[Pages S1467-S1487]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

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

The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of the motion to proceed to
consideration of S. 2061.
Mr. ENSIGN. Mr. President, I wish to make a few opening comments on
the medical liability bill. Last year we had a debate in the Senate on
proceeding--not voting on but proceeding--to an overall medical
liability reform bill. That vote was 49 to 48 in favor of going to the
bill. Unfortunately, the rules of the Senate provide that one needs 60
votes. Otherwise, a filibuster, as it is commonly referred to, is
continued. You cannot proceed to debating the legislation or to votes
or amendments.
There are currently 19 States, according to the American Medical
Association, that are in crisis. Nineteen States are experiencing some
kind of crisis with their medical system because of problems with
medical liability insurance. All but 5 States of the remaining are
showing some problems, the type of problems that have led to those 19
States being in crisis.
We had the vote last year and couldn't get it done. Senator Gregg and
I have introduced the bill before us today, the Healthy Mothers and
Healthy Babies Access to Medical Care Act. This bill limits the scope
of reform of the medical liability system to the practice of obstetrics
and gynecology and the doctors involved in those practices.
Using my own State as an example, at the University of Nevada School
of

[[Page S1468]]

Medicine there has been a dramatic decrease in the number of medical
students deciding to go into obstetrics. This is happening at a time
when Nevada is the fastest growing State in the country. Southern
Nevada--Las Vegas, in particular--is by far the fastest growing
metropolitan area in the Nation. Not only are we not adding the OB/GYNs
we need, we are actually losing them.
The other side will argue that the General Accounting Office did a
study and determined that doctors are not giving up their licenses.
They said that doctors are not leaving their States.
The problem with what the General Accounting Office did is, they went
to the State boards and only did a survey of licenses. I was a
practicing veterinarian and still have a license in veterinary
medicine. Once you have a license, you never give it up because you
never want to take the exam again. So when the General Accounting
Office asked the State board of medical examiners how many doctors have
given up their licenses, and they found out nobody had given up their
licenses, that should not surprise anybody because they are not going
to give them up. That does not mean these doctors are not quitting
practice in Nevada and other States--Pennsylvania, West Virginia,
Washington State, Mississippi, and many others around the country. It
means they haven't given up their licenses because they don't want to
take the exam again. But they are limiting their practices. And many of
them are leaving those States that are affected.
Several years ago, California gave us a good model. California is
right next to my State of Nevada. California passed what is known as
MICRA. It is a medical liability reform bill. Luckily, they passed it
back then because the trial lawyers have become so powerful across the
United States that you could never get the same piece of legislation
passed in California. That would be a shame because it has worked so
well. It is the model around which we built the legislation on the
Senate floor today.
In California--Los Angeles, for example--OB/GYN medical liability
insurance is somewhere a little over $50,000 a year. In Las Vegas,
where we don't have and haven't had this wonderful MICRA law on the
books, premiums can run anywhere from $110,000 up to $200,000 a year.
Not only that, they are telling the doctors in Las Vegas, you have to
limit the number of deliveries you do, especially if you are practicing
on high-risk deliveries.
If you are a woman who has a high-risk pregnancy, you want the best
possible doctor you can get. Unfortunately, those doctors are having to
limit their practice or retire or leave the State because they cannot
afford medical liability coverage any longer.
This is a crisis--a crisis of access to health care for women who
need the health care, women who are in search of gynecological services
or women who are about to deliver babies. The stories--there are many
of them--are tragic in many circumstances.
This is, by the way, only one area of our health care system that is
in crisis. Trauma is another place, and we are going to address that
later this year--emergency rooms. As a matter of fact, the level I
trauma center in Las Vegas closed a couple of years ago because the
doctors could not afford to practice there because of the liability.
There were so many lawsuits--not lawsuits that actually had merit to
them; some of them did but most of them did not. Because of the
potential liability, the doctors said we cannot afford to work here. So
the level I trauma center that serves a four-State region had to close.
That is the same level I trauma center, for those who followed the
national news this last year, where Roy Horn of Siegfried and Roy was
treated after the tiger had attacked him. It is an excellent level I
trauma center. It saves many lives.
We had a press conference last year where a woman whose father was in
Las Vegas and had an accident while the level I trauma center was
closed. He had to be transferred to another hospital, and because of
the delay in treating him, we could definitely argue that this man
would be alive today if the trauma center had not closed. That trauma
center was only closed for 1 week, and it was closed for that reason.
The State of Nevada stepped up; our Governor stepped up and said we
will cover that trauma center under the laws of the State of Nevada.
