. I have talked to the 
people who did the report and encouraged them to look at some of the 
suggestions the AMA made and perhaps do another study that would 
accurately reflect what is really going on today in this country in 
terms of medical malpractice increases and what it is doing to access 
to health care.
  I would like to end my remarks with the words of Dr. Evangeline 
Andarsio. Dr. Andarsio is an OB/GYN from Dayton, OH. I met Dr. Andarsio 
at a physicians rally in Ohio. I will never forget that day. It was 
October of 2002. It was very cold. I was freezing. In fact, when I got 
up, my teeth were chattering. But prior to my getting up, Dr. Andarsio 
started to speak. I thought to myself, this doctor is just going to go 
on and on and on. And I was cold. But as she started, as I listened 
intently to what she was saying, I was moved by her remarks. This was 
truly a dedicated physician who loved her patients, loved what she was 
doing, and who was unable to practice medicine the way she wanted to 
because of this malpractice lawsuit abuse problem she is confronted 
with in our State.
  I would like to close with a quote from her speech:

       Help us to maintain an ability to have a practice that 
     offers patients excellent access to care--to continue one of 
     the most important relationships in our lives--the doctor-
     patient relationship--thus maintaining individualized and 
     compassionate care.

  That is what much of this debate is about. It is about physicians 
being able to practice medicine and do it in a way they did back when 
my wife Janet and I were having our four children. There is a special 
relationship between an OB/GYN and a family. It breaks my heart to see 
so many of them leaving the practice of medicine because of these 
malpractice costs with which they are confronted.
  We do have a crisis. This Senate is going to have to face up to it. I 
am hoping that we will have 60 votes today on cloture on the motion to 
proceed. I think we need to debate this issue. This issue has to be 
debated and the American people who are not aware of the crisis need to 
be made aware of it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. GREGG. Mr. President, what is the present situation relative to 
time?
  The PRESIDING OFFICER. The Senator's side has 37 minutes and the 
other side has 12 and a half minutes.
  Mr. GREGG. The Senator from Florida wanted 20 minutes. I ask 
unanimous consent that he be allowed to proceed after I speak for 20 
minutes, but to the extent his time exceeds 12 minutes, it be debited 
against the time of the Democratic membership after we come back from 
the policy lunches.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. GREGG. Mr. President, I congratulate the Senator from Ohio for an 
excellent statement outlining the gravity of the problem we face, which 
is that women in this country are losing access to OB/GYN doctors, 
especially if they want to have babies. As a result, we are putting a 
lot of pressure on a lot of people--women, specifically, in their 
birthing years--and making it difficult, especially in rural areas, to 
get the type of health care we want them to get.
  We are a society that is built around the concept of babies and 
children, and that is one of the more exciting things that happens in 
everybody's lifetime. Yet we are a society making it extraordinarily 
difficult now for doctors who practice the delivery of children and 
babies to practice their trade.
  As I have said before, lawyers don't deliver children. Doctors 
deliver children. Unfortunately, the doctors are being driven out of 
the business by attorneys, and the cost of their malpractice premiums 
are going up radically. As a result, many doctors in my State are not 
delivering children anymore. I went through the specifics of that 
yesterday. I want to read a compelling letter I received from Debbie 
Risteen. She lives in Derry, NH. She has six children.
  She wrote:

       I regret I could not be here with you in person today to 
     tell you my story myself, as it would have been quite an 
     honor for me. Let me tell you a little about myself. I am a 
     mother of 6 whose ages range from 12 to 8 months. I love 
     children and I homeschool. One of my favorite things of our 
     married life has been being pregnant and delivering our 
     babies. What an incredible time all 6 have been!
       I would like to describe to you a word picture for a 
     moment. . . . It was a very difficult decision for me to 
     decline coming to speak to you all today. One that took a lot 
     thought. I need to weigh the cost at such a short notice. As 
     much as I wanted to be here today, my family needed me more. 
     If anything happened especially with the baby . . . I would 
     be so far away to be able to meet the need and it would take 
     me awhile to get to NH. In this picture, I now want you to 
     see the importance of a pregnant woman needing the care of 
     her OB. Someone she can depend on, trust in the decisions 
     that lie ahead and most of all close in case of an emergency 
     just like my family is depending on me.
       You see, my heart was broken this Christmas when I learned 
     of our dear friend, Dr. Pat Miller, would not be doing what 
     was closest to her heart . . . delivering babies. I could not 
     believe it, you are so wonderful at this, people need you, I 
     would tell her.
       12\1/2\ years ago we made one of the biggest decisions of 
     our lives . . . to begin a family. When we got the exciting 
     news, we were busy looking for the best care, a doctor who 
     was up on the latest, one who could handle complications, a 
     hospital close by, and the list went on. We learned of a new 
     OB in the area . . . Pat Miller. We heard she was all the 
     things we were looking for and more. We were thrilled to be 
     in the care of someone as wonderful as her. Through all of 
     our visits we became very close friends and I knew she truly 
     cared about me, the child, and my husband. Being our first 
     and not knowing what to expect, I knew she was right there if 
     anything was to happen and I trusted her wisdom to do what 
     was best for the both of us. As a matter of fact, 3 of our 
     children were born on her day off and she spent the day at 
     the hospital in case we needed her for any emergencies. It 
     was a tremendous comfort not only to me through these 9 
     months, but also for my husband to know we were in the best 
     care and it was close. We knew that no matter what lied ahead 
     she was there and would make the best choices. As our family 
     began to grow it was a huge help to have her close by, 
     especially when bringing 1 then 2 and so on with me. I have 
     been so fortunate through 6 pregnancies to not have any 
     complications, but as we all know, there are no guarantees to 
     this. Other women are not as fortunate as me, but I would 
     love for them to be able to have the same comfort and trust 
     that I have experienced with our OB. I love our children 
     dearly, and I love babies, and my hearts desire in sharing my 
     story with you, is for legislators to hear 1st hand the 
     importance of people, like Pat Miller, to be

[[Page 2236]]

     able to continue what she loves and does best. To be able to 
     provide an environment in which OB's can continue to deliver 
     babies. To allow other mothers the same opportunity of trust 
     and friendship that we still have today with our OB. Please 
     listen to my heart . . . we need people like Pat Miller back 
     in OB where she does what she knows best. Thank you for 
     listening.
           Sincerely,
                                                   Debbie Risteen.

