[House Report 111-341]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-341

======================================================================

 
      DIRECTING THE ATTORNEY GENERAL TO TRANSMIT TO THE HOUSE OF 
REPRESENTATIVES CERTAIN DOCUMENTS, RECORDS, MEMOS, CORRESPONDENCE, AND 
       OTHER COMMUNICATIONS REGARDING MEDICAL MALPRACTICE REFORM

                                _______
                                

 November 18, 2009.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

    Mr. Conyers, from the Committee on the Judiciary, submitted the 
                               following

                                 REPORT

                             together with

                            ADDITIONAL VIEWS

                       [To accompany H. Res. 871]

  The Committee on the Judiciary, to whom was referred the 
resolution (H. Res. 871) directing the Attorney General to 
transmit to the House of Representatives certain documents, 
records, memos, correspondence, and other communications 
regarding medical malpractice reform, having considered the 
same, report thereon without amendment and without 
recommendation.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Hearings.........................................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     4
New Budget Authority and Tax Expenditures........................     4
Committee Cost Estimate..........................................     4
Performance Goals and Objectives.................................     4
Constitutional Authority Statement...............................     4
Advisory on Earmarks.............................................     4
Section-by-Section Analysis......................................     4
Additional Views.................................................     5

                          Purpose and Summary

    On October 27, 2009, Ranking Member Lamar Smith (R-TN) 
introduced H. Res. 871, a resolution of inquiry. The resolution 
directs the Attorney General to transmit to the House of 
Representatives, not later than 14 days after the date of 
adoption of the resolution, copies of any document, record, 
memo, correspondence or other communications received from the 
American Association of Justice (AAJ), formerly known as the 
Association of Trial Lawyers of America, and any of its 
members, since January 20, 2009, that refers or relates to any 
recommendation regarding medical malpractice reform or that 
references AAJ, or any of its members, and refers or relates to 
any recommendation regarding medical malpractice reform, since 
January 20, 2009.

                               BACKGROUND

    Under the rules and precedents of the House of 
Representatives, a resolution of inquiry is one of the methods 
that the House can use to obtain information from the Executive 
Branch.\1\ It ``is a simple resolution making a direct request 
or demand of the President or the head of an executive 
department to furnish the House of Representatives with 
specific factual information in the possession of the executive 
branch.''\2\ The typical practice has been to use the verb 
``request'' when asking for information from the President, and 
``direct'' when addressing Executive department heads.\3\ 
Clause 7 of Rule XIII of the Rules of the House of 
Representatives provides that if the committee to which the 
resolution is referred does not act on it within 14 legislative 
days, a privileged motion to discharge the resolution from the 
committee is in order on the House floor.
---------------------------------------------------------------------------
    \1\Christopher Davis, House Resolutions of Inquiry, CRS Report, 
November 25, 2008, at 1 (quoting U.S. Congress, House, Deschler's 
Precedents of the United States House of Representatives, H. Doc. 94-
661, 94th Cong., 2nd sess., vol. 7, ch. 24, Sec. 8.
    \2\Id.
    \3\Id.
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    In the course of the consideration of H. Res. 871, it 
became apparent that Ranking Member Smith had not made a direct 
request of the Justice Department for the information described 
in the resolution. At the markup on November 5, 2009, Chairman 
Conyers and Ranking Member Smith agreed to suspend 
consideration while the Department was contacted. The Assistant 
Attorney General for Legislative Affairs advised that a 
thorough search of the Department's records had found no 
documents received from or referencing AAJ during the period in 
question that refer or relate to or any recommendation 
regarding medical malpractice reform. He further stated that 
the Department would make a special effort, without setting any 
precedent, to confirm this in writing by the weekend. In light 
of this advisory, the Committee agreed by voice vote to 
dispense with the resolution by reporting it without 
recommendation.
    The Assistant Attorney General's advisory was confirmed in 
a letter to the Judiciary Committee from the Department of 
Justice, dated November 6, 2009, a copy of which follows:


                                Hearings

    No hearings were held in the Committee on H. Res. 871.