What are the laws of the State of Nevada? It has a $50,000 cap of
liability--total cap. Not $50,000 for pain and suffering but a total
cap of $50,000. That is not even close to what this bill says. This
bill has a $250,000 cap on noneconomic, nonmedical damages. You can
still get all the economic damages you would have incurred; for
instance, loss of income or other types of economic damages. You can
get all of the medical coverage you would need. It is just that
$250,000 cap on pain and suffering awards. Those are the awards we have
seen that are getting outrageous all across America.
That level I trauma center, luckily for Roy Horn, was open. Without
the type of intense care you can receive in a trauma center, Roy Horn,
I think it could be argued, would not be with us today.
Mr. President, even though we have limited this bill to the practice
of obstetrics and gynecology, we do have a much bigger problem in this
country, a problem that must be addressed. We are in a political season
today. We know that. It is an election year for the President, the
Senate, and the House, and there is a lot of politics going on. Some
people say: You guys are just doing this with OB/GYNs to make a
political issue out of it.
If people want to stand up and say that they don't want to fix the
problem happening with access to care for women and children, then I
guess that is a political issue. I think it is a legitimate political
issue. People need to know where Senators stand. They need to know
where our Presidential candidates stand on issues of this importance. I
believe that when they find out where candidates stand, whether they
are incumbents or challengers, this issue will make a difference in
their vote come November.
It is that important to our overall quality of life in America. I
believe it is wrong that we have to have people moving, or not moving,
from State to State because they cannot get access to quality care
because the medical liability costs are too high--one reason versus
another reason.
Some States have enacted good reform. Colorado and California are the
best examples. My State enacted a bill, but, unfortunately, it will
take several years before we know whether that bill will withstand
challenge in the courts. Also, there were two huge loopholes in that
bill that the trial lawyers were able to get in that you will be able
to drive a truck through. That is why many in the medical community in
Nevada are trying to close those loopholes.
We need enactment at the national level. Sixty percent of all medical
bills are paid by the Federal Government between Medicare, Medicaid,
and veterans. It is a national priority. We must get this medical
liability crisis under control so that our trauma centers are not
closing, so that women have access to their OBs, gynecologists, and
nurse midwives, who are also covered under this bill. They sometimes
get left out of the discussion, but they are a very important part of
our health care delivery system in this country and delivering healthy
babies.
The ACTING PRESIDENT pro tempore. The Senator from Illinois is
recognized.
Mr. DURBIN. Mr. President, I thank the Senator from Nevada. I know of
his personal interest in this issue. He has offered legislation before.
Today we are considering S. 2061, which has been offered initially by
Senator Gregg of New Hampshire and Senator Ensign.
It is important to note that this bill, which was brought directly to
the floor, has not been the subject of any committee hearings. In fact,
there has been no effort, to my knowledge, to sit down and find a
bipartisan compromise or sponsorship for this legislation. This bill
was presented to the Senate a few days before we went into recess, and
now it is being called this day.
What is interesting, as well, is that there are announcements from
the Republican leadership that we will quickly move after the vote on
this bill to other issues, and they have been enunciated.
The point I want to make is this: I don't believe this is a
constructive effort that leads us to a solution to a national problem.
This, instead, is a bill

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being called for one reason only: To get a rollcall. It is a bill being
called today to put Senators on the spot. Vote yes; vote no. Why?
Because, frankly, there are some on one side of the issue who want to
demonstrate that they are concerned. So they are bringing a bill to the
floor. They want a rollcall so they can say to those who are looking
for some change and for some legislative progress: See, we moved
quickly on this. We brought a bill to the floor and, darn it, it didn't
pass. We will try to get to it later in the session.
From my point of view, that is not the way to approach this. We
should have dealt with this in good faith and constructive, bipartisan
effort to try to find a solution to a serious national problem. But
that is not the case. Instead, we are having a head-on collision
between the trial lawyers on one side and the doctors on the other
side.
I come to this debate as someone who had a little bit of experience
in this issue a long time ago. Before I was elected to Congress 21
years ago, I was a practicing lawyer. I used to defend doctors who were
sued for medical malpractice. I did that for 5 or 6 years. I came to
understand the nature of these lawsuits and how complicated and painful
many of them are. Then I was on the other side of the table,
representing patients who went into a doctor's office or a hospital and
were injured and they sought compensation because of these injuries. So
I have seen both sides of the issue. I come to this debate with the
belief that we need to bring all of the parties together to find a
solution. What we have with this bill, I am afraid, does not come close
to addressing a serious national issue.

