[House Report 112-39]
[From the U.S. Government Publishing Office]
112th Congress Rept. 112-39
HOUSE OF REPRESENTATIVES
1st Session Part 1
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HELP EFFICIENT, ACCESSIBLE, LOW-COST,
TIMELY HEALTHCARE (HEALTH) ACT OF 2011
_______
March 17, 2011.--Ordered to be printed
_______
Mr. Smith of Texas, from the Committee on the Judiciary,
submitted the following
R E P O R T
together with
DISSENTING VIEWS AND ADDITIONAL DISSENTING VIEWS
[To accompany H.R. 5]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 5) to improve patient access to health care services
and provide improved medical care by reducing the excessive
burden the liability system places on the health care delivery
system, having considered the same, reports favorably thereon
with an amendment and recommends that the bill as amended do
pass.
CONTENTS
Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 7
Background and Need for the Legislation.......................... 8
Hearings......................................................... 63
Committee Consideration.......................................... 63
Committee Votes.................................................. 63
Committee Oversight Findings..................................... 79
New Budget Authority and Tax Expenditures........................ 79
Congressional Budget Office Cost Estimate........................ 80
Performance Goals and Objectives................................. 87
Advisory on Earmarks............................................. 87
Section-by-Section Analysis...................................... 87
Dissenting Views................................................. 88
Additional Dissenting Views...................................... 119
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purpose.
Sec. 3. Encouraging speedy resolution of claims.
Sec. 4. Compensating patient injury.
Sec. 5. Maximizing patient recovery.
Sec. 6. Punitive damages.
Sec. 7. Authorization of payment of future damages to claimants in
HEALTH care lawsuits.
Sec. 8. Definitions.
Sec. 9. Effect on other laws.
Sec. 10. State flexibility and protection of States' rights.
Sec. 11. Applicability; effective date.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--
(1) Effect on health care access and costs.--Congress finds
that our current civil justice system is adversely affecting
patient access to health care services, better patient care,
and cost-efficient health care, in that the health care
liability system is a costly and ineffective mechanism for
resolving claims of health care liability and compensating
injured patients, and is a deterrent to the sharing of
information among health care professionals which impedes
efforts to improve patient safety and quality of care.
(2) Effect on interstate commerce.--Congress finds that the
health care and insurance industries are industries affecting
interstate commerce and the health care liability litigation
systems existing throughout the United States are activities
that affect interstate commerce by contributing to the high
costs of health care and premiums for health care liability
insurance purchased by health care system providers.
(3) Effect on federal spending.--Congress finds that the
health care liability litigation systems existing throughout
the United States have a significant effect on the amount,
distribution, and use of Federal funds because of--
(A) the large number of individuals who receive
health care benefits under programs operated or
financed by the Federal Government;
(B) the large number of individuals who benefit
because of the exclusion from Federal taxes of the
amounts spent to provide them with health insurance
benefits; and
(C) the large number of health care providers who
provide items or services for which the Federal
Government makes payments.
(b) Purpose.--It is the purpose of this Act to implement reasonable,
comprehensive, and effective health care liability reforms designed
to--
(1) improve the availability of health care services in cases
in which health care liability actions have been shown to be a
factor in the decreased availability of services;
(2) reduce the incidence of ``defensive medicine'' and lower
the cost of health care liability insurance, all of which
contribute to the escalation of health care costs;
(3) ensure that persons with meritorious health care injury
claims receive fair and adequate compensation, including
reasonable noneconomic damages;
(4) improve the fairness and cost-effectiveness of our
current health care liability system to resolve disputes over,
and provide compensation for, health care liability by reducing
uncertainty in the amount of compensation provided to injured
individuals; and
(5) provide an increased sharing of information in the health
care system which will reduce unintended injury and improve
patient care.
SEC. 3. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.
The time for the commencement of a health care lawsuit shall be 3
years after the date of manifestation of injury or 1 year after the
claimant discovers, or through the use of reasonable diligence should
have discovered, the injury, whichever occurs first. In no event shall
the time for commencement of a health care lawsuit exceed 3 years after
the date of manifestation of injury unless tolled for any of the
following--
(1) upon proof of fraud;
(2) intentional concealment; or
(3) the presence of a foreign body, which has no therapeutic
or diagnostic purpose or effect, in the person of the injured
person.
Actions by a minor shall be commenced within 3 years from the date of
the alleged manifestation of injury except that actions by a minor
under the full age of 6 years shall be commenced within 3 years of
manifestation of injury or prior to the minor's 8th birthday, whichever
provides a longer period. Such time limitation shall be tolled for
minors for any period during which a parent or guardian and a health
care provider or health care organization have committed fraud or
collusion in the failure to bring an action on behalf of the injured
minor.
SEC. 4. COMPENSATING PATIENT INJURY.
(a) Unlimited Amount of Damages for Actual Economic Losses in Health
Care Lawsuits.--In any health care lawsuit, nothing in this Act shall
limit a claimant's recovery of the full amount of the available
economic damages, notwithstanding the limitation in subsection (b).
(b) Additional Noneconomic Damages.--In any health care lawsuit, the
amount of noneconomic damages, if available, may be as much as
$250,000, regardless of the number of parties against whom the action
is brought or the number of separate claims or actions brought with
respect to the same injury.
(c) No Discount of Award for Noneconomic Damages.--For purposes of
applying the limitation in subsection (b), future noneconomic damages
shall not be discounted to present value. The jury shall not be
informed about the maximum award for noneconomic damages. An award for
noneconomic damages in excess of $250,000 shall be reduced either
before the entry of judgment, or by amendment of the judgment after
entry of judgment, and such reduction shall be made before accounting
for any other reduction in damages required by law. If separate awards
are rendered for past and future noneconomic damages and the combined
awards exceed $250,000, the future noneconomic damages shall be reduced
first.
(d) Fair Share Rule.--In any health care lawsuit, each party shall be
liable for that party's several share of any damages only and not for
the share of any other person. Each party shall be liable only for the
amount of damages allocated to such party in direct proportion to such
party's percentage of responsibility. Whenever a judgment of liability
is rendered as to any party, a separate judgment shall be rendered
against each such party for the amount allocated to such party. For
purposes of this section, the trier of fact shall determine the
proportion of responsibility of each party for the claimant's harm.
SEC. 5. MAXIMIZING PATIENT RECOVERY.
(a) Court Supervision of Share of Damages Actually Paid to
Claimants.--In any health care lawsuit, the court shall supervise the
arrangements for payment of damages to protect against conflicts of
interest that may have the effect of reducing the amount of damages
awarded that are actually paid to claimants. In particular, in any
health care lawsuit in which the attorney for a party claims a
financial stake in the outcome by virtue of a contingent fee, the court
shall have the power to restrict the payment of a claimant's damage
recovery to such attorney, and to redirect such damages to the claimant
based upon the interests of justice and principles of equity. In no
event shall the total of all contingent fees for representing all
claimants in a health care lawsuit exceed the following limits:
(1) Forty percent of the first $50,000 recovered by the
claimant(s).
(2) Thirty-three and one-third percent of the next $50,000
recovered by the claimant(s).
(3) Twenty-five percent of the next $500,000 recovered by the
claimant(s).
(4) Fifteen percent of any amount by which the recovery by
the claimant(s) is in excess of $600,000.
(b) Applicability.--The limitations in this section shall apply
whether the recovery is by judgment, settlement, mediation,
arbitration, or any other form of alternative dispute resolution. In a
health care lawsuit involving a minor or incompetent person, a court
retains the authority to authorize or approve a fee that is less than
the maximum permitted under this section. The requirement for court
supervision in the first two sentences of subsection (a) applies only
in civil actions.
SEC. 6. PUNITIVE DAMAGES.
(a) In General.--Punitive damages may, if otherwise permitted by
applicable State or Federal law, be awarded against any person in a
health care lawsuit only if it is proven by clear and convincing
evidence that such person acted with malicious intent to injure the
claimant, or that such person deliberately failed to avoid unnecessary
injury that such person knew the claimant was substantially certain to
suffer. In any health care lawsuit where no judgment for compensatory
damages is rendered against such person, no punitive damages may be
awarded with respect to the claim in such lawsuit. No demand for
punitive damages shall be included in a health care lawsuit as
initially filed. A court may allow a claimant to file an amended
pleading for punitive damages only upon a motion by the claimant and
after a finding by the court, upon review of supporting and opposing
affidavits or after a hearing, after weighing the evidence, that the
claimant has established by a substantial probability that the claimant
will prevail on the claim for punitive damages. At the request of any
party in a health care lawsuit, the trier of fact shall consider in a
separate proceeding--
(1) whether punitive damages are to be awarded and the amount
of such award; and
(2) the amount of punitive damages following a determination
of punitive liability.
If a separate proceeding is requested, evidence relevant only to the
claim for punitive damages, as determined by applicable State law,
shall be inadmissible in any proceeding to determine whether
compensatory damages are to be awarded.
(b) Determining Amount of Punitive Damages.--
(1) Factors considered.--In determining the amount of
punitive damages, if awarded, in a health care lawsuit, the
trier of fact shall consider only the following--
(A) the severity of the harm caused by the conduct of
such party;
(B) the duration of the conduct or any concealment of
it by such party;
(C) the profitability of the conduct to such party;
(D) the number of products sold or medical procedures
rendered for compensation, as the case may be, by such
party, of the kind causing the harm complained of by
the claimant;
(E) any criminal penalties imposed on such party, as
a result of the conduct complained of by the claimant;
and
(F) the amount of any civil fines assessed against
such party as a result of the conduct complained of by
the claimant.
(2) Maximum award.--The amount of punitive damages, if
awarded, in a health care lawsuit may be as much as $250,000 or
as much as two times the amount of economic damages awarded,
whichever is greater. The jury shall not be informed of this
limitation.
(c) No Punitive Damages for Products That Comply With FDA
Standards.--
(1) In general.--
(A) No punitive damages may be awarded against the
manufacturer or distributor of a medical product, or a
supplier of any component or raw material of such
medical product, based on a claim that such product
caused the claimant's harm where--
(i)(I) such medical product was subject to
premarket approval, clearance, or licensure by
the Food and Drug Administration with respect
to the safety of the formulation or performance
of the aspect of such medical product which
caused the claimant's harm or the adequacy of
the packaging or labeling of such medical
product; and
(II) such medical product was so approved,
cleared, or licensed; or
(ii) such medical product is generally
recognized among qualified experts as safe and
effective pursuant to conditions established by
the Food and Drug Administration and applicable
Food and Drug Administration regulations,
including without limitation those related to
packaging and labeling, unless the Food and
Drug Administration has determined that such
medical product was not manufactured or
distributed in substantial compliance with
applicable Food and Drug Administration
statutes and regulations.
(B) Rule of construction.--Subparagraph (A) may not
be construed as establishing the obligation of the Food
and Drug Administration to demonstrate affirmatively
that a manufacturer, distributor, or supplier referred
to in such subparagraph meets any of the conditions
described in such subparagraph.
(2) Liability of health care providers.--A health care
provider who prescribes, or who dispenses pursuant to a
prescription, a medical product approved, licensed, or cleared
by the Food and Drug Administration shall not be named as a
party to a product liability lawsuit involving such product and
shall not be liable to a claimant in a class action lawsuit
against the manufacturer, distributor, or seller of such
product. Nothing in this paragraph prevents a court from
consolidating cases involving health care providers and cases
involving products liability claims against the manufacturer,
distributor, or product seller of such medical product.
(3) Packaging.--In a health care lawsuit for harm which is
alleged to relate to the adequacy of the packaging or labeling
of a drug which is required to have tamper-resistant packaging
under regulations of the Secretary of Health and Human Services
(including labeling regulations related to such packaging), the
manufacturer or product seller of the drug shall not be held
liable for punitive damages unless such packaging or labeling
is found by the trier of fact by clear and convincing evidence
to be substantially out of compliance with such regulations.
(4) Exception.--Paragraph (1) shall not apply in any health
care lawsuit in which--
(A) a person, before or after premarket approval,
clearance, or licensure of such medical product,
knowingly misrepresented to or withheld from the Food
and Drug Administration information that is required to
be submitted under the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 301 et seq.) or section 351 of the
Public Health Service Act (42 U.S.C. 262) that is
material and is causally related to the harm which the
claimant allegedly suffered; or
(B) a person made an illegal payment to an official
of the Food and Drug Administration for the purpose of
either securing or maintaining approval, clearance, or
licensure of such medical product.
SEC. 7. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN
HEALTH CARE LAWSUITS.
(a) In General.--In any health care lawsuit, if an award of future
damages, without reduction to present value, equaling or exceeding
$50,000 is made against a party with sufficient insurance or other
assets to fund a periodic payment of such a judgment, the court shall,
at the request of any party, enter a judgment ordering that the future
damages be paid by periodic payments, in accordance with the Uniform
Periodic Payment of Judgments Act promulgated by the National
Conference of Commissioners on Uniform State Laws.
(b) Applicability.--This section applies to all actions which have
not been first set for trial or retrial before the effective date of
this Act.
SEC. 8. DEFINITIONS.
In this Act:
(1) Alternative dispute resolution system; adr.--The term
``alternative dispute resolution system'' or ``ADR'' means a
system that provides for the resolution of health care lawsuits
in a manner other than through a civil action brought in a
State or Federal court.
(2) Claimant.--The term ``claimant'' means any person who
brings a health care lawsuit, including a person who asserts or
claims a right to legal or equitable contribution, indemnity,
or subrogation, arising out of a health care liability claim or
action, and any person on whose behalf such a claim is asserted
or such an action is brought, whether deceased, incompetent, or
a minor.
(3) Compensatory damages.--The term ``compensatory damages''
means objectively verifiable monetary losses incurred as a
result of the provision of, use of, or payment for (or failure
to provide, use, or pay for) health care services or medical
products, such as past and future medical expenses, loss of
past and future earnings, cost of obtaining domestic services,
loss of employment, and loss of business or employment
opportunities, damages for physical and emotional pain,
suffering, inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic
service), hedonic damages, injury to reputation, and all other
nonpecuniary losses of any kind or nature. The term
``compensatory damages'' includes economic damages and
noneconomic damages, as such terms are defined in this section.
(4) Contingent fee.--The term ``contingent fee'' includes all
compensation to any person or persons which is payable only if
a recovery is effected on behalf of one or more claimants.
(5) Economic damages.--The term ``economic damages'' means
objectively verifiable monetary losses incurred as a result of
the provision of, use of, or payment for (or failure to
provide, use, or pay for) health care services or medical
products, such as past and future medical expenses, loss of
past and future earnings, cost of obtaining domestic services,
loss of employment, and loss of business or employment
opportunities.
(6) Health care lawsuit.--The term ``health care lawsuit''
means any health care liability claim concerning the provision
of health care goods or services or any medical product
affecting interstate commerce, or any health care liability
action concerning the provision of health care goods or
services or any medical product affecting interstate commerce,
brought in a State or Federal court or pursuant to an
alternative dispute resolution system, against a health care
provider, a health care organization, or the manufacturer,
distributor, supplier, marketer, promoter, or seller of a
medical product, regardless of the theory of liability on which
the claim is based, or the number of claimants, plaintiffs,
defendants, or other parties, or the number of claims or causes
of action, in which the claimant alleges a health care
liability claim. Such term does not include a claim or action
which is based on criminal liability; which seeks civil fines
or penalties paid to Federal, State, or local government; or
which is grounded in antitrust.
(7) Health care liability action.--The term ``health care
liability action'' means a civil action brought in a State or
Federal court or pursuant to an alternative dispute resolution
system, against a health care provider, a health care
organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, regardless
of the theory of liability on which the claim is based, or the
number of plaintiffs, defendants, or other parties, or the
number of causes of action, in which the claimant alleges a
health care liability claim.
(8) Health care liability claim.--The term ``health care
liability claim'' means a demand by any person, whether or not
pursuant to ADR, against a health care provider, health care
organization, or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, including,
but not limited to, third-party claims, cross-claims, counter-
claims, or contribution claims, which are based upon the
provision of, use of, or payment for (or the failure to
provide, use, or pay for) health care services or medical
products, regardless of the theory of liability on which the
claim is based, or the number of plaintiffs, defendants, or
other parties, or the number of causes of action.
(9) Health care organization.--The term ``health care
organization'' means any person or entity which is obligated to
provide or pay for health benefits under any health plan,
including any person or entity acting under a contract or
arrangement with a health care organization to provide or
administer any health benefit.
(10) Health care provider.--The term ``health care provider''
means any person or entity required by State or Federal laws or
regulations to be licensed, registered, or certified to provide
health care services, and being either so licensed, registered,
or certified, or exempted from such requirement by other
statute or regulation.
(11) Health care goods or services.--The term ``health care
goods or services'' means any goods or services provided by a
health care organization, provider, or by any individual
working under the supervision of a health care provider, that
relates to the diagnosis, prevention, or treatment of any human
disease or impairment, or the assessment or care of the health
of human beings.
(12) Malicious intent to injure.--The term ``malicious intent
to injure'' means intentionally causing or attempting to cause
physical injury other than providing health care goods or
services.
(13) Medical product.--The term ``medical product'' means a
drug, device, or biological product intended for humans, and
the terms ``drug'', ``device'', and ``biological product'' have
the meanings given such terms in sections 201(g)(1) and 201(h)
of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(g)(1)
and (h)) and section 351(a) of the Public Health Service Act
(42 U.S.C. 262(a)), respectively, including any component or
raw material used therein, but excluding health care services.
(14) Noneconomic damages.--The term ``noneconomic damages''
means damages for physical and emotional pain, suffering,
inconvenience, physical impairment, mental anguish,
disfigurement, loss of enjoyment of life, loss of society and
companionship, loss of consortium (other than loss of domestic
service), hedonic damages, injury to reputation, and all other
nonpecuniary losses of any kind or nature.
(15) Punitive damages.--The term ``punitive damages'' means
damages awarded, for the purpose of punishment or deterrence,
and not solely for compensatory purposes, against a health care
provider, health care organization, or a manufacturer,
distributor, or supplier of a medical product. Punitive damages
are neither economic nor noneconomic damages.
(16) Recovery.--The term ``recovery'' means the net sum
recovered after deducting any disbursements or costs incurred
in connection with prosecution or settlement of the claim,
including all costs paid or advanced by any person. Costs of
health care incurred by the plaintiff and the attorneys' office
overhead costs or charges for legal services are not deductible
disbursements or costs for such purpose.
(17) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, the Trust Territory of the Pacific Islands,
and any other territory or possession of the United States, or
any political subdivision thereof.
SEC. 9. EFFECT ON OTHER LAWS.
(a) Vaccine Injury.--
(1) To the extent that title XXI of the Public Health Service
Act establishes a Federal rule of law applicable to a civil
action brought for a vaccine-related injury or death--
(A) this Act does not affect the application of the
rule of law to such an action; and
(B) any rule of law prescribed by this Act in
conflict with a rule of law of such title XXI shall not
apply to such action.
(2) If there is an aspect of a civil action brought for a
vaccine-related injury or death to which a Federal rule of law
under title XXI of the Public Health Service Act does not
apply, then this Act or otherwise applicable law (as determined
under this Act) will apply to such aspect of such action.
(b) Other Federal Law.--Except as provided in this section, nothing
in this Act shall be deemed to affect any defense available to a
defendant in a health care lawsuit or action under any other provision
of Federal law.
SEC. 10. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.
(a) Health Care Lawsuits.--The provisions governing health care
lawsuits set forth in this Act preempt, subject to subsections (b) and
(c), State law to the extent that State law prevents the application of
any provisions of law established by or under this Act. The provisions
governing health care lawsuits set forth in this Act supersede chapter
171 of title 28, United States Code, to the extent that such chapter--
(1) provides for a greater amount of damages or contingent
fees, a longer period in which a health care lawsuit may be
commenced, or a reduced applicability or scope of periodic
payment of future damages, than provided in this Act; or
(2) prohibits the introduction of evidence regarding
collateral source benefits, or mandates or permits subrogation
or a lien on collateral source benefits.
(b) Protection of States' Rights and Other Laws.--(1) Any issue that
is not governed by any provision of law established by or under this
Act (including State standards of negligence) shall be governed by
otherwise applicable State or Federal law.
(2) This Act shall not preempt or supersede any State or Federal law
that imposes greater procedural or substantive protections for health
care providers and health care organizations from liability, loss, or
damages than those provided by this Act or create a cause of action.
(c) State Flexibility.--No provision of this Act shall be construed
to preempt--
(1) any State law (whether effective before, on, or after the
date of the enactment of this Act) that specifies a particular
monetary amount of compensatory or punitive damages (or the
total amount of damages) that may be awarded in a health care
lawsuit, regardless of whether such monetary amount is greater
or lesser than is provided for under this Act, notwithstanding
section 4(a); or
(2) any defense available to a party in a health care lawsuit
under any other provision of State or Federal law.
SEC. 11. APPLICABILITY; EFFECTIVE DATE.
This Act shall apply to any health care lawsuit brought in a Federal
or State court, or subject to an alternative dispute resolution system,
that is initiated on or after the date of the enactment of this Act,
except that any health care lawsuit arising from an injury occurring
prior to the date of the enactment of this Act shall be governed by the
applicable statute of limitations provisions in effect at the time the
injury occurred.
Purpose and Summary
The HEALTH Act is modeled on California's legal reforms,
which have been the law in that state for over 30 years. The
HEALTH Act's reforms include a $250,000 cap on noneconomic
damages, limits on the contingency fees lawyers can charge, and
authorization for courts to require periodic payments for
future damages instead of lump sum awards that prevent
bankruptcies in which plaintiffs would receive only pennies on
the dollar. The HEALTH Act also includes provisions creating a
``fair share'' rule, by which damages are allocated fairly, in
direct proportion to fault, and reasonable guidelines--but not
caps--on the award of punitive damages. Finally, the HEALTH Act
will accomplish reform without in any way limiting compensation
for 100% of plaintiffs' economic losses (anything to which a
receipt can be attached), including their medical costs, their
lost wages, their future lost wages, rehabilitation costs, and
any other economic out of pocket loss suffered as the result of
a health care injury. The HEALTH Act also does not preempt any
state law that otherwise caps damages.
Background and Need for the Legislation
The HEALTH Act's reforms are necessary to help improve
health care, make it more affordable, and save taxpayer money
while reducing the Federal deficit.
The HEALTH Act, modeled after California's decades-old and
highly successful health care litigation reforms, addresses the
current crisis in health care by reining in unlimited lawsuits
and thereby making health care delivery more accessible and
cost-effective in the United States. California's Medical
Injury Compensation Reform Act (``MICRA''), which was signed
into law by Governor Jerry Brown in 1976, has proved immensely
successful in increasing access to affordable medical care.
Overall, according to data of the National Association of
Insurance Commissioners (with the latest data available from
2008), the rate of increase in medical professional liability
premiums in California since 1976 has been a relatively modest
387%, whereas the rest of the United States has experienced a
1,089% rate of increase, a rate of increase 281% larger than
that experienced in California, as shown in the following
chart:
By incorporating MICRA's time-tested reforms at the Federal
level, the HEALTH Act will make medical malpractice insurance
affordable again, encourage health care practitioners to
maintain their practices, and reduce health care costs for
patients. Its enactment will particularly help traditionally
under-served rural and inner city communities, and women
seeking obstetrics care.
MICRA's reforms, which have been the law in California for
over 30 years, include a $250,000 cap on noneconomic damages,
limits on the contingency fees lawyers can charge; and
authorization for courts to require periodic payments for
future damages instead of lump sum awards that prevent
bankruptcies in which plaintiffs would receive only pennies on
the dollar. The HEALTH Act also includes provisions creating a
``fair share'' rule, by which damages are allocated fairly, in
direct proportion to fault, and reasonable guidelines--but not
caps--on the award of punitive damages. Finally, the HEALTH Act
will accomplish reform without in any way limiting compensation
for 100% of plaintiffs' economic losses (anything to which a
receipt can be attached), including their medical costs, their
lost wages, their future lost wages, rehabilitation costs, and
any other economic out-of-pocket loss suffered as the result of
a health care injury. The HEALTH Act also does not preempt any
state law that otherwise caps damages.
Enactment of the HEALTH Act will not result in more medical
malpractice cases being brought in Federal court than would be
brought in Federal court otherwise. The Supreme Court has held
that a ``federal standard'' does not confer Federal question
jurisdiction in the absence of Congressional creation of a
Federal cause of action.\1\
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\1\See Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 813
(1986).
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Finally, many state supreme courts have judicially
nullified reasonable litigation management provisions enacted
by state legislatures, many of which sought to address the
crisis in medical professional liability that reduces patients'
access to health care. Consequently, in such states, passage of
Federal legislation by Congress may be the only means of
addressing the state's current crisis in medical professional
liability and restoring patients' access to health care. Laws
passed by states that have already provided for, or may in the
future provide for, different limits on damages in health care
lawsuits will be preserved under the HEALTH Act, as the HEALTH
Act provides that ``No provision of this Act shall be construed
to preempt . . . any state law (whether effective before, on,
or after the date of the enactment of this Act) that specifies
a particular monetary amount of compensatory or punitive
damages (or the total amount of damages) that may be awarded in
a health care lawsuit, regardless of whether or not such
monetary amount is greater or lesser than is provided for under
this Act. . . .'' Some states have limited noneconomic damages
in medical malpractice actions, but at levels higher than
$250,000. Some states place aggregate limits on medical
malpractice awards.
THE HUGE COSTS OF DEFENSIVE MEDICINE
ARE PASSED ON TO TAXPAYERS
The American medical lawsuit system is broken. According to
one study, 40 percent of claims are meritless, in that either
no injury or no error occurred in the case. Attorneys' fees and
administrative costs eat away 54% of the compensation that
should be paid to plaintiffs. And completely meritless claims
(which are nonetheless successful approximately one in four
times) account for nearly a quarter of total administrative
costs.\2\
---------------------------------------------------------------------------
\2\``Claims, Errors, and Compensation Payments in Medical
Malpractice Litigation,'' David Studdert et al., New England Journal of
Medicine (May 11, 2006).
---------------------------------------------------------------------------
Under current rules, health care workers seek to avoid
these costs to themselves by conducting many additional costly
tests and procedures and shifting those costs to taxpayers. As
one physician explained, ``Just one successful lawsuit against
a physician for a missed diagnosis can damage his ability to
maintain his credentials, cost him . . . in increased liability
insurance, jeopardize his financial assets, and even end his
career. Why risk our own money when we can use somebody else's
to protect us, even if it costs millions?''\3\
---------------------------------------------------------------------------
\3\Panda Bear, MD, ``How I Am Learning to Throw Money Away with
Both Hands and a Big Shovel'' (February 5, 2008).
---------------------------------------------------------------------------
DEFENSIVE MEDICINE IS WIDESPREAD,
AND THE SOLUTION IS TORT REFORM
``Defensive medicine'' is widely practiced. 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 frivolous lawsuits.
Indeed, according to a Harvard University research study, 40%
of medical malpractice lawsuits filed in the United States lack
evidence of medical error or any actual patient injury.\4\
---------------------------------------------------------------------------
\4\Available at http://www.hsph.harvard.edu/faculty/articles/
litigation.pdf.
---------------------------------------------------------------------------
A survey released in 2010 found defensive medicine is an
issue for all physicians. The results, published in the
Archives of Internal Medicine, found that 91% of the 1,231
doctors who responded to their survey ``reported believing that
physicians order more tests and procedures than needed to
protect themselves from malpractice suits.'' That view was held
by the vast majority of generalists (91%), medical specialists
(89%), surgeons (93%) and other specialists (94%). The survey
asked two questions: ``Do physicians order more tests and
procedures than patients need to protect themselves from
malpractice suits?'' And, ``Are protections against unwarranted
malpractice lawsuits needed to decrease the unnecessary use of
diagnostic tests?'' Overall, 91 percent of doctors surveyed
agreed with both statements.\5\
---------------------------------------------------------------------------
\5\See Tara F. Bishop, MD, Alex D. Federman, MD, MPH, Salomeh
Keyhani, MD, MPH, ``Physicians' Views on Defensive Medicine: A National
Survey'' Arch. Intern. Med. 2010; 170(12): 1081-1083.
---------------------------------------------------------------------------
According to a 2008 survey conducted by the Massachusetts
Medical Society, 83 percent of physicians reported that they
practice defensive medicine.\6\ Another study in Pennsylvania
put the figure at 93 percent.\7\
---------------------------------------------------------------------------
\6\``Investigation of Defensive Medicine in Massachusetts,''
Massachusetts Medical Society (November 2008).
\7\David Studdert et al., ``Defensive Medicine Among High-Risk
Specialist Physicians in a Volatile Malpractice Environment,'' JAMA
(June 1, 2005) at 2609-2617.
---------------------------------------------------------------------------
Defensive medicine is widespread in specialty medical
fields as well. According to another report:
[A] survey from Emergency Physicians Monthly
[concludes] many tests performed in the ER [emergency
room] are deemed unnecessary to good patient care.
Here's how doctors responded to the following question:
``Given that in a typical shift of eight hours you see
an average of two patients per hour (16 patients/
shift), could you have eliminated any of the following
tests and/or treatments without compromising the
quality of care? If so, how many of each?'' The results
of the survey showed how many times ER doctors
prescribe which types of tests unnecessarily to avoid
unlimited lawsuits:
As you can see, laboratory tests and CT scans comprised
the greatest proportion of unnecessary tests.\8\
---------------------------------------------------------------------------
\8\KevinMD.com ``How Much Unnecessary Testing Goes On in the ER?''
(September 30, 2009).
The same survey found that the HEALTH Act's limit on
noneconomic damages is essential to reducing defensive
medicine: ``The survey also found that non-economic caps are
these physicians' preferred choice of malpractice reform, with
84 percent of emergency physicians calling them a `non-
negotiable part of health reform.'''\9\
---------------------------------------------------------------------------
\9\KevinMD.com ``How Much Unnecessary Testing Goes On in the ER?''
(September 30, 2009). And in 2003, the Florida Governor's Select Task
Force on Health Care Professional Liability Insurance made its official
recommendations to Governor Bush. The Task Force concluded as follows:
``the most important [recommendation] is a cap on noneconomic damages
in the amount of $250,000.'' Governor's Select Task Force on Healthcare
Professional Liability Insurance (January 29, 2003) at xvi (Executive
Summary).
---------------------------------------------------------------------------
Another report on defensive medicine in the ER summarized
ER doctors' incentives as follows:
The fear of missing something weighs heavily on every
doctor's mind. But the stakes are highest in the ER,
and that fear often leads to extra blood tests and
imaging scans for what might be harmless chest pains,
run-of-the-mill head bumps and non-threatening
stomachaches. Many ER doctors say the No. 1 reason is
fear of malpractice lawsuits. ``It has everything to do
with it,'' said Dr. Angela Gardner, president of the
American College of Emergency Physicians.\10\
---------------------------------------------------------------------------
\10\Lindsey Tanner, ``Fear Can Drive ERs To Do Tests to Excess,''
Associated Press (June 21, 2010).
As one Newsweek reporter described the personal experience
---------------------------------------------------------------------------
of individual doctors:
When I asked physicians which medical procedures were
costly and commonly performed but did not help (at
least some) patients, I expected more of them to
justify almost everything they do. Some did. But as the
Newsweek article on ``medicine we can live without''
showed, many physicians couldn't get their nominees to
me fast enough, so eager were they to spread the word
about how much stupid, useless medical care there is.
The reason for that isn't surprising: doctors hate
practicing defensive medicine--that is, ordering tests,
surgeries, or other procedures not because the doctor
knows it will help the patient but to protect the
physician from lawsuits. . . .
[M]ore typical was Angela Gardner, president of the
American College of Emergency Physicians, who had a
list as long as my arm of procedures ER docs perform,
often for no patient benefit. They include following a
bedside sonogram (looking for ectopic pregnancy, for
instance) with an ``official'' sonogram (because if
something is missed it's easier to defend yourself to a
jury if you've ordered the second one); a CT scan for
every child who bumped his or her head (to rule out
things that can be diagnosed just fine by observation);
X-rays that do not guide treatment, such as for a
simple broken arm; CTs for suspected appendicitis that
has been perfectly well diagnosed without it (ORs won't
accept patients for an appendectomy without a CT); and
. . . well, there were more. But in short, Gardner told
me, ``I think there is plenty we could cut out without
hurting patients in any way.''
So why don't they? Because although doctors may hate
practicing defensive medicine, they do it so they don't
get sued. We've known that for a long time, but a
recent survey of physicians is so replete with horror
stories I can't resist sharing them. . . .
Nationwide, physicians estimate that 35 percent of
diagnostic tests they ordered were to avoid lawsuits,
as were 19 percent of hospitalizations, 14 percent of
prescriptions, and 8 percent of surgeries. . . . All
told, it adds up to $650 billion in unnecessary care
every year.
And now for those horror stories. The ER, said one doc
in the Jackson survey, ``should have a CT head scanner
at the entrance door,'' since ``every patient gets a
head CT.''
Another ER doc said he ``routinely admit[s] low-risk
chest pain patients because I know at some point in my
career, one of them will go home and die from a heart
attack. I will admit hundreds to avoid that one death
(and possible lawsuit).'' Another said he ordered 52 CT
scans in one 12-hour shift: ``That's $104K in one
day.'' And another: ``Any patient who presents to the
ER and mentions the magic words `chest pain,' unless
they are well known by the physician, is guaranteed to
undergo multiple blood tests, ECGs, stress tests,
perhaps CT scans, and will incur charges of several
thousand dollars. A very large percentage of these
patients will have very low probability of having
ischemic chest pain, yet all patients will undergo
testing to prevent `something from being missed' in the
name of defensive medicine.''
Like other physicians, this one bemoaned what he has to
do to appease patients, such as a ``paranoid new mom
[who] insists her child needs a head CT after they
bumped their head . . . to rule out a head bleed. So to
appease the lawyers and hospital administration and
everyone else, I have to consciously sedate a perfectly
normal 15-month-old and put them at terrible risk just
to prove to a mother that children don't get head
bleeds from falling over and bumping their heads!''
(That ``terrible risk'' refers to the fact that CTs
deliver a lot of radiation and thus increase the risk
of cancer.) And an anesthesiologist described how he
orders ``lab tests, X rays, cardiac consultations, and
stress tests, [as well as] pregnancy tests . . . most
often to cover our butts.''
Obstetricians really sounded off. One described having
to admit to the hospital ``pregnant patients with
complaints such as stomach pain, cramps, excess vaginal
discharge, headache, etc.'' almost solely for defensive
reasons: ``You can't afford to give them any reason to
point to you if their baby isn't perfect.''\11\
---------------------------------------------------------------------------
\11\Sharon Begley, ``Block That CT Scan!--Despite the massive
overhaul of health care passed by Congress, many costs will remain
high, thanks to doctors' fears of potential lawsuits,'' Newsweek (March
22, 2010).
---------------------------------------------------------------------------
And, according to a recent survey of heart doctors:
A substantial number of heart doctors--about one in
four--say they order medical tests that might not be
needed out of fear of getting sued, according to a new
study . . . [A]bout 24 percent of the doctors said they
had recommended the test in the previous year because
they were worried about malpractice lawsuits . . . The
study was released Tuesday by the journal Circulation:
Cardiovascular Quality and Outcomes.\12\
---------------------------------------------------------------------------
\12\Stephanie Nano, ``Heart Doctors Admit They Order Unnecessary
Tests Out of Fear of Being Sued,'' Associated Press (April 14, 2010).
Moreover, according to the Massachusetts Medical Society,
and White Coat Notes, a publication of the Boston-area medical
---------------------------------------------------------------------------
community:
The fear of being sued is driving Massachusetts
physicians to order many tests, procedures, referrals
to specialists and even hospitalizations for consumers
that aren't needed and drive up health costs by more
than $1.4 billion a year, according to a new study that
is the first of its kind.
The Massachusetts Medical Society surveyed 900 of its
members, including family doctors, obstetricians and
gynecologists and general surgeons, who reported
practicing so-called ``defensive medicine.''
The report found that 83 percent of physicians surveyed
reported practicing defensive medicine and that an
average of 18 to 28 percent of tests, procedures and
referrals and consultations, and 13 percent of
hospitalizations were ordered solely out of fear of
being sued.\13\
---------------------------------------------------------------------------
\13\Kay Lazar, ``Doctors' Practice of `Defensive Medicine'
Widespread, Costly,'' White Coat Notes (November 17, 2008).
A recent Gallup survey of American physicians found the
fear of lawsuits was the driver behind 21 percent of all the
tests and treatments ordered by doctors, which equates to 26
percent of all health care dollars spent. That comes to a
staggering $650 billion.\14\ According to a study of medical
liability costs and the practice of medicine in Health Affairs,
overuse of imaging services alone, driven by fear of lawsuits,
costs as much as $170 billion a year nationally.\15\
---------------------------------------------------------------------------
\14\``Price: Cutting Medical Costs without Obamacare,'' Washington
Times, 3/18/10.
\15\``Addressing the New Health Care Crisis: Reforming the Medical
Litigation System to Improve the Quality of Care 11,'' Office of the
Assistant Secretary for Planning and Evaluation, U.S. Department of
Health and Human Services, 2003.
---------------------------------------------------------------------------
The medical lawsuit crisis affects nurses as well. Nearly
half of nurses say they are prohibited or discouraged from
providing needed care by rules set up to avoid lawsuits.\16\
---------------------------------------------------------------------------
\16\``Fear of Litigation Study, The Impact on Medicine,'' Harris
Interactive (April 11, 2002).
---------------------------------------------------------------------------
DEFENSIVE MEDICINE IS COSTLY
How much money does defensive medicine waste? As was
recently reported:
The latest estimate of the costs of defensive medicine,
from an analysis just published in Health Affairs:
$45.6 billion annually (in 2008 dollars), accounting
for more than 80% of the $55.6 billion total yearly
cost of the medical liability system. The authors from
Harvard University and the University of Melbourne
explain that their analysis doesn't attempt to estimate
social costs or benefits of the malpractice system,
such as damage to physicians' reputations or any
deterrent effect it may provide. . . . [Their
conclusions] include estimates of defensive medicine
costs both for hospitals ($38.8 billion) and for
physicians ($6.8 billion), calculated by looking at
costs in high- and low-liability environments. The
thought is that the difference represents [increased]
spending due to fear of being sued--i.e. defensive
medicine. . . . The total costs of the medical
liability system constitute about 2.4% of total health-
care spending, the authors write. That's ``not
trivial,'' they write, and because some of these costs
``stem from meritless malpractice litigation,'' flaws
in the system are worth addressing.\17\
---------------------------------------------------------------------------
\17\Katherine Hobson, ``How Much Does Defensive medicine Cost? One
Study Says $46 Billion,'' Wall Street Journal Health Blog (September 7,
2010).