                        Committee Consideration

    On November 5, 2009, the Committee met in open session and 
ordered H. Res. 871 reported without recommendation, without 
amendment, by voice vote, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee reports that there 
were no rollcall votes taken during the Committee's 
consideration of H. Res. 871.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this resolution does 
not provide new budgetary authority or increased tax 
expenditures.

                        Committee Cost Estimate

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee estimates that 
implementing the resolution would not result in any significant 
costs. The Congressional Budget Office did not provide a cost 
estimate for the resolution.

                    Performance Goals and Objectives

    Clause 3(c)(4) of rule XIII of the Rules of the House of 
Representatives is inapplicable, because H. Res. 871 does not 
authorize funding.

                   Constitutional Authority Statement

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives is inapplicable, because H. Res. 871 is not a 
bill or a joint resolution that may be enacted into law.

                          Advisory on Earmarks

    Clause 9 of rule XXI of the Rules of the House of 
Representatives is inapplicable, because H. Res. 871 not a bill 
or a joint resolution.

                      Section-by-Section Analysis

    H. Res. 871 directs the Attorney General to transmit to the 
House of Representatives not later than 14 days after the date 
of adoption of the resolution, copies of any document, record, 
memo, correspondence or other communications received from the 
AAJ, formerly known as the Association of Trial Lawyers of 
America, and any of its members, since January 20, 2009, that 
refers or relates to any recommendation regarding medical 
malpractice reform or that references AAJ, or any of its 
members, and refers or relates to any recommendation regarding 
medical malpractice reform, since January 20, 2009.

                            Additional Views

    Although Members will not have the opportunity to vote for 
H. Res. 871 on the House floor, we hope to receive a full and 
complete response to the information requested in this 
resolution of inquiry from the administration prior to a House 
vote on major health care legislation.
    In light of former Democratic National Committee Chairman 
Howard Dean's public admission that the only reason tort reform 
is not included in the Democrats' health care bill is because 
of opposition from trial lawyers, Ranking Member Lamar Smith 
introduced H. Res. 871, a resolution of inquiry that simply 
requests that the administration provide to Congress all 
documents describing trial lawyers' interaction with the 
administration on the issue of health care tort reform, so the 
American people can know why widely supported reforms that 
would make health care cheaper and more accessible--and, 
according to CBO, save $54 billion--have not been included in 
the Democrats' health care legislation.
    The text of H. Res. 871 is as follows:

        Resolved, That the Attorney General is directed to 
        transmit to the House of Representatives, not later 
        than 14 days after the date of the adoption of this 
        resolution, copies of any document, record, memo, 
        correspondence, or other communication--

            (1) Lreceived from the American Association for 
        Justice, formerly known as the Association of Trial 
        Lawyers of America, and any of its members, since 
        January 20, 2009, that refers or relates to any 
        recommendation regarding medical malpractice reform; or

            (2) Lthat references the American Association for 
        Justice, formerly known as the Association of Trial 
        Lawyers of America, or any of its members, and refers 
        or relates to any recommendation regarding medical 
        malpractice reform, since January 20, 2009.

                    THE COSTS OF THE CURRENT SYSTEM

    The American medical liability system is broken. According 
to one study, 40 percent of claims are meritless: either no 
injury or no error occurred. Attorneys' fees and administrative 
costs amount to 54% of the compensation paid to plaintiffs. The 
study found that completely meritless claims (which are 
nonetheless successful approximately one in four times) account 
for nearly a quarter of total administrative costs.\1\
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    \1\``Claims, Errors, and Compensation Payments in Medical 
Malpractice Litigation,'' David Studdert et al., New England Journal of 
Medicine (May 11, 2006).
---------------------------------------------------------------------------
    The American civil litigation system is the most expensive 
in the world, more than twice as expensive as nearly any other 
country.\2\
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    \2\``U.S. Tort Costs and Cross-Border Perspectives: 2005 Update,'' 
Tillinghast-Towers Perrin.
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                    DEFENSIVE MEDICINE AND ITS COSTS