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

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

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

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

Take it from the insurers themselves, no doctor should expect lower
insurance rates as a result of this bill, and no woman should expect
greater access to health care for themselves or their babies.
What women should expect, on the other hand, is a two-tiered legal
system that restricts their rights in the courthouse if they are hurt
by the negligence of a doctor, HMO, drug company, or medical device
manufacturer.

This bill is unjust. It restricts women's access to the legal system
while preserving it actually for men.
Under this bill, if a man shows signs of lung cancer and his illness
is misdiagnosed due to the negligence of his doctor, he can recover
damages to compensate him fully for his injuries. But if a woman with
cervical cancer suffers the same negligence, her damages will be
arbitrarily capped. If a man is prescribed defective blood pressure
medication by an internist, he can recover full damages. But if a woman
is prescribed blood pressure medication during pregnancy that causes
blood clots, her damages will be capped.
The real problem with this bill is not merely that it values the
injuries of men and women differently, as troubling as that is, the
real problem is that it presumes that politicians in Washington are
better able to determine how to compensate injured patients.
Every year, tens of thousands of women and infants are injured at the
hands of OB/GYNs.
Nine years ago, Colin Gourely of Nebraska suffered complications at
birth due to his doctor's negligence. Today, he has cerebral palsy and
is confined to a wheelchair. In his short life, he has needed five
surgeries to correct bone problems and sleeps in a cast every night to
prevent further orthopedic problems.
Shannon Hughes from South Carolina was in the middle of a difficult
labor. Despite repeated calls, the doctor wouldn't come until her 35th
hour of labor. It turned out that the umbilical cord was wrapped around
her baby's neck cutting off oxygen. Today, Shannon's son, Tyler, is
severely brain damaged and bedridden. He requires constant medical care
and is fed through a tube.
When Alexandra Katada was born in McKinney, TX, the doctor stretched
her spine, destroying her nerves, leaving her partially paralyzed. The
baby's elbow was pulled from its socket and broken. She died 8 months
later from her spinal injuries.
Let us be clear: No amount of money can compensate a parent for their
child's pain, but malpractice awards are not simply about money. They
are about offering victims a sense of justice, a way to hold
accountable those responsible for their injuries or the death of their
loved ones.
Some have said that without limits, the legal system looks more like
a lottery. But no jury award could ever make the parents of Colin
Gourely or Tyler Hughes or Alexandra Katada feel