A new study by the Pacific Research Institute estimates
that defensive medicine costs $191 billion a year,\18\ while a
separate study by PricewaterhouseCoopers puts the number even
higher--$239 billion.\19\ That follows another study by
PricewaterhouseCoopers that found, ``While the bulk of the
premium dollar pays for medical services, those medical
services include the cost of medical liability and defensive
medicine. . . . Defensive tests and treatment can pose
unnecessary medical risks and add unnecessary costs to
healthcare.''\20\
---------------------------------------------------------------------------
\18\Available at http://www.heartland.org/custom/semod_policybot/
pdf/26161.pdf.
\19\PricewaterhouseCoopers' Health Research Institute, The Price of
Excess: Identifying Waste in Healthcare Spending (New York:
PricewaterhouseCoopers 2008), endnote 18, at 18.
\20\``The Price of Excess: Identifying Waste in Healthcare
Spending,'' PricewaterhouseCoopers, 2008.
---------------------------------------------------------------------------
THE CONSENSUS IS THAT DEFENSIVE MEDICINE CAUSED BY
UNLIMITED LAWSUITS IS A REAL PROBLEM
President Obama himself acknowledged the harm caused by
defensive medicine, stating ``I want to work with the AMA so we
can scale back the excessive defensive medicine that reinforces
our current system, and shift to a system where we are
providing better care, simply--rather than simply more
treatment.''\21\ The President himself weighed in on the issue
in more detail, writing in the New England Journal of Medicine
that ``the current tort system does not promote open
communications to improve patient safety. On the contrary, it
jeopardizes patient safety by creating an intimidating
liability environment.''\22\ And in his 2011 State of the Union
Address, President Obama said ``I'm willing to look at other
ideas to bring down costs, including one that Republicans
suggested last year: medical malpractice reform to rein in
frivolous lawsuits.'' Although the Associated Press has written
that ``Republicans may be forgiven if [the President's] offer
makes them feel like Charlie Brown running up to kick the
football, only to have it pulled away, again,''\23\ the
President should fulfill his promise and support time-tested
reforms that have proven successful for over three decades in
California.
---------------------------------------------------------------------------
\21\Text: Obama's AMA Speech on Health Care (CBS News) (June 15,
2010).
\22\``Making Patient Safety the Centerpiece of Medical Liability
Reform, '' Sen. Barack Obama and Sen.
Hillary Clinton, New England Journal of Medicine (May 25, 2006).
\23\Associated Press, ``Fact Check: Obama and His Imbalanced
Ledger'' (January 26, 2011).
---------------------------------------------------------------------------
A survey conducted for the bipartisan legal reform
organization ``Common Good,'' whose Board of Advisors included
Eric Holder, who is now President Obama's Attorney General,
found that more than three-fourths of physicians feel that
concern about malpractice litigation has hurt their ability to
provide quality care in recent years. When physicians were
asked, ``Generally speaking, how much do you think that fear of
liability discourages medical professionals from openly
discussing and thinking of ways to reduce medical errors?'' an
astonishing 59% of physicians replied ``a lot.''\24\
---------------------------------------------------------------------------
\24\See Harris Interactive, ``Common Good Fear of Litigation Study:
The Impact of Medicine,'' Final Report (April 11, 2002) (``Executive
Summary'') at 30 (Table 17), available at www.ourcommongood.com/
news.html.
---------------------------------------------------------------------------
President 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. Scheiner 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.\25\
---------------------------------------------------------------------------
\25\David Whelan, ``Obama's Doctor Knocks ObamaCare,'' Forbes.com
(June 16, 2009).
---------------------------------------------------------------------------
The Congressional Budget Office (CBO)
On October 9, 2009, the Congressional Budget Office
announced that a legal reform package modeled on the HEALTH Act
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.
---------------------------------------------------------------------------
\26\See http://cboblog.cbo.gov/?p=389.
---------------------------------------------------------------------------
The billions of dollars in savings from tort reform could
be used to provide health insurance for the uninsured without
raising taxes or penalties on those who already have insurance
policies.
According to another CBO report, ``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\ Lower
health care lawsuit liability premiums would reduce health care
costs for everyone and increase the supply of vital doctors.
---------------------------------------------------------------------------
\27\Congressional Budget Office Cost Estimate of H.R. 4600 (the
HEALTH Act) (September 24, 2002).
---------------------------------------------------------------------------
Further, according to another CBO report, ``analysis [of
the HEALTH Act] indicated that certain tort limitations,
primarily caps on awards . . . effectively reduce average
premiums for medical malpractice insurance. Consequently, CBO
estimates that, in states that currently do not have controls
on malpractice torts, [the HEALTH Act] would significantly
lower premiums for medical malpractice insurance from what they
would otherwise be under current law. . . .''\28\
---------------------------------------------------------------------------
\28\Congressional Budget Office Cost Estimate of H.R. 4600 (the
HEALTH Act) (September 24, 2002).
---------------------------------------------------------------------------
The Government Accountability Office (GAO)
The Government Accountability Office (GAO) found that
rising litigation awards are responsible for skyrocketing
medical professional liability premiums. The report stated that
``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. . . .''\29\
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.''\30\
---------------------------------------------------------------------------
\29\General Accounting Office, ``Medical Malpractice Insurance,''
GAO-03-702 (June 2003) at ``Highlights,'' 4, and 25 (emphasis added).
\30\Id. at 32.
---------------------------------------------------------------------------
The National Commission on Fiscal Responsibility and Reform
The National Commission on Fiscal Responsibility and
Reform, which was created by President Obama, supports health
care litigation reform in its final December 2010 report. As
the Commission states in a report that was endorsed by 61% of
its members (by a vote of 11-7):
Most experts agree that the current tort system in the
United States leads to an increase in health care
costs. This is true both because of direct costs--
higher malpractice insurance premiums--and indirect
costs in the form of over-utilization of diagnostic and
related services (sometimes referred to as ``defensive
medicine''). The Commission recommends an aggressive
set of reforms to the tort system.
Among the policies pursued, the following should be
included: 1) Modifying the ``collateral source'' rule
to allow outside sources of income collected as a
result of an injury (for example workers' compensation
benefits or insurance benefits) to be considered in
deciding awards; 2) Imposing a statute of limitations--
perhaps one to three years--on medical malpractice
lawsuits; 3) Replacing joint-and-several liability with
a fair-share rule, under which a defendant in a lawsuit
would be liable only for the percentage of the final
award that was equal to his or her share of
responsibility for the injury; 4) Creating specialized
``health courts'' for medical malpractice lawsuits; and
5) Allowing ``safe haven'' rules for providers who
follow best practices of care.
Many members of the Commission also believe that we
should impose statutory caps on punitive and non-
economic damages, and we recommend that Congress
consider this approach and evaluate its impact.\31\
---------------------------------------------------------------------------
\31\The National Commission on Fiscal Responsibility and Reform,
``The Moment of Truth'' (December 2010) at 34-35.
The New York Times
According to the New York Times:
The fear of lawsuits among doctors does seem to lead to
a noticeable amount of wasteful treatment. Amitabh
Chandra--a Harvard economist whose research is cited by
both the American Medical Association and the trial
lawyers' association--says $60 billion a year, or about
3 percent of overall medical spending, is a reasonable
upper-end estimate.
Perhaps the best-known study of defensive medicine--by
Dr. Mark McClellan, who later ran Medicare in the Bush
administration, and Daniel Kessler--compared cardiology
treatment in states that had capped malpractice awards
in the 1980s and early '90s with those that didn't. In
the states without caps, stenting and other treatments
were more common, but the outcomes were no better. . .
.
[T]he researchers in the field tend to agree about the
scale of the problem--and how much malpractice reform might
accomplish. . . . Dana Goldman, director of the Schaeffer
Center for Health Policy at the University of Southern
California, adds: ``It is one of the things we need to address
if we want to bend the cost curve.''\32\
---------------------------------------------------------------------------
\32\David Leonhardt, ``Medical Malpractice System Breeds More
Waste,'' The New York Times (September 23, 2009).
The New York Times also reported that Uwe E. Reinhardt, an
economist at Princeton University, has written that the massive
costs of lawsuit abuse in the United States distinguishes it
---------------------------------------------------------------------------
from other countries:
Health-services researchers call the difference between
these numbers [the health care spending of different
countries], ``excess spending.'' That term [conveys] a
difference driven by factors other than G.D.P. per
capita. Prominent among these other factors are: . . .
higher treatment costs triggered by our uniquely
American tort laws, which in the context of medicine
can lead to ``defensive medicine''--that is, the
application of tests and procedures mainly as a defense
against possible malpractice litigation, rather than as
a clinical imperative.\33\
---------------------------------------------------------------------------
\33\Uwe E. Reinhardt, ``Why Does U.S. Health Care Cost So Much?
(Part I),'' The New York Times (November 14, 2008).
We know that our medical liability costs are at least twice
those in other developed countries\34\ and make up 10 percent
of all tort cases. That's the macro perspective, but what about
the physicians, hospitals or other health care providers on the
wrong end of a lawsuit? They can expect to pay an average of
$26,000 to defend a case that is dropped before trial and as
much as $140,000 if the case actually goes to court, regardless
of the merits.\35\ So, even when good doctors win their
lawsuits, which happens the vast majority of the time, they
still lose. They lose valuable patient time, money, and peace
of mind while watching their professional reputations impugned.
---------------------------------------------------------------------------
\34\Manhattan Institute's Center for Legal Policy study (2008).
\35\``Reviving Tort Reform,'' Investor's Business Daily, 11/15/10.
---------------------------------------------------------------------------
USA Today
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.\36\
---------------------------------------------------------------------------
\36\USA Today editorial, ``Our View on `Defensive' Medicine:
Lawyers' Bills Pile High, Driving Up Health Care Costs,'' USA Today
(December 29, 2008).
The editors of USA Today concluded that ``one glaring
omission'' from the health care law ``was significant tort
reform, which was opposed by trial lawyers and their Democratic
allies. CBO estimates that restricting malpractice suits would
save $54 billion over 10 years by curbing tests and procedures
that patients don't really need. So why not add it?''\37\
---------------------------------------------------------------------------
\37\USA Today editorial, ``Don't try to repeal the new health care
law--improve it'' (November 18, 2010) at 9A.
---------------------------------------------------------------------------
The American Medical Association
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.''\38\
---------------------------------------------------------------------------
\38\Carrie Budoff Brown, ``Trial Lawyers Plan Tort Reform Fight,''
Politico (March 16, 2009).
---------------------------------------------------------------------------
The Director of Pediatric Neurosurgery at Johns Hopkins
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. According to Dr. Carson, ``We have to bring
a rational approach to medical litigation.'' ``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.''\39\
---------------------------------------------------------------------------
\39\John Berlau, ``'Gifted Hands' Surgeon Rips Into Obamacare,''
BogGovernment.com, available at http://biggovernment.com/2009/10/14/
gifted-hands-surgeon-rips-into-obamacare/.
---------------------------------------------------------------------------
The Wall Street Journal
As summarized by Kimberly Strassel 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.\40\
---------------------------------------------------------------------------
\40\Kimberly A. Strassel, ``The President's Tort Two-Step,'' The
Wall Street Journal (September 11, 2009).
Since President Obama signed the health care bill into
law, the bipartisan co-chairs of the President's own
deficit reduction commission, Erskine Bowles and Alan
Simpson, recommended that Congress enact a law to ``Pay
lawyers less and reduce the cost of defensive
medicine'' by ``[e]nact[ing] comprehensive medical
malpractice liability reform to cap non-economic and
punitive damages and make other changes in tort
law.''\41\
---------------------------------------------------------------------------
\41\Co-Chair Proposal, at 32, available at http://
www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/
CoChair_Draft.pdf.
---------------------------------------------------------------------------
The Reagan Administration
President Ronald Reagan established a special task force to
study the need for tort reform. That task force, called the
Tort Policy Working Group, consisted of representatives of ten
Reagan Administration agencies and the White House. The final
report of that task force concluded as follows: ``In sum, tort
law appears to be a major cause of the insurance availability/
affordability crisis which the federal government can and
should address in a variety of sensible and appropriate ways.''
The Reagan task force specifically recommended: ``eliminate
joint and several liability,''\42\ ``provide for periodic
payments of future economic damages,''\43\ ``schedule [limit]
contingency fees''\44\ of attorneys, and ``limit non-economic
damages to a fair and reasonable amount.''\45\ Indeed,
regarding the limit on non-economic damages, the report
concluded:
---------------------------------------------------------------------------
\42\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 64.
\43\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 69.
\44\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 72.
\45\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 66.
Recommendation No. 4: Limit non-economic damages to a
---------------------------------------------------------------------------
fair and reasonable amount.
Non-economic damages such as pain and suffering, mental
anguish and punitive damages are inherently open-ended.
They are entirely subjective, and often defy
quantification . . . Moreover, because such damages are
essentially subjective, awards for similar injuries can
vary immensely from case to case, leading to highly
inequitable, lottery-like results. Accordingly, such
damages are particularly suitable for a specific
limitation.\46\
---------------------------------------------------------------------------
\46\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 66.
All of these recommended reforms are part of the HEALTH
Act. The report also contains an extensive discussion of the
harmful effects tort law has on ``medical malpractice''
insurance,\47\ and a discussion and charts describing the
impact of rising malpractice jury awards.\48\
---------------------------------------------------------------------------
\47\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 21-24.
\48\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 36-37, 39-40.
---------------------------------------------------------------------------
THE FURTHER HIDDEN COSTS OF DEFENSIVE MEDICINE:
MORE RADIATION AND NO ADVICE BY TELEPHONE
Defensive medicine entails additional hidden costs. As was
reported recently:
The result [of defensive medicine] can be extra costs,
and potential harm--including side effects from
unneeded drugs and increased risk of future cancer from
excessive radiation.
No one tells patients after a CT scan that the test
``just imparted three years of radiation to your body
as well as significant stress on your kidney, and
Medicare just got charged lots of money.''\49\
---------------------------------------------------------------------------
\49\Lindsey Tanner, ``Fear Can Drive ERs To Do Tests to Excess,''
Associated Press (June 21, 2010).
---------------------------------------------------------------------------
As explained by another doctor:
Of course there is far more to defensive medicine than
obstetric procedures. Many CT scans are entirely
unnecessary, and in fact expose patients to radiation
that may contribute to one in fifty cancers. But woe to
the emergency room doc who didn't immediately scan the
head of a trauma patient. Unnecessary blood tests,
biopsies, and specialist referrals are all done to
``spread the blame'' and make lawsuits defensible.
Defensive medicine costs you more than money. When was
the last time you asked for telephone advice? Doctors
are very, very leery of giving meaningful advice over
the phone, because we can't take the risk of this kind
of conversation in front of a jury:
Attorney: You mean you refilled the medicine without
performing another physical exam? If you had seen the
patient in person, you would have found the cancer
earlier!
Doctor: The medicine had nothing to do with cancer! I
was just trying to help the patient! It's expensive to
make them come in every month for a refill!
Anytime we tell anyone anything, any kind of advice,
doctors must consider the risk of a lawsuit. Everything
we say and do is supposed to be documented, too--to
defend ourselves. Every wonder why the doc spends so
much time scribbling in the chart, instead of talking
to you? It's not because we like writing. It's because
every single day we're reminded that the chart is our
only defense.
Do you think this hasn't increased health care costs?
Do you think it hasn't affected the relationships
doctors have with patients?
The current medical malpractice system is a
disgrace.\50\
---------------------------------------------------------------------------
\50\Roy Benaroch, MD, ``Health Care Costs: Defensive Medicine,''
The Pediatric Insider (2010).
---------------------------------------------------------------------------
DEFENSIVE MEDICINE CAUSES ALL THOSE HARMS
WITHOUT ADDING ANY BENEFITS
Two top economic researchers have concluded: ``[P]hysicians
from states enacting liability reforms that directly reduce
malpractice pressure experience lower growth over time in
malpractice claims rates and in real malpractice insurance
premiums. [Also], physicians from reforming states report
significant relative declines in the perceived impact of
malpractice pressure on practice patterns.''\51\ One of those
economists is Mark McClellan, who worked on health policy
issues in President Clinton's Treasury Department and who has
been described by Senator Ted Kennedy as having ``impressive
credentials both as a physician and as an economist.''\52\
These economists conducted two extensive studies using national
data on Medicare populations and concluded that patients from
states that adopted direct medical care litigation reforms,
such as limits on damage awards, incur significantly lower
hospital costs while suffering no increase in adverse health
outcomes associated with the illness for which they were
treated. In sum, the studies concluded that in states with
medical litigation reforms in place, there was an average
reduction of 4.3% in hospital costs for patients in managed
care programs,\53\ and an average reduction of 7.4% in hospital
costs for patients in non-managed care programs.\54\ They have
thereby quantified the cost of ``defensive medicine,'' in which
doctors perform tests and prescribe medicines that are not
necessary for health in order to avoid patients' future claims
that they suffered adverse health effects because the doctor
didn't do more. Former Senator George McGovern has written that
``Legal fear drive[] [doctors] to prescribe medicines and order
tests, even invasive procedures, that they feel are
unnecessary. Reputable studies estimate that this `defensive
medicine' squanders $50 billion a year, enough to provide
medical care to millions of uninsured Americans.''\55\ Reducing
defensive medicine will save tens of billions more of taxpayer
dollars.
---------------------------------------------------------------------------
\51\See Daniel P. Kessler and Mark B. McClellan, ``The Effects of
Malpractice Pressure and Liability Reforms on Physicians' Perceptions
of Medical Care,'' 60 Law and Contemporary Problems 1: 81-106 (1997),
at 105.
\52\Marc Kaufman, ``Bush Adviser Tabbed for FDA,'' Washington Post
(September 25, 2002) at A25.
\53\Daniel P. Kessler and Mark B. McClellan, ``Medical Liability,
Managed Care, and Defensive Medicine,'' National Bureau of Economic
Research (NBER) Working Paper 7537 (February 2000) at 16.
\54\Daniel P. Kessler and Mark B. McClellan, ``Do Doctors Practice
Defensive Medicine?'' The Quarterly Journal of Economics (May 1996) at
386 (``Our analysis indicates that reforms that directly limit
liability, caps on damage awards . . . and collateral source rule
reforms--reduce hospital expenditures by 5 to 9 percent within three to
five years of adoption. . . .''). The researchers in this study
analyzed populations in predominantly non-managed care programs in the
mid-1980's, and found that, of the populations studied with two
different types of illnesses, direct health care litigation reforms
would reduce hospital expenditures by 5.8% and 8.9% several years after
their adoption. Id. at 367, 382.
\55\See George McGovern and Alan Simpson, ``We're Reaping What We
Sue,'' Wall Street Journal (April 17, 2002) at A20.
---------------------------------------------------------------------------
REDUCING UNLIMITED LAWSUITS WILL HELP REDUCE
MEDICAL ERRORS
The best evidence about medical injuries comes from two
large studies of hospital records, which both concluded that
under one percent of hospital charts showed negligent medical
injury.\56\ Nevertheless, the litigation reforms in the HEALTH
Act will reduce the incidence of medical malpractice because
the threat of potentially infinite liability in an unregulated
tort system prevents doctors from discussing medical errors and
looking for ways to improve the delivery of health care.
---------------------------------------------------------------------------
\56\D. Mills, J. Boyden, and D. Rubsamen, ``Report on the Medical
Insurance Feasibility Study,'' (San Francisco: Sutter Publications
1977, sponsored jointly by the California Medical Association and
California Hospital Association); A. Localio, et al., ``Relation
Between Malpractice Claims and Adverse Events Due to Negligence,'' New
Engl. J. Med. 325:245-251 (1991).
---------------------------------------------------------------------------
The HEALTH Act would largely dispel that fear and allow
doctors to freely suggest improvements in medical care. The
medical journal Annals of Medicine detailed reports of medical
errors. As has been reported, ``[c]reating a series of articles
on [medical] mistakes was the idea of Dr. Robert M. Wachter,
associate chairman of the department of medicine at the
University of California at San Francisco. . . . The series was
inspired in part by a 1999 report by the Institute of Medicine,
which found that mistakes in hospitals killed 44,000 to 98,000
patients a year . . . In an editorial about the new series, Dr.
Wachter and his colleagues wrote that the medical profession
``for reasons that include liability issues . . . was not
harnessing the full power of errors to teach [and thereby
reduce errors].''\57\
---------------------------------------------------------------------------
\57\Denise Grady, ``Oops, Wrong Patient: Journal Takes on Medical
Mistakes,'' New York Times (June 18, 2002).
---------------------------------------------------------------------------
A survey conducted for the bipartisan legal reform
organization ``Common Good,'' whose Board of Advisors included
former Senator George McGovern, Eric Holder, and former Senator
Paul Simon, found that more than three-fourths of physicians
feel that concern about malpractice litigation has hurt their
ability to provide quality care in recent years. When
physicians were asked, ``Generally speaking, how much do you
think that fear of liability discourages medical professionals
from openly discussing and thinking of ways to reduce medical
errors?'' an astonishing 59% of physicians replied ``a
lot.''\58\
---------------------------------------------------------------------------
\58\See Harris Interactive, ``Common Good Fear of Litigation Study:
The Impact of Medicine,'' Final Report (April 11, 2002) (``Executive
Summary'') at 30 (Table 17), available at www.ourcommongood.com/
news.html.
---------------------------------------------------------------------------
Indeed, according to an exhaustive study by the RAND
Corporation, California's reduction in the number of health
care lawsuits filed in that state is attributable to improved
patient safety at California hospitals. According to the study:
Our results showed a highly significant correlation
between the frequency of adverse events [medical
errors] and malpractice claims: On average, a county
that shows a decrease of 10 adverse events in a given
year would also see a decrease of 3.7 malpractice
claims. Likewise, a county that shows an increase of 10
adverse events in a given year would also see, on
average, an increase of 3.7 malpractice claims.
According to the statistical analysis, nearly three-
fourths of the within-county variation in annual
malpractice claims could be accounted for by the
changes in patient safety outcomes. We also found that
the correlation held true when we conducted similar
analyses for medical specialties--specifically,
surgeons, nonsurgical physicians, and obstetrician/
gynecologists (OB-GYNs). Nearly two-thirds of the
variation in malpractice claiming against surgeons and
nonsurgeons can be explained by changes in safety. The
association is weaker for OB-GYNs, but still
significant.\59\
---------------------------------------------------------------------------
\59\Michael D. Greenberg, Amelia M. Haviland, J. Scott Ashwood,
Regan Main, ``Is Better Patient Safety Association with Less
Malpractice Activity?'' RAND Institute for Civil Justice (2010) at x.
With the passage of health care lawsuit reform in
California, doctors, hospitals and other healthcare providers
are able to share information needed to create a safer
environment, without fear of lawsuits, and focus on their
patients instead of worrying about getting sued.
THE ``98,000 MEDICAL-ERROR DEATHS PER YEAR'' STATISTIC
IS EXAGGERATED AND MISLEADING
We should do everything we can to reduce medical errors,
but the widely cited claim that 98,000 patients die annually
due to medical errors has been shown to be exaggerated and
unreliable.
The Institute of Medicine (IOM) study upon which the 98,000
death figure is based actually estimated a range of 44,000 to
98,000 deaths a year.\60\ So even according to that study,
98,000 is not a definitive figure but merely the top end of a
very wide and imprecisely estimated range.
---------------------------------------------------------------------------
\60\Institute of Medicine, ``To Err Is Human: Building a Safer
Health System'' (2000).
---------------------------------------------------------------------------
Shortly after its release in the year 2000, the IOM study
came under heavy criticism for imprecise methodology that
greatly overstated the rate of deaths from medical errors.
Doctors and academics have pointed to many fundamental problems
with the IOM's data that lead it to overstate the rate of death
from medical error. For example, the IOM data treated deaths
from drug abuse as ``medication errors.''\61\
---------------------------------------------------------------------------
\61\Rick Weiss, ``Report on Medical Errors Called Erroneous,'' The
Washington Post (July 5, 2000).
---------------------------------------------------------------------------
Dr. Troyen Brennan, the lead Harvard researcher who
compiled much of the data upon which the IOM report was based
wrote shortly after the report's release that ``I have
cautioned against drawing conclusions about the numbers of
deaths in these studies,'' that ``[t]he ability of identifying
errors is methodologically suspect,'' and that ``[a] careful
reader must have some reservations about the IOM report.''\62\
Dr. Brennan and two other researchers later revisited their
methodology and determined that the IOM's figures were
``imprecise,'' and that the actual figure could be as little as
10 percent of the IOM's estimate.\63\
---------------------------------------------------------------------------
\62\Troyen A. Brennan, ``The Institute of Medicine report on
medical errors--could it do harm?'' New England Journal of Medicine
(2000); see also John D. Dunn, ``The Patient Safety Crusade--a Phony
Crisis,'' The Heartland Institute (2006).
\63\Eric J. Thomas et al., ``The Reliability of Medical Record
Review for Estimating Adverse Event Rates,'' Annals of Internal
Medicine (2002); see also Zachary F. Meisel and Jesse M. Pines,
``Health Care Scare: How to avoid medical mistakes,'' Slate Medical
Examiner (June 3, 2009).
---------------------------------------------------------------------------
Three doctors associated with the University of Indiana's
Regenstreif Institute wrote in the Journal of the American
Medical Association that the IOM study was constructed to
exaggerate the avoidable damage done by medical mistakes, and
concluded that ``[t]he available data do not support IOM's
claim of large numbers of deaths caused by adverse events,
preventable or otherwise.''\64\
---------------------------------------------------------------------------
\64\Clement J. McDonald et al., ``Deaths Due to Medical Errors Are
Exaggerated in Institute of Medicine Report,'' Journal of the American
Medical Association (2000).
---------------------------------------------------------------------------
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.\65\
---------------------------------------------------------------------------
\65\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.\66\
Hundreds or even thousands of patients may die annually due to
lack of doctors.\67\
---------------------------------------------------------------------------
\66\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).
\67\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.\68\ 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.''\69\
---------------------------------------------------------------------------
\68\``Defensive Medicine in Massachusetts,'' pp. 4-5.
\69\``Overview of the 2009 ACOG Survey on Professional Liability.''
---------------------------------------------------------------------------
As one doctor wrote recently:
I am what you call a successful neurosurgeon, and I
have nothing against ``socialized medicine'' as such.
Everybody deserves good health care. But I am
nonetheless worried about President Obama's health care
reform, because without tort reform as part of the
package, it can't address the labor shortage we face in
my specialty. . . .
Only because spinal problems affect nearly 80% of our
aging population: It's one of the most common reasons
patients visit a primary care physician, right behind
the yearly physical, the common cold, prenatal care and
anxiety-related disorders. Baby boomers are about to
overwhelm the system with demand for treatment of
spinal problems--including surgery--at precisely the
moment the supply of neurosurgeons able to treat them
is dwindling. . . .
Thus we come to the second reason: the cost of
malpractice insurance, which creates a very high cost
of entry into this field. Unfortunately, the health
care reforms of the Obama administration have done
little to curb costs. These costs are imposed by
hospital inefficiencies as unpoliced by government-run
insurance plans and by the price of malpractice
insurance undisciplined by tort reform.
I believe that tort reform is the key to reducing both
kinds of cost, because the malignant threat of
malpractice haunts the hospitals as well as the
physicians. Without such reform, the choice for
practicing neurosurgeons like me is between retirement
and working 24/7 just to cover my insurance overhead.
My premature retirement will reduce the supply of
surgeons capable of dealing with the spinal problems of
an aging population--and that supply is already short
and getting shorter. Meanwhile, a few more board-
certified surgeons a year won't meet the growing
demand. The lines at your doctor's office could get
long.
When Congress returns to consider the problem of health
care, it must understand that without tort reform,
neurosurgery of the kind I can provide to an aging
population will be unavailable.\70\
---------------------------------------------------------------------------
\70\Dr. Michael Lavyne, ``Obamacare Will Fail Without Tort Reforn:
Malpractice Insurance Costs Are Crippling Medicine,'' New York Daily
News (November 19, 2010).
A new study from Northwestern University's Feinberg School
of Medicine polled residents and found that many wish to leave
the state to avoid its ``hostile'' malpractice environment. The
study concluded that ``[a]pproximately one-half of graduating
Illinois residents and fellows are leaving the state to
practice . . . . [T]he medical malpractice liability
environment is a major consideration for those that plan to
leave Illinois to practice.''\71\ Without a uniform law to
control health care costs, many states will continue to suffer
under doctor shortages.
---------------------------------------------------------------------------
\71\Northwestern University Feinberg School of Medicine, ``Illinois
New Physician Workforce Study: Final Report November 2010) at 4.
---------------------------------------------------------------------------
As one local New Jersey official has written:
Let's say you are a woman over 40 who follows the
American Cancer Society guidelines (regardless of the
recent controversy about them) and faithfully gets a
mammogram each year.
What would you do if you tried to make your 2010
appointment, only to learn this test is no longer
available anywhere in the state? Would you take a day
off from work to travel to Pennsylvania--or forgo your
screening entirely?
Unfortunately, this is a very real possibility for New
Jersey women. Eighty-nine percent of radiologists
surveyed by the New Jersey Medical Care Availability
Task Force said that new doctors in their specialty are
unwilling to perform mammography or have asked for
limited exposure to it.
Or, imagine getting pregnant and having your
obstetrician tell you that you fall into a high-risk
category. The good news is that you can be effectively
treated by a specialist. The bad news? The closest
specialist is in upstate New York. Do you leave your
family for days at a time? Do you take a risk and allow
your regular physician to do the best she can? This is
a decision no woman should have to make, but many may
face. Hospitals in New Jersey have reported a serious
decline in the number of applicants for specialized
obstetrics training--and no new candidates means
steadily decreasing access to care.
Even as debate about national health care reform rages
across the country, we in New Jersey must confront a
homegrown crisis: Our state is losing doctors at an
alarming rate. With or without a Federal mandate, if
there are no doctors to treat New Jersey's patients,
the details don't matter. Why the exodus of physicians?
To a significant degree, they are fleeing malpractice
insurance premiums and legal exposure so enormous as to
make the practice of many medical specialties in our
state near untenable. . . .
Medical malpractice liability premiums had already
spiraled out of control back in 2002, when huge crowds
of physicians donned their white coats and demonstrated
at the Statehouse to draw attention to the need for
reform. Around the same time, Dr. Dolores Williams, an
obstetrician, testified before an Assembly joint
committee that her insurance premiums--which had
escalated from $30,000 to an estimated $72,000--left
her financially unable to continue delivering babies.
Her decision to stop, she said, ``was based on possibly
losing my home, my assets, [and] my ability to fund my
children's college tuition.''
Seven years later, these problems have only gotten
worse, not only in obstetrics but in a range of other
specialties like orthopedics and neonatology.
``The cumulative effect of medical malpractice claims
on the health care system in New Jersey is alarming,''
agrees Marcus Rayner, executive director of the New
Jersey Lawsuit Reform Alliance. ``Due to skyrocketing
medical malpractice insurance premiums and the threat
of a lawsuit, hospitals have fewer OB-GYNs willing to
work in emergency departments, and fewer specialty
physicians willing to work at all.''
Five years ago, a survey of New Jersey's neurosurgeons
indicated that there were only 63 remaining in the
state--to serve a population of more than 8.5 million.
Someday it could be your teenager who suffers a head
injury in a sports or car accident, and urgently needs
the care of a neurosurgeon. What are the odds that one
would be available?\72\
---------------------------------------------------------------------------
\72\Amy H. Handlin, ``Reduce Medical Liability Costs Before More
Specialists Flee N.J.,'' New Jersey Times (November 22, 2009).
It is clear that no doctor is safe from lawsuit abuse, but
as studies have shown, some are more vulnerable to abusive
litigation than others because of their specialty or the
location of their practice. Today, one-third of orthopedists,
trauma surgeons, ER doctors and plastic surgeons will probably
be sued in any given year.\73\ Neurosurgeons face liability
lawsuits more often--every two years on average.\74\
---------------------------------------------------------------------------
\73\``Defending the Practice of Medicine,'' Richard E. Anderson,
M.D., Archives of Internal Medicine, June
2004.
\74\``Effective Legal Reform and the Malpractice Insurance
Crisis,'' Richard E. Anderson, M.D., Yale Journal of Health Policy, Law
and Ethics, December 2004.
---------------------------------------------------------------------------
OB-GYNs are another favorite target of personal injury
lawyers with nearly three out of five OB-GYNs sued at least
twice in their careers. The American College of Obstetricians
and Gynecologists (ACOG) 2009 Medical Liability Survey found
nearly 91 percent of OB-GYNs surveyed had experienced at least
one liability claim filed against them and sadly, we know most
of the cases are without merit.\75\
---------------------------------------------------------------------------
\75\American College of Obstetrics and Gynecologists Medical
Liability Survey, 9/09.
---------------------------------------------------------------------------
Three out of four emergency rooms say they have had to
divert ambulances because of a shortage of specialists and more
than 25 percent lost specialist coverage due to medical
liability issues.\76\
---------------------------------------------------------------------------
\76\Hospital Emergency Department Administration Survey, ``Federal
Medical Liability Reform,'' 2004, the
Schumacher Group, Alliance of Specialty Medicine, July 2005.
---------------------------------------------------------------------------
One emergency room physician was quoted as saying, ``The
lack of on-call specialists affects the numbers of patients
referred to tertiary care facilities even for basic specialty
related diseases (like orthopedics). This adds to emergency
department crowding in some facilities, and it means that
patients have to travel across town or greater distances for a
relatively simple problem that could have been resolved if the
specialist had been on call at the initial facility.''\77\
---------------------------------------------------------------------------
\77\``National Report Card on the State of Emergency Medicine,''
American College of Emergency
Physicians, 2009.
---------------------------------------------------------------------------
The Association of American Medical Colleges (AAMC) has
predicted that once the new health care reform provisions take
effect in 2015, in just four short years, ``the shortage of
physicians across all specialties will more than quadruple to
almost 63,000.''\78\ Another group, the American Academy of
Family Physicians, has projected the shortfall of family
physicians will reach 149,000 by 2020.\79\
---------------------------------------------------------------------------
\78\Association of American Medical Colleges Center for Workforce
Studies estimates, 9/30/10.
\79\``Doctor Shortage Looms as Primary Care Loses it Pull,'' Janice
Lloyd, USA Today, 8/18/09.
---------------------------------------------------------------------------
AAMC also found the country will need 46,000 more surgeons
and other specialists to meet demand in the next decade and
that those living in rural or inner city locations will suffer
the most severe impact. According to Dr. Atul Grover, of the
AAMC, ``This will be the first time since the 1930s that the
ratio of physicians to the population will start to
decline.''\80\
---------------------------------------------------------------------------
\80\``Agencies warn of coming doctor shortage,'' Tammy Worth, Los
Angeles Times, 6/7/10.
---------------------------------------------------------------------------
DOCTOR SHORTAGE CONSEQUENCES: THE DYESS TRAGEDY
Regardless of the merits of any given case, there are
inherent problems with so-called ``pain and suffering'' or
noneconomic damages: they are utterly standardless,
unquantifiable, and subject to discriminatory application based
of whether or not a particular person happens to be sympathetic
or unsympathetic, and even whether or not a particular case has
attracted media attention. Tony Dyess's injury did not receive
media attention. He was in a car accident in Mississippi. There
were no longer any neurosurgeons in the area. They had stopped
practicing because they couldn't afford medical professional
liability insurance. It took six hours to airlift Tony Dyess to
a hospital that could treat his brain injury. It was too late.
The ``golden hour'' had passed, and Tony Dyess has been left
permanently brain damaged. As Tony Dyess' wife Leanne has said,
``From my perspective . . . this problem far exceeds any other
challenge facing America's health care--even the challenge of
the uninsured. My family had insurance when Tony was injured.
We had good insurance. What we didn't have was a doctor. And
now, no amount of money can relieve our pain and suffering. But
knowing that others may not have to go through what we've gone
through, could go a long way toward helping us heal.'' When
Leanne Dyess began telling this story, trial lawyers gave her
false information about what happened the night her husband was
injured, then tried to hire her. She refused.
We all recognize that injured victims should be adequately
compensated for their injuries. But too often in this debate we
lose sight of the larger health care picture. This country is
blessed with the finest health care technology in the world. It
is blessed with the finest doctors in the world. People are
smuggled into this country for a chance at life and healing,
the best chance they have in the world.
The Department of Health and Human Services issued a report
recently that included the following amazing statistics.\81\
During the past half century, death rates among children and
adults up to age 24 were cut in half. Mortality among adults
25-64 years fell nearly as much, and dropped among those 65
years and over by a third. The infant mortality rate--deaths
before the first birthday--has plummeted 75 percent since 1950.
These are amazing statistics. And they didn't just happen. They
happened because America produces the best health care
technology and the best health care providers to use it. But
now there are fewer and fewer doctors to use that miraculous
technology. We have the best brain scanning and brain operation
devices in history, and fewer and fewer neurosurgeons to use
them. According to the American Board of Neurological Surgery,
in 2001 there were fewer active board-certified neurosurgeons
(2,936) than there have been in the last decade. Also in 2001,
4.5 times as many board-certified neurosurgeons retired as
retired a decade ago (1,400 retired in 2001, only 309 retired
in 1990). Only about 100-200 neurosurgeons graduate from
residency training programs each year, but it takes about 5
years of post-residency to become ``board certified.''
Unlimited lawsuits are driving doctors out of the healing
profession. They are reversing the clock. They are making us
all less safe. All in the name of unlimited lawsuits and
lawyers' lust for their cut of unlimited awards. But when
someone gets sick, or is bringing a child into the world, we
can't call our lawyers for help.
---------------------------------------------------------------------------
\81\Available at http://www.cdc.gov/nchs/releases/02news/hus02.htm.