    ``Defensive Medicine'' is widely practiced--and costly. 
Skyrocketing medical liability insurance rates have distorted 
the practice of medicine. Costly, but unnecessary, tests have 
become routine as doctors try to protect themselves from 
lawsuits. According to a 2008 survey conducted by the 
Massachusetts Medical Society, 83 percent of physicians 
reported that they practice defensive medicine.\3\ Another 
study in Pennsylvania put the figure at 93 percent.\4\
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    \3\``Investigation of Defensive Medicine in Massachusetts,'' 
Massachusetts Medical Society (November 2008).
    \4\``Defensive Medicine Among High-Risk Specialist Physicians in a 
Volatile Malpractice Environment,'' David Studdert et al., JAMA (June 
1, 2005) at 2609-2617.
---------------------------------------------------------------------------
    While estimates vary, the Pacific Research Institute has 
put the cost of defensive medicine at $124 billion.\5\ Others 
have arrived at higher figures.\6\
---------------------------------------------------------------------------
    \5\Jackpot Justice: The True Cost of America's Tort System, L.J. 
McQuillan et al, Pacific Research Institute (2007).
    \6\``Wasted Medical Dollars,'' Kevin Pho, USA Today (April 23, 
2008).
---------------------------------------------------------------------------
    A new study by the Pacific Research Institute estimates 
that defensive medicine costs $191 billion a year,\7\ while a 
separate study by PricewaterhouseCoopers puts the number even 
higher--$239 billion.\8\
---------------------------------------------------------------------------
    \7\Available at http://www.heartland.org/custom/semod_policybot/
pdf/26161.pdf.
    \8\PricewaterhouseCoopers' Health Research Institute, The Price of 
Excess: Identifying Waste in Healthcare Spending (New York: 
PricewaterhouseCoopers 2008), endnote 18, at 18.
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            THE CURRENT SYSTEM IS CAUSING A DOCTOR SHORTAGE

    Lawsuit abuse drives doctors out of practice. There is a 
well-documented record of doctors leaving the practice of 
medicine and hospitals shutting down particular practices that 
have high liability exposure. This problem has been 
particularly acute in the fields of ob-gyn and trauma care, as 
well as in rural areas.\9\
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    \9\For an extensive compilation of such instances see ``Addressing 
the New Health Care Crisis: Reforming the Medical Litigation System to 
Improve the Quality of Care,'' U.S. Department of Health and Human 
Services (March 3, 2003).
---------------------------------------------------------------------------
    The absence of doctors in vital practice areas is at best 
an inconvenience; at worst it can have deadly consequences.\10\ 
Hundreds or even thousands of patients may die annually due to 
lack of doctors.\11\
---------------------------------------------------------------------------
    \10\See Testimony of Leanne Dyess, ``Patient Access Crisis: The 
Role of Medical Litigation,'' Senate Judiciary Committee (February 11, 
2003); Testimony of Dr. Thomas Gleason, ``Medical Liability Reform: 
Stopping the Skyrocketing Price of Health care,'' House Small Business 
Committee (February 17, 2005).
    \11\See Testimony of Theodore Frank, ``Protecting Main Street from 
Lawsuit Abuse,'' Senate Republican Conference (March 16, 2009) (``The 
effect of the loss of productive doctors and the closing of emergency 
rooms . . . is in the hundreds of lives a year, and perhaps as high as 
1,000 deaths and many exacerbated injuries.''); ``Tort Reform and 
Accidental Deaths,'' Paul Rubin and Joanna Shepherd, Emory Law and 
Economics Research Paper No. 05-17H (finding tort reforms saved 
approximately 2,000 lives in the year 2000 and 24,000 over a 20-year 
period).
---------------------------------------------------------------------------
    According to the Massachusetts study, 38 percent of 
physicians have reduced the number of higher-risk procedures 
they provide, and 28 percent have reduced the number of higher-
risk patients they serve, out of fear of liability.\12\ The 
American College of Obstetricians and Gynecologists has 
concluded that the ``current medico-legal environment continues 
to deprive women of all ages, especially pregnant women, of 
their most educated and experienced women's health care 
providers.''\13\
---------------------------------------------------------------------------
    \12\``Defensive Medicine in Massachusetts,'' pp. 4-5.
    \13\``Overview of the 2009 ACOG Survey on Professional Liability.''
---------------------------------------------------------------------------
    Excessive litigation damages the doctor-client relationship 
and impairs care. Beyond the dollars and cents, when doctors 
begin to see their clients as potential litigants, the quality 
of care patients receive is seriously compromised. In a recent 
survey, 76 percent of doctors said that their concern about 
being sued has hurt their ability to provide quality patient 
care. Nearly half of nurses say they are prohibited or 
discouraged from providing needed care by rules set up to avoid 
lawsuits.\14\
---------------------------------------------------------------------------
    \14\``Fear of Litigation Study, The Impact on Medicine,'' Harris 
Interactive (April 11, 2002).
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                             PROVEN REFORMS