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that they were holding a winning ticket.
Malpractice awards are decided by juries and approved by judges. This
is the same system on which we rely to decide life and death issues in
capital cases. Why would we not trust our citizens to fairly evaluate
how to deliver justice for the victims of medical malpractice?
Democrats are eager to work together with our colleagues to craft a
real solution to the problem of rising malpractice premiums. But, once
again, rather than working with us to craft a true compromise that
would address the problems of increasing insurance premiums, the
Republican leadership has decided to bring this bill to the floor with
the same level of problems, the same concerns we had 7 months ago.
If our colleagues were serious about combating the rising cost of
malpractice premiums, they would join us in supporting bipartisan
legislation that includes both long-term and short-term solutions that
directly address the rising premiums without harming injured
Americans--solutions such as individual tax credits to offset costs
when premiums rise sharply; reasonable limits to punitive damages;
prohibitions against commercial insurers engaging in activities that
violate Federal antitrust laws; sensible ways to reduce medical errors;
and direct assistance to geographic areas that have a shortage of
health care providers due to dramatic increases in malpractice
premiums.
The Senate faced a similar situation discussing concerns about the
rising terrorism insurance rates. Some thought then that the only
solution was to undo the jury system. Instead, the Senate worked
together and developed a bipartisan solution that fixed the problem and
brought down insurance rates dramatically.
We should pursue the same model for addressing this problem as well.
There is no question that malpractice rates are a serious problem.
Doctors and patients deserve a real answer. This bill is not it. I urge
my colleagues to reject cloture.
I yield the floor.
The PRESIDING OFFICER (Mr. Santorum). The Senator from Illinois.
Mr. DURBIN. Mr. President, I thank the Senator from South Dakota
because I think he has raised an important issue of concern in this
debate and that is one I have initiated in my opening remarks. We need
to have a constructive bipartisan conversation about a serious national
problem. Instead, this bill, S. 2061, was introduced just a few days
ago without a committee hearing, reference to committee, without any
attempt to find common ground and find a solution. In fact, it is being
called today so there will be a vote on record and nothing else. It is
anticipated the bill will not go forward.
I spoke to doctors in Illinois over the weekend, doctors who share my
concern about the medical malpractice premium situation in our State. I
have told them what we are doing today is frankly a political exercise.
It is an exercise to come up with a roll call vote so those on one side
of the issue can go to their supporters and say, we have worked hard.
We brought this bill to the floor, we have been stopped, and we cannot
get back to it because we are so busy. Frankly, that is no solution. In
State after State, including my State, there are areas where there are
serious medical malpractice premium problems. They arise for a variety
of reasons. Memorial Hospital in Belleville, IL, has lost numerous
obstetricians and gynecologists in the last year due to rising
malpractice premiums. Community leaders in that town, which I am
familiar with--it is an area I grew up in--have come to me and said,
this is a real source of concern. We are losing doctors. They are
doctors who are leaving the practice to retire early, and I met one
doctor in that circumstance. There are some who are moving to rural
counties where the malpractice premiums are lower and they are further
away, of course, from the people they originally served. Some are
moving across the river to Missouri where they are finding malpractice
premiums are a fraction of what they are in Illinois.
There is no doubt in my mind there is a serious problem that needs to
be addressed. It is not just in the obstetrical/gynecological area. The
OB/GYN issue is an important one, but there are other areas of need
relative to trauma care, neurosurgery, and orthopedic surgery. The list
is long and we need to address it in a serious and responsible way.
This bill, however, is being brought to us on a moment's notice. This
bill is being brought to us in an effort to really check off the box
that says, yes, we considered medical malpractice and now we are going
to move on. That is unfair and it is unfortunate, and we can do better.
I will tell my colleagues a story about some of the situations I know
of in my State. Eduardo Barriuso, who is a physician in the Humboldt
Park area of Chicago, pays $104,000 a year for malpractice insurance.
He earns about $175,000 because the patients he sees are poor patients,
Medicaid and Medicare patients. Doctors who depend on Medicaid and
Medicare are not wealthy individuals, but they perform a valuable
function because if they are not there to serve the poorest of the
poor, then who will?
This doctor says that faced with $104,000 in annual premiums and a
$175,000 annual income, he cannot continue his practice, and he
certainly cannot pass on the higher costs of medical malpractice
insurance to his patients who are poor people.
Another Chicago area OB/GYN has announced he is going to study to
obtain his pharmacist license. Right now he is paying $115,000 a year
for liability insurance.
Let's go to the root cause of the issue. Why are we even debating
this issue of medical malpractice? There are several reasons. First,
the men and women who are engaged in the medical profession are some of
the most important people in our lives, some of the most important
people in America. These are men and women who at great personal
sacrifice go to medical school so that they are trained and skilled to
be there when we need them, when our families need them. Time and
again, my family and most who are following this debate have turned to
a doctor in the hopes that he or she can cure an illness, provide some
hope, give people some reason to believe they can overcome a disease,
disability, or an injury.

Doctors are so critically important to all of us and yet when one
takes a look at a doctor's practice, at a doctor's skills, there is a
human side to the equation. They are human beings. They do make
mistakes. Some are simple negligence. Some are far worse. When these
mistakes occur, when a patient is in a hospital or a doctor's office
and the wrong thing is done and that patient is injured, what should
happen? In most walks of life in America, we are held accountable for
our actions.
If I decide this evening to take my car and go out speeding on a
highway, strike another car and injure someone, I will be held
accountable. I was negligent. I did not reach the standard of safety
that is expected of me as a driver and I must pay the price. That is
true for businesspeople, for individuals, for virtually everyone in
America. It is certainly true for medical professionals. When they make
a mistake by negligence or intentional misconduct, they can and should
be held accountable. I think that is part of our system of justice.
Very few, if any, people argue that is not a reasonable thing to do.
How serious then are the number of medical errors and medical
malpractice cases that occur across the United States? Well, the most
far-reaching study of the extended cost of medical errors in hospitals
and doctors' offices was published by the Journal of the American
Medical Association last October. This is a dispassionate, objective
analysis of the likelihood of medical errors and medical negligence in
America. The authors of the study analyzed 7.4 million patient records
from 994 hospitals in 28 States, representing some 20 percent of all
the hospitals in America. This was an exhaustive study.
They concluded medical injuries in hospitals ``pose a significant
threat to patients and incur substantial costs to society,'' and ``are
a serious epidemic confronting our health care system.''
A study in the Journal of the American Medical Association has told
us as we go into this debate the first thing we can acknowledge is we
have an epidemic of medical negligence in America. Now this was not the
Journal of