---------------------------------------------------------------------------
WOMEN ARE AT RISK UNDER THE DOCTOR SHORTAGE
DRIVEN BY UNLIMITED LAWSUITS
Women pay an especially high price when it comes medical
liability and access to care. According to Albert L. Strunk,
M.D., deputy executive vice president of ACOG, ``the medical
liability situation for OB-GYNs remains a chronic crisis and
continues to deprive women of all ages--especially pregnant
women--of experienced ob-gyns.''\82\ ACOG's own data proves the
point. According to their 2009 survey, 63 percent of OBGYNs
said they had made changes to their practice because of the
risk or fear of liability claims. Between seven and eight
percent have stopped practicing obstetrics altogether. In fact,
ACOG found that the average retirement age of practicing
obstetrics was 48. Once upon a time, before the medical lawsuit
abuse crisis, that was considered mid-point in a doctor's
career.\83\
---------------------------------------------------------------------------
\82\American College of Obstetricians and Gynecologists (ACOG) news
release, 11/3/06.
\83\``Survey on Professional Liability, ACOG, 9/09.
---------------------------------------------------------------------------
Looking state by state, the picture is even more alarming.
For example in 2007, Hawaiian women faced the harsh reality
that 42 percent of the state's OB-GYNs had stopped providing
prenatal care.\84\ Dr. Francine Sinofsky, an OB-GYN in East
Brunswick, N.J., says two of her practice's seven members no
longer practice obstetrics due to the cost of medical
liability. One who practices gynecology only pays $14,000 a
year for liability insurance while another who practices
obstetrics as well pays more than $100,000.\85\ In 2008, 1,500
counties in America, including eight counties in New York
alone, did not have a single obstetrician as liability issues
chased good doctors out of obstetrics.\86\
---------------------------------------------------------------------------
\84\``Doctors Urging Lawmakers to Support Tort Reform,'' KGMB9.com.
\85\``The Doctor Drain,'' Lauren Otis, The New Jersey Monthly, 2/5/
08.
\86\``Center for Health Workforce Studies, cited in ``no Place to
be Born,'' New York Sun, 8/25/08.
---------------------------------------------------------------------------
But the negative impact of lawsuit abuse on women's health
goes beyond obstetrics. Today, the number of radiologists
willing to read mammograms is shrinking, exacerbated by the
decreasing number of medical residents choosing radiology as
their specialty. The reason is simple. A failure to diagnose
properly is the number one allegation in most liability
lawsuits.\87\ That makes radiologists the number one group of
physicians affected.\88\ Abuse of the litigation system is
putting women at risk.
---------------------------------------------------------------------------
\87\AMA News, 3/20/06.
\88\``Failure to Diagnose: Putting the Pieces Together, A Risk
Management Review of Closed Claims in Selected Specialties 2002-2004,''
Linda Greenwald, Doctors' Insurance Services of New England, 2005.
---------------------------------------------------------------------------
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.\89\
---------------------------------------------------------------------------
\89\``The Medical Malpractice `Crisis': Trends and the Impact of
State Tort Reforms,'' Kenneth E. Thorpe, (January 21, 2004) at 20-30.
---------------------------------------------------------------------------
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.\90\ The cumulative effect of all state
reforms put together could be as much as a 74 percent reduction
in premiums.\91\
---------------------------------------------------------------------------
\90\``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).
\91\``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).
---------------------------------------------------------------------------
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.\92\
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).
---------------------------------------------------------------------------
\92\See http://www.micra.org/about-micra/docs/
micra_access_and_affordability.pdf.
---------------------------------------------------------------------------
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.''\93\ Further, since Proposition 103 went into effect,
no medical professional liability insurer has been denied a
requested premium increase.
---------------------------------------------------------------------------
\93\Orange County Register (October 22, 1997).
---------------------------------------------------------------------------
COMMENTS OF SUPPORTERS OF CALIFORNIA'S HEALTH CARE LITIGATION REFORMS
(ON WHICH THE HEALTH ACT IS MODELED)
Cruz Reynoso, Democratic Vice Chairman of the U.S.
Commission on Civil Rights (appointed by former Senate Majority
Leader George Mitchell in 1993), Professor of Law at UCLA, and
former Justice of the California Supreme Court:
Medical insurance has been going up. I think there's no
question that what the legislature did and continues to
do has had an influence on keeping those expenses down
and that's a very important public policy. . . .
Publicly-funded medical centers were very supportive of
the continued protection of MICRA because if their own
insurance rates would go up they would be less able to
serve the poor. . . . I personally have favored having
as much access to the courts as possible, but at the
same time you have to be careful that it doesn't do so
in a way that is destructive, for example, in the
medical field, destructive of the ability of society to
respond to the medical needs of the people.
Nancy Sasaki, President and CEO of Planned Parenthood, Los
Angeles:
If the caps [on non-economic damages] in MICRA were to
be increased, you actually would begin to see kind of a
domino effect. . . . If insurance costs for the
physicians go up they typically will then, as any
business would, look at what services are their highest
risks, which services are costing them the most, and
they may no longer provide that. And that's happened in
the past, where physicians have stopped providing
obstetric care because of costs.
Donna Stidham, Director of Managed Care and Patient
Services, AIDS Health Care Foundation:
[An] increase in the MICRA cap . . . would increase our
premiums phenomenally. In a single clinic setting it
could probably increase their premiums maybe twenty or
thirty thousand dollars. For multiple physicians, I'd
hate to even guess, but it'd be in the hundreds of
thousands, which would take away from direct patient
care. . . . So it would directly take away from care,
from the patients. You'd see us perhaps not being able
to admit all types of patients. Right now we can take
any kind of patient, whether they have the ability to
pay or not.
CALIFORNIA SUPREME COURT STATEMENTS ON THE PURPOSES
OF MICRA'S LIMIT ON NONECONOMIC DAMAGES
The California Supreme Court has stated the following
purposes of California Civil Code section 3333.2, which limits
recovery of noneconomic damages to $250,000:
One purpose is to provide a more stable base on which
to calculate insurance rates'' by eliminating the
``unpredictability of the size of large noneconomic
damage awards, resulting from the inherent difficulties
in valuing such damages and the great disparity in the
price tag which different juries placed on such
losses.''\94\
---------------------------------------------------------------------------
\94\Fein v. Permanent Medical Group, 38 Cal.3d 137, 163 (1985); see
also Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital 8
Cal.4th 100, 112 (1984).
Another purpose is to ``promote settlements by
eliminating `the unknown possibility of phenomenal
awards for pain and suffering that can make litigation
worth the gamble.'''\95\
---------------------------------------------------------------------------
\95\Fein v. Permanent Medical Group, 38 Cal.3d 137, 163 (1985).
Another purpose is to be fair to medical malpractice
plaintiffs by ``reduc[ing] only the very large
noneconomic damage awards, rather than to diminish the
more modest recoveries from pain and suffering and the
like in the great bulk of cases.''\96\
---------------------------------------------------------------------------
\96\Id.
---------------------------------------------------------------------------
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.\97\ Communities in Texas that
once did not have primary or specialty care doctors now have a
full complement of physicians.
---------------------------------------------------------------------------
\97\``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).
---------------------------------------------------------------------------
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.\98\ 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.\99\
---------------------------------------------------------------------------
\98\Peggy Venable, ``Tort Reform? We've Already Done It,''
Washington Post (September 16, 2009).
\99\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.\100\ The fiscal stimulus
to the state from judicial reforms is almost a $2.6 billion per
year increase in state revenue.\101\ 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.\102\
---------------------------------------------------------------------------
\100\Id.
\101\Id.
\102\Id.
---------------------------------------------------------------------------
As the Wall Street Journal has observed:
Before the reform, Texas was a kind of holy place on
the tort bar pilgrimage. Now it's a Mecca for doctors,
especially the emergency physicians, obstetricians and
surgical specialists who elsewhere can face blue-sky
malpractice premiums. Liability rates have fallen by
27.5% on average since 2003. The number of doctors
applying to practice in Texas has increased 60%, even
as the overall population grew by 14%.
All of this is helping to end an acute Lone Star
physicians shortage, especially in rural areas. Twenty-
three counties now have their first E.R. doctor, 10
their first OB-GYN. Hospitals are reinvesting the
malpractice savings in scarce services like
neurosurgery and neonatal units and expanding access to
care. This Texas success has opened eyes in nearby
Oklahoma, where even Democrats have been forced to
agree to some legal reforms.\103\
---------------------------------------------------------------------------
\103\Wall Street Journal (editorial), ``Loser Pays, Everyone Wins''
(December 15, 2010).
---------------------------------------------------------------------------
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 who wondered why a supposedly comprehensive
``reform'' of the health-care system does not 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.''
Moreover, the Democrats' health care law's offer of HHS
``demonstration projects'' on tort reform, rings hollow given
that the cabinet secretary tasked with implementing this
proposal for demonstration projects is Kathleen Sebelius.
Before she was governor of Kansas and the insurance
commissioner of Kansas, she spent eight years as the head of
the Kansas Trial Lawyers Association, now the Kansas
``Association for Justice.'' The KAJ's total opposition to
reform is highlighted on its website. And Sebelius is also the
state executive who, according to the New York Times, ``failed
to make significant improvement in health coverage or costs
during her two terms as governor.''
The top contributor to President Obama's presidential
campaign was the legal industry, whose donations came to more
than $43 million. More than 80 percent of the money given to
Congress by lawyers, mostly from the plaintiffs' bar, went to
Democrats--almost $22 million.
More recently, when President Obama spoke to the American
Medical Association's convention in June of this year, he told
the audience ``I'm not advocating caps on malpractice awards.''
SUPPORT FOR REFORM: THE AMERICAN PEOPLE
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.\104\
---------------------------------------------------------------------------
\104\``National Voter Survey: Health Care Reform and the Legal
System 2009,'' Clarus Research Group (August 2009).
---------------------------------------------------------------------------
As the Associated Press recently reported:
Most Americans want Congress to deal with malpractice
lawsuits driving up the cost of medical care, says an
Associated Press poll. Yet Democrats are reluctant to
press forward on an issue that would upset a valuable
political constituency--trial lawyers--even if
President Barack Obama says he's open to changes. The
AP poll found that 54 percent of Americans favor making
it harder to sue doctors and hospitals for mistakes
taking care of patients, while 32 percent are opposed .
. . Support for limits on malpractice lawsuits cuts
across political lines, with 58 percent of independents
and 61 percent of Republicans in favor. Democrats are
more divided. Still, 47 percent said they favor making
it harder to sue, while 37 percent are opposed. The
survey was conducted by Stanford University with the
nonprofit Robert Wood Johnson Foundation . . . In the
poll, 59 percent said they thought at least half the
tests doctors order are unnecessary, ordered only
because of fear of lawsuits.\105\
---------------------------------------------------------------------------
\105\Ricardo Alonso-Zaldivar and Trevor Tompson, ``AP: Support for
Curbs on Malpractice Lawsuits,'' The Associated Press (November 19,
2009).
In a poll done by the Health Coalition on Liability and
Access (HCLA) in October 2009, 69 percent of Americans said
they wanted medical liability reform included in health care
reform legislation. Seventy-two percent said that their access
to quality medical care is at risk because lawsuit abuse forces
good doctors out of the practice of medicine. A Rasmussen poll
done at the same time found that 57 percent of people favored
limiting jury awards.\106\
---------------------------------------------------------------------------
\106\Rasmussen Research, 12/2/09.
---------------------------------------------------------------------------
The American people clearly understand the issue of
liability reform and the motives behind the raft of lawsuits
trial lawyers are bringing to stop reform in its tracks. The
Health Coalition on Liability and Access poll done in
October 2009 found that by a wide margin, 70 percent of
Americans support full payment for lost wages and medical
expenses and reasonable limits on awards for non-economic
``pain and suffering.'' Sixty-eight percent of those polled
also favor a law to limit the fees personal injury attorneys
can take from an award or settlement.
BLAMING THE INSURANCE COMPANIES IS OFTEN A RED HERRING
As Dr. Stanley Goldfarb, associate dean of clinical
education at the University of Pennsylvania School of Medicine,
has written: ``The president points to for-profit insurance
companies [as the source of the problem], 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. [Insurance] `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.''\107\
---------------------------------------------------------------------------
\107\Stanley Goldfarb, ``The Malpractice Problem: We Can't Have
Health Care Reform Without Tort Reform,'' The Weekly Standard (October
27, 2009).
---------------------------------------------------------------------------
The Department of Health and Human Services concluded that
the average award in medical malpractice cases has risen 76% in
recent years, and that ``mega-awards'' for ``pain and
suffering'' have occurred in states without any limits on what
a plaintiff can recover.\108\ Large numbers of these cases are
meritless. The Harvard Medical Practice Study, for example,
found that over half of the filed medical professional
liability claims they studied were brought by plaintiffs who
suffered either no injuries at all, or, if they did, such
injuries were not caused by their health care providers, but
rather by the underlying disease.\109\ These findings have been
confirmed.\110\ Also, before the 1960s, only one physician in
seven had ever been sued in their entire lifetime,\111\ whereas
today's rate is about one in seven per year.\112\
---------------------------------------------------------------------------
\108\Department of Health and Human Services, ``Confronting the New
Health Care Crisis: Improving Health Care Quality and Lowering Costs by
Fixing Our Medical Liability System'' (July 24, 2002) at 9-10 (``These
mega-awards for non-economic damages have occurred (as would be
expected) in states that do not have limitations on the amounts that
can be recovered.'').
\109\See Harvard Medical Practice Study to the State of New York,
Patients, Doctors, and Lawyers: Medical Injury, Malpractice Litigation,
and Patient Compensation in New York at 11-5 (1990) (``[T]he tort
system imposes the costs of defending claims on [health care] providers
who may not even have been involved in an injury, let alone a negligent
injury.'').
\110\See D. Studdert et al., ``Negligent Care and Malpractice
Claiming Behavior in Utah and Colorado,'' 38 Medical Care 3: 250-60,
250 (2000) (``Eighteen patients from out study sample filed claims: 14
were made in the absence of discernable negligence and 10 were made in
the absence of any adverse event . . . The poor correlation between
medical negligence and malpractice claims that was present in New York
in 1984 is also present in Utah and Colorado in 1992 . . . [W]hen a
physician is sued, there is a high probability that it will be for
rendering nonnegligent care.'') (emphasis added).
\111\See ``Opinion Survey of Medical Professional Liability,'' JAMA
164:1583-1594 (1957).
\112\See R. Bovbjerg, ``Medical Malpractice: Problems & Reforms,''
The Urban Institute, Intergovernmental Health Policy Project (1995).
---------------------------------------------------------------------------
The medical insurance crisis caused insurers like St.
Paul--an insurer of 42,000 doctors, 750 hospitals, 5,800 health
care facilities, and 72,000 health care providers such as
nurses--to leave the medical professional liability insurance
business entirely.\113\ In the words of Thomas A. Bradley,
chief financial officer of St. Paul, the medical malpractice
insurance crisis was ``basically another World Trade Center
loss for us this year.''\114\ Other medical malpractice
insurers have also left the market,\115\ and many others have
become insolvent. Licensed carriers' medical professional
liability insurance business has, on average, been unprofitable
since 1990-2000.\116\
---------------------------------------------------------------------------
\113\See Joseph T. Hallinan, ``St. Paul Gradually Will Pull Out Of
Malpractice-Insurance Sector,'' The Wall Street Journal (December 13,
2001) at B2.
\114\``St. Paul to Exit Medical Malpractice, Pose $900 Million
Charge,'' Best's Insurance News (December 12, 2001).
\115\See Meg Green, ``Med Malcontent: Top medical malpractice
writer St. Paul Cos. Abandons the Unprofitable Business. Who Will Fill
the Void?'' Best's Review (February 1, 2002) at 12.
\116\See American Medical Association, ``Trends Report: Medical
Professional Liability Insurance'' (April 2002) at 5.
---------------------------------------------------------------------------
The claim that sharp increases in medical liability
insurance rates are due to insurer losses in the stock market
is also dubious, as less than 15% of the assets of medical
liability insurance companies are stocks.\117\ Additionally,
60% of the doctors in the United States are insured by
insurance companies that are owned and operated by other
doctors and which operate primarily for their benefit.\118\
---------------------------------------------------------------------------
\117\See Physician Insurers Association of America, ``Bordering on
Malpractice: Serious Errors Found in Consumer Federation of America
Report on Medical Liability Insurance'' (May 9, 2002).
\118\Physician Insurers Association of America.
---------------------------------------------------------------------------
THE ``PATIENT PROTECTION AND AFFORDABLE CARE ACT'' (PPACA)
IS A TRIAL LAWYERS' BAILOUT BILL
The ``Patient Protection and Affordable Care Act'' (PPACA),
passed by Democrats during the last Congress, 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 explicitly allows trial lawyers to ``opt-out''
of any alternative liability system, meaning if their frivolous
lawsuit is limited by the alternative system, they can simply
``opt-out'' of the alternative system and file in court like
they always have. Section 10607 of the Democrats' bill states
that any states' ``proposed alternative'' must ``provide[]
patients the ability to opt out of or voluntarily withdraw from
participating in the alternative at any time and to pursue
other options, including litigation, outside the
alternative.''\119\ So the bill literally prohibits any
alternative to litigation, or any new limits on litigation,
from being enforced.
---------------------------------------------------------------------------
\119\42 U.S.C.A. Sec. 280g-15(c)(2)(g).
---------------------------------------------------------------------------
Also, the CBO concluded that caps on ``non-economic
damages'' would save at least $54 billion in health care costs.
Not only are any such caps prevented from being enforced under
the legislation, but the legislation requires that the
Secretary of Health and Human Services provide states with
``guidance on [the award] of non-economic damages . . . in
determining appropriate payment.''\120\ Consequently, not only
does this legislation prevent states from taking part in the
demonstration projects if they seek to enforce the reforms the
CBO said would save $54 million; it also requires the Secretary
of Health and Human Services to encourage states to adopt
lawsuit damages criteria the CBO has concluded would raise
health care costs, not lower them. That's not tort reform. It's
tort deform.
---------------------------------------------------------------------------
\120\42 U.S.C.A. Sec. 280g-15(f)(2)(A).
---------------------------------------------------------------------------
Further, because the health care bill signed into law by
President Obama calls for the Federal Government and its
regulators to create all manner of new standards and guidelines
for medical professionals to follow, it opens up many more
opportunities for trial lawyers to sue doctors if they deviate
at all from those Federal standards and guidelines. The House-
passed version of the legislation, H.R. 3962, contained a
provision that made clear that the new government guidelines
provided for by the bill ``shall not be construed to establish
the standard of care or duty of care owed by health care
providers to their patients in any medical malpractice action
or claim.''\121\ But the bill signed into law by President
Obama fails to contain such a provision, which can only be read
as an invitation to trial lawyers to sue doctors whenever they
deviate one iota from whatever guidelines or standards are
handed down from Washington, D.C. That's a step backward for
legal reform, and yet another cause of defensive medicine.
---------------------------------------------------------------------------
\121\See H.R. 3962 (111th Cong. 1st Sess.) (passed November 7,
2009) (SEC. 261. CONSTRUCTION REGARDING STANDARD OF CARE. (a) IN
GENERAL.--The development, recognition, or implementation of any
guideline or other standard under a provision described in subsection
(b) shall not be construed to establish the standard of care or duty of
care owed by health care providers to their patients in any medical
malpractice action or claim . . . '').
---------------------------------------------------------------------------
REFORM MUST COME AT THE FEDERAL LEVEL
The HEALTH Act appropriately addresses a national problem
because doctors are moving from state to state based on which
states have enacted reasonable legal reforms. Doctors should be
able to practice anywhere there are patients, not just where
certain states have enacted reasonable legal reforms that allow
them to practice.
As Senator Lieberman has described, the crisis is national
in scope and warrants a Federal response: ``I did not always
support a national or Federal approach to product liability
reform or tort reform generally, and I can understand the
hesitancy, particularly of some of the Members, to support
Federal involvement in what traditionally has been a province
of the States. . . . So I listened to [] folks, and I came to
understand the necessity of Federal action and, of course, to
understand the reality and appreciate the reality that we are
one country; that products travel from State to State; that
people using them travel from State to State; and that there is
a crying need out there in the interest of every State and our
country, our economy, the equity of our society, to build a
floor of fairness, a common system that will protect the rights
of all.''\122\
---------------------------------------------------------------------------
\122\Senator Lieberman, floor statement on the Common Sense Product
Liability and Legal Reform Act (April 27, 1995).
---------------------------------------------------------------------------
Over 20 state supreme courts have judicially nullified
reasonable litigation management provisions enacted by state
legislatures, many of which sought to address the crisis in
medical professional liability that reduces patients' access to
health care. Consequently, in such states, passage of Federal
legislation by Congress is the only means of addressing the
state's current crisis in medical professional liability and
restoring patients' access to health care. Many more may do so
unless Congress acts under its Supremacy Clause and Commerce
Clause authority to let doctors treat patients wherever they
are, not just where states have enacted legal reforms that can
be upheld under their state constitutions.\123\
---------------------------------------------------------------------------
\123\See Rept. 107-693 pt. 1 (107th Cong., 2d Sess.) at 13 and
n.14.
---------------------------------------------------------------------------
THE NEED FOR FEDERAL LAWSUIT REFORM THAT APPROPRIATELY USES
CONGRESS' COMMERCE CLAUSE POWER
Many state supreme courts have judicially nullified
reasonable litigation management provisions enacted by state
legislatures, many of which sought to address the crisis in
medical professional liability that reduces patients' access to
health care. Consequently, in such states, passage of Federal
legislation by Congress may be the only means of addressing the
state's current crisis in medical professional liability and
restoring patients' access to health care.
Further, Federal legislation is needed to stem the flow of
doctors from one state to another, as they flee states to avoid
excessive liability costs. Doctors should feel free to practice
medicine wherever they want in this country, and patients
everywhere should be able to obtain the medical care they need.
While tort reform is usually adopted at the state level in
the first instance, it can also be adopted at the Federal
level, when the effects of tort law present a threat to state
autonomy. Indeed, James Madison described the purpose of the
Constitution's Commerce Clause as follows: ``A very material
object of this power [of Congress] was the relief of the States
which import and export through other States, from the improper
contributions levied on them by the latter. Were these [States]
at liberty to regulate the trade between State and State, it
must be foreseen that ways would be found out to load the
articles of import and export, during the passage through their
jurisdiction, with duties which would fall on the makers of the
latter and the consumers of the former. We may be assured by
past experience, that such a practice would be introduced by
future contrivances; and both by that and a common knowledge of
human affairs, that it would nourish unceasing animosities, and
not improbably terminate in serious interruptions of the public
tranquility.''\124\ Clearly, Madison predicted that states
would see in the future the rise of new forms of rules and
regulations that would increase the costs of things nationwide,
but which could not be foreseen at the time of the Founding,
and that Congress would needs its Commerce Clause authority to
counter those cost-increasing influences.\125\ Indeed, one
modern manifestation of the problem Madison foresaw is that,
today, some states' tort law allows unbounded lawsuits that
increase the costs of selling products or services (including
medical services) that cross into their jurisdictions. There is
even a word for this modern phenomenon. It is called the ``tort
tax,'' and when it's applied to national industries, it's
passed on to consumers everywhere. The result is higher prices,
and potentially lost jobs, across multiple states, or
nationwide. When that happens, Congress can, and often should,
enact Federal tort reform to preserve federalism principles.
While some argue that businesses can avoid tort liability by
simply avoiding states that have oppressive tort laws, James
Madison clearly rejected that argument against Congressional
action, arguing instead that Congress should have the power to
enact rules that allow businesses to enter into a state
``jurisdiction'' without having to worry that doing so would
dramatically increase the price of their products elsewhere.
Likewise, Alexander Hamilton wrote in the Federalist Papers
that ``The government of the Union must be empowered to pass
all laws, and to make all regulations which have relation to
them. The same must be the case in respect to commerce, and to
every other matter to which its jurisdiction is permitted to
extend.''\126\
---------------------------------------------------------------------------
\124\The Federalist Papers, Federalist No. 42 at 267-68 (Clinton
Rossiter ed., 1961) (emphasis added).
\125\At the time of the Founding and soon thereafter, out-of-
control state litigation was kept in check in the states by strict
limits on lawyers' fees, which no longer prevail. During the American
Colonial period, lawyers were roundly despised and subjected to strict
limits on lawsuits. According to one historian, ''[i]n every one of the
Colonies, practically throughout the Seventeenth Century, a lawyer or
attorney was a character of disrepute and of suspicion. . . . In many
Colonies, persons acting as attorneys were forbidden to receive any fee
. . . in all, they were subjected to the most rigid restrictions as to
fees and procedure.'' Charles Warren, A History of the American Bar 4
(William S. Hein & Co., Inc. 1913). Early American observer Benjamin
Austin wrote, ``if we look through the different counties throughout
the Commonwealth, we shall find that the troubles of the people arise
principally from debts enormously swelled by tedious law-suits.''
Benjamin Austin, Observations on the Pernicious Practice of the Law 4
(1786). As one historian summarized the situation in early America,
``[l]awsuits were often begun or continued for no other purpose than to
embarrass an enemy by making him incur legal costs.'' Anton-Hermann
Chroust, The Rise of the Legal Profession in America: The Colonial
Experience vol. 1, 82 (U. of Okla. Press 1965). Attorneys were so
despised in early America that they often inspired violence. As one
historian wrote:
During Shay's Rebellion, in 1786 people actually demanded
that all inferior courts and all lawyers be entirely
eliminated . . . In Vermont and New Hampshire vociferous
demands were made to suppress the legal profession
completely, or at least to reduce the number of lawyers
and, incidentally, to cut down substantially the usual
legal fees. In Vermont, where the general populace was
particularly vehement in its actions and denouncements,
courthouses were set afire . . . As early as 1786 the town
of Braintree, Massachusetts, passed a resolve ``to crush .
. . that order of Gentlemen denominated Lawyers . . . whose
. . . conduct appears . . . to tend rather to the
---------------------------------------------------------------------------
destruction than the preservation of this Commonwealth.''
Anton-Hermann Chroust, The Rise of the Legal Profession in America: The
Revolution and the Post-Revolutionary Era vol. 2, 26-27 (U. of Okla.
Press 1965) (citing Laws and Resolves of Mass., c. 23, Sec. 2, (1785);
John Adams, The Adams Papers: Diary and Autobiography of John Adams
vol. 1, 342 (1902); John Quincy Adams, Three Episodes of Massachusetts
History 897 (1893)).
Fear that the legal profession would abuse its power to generate
lawsuits was also reflected in limits on attorneys' fees. In 1784,
Connecticut by statute limited attorneys' fees according to a ``Table
of Fees.'' Acts and Laws of the State of Connecticut in America 10-11
(1784). In 1792, Georgia regulated attorneys' fees as follows: for
``each cause commenced and tried in the superior or inferior courts,''
eighteen shillings and eight pence. A Digest of the Laws of the State
of Georgia 476 (1800). In 1714, Massachusetts fixed attorneys' fees at
twelve shillings ``at the superiour court of judicature . . . and at
the inferiour court, ten shillings, and no more.'' Acts and Laws, of
Her Majesties Province of the Massachusetts-Bar in New-England 185
(1714). In 1719, Rhode Island attorneys' fees were fixed at a maximum
of twelve shillings. Charter Granted by His Majesty King Charles the
Second to the Colony of Rhode Island and Providence-Plantations in
America 21 (1719). In 1766 these fees were reduced to a maximum of five
shillings. Acts and Laws of His Majesty's Colony of Rhode-Island and
Providence-Plantations in America 98 (1767). By 1748, the New Jersey
Legislature passed a statute establishing an elaborate schedule of
lawyer's fees. The Acts of the General Assembly of the Province of New-
Jersey 167 (Allinson ed. 1776). In 1778, in Virginia, attorneys' fees
were fixed by statute in the General Court and the High Court of
Chancery depending on the nature of the action. Anton-Hermann Chroust,
The Rise of the Legal Profession in America: The Revolution and the
Post-Revolutionary Era vol. 2, 261-62 (U. of Okla. Press 1965) (citing
9 Statutes at Large of Virginia 529 (Hening ed. 1823)). In 1795, in
Pennsylvania, attorneys' fees in the Court of Common Pleas were set for
filing a lawsuit and entering an appearance as follows: ``if the suit
is ended before or during the sitting of the first court,'' at $1.67;
for every suit ``ended after the first court and before judgment,''
$3.34; and for ``every suit prosecuted to judgment,'' $4.00. 15
Statutes at Large of Pennsylvania, c. 1863, Sec. 1, 360 (1911). In
1801, New York enacted the comprehensive Act Regulating the Fees of
Several Officers and Ministers of Justice within the state, which
included limits on attorneys' fees. 5 Laws of the State of New York
Passed at the Session of the Legislature Held in the Year 1801, c. 190,
553-71 (1871). In 1810, in Maryland, a statute was enacted providing
``no attorney of any of the county courts shall be authorized to charge
more . . . than the sum of three dollars and thirty-three cents and one
third of a cent in any one suit.'' Laws of Maryland of 1810, c. 126,
Sec. 2; 1 The General Public Statutory Law of Maryland 601 (1840).
Delaware had its own unique method for reducing litigiousness. In 1793,
Delaware passed the Act for Regulating and Establishing Fees providing
that for all pleadings in an action subsequent to a declaration, the
fee would be one cent for every written line, twelve words to a line.
Anton-Hermann Chroust, The Rise of the Legal Profession in America: The
Revolution and the Post-Revolutionary Era vol. 2, 256 (U. of Okla.
Press 1965).
---------------------------------------------------------------------------
\126\The Federalist Papers, Federalist No. 23 at 155 (Clinton
Rossiter ed., 1961).
---------------------------------------------------------------------------
James Madison and the Founders clearly supported the power
of the People's national representatives in Congress to
preserve citizens' access to privately-provided goods and
services. Madison said, in the seminal speech he gave defending
the Commerce Clause at the Virginia convention called to ratify
the Constitution, that ``All agree that the general government
ought to have power for the regulation of commerce . . . There
are regulations in different states which are unfavorable to
the inhabitants of other states . . . This will not be the case
when uniform regulations will be made'' by Congress.\127\
Indeed, that's what Congress did when it passed the Protection
of Lawful Commerce in Arms Act in 2006, which prohibits
lawsuits in either state or Federal court against the firearms
industry for damages resulting from the unlawful use of
firearms by others. That Federal tort reform law was upheld as
coming within Congress' Commerce Clause authority by the Second
Circuit Court of Appeals, which said ``We find that Congress
has not exceeded its authority in this case, where there can be
no question of the interstate character of the industry in
question and where Congress rationally perceived a substantial
effect on the industry of the litigation that the Act seeks to
curtail.''\128\ The same holds true where there can be no
question of the interstate character of the health care
industry and where Congress rationally perceives a substantial
effect lawsuits have on that industry.\129\ Congress has
enacted many Federal tort reform statutes.\130\
---------------------------------------------------------------------------
\127\James Madison, ``Speech in the Virginia Ratifying Convention''
in Madison: Writings (1999) at 378-79.
\128\City of New York v. Beretta Corp., 524 F.3d 384, 394 (2008),
cert. denied 129 S.Ct. 1579 (2009).
\129\Congress has acted many times to enact Federal tort reforms,
including the Volunteer Protection Act of 1997, which creates immunity
for volunteers to nonprofits or government bodies. 42 U.S.C.A.
Sec. Sec. 14501 et seq. Congress has also passed the Partial-Birth
Abortion Ban Act of 2003, which prohibited a specific medical procedure
that involves a particularly gruesome form of abortion procedure. That
Act was upheld by the Supreme Court in Gonzales v. Carhart, 550 U.S.
124 (2007), in which the Court upheld Congress' ``legislative power,
exercised in this instance under the Commerce Clause, to regulate the
medical profession,'' id. at 166, concluding that ``Considerations of
marginal safety, including the balance of risks, are within the
legislative competence when the regulation is rational and in pursuit
of legitimate ends.'' Id.
\130\See, e.g., Employers Liability Act of 1908, 35 Stat. 65, c.
149; Price-Anderson Act, 42 U.S.C. Sec. 2210(e); Atomic Testing
Liability Act, 42 U.S.C. Sec. 2212; National Childhood Vaccine Injury
Compensation Act of 1986
42 U.S.C. Sec. Sec. 300aa-1-300aa-34; Comprehensive Environmental
Response, Compensation, and Liability Act (Superfund); General Aviation
Revitalization Act, P.L. 103-298, 49 U.S.C. Sec. 40101 note; Cruise
Ship Liability, P.L. 104-324, Sec. 1129; Bill Emerson Good Samaritan
Food Donation Act, P.L. 104-210, 42 U.S.C. Sec. 1791; Volunteer
Protection Act of 1997, P.L. 105-1, 42 U.S.C. Sec. Sec. 14501-14505;
Amtrak Reform and Accountability Act of 1997, P.L. 105-134, Sec. 161,
49 U.S.C. Sec. 28103; Aviation Medical Assistance Act of 1998, P.L.
105-170 (1998), 49 U.S.C. Sec. 44701 note; Biomaterials Access
Assurance Act of 1998, P.L. 105-230, 21 U.S.C. Sec. Sec. 1601-1606; Y2K
Act, P.L. 106-37, 15 U.S.C. Sec. Sec. 6601-6617; Cardiac Arrest
Survival Act of 2000, P.L. 106-505, Sec. 404, 42 U.S.C. Sec. 238q; Air
Transportation Safety and System Stabilization Act, P.L. 107-42,
Sec. 201(b); September 11th Victim Compensation Fund of 2001, 49 U.S.C.
Sec. 40101 note; Paul D. Coverdell Teacher Protection Act of 2001, P.L.
107-110, Sec. Sec. 2361-2368; Multiparty, Multiforum Trial Jurisdiction
Act of 2002, P.L. 107-273, Sec. 11020; Homeland Security Act of 2002,
P.L. 107-296, Sec. Sec. 304, 863, 890, 1201, 1402, and 1714-1717.
---------------------------------------------------------------------------
Of note, Congress passed the Partial-Birth Abortion Ban Act
of 2003, which prohibited a specific medical procedure that
involves a particularly gruesome form of abortion procedure,
under its Commerce Clause authority. That Act was upheld by the
Supreme Court in Gonzales v. Carhart,\131\ in which the Court
upheld Congress' ``legislative power, exercised in this
instance under the Commerce Clause, to regulate the medical
profession,''\132\ concluding that ``Considerations of marginal
safety, including the balance of risks, are within the
legislative competence when the regulation is rational and in
pursuit of legitimate ends.''\133\
---------------------------------------------------------------------------
\131\550 U.S. 124 (2007).
\132\Id. at 166.
\133\Id.
---------------------------------------------------------------------------
Also, Federal tort reform regarding vaccine liability has
been the law for several decades. In the late 1980's, Congress
enacted the National Vaccine Injury Compensation Program, 42
U.S.C. Section 300aa-10 through -34, a Federal program that
preempts state court tort awards, to protect vaccine
manufacturers from bankruptcy in the face of otherwise
unlimited state tort jury awards. The Act overrides the state
court system, putting compensation decisions in the hands of a
congressionally created Office of Special Masters, which
currently consists of one Chief Special Master and seven
Associate Special Masters who are appointed by the U.S. Court
of Federal Claims to serve for four-year terms. To this day,
that Act has never been successfully challenged on
constitutional grounds. If it were, millions of children could
be forced to go without necessary vaccines because
manufacturers would refrain from providing them. Note that
while the Federal vaccine compensation program completely
overrides state courts and juries, the HEALTH does not go
nearly so far because the HEALTH Act allows state lawsuits to
proceed, but with reasonable limits on a narrow category of
damages and other process reforms.
The Congressional Research Service also ``concludes that
enactment of tort reform legislation generally would appear to
be within Congress's power to regulate commerce, and would not
appear to violate principles of due process or federalism . . .
In concluding that Congress has the authority to enact tort
reform `generally,' we refer to reforms that have been widely
implemented at the state level, such as caps on damages and
limitations on joint and several liability and on the
collateral source rule.''\134\ Caps on damages and limitations
on joint and several liability are precisely the reforms
contained in the HEALTH Act.
---------------------------------------------------------------------------
\134\Henry Cohen, Legislative Attorney, American Law Division, CRS
Report to Congress, Federal Tort Reform Legislation: Constitutionality
and Summaries of Selected Statutes (February 26, 2003) at 1.
---------------------------------------------------------------------------
Laws passed by states that have already provided for, or
may in the future provide for, different limits on damages in
health care lawsuits will be preserved under the HEALTH Act, as
the HEALTH Act provides that ``No provision of this Act shall
be construed to preempt . . . any State law (whether effective
before, on, or after the date of the enactment of this Act)
that specifies a particular monetary amount of compensatory or
punitive damages (or the total amount of damages) that may be
awarded in a health care lawsuit, regardless of whether or not
such monetary amount is greater or lesser than is provided for
under this Act . . . '' Some states have limited noneconomic
damages in medical malpractice actions, but at levels higher
than $250,000. Some states place aggregate limits on medical
malpractice awards. Those limits would be preserved under the
HEALTH Act.
President Ronald Reagan established a special task force to
study the need for tort reform. That task force, called the
Tort Policy Working Group, consisted of representatives of ten
Reagan Administration agencies and the White House. The final
report of that task force concluded as follows: ``In sum, tort
law appears to be a major cause of the insurance availability/
affordability crisis which the federal government can and
should address in a variety of sensible and appropriate ways.''
Indeed, the Reagan task force specifically recommended
``eliminate joint and several liability,''\135\ ``provide for
periodic payments of future economic damages,''\136\ ``schedule
[limit] contingency fees''\137\ of attorneys, and ``limit non-
economic damages to a fair and reasonable amount.''\138\
Indeed, regarding the limit on non-economic damages, the report
concluded:
---------------------------------------------------------------------------
\135\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 64.
\136\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 69.
\137\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 72.
\138\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 66.
Recommendation No. 4: Limit non-economic damages to a
---------------------------------------------------------------------------
fair and reasonable amount.
Non-economic damages such as pain and suffering, mental
anguish and punitive damages are inherently open-ended.
They are entirely subjective, and often defy
quantification . . . Moreover, because such damages are
essentially subjective, awards for similar injuries can
vary immensely from case to case, leading to highly
inequitable, lottery-like results. Accordingly, such
damages are particularly suitable for a specific
limitation.''\139\
---------------------------------------------------------------------------
\139\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 66.