  That is a pretty compelling letter. It is anecdotal, but it is an 
anecdote happening across this country. Stories are being retold. Women 
are losing their OBs because these physicians are getting out of the 
practice of delivering babies because of the cost of their malpractice 
insurance. This bill will help alleviate that problem, and it is 
absolutely critical to give women this access and to not do things 
extremely discriminatory against women, and especially women who wish 
to become pregnant and have children.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, I rise today in support of S. 2061, the 
Healthy Mothers and Healthy Babies Access to Care Act, the principal 
sponsors of which were Senator Gregg and Senator Ensign.
  Much of America cannot access basic medical services because lawsuits 
are driving insurance premiums through the roof and driving doctors 
literally out of business. Seven months ago a majority of Senators 
voted to try to do something about this problem. Unfortunately, not a 
single Democratic Senator supported our effort and therefore we could 
not overcome a filibuster and were prevented from even considering S. 
11, the Patients First Act of 2003.
  In the last 7 months, the crisis has gotten no better. That is the 
bad news. The good news is our resolve has not waned so again we are 
before the American people waiting and willing to roll up our sleeves 
to fix this problem if our friends on the other side of the aisle will 
let us have a chance.
  Like the bill we offered last July, the reforms we are now proposing 
are tried and true. They are based on California's MICRA legislation, 
which for a quarter of a century has stabilized insurance premiums and 
helped ensure access to health care for those in the Golden State. The 
Healthy Mothers and Healthy Babies Access to Care Act would allow 
plaintiffs to recover unlimited economic damages, up to a quarter 
million dollars in noneconomic damages, and punitive damages up to the 
greater of a quarter million or twice economic damages.
  While the reforms in S. 2061 are similar to those in MICRA and S. 11, 
the scope of S. 2061 is much more narrow. The bill we are asking the 
Senate to begin considering today pertains only to obstetrics and 
gynecological services. If our friends across the aisle will not help 
us protect all medical professionals with MICRA-type reforms, then 
perhaps they will let us take this important step toward reform by 
protecting at least one specialty.
  OB/GYNs provide some of the most critical medical services in our 
country. Unfortunately, OB/GYNs also suffer from some of the highest 
premiums. As a result, women and children across our country are placed 
in danger as they struggle to find, oftentimes unsuccessfully, basic 
obstetric care. This is a nationwide problem. Data from the American 
College of Obstetricians and Gynecologists illustrates the legal and 
financial jeopardy faced by OB/GYNs across our country today.
  Obstetrics and gynecology are among the top three specialties with 
the highest professional liability insurance premiums. OB/GYNs were No. 
1 among 28 specialty groups in the number of claims filed against them. 
OB/GYNs were also the highest of all specialty groups in the average 
cost of defending against a claim. OB/GYNs are also facing enormous 
increases in the average payout of claims brought against them.
  For example, back in 1996, the average award against an OB/GYN was 
$254,495. Between 1996 and 1998, the average award went up to about 
$350,000--from $250,000 up to $350,000 in 2 years. By 2000, the average 
award against an OB/GYN had increased to about $400,000. That is an 
increase of almost 40 percent in 4 short years.
  This phenomenon is even more striking when one looks at cases 
involving alleged brain injuries to newborns. Such cases account for 30 
percent of all claims against OB/GYNs but research shows physician 
error is responsible for fewer than 4 percent of neurologically 
impaired infants. Despite the rarity of physician error in these cases, 
the average award in these few cases where obstetricians are at fault 
has dramatically increased in just a few years. In 1996, the average 
award in these type cases was about $460,000. Two years later, the 
average award had doubled to $935,000.
  Today, the median award in childbirth cases has risen to over $2 
million. This is the highest category of award for all types of medical 
liability cases. American women should not be misled by these 
statistics. They should not worry that despite annual advances in 
medical technology and training there is somehow an increasingly poor 
level of obstetric care in this country.
  No, these troubling statistics do not mean America's medical schools 
have lowered their standards and a rash of incompetent obstetricians 
has begun to practice medicine. In fact, according to the Society of 
Obstetricians and Gynecologists, over 80 percent of all cases that went 
to verdict against an OB/GYN resulted in judgments for the physician. 
In other words, on average eight out of 10 cases that went to trial 
against OB/GYNs were not meritorious.
  It is the dramatic increase in awards noted above and the specter of 
such awards in settlement negotiations that is driving malpractice 
premiums through the roof, not a lowering of medical standards for 
practice.
  Looking at my own State, the immediate result of skyrocketing 
liability premiums is the doctors pack up and move to a State such as 
California with liability reform or they just simply close their doors 
altogether. When this happens, the ultimate victims, of course, are the 
patients, the mothers and their children.
  Let's take a look at the Commonwealth of Kentucky. Kentucky does not 
have a medical liability reform system. Not surprisingly, liability 
insurance rates for OBs in my State increased 64 percent in one year 
from 2002 to 2003. Also not surprisingly in the last 3 years, Kentucky 
has lost one-fourth of its obstetricians.
  Moreover, Kentucky has lost nearly half its potential obstetric 
services during this time when one factors in those who have limited 
their practices.
  As this chart I have shows, roughly 60 percent of the counties in the 
Commonwealth of Kentucky have no obstetrician at all--none. These are 
counties in red on this map. It is a majority of the counties in my 
State that have no obstetricians at all.
  Other counties, such as Perry County, down in southeast Kentucky, 
down this way, technically have a practicing OB/GYN, but that one 
doctor has stopped delivering babies within the last year, so if you 
are in Perry County, that doesn't do you much good. Still other 
counties, such as Greenup, Lawrence, and Johnson Counties, in northeast 
Kentucky, have just one OB/GYN in each county, so if you are a woman in 
those counties you better hope there is not another woman having a baby 
when you are, or the doctor isn't out of town or busy with another 
patient. If that happens, you are going to have to drive through the 
hills on the backroads of eastern Kentucky to try to find a doctor to 
deliver your baby. All told, 82 of Kentucky's 120 counties have no OBs, 
or just have one OB.
  According to Dr. Doug Milligan of Lexington, who specializes in 
caring for women with high-risk pregnancies, 11 OBs in eastern Kentucky 
have recently quit delivering babies or left the State, forcing women 
to drive for hours.
  According to Dr. Milligan, apart from problems with delivering 
babies, some women are developing complications because they are not 
getting prenatal care.
  So what should we conclude from all of this? The situation I have 
just described is not, unfortunately, unique to Kentucky. As you will 
hear from my colleagues, States across the country are in similar 
straits. So I commend