    The states have proven that legal reform works. While 
Democrats in Washington talk about the need to study the 
problem, states have acted to address it. Several states have 
limited noneconomic damages--such as those for ``pain and 
suffering--and dramatically lessened the burden of lawsuits. In 
states with such limits, premiums are 17 percent lower than 
they are in states without them.\15\
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    \15\``The Medical Malpractice `Crisis': Trends and the Impact of 
State Tort Reforms,'' Kenneth E. Thorpe, (January 21, 2004) at 20-30.
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                      PROVEN REFORMS IN CALIFORNIA

    States also have had success with a variety of other 
reforms. A comprehensive study of these reforms suggests that 
attorney-fee limits, such as those in California, are 
particularly effective.\16\ The cumulative effect of all state 
reforms put together could be as much as a 74 percent reduction 
in premiums.\17\
---------------------------------------------------------------------------
    \16\``Tort Law Tally: How State Tort Reforms Affect Tort Losses and 
Tort Insurance Premiums,'' Nicole V. Crain, and W. Mark Crain, et al, 
Pacific Research Institute (2009).
    \17\Id.
---------------------------------------------------------------------------
    California's decades-old and highly successful health care 
litigation reforms. California's Medical Injury Compensation 
Reform Act (called ``MICRA'') has proved immensely successful 
in increasing access to affordable medical care in California 
since it was signed into law in 1975 by Governor Jerry Brown. 
It has kept California medical malpractice insurance rates 
consistently much lower than the average in the rest of the 
country.\18\ MICRA's reforms, which are included in the HEALTH 
Act, include: a $250,000 cap on noneconomic (``pain and 
suffering'') damages; limits on the contingency fees lawyers 
can charge, so larger percentages of awards go to victims, not 
lawyers; and authorization for defendants to introduce evidence 
showing the plaintiff received compensation for losses from 
outside sources (to prevent double recoveries). Some critics 
claim that a California automobile insurance reform measure 
called Proposition 103 that required a ``rollback'' of 
insurance premiums--and not California's health care litigation 
reforms--have controlled medical professional liability 
premiums in that state. However, according to the Orange County 
Register, ``a rollback [under Proposition 103] never took place 
because the [California Supreme] court amended Prop. 103 to say 
that insurers could not be forced to implement the 20 percent 
rollback if it would deprive them of a fair profit.''\19\ 
Further, since Proposition 103 went into effect, no medical 
professional liability insurer has been denied a requested 
premium increase.
---------------------------------------------------------------------------
    \18\See http://www.micra.org/about-micra/docs/
micra_access_and_affordability.pdf.
    \19\Orange County Register (October 22, 1997).
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                        PROVEN REFORMS IN TEXAS