All of these recommended reforms are part of H.R. 5, the
HEALTH Act. The report also contains an extensive discussion of
the harmful effects tort law has on ``medical malpractice''
insurance,\140\ and a discussion and charts describing the
impact of rising malpractice jury awards.\141\
---------------------------------------------------------------------------
\140\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 21-24.
\141\Report of the Tort Policy Working Group on the Causes, Extent
and Policy Implications of the Current Crisis in Insurance Availability
and Affordability (February 1986), at 36-37, 39-40.
---------------------------------------------------------------------------
STATE LAWS THAT LIMIT DAMAGES TO SPECIFIC AMOUNTS
ARE PRESERVED UNDER THE HEALTH ACT
Laws passed by states that have already provided for, or
may in the future provide for, different limits on damages in
health care lawsuits will be preserved under the HEALTH Act, as
the HEALTH Act provides that ``No provision of this Act shall
be construed to preempt . . . any State statutory limit
(whether enacted before, on, or after the date of the enactment
of this Act) on the amount of compensatory or punitive damages
(or the total amount of damages) that may be awarded in a
health care lawsuit, whether or not such State limit permits
the recovery of a specific dollar amount of damages that is
greater or lesser than is provided for under this Act. . . .''
What follows is a list of states that have specific limits
on damages in health care lawsuits.
Alabama--None; $400,000 cap on non-economic damages; $1
million cap on wrongful death damages, overturned by Smith v.
Shulte, 671 So.2d 1331 (1991), cert. denied, 517 U.S. 1220
(1996).
Alaska--$250,000 cap on non-economic damages for claims
involving personal injury, and a $400,000 cap on non-economic
damages for claims involving wrongful death or a severe
permanent physical impairment that is more than seventy percent
disabling. A single cap applies regardless of the number of
health care providers against whom the claim is asserted or the
number of causes of action filed. (2005).
Arizona--None; Article 2 sec. 31 and Article 18 sec. 6 of
Arizona's constitution prohibits limiting recoverable damages.
Arkansas--None; Article 5 sec. 32 of Arkansas' constitution
prohibits limiting damages recoverable for injury or death.
California--$250,000 cap on non-economic damages (since
1975); upheld in Fein v. Permanente Medical Group, 38 Cal. 3d
137, 695 P.2d 665 (1985).
Colorado--$1 million cap on total damages, including any
derivative claim by any other claimant, of which non-economic
losses shall not exceed $250,000 (including any derivative
claim by any other claimant). Upon good cause shown and if the
court determines such limit would be unfair, the court may
award damages in excess of the limit. In this case, the court
may award the present value of additional future damages only
for loss of such excess future earnings or such excess future
medical and other health care costs, or both. (1988). Upheld in
Scholz v. Metropolitan Pathologists P.C., 851 P.2d 901 (1993).
Effective July 1, 2003, the non-economic damages cap was raised
to $300,000.
Connecticut--None.
Delaware--None.
D.C.--None.
Florida--For providers, $500,000 cap on non-economic
damages for causes of action for injury or wrongful death due
to medical negligence of physicians and other health care
providers. Cap applies per claimant regardless of the number of
defendants. Cap increases to $1 million for certain exceptions.
For non-providers, $750,000 cap on non-economic damages per
claimant for causes of action for injury or wrongful death due
to the medical negligence of nonpractitioners, regardless of
the number of nonpractitioner defendants. Cap increases to $1.5
million for certain exceptions. (2003) Previous law upheld but
subject to rules on voluntary arbitration, Univ. of Miami v.
Echarte, 618 So.2d 189 (1993).
Georgia--None; previous reforms included the following but
were held unconstitutional in Atlanta Oculoplasty Surgery, P.C.
v. Nestlehutt, 691 S.E.2d 219 (Ga. 2010) (statute limiting
awards of noneconomic damages in medical malpractice cases to a
predetermined amount violated state constitutional right to
jury trial): $350,000 cap on non-economic damages awarded
against all health care providers and a separate $350,000 cap
on non-economic damages awarded against a single medical
facility that can increase to $700,000 if more than one
facility is involved. No more than $1.05 million can be awarded
in a medical liability cause of action. Health Care Providers--
Any judgment in a medical liability action, including wrongful
death, against a health care provider shall not exceed $350,000
in non-economic damages regardless of the number of defendant
health care providers against whom the claim is asserted or the
number of separate causes of action on which the claim is
based. The cap applies to each claimant, however, the term
``claimant'' is defined as including all persons claiming to
have sustained damages as a result of the bodily injury or
death of a single person. Medical Facilities--Establishes a
separate $350,000 cap on non-economic damages awarded in
medical liability actions, including wrongful death, against a
single medical facility including all persons and entities for
which vicarious liability theories may apply, regardless of the
number of separate causes of action on which the claim is
based. If the lawsuit involves more than one medical facility,
the total amount of non-economic damages that can be awarded
against the facilities is $700,000 with a single facility not
liable for more than $350,000. (2005).
Hawaii--$375,000 cap on non-economic damages, with
exceptions for certain types of damages, such as mental
anguish. (1986).
Idaho--$250,000 cap on non-economic damages per claimant in
personal injury and wrongful death actions. The cap will be
adjusted annually beginning July 1, 2004 based on the average
annual wage. The limit does not apply to causes of action
arising out of willful or reckless misconduct, or felonious
actions. (2003) Upheld, Kirkland v. Blaine County Medical
Center, 134 Idaho 464, 4 P.3d 1115 (2000).
Illinois--None; reforms struck down in LeBron v. Gottlieb
Memorial Hospital, 930 N.E.2d 895 (Ill. 2010) (holding
unconstitutional caps on non-economic damages and requirement
of periodic payments of damages). Reforms that were struck down
included the following: $500,000 cap on non-economic damages
for awards in a medical liability cause of action, including
wrongful death, against a physician, the physician's business
or corporate entity, and personnel or health care
professionals. Separate $1 million cap on non-economic damages
for awards in a medical liability cause of action, including
wrongful death, against a hospital and its personnel or
hospital affiliates. Both caps apply to all plaintiffs in any
civil action arising out of the care. The caps apply to
injuries that occur after the effective date of the act.
(2005); previous $500,000 cap on non-economic damages,
overturned Best v. Taylor Machine Works, 689 N.E.2d 1057 (Ill.
1997). $500,000 cap on economic and non-economic damages,
overturned Wright v. Central DuPage Hospital Assn., 63 Ill.2d
313, 347 N.E.2d 736 (1976).
Indiana--$750,000 cap on total damages for any act of
malpractice that occurs after 12/31/89 and before 7/1/99. $1.25
million total cap for any act of malpractice that occurs after
6/30/99. Health care providers are not liable for more than
$250,000 for an occurrence of malpractice any amount awarded in
excess of $250,000 will be paid through the Patient
Compensation Fund. (1975) Upheld, Johnson v. St. Vincent
Hospital, 404 N.E. 2d 585 (1980).
Iowa--None.
Kansas--$250,000 cap on non-economic damages. This is the
total amount of non-economic damages recoverable by each party
from all of the defendants. (1988) Upheld, Samsel v. Wheeler
Transport Services, Inc., 246 Kan. 336 (1990); previous law
struck down as unconstitutional, Kansas Malpractice Victims
Coalition v. Bell, 243 Kan. 333, 757 P.2d 251 (1988).
Kentucky--None. Section 54 of Kentucky's Constitution
prohibits cap on damages.
Louisiana--$500,000 cap on total damages, excluding damages
recoverable for medical care. A health care provider covered by
the Patient's Compensation Fund shall not be liable for more
than $100,000. The Patient's Compensation Fund will cover the
excess amount awarded up to the cap. (1975); Upheld caps on
total damages, but future medical expenses are excluded from
cap, Butler v. Flint Goodrich Hospital of Dillard University,
607 So. 2d 517 (1992); ruled unconstitutional by Louisiana
Court of Appeal, Third Circuit in Arrington v. ER Physicians
Group, No. 04-1235 (La. Ct. App. Sept. 2006). Vacated and set
aside by Louisiana Supreme Court Arrington v. Galen-Med, Inc.
(La. 06-2968 Feb. 2007).
Maine--$400,000 cap on non-economic damages in wrongful
death actions. (1999).
Maryland--The limit on non-economic damages is frozen at
$650,000 until January 1, 2009, after which time the cap will
increase annually by $15,000 per year. Cap applies in aggregate
to all claims and defendants arising from the same medical
injury. (Cap also applies in wrongful death actions if the
claim involves only one claimant or beneficiary). In wrongful
death actions involving two or more claimants or beneficiaries,
then the total cap on non-economic damages is $812,500 (125% of
the cap). (2005); previous law upheld as constitutional, Murphy
v. Edmunds, 325 MD 342, 601 A.2d 102 (1992).
Massachusetts--$500,000 cap on non-economic damages, with
exceptions for proof of substantial disfigurement or permanent
loss or impairment, or other special circumstances which
warrant a finding that imposition of such limitation would
deprive the plaintiff of just compensation for the injuries
sustained. (1986).
Michigan--$280,000 cap on non-economic damages, adjusted
annually for inflation, except in cases where the plaintiff is
hemiplegic, paraplegic, or quadriplegic due to an injury to the
brain or spinal cord, or where the plaintiff has permanently
impaired cognitive capacity rendering him incapable of making
independent, responsible life decisions and permanently
incapable of independently performing the activities of normal,
daily living, or the plaintiff has had permanent loss or damage
to a reproductive organ resulting in the inability to
procreate, then non-economic damages shall not exceed $500,000.
As of 2003 the $280,000 cap is $359,000 and the $500,000 cap is
$641,000. (1993) Upheld, Zdrojewski v. Murphy, 202 Mich. App.
Lexis 1566 (2002); Upheld Smith v. Botsford General Hospital
(6th Cir. 2005).
Minnesota--None.
Mississippi--$500,000 cap on non-economic damages per
plaintiff for medical liability causes of action filed against
a health care provider. (2004).
Missouri--$350,000 cap on non-economic damages per
plaintiff irrespective of the number of defendants. Law
specifies that multiple caps cannot apply to a single
defendant. The law also specifies that in a personal injury
case a spouse who claims loss of consortium shall be considered
the same plaintiff as their spouse. In wrongful death cases,
all individuals asserting a claim shall be considered a single
plaintiff. (2005); previous law upheld, Adams v. Children's
Mercy Hospital, 848 S.W. 2d 535 (1993).
Montana--$250,000 cap on non-economic damages per
occurrence. If a single incident of malpractice injures
multiple, unrelated patients, the $250,000 cap applies to each
patient and all claims deriving from injuries to that patient.
(1995, 1997).
Nebraska--$1.75 million in total damages. Health care
providers who qualify under the Hospital-Medical Liability Act
(i.e. carry minimum levels of liability insurance and pay
surcharge into excess coverage fund) shall not be liable for
more than $500,000 in total damages. Any excess damages shall
be paid from the excess coverage fund. (1976, 1984, 1986, 1992,
2003); upheld, Prendergast v. Nelson, 256 N.W.2d 657 (1977);
Gourley ex. rel Gourley v. Nebraska Methodist Health System
Inc., 265 Neb. 918, 633 N.W.2d 43 (Neb. 2003).
Nevada--$350,000 cap on non-economic damages awarded to
each plaintiff from each defendant. (2004).
New Hampshire--None; $875,000 cap on non-economic damages,
overturned, Brannigan v. Usitalso, 587 A.2d 1232 (N.H. 1991).
$250,000 cap on non-economic damages in medical malpractice,
overturned, Carson v. Maurer, 424 A.2d 825 (N.H. 1980).
New Jersey--None.
New Mexico--$600,000 cap on total damages, excluding
punitive damages and past and future medical care. Health care
providers personal liability shall not exceed $200,000, any
award in excess of this amount shall be paid by the patient
compensation fund. (1992) Upheld, Fed. Express Corp. v. United
States, 228 F. Supp. 2d 1267 (NM 2002).
New York--None.
North Carolina--None.
North Dakota--$500,000 cap on non-economic damages. (1995)
Economic damage awards in excess of $250,000 are subject to
judicial review for reasonableness. (1987); previous law struck
down as unconstitutional. Arneson v. Olson, 270 N.W.2d (N.D.
1978).
Ohio--Establishes a sliding cap on non-economic damages.
The cap shall not exceed the greater of $250,000 or three times
the plaintiff's economic loss up to a maximum of $350,000 for
each plaintiff or $500,000 per occurrence. The maximum cap will
increase to $500,000 per plaintiff or $1,000,000 per occurrence
for a claim based on either (A) a permanent and substantial
physical deformity, loss of use of a limb, or loss of a bodily
organ system, or (B) a permanent physical functional injury
that permanently prevents the injured person from being able to
independently care for self and person life sustaining
activities. (2002) Note: The Ohio Legislature's previous
attempts to enact a law with a cap on non-economic damages were
overturned by the Ohio Supreme Court. For example, $250,000-
500,000 sliding scale cap on non-economic damages, overturned,
State ex rel. Ohio Academy of Trial Lawyers v. Sheward, 86 Ohio
3d 451, 715 N.E. 2d (1999).
Oklahoma--Two caps, one for obstetric cases and care
provided in an emergency room and a separate cap for all other
medical liability causes of action. $300,000 cap on non-
economic damages for cases involving pregnancy, labor and
delivery, care provided immediately post partum. The cap also
applies in cases involving emergency-room care or medical
services provided as a follow up to such care. The judge may
lift the cap if the judge makes a finding, out of the presence
of the jury, that there is clear and convincing evidence of
negligence. The cap applies regardless of the number of parties
against whom the medical negligence action is brought. (2003).
$300,000 cap on non-economic damages for all other medical
liability causes of action. The cap applies only if the
defendant has made an offer of judgment (i.e. offer to settle)
and the amount of the verdict awarded to the plaintiff is less
than 1\1/2\ times the amount of the final offer of judgment.
The cap applies to each medical injury regardless of the number
of actions brought and adjusts annually based on any increases
in the Consumer Price Index. The cap will not apply if nine or
more members of the jury find by clear and convincing evidence
that the defendant committed negligence or if nine or more
members find by a preponderance of the evidence that the
defendant's conduct was willful or wanton. These questions,
however, will only be proposed to the jury if the judge makes a
threshold finding that there is evidence to support such
findings. (2004). Neither cap applies in wrongful death cases
because the Oklahoma Constitution specifically limits damage
limitations in those types of cases.
Oregon--None; $500,000 cap on non-economic damages,
overturned, Lakin v. Senco Products, 987 P.2d 463 (Or. 1999).
However, an earlier decision, Greist v. Phillips, 322 Or. 281,
906 P.2d 789 (1995), upheld the cap for wrongful death cases.
Pennsylvania--None. Article III sec. 18 of Pennsylvania's
Constitution prohibits limiting damages for personal injuries
or death. Punitive damages are capped at 2 times actual
damages.
Rhode Island--None.
South Carolina--$350,000 stacked cap on non-economic
damages. A claim for non-economic damages in a medical
liability action against a single health care provider or
single health care institution cannot exceed $350,000. If the
award is against more than one health care provider or
institution, the total award for non-economic damages cannot
exceed $1.05 million, with each defendant not liable for more
than $350,000. The cap applies separately to each claimant and
adjusts annually for inflation based on the Consumer Price
Index. (2005).
South Dakota--$500,000 cap on total general (non-economic)
damages. (1985, revived by 1996 court decision). Struck down
cap on total damages, revived cap on non-economic damages,
Knowles ex. rel. Knowles v. United States, 544 N.W. 2d 183 (SD
1996).
Tennessee--None.
Texas--$250,000 cap on non-economic damages for claims
against physicians and other health care providers. The cap
applies per claimant regardless of the number of defendants.
Also provides a $250,000 cap on non-economic damages awarded
against a single health care institution and a $500,000 cap on
non-economic damages if a judgment is rendered against two or
more health care institutions, with the total amount of non-
economic damages for each individual institution, not exceeding
$250,000 per claimant, irrespective of the number defendants,
causes of action, or vicarious liability theories involved. The
total amount of noneconomic damages for health care
institutions cannot exceed $500,000. Combining the liability
limits for physicians, health care providers, and institutions,
the maximum non economic damages that a claimant could recover
in a health care liability claim is capped at $750,000. (2003).
Proposition 12, a ballot initiative to amend the Texas
Constitution to specifically allow the legislature to enact
laws that place limits on non-economic damages in health care
and medical liability cases, was approved by the voters on
September 13, 2003. $500,000 cap on all civil damages for
wrongful death, indexed for inflation since 1977. The cap does
not apply to medical, hospital, and custodial care received
before judgment or required in the future. In 2002 the cap
reached approximately $1.4 million. (1977, limited by 1990
court decision). $500,000 cap on non-economic damages (adjusted
annually), overturned as applied to cases other than wrongful
death, Rose v. Doctors Hospital, 801 S.W. 2d 841 (Tex. 1990).
Utah--$450,000 cap on non-economic damages.
Vermont--None.
Virginia--$1.5 million cap on total damages for acts
occurring on or after Aug. 1, 1999. This cap is increased by
$50,000 annually beginning on or after July 1, 2000 until July
1, 2006. On July 1, 2007 and July 1, 2008 the cap is increased
by $75,000. The last increase shall be July 1, 2008. (1976,
1977, 1983, 1999, 2001) Upheld, Etheridge, et.al. v. Medical
Center Hospitals, 237 Va. 87, 376 S.E.2d 525 (Va. 1989).
Washington--None; sliding cap on non-economic damages,
overturned, Sophie v. Fiberboard Corp., 771 P.2d 711 (Wash.
1989).
West Virginia--$250,000 cap on non-economic damages per
occurrence, regardless of the number of plaintiffs and number
of defendants. The cap increases to $500,000 per occurrence,
for the following types of injuries; permanent and substantial
physical deformity, loss of use of a limb or loss of a bodily
organ system; or permanent physical or mental functional injury
that permanently prevents the injured person from being able to
independently care for himself or herself and perform life
sustaining activities. The limits only apply to defendants who
have at least $1,000,000 per occurrence in medical liability
insurance. The limits will be adjusted annually for inflation
up to $375,000 per occurrence or $750,000 for injuries that
fall within the exception. (2003). Upheld previous cap on non-
economic damages, Robinson v. Charleston Area Med. Center, 186
W.Va. 720 (1991); Verba v. Ghaphery 552 S.E. 2d 406 (W.Va.
2001).
Wisconsin--$750,000 cap on non-economic damages. (Enacted
2006). $350,000 cap on non economic medical malpractice damages
overturned as unconstitutional. Ferdon v. Wisconsin Patients
Compensation Fund, 701 N.W.2d. 440 (Wis. 2005).
Wyoming--None; constitution prohibits caps.
LIST OF STATES WHOSE STATE JUDGES HAVE ABUSED ``OPEN COURTS''
PROVISIONS TO STRIKE DOWN TORT REFORMS ENACTED BY STATE LEGISLATURES
State constitutions often contain provisions that are very
malleable in the hands of activist state judges and provide an
opportunity for a judge who perceives the judiciary to be the
dominant branch of government to easily forget the appropriate
powers of its co-equal branch, the legislature. For example, a
number of state constitutions have so-called ``open courts''
provisions. As a practical matter, they are intended to provide
citizens of a state with justice and reasonable access to the
courts. Open court provisions, however, can be stretched to
suggest that any time a legislature in any way limits any
person's rights to sue, it is violative of the ``open courts''
provision. There is no state constitutional history that
suggests this extreme result. Respect for fundamental
principles of separation of powers counsels against such an
interpretation. Nevertheless, in the area of civil justice
reform and judicial nullification of legislative efforts to
improve the system of justice, such interpretations have
spread.
The following cases are representative of those in which
state courts have used a generic state constitutional provision
providing that ``the courts shall be open'' to prohibit state
legislatures from enacting tort reform:
Jackson v. Mannesmann Demag Corp., 435 So. 2d 725 (Ala.
1983) (holding statute of repose regarding improvements to real
property violated open courts provision of state constitution)
Smith v. Dep't of Ins., 507 So. 2d 1080 (Fla. 1987)
(statute setting $450,000 limit on noneconomic damages awards
violated access to courts provision of state constitution);
Owens-Corning Fiberglass Corp. v. Corcoran, 679 So. 2d 291
(Fla. Dist. Ct. App. 1996) (holding application of former
statute of repose to latent asbestos injury violated access to
courts provision of state constitution)
Martin v. Richey, 711 N.E.2d 1273 (Ind. 1999) (finding two-
year occurrence-based statute of limitations as applied to
plaintiff was an unconstitutional violation of the privileges
and immunities clause and the open courts provision of the
Indiana Constitution); Van Dusen v. Stotts, 712 N.E.2d 491
(Ind. 1999) (holding same); Harris v. Raymond, 715 N.E.2d 388
(Ind. 1999) (holding same)
McCollum v. Sisters of Charity of Nazareth Health Corp.,
799 S.W.2d 15 (Ky. 1990) (holding five-year statute of repose
for health care liability actions violated open courts
provision of state constitution); Perkins v. N.E. Log Homes,
808 S.W.2d 809 (Ky. 1991) (holding that seven-year statute of
repose for improvements to real property violated state
constitutional prohibition against ``special legislation'' and,
according to the court, any remedial legislation would violate
provisions in the state constitution providing for open courts
and limits on the power of the legislature)
Strahler v. St. Luke's Hosp., 706 S.W.2d 7 (Mo. 1986)
(finding statute of limitations for health care liability
actions violated access to courts provision of state
constitution insofar as the statute applied to minors)
Sorrell v. Thevenir, 633 N.E.2d 504 (Ohio 1994) (holding
statute providing offset of collateral source benefits received
by plaintiff violated right to jury trial, due process, equal
protection, right to open courts, and right to meaningful
recovery provisions of state constitution); Samuels v. Coil Bar
Corp., 579 N.E.2d 558 (Ohio 1991) (finding same as applied to
wrongful death actions)
Daugaard v. Baltic Coop. Bldg. Supply Ass'n, 349 N.W.2d 419
(S.D. 1984) (holding that six-year statute of repose for
improvements to real property violated open courts provision of
state constitution)
LIST OF OTHER STATES WHOSE SUPREME COURTS
HAVE NULLIFIED LEGAL REFORMS
Alabama--Clark and Halliburton Industrial Services Division
v. Container Corp. of America, 589 So. 2d 184 (Ala. 1991)
(statute allowing for periodic payments of personal injury
awards over $150,000 held unconstitutional under state
constitution); Henderson v. Alabama Power Co., 627 So. 2d 878
(Ala. 1993) (statute setting $250,000 limit on punitive damages
awards held unconstitutional under state constitution); Moore
v. Mobile Infirmary Association, 592 So. 2d 156 (Ala. 1991)
(statute setting $400,000 limit on noneconomic damages awards
in health care liability actions held unconstitutional under
state constitution); Smith v. Schulte, 671 So. 2d 1334 (Ala.)
(1987 statute setting $1 million aggregate limit on damages
awards in health care liability actions held unconstitutional
under state constitution), cert. denied, 517 U.S. 1220 (1996).
Alaska--Turner Construction Co., Inc. v. Scales, 752 P.2d
467 (Alaska 1988) (six-year statute of repose on suits filed
against design professionals held unconstitutional under state
constitution).
Arizona--Anson v. American Motors Co., 747 P.2d 581 (Ariz.
App. 1987) (two-year statute of limitations for wrongful death
actions, with accrual at time of death, held unconstitutional
under state constitution); Barrio v. San Manuel Division
Hospital For Magma Copper Co., 692 P.2d 280 (Ariz. 1984)
(statute of limitations which required minor injured when below
age of seven to bring action for medical malpractice by the
time she reached age ten held unconstitutional under state
constitution); Hazine v. Montgomery Elevator Co., 861 P.2d 625
(Ariz. 1993) (twelve-year product liability statute of repose
held unconstitutional under state constitution); Kenyon v.
Hammer, 688 P.2d 961 (Ariz. 1984) (three-year statute of
limitations for wrongful death claim held unconstitutional
under state constitution); Smith v. Myers, 887 P.2d 541 (1994)
(periodic payments requirement found unconstitutional).
Colorado--Austin v. Litvak, 682 P.2d 41 (Colo. 1984)
(three-year statute of repose in medical malpractice actions
held unconstitutional under state constitution insofar as the
statute applied to persons whose claims were based on negligent
misdiagnosis).
Florida--Smith v. Department of Insurance, 507 So. 2d 1080
(Fla. 1987) (statute setting $450,000 limit on noneconomic
damages awards held unconstitutional under state constitution).
Georgia--Denton v. Con-Way Southern Express, Inc., 402
S.E.2d 269 (Ga. 1991) (statute authorizing admission of
collateral sources of recovery available to plaintiffs seeking
special damages for tortious injury held unconstitutional under
state constitution), and Atlanta Oculoplasty Surgery, P.C. v.
Nestlehutt, 691 S.E.2d 219 (Ga. 2010) (statute limiting awards
of noneconomic damages in medical malpractice cases to a
predetermined amount violated state constitutional right to
jury trial).
Illinois--Best v. Taylor Machine Works, Inc., 689 N.E.2d
1057 (Ill. 1997) (Civil Justice Reform Amendments of 1995's
$500,000 limit on noneconomic damages award and abolition of
joint liability held unconstitutional under state
constitution), and LeBron v. Gottlieb Memorial Hospital, 930
N.E.2d 895 (Ill. 2010) (holding unconstitutional caps on non-
economic damages and requirement of periodic payments of
damages).
Indiana--Martin v. Richey, 711 N.E.2d 1273 (Ind. 1999)
(two-year occurrence-based statute of limitations as applied to
plaintiff was held unconstitutional under state constitution);
Van Dusen v. Stotts, 712 N.E.2d 491 (Ind. 1999) (same); Harris
v. Raymond, 715 N.E.2d 388 (Ind. 1999) (same).
Kansas--Farley v. Engelken, 740 P.2d 1058 (Kan. 1987)
(abrogation of collateral source rule in health care liability
actions held unconstitutional under state constitution); Kansas
Malpractice Victims Coalition v. Bell, 757 P.2d 251 (Kan. 1988)
(Kansas Health Care Provider Insurance Availability Act
provisions setting $1 million limit on aggregate damages in
health care liability actions and provision requiring annuity
for payments for future economic loss in all health care
liability actions held unconstitutional under state
constitution); Thompson v. KFB Insurance Co., 850 P.2d 773
(Kan. 1993) (statute allowing evidence of collateral source
benefits where claimant demands judgment for damages in excess
of $150,000 held unconstitutional under state constitution).
Kentucky--McCollum v. Sisters of Charity of Nazareth Health
Corp., 799 S.W.2d 15 (Ky. 1990) (five-year statute of repose
for health care liability actions held unconstitutional under
state constitution); O'Bryan v. Hedgespeth, 892 S.W.2d 571 (Ky.
1995) (statute allowing admission of evidence of collateral
source payments in personal injury actions held
unconstitutional under state constitution); Williams v. Wilson,
972 S.W.2d 260 (Ky. 1998) (1988 punitive damages reform statute
requiring a plaintiff to show that the defendant acted with
``flagrant indifference to the rights of the plaintiff and with
a subjective awareness that such conduct will result in human
death or bodily harm'' as a predicate for punitive damages
liability held unconstitutional under state constitution).
Missouri--Strahler v. St. Luke's Hospital, 706 S.W.2d 7
(Mo. 1986) (statute of limitations for health care liability
actions held unconstitutional under state constitution insofar
as the statute applied to minors).
New Hampshire--Carson v. Maurer, 424 A.2d 825 (N.H. 1980)
(this New Hampshire Supreme Court decision is, to date, the
most sweeping repudiation of medical malpractice tort reform
legislation on state constitutional grounds. A $250,000.00
damage cap on non-economic damages was invalidated, along with
restrictions on attorneys' fees, limitations on the collateral
source rule, periodic damage payment provisions, a reduction of
the existing statutes of limitations, generally and for minors,
stricter requirements for expert testimony and notification of
suit requirements); Brannigan v. Usitalo, 587 A.2d 1232 (N.H.
1991) (statute limiting recovery for noneconomic loss to
$875,000 in personal injury actions held unconstitutional under
state constitution); Heath v. Sears, Roebuck & Co., 464 A.2d
288 (N.H. 1983) (twelve-year statute of repose and three-year
statute of limitations for product liability actions held
unconstitutional under state constitution).
North Dakota--Arneson v. Olson, 270 N.W. 2d (N.D. 1978)
(struck down $500,000 cap on total non-economic damages saying
cap constituted an unconstitutional deprivation of theright to
a jury trial); Hanson v. Williams County, 389 N.W.2d 319 (N.D.
1986) (ten-year product liability statute of repose held
unconstitutional under state constitution).
Ohio--State v. Ohio Academy of Trial Lawyers v. Sheward,
715 N.E. 2d (1999) (court overturned caps as a violation of the
due process clause; also found the entire bill unconstitutional
as a violation of the one subject rule and separation of powers
clause); Adamsky v. Buckeye Local School District, 653 N.E.2d
212 (Ohio 1995) (two-year statute of limitations for personal
injury actions against political subdivisions held
unconstitutional under state constitution, as applied to
minors); Crowe v. Owens Corning Fiberglas, 718 N.E.2d 923 (Ohio
1999) (limitation on punitive damages held unconstitutional
under state constitution); Gaines v. Preterm-Cleveland, Inc.,
514 N.E.2d 709 (Ohio 1987) (health care liability statute of
repose held unconstitutional under state constitution as
applied to adult litigants who, following discovery, did not
have adequate time to file actions); Galayda v. Lake Hospital
Systems, Inc., 644 N.E.2d 298 (Ohio 1994) (statute requiring
periodic payments of future damages awards in medical
malpractice suits held unconstitutional under state
constitution), reconsideration denied, 644 N.E.2d 1389 (Ohio),
cert. denied sub nom. Damian v. Galayda, 516 U.S. 810 (1995);
Gladon v. Greater Cleveland Regional Transit Authority, 1994 WL
78468 (Ohio App. Mar. 10, 1994) ($250,000 limit on noneconomic
damages awards held unconstitutional under state constitution),
rev'd on other grounds, 662 N.E.2d 287 (Ohio 1996); Hardy v.
VerMeulen, 512 N.E.2d 626 (Ohio 1987) (statute barring health
care liability claims brought more than four years after act or
omission constituting alleged malpractice occurred, as applied
to bar claims of health care liability plaintiffs who did not
know or could not have known of their injuries, held
unconstitutional under state constitution), cert. denied, 484
U.S. 1066 (1988); Mominee v. Scherbarth, 503 N.E.2d 717 (Ohio
1986) (statute which required health care liability actions to
be brought within one year from date cause of action accrued,
or four years from date alleged malpractice occurred, whichever
came first, held unconstitutional under state constitution
insofar as the statute applied to minors); Morris v. Savoy, 576
N.E.2d 765 (Ohio 1991) ($200,000 limit on general damages in
health care liability actions held unconstitutional under state
constitution); Schwan v. Riverside Methodist Hospital, 452
N.E.2d 1337 (Ohio 1983) (statute of limitations for health care
liability actions, as it applied to minors, held
unconstitutional under state constitution); Sorrell v.
Thevenir, 633 N.E.2d 504 (Ohio 1994) (statute providing offset
of collateral source benefits received by plaintiff held
unconstitutional under state constitution); Samuels v. Coil Bar
Corp., 579 N.E.2d 558 (Ohio Cm. Pl. 1991) (same as applied to
wrongful death actions).
Oklahoma--Woods v. Unity Health Center, Inc., 196 P.3d 529
(Ok. 2008) (court overturned cap as a special law).
Oregon--Lakin v. Senco Products, Inc., 987 P.2d 463 (Or.
1999) ($500,000 limit on noneconomic damages in personal injury
and wrongful death actions arising out of common law held
unconstitutional under state constitution).
Pennsylvania--Viadock v. Nesbitt Mem'l Hosp., 489 A.2d 240
(Pa. Super. Ct. 1985) (finding that a collateral source
modification was not severable from a medical malpractice
arbitration statute, which was invalidated as a violation of
the right to trial by jury).
Rhode Island--Kennedy v. Cumberland Engineering Co., Inc.,
471 A.2d 195 (R.I. 1984) (ten-year statute of repose for
product liability actions held unconstitutional under state
constitution).
South Dakota--Knowles v. Federal, 544 N.W.2d 183 (S.D.
1996) ($1 million aggregate limit on economic and noneconomic
damages in health care liability actions held unconstitutional
under state constitution, but more limited statute capping
noneconomic damages awards in health care liability actions at
$500,000 remained in effect).
Texas--Lucas v. Federal, 757 S.W.2d 687 (Tex. 1988)
($500,000 aggregate limit on damages in health care liability
actions held unconstitutional under state constitution); Nelson
v. Krusen, 678 S.W.2d 918 (Tex. 1984) (two-year statute of
limitations for medical malpractice actions held
unconstitutional under state constitution).
Utah--Berry v. Beech Aircraft Corp., 717 P.2d 670 (Utah
1985) (statute of repose barring product liability claims six
years after of purchase or ten years after date of manufacture
of product held unconstitutional under state constitution); Lee
v. Gaufin, 867 P.2d 572 (Utah 1993) (provision of Utah Health
Care Malpractice Act subjecting minors to two-year statute of
limitations and four-year statute of repose held
unconstitutional under state constitution).
Washington--Sofie v. Fibreboard Corp., 771 P.2d 711 (Wash.
1989) (variable limit on noneconomic damages awards held
unconstitutional under state constitution).
Wisconsin--Ferdon v. Wisconsin Patient Compensation
Fund,701 N.W.2d. 440 (Wis. 2005) (court held that cap on non-
economic damages violates the equal protection clause); Kohnke
v. St. Paul Fire & Marine Insurance Co., 410 N.W.2d 585 (Wis.
App. 1987) (medical malpractice statute of limitations held
unconstitutional under state constitution), aff'd on other
grounds, 424 N.W.2d 191 (Wis. 1988).
Wyoming--Squillace v. Kelley, 990 P. 2d 497 (Wy. 1999)
(striking down all legislative reforms on grounds they are an
unconstitutional infringement on the judiciary's exclusive
power to control practice and procedure in the state's courts).
LIMITS ON ATTORNEYS FEES MEAN MORE MONEY GOES TO VICTIMS
The HEALTH Act's limits on attorneys' fees--the same as
those provided for in California's law--will reduce lawyers'
incentives to bring frivolous lawsuits while allowing more
money to go directly to injured patients.
Currently, limited resources can either fund lawyers or
they can fund patients in our health care system. Under the
HEALTH Act, the larger a victim's demonstrable, real-life,
quantifiable economic damages are, the more they will receive
because lawyers will be allowed to take only 15% of awards over
$600,000.
Standard attorney contingency fee agreements allow lawyers
to take one-third--a full 33.3%--of their client's awards, so
victims are left with only 66%. The HEALTH Act would allow
victims to keep roughly 75% of awards under $600,000, and 85%
of awards over $600,000. Under the HEALTH Act, victims who
demonstrate large losses get more, and lawyers get less.
THE HEALTH ACT ALLOWS UNLIMITED ECONOMIC DAMAGES
Nothing in the HEALTH Act denies injured plaintiffs the
ability to obtain adequate redress, including compensation for
100% of their economic losses (essentially anything to which a
receipt can be attached), including their medical costs, the
costs of pain relief medication, their lost wages, their future
lost wages, rehabilitation costs, and any other economic out of
pocket loss suffered as the result of a health care injury.
``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 and lifetime rehabilitation
care, and anything to which a receipt can be attached. Indeed,
the terms ``noneconomic damages'' and ``pain and suffering
damages'' (which the Federal legislation limits to $250,000
unless a state law provides for a higher or lower limit) are
misnomers: only ``economic damages''--which the Federal
legislation does not limit--can be used to pay for drugs and
services that actually reduce pain.
Consequently, the HEALTH Act does nothing to hurt women and
children. Any lawyer can easily produce charts proving the
economic value of a stay-at-home-mom's services. Anything
necessary to replace those services are economic damages that
the HEALTH Act does not limit one bit. Similarly, the future
income lost by an injured child constitutes economic damages
that are easily proved and which would be fully available from
responsible parties under the HEALTH Act.
The following are some recent, very large awards to victims
of medical malpractice under California's legal reforms, which
cap non-economic damages at $250,000, but which do not cap
quantifiable economic damages. The HEALTH Act is modeled on
California's legal reform. These cases show that reasonable
legal reforms such as those in the HEALTH Act still allow for
very large, multi-million dollar awards to deserving victims.
Also, loses due to disfigurement can be economically
quantified. The Veterans Administration, for example, has a
rating schedule that quantifies the economic costs of
disfigurement.\142\
---------------------------------------------------------------------------
\142\See L.E. Johnson, Robert D. Ley, and Paul T. Benshoof,
``Estimating Economic Loss for a Facially Disfigured Minor: A Case
Study,'' Journal of Legal Economics (July, 1993) (The V.A. rating
schedule was obtained from a Veterans Benefits Office at the V.A.
Center in St. Paul, Minnesota after being advised that the V.A.
disability ratings are for economic loss exclusively. The percentage
disability ratings contained in the V.A. S-R-D are based on case study
data on economic loss from facial disfigurement. This data was
initially collected during World War II by the V.A. and has been
updated from that time . . . The first component of economic loss is
termed social loss. Social loss refers to the additional cost of job
search which results from facial disfigurement. The second component of
economic loss is what the V.A. terms industrial loss. Industrial loss
refers to lost income because of lost earning capacity.'').