[[Page 2237]]

Senator Gregg and Senator Ensign for trying to address this important 
problem.
  As I have said earlier, their legislation is modeled on reforms that 
have stood the test of time in California, and it has been endorsed by 
the American Medical Association, the American College of Obstetricians 
and Gynecologists, and a host of other medical organizations.
  I hope a dozen brave souls on the other side of the aisle will give 
the Senate a chance to consider this bill.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I understand there was an agreement for 
the allocation of time evenly divided between the two parties this 
morning, and that there has also been an agreement to divide the time 
during the afternoon.
  I have talked with our leadership. They have indicated I could use 10 
minutes of our time this afternoon, for the Democratic side, and use it 
at this time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KENNEDY. What adjustment has to be made in the afternoon will be 
made.
  Mr. President, I intend to speak to the issue before us, medical 
malpractice, in a moment. I will yield myself 6 minutes now and then I 
will speak on the medical malpractice in just a moment.


                     The Federal Marriage Amendment

  Earlier today the President announced his endorsement of the Federal 
marriage amendment. By endorsing this shameful effort to write 
discrimination back into the Constitution, President Bush has betrayed 
his campaign promise to be ``a uniter, not a divider.''
  The Constitution is the foundation of our democracy and it reflects 
the enduring principles of our country. We have amended the 
Constitution only 17 times in the two centuries since the adoption of 
the Bill of Rights. Aside from the amendment on prohibition, which was 
quickly recognized as a mistake and repealed 13 years later, the 
Constitution has often been amended to expand and protect people's 
rights, never to take away or restrict their rights.
  By endorsing this shameful proposal, President Bush will go down in 
history as the first President to try to write bias back into the 
Constitution.
  Advocates of the Federal marriage amendment claim it will not prevent 
States from granting some legal benefits to same-sex couples, but that 
is not what the proposed amendment says. By forbidding same-sex couples 
from receiving ``the legal incidents of marriage,'' the amendment would 
prohibit State courts from enforcing many existing State and local 
laws, including laws that deal with civil unions and domestic 
partnerships and other laws that have nothing to do with such 
relationships.
  Just as it is wrong for a State's criminal laws to discriminate 
against gays and lesbians, it is wrong for a State's civil laws to 
discriminate against gays and lesbians by denying them the many 
benefits and protections provided for married couples.
  The proposed amendment would prohibit States from deciding these 
important issues for themselves. This Nation has made too much progress 
in the ongoing battle for civil rights to take such an unjustified step 
backwards now.
  We all know what this is about. It is not about how to protect the 
sanctity of marriage, or how to deal with activist judges. It is about 
politics, an attempt to drive a wedge between one group of citizens and 
the rest of the country, solely for partisan advantage. We have 
rejected that tactic before and I hope we will do so again.
  The timing of today's statement is also a sign of the desperation of 
the President's campaign for reelection. When the war in Iraq, jobs and 
the economy, health care, education, and many other issues are going 
badly for the President and his reelection campaign is in dire straits, 
the President appeals to prejudice in a desperate tactic to salvage his 
campaign.
  I am optimistic the Congress will refuse to pass this shameful 
amendment. Many of us on both sides of the aisle have worked together 
to expand and defend the civil rights of gays and lesbians. Together, 
on a bipartisan basis, we have fought for a comprehensive Federal 
prohibition on job discrimination on the basis of sexual orientation. 
We have fought together to expand the existing Federal hate crimes law 
to include hate crimes based upon this flagrant form of bigotry.
  I hope we can all agree that Congress has more pressing challenges to 
consider than a divisive, discriminatory constitutional amendment that 
responds to a nonexistent problem. Let's focus on the real issues of 
war and peace, jobs and the economy, and the many other priorities that 
demand our attention so urgently in these troubled times.
  Mr. President, as to the issue that we will be voting on this 
afternoon, on the medical malpractice legislation, I spoke on this 
issue yesterday but there are a few additional points that I wish to 
make today.
  How much time do I have remaining?
  The PRESIDING OFFICER. The Senator has 6 minutes remaining.