    After Texas adopted a new liability system in 2003, medical 
liability premiums fell dramatically, and thousands of new 
doctors flooded into the state.\20\ Communities in Texas that 
once did not have primary or specialty care doctors now have a 
full complement of physicians.
---------------------------------------------------------------------------
    \20\``Tort Reform: A Victory for Patient Access,'' Texas Medical 
Association (July 5, 2006); ``Texas-Style Health Care Reform is Bigger 
and Better,'' Sally Pipes, San Francisco Examiner (July 24, 2009).
---------------------------------------------------------------------------
    Texas passed significant tort reform in 1995, and more 
reforms have been enacted since then. A 2008 study from the 
Perryman Group found that perhaps the most visible economic 
impact of the lawsuit reforms are the benefits experienced by 
Texans who have better access to high-quality healthcare.\21\ 
Doctors and hospitals are using their liability insurance 
savings to expand services and initiate innovative programs; 
those savings have allowed Texas hospitals to expand charity 
care by 24 percent.\22\
---------------------------------------------------------------------------
    \21\Peggy Venable, ``Tort Reform? We've Already Done It,'' The 
Washington Post (September 16, 2009).
    \22\Id.
---------------------------------------------------------------------------
    The total impact of tort reforms implemented since 1995 
includes gains of $112.5 billion in spending each year as well 
as almost 499,900 jobs in the state.\23\ The fiscal stimulus to 
the state from judicial reforms is almost a $2.6 billion per 
year increase in state revenue.\24\ In addition, these reforms 
are responsible for approximately 430,000 individuals having 
health insurance than would otherwise, and there has been an 
increase in the number of doctors, particularly in regions 
which have been facing severe shortages.\25\
---------------------------------------------------------------------------
    \23\Id.
    \24\Id.
    \25\Id.
---------------------------------------------------------------------------

                 THE CONGRESSIONAL BUDGET OFFICE (CBO)

    On October 9, 2009, the Congressional Budget Office 
pronounced that a tort reform package would reduce the Federal 
budget deficit by an estimated $54 billion over the next 10 
years.\26\ CBO recognizes that civil justice reforms also have 
an impact on the practice of ``defensive medicine.'' Defensive 
medicine is when doctors order more tests or procedures than 
are truly necessary just to protect themselves from frivolous 
lawsuits. Studies show that defensive medicine does not advance 
patient care or enhance a physician's diagnostic capabilities. 
That billions of dollars in savings from tort reform could be 
used to provide health insurance for the uninsured without 
raising taxes on those who already have insurance policies.
---------------------------------------------------------------------------
    \26\See http://cboblog.cbo.gov/?p=389.
---------------------------------------------------------------------------
    According to CBO, ``CBO estimates that, under [the HEALTH 
Act], premiums for medical malpractice insurance ultimately 
would be an average of 25 percent to 30 percent below what they 
would be under current law.''\27\
---------------------------------------------------------------------------
    \27\Congressional Budget Office Cost Estimate of H.R. 4600 (the 
HEALTH Act) (September 24, 2002).
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               THE GOVERNMENT ACCOUNTABILITY OFFICE (GAO)

    Also, the Government Accountability Office (GAO) found that 
rising litigation awards are responsible for skyrocketing 
medical professional liability premiums. The report stated 
that--quote--``GAO found that losses on medical malpractice 
claims--which make up the largest part of insurers' costs--
appear to be the primary driver of rate increases in the long 
run . . .''\28\ The GAO also concluded that insurer profits 
``are not increasing, indicating that insurers are not charging 
and profiting from excessively high premium rates'' and that 
``in most states the insurance regulators have the authority to 
deny premium rate increases they deem excessive.''\29\
---------------------------------------------------------------------------
    \28\General Accounting Office, ``Medical Malpractice Insurance,'' 
GAO-03-702 (June 2003) at ``Highlights,'' 4, and 25 (emphasis added).
    \29\Id. at 32.
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                           BARRIERS TO REFORM