August 2010, Contra Costa County
$5,500,000
February 2010, Riverside County
$16,500,000
February 2010, Los Angeles County
$12,000,000
November 2009, Los Angeles County
$5,000,000
October 2009, Sacramento County
$5,750,000
September 2009, Los Angeles County
$7,300,000
January 2009, San Diego County
$16,000,000
September 2008, Los Angeles County
$9,000,000
April 2008, San Francisco County
$5,100,000
July 2007, Los Angeles County
$96,400,000
June 2007, Orange County
$11,700,000
May 2007, San Diego County
$15,700,000
THE KEY TO REDUCING HEALTH CARE COSTS IS A FIRM CAP ON NONECONOMIC
DAMAGES
Caps on noneconomic damages are essential to the success of
the HEALTH Act's reforms. Indeed, the savings of $54 billion
over ten years that CBO concluded would be significantly
diminished if the cap were raised over time. The key to the
success of the legal reforms in California is its cap on
noneconomic damages at $250,000, which is not indexed to
inflation. The recent reforms in Texas also do not index the
caps to inflation. The California cap has stood the test of
time and remains an effective check on medical professional
liability rates precisely because it was not indexed to
inflation back in 1975. What may have been described by some as
an arbitrary figure in 1975 has become the keystone of the only
proven, long-term, legislative solution to the current crisis
in access to medical care. A 2010 study showed that doubling
California's cap on noneconomic damages would cost that state
between $1.3 and $2.4 billion in employee and retiree benefits
over a 10-year period.\143\ If one extrapolates from that
number, it becomes clear that linking H.R. 5's cap on
noneconomic damages to the Consumer Price Index, or similarly
linking it to inflation, would cost Federal taxpayers around
$14 billion or more.
---------------------------------------------------------------------------
\143\C. Paul Wazzan, Ph.D. and Dawn Eash, M.S., ``Estimated
Increases in State of California Employee and Retiree Costs Caused by
Doubling the MICRA Cap'' (June 9, 2010) at 3.
---------------------------------------------------------------------------
The Consumer Price Index and noneconomic damages are also
apples and oranges. ``Pain and suffering'' cannot be measured,
and there is no consumer price index for ``pain and
suffering.'' However, quantifiable economic damages are not
limited by the HEALTH Act, and because those damages can be
measured, they can and are adjusted upward in future years to
account for inflationary effects on economic goods and services
that can be quantified.
CONGRESS SHOULD ENACT A FAIR SHARE RULE
Respect for the law is fostered when it is fair and just
and punishments are proportionate to the wrongs committed. As
Thomas Jefferson noted, ``if the punishment were only
proportional to the injury, men would feel that their
inclination as well as their duty to see the laws
observed.''\144\
---------------------------------------------------------------------------
\144\Thomas Jefferson, A Bill for Proportioning Crimes and
Punishments in Cases Heretofore Capital, in 2 The Papers of Thomas
Jefferson 492, 493 (Julian P. Boyd ed., 1950).
---------------------------------------------------------------------------
The rule of joint liability, commonly called joint and
several liability, provides that when two or more persons
engage in conduct that might subject them to individual
liability and their conduct produces a single injury, each
defendant will be liable for the total amount of damages.\145\
Joint liability is unfair because it puts full responsibility
on those who may have been only marginally at fault.\146\
---------------------------------------------------------------------------
\145\See Coney v. J.L.G. Indus., Inc., 454 N.E.2d 197 (Ill. 1983).
\146\For example, in Walt Disney World Co. v. Wood, 515 So.2d 198
(Fla. 1987), Disney was required to pay an entire damages award, even
though it was found only 1% at fault for the claimant's harm.
---------------------------------------------------------------------------
Relevant to the ``fair share'' rule in the HEALTH Act are
Senator Lieberman's observations that
There is a concept, joint and several liability,
started out in the law as a way of proportioning
responsibility when an accident was caused by a number
of different parties working together in a way that
caused negligence, and often it was not clear which one
actually caused it. So they said everybody could be
held liable regardless of the percentage of negligence.
It now has grown to a point where what it really means
is that somebody who is not liable, or liable very
little, if they happen to have deep pockets, they can
be held fully liable. That is the wrong message to
send. . . . If you hurt somebody, you have to pay. If
you do not, you should not have to pay. What kind of
cynicism is developed when somebody who did little or
no wrong ends up having to pay the whole bill because
somebody else slipped up.\147\
---------------------------------------------------------------------------
\147\Senator Lieberman, floor statement on the Common Sense Product
Liability and Legal Reform Act (April 27, 1995).
Joint and several liability, although motivated by a desire
to insure that plaintiffs are made whole, leads to a search by
plaintiffs' attorneys for ``deep pockets'' and to a
proliferation of lawsuits against those minimally liable or not
liable at all. The HEALTH Act, by providing for a ``fair
share'' rule that apportions damages in proportion to a
defendant's degree of fault, prevents unjust situations in
which hospitals can be forced to pay for all damages resulting
from an injury even when the hospital is minimally at fault.
For example, say a drug dealer staggers into the emergency room
with a gunshot wound after a deal goes bad. The surgeon who
works on him does the best he can, but it is not perfect. The
drug dealer sues.\148\ The jury finds the drug dealer
responsible for the vast majority of his own injuries, but it
also finds the hospital 1% responsible because the physician
was fatigued after working too long. Today the hospital can be
made to pay 100% of the damages if no other defendant has the
means to pay their share of the damages. That is unfair.
---------------------------------------------------------------------------
\148\This hypothetical is not fanciful. See Ray Flanagan, ``After
Stabbing Son, Mom Sues Doctors,'' The Scranton Time Tribune (May 29,
2002) (``Mrs. Taylor and her husband, Brian, are suing . . . the
obstetricians who treated her in the months before she exploded in
violence that left her son, Zachary, with two punctured lungs, a
severed jugular vein and scalp wounds on July 14, 2000 . . . They
accuse the doctors and their employers of not adequately responding as
she became more psychotic, delusional and depressed as the end of her
pregnancy neared.'').
---------------------------------------------------------------------------
The Volunteer Protection Act of 1997\149\ abolished joint
liability for non-economic damages for volunteers of nonprofit
organizations. That law was overwhelmingly supported by a
bipartisan majority of Congress.\150\ Joint liability also
brought about a serious public health crisis that critically
threatened the availability of implantable medical devices,
such as pacemakers, heart valves, artificial blood vessels, and
hip and knee joints. Companies had ceased supplying raw
materials and component parts to medical implant manufacturers
because they found the costs of responding to litigation far
exceeded potential sales revenues, even though courts were not
finding the suppliers liable. Congress responded to the crisis
and enacted legislation, the Biomaterials Access Assurance Act
of 1998,\151\ that allows medical device suppliers to obtain
early dismissal, without extensive discovery or other legal
costs, in certain tort suits involving finished medical
implants.
---------------------------------------------------------------------------
\149\Pub. L. No. 105-19, 111 Stat. 218.
\150\See Dan Carney, Volunteer Liability Limit Heads to President,
Cong. Q., May 24, 1997, at 1199 (``The measure passed the House on May
21 by a vote of 390-35, and the Senate cleared it by voice vote later
that day. An earlier Senate version passed May 1 by a vote of 99-1.'')
(omitting references to bill numbers).
\151\P.L. No. 105-230, 21 U.S.C. Sec. Sec. 1601-1606.
---------------------------------------------------------------------------
As Senator Lieberman has observed,
Consumers are the ones who suffer when valuable
innovations do not occur or when needed products, like
life-saving medical devices, do not come to market or
are not available in our country any longer because no
one will supply the necessary raw materials. The
inadequacies and excesses of our product liability
system are quite literally matters of life and death
for some people whose lives depend on medical devices
that may no longer be available in the United
States.\152\
---------------------------------------------------------------------------
\152\Senator Lieberman, floor statement on the Common Sense Product
Liability and Legal Reform Act (April 27, 1995).
---------------------------------------------------------------------------
THE HEALTH ACT DOES NOT CAP PUNITIVE DAMAGES,
BUT DOES INCLUDE REASONABLE GUIDELINES FOR THEIR USE
The United States Supreme Court has observed that punitive
damages have ``run wild'' in the United States, jeopardizing
fundamental constitutional rights.\153\ The Supreme Court has
also emphasized that ``the impact of [a punitive damages award]
is unpredictable and potentially substantial.''\154\
---------------------------------------------------------------------------
\153\Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1, 18 (1991).
See also Honda Motor Co., Ltd. v. Oberg, 512 U.S. 415, 432 (1994)
(stating that punitive damages ``pose an acute danger of arbitrary
deprivation of property,'' raising serious due process concerns).
\154\International Bhd. of Elec. Workers v. Foust, 442 U.S. 42, 50
(1979).
---------------------------------------------------------------------------
The HEALTH Act does not cap punitive damages. Rather, it
includes reasonable guidelines that would govern their award.
Under these guidelines, a punitive damages award could not
exceed the greater of $250,000, or two times the amount of
economic damages that are awarded (and economic damages under
the HEALTH Act are not limited at all). Federal legislation
should put reasonable parameters on punitive damages to make
the punishment fit the offense.\155\ Proportionality has been
an important part of the United States Supreme Court's
consideration of the validity of criminal punishment.\156\ Even
serious crimes such as larceny, robbery, and arson have
sentences defined with a maximum set forth in a statute.\157\
As former Supreme Court Justice Lewis Powell wrote, ``It is
long past time to bring the law of punitive damages into
conformity with our notions of just punishment.''\158\ Under
the HEALTH Act, the larger the economic losses suffered by the
victim, the larger the punishment can be.
---------------------------------------------------------------------------
\155\Congress included a cap on punitive damages for individuals
and small businesses in the Year 2000 Readiness and Responsibility Act,
Pub. L. 106-37, 113 Stat. 135 (1999). The ``Y2K Act'' established
procedures and legal standards for lawsuits stemming from Year 2000
date-related computer failures.
\156\See Solem v. Helm, 463 U.S. 277, 284 (1983) (``The principle
that a punishment should be proportionate to the crime is deeply rooted
and frequently repeated in common-law jurisprudence''); Weems. v.
United States, 217 U.S. 349, 366-67 (1910) (it is ``a precept of the
fundamental law'' as well as ``a precept of justice that punishment
should be graduated and proportioned to the offense'').
\157\Some examples of Federal criminal fines, even for particularly
egregious crimes, do not exceed $250,000 and include the following:
tampering with consumer products ($250,000 if death results), U.S.
Sentencing Guidelines Manual Sec. Sec. 2N1.1, 5E1.2 (1998); assault on
the President ($30,000), U.S. Sentencing Guidelines Manual
Sec. Sec. 2A6.1, 5E1.2 (1998); bank robbery ($75,000), U.S. Sentencing
Guidelines Manual Sec. Sec. 2B3.1, 5E1.2; and sexual exploitation of
children ($100,000), U.S. Sentencing Guidelines Manual Sec. Sec. 2G2,
5E1.2 (1998). See generally Jonathan Kagan, Comment, Toward a Uniform
Application of Punishment: Using the Federal Sentencing Guidelines as a
Model for Punitive Damages Reform, 40 U.C.L.A. L. Rev. 753 (1993).
\158\Lewis Powell, ``The Bizarre Results of Punitive Damages,''
Wall Street Journal (March 8, 1995), at A21.
---------------------------------------------------------------------------
Ten states base punitive damages awards on a similar
formula (AL, AK, CO, CT, FL, IN, NJ, NC, ND, TX). At the state
level, limits on punitive damages awards exist in a number of
states.\159\
---------------------------------------------------------------------------
\159\See Ala. Code Sec. 6-11-21 (1999); Alaska Admin. Code tit. 58
Sec. 9.17.020(f)-(h); Colo. Rev. Stat. Sec. 13-21-102(1)(a); Conn. Gen.
Stat. Sec. 52-240b; Fla. Stat. Ann. Sec. 768.73(1)(b); Ind. Code Ann.
Sec. 34-51-3-4; Kan. Stat. Ann. Sec. 60-3701; N.J. Stat. Ann.
Sec. 2A:15-5.14; N.C. Gen. Stat. Sec. 1D-25; N.D. Cent. Code
Sec. 32.03.2-11(4); Okla. Stat. tit. 23 Sec. 9.1; Tex. Civ. Prac. &
Rem. Code Ann. Sec. 41.008; Va. Code Ann. Sec. 8.01-38.1.
---------------------------------------------------------------------------
Academic groups have also recommended limiting punitive
damages to prevent excessive punitive damages awards.\160\
---------------------------------------------------------------------------
\160\See American Bar Association, Special Committee on Punitive
Damages of the American Bar Association, Section on Litigation,
Punitive Damages: A Constructive Examination (1986) at 64-66
(recommending that punitive damages awards in excess of three-to-one
ratio to compensatory damages be considered presumptively
``excessive''); American College of Trial Lawyers, Report on Punitive
Damages of the Committee on Special Problems in the Administration of
Justice 15-16 (1989), at 15 (proposing that punitive damages be awarded
up to two times a plaintiff's compensatory damages or $250,000,
whichever is greater); American Law Institute, 2 Enterprise
Responsibility for Personal Injury--Reporters' Study (1991), at 258-59
(endorsing concept of ratio coupled with alternative monetary ceiling).
---------------------------------------------------------------------------
Opponents of punitive damages reform argue that changes in
the law are not needed because large punitive damages awards
are often reduced on appeal. However, the practical reality is
that the impact of potentially infinite punitive damages
stretches beyond an actual award. As Yale law professor George
Priest has observed: ``[T]he availability of unlimited punitive
damages affects the 95% to 98% of cases that settle out of
court prior to trial. It is obvious and indisputable that a
punitive damages claim increases the magnitude of the ultimate
settlement and, indeed, affects the entire settlement process,
increasing the likelihood of litigation.''\161\
---------------------------------------------------------------------------
\161\George L. Priest, Punitive Damages Reform: The Case of
Alabama, 56 La. L. Rev. 825, 830 (1996).
---------------------------------------------------------------------------
It has also been argued that unlimited punitive damages are
needed to police wrongdoing. However, there is no credible
evidence that the behavior of profit-making enterprises is less
safe in either those states that have set limits on punitive
damages or in the six states--Louisiana, Nebraska, Washington,
New Hampshire, Massachusetts, and Michigan--that do not permit
punitive damages at all.\162\ Furthermore, plaintiffs in these
six states have no more difficulty obtaining legal
representation than in those states where punitive damages are
potentially limitless.
---------------------------------------------------------------------------
\162\See W. Kip Viscusi, Punitive Damages: The Social Costs of
Punitive Damages Against Corporations In Environmental and Safety
Torts, 87 Geo. L.J. 285, 294 (1998).
---------------------------------------------------------------------------
Regarding reasonable guidelines for punitive damages,
Senator Lieberman has supported an amendment providing that
``punitive damages, which have been much discussed here and are
an essential part of the continued bullying and bluffing that
goes on in our tort system--be limited to $250,000 or three
times economic damages.''\163\ The HEALTH Act limits punitive
damages to two times economic damages.
---------------------------------------------------------------------------
\163\Senator Lieberman, floor statement on the Common Sense Product
Liability and Legal Reform Act (April 27, 1995).
---------------------------------------------------------------------------
THE ``CLEAR AND CONVINCING'' RULE IS APPROPRIATELY APPLIED
TO CLAIMS FOR QUASI-CRIMINAL PUNITIVE DAMAGES
The HEALTH Act provides that punitive damages may be
awarded against a person in a health care lawsuit only if it is
proven by clear and convincing evidence that such person acted
with malicious intent to injure the claimant, or that such
person deliberately failed to avoid unnecessary injury that
such person knew the claimant was substantially certain to
suffer. The ``clear and convincing evidence'' burden of proof
standard is appropriate because it reflects the quasi-criminal
nature of punitive damages. Such a standard takes a middle
ground between the burden of proof standard ordinarily used in
civil cases--that is, proof by a ``preponderance of the
evidence''--and the criminal law standard--that is, proof
``beyond a reasonable doubt.''
The ``clear and convincing evidence'' standard is the law
in twenty-nine states and the District of Columbia\164\ and it
has been recommended by the principal academic groups that have
analyzed the law of punitive damages over the past 15 years,
including the American Bar Association, the American College of
Trial Lawyers, and the National Conference of Commissioners on
Uniform State Laws.\165\ The Supreme Court has also
specifically endorsed the ``clear and convincing evidence''
standard in punitive damages cases.\166\ There is also support
for the ``clear and convincing evidence'' standard at the
Federal level. The Volunteer Protection Act of 1997,\167\ which
was enacted with strong bipartisan support, requires ``clear
and convincing evidence'' of punitive damages liability before
punitive damages can be imposed against volunteers of nonprofit
organizations.
---------------------------------------------------------------------------
\164\See Ala. Code Sec. 6-11-20; Alaska Stat. Sec. 09.17.020; Cal.
Civ. Code Sec. 3294(a); Fla. Stat. ch. 768.73; Ga. Code Ann. Sec. 51-
12-5.1; Iowa Code Ann. Sec. 668A.1; Kan. Stat. Ann. Sec. 60-3701(c);
Ky. Rev. Stat. Ann. Sec. 411.184(2); Minn. Stat. Ann. Sec. 549.20;
Miss. Code Ann. Sec. 11-1-65(1)(a); Mont. Code Ann. Sec. 27-1-221(5);
N.J. Stat. Ann. Sec. 2A:15-5.12; Nev. Rev. Stat. Ann. Sec. 42-005(1);
N.C. Gen. Stat. 10-15(b); N.D. Cent. Code Sec. 32-03.2-11; Ohio Rev.
Code Ann. Sec. 2307.80(A); Okla. Stat. Ann. tit. 23, Sec. 9.1; Or. Rev.
Stat. Sec. 18.537; S.C. Code Ann. Sec. 15-33-135; S.D. Codified Laws
Ann. Sec. 21-1-4.1; Tex. Civ. Prac. & Rem. Code Sec. 41.003; Utah Code
Ann. Sec. 78-18-1; Linthicum v. Nationwide Life Ins. Co., 723 P.2d 675
(Ariz. 1986); Jonathan Woodner, Co. v. Breeden, 665 A.2d 929 (D.C.
1995); Masaki v. General Motors Corp., 780 P.2d 566 (Haw. 1989);
Travelers Indem. Co. v. Armstrong, 442 N.E.2d 349 (Ind. 1982); Tuttel
v. Raymond, 494 A.2d 1353 (Me. 1985); Owens-Illinois v. Zenobia, 601
A.2d 633 (Md. 1992); Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104
(Mo. 1996); Hodges v. S.C. Toof & Co., 833 S.W.2d 896 (Tenn. 1992);
Wangen v. Ford Motor Co., 294 N.W.2d 437 (Wis. 1980). One state,
Colorado, requires proof ``beyond a reasonable doubt'' in punitive
damages cases. See Colo. Rev. Stat. Sec. 13-25-127(2).
\165\See American Bar Association, Special Committee on Punitive
Damages of the American Bar Association, Section on Litigation,
Punitive Damages: A Constructive Examination 19 (1986); American
College of Trial Lawyers, Report on Punitive Damages of the Committee
on Special Problems in the Administration of Justice 15-16 (1989);
National Conference Of Commissioners On Uniform State Laws, Uniform Law
Commissioners' Model Punitive Damages Act Sec. 5 (approved on July18,
1996); see also American Law Institute, 2 Enterprise Responsibility for
Personal Injury--Reporters' Study 248-49 (1991).
\166\See Pacific Mutual Life Ins. Co. v. Haslip, 499 U.S. 1, 23
n.11 (1991) (stating that ``[t]here is much to be said in favor of a
state's requiring, as many do . . . a standard of `clear and convincing
evidence''').
\167\Pub. L. No. 105-19, 111 Stat. 218.
---------------------------------------------------------------------------
BIFURCATED PROCEDURES FOR CONSIDERING PUNITIVE DAMAGES
PREVENTS UNFAIR AND PREJUDICIAL AWARDS
The HEALTH Act also contains a procedural reform called
``bifurcation.'' Under such a procedure, at either party's
request, a trial would be divided so that the proceedings on
punitive damages would be separate from and subsequent to the
proceedings on compensatory damages. This procedure would
achieve judicial economy by having the same jury determine both
compensatory damages and punitive damages issues.
Bifurcated trials are fair because they prevent evidence
that is highly prejudicial and relevant only to the issue of
punishment from being heard by jurors and improperly considered
when they are determining underlying liability. For example,
plaintiffs' lawyers routinely introduce evidence of a company's
net worth. Although a jury is often instructed to ignore such
evidence unless it decides to punish the defendant, this is
very difficult as a practical matter for jurors to do. The net
result may be that jurors overlook key issues regarding whether
a defendant is liable for compensatory damages and make an
award simply because they believe the defendant can afford to
pay it. Bifurcation would help prevent that unfair result
because evidence of the defendant's net worth would be
inadmissible in the first, compensatory damages phase of the
case. Bifurcation also helps jurors compartmentalize a trial,
allowing them to more easily separate the burden of proof that
is required for compensatory damage awards--that is, proof by a
preponderance of the evidence--from a higher burden of proof
for punitive damages, that is, proof by clear and convincing
evidence.
Bifurcation of punitive damages trials is supported by the
American Bar Association, the American College of Trial
Lawyers, and the National Conference of Commissioners on
Uniform State Laws, among other well-known organizations.\168\
---------------------------------------------------------------------------
\168\See American Bar Association, Special Committee on Punitive
Damages of the American Bar Association, Section on Litigation,
Punitive Damages: A Constructive Examination (1986) at 19; American
College of Trial Lawyers, Report on Punitive Damages of the Committee
on Special Problems in the Administration of Justice (1989) at 18-19;
National Conference Of Commissioners On Uniform State Laws, Uniform Law
Commissioners' Model Punitive Damages Act Sec. 5 (approved on July 18,
1996) at Sec. 11; American Law Institute, 2 Enterprise Responsibility
for Personal Injury--Reporters' Study 248-49 (1991) at 255 n.41.
---------------------------------------------------------------------------
CONGRESS SHOULD ENACT A SAFE HARBOR FROM PUNITIVE DAMAGES FOR FDA
COMPLIANCE
Litigation is threatening the viability of the life-saving
drug industry.\169\ To help encourage new drug development and
contain the costs of life-saving drugs, the HEALTH Act contains
a safe harbor from punitive damages for defendants whose drugs
or medical products comply with rigorous regulations.
---------------------------------------------------------------------------
\169\See Michael Freedman, ``The Tort Mess'' Forbes (May 13, 2002)
(``The pharmaceutical industry has always been a ripe target for suits.
The difference nowadays is simply that the dollar amounts have gotten
bigger . . . If a drug saves 100 lives for every one it loses, someone
who faces certain death should not hesitate to use it. But what happens
if the tort system says every death must be paid for? The average
payout on a wrongful death claim increased from $1 million in 1994 to
$5.7 million in 2000 (the most recent data point available), according
to Jury Verdict Research. To merely break even, the drug's maker would
have to charge $57,000 for every dose. It can't get away with that. So
a potential wonder drug may never see the light of day. A study in the
Journal of the American Medical Association estimates that 100,000
people die each year in the U.S. from drug-related deaths. If the
families of each sued and won that average of $5.7 million, total
liability would hit $570 billion. That's twice the combined revenues of
the top 12 drug companies . . . Steven Garber, a researcher at the Rand
Research Institute for Civil Justice, says drug companies are willing
to take on the risk of lawsuits in marketing blockbusters like Viagra
and Vioxx. But in other cases the chance of liability is too great.
Garber says companies once stopped making new products for use during
pregnancy because of the high risk of birth defects. Companies also
limit research on orphan drugs--those that cure rare, often fatal
illnesses--because the potential tort liability outweighs the profit
potential.'').
---------------------------------------------------------------------------
FDA standards and regulations are rigorous. The regulatory
objectives of the Food, Drug, and Cosmetics Act (``FDCA'') are
to ensure that the manufacturer shares all risk information
with the FDA so that the agency may make informed risk-benefit
judgments about the utility of a pharmaceutical. These
judgments occur throughout the life of the drug. The agency
determines which drugs reach the market and the labeling for
those that do. The receipt of new safety information can lead
the agency, after holding a hearing, to withdraw approval for
marketing of a drug.\170\ The Secretary of Health and Human
Services also has the authority to order the withdrawal of
marketing approval without a hearing where there appears to be
an ``imminent hazard to public health.''\171\
---------------------------------------------------------------------------
\170\See 21 U.S.C. Sec. 355(e)(1); 21 C.F.R. Sec. 5.82.
\171\See 21 U.S.C. Sec. 355(e).
---------------------------------------------------------------------------
To obtain FDA approval for marketing a prescription drug, a
pharmaceutical applicant must generate substantial pre-
marketing safety and efficacy information through human
clinical trials. The FDA must ensure that the proposed new drug
complies with the FDCA mandate that safety be established and
that ``substantial evidence'' of efficacy be demonstrated for
the drug's proposed uses.\172\ The FDA review process often
takes years of evaluation after the NDA's submission.
Ultimately, approval by the FDA reflects a risk-benefit
judgment that the product will enhance public health. The
entire NDA process is a lengthy one, typically taking between
five and seven years to complete.
---------------------------------------------------------------------------
\172\See 21 U.S.C. Sec. 355(d) (1988) (``[S]ubstantial evidence''
means evidence consisting of adequate and well-controlled
investigations, including clinical investigations, by experts qualified
. . . to evaluate the effectiveness of the drug involved, on the basis
of which it could fairly and responsibly be concluded by such experts
that the drug will have the effect it purports or is represented to
have under the conditions of use prescribed, recommended, or suggested
in the labeling or proposed labeling thereof.'').
---------------------------------------------------------------------------
The FDCA and its implementing regulations ensure that a
manufacturer shares risk information with the FDA even after
the product has been marketed.\173\ Post-marketing surveillance
consists of two primary components: reports of individual
adverse experiences and epidemiologic studies. Serious
reactions must be reported within fifteen working days of
receipt of the information.\174\ A comprehensive, post-
marketing system of reporting and record-keeping requirements
ensures that the manufacturer reports adverse drug experiences
discovered in clinical, epidemiological, or surveillance
studies, through review of the medical literature, or
otherwise.\175\ Post-marketing reporting obligations include
the disclosure of data regarding adverse reactions outside the
United States.
---------------------------------------------------------------------------
\173\See 21 C.F.R. Sec. 314.80.
\174\See 21 C.F.R. Sec. 314.80(c)(1).
\175\See 21 C.F.R. Sec. Sec. 310.303(a), 314.80(c).
---------------------------------------------------------------------------
A few states have already specifically focused on
pharmaceuticals and punitive damages and statutorily provide an
FDA regulatory compliance defense against such damages.\176\
---------------------------------------------------------------------------
\176\The five states that have proscribed punitive damages where
the manufacturer has complied with the FDCA are Arizona,
Az.Rev.State.Ann. Sec. 12-701; New Jersey, N.J.Sata.Ann. Sec. 2A:58C-
5(c); Ohio, Ohio.Rev.Code Ann. Sec. 2307.80(c); Oregon, Or.Rev.Stat.
Sec. 30.927; and Utah, Utah Code Ann. Sec. 78-18-2.
---------------------------------------------------------------------------
Research has also confirmed that the reason drug prices
generally are so high in the United States compared to Canada,
for example, is because of the much larger liability risks
drugs are exposed to in this country. One researcher, for
example, has concluded that
A large part of the observed variation in the price
differential [of drugs in the United States and Canada]
is attributable to anticipated liability cost, and
liability effects explain virtually all of the very big
price differences observed. . . . [T]his work indicates
that liability costs must have a role in any complete
explanation of international price differences. The
fact that liability risk plays such a vital role in the
model implies that any study of international drug
pricing which ignores differences in tort law
environments across countries is seriously flawed. The
size of these effects is simply too large to
ignore.\177\
---------------------------------------------------------------------------
\177\Richard Manning, ``Products Liability and Prescription Drug
Prices in Canada and the United States,'' 40 Journal of Law and
Economics 203, 234 (1997).
Relevant to the HEALTH Act's safe harbor from punitive
damages for FDA-approved products is Senator Lieberman's
observation that ``Consumers are the ones who suffer when
valuable innovations do not occur or when needed products, like
life-saving medical devices, do not come to market or are not
available in our country any longer because no one will supply
the necessary raw materials. The inadequacies and excesses of
our product liability system are quite literally matters of
life and death for some people whose lives depend on medical
devices that may no longer be available in the United
States.''\178\
---------------------------------------------------------------------------
\178\Senator Lieberman, floor statement on the Common Sense Product
Liability and Legal Reform Act (April 27, 1995).
---------------------------------------------------------------------------
STATUTE OF LIMITATIONS
Statutes of limitation define the time period following an
injury in which a suit must be brought, in order to protect
defendants from the prejudice of stale claims by requiring
trials while the best evidence is still available. The best way
to allow every patient his or her day in court while preventing
prejudice to health care providers is to codify a reasonable
statute of limitations, which the HEALTH Act does.
The HEALTH Act provides that a medical malpractice lawsuit
must be filed no later than one year after a person discovers
an injury, or within three years at the latest. The HEALTH Act
makes an exception for minors under the age of 6, extending the
time within a suit must be filed to the longer of 3 years or
the date on which the minor reaches the age of 8. These
provisions are based on California's MICRA law.\179\ The HEALTH
Act's statute of limitations provisions are designed to
protect, for example, OB-GYN's, who should not have to worry
about being sued a decade or more after they've delivered a
baby. Also, like the HEALTH Act, California's MICRA law
includes no exception for latent injuries.
---------------------------------------------------------------------------
\179\See Cal.C.C.P. Sec. 340.5.
---------------------------------------------------------------------------
STATES ARE FREE TO ALLOW FOR HIGHER AWARDS
UNDER THE HEALTH ACT
States remain free to define how quantifiable economic
losses are calculated in any case. Under the HEALTH Act, the
only damages that would be limited would be those for
unquantifiable ``pain and suffering'' damages, and ``pain and
suffering'' damages could be up to $250,000. Also available
under the HEALTH Act are punitive damages up to twice the
amount of economic damages awarded. Further, the HEALTH Act
saves from preemption any state law that limits noneconomic or
punitive damages at a specific amount higher than the limits
provided for in the HEALTH Act. That means that if a state law
limited noneconomic damages to $10 billion, that state law
would govern, even under the HEALTH Act.
Hearings
The Committee on the Judiciary held an oversight hearing on
the need for medical liability reform on January 20, 2011.
Testimony was received from Dr. Stuart L. Weinstein, Health
Coalition on Liability and Access; Joanne Doroshow, Executive
Director, Center for Justice & Democracy; and Dr. Ardis Hoven,
Chairwoman, American Medical Association Board of Trustees.
Committee Consideration
On February 16, 2011, the Committee met in open session and
ordered the bill H.R. 5 favorably reported with an amendment,
by a roll call vote of 18 to 15, 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 advises that the
following roll call votes occurred during the Committee's
consideration of H.R. 5:
1. An amendment by Mr. Conyers to exempt claims based on
intentional tort liability from the bill's coverage. Defeated
10 to 19.
ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly....................................................
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot......................................................
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz....................................................
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson.....................................................
Mr. Pierluisi...................................................
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 10 19
----------------------------------------------------------------------------------------------------------------
2. An amendment by Ms. Waters to exclude medical products
that are defective as result of negligence in the manufacture
or distribution of the product from the bill's punitive damage
exemption for products that comply with FDA Standards. Defeated
11 to 16.
ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot......................................................
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz....................................................
Mr. Reed........................................................ X
Mr. Griffin.....................................................
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle......................................................
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 11 16
----------------------------------------------------------------------------------------------------------------
3. An amendment by Mr. Nadler to add restrictions on when
judges may issue protective orders and the sealing of cases and
settlements. Defeated 10 to 15.
ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot......................................................
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz....................................................
Mr. Reed........................................................ X
Mr. Griffin.....................................................
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle......................................................
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 10 15
----------------------------------------------------------------------------------------------------------------
4. An amendment by Ms. Sanchez to exclude lawsuits against
nursing homes from the bill's limits on noneconomic and
punitive damages. Defeated 11 to 14.
ROLLCALL NO. 4
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino......................................................
Mr. Gowdy....................................................... X
Mr. Ross........................................................
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson.....................................................
Mr. Pierluisi...................................................
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 11 14
----------------------------------------------------------------------------------------------------------------
5. An amendment by Ms. Chu to add a section to the bill
applying antitrust laws to health sector insurers. Defeated 13
to 13.
ROLLCALL NO. 5
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................
Mr. Franks......................................................
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Reed........................................................ X
Mr. Griffin.....................................................
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 13 13
----------------------------------------------------------------------------------------------------------------
6. An amendment by Ms. Jackson Lee to exclude lawsuits
related to irreversible or life altering injuries from the
bill's limits on noneconomic and punitive damages. Defeated 13
to 19.
ROLLCALL NO. 6
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan......................................................
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 13 19
----------------------------------------------------------------------------------------------------------------
7. An amendment by Ms. Wasserman Schultz to add a section
to the bill exempting actions by minors from the bill's limits
on damages. Defeated 14 to 18.
ROLLCALL NO. 7
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot......................................................
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu.........................................................
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 14 18
----------------------------------------------------------------------------------------------------------------
8. An amendment by Ms. Wasserman Schultz to modify the
bill's statute of limitation provision to change the timeframe
related to the manifestation or discovery of an injury related
to a minor. Defeated 14 to 18.
ROLLCALL NO. 8
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot......................................................
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu.........................................................
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 14 18
----------------------------------------------------------------------------------------------------------------
9. An amendment by Mr. Cohen to exclude from the bill's
limits on damages lawsuits related to a foreign object being
left inside a patient or performing a procedure on the wrong
patient or body part. Defeated 14 to 19.
ROLLCALL NO. 9
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu.........................................................
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 14 19
----------------------------------------------------------------------------------------------------------------
10. An amendment by Mr. Scott to strike the provision in
the bill creating the fair share rule. Defeated 14 to 20.
ROLLCALL NO. 10
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz...........................................
-----------------------------------------------
Total....................................................... 14 20
----------------------------------------------------------------------------------------------------------------
11. An amendment by Mr. Quigley to strike the punitive
damages exemption for products that comply with FDA Standards.
Defeated 16 to 20.
ROLLCALL NO. 11
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 16 20
----------------------------------------------------------------------------------------------------------------
12. An amendment by Mr. Johnson to specify that nothing in
the bill shall preempt any applicable State constitutional
provisions. Defeated 16 to 18.
ROLLCALL NO. 12
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 16 18
----------------------------------------------------------------------------------------------------------------
13. An amendment by Mr. Johnson to strike the references in
the bill to ``State or Federal court or pursuant to an
alternative dispute resolution system'' and replaces those
references with ``Federal Court.'' Defeated 16 to 19.
ROLLCALL NO. 13
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 16 19
----------------------------------------------------------------------------------------------------------------
14. An amendment by Mr. Johnson to strike provisions in the
bill that make the bill applicable to health care organizations
and manufacturers, distributors, suppliers, marketers,
promoters and sellers of medical products. Defeated 16 to 19.
ROLLCALL NO. 14
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz....................................................
Mr. Reed........................................................ X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 16 19
----------------------------------------------------------------------------------------------------------------
15. An amendment by Mr. Deutch to apply the bill's
provisions to lawsuits brought by health care providers, health
care organizations, and pharmaceutical and device
manufacturers. Defeated 15 to 20.
ROLLCALL NO. 15
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Reed........................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 15 20
----------------------------------------------------------------------------------------------------------------
16. An amendment by Ms. Waters to excludes lawsuits
involving preexisting conditions from the bill's coverage.
Defeated 14 to 20.
ROLLCALL NO. 16
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Reed........................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu.........................................................
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 14 20
----------------------------------------------------------------------------------------------------------------
17. An amendment by Ms. Waters to amend the McCarran-
Ferguson Act to clarify the application of antitrust laws to
medical malpractice insurers. Defeated 14 to 19.
ROLLCALL NO. 17
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Reed........................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu.........................................................
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 14 19
----------------------------------------------------------------------------------------------------------------
18. An amendment by Mr. Nadler to index the bill's $250,000
caps for noneconomic and punitive damages to the Consumer Price
Index. Defeated 15 to 18.
ROLLCALL NO. 18
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Reed........................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu.........................................................
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 15 18
----------------------------------------------------------------------------------------------------------------
19. An amendment by Mr. Deutch to specifically exclude from
the definition of ``health care liability claim'' certain
intentional torts. Defeated 15 to 19.
ROLLCALL NO. 19
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz....................................................
Mr. Reed........................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu.........................................................
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 15 19
----------------------------------------------------------------------------------------------------------------
20. An amendment by Ms. Jackson Lee to add to the bill a
section declaring that it is the sense of the Congress that the
bill should adhere to the Due Process Clause of the Fifth
Amendment. Defeated 13 to 19.
ROLLCALL NO. 20
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz....................................................
Mr. Reed........................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott.......................................................
Mr. Watt........................................................
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu.........................................................
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 13 19
----------------------------------------------------------------------------------------------------------------
21. Motion to order the bill favorably reported as amended.
Approved 18 to 15.
ROLLCALL NO. 21
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz....................................................
Mr. Reed........................................................
Mr. Griffin.....................................................
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu.........................................................
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
-----------------------------------------------
Total....................................................... 18 15
----------------------------------------------------------------------------------------------------------------
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 legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 5, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 10, 2011.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5, the ``Help
Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act
of 2011.''
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Tom Bradley,
who can be reached at 226-9010.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 5--Help Efficient, Accessible, Low-cost, Timely Healthcare
(HEALTH) Act of 2011.
SUMMARY
H.R. 5 would impose limits on medical malpractice
litigation in state and Federal courts by capping awards and
attorney fees, modifying the statute of limitations, and
eliminating joint and several liability.
CBO expects that those changes would, on balance, lower
costs for health care both directly and indirectly: directly,
by lowering premiums for medical liability insurance; and
indirectly, by reducing the use of health care services
prescribed by providers when faced with less pressure from
potential malpractice suits. Those reductions in costs would,
in turn, lead to lower spending in Federal health programs and
to lower private health insurance premiums.
Because employers would pay less for health insurance for
employees, more of their employees' compensation would be in
the form of taxable wages and other fringe benefits. As
discussed below, the bill would also increase revenues because
it would result in lower subsidies for health insurance. In
total, CBO and the staff of the Joint Committee on Taxation
(JCT) estimate that enacting H.R. 5 would increase Federal
revenues by about $6 billion over the 2011-2021 period.
Enacting H.R. 5 would also reduce Federal direct spending
for Medicare, Medicaid, the government's share of premiums for
annuitants under the Federal Employees Health Benefits (FEHB)
program, and other Federal health benefits programs. CBO
estimates that direct spending would decline by almost $34
billion over the 2011-2021 period.
Because enacting the legislation would affect direct
spending and revenues, pay-as-you-go procedures apply. In
total, CBO estimates that enacting H.R. 5 would reduce deficits
by almost $10 billion over the 2011-2016 period and by about
$40 billion over the 2011-2021 period.