                    medical malpractice legislation

  Mr. KENNEDY. Mr. President, today's vote of S. 2061 is a test of the 
Senate's character. In the past, this body has had the courage to 
reject the simplistic and ineffective responses proposed by those who 
contend that the only way to help doctors is to further hurt seriously 
injured patients. Unfortunately, as we saw in the Patients' Bill of 
Rights debate, the Bush administration and congressional Republicans 
are again advocating a policy which will benefit neither doctors nor 
patients, only insurance companies. Caps on compensatory damages and 
other extreme ``tort reforms'' are not only unfair to the victims of 
malpractice, the do not result in a reduction of malpractice insurance 
premiums.
  Once more, we must stand resolute.
  We must not sacrifice the fundamental legal rights of seriously 
injured patients on the altar of insurance company profits. We must not 
surrender our most vulnerable citizens--seriously injured women and 
newborn babies--to the avarice of these companies.
  This bill contains most of the same arbitrary and unreasonable 
provisions which were decisively rejected by a bipartisan majority of 
the Senate last year. The only difference is that last year's bill took 
basic rights away from all patients, while this bill takes those rights 
away only from women and newborn babies who are the victims of 
negligent obstetric and gynecological care. That change does not make 
the legislation more acceptable. On the contrary, it adds a new element 
of unfairness.
  This legislation would deprive seriously injured patients of the 
right to recover fair compensation for their injuries by placing 
arbitrary caps on compensation for non-economic loss in all obstetrical 
and gynecological cases. These caps only serve to hurt those patients 
who have suffered the most severe, life-altering injuries and who have 
proven their cases in court.
  They are the children who suffered serious brain injuries at birth 
and will never be able to lead normal lives. They are the women who 
last organs, reproductive capacity, and in some cases even years of 
life. These are life-altering conditions. It would be terribly wrong to 
take their rights away. The Republicans talk about deterring frivolous 
cases, but caps by their nature apply only to the most serious cases 
which have been proven in court. These badly injured patients are the 
last ones we should be depriving of fair compensation.
  A person with a severe injury is not made whole merely by receiving 
reimbursement for medical bills and lost wages. Noneconomic damages 
compensate victims for the very real, though not easily quantifiable, 
loss in quality of life that results from a serious, permanent injury. 
It is absurd to suggest that $250,000 is fair compensation for a child 
who is severely brain injured at birth and, as a result, can never 
participate in the normal activities of day-to-day living; or for a

[[Page 2238]]