    The reason Democrats continue to refuse to add serious 
medical lawsuit reform to their health care legislation remains 
purely political, as was recently revealed by former DNC Chair 
Howard Dean. At a recent health care town hall meeting hosted 
by Rep. Jim Moran (D-VA), Dean responded to an angry 
constituent wondered why a supposedly comprehensive ``reform'' 
of the health-care system doesn't include tort reform to lower 
costs of malpractice insurance and reduce defensive medicine. 
Dean responded remarkably candidly, stating:

        ``This is the answer from a doctor and a politician,'' 
        said Dean. ``Here is why tort reform is not in the 
        bill. When you go to pass a really enormous bill like 
        that the more stuff you put in, the more enemies you 
        make, right? And the reason why tort reform is not in 
        the bill is because the people who wrote it did not 
        want to take on the trial lawyers in addition to 
        everybody else they were taking on, and that is the 
        plain and simple truth. Now, that's the truth.''

                           SUPPORT FOR REFORM

    The American people are demanding legal reform. A recent 
survey found that 83 percent of Americans believe that 
reforming the legal system needs to be a part of any health 
care reform plan.\30\
---------------------------------------------------------------------------
    \30\``National Voter Survey: Health Care Reform and the Legal 
System 2009,'' Clarus Research Group (August 2009).
---------------------------------------------------------------------------
    The USA Today editorial board also recently came out 
supporting tort reform, stating:

        A study last month by the Massachusetts Medical Society 
        found that 83% of its doctors practice defensive 
        medicine at a cost of at least $1.4 billion a year. 
        Nationally, the cost is $60 billion-plus, according to 
        the Health and Human Services Department. [And a] 2005 
        study in the Journal of the American Medical 
        Association found 93% of Pennsylvania doctors practice 
        defensive medicine. The liability system is too often a 
        lottery. Excessive compensation is awarded to some 
        patients and little or none to others. As much as 60% 
        of awards are spent on attorneys, expert witnesses and 
        administrative expenses . . . The current system is 
        arbitrary, inefficient and results in years of 
        delay.\31\
---------------------------------------------------------------------------
    \31\USA Today editorial, ``Our View on `Defensive' Medicine: 
Lawyers' Bills Pile High, Driving Up Health Care Costs,'' USA Today 
(December 29, 2008).

    Discussing the need for tort reform, the President of the 
American Medical Association said ``If the [health care] bill 
doesn't have medical liability reform in it, then we don't see 
how it is going to be successful in controlling costs.''\32\
---------------------------------------------------------------------------
    \32\Carrie Budoff Brown, ``Trial Lawyers Plan Tort Reform Fight,'' 
Politico (March 16, 2009).
---------------------------------------------------------------------------
    Obama's own doctor of over two decades also supports 
medical tort reform. David Scheiner was Obama's doctor from 
1987 until he entered the White House; he vouched for the then-
candidate's ``excellent health'' in a letter last year. As was 
recently reported in Forbes magazine:

        [Dr. Schneider is] still an enthusiastic Obama 
        supporter, but he worries about whether the health care 
        legislation currently making its way through Congress 
        will actually do any good, particularly for doctors 
        like himself who practice general medicine. ``I'm not 
        sure [Obama] really understands what we face in primary 
        care,'' Scheiner says.

        . . . Scheiner is critical of Obama's pick for Health 
        and Human Services secretary--Kansas Gov. Kathleen 
        Sebelius, who used to work as the chief lobbyist for 
        her state's trial lawyers association.

        . . . Scheiner says he never thought it was appropriate 
        to talk about health policy with Obama, especially once 
        he became a U.S. Senator. The one exception was medical 
        malpractice reform. ``I once briefly talked to him 
        about malpractice, and he took the lawyers' position,'' 
        he says.