Federal spending for active workers participating in the
FEHB program is included in the appropriations for Federal
agencies, and is therefore discretionary. H.R. 5 would also
affect discretionary spending for health care services paid by
the Departments of Defense (DoD) and Veterans Affairs (VA). CBO
estimates that implementing H.R. 5 would reduce discretionary
spending by about $1 billion over the 2012-2021 period,
assuming appropriations actions consistent with the
legislation.
H.R. 5 contains an intergovernmental mandate as defined in
the Unfunded Mandates Reform Act (UMRA) because it would
preempt state laws that provide less protection for health care
providers and organizations from liability, loss, or damages
(other than caps on awards for damages). CBO estimates the cost
of complying with the mandate would be small and would fall
well below the threshold established in UMRA for
intergovernmental mandates ($71 million in 2011, adjusted
annually for inflation).
H.R. 5 contains several mandates on the private sector,
including caps on damages and on attorney fees, the statute of
limitations, and the fair share rule. The cost of those
mandates would exceed the threshold established in UMRA for
private-sector mandates ($142 million in 2011, adjusted
annually for inflation) in four of the first five years in
which the mandates were effective, rising to $1.4 billion per
year in 2016, and totaling $3.3 billion over the 2012-2016
period.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 5 is shown in the
following table. The costs of this legislation fall within
multiple budget functions, primarily 550 (health) and 570
(Medicare).
By Fiscal Year, in Millions of Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011-2016 2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Estimated Revenues
On-budget 0 * 0.1 0.2 0.5 0.7 0.7 0.8 0.8 0.9 0.9 1.4 5.4
Off-budget 0 * * 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.3 1.0
Total 0 * 0.1 0.3 0.5 0.8 0.8 0.9 1.0 1.0 1.1 1.7 6.4
CHANGES IN DIRECT SPENDING
Estimated Budget Authority 0 -0.1 -0.4 -1.2 -2.5 -3.8 -4.4 -4.7 -5.2 -5.5 -5.9 -8.0 -33.7
Estimated Outlays 0 -0.1 -0.4 -1.2 -2.5 -3.8 -4.4 -4.7 -5.2 -5.5 -5.9 -8.0 -33.7
NET CHANGE IN THE DEFICIT FROM CHANGES IN REVENUES AND DIRECT SPENDING
Impact on the
Deficit\1\
On-budget 0 -0.1 -0.5 -1.4 -3.0 -4.5 -5.1 -5.5 -6.0 -6.4 -6.8 -9.4 -39.1
Off-budget 0 * * -0.1 -0.1 -0.1 -0.1 -0.2 -0.2 -0.2 -0.2 -0.3 -1.0
Total 0 -0.1 -0.5 -1.5 -3.0 -4.6 -5.2 -5.6 -6.2 -6.5 -7.0 -9.7 -40.1
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level 0 0 * * -0.1 -0.1 -0.2 -0.2 -0.2 -0.2 -0.2 -0.3 -1.1
Estimated Outlays 0 0 * * -0.1 -0.1 -0.2 -0.2 -0.2 -0.2 -0.2 -0.3 -1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Negative numbers denote decreases in deficits.
* = Increase in revenues, reduction in spending, or reduction in deficits of less than $50 million.
BASIS OF ESTIMATE
H.R. 5 would establish:
LA 3-year statute of limitations for medical
malpractice claims, with certain exceptions, from the
date of discovery of an injury;
LA cap of $250,000 on awards for noneconomic
damages;
LA cap on awards for punitive damages that
would be the larger of $250,000 or twice the economic
damages, and restrictions on when punitive damages may
be awarded;
LReplacement of joint-and-several liability
with a fair-share rule, under which a defendant in a
lawsuit would be liable only for the percentage of the
final award that was equal to his or her share of
responsibility for the injury;
LSliding-scale limits on the contingency fees
that lawyers can charge; and
LA safe harbor from punitive damages for
products that meet applicable FDA safety requirements.
Over the 2011-2021 period, CBO and the staff of the Joint
Committee on Taxation estimate that enacting H.R. 5 would
reduce direct spending by about $34 billion and increase
Federal revenues by about $6 billion. The combined effect of
those changes in direct spending and revenues would reduce
Federal deficits by $40 billion over that period, with changes
in off-budget revenues accounting for about $1 billion of that
reduction in deficits. Because those estimates assume enactment
of H.R. 5 near the end of fiscal year 2011, no budgetary
effects are expected in that year.
In addition, CBO estimates that implementing H.R. 5 would
reduce discretionary spending for the FEHB program, DoD, and VA
by about $1 billion over the 2012-2021 period.
Effects on National Spending for Health Care. CBO reviewed
recent research on the effects of proposals to limit costs
related to medical malpractice (``tort reform''), and estimates
that enacting H.R. 5 would reduce national health spending by
about 0.4 percent.\1\ That figure comprises a direct reduction
in spending for medical liability premiums and an additional
indirect reduction from slightly less utilization of health
care services. CBO's estimate takes into account the fact that,
because many states have already implemented some elements of
H.R. 5, a significant fraction of the potential cost savings
has already been realized. Moreover, the estimate assumes that
the reduction of about 0.4 percent would be realized over a
period of four years, as providers gradually change their
practice patterns.
---------------------------------------------------------------------------
\1\See Congressional Budget Office, letter to the Honorable Orrin
G. Hatch regarding CBO's Analysis of the Effects of Proposals to Limit
Costs Related to Medical Malpractice, (October 9, 2009). http://
www.cbo.gov/ftpdocs/106xx/doc10641/10-09-Tort_Reform.pdf. The estimated
effect on national health spending reported in that letter is different
from the estimated effect for H.R. 5 because the two proposals would
impose different limits on medical malpractice litigation.
---------------------------------------------------------------------------
Revenues. CBO estimates that private health spending would
be reduced by about 0.4 percent. Much of private-sector health
care is paid for through employment-based insurance that
represents nontaxable compensation. In addition, beginning in
2014, refundable tax credits will be available to certain
individuals and families to subsidize health insurance
purchased through new health insurance exchanges. (The portion
of those tax credits that exceed taxpayers' liabilities are
classified as outlays, while the portions that reduce
taxpayers' liabilities are recorded as reductions in revenues.)
Lower costs for health care arising from enactment of H.R.
5 would lead to an increase in taxable compensation and a
reduction in subsidies for health insurance purchased through
an exchange. Those changes would increase Federal tax revenues
by an estimated $6.4 billion over the 2011-2021 period,
according to estimates by JCT. Social Security payroll taxes,
which are off-budget, account for $1.0 billion of that increase
in Federal revenues.
Direct Spending. CBO estimates that enacting H.R. 5 would
reduce direct spending for Medicare, Medicaid, the Children's
Health Insurance Program, the Federal Employees Health Benefits
program, the Defense Department's TRICARE for Life program, and
subsidies for enrollees in health insurance exchanges by
roughly $34 billion over the 2011-2021 period.
For programs other than Parts A and B of Medicare, the
estimate assumes that Federal spending for acute care services
would be reduced by about 0.4 percent, in line with the
estimated reductions in the private sector.
CBO estimates that the reduction in Federal spending for
services covered under Parts A and B of Medicare would be
larger--about 0.5 percent--than in the other programs or in
national health spending in general. That estimate is based on
empirical evidence showing that the impact of tort reform on
the utilization of health care services is greater for Medicare
than for the rest of the health care system.\2\
---------------------------------------------------------------------------
\2\One possible explanation for that disparity is that the bulk of
Medicare's spending is on a fee-for-service basis, whereas most private
health care spending occurs through plans that manage care to some
degree. Such plans limit the use of services that have marginal or no
benefit to patients (some of which might otherwise be provided as
``defensive'' medicine), thus leaving less potential for savings from
the reduction of utilization in those plans than in fee-for-service
systems.
---------------------------------------------------------------------------
Spending Subject to Appropriation. CBO estimates that
implementing H.R. 5 would reduce Federal spending for health
insurance for Federal employees covered through the FEHB
program by about 0.4 percent--in line with the estimated
reductions in the private sector--and would reduce spending for
health insurance and health care services paid for by the
Departments of Defense and Veterans Affairs by lesser amounts.
CBO expects that the impact on those agencies would be
proportionally smaller than the impact on overall health
spending because medical malpractice costs are already lower
than average for entities covered by the Federal Tort Claims
Act. In CBO's estimation, the cost of health insurance and
health care services funded through appropriation acts would be
reduced by $1.1 billion over the 2012-2021 period.
PAY-AS-YOU-GO CONSIDERATIONS
The Statutory Pay-As-You-Go Act of 2010 establishes budget
reporting and enforcement procedures for legislation affecting
direct spending or revenues. The net changes in outlays and
revenues that are subject to those pay-as-you-go procedures are
shown in the following table. Only on-budget changes to outlays
or revenues are subject to pay-as-you-go procedures.
CBO Estimate of Pay-As-You-Go Effects for H.R. 5, as
ordered reported by the House Committee on the Judiciary on
February 16, 2011
By Fiscal Year, in Millions of Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011-2016 2011-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE ON-BUDGET DEFICIT
Statutory Pay-As-You-Go Impact 0 -110 -475 -1,425 -2,950 -4,450 -5,100 -5,450 -6,000 -6,350 -6,800 -9,410 -39,110
Memorandum:
Direct spending 0 -100 -400 -1,200 -2,500 -3,800 -4,400 -4,700 -5,200 -5,500 -5,900 -8,000 -33,700
Revenues 0 10 75 225 450 650 700 750 800 850 900 1,410 5,410
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS
Intergovernmental Mandates
The bill contains an intergovernmental mandate because it
would preempt state laws that would prevent the application of
any provision of the bill; however, it would not preempt any
state law that provides greater protections for health care
providers and organizations from liability, loss, or damages.
While the preemption would limit the application of state and
local laws, CBO estimates that it would not impose significant
costs and would fall well below the threshold established in
the Unfunded Mandates Reform Act for intergovernmental mandates
($71 million in 2011, adjusted annually for inflation).
Other Impacts
A decline in health care spending is expected to result in
a decrease in rates for health insurance premiums. State,
local, and tribal governments, as employers, would save money
as a result of lower health insurance premiums precipitated by
the bill. State, local, and tribal governments that collect
income taxes also would realize increased tax revenues as a
result of increases in workers' taxable income. State spending
in Medicaid would decrease by over $3 billion over the 2012-
2016 period, with additional saving in the subsequent years.
ESTIMATED IMPACT ON THE PRIVATE SECTOR
H.R. 5 contains several mandates on the private sector,
because it would limit the amount of compensatory damages that
a plaintiff can receive.
Compensatory damages are paid to compensate a claimant for
loss, injury, or harm suffered by a defendant's breach of duty.
Laws that directly limit the right of plaintiffs to be
compensated for losses that they incurred as a result of a
defendant's wrongful acts impose a mandate.
Applying this standard, the cap on non-economic damages,
the statute of limitations, and the fair-share rule included in
H.R. 5 would be considered mandates on the private sector, as
defined by UMRA, because they would limit the ability of some
claimants to recover the entire amount of compensatory damages
that could be collected under current law. In addition, the cap
on attorney fees is a mandate because it limits the fees that
attorneys might otherwise be able to collect from their
clients. The cost of those mandates would exceed the threshold
established in UMRA for private-sector mandates ($142 million
in 2011, adjusted annually for inflation) in four of the first
five years in which the mandates were effective, rising to $1.4
billion per year in 2016, and totaling $3.3 billion over the
2012-2016 period.
ESTIMATE PREPARED BY:
Federal Costs: Tom Bradley and Kirstin Nelson
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
Branum
Impact on the Private Sector: Stuart Hagen
ESTIMATE APPROVED BY:
Holly Harvey, Deputy Assistant Director for Budget Analysis
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R. 5
will improve patient access to health care services and provide
improved medical care by reducing the excessive burden the
liability system places on the health care delivery system.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 5 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Section 1. Short Title.
Section 2. Findings and Purpose.
Section 3. Provides for a 3-year statute of limitations
with certain exceptions for minors, fraud, intentional
concealment, and the presence of a foreign body.
Section 4. Provides for a $250,000 cap on noneconomic
damages and a ``fair share'' rule, by which damages are
allocated fairly, in direct proportion to fault.
Section. 5. Provides for sliding scale limits on the
contingency fees lawyers can charge.
Section 6. Provides guidelines for the award of punitive
damages, including guidelines for punitive damages awards not
to exceed the greater of $250,000 or twice economic damages.
Also provides a safe harbor from punitive damages for products
that meet applicable FDA safety requirements, with exceptions
for cases in which information required to be given to the FDA
was withheld and cases in which illegal payments were made to
the FDA. Also includes a provision protecting pharmacists and
doctors from being named in lawsuits for forum-shopping
purposes.
Section 7. Provides authorization for courts to require
periodic payments for future damages.
Section 8. Definitions.
Section 9. Provides that except as provided in the Act
nothing in the Act shall affect any Federal vaccine-related
injury or any defense available to a defendant in a health care
lawsuit or action under any other provision of Federal law.
Section 10. Provides a savings clause that saves from
preemption state laws that limit damages to specific amounts.
Section 11. Provides that the Act shall apply to any health
care lawsuit brought in a Federal or State court that is
initiated on or after the date of the enactment of this Act,
except that any health care lawsuit arising from an injury
occurring prior to the date of the enactment of this Act shall
be governed by the applicable statute of limitations provisions
in effect at the time the injury occurred.
Dissenting Views
INTRODUCTION
H.R. 5\1\ is a relic. If the bill goes to the floor this
Congress, it will mark the tenth time that the House of
Representatives has considered broad legislation that preempts
state medical malpractice laws and the sixth time it has taken
up the HEALTH Act or substantially similar legislation. This
iteration of H.R. 5 is identical to versions introduced in the
108th and 109th Congresses--both labeled ``H.R. 5,'' both
passed by the House, neither considered by the Senate.\2\ In
the 107th Congress, the HEALTH Act was introduced as H.R. 4600
and passed by the House, but again did not receive
consideration in the Senate.\3\ The HEALTH Act provided the
basis for the Republican motion to recommit offered at the end
of debate on the ``Affordable Health Care for Americans Act.''
That motion was voted down 187 to 243.\4\
---------------------------------------------------------------------------
\1\Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH)
Act of 2011, H.R. 5, 112th Cong. (2011) [hereinafter HEALTH Act].
\2\Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH)
Act of 2005, H.R. 2580, 109th Cong. (2005); Help Efficient, Accessible,
Low-cost, Timely Healthcare (HEALTH) Act of 2003, H.R. 5, 108th Cong.
(2003).
\3\Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH)
Act of 2002, H.R. 4600, 107th Cong. (2002).
\4\Common Sense Health Care Reform and Affordability Act, H. Amdt.
510, 111th Cong. (2009) (offered by Minority Leader John Boehner as a
substitute amendment to H.R. 3962, the ``Affordable Health Care for
America Act'').
---------------------------------------------------------------------------
The substance of the bill is as dangerous and one-sided as
it was when it was first proposed almost two decades ago.\5\
That this legislation has never become law is not surprising.
The medical malpractice ``crisis'' it purports to address does
not exist--and, if it did exist, H.R. 5 would not solve it.
---------------------------------------------------------------------------
\5\See Common Sense Product Liability and Legal Reform Act of 1995,
H.R. 956, 104th Cong. (1995).
---------------------------------------------------------------------------
These dissenting views begin with background and a
description of the legislation. It then turns to our general
concerns, which include an analysis of the medical malpractice
liability ``crisis'' and the policy implications of the bill.
We then discuss the mixed messages that the majority has sent
on the issue of states' rights, and list our specific concerns
with the most troubling provisions of the bill. We conclude
that the House should reject H.R. 5.
I. BACKGROUND
A medical malpractice claim is a tort-based legal claim for
damages arising out of an injury caused by a health care
provider. Tort claims are part of the ``common law,'' or judge-
made law, of the United States civil justice system.
Traditionally, tort claims have been reserved to the states.\6\
All 50 states have considered some version of limited liability
for medical malpractice.\7\ The National Conference of State
Legislatures maintains that ``American federalism contemplates
diversity among the states in establishing these rules.''\8\
---------------------------------------------------------------------------
\6\``Tort law at present is almost exclusively state law rather
than federal law.'' U.S. Congressional Research Service, Federal Tort
Reform Legislation: Constitutionality and Summaries of Selected
Statutes, 95-797 (Jan. 28, 2010), at 1.
\7\See Michael I. Krauss & Robert A. Levy, Can Tort Reform and
Federalism Coexist? 514 Cato Inst. Pol'y Analysis (2004).
\8\National Conference of State Legislatures, 2010-2011 Policies
for the Jurisdiction of the Law and Criminal Justice Committee: Medical
Malpractice, http://www.ncsl.org/default.aspx?Tab
ID=773&tabs=855,27,671#Medical_Malpractice (last visited Mar. 1, 2011)
[hereinafter NCSL Policy].
---------------------------------------------------------------------------
The tort system provides various benefits to society.
First, it compensates patients who have been injured by the bad
acts of others. Second, it deters future misconduct and
carelessness that may cause injury and punishes wrongdoers who
inflict such injury. Third, it prevents future injury by
removing dangerous products and practices from the marketplace.
Fourth, it informs an otherwise unknowing public of these
harmful products or practices, thereby adding to public health
and public safety.\9\
---------------------------------------------------------------------------
\9\Joan Claybrook, Consumers and Tort Law, 34 Fed. B. News & J. 127
(1987).
---------------------------------------------------------------------------
Most medical malpractice claims are based on the tort of
``negligence,'' defined as conduct ``which falls below the
standard established by law for the protection of others
against unreasonable risk and harm.''\10\ In medical
malpractice cases, this legal standard is based on the
practices of the medical profession,\11\ and is usually
determined based on the testimony of expert witnesses.
---------------------------------------------------------------------------
\10\Restatement (Second) of Torts Sec. 282 (1965).
\11\David M. Harney, Medical Malpractice 413 (2d ed. 1987).
---------------------------------------------------------------------------
As with other torts, there are two general types of remedy
for medical malpractice. Courts may award compensatory damages
for economic and noneconomic losses such as medical expenses,
lost wages, pain and suffering, reduced life expectancy and
diminished quality of life. Courts may also award punitive
damages to punish and deter willful and wanton conduct.
Medical malpractice liability reform has historically
attracted the attention of Congress during insurance industry
``crisis''periods, which occurred during the mid-1970s, the
mid-1980s, and the early 2000s.\12\ These periods were marked
by increases in insurance premiums, reported difficulties in
finding malpractice insurance for certain medical specialties,
and reports of physicians leaving geographical areas or
retiring to avoid insurance difficulties. Currently, the
medical liability insurance market does not exhibit crisis
symptoms.\13\ Moreover, the industry's cycle of ``crisis'' and
``calm'' appears to be driven more by the investment practices
of insurance companies than by litigation or the legal
system.\14\
---------------------------------------------------------------------------
\12\U.S. Congressional Research Service, Medical Malpractice
Insurance and Health Reform, R40862 (Apr. 15, 2010).
\13\Id.
\14\Id.
---------------------------------------------------------------------------
Still, the Federal Government has a role to play in
encouraging the states to adopt more efficient medical
malpractice liability systems. In September 2009, President
Obama directed the Department of Health and Human Services to
help state governments and health care providers try
alternative methods of resolving malpractice allegations.\15\
Under this directive, the Agency for Healthcare Research and
Quality has already funded seven demonstration and various
planning grants for a total amount of $25 million.\16\ These
grants support evidence-based patient safety and medical
liability projects designed to reduce preventable harms, inform
injured patients promptly, and promote settlement of cases
through alternative dispute resolution.\17\
---------------------------------------------------------------------------
\15\See The White House, Office of the Press Secretary, FACT SHEET:
Patient Safety and Medical Liability Reform Demonstration (Sept. 17,
2009), available at http://www.whitehouse.gov/the-press-office/fact-
sheet-patient-safety-and-medical-liability-reform-demonstration.
\16\See U.S. Dep't of Health & Human Services, Agency for Health
Care Research and Quality, Medical Liability Reform & Patient Safety
Initiative, http://www.ahrq.gov/qual/liability/
\17\Id.
---------------------------------------------------------------------------
On March 23, 2010, President Obama signed into law
comprehensive health care reform, the Patient Protection and
Affordable Care Act.\18\ Among other important reforms, the
bill authorizes $50 million for grants to the states to
develop, implement, and evaluate alternatives to current tort
litigation systems.\19\ Preference is given to states that have
developed alternatives in consultation with relevant
stakeholders to enhance patient safety, reduce medical errors
and adverse events, and improve access to medical malpractice
liability insurance.\20\ President Obama's budget request for
FY 2012 asks for $100 million for additional grants to develop
medical malpractice liability reform, followed by $50 million
for each fiscal year through 2015.\21\
---------------------------------------------------------------------------
\18\Pub. L. No. 111-148.
\19\Id. Sec. 10607.
\20\Id.
\21\Office of Mgmt. & Budget, Exec. Office of the President, Budget
of the United States Government, Fiscal Year 2012, at 191, available at
http://www.whitehouse.gov/omb/budget/Overview/.
---------------------------------------------------------------------------
II. DESCRIPTION OF THE LEGISLATION
H.R. 5 is not ``designed brilliantly to cooperate with the
States in trying to encourage better practices in medicine,''
as its supporters maintain.\22\ Rather, the bill preempts state
law in all 50 states with a rigid, uniform set of rules
designed to cut off restitution for victims of medical
malpractice.
---------------------------------------------------------------------------
\22\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of
Rep. Trent Franks, Member, House Comm. on the Judiciary).
---------------------------------------------------------------------------
Although it is often described as a ``medical malpractice''
bill, H.R. 5 extends far beyond the field of medical
malpractice liability. The bill applies to all ``health care
lawsuits,'' and defines the term as ``any health care liability
claim concerning the provision of health care goods or services
or any medical product . . . brought in a State or a Federal
court or pursuant to an alternative dispute resolution
system.''\23\ Because this definition is so broad, the bill
offers new protections to medical device and pharmaceutical
manufacturers, nursing homes, hospitals, HMOs, and insurance
companies, among others. In any case involving these
defendants, H.R. 5 limits the amount of noneconomic damages--
e.g., damages for physical impairment, pain, suffering, and
wrongful death--to $250,000.\24\
---------------------------------------------------------------------------
\23\HEALTH Act, 112th Cong. Sec. 9(7).
\24\Id. Sec. 4(b). ``In any health care lawsuit, the amount of
noneconomic damages recovered may be as much as $250,000, regardless of
the number of parties against whom the action is brought or the number
of separate claims or actions brought with respect to the same
occurrence.'' Id.
---------------------------------------------------------------------------
H.R. 5 eliminates joint and several liability for both
economic and noneconomic damages.\25\ In cases where there is
more than one defendant, joint and several liability ensures
that injured patients are fully compensated for their losses by
making each defendant liable for up to the full amount of the
damages.\26\ Prior to markup, H.R. 5 also included a provision
that would repeal the ``collateral source'' rule, which
prevents wrongdoers from reducing damage awards by any amount a
patient may have received from health insurance, disability
insurance, or other outside sources. The committee accepted an
amendment offered by Rep. Robert Scott to remove this cost-
shifting provision from the bill.\27\ It was the only amendment
accepted by the majority during the markup of H.R. 5.
---------------------------------------------------------------------------
\25\Id. Sec. 4(d). The so-called ``Fair Share'' rule provides: ``In
any health care lawsuit, each party shall be liable for that party's
several share of any damages only and not for the share of any other
person. Each party shall be liable only for the amount of damages
allocated to such party in direct proportion to such party's percentage
of responsibility. A separate judgment shall be rendered against each
such party for the amount allocated to such party.'' Id.
\26\The sponsors of H.R. 5 imagine that a clear percentage of
damages can always be apportioned to each defendant. Often, a clear
allocation of fault is not possible when multiple defendants are
involved. ``Here again is the typical case that two vehicles collide
and injure a third person. The duties which are owed to the plaintiff
by the defendants are separate, and may not be identical in character
or scope, but the entire liability rests upon the fact that each has
contributed to the single result, and that no reasonable division can
be made.'' William Prosser, Joint Torts & Several Liability, 25 Cal. L.
Rev. 413 (1939).
\27\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011.
---------------------------------------------------------------------------
H.R. 5 further limits a patient's ability to recover
punitive damages in a number of specific and peculiar ways.
First, the bill imposes a heightened standard for the recovery
of punitive damages. In order to recover punitive damages at
all, a patient must demonstrate by clear and convincing
evidence that a defendant ``acted with malicious intent'' to
injure the patient, or that the defendant ``deliberately failed
to avoid unnecessary injury'' that he or she knew the patient
was ``substantially certain'' to suffer.\28\ Second, even if a
patient can meet this burden, the bill limits punitive damages
to two times the amount of economic damages or $250,000,
whichever is greater.\29\
---------------------------------------------------------------------------
\28\HEALTH Act, 112th Cong. Sec. 7(a).
\29\Id. Sec. 7(b)(2).
---------------------------------------------------------------------------
In addition, H.R. 5 altogether bans punitive damages in
cases that involve manufacturers of drugs and devices that are
approved by the FDA.\30\ The only exceptions to this rule are
for cases in which the defendant ``knowingly misrepresented to
or withheld from the Food and Drug Administration information
that is required to be submitted'' and cases in which a person
bribes an FDA official ``for the purpose of either securing or
maintaining approval, clearance, or licensure.''\31\ The bill
extends this absolute ban on punitive damages to manufacturers
of drugs and devices that are not approved by the FDA but are
``generally recognized among qualified experts as safe and
effective''\32\ and to all defendants with respect to the
packaging or labeling of a pharmaceutical.\33\ These last rules
have the pernicious effect of sidestepping federal safety
regulations in addition to limiting a patient's ability to
recover damages in court.
---------------------------------------------------------------------------
\30\Id. Sec. 7(c)(1)(A)(i).
\31\Id. Sec. 7(c)(4).
\32\Id. Sec. 7(c)(1)(A)(ii).
\33\HEALTH Act, 112th Cong. Sec. 7(c)(3).
---------------------------------------------------------------------------
H.R. 5 sets strict limits on the amount an attorney may
receive in contingency fee payments. Specifically, the total
amount of all contingent fees for representing all claimants in
a health care lawsuit may not exceed: (1) 40% of the first
$50,000 recovered by the claimant(s); (2) 33 1/3% of the next
$50,000 recovered by the claimant(s); (3) 25% of the next
$500,000 recovered by the claimant(s); and (4) 15% of any
amount by which the recovery by the claimant(s) is in excess of
$600,000.\34\ The bill also gives courts the authority to
approve fees lower than those provided for by this formula.
---------------------------------------------------------------------------
\34\Id. Sec. 5(a).
---------------------------------------------------------------------------
H.R. 5 also introduces a restrictive statute of limitations
for medical malpractice claims. A ``health care lawsuit may be
commenced no later than 3 years after the date of manifestation
of injury or 1 year after the claimant discovers, or through
the use of reasonable diligence should have discovered, the
injury, whichever occurs first.''\35\ The effect of this
provision is that a claimant often has only one year from the
date of discovering the injury to file suit. A claimant will,
quite often, discover an injury on the same day an injury
manifests itself. This provision cuts in the opposite direction
for patients whose injuries have long latency periods. A
patient might manifest symptoms of HIV or hepatitis long before
discovering the cause of the injury, but have no recourse if
the 3-year deadline has expired.
---------------------------------------------------------------------------
\35\Id. Sec. 3 (emphasis added).
---------------------------------------------------------------------------
H.R. 5 further disadvantages patients by requiring judges
to permit periodic payments at the request of the
defendant.\36\ To the extent that a patient can successfully
negotiate the obstacles set up by the bill, actual payment of
damages could take years--assuming the defendant remains
solvent.
---------------------------------------------------------------------------
\36\Id. Sec. 8(a). ``In any health care lawsuit, if an award of
future damages . . . equaling or exceeding $50,000 is made against a
party with sufficient insurance or other assets to fund a periodic
payment of such a judgment, the court shall, at the request of any
party, enter a judgment ordering that the future damages be paid by
periodic payments.'' Id. (emphasis added).
---------------------------------------------------------------------------
H.R. 5 written to be ``one-way preemptive''--it only
supercedes existing state and federal laws that are favorable
to patients, and it does so on an incredibly sweeping scale.
Many hard-earned patient and consumer protections fall to the
wayside. For example, the most popular provisions of the
Affordable Care Act, many of them already in effect, are
weakened by this legislation. An insurance company might deny
coverage of a child with a pre-existing condition, rescind
coverage when a patient gets sick, or kick a child off a
parent's insurance plan before his or her 26th birthday. No
matter how blatant the violation, that company would have all
of the new protections afforded to it under H.R. 5. Even if a
family could overcome the procedural obstacles H.R. 5 puts in
its path, it would be entitled to no more than $250,000 in
noneconomic damages. That capped award might simply be the cost
of doing business for a wealthy insurance company.
III. GENERAL CONCERNS
Our general concerns with H.R. 5 stem from one of the
bill's central flaws: this legislation was designed to address
an insurance ``crisis'' that does not exist. This section
demonstrates that the investment market, not litigation, drives
the insurance industry through cycles of ``crisis'' and calm,
and that H.R. 5 exacerbates the real crisis--the epidemic of
actual medical malpractice. Moreover, the bill will not
accomplish any of its supporters' stated goals--it will not
lower insurance premiums, have a substantive effect on
``defensive medicine,'' or significantly impact the cost of
health care.
A. LThe cycle of ``crisis'' and ``calm'' is driven by the investment
practices of insurance companies.
In past sessions of Congress, supporters of the bill have
pointed to a common set of symptoms in the insurance market--
most often, ``skyrocketing'' insurance premiums and
difficulties in finding medical malpractice liability
coverage.\37\ Restricting the ability of patients to recover
damages for malpractice, they argued, would reduce the
frequency of malpractice lawsuits. This would, in theory, lower
medical malpractice premiums, making insurance more available
to doctors and doctors more available to patients. This policy
assumption--that discouraging litigation mitigates the
insurance ``crisis''--does not square with the facts.
---------------------------------------------------------------------------
\37\See, e.g., 151 Cong. Rec. H6990 (daily ed. July 28, 2005).
``The costs of the tort system continue to take their toll on the
Nation's economy. Medical professional liability insurance rates have
skyrocketed, causing major insurers to drop coverage or raise premiums
to unaffordable levels. We have heard case after case where this last
occurred nationwide. . . . The HEALTH Act . . . addresses this crisis
by eliminating frivolous lawsuits by making health care more accessible
and more affordable.'' Id. (statement of Rep. Steve Chabot).
---------------------------------------------------------------------------
From a historical perspective, Congress paid closest
attention to medical malpractice liability insurance during
``crisis'' periods in the mid-1970s, the mid-1980s, and the
early 2000s.\38\ These periods are punctuated by the same
symptoms described by supporters of H.R. 5--increases in
malpractice insurance premiums, claims of insurance scarcity,
and stories of physicians abandoning specialties or communities
because of the high cost of insurance.\39\ In each instance,
the ``crisis'' abated when the financial market stabilized.\40\
---------------------------------------------------------------------------
\38\U.S. Congressional Research Service, Medical Malpractice
Insurance and Health Reform, R40862 (Feb. 22, 2011).
\39\Id.
\40\See, e.g., U.S. Congressional Research Service, Medical
Malpractice Insurance: An Economic Introduction and Review of
Historical Experience, RL31886 (Oct. 2, 2009).
---------------------------------------------------------------------------
Experts attribute this cycle of crisis and calm to the
investment practices of the insurance industry--not to the
frequency of litigation or the size of jury awards. Joanne
Doroshow, Executive Director for the Center for Justice and
Democracy, testified at a hearing of the Subcommittee on
Commercial and Administrative law in the 108th Congress and
explained:
Insurers make their money from investment income.
During years of high interest rates and/or insurer
profits, insurance companies engage in fierce
competition for premium dollars to invest for maximum
return. More specifically, insurers engage in severe
underpricing to insure very poor risks just to get
premium dollars to invest. But when investment income
decreases because interest rates drop, the stock market
plummets, and/or cumulative price cuts make profits
become unbearably low, the industry responds by sharply
increasing premiums and reducing coverage, creating a
``liability insurance crisis.''\41\
---------------------------------------------------------------------------
\41\Health Care Litigation Reform: Does Limitless Litigation
Restrict Access to Health Care? Hearing on H.R. 4600 Before the
Subcomm. on Commercial and Admin. Law of the H. Comm. On the Judiciary,
107th Cong. 15 (2002) (statement of Joanne Doroshow, Executive
Director, Center for Justice & Democracy).
This market-driven cycle repeats itself over and over again.
During the ``crisis'' of the 1970s, insurance companies
increased premiums for medical malpractice insurance by large
margins and denied coverage to doctors in certain
specialties.\42\ In response, the states initiated reforms
designed to provide alternative sources of insurance and to
reduce the volume and costs of medical malpractice claims.
Physician- and hospital-owned insurance companies emerged as an
alternative to traditional insurance providers, and, for at
least a decade, insurance was accessible and affordable in a
market dominated by these companies.
---------------------------------------------------------------------------
\42\U.S. Congress, Office of Technology Assessment, Impact of Legal
Reforms on Medical Malpractice Costs, Pub. No. OTA-BP-H-119, at 13
(1993).
---------------------------------------------------------------------------
Prior to the ``crisis'' of the mid-1980s, a favorable
investment market allowed the insurance industry to offer
stable and affordable premium rates for medical malpractice
insurance. When interest rates dropped in 1984, however,
insurance providers responded by drastically increasing the
cost of medical malpractice insurance.\43\ In some instances,
insurance rates more than tripled for manufacturers,
municipalities, doctors, nurses, midwives, daycare centers,
nonprofit groups, and other customers of liability
insurance.\44\
---------------------------------------------------------------------------
\43\Id. at 15.
\44\Id.
---------------------------------------------------------------------------
The roots of the most recent ``crisis'' were described by
Raul King, an economist and insurance industry expert with
Congressional Research Service, at a forum held by House
Democrats in 2003:
What has happened in the 1990s, after the last medical
malpractice in the mid-`80s, is that in the 1990s the
markets were up. For an extended period of time,
interest rates were relatively low, but the bottom line
is that investments were very, very high, and they can
continue to price their business in such a way to
maximize premium for investment purposes.
Some would argue that, starting in 2000, when not
only the medical malpractice area but insurance in
general, not just medical malpractice but all P& C,
property and casualty insurance, when the market cycle
started to turn, investments were not what they
expected. Interest rates were low, and across the board
rates started firming up.
Incidentally, when the market is considered soft,
coverage is readily available. Prices are relatively
low. The insurance company will make their products
available in the marketplace, and they will
aggressively sell as much as they can because they want
the business, and it's intensely competitive.
Some would argue that this soft market that went
beyond the six years but right close to ten years, and
this is what the consumer groups have argued is cash
flow underwriting--what Bob Hunter, for example, would
argue is cash flow underwriting. They run into a
problem. Their investments can't cover their premium
losses and underwriting losses.
So what they have to do is increase premiums
dramatically. They have to in some cases withdraw from
the marketplace, change the amount of insurance they'll
make available, in the marketplace. Rather than selling
a $500,000 policy, they'll sell only a $250,000 policy,
and that's all that's available in a given state.\45\
---------------------------------------------------------------------------
\45\Democratic Forum on Malpractice, Feb. 11, 2003, Transcript at
32-33.
Once again, when the bottom dropped out on the investment
market, premiums increased and availability of coverage
declined. Although each crisis ``brought about attempts at
malpractice reform in many states, it only subsided when the
economy finally recovered and interest rates rose.''\46\
---------------------------------------------------------------------------
\46\Mitchell J. Nathanson, It's the Economy (and Combined Ratio),
Stupid: Examining the Medical Malpractice Litigation Crisis Myth and
the Factors Critical to Reform, 108 Penn. St. L. Rev. 1077 (2004).
---------------------------------------------------------------------------
Both the American Medical Association and members of the
insurance industry acknowledge that these periods of ``crisis''
are market driven. In a 2003 internal memo, the AMA's Board of
Trustees recognized that ``the insurance underwriting cycle is
now at a point where insurers have both pricing power and a
need to increase revenues through premiums as returns on
investments are no longer able to subsidize underwriting losses
and as insurers have suffered large claim losses in other
areas.''\47\ The memo explains further:
---------------------------------------------------------------------------
\47\American Medical Ass'n, Report 35 of the Board of Trustees (A-
02) on Liability Reform, at 2.
For several years, insurers kept prices artificially
low while competing for market share and new revenue to
invest in a booming stock market. As the bull market
surged, investments by these historically conservative
insurers rose to 10.6% in 1999, up from a more typical
3% in 1992. With the market now in a slump, the
insurers can no longer use investment gains to
subsidize low rates. The industry reported realized
capital gains of $381 million last year, down 30% from
the high point in 1998, according to the A.M. Best
Company, one of the most comprehensive sources of
insurance industry data.\48\
---------------------------------------------------------------------------
\48\Id.
When investment income became scarce, insurance companies
increased premiums to turn a profit. This observation has been
confirmed by the National Conference of State Legislatures.\49\
The Physicians Insurers Association of America reported that
investment income constituted 47% of insurance company income
during the ``calm'' of 1995, but only 31% during the ``crisis''
of 2001.\50\
---------------------------------------------------------------------------
\49\Peter Eisler, et al., Hype Outraces Facts in Malpractice
Debate, USA Today, Mar. 5, 2003 available at http://www.usatoday.com/
news/nation/2003-03-04-malpractice-cover_x.htm.
\50\Id.
---------------------------------------------------------------------------
H.R. 5 does nothing to address this boom-and-bust cycle. It
does nothing about the investment practices of the insurance
industry. It does nothing to repeal the anomalous McCarran-
Ferguson antitrust exemption for the insurance industry, which
is critical to stabilizing the medical malpractice insurance
market.\51\ It does nothing to require that premium increases
be justified, or to permit health care providers to challenge
increases when they occur. Instead, H.R. 5 pretends that a
series of restrictions on patients' rights will prevent the
next ``crisis.''