woman who lost her reproductive capacity because of an OB/GYN's 
malpractice.
  This is not a better bill because it applies only to patients injured 
by obstetrical and gynecological malpractice. That just makes it even 
more arbitrary.
  The entire premise of this bill is both false and offensive. Our 
Republican colleagues claim that women and their babies must sacrifice 
their fundamental legal rights in order to preserve access to OB/GYN 
care. The very idea is outrageous.
  For those locales--mostly in sparsely populated areas--where the 
availability of specialists is a problem, there are far less drastic 
ways to solve it. It is based on the false premise that the 
availability of OB/GYN physicians depends on the enactment of draconian 
tort reforms. If that were accurate, States that have already enacted 
damage caps would have a higher number of OB/GYNs providing care. 
However, there is in fact no correlation. States without caps actually 
have 28.4 OB/GYNs per 100,000 women, while States with caps have 25.2 
OB/GYNs per 100,000 women.
  And that is only one of many fallacies in this bill. If the issue is 
truly access to obstetric and gynecological care, why has this bill 
been written to shield from accountability HMOs that deny needed 
medical care to a woman suffering serious complications with her 
pregnancy, a pharmaceutical company that fails to warn of dangerous 
side effects caused by its new fertility drug, and a manufacturer that 
markets a contraceptive device which can seriously injure the user? Who 
are the authors of this legislation really trying to protect?
   In reality, this legislation is designed to shield the entire health 
care industry from basic accountability for the care it provides to 
women and their infant children. It is a stalking horse for broader 
legislation which would shield them from accountability in all health 
care decisions involving all patients. While those across the aisle 
like to talk about doctors, the real beneficiaries will be insurance 
companies and large health care corporations. This legislation would 
enrich them at the expense of the most seriously injured patients; 
women and children whose entire lives have been devastated by medical 
neglect and corporate abuse.
   When will the Republican party start worrying about injured patients 
and stop trying to shield big business from the consequences of its 
wrongdoing?
   If we were to arbitrarily restrict the rights of seriously injured 
patients as the sponsors of this legislation propose, what benefits 
would result? Certainly less accountability for health care providers 
will never improve the quality of health care. It will not even result 
in less costly care. The cost of medical malpractice premiums 
constitutes less than two-thirds of 1 percent--0.66 percent--of the 
Nation's health care expenditures each year. Malpractice premiums are 
not the cause of the high rate of medical inflation.
   In this era of managed care and cost controls, it is ludicrous to 
suggest that the major problem facing American health care is 
``defensive medicine.'' The problem is not ``too much health care,'' it 
is ``too little'' quality health care.
   A CBO report released in January of this year rejected claims being 
made about the high cost of ``defensive medicine''. Their analysis 
``found no evidence that restrictions or tort liability reduce medical 
spending.'' There was ``no statistically significant difference in per 
capita health care spending between States with and without limits on 
malpractice torts.''
   The White House and other supporters of caps have argued that 
restricting an injured patient's right to recover fair compensation 
will reduce malpractice premiums. But, there is scant evidence to 
support their claim. In fact, there is substantial evidence to refute 
it. In the past year, there have been dramatic increases in the cost of 
medical malpractice insurance in States that already have damage caps 
and other restrictive tort reforms on the statute books, as well as the 
States that do not. No substantial increase in the number or size of 
malpractice judgments has suddenly occurred which would justify the 
enormous increase in premiums which many doctors are being forced to 
pay.
   The reason for sky-high premiums cannot be found in the courtroom.
   Caps are not only unfair to patients, they are also an ineffective 
way to control medical malpractice premiums. Comprehensive national 
studies show that medical malpractice premiums are not significantly 
lower on average in States that have enacted damage caps and other 
restrictions on patient rights than in States without these 
restrictions. Insurance companies are merely pocketing the dollars 
which patients no longer receive when ``tort reform'' is enacted.
   Focusing on premiums paid by OB/GYN physicians, the evidence is the 
same. Data from the Medical Liability Monitor shows that the average 
liability premium for OB/GYNs in 2003 was actually slightly higher in 
States with caps of damages--$63,278--than in States without caps--
$59,224. It also showed that the rate of increase last year was higher 
in States with caps--17.1 percent--than it was in States without caps--
16.6 percent.
   This evidence clearly demonstrates that capping malpractice damages 
does not benefit the doctors it purports to help. Their rates remain 
virtually the same. It only helps the insurance companies earn even 
bigger profits. As Business Week Magazine concluded after reviewing the 
data, ``the statistical case for caps is flimsy.'' That was in the 
March 3, 2003 issue.
   If a Federal cap on non-economic compensatory damages were to pass, 
it would sacrifice fair compensation for injured patients in a vain 
attempt to reduce medical malpractice premiums. Doctors will not get 
the relief they are seeking. Only the insurance companies, which 
created the recent market instability, will benefit.
  Insurance industry practices are responsible for the sudden dramatic 
premium increases which have occurred in some States in the past 2 
years. The explanation for these premium spikes can be found not in 
legislative halls or in courtrooms, but in the boardrooms of the 
insurance companies themselves.
  Insurers make much of their money from investment income. Interest 
earned on premium dollars is particularly important in medical 
malpractice insurance because there is a much longer period of time 
between receipt of the premium and payment of the claim than in most 
lines of casualty insurance. The industry creates a ``malpractice 
crisis'' whenever its investments do poorly. The combination of a sharp 
decline in the equity markets and record low interest rates in recent 
years is the reason for the sharp increase in medical malpractice 
insurance premiums. What we are witnessing is not new. The industry has 
engaged in this pattern of behavior repeatedly over the last 30 years.
  Last year, Weiss Ratings, Inc., a nationally recognized financial 
analyst conducted an in-depth examination of the impact of capping 
damages in medical malpractice cases. Their conclusions sharply 
contradict the assumptions on which this legislation is based. Weiss 
found that capping damages does reduce the amount of money that 
malpractice insurance companies pay out to injured patients. However, 
those savings are not passed on to doctors in lower premiums.
  Between 1991 and 2002, the Weiss analysis shows that premiums rose by 
substantially more in the States with damage caps than in the States 
without caps. The 12-year increase in the annual malpractice premium 
was 48.2 percent in the States that had caps, and only 35.9 percent in 
the States that had no caps. In the words of the report:

       On average, doctors in States with caps actually suffered a 
     significantly larger increase than doctors in States without 
     caps . . . . In short, the results clearly invalidate the 
     expectations of cap proponents.

  Doctors, especially those in high-risk specialties, whose malpractice 
premiums have increased dramatically over the past few years, do 
deserve premium relief. That relief will only come as the result of 
tougher regulation of

[[Page 2239]]

the insurance industry. When insurance companies lose money on their 
investments, they should not be able to recover those losses from the 
doctors they insure. Unfortunately, that is what is happening now.
  Doctors and patients are both victims of the insurance industry. 
Excess profits from the boom years should be used to keep premiums 
stable when investment earnings drop. However, the insurance industry 
will never do that voluntarily. Only by recognizing the real problem 
can we begin to structure an effective solution that will bring an end 
to unreasonably high medical malpractice premiums.
  There are specific changes in the law which should be made to address 
the abusive manner in which medical malpractice insurers operate. The 
first and most important would be to subject the insurance industry to 
the Nation's anti-trust laws. It is the only major industry in America 
where corporations are free to conspire to fix prices, withhold and 
restrict coverage, and engage in a myriad of other anticompetitive 
actions. A medical malpractice ``crisis'' does not just happen. It is 
the result of insurance industry schemes to raise premiums and to 
increase profits by forcing anti-patient changes in the tort law. I 
have introduced with Senator Leahy, legislation which will at long last 
require the insurance industry to abide by the same rules of fair 
competition as other businesses. Secondly, we need stronger insurance 
regulations which will require malpractice insurers to set aside a 
portion of the windfall profits they earn from their investment of 
premium dollars in the boom years to cover part of the cost of paying 
claims in lean years. This would smooth out the extremes in the 
insurance cycle which have been so brutal for doctors. Thirdly, to 
address the immediate crisis that some doctors in high risk specialties 
are currently facing, we should provide temporary premium relief. This 
is particularly important for doctors who are providing care to 
underserved populations in rural and inner city areas.
  Unlike the harsh and ineffective proposals in S. 2061, these are real 
solutions which will help physicians without further harming seriously 
injured patients. Unfortunately, the Republican leadership continues to 
protect their allies in the insurance industry and refuses to consider 
real solutions to the malpractice premium crisis.
  This legislation--S. 2061--is not a serious attempt to address a 
significant problem being faced by physicians in some States. It is the 
product of a party caucus rather than the bipartisan deliberations of a 
Senate committee. It was designed to score political points, not to 
achieve the bipartisan consensus which is needed to enact major 
legislation. For that reason, it does not deserve to be taken seriously 
by the Senate.
  I withhold whatever time I have and suggest the absence of a quorum.
  The PRESIDING OFFICER. Will the Senator withhold on suggesting the 
absence of a quorum?
  Mr. KENNEDY. I withhold suggesting the absence of the quorum.

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