        . . . Scheiner, like most others in his profession, 
        thinks that it should be harder to sue doctors and that 
        awards should be capped. He says that he and other 
        doctors must order too many tests and imaging studies 
        just to avoid being sued.\33\
---------------------------------------------------------------------------
    \33\David Whelan, ``Obama's Doctor Knocks ObamaCare,'' Forbes.com 
(June 16, 2009).

    One of the Nation's top surgeons, with credibility and 
acclaim the world over for the pioneering surgeries he has and 
his personal story of overcoming hardship, recently severely 
criticized the dominant health care legislation before 
Congress. Benjamin Carson, director of pediatric neurosurgery 
at the Johns Hopkins Medical Institutions in Baltimore, 
Maryland, and recipient of numerous awards including the 
Presidential Medal of Freedom, criticized in a recent interview 
the approach of the current bills for their mandate, creation 
of a ``public option,'' and lack of malpractice liability 
reform. He pointed to excessive litigation, pointing out how 
much malpractice insurance and other forms of ``defensive 
medicine'' to protect against lawsuits add to medical costs. In 
the interview with a local television station, Carson insisted 
that tort reform must go ``hand in hand'' as part of any true 
health care reform. ``We have to bring a rational approach to 
medical litigation,'' he said. ``We're the only nation in the 
world that really has this problem. Why is it that everybody 
else has been able to solve this problem but us? Simple. 
Special interest groups like the trial lawyers' association. 
They don't want a solution.''\34\
---------------------------------------------------------------------------
    \34\John Berlau, ```Gifted Hands' Surgeon Rips Into Obamacare,'' 
BogGovernment.com, available at http://biggovernment.com/2009/10/14/
gifted-hands-surgeon-rips-into-obamacare/.
---------------------------------------------------------------------------
    As Stanley Goldfarb, MD and associate dean of clinical 
education at the University of Pennsylvania School of Medicine, 
has written: ``The president points to for-profit insurance 
companies, but for-profit insurance companies only make up 25 
percent of the system and they are not that profitable, ranking 
85th among all U.S. industries. `Reform' will redistribute the 
money, not reduce the overall costs. There is much that can be 
done to make our system more efficient. Tort reform is a great 
place to start.''\35\
---------------------------------------------------------------------------
    \35\Stanley Goldfarb, ``The Malpractice Problem: We Can't Have 
Health Care Reform Without Tort Reform,'' The Weekly Standard (October 
27, 2009).
---------------------------------------------------------------------------
    Even prominent Democrat strategist Bob Beckel has conceded 
medical tort reform is essential, writing recently that:

        . . . CBO has reviewed the few credible reports that do 
        exist and concluded, ``A number of those studies have 
        found that state level tort reforms have decreased the 
        number of lawsuits filed, lowered the value of claims 
        and damage awards . . . thereby reducing general 
        insurance premiums. Indeed premiums fell by 40% for 
        some commercial policies''. (CBO Report June 2004) . . 
        . [O]ne irrefutable fact remains; between 1997 and 2007 
        medical tort costs (including insurance premiums) have 
        risen from $15 billion to $30 billion a year. That fact 
        alone should insure that yearly savings in the billions 
        from medical tort reform would pass the credibility 
        test.''\36\
---------------------------------------------------------------------------
    \36\Bob Beckel, ``Dems' Ace in the Hole on Health Care: Tort 
Reform,'' Real Clear Politics (August 17, 2009).

    As Kimberly Strassel has written in the Wall Street 
---------------------------------------------------------------------------
Journal:

        Tort reform is a policy no-brainer. Experts on left and 
        right agree that defensive medicine--ordering tests and 
        procedures solely to protect against Joe Lawyer--adds 
        enormously to health costs. The estimated dollar 
        benefits of reform range from a conservative $65 
        billion a year to perhaps $200 billion. In context, Mr. 
        Obama's plan would cost about $100 billion annually. 
        That the president won't embrace even modest change 
        that would do so much, so quickly, to lower costs, has 
        left Americans suspicious of his real ambitions.