---------------------------------------------------------------------------
\51\See Medical Liability Reform--Cutting Costs, Spurring
Investment, Creating Jobs, Hearing Before the H. Comm. on the
Judiciary, 112th Cong., Jan. 20, 2011 (statement of Joanne Doroshow,
Executive Director, Center for Justice and Democracy). Judiciary
Republicans voted down two amendments that would have addressed this
exemption. An amendment by Rep. Judy Chu would have applied antitrust
laws to health-sector insurance providers. Another amendment by Rep.
Maxine Waters and Rep. Mike Quigley that would have repaired the
exemption in the McCarran-Ferguson Act. Continued Consideration of H.R.
5, The Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH)
Act of 2011 and the Committee's Oversight Plan, 112th Cong., Feb. 16,
2011.
---------------------------------------------------------------------------
B. LNo insurance ``crisis'' exists today.
Although supporters of H.R. 5 may suggest otherwise, the
evidence shows that there is no insurance ``crisis'' today.
According to the Medical Liability Monitor, premiums for
medical malpractice insurance ``have eased nationwide.''\52\ In
2009, 58 percent of premiums stayed level and 36 percent of
premiums fell.\53\ According to A.M. Best, after reaching an
average annual increase of 14.2 percent during the height of
the ``crisis'' in 2003, medical malpractice premiums began to
fall--declining by 6.6 percent in 2007, and by an additional
5.3 percent in 2008.\54\ Without any of the federal
intervention contemplated by H.R. 5, the ``crisis'' of the mid-
2000s appears to have peaked in 2004 and abated by 2006.
Premiums have dropped in every state--whether or not court
systems have been modified to limit liability for medical
malpractice defendants.\55\
---------------------------------------------------------------------------
\52\Amy Lynn Sorrel, Liability Premiums Stay Stable, but Insurers
Warn This Might Not Last, Am. Med. News (Nov. 23, 2009) available at
http://www.ama-assn.org/amendnews/2009/11/23//prl121123.htm. See also
Medical Liability Monitor (Oct. 2008).
\53\Id.
\54\U.S. Congressional Research Service, Medical Malpractice
Insurance: An Economic Introduction and Review of Historical
Experience, RL31886 (October 2, 2009) (citing A.M. Best Statistical
Study, Continued Improvement in 2005 Results as Medical Malpractice
Premium Growth Subsides (Aug. 28, 2006), and A.M. Best's Special
Report, U.S. Medical Professional Liability 2008 Market Review (Apr.
27, 2009).
\55\Americans for Ins. Reform, True Risk: Medical Liability,
Malpracitce Insurance and Health Care (July 2009) available at http://
insurance-reform.org/pr/090722.html.
---------------------------------------------------------------------------
Insurance companies are also doing well, especially
compared to other sectors of the economy. In 2007, medical
malpractice insurers had an overall return on net worth of 15.6
percent, well over the average 12.5 percent return for the
entire property and casualty insurance industry.\56\ Profits
are holding. In 2009, according to the National Association of
Insurance Commissioners, return on net worth for medical
malpractice insurers remained steady at 15.3 percent.\57\
---------------------------------------------------------------------------
\56\A.M. Best's Special Report, Solid Underwriting Undercut by
MPLI's Investment Losses (Apr. 27, 2009).
\57\Americans for Ins. Reform, True Risk: Medical Liability,
Malpractice Insurance and Health Care (July 2009). See also Medical
Liability Reform--Cutting Costs, Spurring Investment, Creating Jobs,
Hearing Before the H. Comm. on the Judiciary, 112th Cong., Jan. 20,
2011 (statement of Joanne Doroshow, Executive Director, Center for
Justice and Democracy).
---------------------------------------------------------------------------
Medical malpractice cases are also less frequent than at
any time in the last decade. According to the National Center
for State Courts, only 4.4 percent of the civil caseload is
comprised of tort cases; of these, only 2.8 percent are medical
negligence cases.\58\ Even that share has declined by fifteen
percent over the past ten years.\59\ The National Practitioner
Databank, which tracks all medical malpractice payments by all
physicians in the United States, confirms the same downward
trend.\60\
---------------------------------------------------------------------------
\58\Nat'l Center for State Courts, Examining the Work of State
Courts: An Analysis of 2008 State Court Caseloads (2010) available at
http://www.ncsconline.org/d_research/csp/2008_files/EWSC-2008-
Online%20Version%20v2.pdf.
\59\Id.
\60\Nat'l Practitioner Databank, Annual Report (2006) available at
http://www.npdb-hipdb.hrsa.gov/pubs/stats/2006_NPDB_Annual_Report.pdf.
---------------------------------------------------------------------------
In addition, jury awards are stable. An actuarial analysis
conducted by J. Robert Hunter, Director of Insurance of the
Consumer Federation of America, shows that the average medical
malpractice payout hovered at just under $30,000 for an entire
decade--from 1990 to 2000--without adjustment for
inflation.\61\ According to a more recent study by the National
Center for State Courts, medical malpractice claims actually
declined 15 percent from 1999 to 2008.\62\ Insurance industry
data shows that claims have dropped 45 percent after adjusting
for inflation.\63\
---------------------------------------------------------------------------
\61\Letter from J. Robert Hunter, Director of Insurance, Consumer
Federation of America, to Joanne Doroshow, Executive Director, Center
for Justice & Democracy (Oct. 13, 2001).
\62\National Center for State Courts, supra note 58.
\63\See Americans for Ins. Reform, supra note 55.
---------------------------------------------------------------------------
H.R. 5 attempts to contain allegedly ``rampant'' punitive
damages, but the evidence shows that punitive damages are
rarely rewarded. According to the Bureau of Justice Statistics,
in 1996 only 1.1 percent of medical malpractice plaintiffs who
prevailed at trial were awarded punitive damages.\64\ Only 1.2
percent of those awards were awarded by juries.\65\ In 2005,
there were too few medical malpractice cases in which punitive
damages were awarded to provide a statistically reliable
estimate of the amount of punitive damages in state courts.\66\
---------------------------------------------------------------------------
\64\U.S. Dep't of Justice, Bureau of Justice Stat., Tort Bench and
Jury Trials in State Courts, 2005 (Nov. 2009).
\65\Id.
\66\Id.
---------------------------------------------------------------------------
C. LMedical malpractice is the real crisis.
At best, H.R. 5 is untimely--it is designed to lower
premium rates that have already dropped, and curb damages that
are rare and trending downward. In practice, the bill ignores
the real medical malpractice crisis in America.
Medical error is the sixth leading cause of death in the
United States.\67\ In 1999, the Institute of Medicine of the
National Academy of Sciences estimated that between 44,000 and
98,000 hospital deaths in the United States each year are
attributable to medical mismanagement--at a cost of $29 billion
annually.\68\ This estimate does not include losses for medical
errors at outpatient centers, physician offices, or clinics.
During the period of study, the number deaths due to medical
malpractice was greater than the number of people who died due
to motor vehicle accidents (43,458), breast cancer (42,297), or
AIDS (16,516).\69\
---------------------------------------------------------------------------
\67\Centers for Disease Control, Nat'l Center for Health Care
Stat., Deaths/Mortality, 2005, http://www.cdc.gov/nchs/fastats/
deaths.htm.
\68\To Err is Human: Building a Safer Health System, (Linda T.
Kohn, Janet M. Corrigan, and Molla S. Donaldson, eds. Institute of
Medicine, National Academy Press 1999) [hereinafter IOM Report].
\69\Id.
---------------------------------------------------------------------------
The Congressional Budget Office estimated 181,000 severe
injuries occurred due to medical negligence in 2003.\70\
According to a 2008 report by the Institute for Healthcare
Improvement, there are fifteen million incidents of negligent
medical harm each year.\71\ The Joint Commission Center on
Transforming Healthcare reports as many as forty wrong site,
wrong side, and wrong patient procedures every week.\72\ The
Journal of American Medicine reports that there are 1,500
incidents of surgical tools left in patients each year.\73\
Notably, the majority rejected an amendment offered by Rep.
Steve Cohen that would have exempted these incidences of gross
negligence from the $250,000 cap on non-economic damages.\74\
---------------------------------------------------------------------------
\70\U.S. Congressional Budget Office, Key Issues 150-54 (Dec.
2008).
\71\Institute for Healthcare Improvement, Campaign--FAQs, http://
www.ihi.org/IHI/Programs/Campaign/Campaign.htm?TabId=6.
\72\American Ass'n for Justice, Medical Negligence: The Role of
America's Civil Justice System in Protecting Patients' Rights (Feb.
2011) (citing Joint Commission Center for Transforming Healthcare,
Wrong Site Surgery Project http://
www.centerfortransforminghealthcare.org/projects/
display.aspx?projectid=4). Judiciary Republicans voted down an
amendment offered by Rep. Steve Cohen that would exempt wrong-site or
wrong-patient surgeries from the $250,000 cap on non-economic damages.
Continued Consideration of H.R. 5, The Help Efficient, Accessible, Low-
cost, Timely Healthcare (HEALTH) Act of 2011 and the Committee's
Oversight Plan, 112th Cong., Feb. 16, 2011.
\73\See Nagy, et al., Radio Frequency Identification Systems
Technology in the Surgical Setting, Surgical Innovation, Vol. 13, No. 1
(March 2006).
\74\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011.
---------------------------------------------------------------------------
Medical malpractice pervades American society. A November
2010 study by the Office of the Inspector General of the
Department of Health and Human Services found that
approximately one in seven hospital patients experience a
medical error, and that these errors cost Medicare $4.4 billion
every year.\75\ This sum does not include ``additional costs
required for follow-up care after the sample
hospitalizations.''\76\ Medical errors occur in more than one
in ten cases involving children with complex medical
problems.\77\ Two in five chronically ill patients receive care
inconsistent with medical literature.\78\ One 15-year
observational study showed that 45.8 percent of patients
experience least some error while receiving medical
treatment.\79\
---------------------------------------------------------------------------
\75\U.S. Dep't of Health and Human Services, Office of the
Inspector General, Adverse Events in Hospitals: National Incidence
Among Medicare Beneficiaries (Nov. 2010), at i-ii.
\76\Id. at ii-iii.
\77\Eisler et al., supra note 49.
\78\Lee Harris, Tort Reform as Carrot-and-Stick, 46 Harv. J. on
Legis. 163, 169 (2009).
\79\Id. (citing Lori Andrews, Studying Medical Error in Situ:
Implications for Malpractice Law and Policy, 54 DePaul L. Rev. 357
(2005)).
---------------------------------------------------------------------------
These figures may even be under-reported. Twenty-three
states have no medical error detection programs, and even those
with mandatory programs likely miss a majority of the harm.\80\
The New England Journal of Medicine reports that ``Most medical
centers continue to depend on voluntary reporting to track
institutional safety, despite repeated studies showing the
inadequacy of such reporting.''\81\ The only national database
of malpractice claims, the National Practitioners Databank,
remains closed to the public.\82\ The American Medical
Association goes so far as to offer its members a primer on
``How to evade a report to the NPDB.''\83\
---------------------------------------------------------------------------
\80\Cathleen F. Crowley & Eric Nalder, Year After Report, Patients
Still Face Risks, Times Union, Sept. 20, 2010.
\81\Christopher P. Landrigan et al., Temporal Trends in Rates of
Patient Harm Resulting from Medical Care, 363 N. Engl. J. Med 2124-34
(2010).
\82\American Ass'n for Justice, supra note 72, at 9.
\83\AMA webpage on the National Practitioner Databank, http://
www.ama-assn.org/ama/pub/physician-resources/legal-topics/business-
management-topics/national-practitioner-data-bank.shtml.
---------------------------------------------------------------------------
Changes to court systems that ignore patient safety do
little to reverse this trend. After Texas enacted its cap on
non-economic damages, complaints against Texas doctors to the
state medical board rose from 2,942 to 6,000, more than half of
which were focused on poor quality of medical care.\84\ And
yet, according to a lengthy investigation by the Houston
Chronicle, ``Texas has fumbled attempts to establish a medical
error reporting system, often leaving patients to discover
errors the hard way--when a mistake costs them their livelihood
or the life of a loved one.''\85\
---------------------------------------------------------------------------
\84\Terry Langford, Texas Laws are Vague, Abandoned or Unfunded,
Houston Chronicle, July 30, 2009.
\85\Id.
---------------------------------------------------------------------------
The costs of medical malpractice are staggering. CRS has
found that ``the damage from medical malpractice usually
requires additional treatment to repair, sometimes an entire
lifetime of medical treatment.''\86\ In addition to these human
costs, the total financial cost of medical malpractice--
including lost income, lost household production, disability
and health care costs--is estimated by the Centers for Disease
Control to be between $17 billion and $29 billion each
year.\87\
---------------------------------------------------------------------------
\86\U.S. Congressional Research Service, supra note 54.
\87\See Centers for Disease Control, supra note 67.
---------------------------------------------------------------------------
And yet, there is a profound disconnect between the actual
incidence of medical malpractice and the insurance industry.
According to one analysis published in the Harvard Journal on
Legislation: ``Bad doctors are not penalized by insurance
companies, which do not normally take into account previous
performance when assessing medical malpractice insurance
rates.''\88\ Instead, insurance companies charge premiums based
on general factors like physician speciality, without giving an
``account for the competence, skill, and quality of medical
services provided by the physician.''\89\ The problem is
compounded by lax discipline for habitually negligent health
care providers. In one study published by N.Y.U., state
licensing boards were found to have disciplined less than 17
percent of doctors with five or more medical malpractice
payouts on record.\90\
---------------------------------------------------------------------------
\88\Lee Harris, supra note 78 at 178.
\89\Id. (citing Catherine Sharkey, Unintended Consequences of
Medical Malpractice Damage Caps, 80 N.Y.U.L. Rev. 391, 410 (2005)
(noting that physicians are not experience-rated and, thus, both
``negligent and non-negligent physicians pay similar premiums'')).
\90\Id.
---------------------------------------------------------------------------
This disconnect is the foundation for H.R. 5. By enacting
sweeping changes to the court systems in all 50 states, this
bill gives all health care providers--all physicians,
hospitals, clinics, pharmaceutical manufacturers, device
manufacturers, and insurance companies--the benefit of
additional liability protection in cases of medical
malpractice. By forcing the states to cap non-economic damages,
the bill disproportionately penalizes members of vulnerable
groups, such as women, children, and minorities, all of whom
are more likely to realize comparatively substantial non-
economic losses. Capping damages ``only serves to compel the
most grievously injured at the hands of the most clearly
negligent and/or reckless to bear the brunt of reform.''\91\
---------------------------------------------------------------------------
\91\Mitchell J. Nathanson, supra note 46 at 1109.
---------------------------------------------------------------------------
Fortunately, there appear to be effective policy solutions
for addressing the medical malpractice crisis. For example, the
Wall Street Journal has found that, by committing to patient
safety, anesthesiologists have halved the rate at which they
are sued for malpractice, and pay for malpractice insurance at
rates lower than the rates they paid 20 years ago.\92\
---------------------------------------------------------------------------
\92\Joseph Hallinan, Heal Thyself: Once Seen as Risky, One Group of
Doctors Changes Its Ways, Wall St. J., June 21, 2005, at 1.
---------------------------------------------------------------------------
Along these lines and under the leadership of the Obama
Administration, the Affordable Care Act provides financial
incentives for health care providers to improve care and reduce
unnecessary errors. For example, Medicare payments will be
reduced for ``hospital acquired conditions''\93\ and high rates
of readmission.\94\ The Act also creates the ``Hospital Value
Based Purchasing Program,'' which gives health care providers
incentives to perform well on a set of quality measures that
include efficiency, outcome, and patient experience of
care.\95\ These reforms are the first steps towards a national
plan to address medical malpractice. The Act instructs the
Center for Medicare and Medicaid Innovation to develop new
concepts for improving patient care and reducing costs.\96\
---------------------------------------------------------------------------
\93\Central line infections and surgical site infections are common
examples of ``hospital acquired conditions.'' Pub. L. No. 111-148
Sec. 3008.
\94\Id. Sec. 3025.
\95\Id. Sec. 3001
\96\Id. Sec. 3021.
---------------------------------------------------------------------------
Unfortunately, H.R. 5 ignores this progress. Instead of
encouraging health care providers to make fewer mistakes, the
bill cuts off a patient's right to be made whole when mistakes
are made. Effective legislation would address the real crisis
directly. H.R. 5 addresses a crisis that does not exist.
D. LEven if the crisis did exist, H.R. 5 would not lower medical
malpractice insurance premiums.
In his pitch for H.R. 5, Chairman Smith argued that,
because of a statewide $250,000 cap on noneconomic damages,
``the rate of increase in medical professional liability
premiums in California since 1976 has been 280% lower than the
rate of increase experienced in other states.''\97\ A closer
look at the evidence will show that regulation of the insurance
industry, not ``tort reform,'' stabilized the cost of insurance
in California.\98\
---------------------------------------------------------------------------
\97\Markup of H.R. 5, The Help Efficient, Accessible, Low-cost,
Timely Healthcare (HEALTH) Act of 2011 and the Committee's Oversight
Plan, 112th Cong., Feb. 9, 2011 (statement of Rep. Lamar Smith,
Chairman, House Comm. on the Judiciary).
\98\See Study Finds No Link Between Tort Reforms and Insurance
Rates, Liability Week, July 19, 1999 (quoting Sherman Joyce, President,
American Tort Reform Association); Michael Prince, Tort Reforms Don't
Cut Liability Rates, Study Says, Bus. Ins., July 19, 1999 (quoting
Victor Schwartz, General Counsel, American Tort Reform Association);
Press Release, AIA Cites Fatal Flaws in Critic's Reports on Tort
Reform, Am. Ins. Ass'n, Mar. 13, 2002.
---------------------------------------------------------------------------
The California experience is instructive. H.R. 5 is based
largely on California's ``Medical Injury Compensation Reform
Act'' (MICRA).\99\ Enacted in 1975, MICRA caps noneconomic
damages at $250,000,\100\ eliminates joint and several
liability for noneconomic damages,\101\ limits attorneys' fees
on a sliding scale,\102\ and imposes a strict statute of
limitations on medical malpractice claims.\103\ These new
protections for defendants had mixed success, at best.
---------------------------------------------------------------------------
\99\H.R. 5 incorporates ``California's time-tested reforms at the
Federal level.''Markup of H.R. 5, The Help Efficient, Accessible, Low-
cost, Timely Healthcare (HEALTH) Act of 2011 and the Committee's
Oversight Plan, 112th Cong., Feb. 9, 2011 (statement of Rep. Lamar
Smith, Chairman, House Comm. on the Judiciary).
\100\Cal. Civ. Code Sec. 3333.2.
\101\Id. Sec. 1431.2.
\102\Cal. Bus. & Prof. Code Sec. 6146.
\103\Cal. Civ. Proc. Code Sec. 340.5.
---------------------------------------------------------------------------
In 1995, a comprehensive study of MICRA's impact found: (1)
per capita health care expenditures in California exceeded the
national average every year between 1975 and 1993; (2) the rise
in the cost of health care in California exceeded the rate of
inflation every year between 1975 and 1993; (3) hospital
patient costs were higher in California than in almost any
other state; and (4) California's medical malpractice liability
premiums nearly doubled in the 12 years following the enactment
of MICRA.\104\ In 1999, the California State Assembly Committee
on the Judiciary concluded that medical malpractice premiums
had not declined since the enactment of MICRA--California had,
at best, experienced a slower rate of premium increase.\105\
Further, MICRA altogether failed to decrease the number of
malpractice cases filed in California courts.\106\
---------------------------------------------------------------------------
\104\Proposition 103 Enforcement Project, MICRA: The Impact on
Health Care Costs of California's Experiment with Restrictions on
Medical Malpractice Lawsuits, 1995.
\105\Brian A. Liang & LiLan Ren, Medical Liability Insurance and
Damage Caps: Getting Beyond Band Aids to Substantive Systems Treatment
to Improve Quality and Safety in Healthcare, 30 Am. J. L. & Med. 501,
506 (2004).
\106\Id.
---------------------------------------------------------------------------
To the extent that the cost of insurance stabilized in
California after 1975, much of the credit is owed to
Proposition 103, which became law in 1988. Among other reforms
of the insurance industry, Proposition 103 required insurance
companies to hold public hearings before increasing premiums
more than 15 percent. This requirement effectively froze the
cost of medical malpractice liability insurance for many health
care providers.\107\ Under the rollback provisions of
Proposition 103, insurance companies refunded over $1.2 million
to policyholders.\108\ Within three years, medical malpractice
insurance had dropped in cost, on average, by 20.2
percent.\109\ Reform of the insurance industry, not of the
court system, lowered the cost of insurance.
---------------------------------------------------------------------------
\107\Testimony of Harvey Rosenfeld, Before the House Comm. on
Energy and Commerce, Feb. 10, 2003; see also Joseph B. Treaster,
Malpractice Insurance: No Clear or Easy Answers, N.Y. Times, Mar. 5,
2003.
\108\Id.
\109\Id.
---------------------------------------------------------------------------
E. LH.R. 5 will have no substantial effect on ``defensive medicine.''
Supporters of H.R. 5 frequently invoke ``the waste in our
health care system caused by so-called `defensive
medicine.'''\110\ Defensive medicine occurs, they argue, ``when
doctors are forced by the threat of lawsuits to conduct tests
and prescribe drugs that aren't medically required.''\111\ The
majority's briefing memo for the markup of H.R. 5 cites to a
``survey from Emergency Physicians Monthly'' as proof that
``the HEALTH Act's limits on noneconomic damages are essential
to reducing defensive medicine,'' mostly because ``non-economic
caps are . . . physicians' preferred choice of malpractice
reform.''\112\ Although doctors certainly have financial
incentives to prefer damage caps, there is little evidence that
the practice of defensive medicine exists as the majority
defines it, and even less to suggest that H.R. 5 would reduce
its frequency.
---------------------------------------------------------------------------
\110\Markup of H.R. 5, The Help Efficient, Accessible, Low-cost,
Timely Healthcare (HEALTH) Act of 2011 and the Committee's Oversight
Plan, 112th Cong., Feb. 9, 2011 (statement of Rep. Lamar Smith,
Chairman, House Comm. on the Judiciary).
\111\Id.
\112\Memorandum from Lamar Smith, Chairman, House Comm. on the
Judiciary, to Members of the Committee (Feb. 4, 2011) at 2 (on file
with author).
---------------------------------------------------------------------------
A landmark study by the non-partisan Office of Technology
Assessment found that ``[c]onventional tort reforms that tinker
with the existing process for resolving malpractice claims
while retaining the personal liability of the physician are
[unlikely to] alter physician behavior.''\113\ Most defensive
medicine studies since have failed to demonstrate any real
impact on medical practice arising from higher malpractice
premiums.\114\
---------------------------------------------------------------------------
\113\U.S. Congress, Office of Technology Assessment, supra note 42,
at 92.
\114\Michelle M. Mello & Troyen A. Brennan, Deterrence of Medical
Errors: Theory and Evidence for Malpractice Reform, 80 Tex. L. Rev.
1595 (2002).
---------------------------------------------------------------------------
The reality is that much of ``defensive medicine'' results,
not from threat of litigation, but from financial incentives to
order unnecessary tests and procedures. In a fee-for-service
health care system, health care providers benefit financially
by providing additional services.\115\ The GAO has criticized
the use of ``self-serving'' defensive medicine surveys--such as
the one highlighted by the majority in its briefing memo--
citing to low response rates and unscientific questioning, and
concluding that ``so-called defensive medicine may be motivated
less by liability concerns than by the income it generates for
physicians or by positive (albeit small) benefits to
patients.''\116\
---------------------------------------------------------------------------
\115\Id.
\116\U.S. General Accounting Office, Analysis of Medical
Malpractice: Implications of Rising Premiums on Access to Health Care,
GAO-03-836 (Aug. 29, 2003).
---------------------------------------------------------------------------
A June 1, 2009, article in New Yorker magazine framed the
issue in more direct terms. Why had the cost of health care
risen so high in McAllen, Texas?
``It's malpractice,'' a family physician who had
practiced here for 33 years said. ``McAllen is legal
hell,'' the cardiologist agreed. Doctors order
unnecessary tests just to protect themselves, he said.
Everyone thought the lawyers here were worse than
elsewhere.
That explanation puzzled me. Several years ago, Texas
passed a tough malpractice law that capped pain-and-
suffering awards at $250,000. Didn't lawsuits go down?
``Practically to zero,'' the cardiologist admitted.
``Come on,'' the general surgeon finally said. ``We all
know these arguments are bullshit. There is
overutilization here, pure and simple.'' Doctors, he
said, were racking up charges with extra tests,
services, and procedures.''\117\
---------------------------------------------------------------------------
\117\Atul Gawande, The Cost Conundrum: What a Texas Town Can Teach
Us About Health Care, New Yorker, June 1, 2009.
Additional studies have shown that doctors' fear of lawsuits is
``out of proportion to the risk of being sued,'' that damage
caps have little impact on these perceptions, and that many
doctors will, wittingly or unwittingly, ``exaggerate their
concern about being sued, using it as a justification for high-
spending behavior that is rewarded by fee-for-service payment
systems.''\118\
---------------------------------------------------------------------------
\118\David Katz, Physicians Still Fear Malpractice Lawsuits,
Despite Tort Reforms, Health Affairs, Sept. 2010, Vol. 29, Issue 9
available at http://content.healthaffairs.org/content/29/9.toc.
---------------------------------------------------------------------------
That type of overstatement was evident in the Committee's
January hearing on medical liability reform, where one
Republican witness testified that ``the cost of the practice of
defensive medicine [is estimated] to be between $70 billion and
$126 billion per year.''\119\ When pressed by Rep. Scott,
however, Dr. Hoven had difficulty justifying her claim:
---------------------------------------------------------------------------
\119\Medical Liability Reform--Cutting Costs, Spurring Investment,
Creating Jobs, Hearing Before the H. Comm. on the Judiciary, 112th
Cong., Jan. 20, 2011 (unofficial transcript) (testimony of Dr. Ardis
Hoven, Chair, Board of Trustees of the American Medical Association).
Mr. Scott. And are you suggesting that $70 billion to
$126 billion worth of cases, services were rendered
that were not medically necessary, were not needed?
Dr. Hoven. That is not what I said, Congressman.
Mr. Scott. Well, what are you saying?
Dr. Hoven. I am saying that health care delivered in
the examining room, in the operating room, is driven by
what is based on clinical judgment and based on
assurance testing, which is documentation and proving
that, in fact, that is what is wrong with a patient.
When we talk about cost control in this country, we
are talking about the fact that--and this goes to the
whole issue of cost containment, which is, if, in fact,
you would recognize my medical judgment and allow me to
decide when it is important to do a test or not, then
our patients would be better served.
Mr. Scott. By not providing the services?
Dr. Hoven. If, in my judgment, they don't need it.
Mr. Scott. And you are not able to--and you charge
for services that, in your judgment, are not needed to
the tune of $70 billion to $126 billion?
Dr. Hoven. I do not do that.\120\
---------------------------------------------------------------------------
\120\Id.
Supporters of H.R. 5 can speak about defensive medicine in the
abstract, but their expert on the phenomenon was unwilling or
unable to discuss specifics.
A nonpartisan analysis confirms that the changes proposed
by H.R. 5 will have a negligible impact on the behavior of
physicians. The CBO has found not found significant evidence
that ``defensive medicine'' exists as a pervasive problem, and
projects a scant 0.3 percent savings ``from slightly less
utilization of health care services'' if H.R. 5 were to be
enacted.\121\ Once again, supporters of H.R. 5 point to a
crisis that does not exist, and propose legislation that would
not solve the problem the problem if it did.
---------------------------------------------------------------------------
\121\U.S. Congressional Budget Office, Analysis of the Effects of
Proposals to Limit Costs Related to Medical Malpractice (``Tort
Reform''), Letter to the Hon. Orrin G. Hatch, Oct. 9, 2009, available
at http://www.cbo.gov/doc.cfm?index=10641 [hereinafter CBO Letter].
---------------------------------------------------------------------------
F. LH.R. 5 will not have a significant impact on the cost of health
care or on federal spending.
Although supporters of H.R. 5 argue that limits on medical
malpractice liability will help lower the cost of health care,
they have targeted a minuscule segment of annual health care
spending. According to the National Association of Insurance
Commissioners, medical malpractice premiums totaled
approximately $11.2 billion in 2008.\122\ The overall cost of
health care that year totaled $2.6 trillion.\123\ In practice,
H.R. 5 purports to impact health care spending by taking aim at
0.004 percent of the annual health care budget.
---------------------------------------------------------------------------
\122\NAIC, Countrywide Summary of Medical Malpractice Insurance,
Calendar Years 1991-2008 (Sept. 1, 2009).
\123\Scoring Health Care Reform: CBO'S Budget Options: Hearing
Before the S. Comm. on Finance, 111th Cong. 39 (2009) (statement of
Douglas Elmendorf, Director, Congressional Budget Office).
---------------------------------------------------------------------------
Proponents of H.R. 5 also mention the possibility of
federal budget savings, citing to a 2009 CBO study that
concludes a proposal like H.R. 5 would result in a $54 billion
in budget savings over ten years.\124\ Their use of this study
is troubling for several reasons. First, it is ironic that the
same House Republicans who casually dismissed $230 billion in
savings identified by the CBO in the Affordable Care Act now
apply such importance to asserted savings from H.R. 5. Second,
$13 billion of the savings identified by the CBO has nothing to
do with federal spending; rather, it results from the increased
taxes health professionals will pay if H.R. 5 is enacted.\125\
Third, at least one provision of H.R. 5 is projected to
increase costs. The CBO concluded that ``reform of joint-and-
several liability rules . . . is likely to increase the
financial liability of the providers assigned the greatest
share of responsibility in malpractice cases--typically
physicians.''\126\ Fourth, ``because many states have already
implemented some of the changes in the package, a significant
fraction of the potential cost savings has already been
realized.''\127\
---------------------------------------------------------------------------
\124\Id.
\125\Id.
\126\Id.
\127\Id.
---------------------------------------------------------------------------
Finally, supporters of H.R. 5 miss the narrow scope of the
CBO analysis. The CBO letter is solely an analysis of the
immediate effects of this legislation on the federal budget. It
does not account for the full social and financial cost of
enacting H.R. 5. The CBO admits as much: ``There is less
evidence about the effects of tort reform on people's health,
however, than about the effects of on health care spending--
because many studies of malpractice costs do not examine health
outcomes.''\128\
---------------------------------------------------------------------------
\128\Id.
---------------------------------------------------------------------------
In the long term, victims of malpractice who are injured
but denied full restitution require additional support from
Medicare, Medicaid, and other government programs. Moreover,
the CBO letter acknowledges that, if the changes contemplated
in H.R. 5 are enacted, the U.S. morality rate will increase by
as much as 0.2%.\129\ That constitutes an additional 4,853
Americans killed every year, or 48,250 Americans over the 10-
year period CBO examines.\130\ In our judgment, that is too
high a price to pay for this legislation. H.R. 5 leaves the
families of these patients without full recourse, and leans on
the Federal Government to make up much of the difference.
---------------------------------------------------------------------------
\129\CBO Letter, supra note 123.
\130\Based on 2,436,264 annual deaths, according to the Center for
Disease Control and Prevention. Centers for Disease Control, supra note
67.
---------------------------------------------------------------------------
IV. STATES' RIGHTS AND FEDERALISM CONCERNS
The majority has sent decidedly mixed messages with respect
to states' rights. In the markup of the bill, supporters of
H.R. 5 argued that ``bringing a medical liability lawsuit is an
activity that substantially affects interstate commerce. There
is no federalism concern with this legislation.''\131\ This
claim did not sit well with many members of the majority.\132\
Later, proponents appeared to concede at least the existence of
a states' rights problem, promising to work on an amendment for
introduction on the House floor.\133\ No such amendment has
been shared with Democratic members of the committee, and the
majority voted down several amendments that would have
addressed this issue directly.
---------------------------------------------------------------------------
\131\Markup of H.R. 5, The Help Efficient, Accessible, Low-cost,
Timely Healthcare (HEALTH) Act of 2011 and the Committee's Oversight
Plan, 112th Cong., Feb. 9, 2011 (statement of Rep. Lamar Smith,
Chairman, House Comm. on the Judiciary).
\132\``I got problems with that. I think it's a violation of the
Tenth Amendment, and I don't believe the Federal Government has any
more authority to regulate health care under the Commerce Clause than
it does to regulate liability caps in states under the Commerce
Clause.'' Id. (statement of Rep. Ted Poe, Member, House Comm. on the
Judiciary).
\133\``I want to reassure the gentleman from Georgia and the
gentleman from North Carolina, and particularly two gentlemen from
Texas on my side, that we are actively working on an amendment for the
House floor that would empower States to have control over what aspect
of this law would apply to the States or whether the law would apply to
those States at all.'' Continued Consideration of H.R. 5, The Help
Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011
and the Committee's Oversight Plan, 112th Cong., Feb. 16, 2011
(statement of Rep. Lamar Smith, Chairman, House Comm. on the
Judiciary).
---------------------------------------------------------------------------
Simply put, H.R. 5 is a direct attack on states' rights. It
preempts the law in all 50 states, and its so-called ``state
flexibility'' provision does almost nothing to mitigate serious
federalism concerns.
A. LThe states set the rules for their own court systems, and
federalism permits diverse systems to coexist.
Historically, the states have been allowed to set their own
rules for their own court systems. The two litigants in a
medical malpractice case are usually an in-state plaintiff and
an in-state physician.\134\ Except in limited circumstances,
malpractice cases can only be filed in state court.\135\ Even
when malpractice cases can be filed in federal court, those
courts apply state malpractice law.
---------------------------------------------------------------------------
\134\See Michael I. Krauss & Robert A. Levy, supra note 7.
\135\Medical malpractice cases filed in federal court are based on
diversity jurisdiction; e.g., where the parties reside in different
states.
---------------------------------------------------------------------------
All 50 states have considered some changes to their tort
systems, and different states have adopted different approaches
to the issue of medical malpractice liability. The National
Conference of State Legislatures (NCSL), a bipartisan
organization representing the elected legislators and
professional staffs of all 50 state legislatures, maintains
that ``American federalism contemplates diversity among the
states in establishing these rules.''\136\
---------------------------------------------------------------------------
\136\NCSL Policy, supra note 8.
---------------------------------------------------------------------------
All 50 states have statutes of limitations in place with
respect to negligence cases.\137\ All 50 states have rules of
evidence to provide for the full and fair adjudication of
lawsuits.\138\ Some states--Colorado, Florida, Illinois,
Maryland, Michigan, Texas, and West Virginia, among others--
have already enacted medical malpractice damage caps of their
own.\139\ Other states--including Arizona, Connecticut, Iowa,
Kentucky, New York, Oregon, Tennessee, and Wyoming--have
expressly chosen not to limit medical malpractice damages, in
some instances by amendment to the state constitution or
popular referendum.\140\ Federalism allows each state to choose
the rules for medical malpractice cases that best fit the
particular needs of its citizens, and permits diverse systems
to flourish and to coexist.
---------------------------------------------------------------------------
\137\Id.
\138\Id.
\139\Colo. Rev. Stat. Sec. 12-64-302; Fla. Stat. Sec. Sec. 766.118
and 768.73; 735 Ill. Comp. Stat. Sec. 5/2-1115; Md. Code, Cts. & Jud.
Proc Sec. 3-2A-09; Mich. Comp. Laws Sec. 600.1483; Tex. Civ. Proc. &
Rem. Code Sec. 74.301; W. Va. Code Sec. 55.7B.8.
\140\See, e.g., Ariz. Const., Art. 2, sec. 31. ``No law shall be
enacted in this state limiting the amount of damages to be recovered
for causing the death or injury of any person.'' Id. See also Ark.
Const. Art.5, sec. 32; Ky. Const. Sec. 54; Penn. Const., Art III, sec.
18.
---------------------------------------------------------------------------
B. LH.R. 5 preempts state law in all 50 states.
H.R. 5 overturns this entire federalist approach to medical
malpractice liability reform to impose a uniform set of rules
on the states. No state is immune. No state has adopted the
bill's precise regime of $250,000 caps on noneconomic damages,
$250,000 caps on punitive damages, elimination of joint-and-
several liability, and a 3-year limited statute of limitations.
Moreover, no state has attempted to capture every action
against ``a health care provider, a health care organization,
or the manufacturer, distributor, supplier, marketer, promoter,
or seller of a medical product, regardless of the theory of
liability on which the claim is based,''\141\ in a law to
reform ``medical malpractice'' liability.
---------------------------------------------------------------------------
\141\HEALTH Act, 112th Cong. Sec. 9(7).
---------------------------------------------------------------------------
The National Conference of State Legislatures categorically
rejects the ``one-size-fits-all approach to medical malpractice
envisioned in H.R. 5'' and has reached the ``resounding
bipartisan conclusion'' that ``federal medical malpractice
legislation is unnecessary.''\142\ In a letter to the Chairman
and Ranking Member of the Judiciary Committee, NCSL argues
further that its opposition to H.R. 5 ``will extend to any bill
or amendment that directly or indirectly preempts any state law
governing the awarding of damages by mandatory, uniform amounts
or the awarding of attorney's fees.''\143\
---------------------------------------------------------------------------
\142\Letter from Nevada Assemblyman William Horne, Chair, NCSL, and
Texas Rep. Jerry Madden, Immediate Past Chair, NCSL, to Rep. Lamar
Smith and Rep. John Conyers, Feb. 16, 2011.
\143\Id.
---------------------------------------------------------------------------
With two limited exceptions, H.R. 5 explicitly preempts the
states in every area of law it reaches--statutes of limitation,
attorneys' fees, rules of evidence, suits against
pharmaceutical and device manufacturers, and caps on punitive
damages.\144\
---------------------------------------------------------------------------
\144\HEALTH Act, 112th Cong. Sec. 11(a).
---------------------------------------------------------------------------
The first exception exists solely to further disadvantage
victims of medical malpractice. H.R. 5 does not preempt any law
``that imposes greater procedural or substantive protections
for healthcare providers and healthcare organizations.''\145\
In effect, any state law that goes further than H.R. 5 to favor
defendants--e.g., a law that provides for shorter statutes of
limitation, imposes lower caps on punitive damages, or removes
consumer protections in instances of fraud\146\ or
bribery\147\--stays on the books.
---------------------------------------------------------------------------
\145\Id. Sec. 11(b)(2).
\146\Id. Sec. 7(c)(4).
\147\Id.
---------------------------------------------------------------------------
The second exception to general preemption--the ``State
Flexibility'' provision--is, at best, misnamed. Any state law
that ``specifies a particular monetary amount of compensatory
or punitive damages'' avoids preemption by the $250,000 cap on
noneconomic damages imposed by H.R. 5.\148\ This provision
allows existing monetary caps on medical liability damages to
stand. But it also forces states without the full range of
damage caps contemplated by H.R. 5 to adopt a specific scheme.
For example:
---------------------------------------------------------------------------
\148\Id. Sec. 11(c).
Arizona. The Arizona state constitution explicitly
prohibits any statutory limit on the amount of damages
recoverable by a plaintiff in a medical malpractice
suit.\149\ H.R. 5 would preempt the state constitution
and force Arizona to adopt a $250,000 cap on
noneconomic damages in all health care lawsuits. H.R. 5
also preempts similar provisions in the state
constitutions of Arkansas, Kentucky, and Pennsylvania.
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\149\Ariz. Const., Art. 2, sec. 31.
Connecticut. Connecticut imposes several procedural
requirements on medical malpractice litigants, but does
not include caps on damages.\150\ H.R. 5 would preempt
state law and force Connecticut to adopt a $250,000 cap
on noneconomic damages in all health care lawsuits.
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\150\Conn. Gen. Stat. Sec. Sec. 51-251c and 52-584.2.
California. California caps only noneconomic damages
for medical malpractice claims involving licensed
medical professionals.\151\ Under H.R. 5, it would be
forced to cap damages on cases involving nursing homes,
pharmaceutical companies, and the insurance industry.
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\151\Cal. Civ. Code Sec. 3333.2.
Indiana. Indiana caps total compensatory damages at
$1,250,000 overall and $250,000 per health care
provider, with no limit for wrongful death claims.\152\
Under H.R. 5, it would be force to cap damages in
wrongful death suits, as well as in cases involving
nursing homes, pharmaceutical manufacturers, and
insurance companies.
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\152\Ind. Code Sec. 34-18-4-3.
Texas. Texas caps noneconomic damages in cases
involving medical professionals and health care
institutions, but not in cases involving the drug and
device industry.\153\ Under H.R. 5, it would be forced
adopt a $250,000 cap in such cases.
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\153\Tex. Civ. Proc. & Rem. Code Sec. 74.301.
In sum, no state will go unaffected by the H.R. 5. The ``state
flexibility'' provision provides for very little actual
flexibility.
C. LThe majority sends mixed messages on states' rights and H.R. 5.
The Federal Government has an important role to play in
controlling the costs of health care. Supporters of H.R. 5
invoke a broad ``effect on interstate commerce'' as
constitutional justification for the bill.\154\ Specifically,
they find that ``the health care insurance industries affecting
interstate commerce and the health care liability litigation
systems existing throughout the United States are activities
that affect interstate commerce by contributing to the high
costs of health care.''\155\ Because the health care and
insurance industries have a massive impact on the national
economy, Congress has the authority and reason to act where the
individual states are unable to address the issue separately.
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\154\Id. Sec. 2(a)(2).
\155\Id.
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For the past two years, supporters of H.R. 5 have argued
precisely the opposite with respect to the Affordable Care
Act.\156\
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\156\See, e.g., Rep. Lamar Smith, Updated Health Care Frequently
Asked Questions (FAQ) available at http://lamarsmith.house.gov/Issues/
Issue/?IssueID=13970 (``I co-sponsored legislation that increases
funding for state-based programs providing health insurance to
individuals unable to obtain affordable insurance from private
insurers. This bill passed by Congress is a massive overreach of
government control.'').
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In fact, the majority has argued both sides of the states'
rights question on the same day. On the morning of February 16,
in a full committee hearing on ``The Constitutionality of the
Patient Individual Mandate,'' Republican members described the
Affordable Care Act as a massive overreach of the Federal
Government and a clear violation of the Tenth Amendment.\157\
Chairman Smith argued further that ``if the individual mandate
is upheld'' by the Supreme Court, ``it would be the end of
federalism.\158\ Later that afternoon, in the continued markup
of H.R. 5, Republican members of the committee voted twice--by
party line both times--to reject amendments to the bill that
would have allowed existing state laws to stand.\159\
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\157\``I think that [the Affordable Care Act] expanded the Commerce
Clause beyond the intentions of the Founding Fathers and the concepts
that we basically hold today. . . . [I]f Obamacare is upheld as
constitutional . . . then what could be constrained by the Commerce
Clause?'' The Constitutionality of the Patient Individual Mandate:
Hearing Before the H. Comm. on the Judiciary, 112th Cong. (Feb. 16,
2011) (statement of Rep. Steve King, member, H. Comm. on the
Judiciary).
\158\Id. (statement of Rep. Lamar Smith, chairman, H. Comm. on the
Judiciary).
\159\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011. Amendments
introduced by Rep. Hank Johnson would have struck preemption language
in H.R. 5 and permitted existing state medical malpractice liability
laws (or, in the alternative, relevant provisions of state
constitutions) to remain in effect. At least two members of the
majority were ``noticeably absent from the room'' when these amendments
were rejected. Brett Coughlin, House Judiciary Approves Tort Reform,
Politico, Feb. 16, 2011 available at http://www.politico.com/news/
stories/0211/49703.html.
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The majority's position on states' rights took an even
stranger turn when the committee considered an amendment to
``repair certain provisions in the McCarran-Ferguson Act which
currently exempt medical malpractice insurers from Federal
antitrust laws.''\160\ In opposition to the amendment, the
majority argued:
---------------------------------------------------------------------------
\160\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of
Rep. Maxine Waters, member, H. Comm. on the Judiciary).
Under our current system, Mr. Chairman, State
regulation of health insurance, State regulators have
authority to prevent rates that are excessive,
inadequate, or unfairly discriminatory. . . . By
letting Department of Justice and FTC second guess
State insurance regulator's competition policies, this
amendment would disrupt subtle law in nearly every
State in the Union.\161\
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\161\Id. (statement of Rep. Trent Franks, member, H. Comm. on the
Judiciary).
The majority opposed this amendment because it would have
preempted state law. To summarize: the majority was in favor of
states' rights in the morning and opposed to states' rights in
the afternoon--except while debating this amendment, when they
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favored states' rights again.
To their credit, some members of the majority have made
public comments pointing out this inconsistency.\162\ Others
are content to repeat the fiction that H.R. 5 ``specifically
exempts state laws and does not change what states have already
adopted.''\163\
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\162\Comparing the Affordable Care Act to H.R. 5, Rep. Ted Poe
remarked: ``to be consistent, they're both not covered under the
Interstate Commerce [Clause]. I don't think the Constitution gives the
Federal government any authority in either one of those areas.'' Markup
of H.R. 5, The Help Efficient, Accessible, Low-cost, Timely Healthcare
(HEALTH) Act of 2011 and the Committee's Oversight Plan, 112th Cong.,
Feb. 9, 2011 (statement of Rep. Ted Poe, member, H. Comm. on the
Judiciary).
\163\Id. (statement of Rep. Lamar Smith, Chairman, H. Comm. on the
Judiciary).
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V. SPECIFIC CONCERNS WITH THE LEGISLATION
H.R. 5 imposes new restrictions on medical malpractice
cases. It applies these restrictions across the board--no
matter how much merit a case may have, regardless of the
negligence at issue or the severity of the injury. Individually
and collectively, the provisions of H.R. 5 are unjust and
unfair. The following are just a few of the most pressing
problems with the bill.
A. LThe $250,000 cap on noneconomic damages is unfair and
discriminatory (Section 4(b)).
The $250,000 cap on noneconomic damages is manifestly
unfair. It discriminates against women, children, and other
vulnerable members of society and does account for the effects
of inflation. The bill's sweeping definition of ``health care
lawsuit'' gives the cap a particularly insidious reach.
H.R. 5 imposes an arbitrarily low cap on noneconomic
damages in every case, regardless of the negligence or the
extent of injury involved. This one-size-fits-all approach
objectifies patients and gives the courts little room to
restore any loss that does not come with a price tag. The cap
does nothing but stop the most severely injured patients from
receiving adequate compensation.\164\ It is patently unfair.
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\164\A survey by the RAND Corporation found that the ``most
significant impact'' of California's $250,000 cap ``falls on patients
and families who are severely injured or killed as a result of medical
negligence or mistakes.'' ConsumerWatchDog.com, RAND Study: California
Patients Killed or Maimed by Malpractice Lose Most Under Damage Caps,
http://www.
consumerwatchdog.org/newsrelease/rand-study-california-patients-killed-
or-maimed-malpractice-lose-most-under-damage-caps (last visited Mar. 1,
2011).
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Some malpractice cases clearly call for damages that exceed
$250,000. At a forum hosted by Democratic members in 2003,
Kathy Olsen described her son's injuries.\165\ When Steve Olsen
was 2 years old, he fell on a stick in the woods. His infection
was severe enough that the Olsens asked for a CAT scan, but
Steve's doctor administered a steroid injection and sent him
home without further treatment. The next day, Steve returned to
the hospital in a coma, permanently blind and brain damaged
from a growing brain abscess. At trial, a jury concluded that
the doctor had committed malpractice. Given the magnitude of
the injury--Steve had no lost wages, but he would never play
sports, work, or enjoy normal relationships with his peers--the
jury awarded the Olsens $7.1 million in ``noneconomic''
damages. Because the case was subject to California's medical
malpractice cap, the judge was forced to reduce the award to
$250,000.
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\165\Democratic Forum on Malpractice, Feb. 11, 2003, Transcript at
60.
---------------------------------------------------------------------------
Mrs. Olsen testified: ``California's malpractice law has
failed innocent patients, consumers, and taxpayers. Under this
law people are victimized twice, once by the wrongdoer and
again by the laws that deny them the right to hold the
wrongdoer accountable.''\166\ As to the cap on damages, Mrs.
Olsen observed that the ``law is regressive by hurting the most
seriously injured victims, those who are permanently and
catastrophically injured by medical negligence. . . . In
California, and now proposed nationwide, no matter how old you
are or how disabled you become or how catastrophic your
injuries are, there is a one size fits all limit on your pain
and suffering.''\167\
---------------------------------------------------------------------------
\166\Id. at 62.
\167\Id.
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The $250,000 cap is a particular burden on women, children,
seniors, and the poor. Proportionally, these patients have more
trouble demonstrating lost wages and other economic losses.
Studies of medical malpractice cases show that women recover
economic damages in lower amounts because they receive lower
overall wages.\168\ Women are three times more likely than men
to receive noneconomic damages.\169\ Women are far more likely
to suffer severe noneconomic loss (e.g., loss of fertility or
disfigurement) or to be a victim of the type of conduct that
leads to punitive damages (e.g., sexual assault, fraud, false
imprisonment, and extreme violation of medical standards).\170\
With the cap on noneconomic damages in place, a woman without a
salary is limited to $250,000 to compensate for these injuries.
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\168\See Thomas Koenig & Michael Rustad, His and Her Tort Reform:
Gender Injustice in Disguise, 70 Wash. L. Rev. 1 (1995).
\169\Id. at 84.
\170\Id.
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These effects are more than theoretical. After undergoing a
double mastectomy, Linda McDougal was told that she had never
had breast cancer--a pathologist had mixed up her charts with
those of another patient.\171\ Although she recovered $8,000 in
lost wages and $48,000 in medical bills, her actual losses were
profound:
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\171\Democratic Forum on Malpractice, February 11, 2003, Transcript
at 48.
My scars are not only physical, but emotional as well.
. . . My disfigurement from medical negligence is
almost entirely noneconomic. . . . I could never have
predicted or imagined in my worst nightmare that I
would end up having both of my breasts removed
needlessly because of a medical error. No one plans on
being a victim of medical malpractice, but it
happened.\172\
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\172\Id. at 50-51.
The cap on non-economic damages puts a price tag on the worst
types of physical and psychological trauma. Under H.R. 5, Mrs.
McDougal would be entitled to $250,000 for her permanent
disfigurement, nothing more.
On May 29, 2010, Connie Spears went to a San Antonio
hospital reporting excruciating leg pain. Mrs. Spears had
experienced blood clots before, so frequently and some so
severe that doctors had installed a filter in one of her
heart's main veins. In the San Antonio emergency room, however,
the doctor on call diagnosed Mrs. Spears with ``bilateral leg
pain'' and told her to follow up with her primary care
physician. Three days later, in immense pain and with her legs
a burgundy color, Spears called 911 and was transported by
ambulance to a different hospital. This time, doctors
determined that the 54 year old's vein filter was severely
clotted and had led to tissue death in her legs and kidney
failure. When Mrs. Spears regained consciousness weeks later,
she learned that doctors had amputated both of her legs to save
her life.\173\ ```Do you know what it's like not to have any
legs?' Mrs. Spears asked tearfully, trembling as she lifted her
dress to reveal the thick pink scars stretched like pillow
seams across her thighs. `It's ruined all of our lives.'''\174\
Under H.R. 5, Mrs. Spears would be limited to $250,000 as
compensation for the trauma of losing her legs.
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\173\Emily Ramshaw, State's Tort Reform Makes Lawyers Wary of
Taking on Patients, N.Y. Times, Dec. 19, 2010, at A39.
\174\Id.
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The $250,000 cap in H.R. 5 is pegged to the amount adopted
by California in 1975, at a time when noneconomic damages
rarely exceeded $250,000. More than 30 years later, inflation
has taken its toll.\175\ Translated into 2011 dollars, the
$250,000 cap imposed in 1975 is worth about $61,000 today. If
adjusted to reflect inflation in medical care value, the cap
would be worth almost $2 million today. The majority voted down
two amendments offered by Rep. Jerrold Nadler that would have
corrected this error--one that would have raised the cap to
$1,977,500 and ensure that the amount is adjusted annually for
inflation, and one that would have simply adjusted the $250,000
cap for inflation in future years.\176\ Although any arbitrary
cap is unfair, these amendments would have at least mitigated
the damage.
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\175\See U.S. Congressional Research Service, Medical Malpractice
Liability Reform: Legal Issues and Fifty-State Survey of Caps on
Punitive Damages and Noneconomic Damages, RL31692 (Jan. 18, 2006).
\176\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011.
---------------------------------------------------------------------------
Many states have adopted some form of cap on medical
malpractice damages, but no state has capped damages in all
``health care lawsuits,'' as H.R. 5 defines the term. H.R. 5
reaches all suits ``concerning the provision of health care
goods or services or any medical product affecting interstate
commerce, or any health care liability action concerning the
provision of health care goods or services or any medical
product affecting interstate commerce.''\177\ The bill is an
unprecedented experiment in limiting the rights of patients as
they face insurance companies, HMOs, pharmaceutical and device
manufacturers, and other entities that have nothing to do with
traditional medical malpractice.
---------------------------------------------------------------------------
\177\HEALTH Act, 112th Cong. Sec. 9(7).
---------------------------------------------------------------------------
Because of the uncertain interaction between the bill's
definition of ``economic damages'' and existing state law, caps
on noneconomic damages have a particularly harmful effect on
children. In markup, Rep. Debbie Wasserman Schultz offered an
amendment to exempt minors from the $250,000 cap on noneconomic
damages. She reasoned: ``the basis of the amendment is just
common sense. Children don't work. Like women and the elderly
who tend to be in lower wage jobs, children are even more
disproportionately impacted by these noneconomic damage.''\178\
In response, supporters of H.R. 5 argued that ``the reality is
that the economic damages accrue to the parents, and the
parents certainly have the right to sue on behalf of economic
damages in a limitless capacity.''\179\ Although the majority
was unable to name a single malpractice case in which parents
recovered economic damages on behalf of an injured child, they
defeated the amendment along party lines.
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\178\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of
Rep. Debbie Wasserman Schultz, member, H. Comm. on the Judiciary).
\179\Id. (statement of Rep. Trent Franks, member, H. Comm. on the
Judiciary).
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H.R. 5 defines ``economic damages'' as ``objectively
verifiable monetary losses . . . such as past and future
medical expense, loss of past and future earnings, cost of
obtaining domestic services, loss of employment, and loss of
business or employment opportunities.''\180\ On its face, this
provision appears to be of limited use to children, who do not
work, and the elderly, who may not have significant future
earnings. If the majority intended for children's future lost
wages to count as ``economic damages,'' they could have voted
for an amendment proposed by Rep. Robert Scott that would have
clarified the bill. Instead, they voted down the proposal--
leaving patients to sort out the meaning of the term ``economic
damages'' case by case, and state by state.
---------------------------------------------------------------------------
\180\HEALTH Act, 112th Cong. Sec. 9(6).
---------------------------------------------------------------------------
The rejection of these amendments has real consequences. In
2008, 17-year-old Olivia Cull was in the process of finishing
her senior year at the Archer School for Girls, where she was
an accomplished scholar, actress, and musician. She had been
accepted early into Smith College and planned to major in
Classical Studies and Ancient Arts and Languages. That year,
Olivia underwent a routine cardiac catheterization to assess a
congenital heart condition. The procedure was without incident,
but later, while Olivia was still under general anesthesia, a
cardiology fellow-in-training pulled the catheter lines and
caused Olivia's heart rate, pulse, and blood pressure to drop
rapidly. Basic cardiopulmonary resuscitation was not started
for more than ten minutes. Olivia suffered severe and extensive
brain damage, never regained consciousness, and died on January
20, 2009.\181\ It is difficult to put a price tag on the loss
caused to Olivia's parents, but it cannot be measured by
``objectively verifiable monetary losses'' and should not be
capped at $250,000.
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\181\American Ass'n for Justice, The Real Victims of H.R. 5 (Feb.
2011).
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B. LThe abolition of joint and several liability creates an unfair
standard for the patient (Section 4(d)).
Joint and several liability has been part of American
common law for centuries.\182\ The doctrine provides that all
tortfeasors who are responsible for an injury are ``jointly and
severally'' liable for the claimant's damages. A patient can
sue all responsible defendants and recover from each one in
proportion to degree of fault, or sue any one defendant and
recover the total amount of damages. A defendant who pays more
than his or her share is then entitled, under the doctrine of
contribution, to seek compensation from other responsible
parties based on their degree of fault.\183\ Joint and several
liability is designed to ensure that patients of wrongful
conduct are able to fully recover damages for their injuries,
especially when one or more of the defendants is insolvent.
---------------------------------------------------------------------------
\182\See, e.g., Michael L. Rustad & Thomas H. Koenig, Taming the
Tort Monster: The American Civil Justice System As A Battleground of
Social Theory, 68 Brook L. Rev. 1 (Fall 2002); Matthew W. Light, Who's
the Boss?: Statutory Damage Caps, Courts, and State Constitutional Law,
58 Wash. & Lee L. Rev. 315 (Winter, 2001).
\183\Restatement (Third) of Torts Sec. 23 (1999).
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H.R. 5 replaces this doctrine with its so-called ``Fair
Share'' rule, which provides: ``each party shall be liable for
that party's share of any damages only and not for the share of
any other person. . . . A separate judgment shall be rendered
against each party for the amount allocated to such
party.''\184\ In practice, H.R. 5 would require a patient to
demonstrate each defendant's proportional responsibility for an
injury.
---------------------------------------------------------------------------
\184\HEALTH Act, 112th Cong. Sec. 4(d).
---------------------------------------------------------------------------
This burden is unfair. Plaintiffs would be required to
bring a separate case against each defendant, ``each requiring
a finding of duty of care, a breach of that duty, proximate
cause, finding damages, and a determination of what part of
total damages are attributed to which malpractice. Each case
requires an expert witness, depositions, and the full expense
of complicated litigation.''\185\ The rule is also unnecessary.
As Rep. Scott argued in markup: ``Health care providers already
can agree, in advance, how to apportion responsibility and they
provide insurance and all pay premiums and set fees for
services accordingly.''\186\ Although H.R. 5 is based on
California's medical malpractice law, not even California
eliminates joint and several liability for economic damages.
The CBO notes that this particular proposal will actually
increase the overall cost of health care.\187\
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\185\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of
Rep. Robert Scott, member, H. Comm. on the Judiciary).
\186\Id.
\187\CBO Letter, supra note 123.
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Rather than engage in debate on the facts, supporters of
H.R. 5 turned to a tired anecdote to support this provision:
Say a drug dealer staggers into an emergency room with
a gunshot wound after a deal dealing drugs goes bad.
The surgeon works on him, does the best he possibly
can, but it is not perfect, and drug dealer sues him.
The jury finds the drug dealer 99 percent responsible
for his own injuries. But it also finds the hospital 1
percent responsible because the physician was fatigued
after working too long. But today, the hospital can be
made to pay 100 percent of the damages because the drug
dealer is without means.\188\
---------------------------------------------------------------------------
\188\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of
Rep. Trent Franks, member, H. Comm. on the Judiciary).
First, this story is borrowed from past debates. It has been
used by the majority to defend this proposal nearly every time
H.R. 5 has been considered by the committee.\189\ Second, its
premise is factually incorrect. All 50 states have adopted some
form of contributory negligence or comparative negligence
standard that bars plaintiffs from recovering for damages for
which they are substantially responsible.\190\ Even if the
``drug dealer'' could somehow bring a colorable malpractice
claim against the ``hospital,'' he would not be entitled to
recover damages if he were ``99 percent'' at fault. Third, it
goes to show how little consideration has been given to the
effect of preempting state law in all 50 states. Supporters of
H.R. 5 appear to be unaware of how state law applies in
instances of joint and several liability, let alone prepared
for the unintended consequences of wiping out centuries of
jurisprudence in the United States.
---------------------------------------------------------------------------
\189\See, e.g., Markup of Help Efficient, Accessible, Low-cost,
Timely Healthcare (HEALTH) Act of 2002, 107th Cong. (statement of Rep.
Bachus, member, H. Comm. on the Judiciary).
\190\See, e.g., Board of County Comm'r of Garret County v. Bell
Atlantic, 695 A.2d 171 (Md. 1997) (outlining a standard of pure
contributory negligence in Maryland); Liv v. Yellow Cab, 119 Cal. Rptr.
858 (1975) (outlining a standard of pure comparative fault in
California); O.C.G.A. Sec. 51-11-7 (codifying a 50 percent bar rule in
Georgia); and Tex. Civ. Prac. & Rem. Code Sec. Sec. 33.001-33.017
(codifying a 51 percent bar rule in Texas).
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C. LPunitive damages caps protect the most egregious instances of
malpractice (Sections 7(a) and 7(b)).
The bill's limits on punitive damages are problematic for
two reasons. First, the heightened standard is practically
impossible for patients to prove. Second, the $250,000 cap is
fundamentally inadequate in cases extreme enough to warrant
punitive damages.
Under H.R. 5, punitive damages are only available if a
plaintiff can prove by ``clear and convincing evidence'' that a
defendant ``acted with malicious intent to injure the
claimant'' or ``deliberately failed to avoid unnecessary
injury'' that he or she was ``substantially certain'' the
patient would suffer.\191\ Because proving state of mind in
this manner is virtually impossible, perpetrators of the most
extreme forms of malpractice will now go unpunished.
---------------------------------------------------------------------------
\191\HEALTH Act, 112th Cong. Sec. 7(a).
---------------------------------------------------------------------------
In markup, Ranking Member Conyers offered an amendment that
would have exempted claims based on intentional tort liability
from this new standard.\192\ The majority argued that the
amendment was ``redundant'' because criminal activity is
already exempted from the bill,\193\ and voted it down on party
lines. There are many differences between intentional tort
claims and criminal charges--they are brought in entirely
separate court systems, with separate rules of procedure and
separate burdens of proof--but H.R. 5 does not reflect this
fact.
---------------------------------------------------------------------------
\192\Markup of H.R. 5, The Help Efficient, Accessible, Low-cost,
Timely Healthcare (HEALTH) Act of 2011 and the Committee's Oversight
Plan, 112th Cong., Feb. 9, 2011.
\193\Id. (statement of Trent Franks, member, H. Comm. on the
Judiciary).
---------------------------------------------------------------------------
Rep. Ted Deutch offered a narrower amendment to exempt
certain intentional torts (e.g., assault, batter, rape,
conversion, false imprisonment, and intentional infliction of
emotional distress) from the scope of the bill.\194\ The
majority voted down this amendment as well, arguing that these
torts have ``nothing to do with medical liability.''\195\ A
plain reading of H.R. 5 shows that the bill applies to any
claim ``against a health care provider, health care
organization, or the manufacturer distributor, supplier,
marketer, promoter, or seller of a medical product . . .
regardless of the theory of liability on which the claim is
based.''\196\ An intentional tort claim against a health care
provider quite clearly falls into this irresponsibly sweeping
definition.
---------------------------------------------------------------------------
\194\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of
Ted Deutch, member, H. Comm. on the Judiciary).
\195\Id. (statement of Trent Franks, member, H. Comm. on the
Judiciary).
\196\HEALTH Act, 112th Cong. Sec. 9(9) (emphasis added).
---------------------------------------------------------------------------
Even if a patient is somehow able to show malicious intent,
recovery of punitive damages is limited at $250,000 or two
times the amount of economic damages awarded.\197\ This cap
eliminates much of the deterrent effect of punitive damages--
$250,000 for grossly negligent conduct would merely be the
price of doing business for many hospitals, pharmaceutical
manufacturers, insurance companies, and other wealthy health
care providers. Worse, the cap applies in the most outrageous
instances of medical malpractice, including cases involving
drug abuse, alcohol abuse, and sexual assault.\198\ In markup,
Rep. Debbie Wasserman Schultz cited the case of Dr. Earl
Bradley, a Delaware pediatrician who sexually assaulted 103
children over the course of his medical career.\199\ Under H.R.
5, the patients in this case--children, some as young as three
months old, with no economic damages to prove--would be
entitled seek no more than $250,000 in punitive damages.
---------------------------------------------------------------------------
\197\Id. Sec. 7(b)(2).
\198\Public Citizen found that ``47.7% of doctors [found to have
been disciplined for sexual abuse or misconduct by a disciplinary
board] were allowed to continue practicing, their behavior probably
unknown to most if not all of their patients.'' Sidney Wolfe et al.,
20,125 Questionable Doctors (2000).
\199\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of
Rep. Debbie Wasserman Schultz, member, H. Comm. on the Judiciary).
---------------------------------------------------------------------------
D. LShielding drug and device manufacturers from punitive damages
places consumers at grave risk (Section 7(c)).
H.R. 5 provides blanket immunity from punitive damages to
the manufacturers of drugs and devices that have been approved
by the Federal Drug Administration.\200\ This provision alone
would be troubling enough. Simply because a product has been
approved by the FDA does not mean that a company should be
immunized from punitive liability when that product causes
severe harm to a consumer. Medical devices cause approximately
53 deaths and more than 1,000 serious injuries every year, with
a cost of more than $26 billion annually.\201\ Government
safety standards, at their best, establish only a minimum level
of protection for the public. At their worst, they are
outdated, under-protective, and under-enforced.
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\200\HEALTH Act, 112th Cong. Sec. 7(c)(1)(A)(i).
\201\See Robert Cohen & J. Scott Orr, Faulty Medical Implants Enter
Market Through Flawed System, Newhouse News Service, 2002.
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Moreover, the bill completely insulates manufacturers and
distributors of drugs and devices from defects arising during
the manufacturing process, which occurs after the FDA has given
its approval of the device. This means that a drug company
distributing an FDA-approved product that is manufactured in a
flawed manner and harms consumers would be insulated from
punitive damages, even if the flawed manufacture was
intentional or reckless.
H.R. 5 goes even further, extending this immunity to
manufacturers and distributors of drugs and devices that are
``generally recognized among qualified experts as safe and
effective,'' whether or not FDA approval has been sought.\202\
In these cases, so long as a defendant can find an expert
witness to vouch for its product, federal safety standards are
sidestepped altogether. Unless the defendant company has
withheld or misrepresented information from the FDA or
attempted to bribe an FDA official,\203\ punitive damages are
not available, no matter how flagrant the harm.
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\202\HEALTH Act, 112th Cong. Sec. 7(c)(1)(A)(ii).
\203\Id. Sec. 7(c)(4).
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Rep. Mike Quigley and Rep. Sheila Jackson Lee offered an
amendment that would have struck this provision.\204\ The
majority opposed the amendment because ``litigation is
threatening the viability of the lifesaving drug
industry.''\205\ Drug manufacturers can hardly plea poverty. In
2009, the pharmaceutical industry was the third most profitable
segment of the U.S. economy.\206\ Medical device and equipment
manufacturers came in fourth.\207\ By rejecting this amendment,
supporters of H.R. 5 chose to side with these industries rather
than with individual patients and consumers.
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\204\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011.
\205\Id. (statement of Rep. Trent Franks, member, H. Comm. on the
Judiciary).
\206\CnnMoney.com, Fortune 500 D Top Industries: Most Profitable,
http://money.cnn.com/ magazines/fortune/fortune500/2009/performers/
industries/profits/.
\207\Id.
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E. LLimits on contingency fees deny patients access to the justice
system (Section 5).
Contingency fee arrangements--where attorneys forgo
immediate payment in exchange for a share of the damages if a
plaintiff prevails in court--serve a useful and essential
function in the legal system.\208\ Because contingency fee
agreements require little or no money up front, injured
plaintiffs who could not otherwise afford legal representation
have access to counsel. And because attorneys who take losing
cases are paid little or nothing for their efforts, contingency
fees also serve as a screening mechanism for ``frivolous''
cases.\209\ Lawyers will not incur the risk of taking a
contingency fee case with little merit.
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\208\See Herbert M. Kritzer, Lawyer Fees and Lawyer Behavior in
Litigation: What does the Empirical Literature Really Say?, 80 Tex. L.
Rev. 1943 (2002); and Herbert M. Kritzer, Economic Policy Litigation
Conference Seven Dogged Myths Concerning Contingency Fees, 80 Wash. U.
L.Q. 739 (Fall 2002).
\209\Id.
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In an unusual position for the traditionally free-market
majority, supporters of H.R. 5 prefer that state and federal
courts to step into attorney-client agreements and ``supervise
the arrangements for payment of damages.''\210\ The bill
requires that all contingency fee arrangements adhere to a
specific formula: ``(1) Forty percent of the first $500,000
recovered by the claimant(s). (2) Thirty-three percent and one-
third percent of the next $500,000 recovered by the
claimant(s). (3) Twenty-five percent of the next $500,000
recovered by the claimant(s). (4) Fifteen percent of the next
$500,000 recovered by the claimant.''\211\
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\210\HEALTH Act, 112th Cong. Sec. 5.
\211\Id.
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This provision purports to limit conflict of interest ``in
any health care lawsuit in which the attorney for a party
claims a financial stake in the outcome,''\212\ but the
contingency fees formula will have the effect of making it more
difficult for poor patients to secure legal representation in
medical malpractice cases. Although the stated purpose of this
bill is curb the costs of lawsuits and lower insurance
premiums, contingency fees do not change the size of a jury
award or an insurance company's obligation to pay damages on
behalf of a health care provider. Moreover, the one-sided
formula does nothing to limit conflicts of interest on the
other side of the case. Defense counsels are paid by the hour
and have direct financial incentive to engage in unnecessary
litigation and drive up costs. The bill's stated concern about
legal ethics notwithstanding, this proposal is a naked attempt
to prevent plaintiffs from accessing the courts.
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\212\Id.
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F. LPeriodic payments shift the risks of bankruptcy to individual
patients (Section 8).
If H.R. 5 passes, courts will no longer have discretion in
structuring payment of damages over time. At the request of a
defendant found to have committed malpractice, ``the court
shall . . . enter a judgment ordering that future damages be
paid by periodic payments.''\213\ As with the other defendant-
friendly provisions of this bill, this requirement harms
patients and protects proven bad actors.
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\213\Id. Sec. 8(a) (emphasis added).
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Periodic payment plans allow a negligent party to stall
while the patient assumes the risk. The defendant (or the
defendant's insurance company) can invest and earn interest on
compensation owed to the patient. If a defendant files for
bankruptcy--or simply refuses to pay--it is the patient's
responsibility to retain counsel and press the matter in court.
There may be instances where a court, in its discretion, finds
good reason to structure payment of damages over time. H.R. 5
removes that discretion, however, and the one-sidedness of this
provision is unjustifiable.
G. LA strict statute of limitations denies patients a chance to be
heard in court (Section 3).
H.R. 5 requires that a health care lawsuit commence ``3
years after the date of manifestation of injury or 1 year after
the claimant discovers, or through the use of reasonable
diligence should have discovered, the injury, whichever occurs
first.''\214\ The bill provides an oddly limited exception for
minors under the age of six.\215\ Rep. Debbie Wasserman Schultz
offered an amendment that would have clarified this provision
and tolled the statute of limitations until minors reach
adulthood, but the majority voted it down.\216\
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\214\Id. Sec. 3.
\215\``Actions by a minor shall be commenced within 3 years from
the date of the alleged manifestation of injury except that actions by
a minor under the full age of six years shall be commenced within 3
years of manifestation of injury or prior to the minor's 8th
birthday.'' Id.
\216\Continued Consideration of H.R. 5, The Help Efficient,
Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011 and the
Committee's Oversight Plan, 112th Cong., Feb. 16, 2011 (statement of
Rep. Debbie Wasserman Schultz, member, H. Comm. on the Judiciary).
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In most cases, this 3-year statute of limitations is, in
effect, a 1-year statute of limitations in disguise. Because
most patients will discover an injury only when it manifests
itself, the 1-year statute of limitations will begin to run
immediately. In other cases, the 3-year statute of limitations
alone cuts off patients from bringing legitimate claims--
particularly in cases that involve diseases with long latency
periods. For example, a child infected with HIV from a tainted
blood infusion may manifest symptoms long before a diagnosis is
sought. If the child is at least 6 and more than 3 years have
passed since the symptoms first began to manifest, H.R. 5 cuts
off all legal recourse. These patients deserve their day in
court.
CONCLUSION
Collectively, the ``reforms'' proposed by H.R. 5 would
limit a patient's ability to recover compensation for damages
caused by medical negligence, defective products, and
irresponsible insurance practices. In addition to raising core
issues of fairness, H.R. 5 preempts the law in all 50 states,
with little regard for the consequences. This legislation was
designed more than 20 years ago to resolve an insurance
``crisis,'' but all available evidence shows that the insurance
market is not in crisis today. H.R. 5 does not make insurance
more available, does not cut spending to any appreciable
degree, and does not address issues of access to justice or
patient safety. Because H.R. 5 solves few problems facing
Americans and exacerbates many real ones, we believe that
Congress should reject this bill.
John Conyers, Jr.
Jerrold Nadler.
Robert C. ``Bobby'' Scott.
Melvin L. Watt.
Sheila Jackson Lee.
Maxine Waters.
Steve Cohen.
Henry C. ``Hank'' Johnson, Jr.
Pedro Pierluisi.
Mike Quigley.
Ted Deutch.
Debbie Wasserman Schultz.
Additional Dissenting Views
1. Introduction
Proponents of H.R. 5, the Help Efficient, Accessible, Low-
cost, Timely Healthcare (HEALTH) Act of 2011, claim it is the
same as California's Medical Injury Compensation Reform Act
(MICRA), a law passed in 1975 to limit noneconomic damages in
medical malpractice lawsuits. While H.R. 5 may appear similar
to the California law, a closer look reveals that H.R. 5 is
extreme and unnecessarily limits the rights of patients.
Indeed, there are distinct provisions contained in H.R. 5 that
differ dramatically from MICRA.
2. HR 5 is Breathtaking in Scope
First MICRA does not match H.R. 5 in its breathtaking scope
by providing protection to not only doctors, but drug and
device manufacturers, nursing homes, insurance companies and
HMOs. H.R. 5's cap of $250,000 on noneconomic damages applies
broadly to all ``health care lawsuits,'' including product
liability actions against negligent drug companies and for-
profit nursing home corporations.\1\ MICRA only applies to
malpractice cases against a doctor or hospital.
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\1\See Section 9, Definitions (7), (8),(9), (10), (11), (12), and
(14).
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3. Punitive Damages
Punitive damages are capped in H.R. 5 at two times the
economic loss or $250,000, whichever is greater.\2\
California's MICRA law does not cap punitive damages. Punitive
damages are reserved for only the most egregious cases and are
meant to punish the defendant and deter future dangerous
conduct.
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\2\See Section 7(a) and (b).
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Furthermore, H.R. 5 gives total immunity from punitive
damages to the pharmaceutical industry if the products have
been approved by the FDA or, even if not approved by the FDA,
are ``generally recognized among qualified experts as safe and
effective . . .'' MICRA does not contain this kind of sweeping
immunity for the drug industry.\3\ Granting immunity from the
threat of punitive damages removes the major financial
incentive for drug companies to immediately remove dangerous
drugs from the shelves as soon as they become aware of those
dangers.
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\3\See Section 7(c).
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4. Loss of Consortium
Unlike H.R. 5, California courts recognize a separate claim
for loss of consortium--claims brought by the spouse of an
injured patient for loss to the marital relationship. H.R. 5's
more restrictive cap limits the rights of both the patient and
the spouse to a $250,000 aggregate. The amount of noneconomic
damages that can be recovered cannot exceed $250,000 no matter
how many parties have suffered injuries as a result of medical
negligence.
5. Joint & Several Liability
H.R. 5 completely eliminates joint liability for economic
and noneconomic loss.\4\ California law only eliminates joint
liability for noneconomic damages. Joint liability enables an
individual to bring one claim against all of the parties
involved and have those responsible for the injuries apportion
fault among them, ensuring the injured victim is fully
compensated. Because economic damages typically include an
award meant to pay for the future medical costs of the victim,
a majority of states (including California) have refused to
limit joint liability for economic loss. When injured patients
are not fully compensated for their future health care costs,
taxpayers end up footing the bill.
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\4\See Section 4(d).
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6. Insurance Industry Reforms
H.R. 5 does not contain any provisions addressing conduct
in the medical malpractice insurance industry. Following the
passage of MICRA, California enacted Proposition 103, a ballot
initiative that included a mandatory 20% premium rate rollback.
It is clear that both of these changes were necessary to
address rising medical malpractice insurance premiums in
California. H.R. 5 does not include any insurance reform to
guarantee lower rates for doctors. In fact, the bill does not
even mention insurance companies except for the provisions
giving them protection from liability.
Howard L. Berman.
Zoe Lofgren.
Maxine Waters.
Judy Chu.
Linda T. Sanchez.