    It's also a political no-brainer. Americans are on board. 
Polls routinely show that between 70% and 80% of Americans 
believe the country suffers from excess litigation. The entire 
health community is on board. Republicans and swing-state 
Democrats are on board. State and local governments, which have 
struggled to clean up their own civil-justice systems, are on 
board. In a debate defined by flash points, this is a rare area 
of agreement. Former Democratic Sen. Bill Bradley, in a New 
York Times piece, suggested a ``grand bipartisan compromise'' 
in which Democrats got universal coverage in return for 
offering legal reform.
    The only folks not on board are a handful of powerful trial 
lawyers, and a handful of politicians who receive a generous 
cut of those lawyers' contingency fees. The legal industry was 
the top contributor to the Democratic Party in the 2008 cycle, 
stumping up $47 million. The bill is now due, and Democrats are 
dutifully making a health-care down payment.
    During the markup of a bill in the Senate Health Committee, 
Republicans offered 11 tort amendments that varied in degree 
from mere pilot projects to measures to ensure more rural 
obstetricians. On a party line vote, Democrats killed every 
one.\37\
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    \37\Kimberly A. Strassel, ``The President's Tort Two-Step,'' The 
Wall Street Journal (September 11, 2009).
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                      REPUBLICAN-SUPPORTED REFORMS

    Republican-sponsored legislation would make Federal law the 
same legal reforms California implemented over 30 years ago. 
That legislation, called the HEALTH Act, remains the ``gold 
standard'' for health care legal reform, and it continues to be 
supported by every major medical organization.
    The HEALTH Act does not limit in any way an award of 
``economic damages'' from anyone responsible for harm. Economic 
damages include anything whose value can be quantified, 
including lost wages or home services (including lost services 
provided by stay-at-home mothers), medical costs, the costs of 
pain-reducing drugs, therapy, and lifetime rehabilitation care, 
and anything else to which a receipt can be attached.
    Only economic damages--which the Federal legislation does 
not limit--can be used to pay for drugs and services that 
actually reduce pain. Nothing in the HEALTH Act prevents juries 
from awarding very large amounts to victims of medical 
malpractice, including stay-at-home mothers and children. 
California's legal reforms (just like the HEALTH Act) cap non-
economic damages at $250,000, but do not cap quantifiable 
economic damages.

               THE DEMOCRATS' TRIAL LAWYERS' BAILOUT BILL

    The Democrats' health care bill, H.R. 3962, not only fails 
to contain any of the tort reforms the CBO concluded would save 
at least $54 billion in health care costs, but it also contains 
a provision that deters states from enacting such reforms in 
the future by explicitly prohibiting tort reform 
``demonstration project'' funds to states that enact limits on 
damages or attorneys' fees. Section 2531 of the Democrats' bill 
states that ``the Secretary [of HHS] shall make an incentive 
payment . . . to each State that has an alternative medical 
liability law in compliance with this section,'' but then goes 
on to say a state can take advantage of such funds only if 
``the law does not limit attorneys' fees or impose caps on 
damages,'' which are precisely the tort reforms the CBO 
concluded yield real health care costs savings.
    So not only does the Democrats' bill fail to contain any of 
the tort reforms we know bring health care costs down from 
decades of experience, but it even prohibits states that want 
to try such reforms from taking part in the government-funded 
tort reform demonstration projects. That is a not only blow to 
state reform effort. It is a federally-funded bribe 
discouraging states from enacting real reform, and a giant 
bailout for trial lawyers.

                                   Lamar Smith.
                                   F. James Sensenbrenner, Jr.
                                   Howard Coble.
                                   Elton Gallegly.
                                   Bob Goodlatte.
                                   Darrell E. Issa.
                                   J. Randy Forbes.
                                   Steve King.
                                   Trent Franks.
                                   Jim Jordan.
                                   Jason Chaffetz.
                                   Tom Rooney.

                                  
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