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the American Trial Lawyers. This was the Journal of the American
Medical Association. They published a study that told us and warned us
we have a serious problem in America.
The study found injuries in U.S. hospitals in the year 2000, for just
one year, led to approximately 32,600 deaths, at least 2.4 million
extra days of patient hospitalization, and additional costs of up to
$9.3 billion. These injuries did not include adverse drug reactions or
malfunctioning medical devices.
Dr. Carolyn Clancy, Director of the Agency for Health Care Research
and Quality, called medical errors ``a national problem of epidemic
proportions.''
This was at a hearing before the Government Affairs Committee last
June. She said Congress and the Bush administration need to make sure
health care professionals work in systems that are designed to prevent
mistakes and catch problems before patients are injured.
According to the Institute of Medicine, the medical errors epidemic
has caused more American deaths per year than breast cancer, AIDS, and
automobile accidents combined. It is the equivalent to a jumbo jetliner
crashing every 24 hours for an entire year.
More than 70 studies of the past decade have documented serious
quality problems in medical treatment, yet this bill before us today,
S. 2061, does absolutely nothing to address this underlying problem of
patient safety. How can we in good conscience talk about a medical
malpractice problem and conclude the only place we need look is to the
courtroom, to the patient once injured who goes to the courthouse
seeking some compensation, some accountability for an injury that was
absolutely no fault of their own? Yet the bill before us is absolutely
silent when it comes to making doctors' offices, hospitals, and patient
treatment safer.
This last Sunday in the New York Times, an interesting article on
patient safety was published. I ask unanimous consent that the article
be printed in the Congressional Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

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

Running a Hospital Like a Factory, in a Good Way

(By Andrea Gabor)

On the face of it, SSM St. Joseph Health Center, a small
hospital in suburban St. Louis, does not seem very
revolutionary in business terms. The hospital is a nonprofit
institution run by the Franciscan Sisters of Mary. The chief
executive, Alan Kevin Kast, is a former seminarian who begins
his meetings with prayer and refers to his hospital as a
ministry. A crucifix hangs in every room.
Yet St. Joseph is also guided by worldly objectives. The
364-bed hospital, part of SSM Health Care, which has 20
hospitals in four states and is led by Sister Mary Jean Ryan,
is in the vanguard of health care change. By using the
quality and productivity techniques that helped strengthen
American industry in the 1980's, the hospital has improved
patient care and reduced medication errors, waiting time in
the emergency room and infection rates. It has even sharply
reduced nursing turnover, which prevents many hospitals from
delivering consistent care.
Other hospitals are also starting to use some of the
techniques that have made industry more efficient in its
quest to improve quality and save money. Every year,
preventable medical errors cost $9 billion, and tens of
thousands of lives, according to a recent study by the Agency
for Healthcare Research and Quality, part of the Department
of Health and Human Services, and Johns Hopkins University.
Whether in industry or in health care, a quality strategy
``gives a unified vocabulary for thinking about production as
a system with a focus on customers,'' said Donald Berwick,
founder of the Institute for Healthcare Improvement, an
advocacy organization based in Boston.
Many hospitals are using a road map provided by General
Electric, which has been selling its productivity-enhancing,
cost-cutting elixir known as Six Sigma, along with medical
imaging equipment, to hospitals around the country. Six Sigma
is a statistical measure that can be applied to any industry
and refers to a goal of reducing errors to 3.5 parts per
million. Two years ago, for example, the North Shore-Long
Island Jewish Health System contracted with GE Medical
Systems and the Harvard School of Public Health to help start
a leadership training center. Similarly, after close to a
decade of cost-cutting, the Yale New Haven Hospital also
recently signed up with GE.
New devotees of quality are beginning to measure and
analyze everything from waste and waiting time to infection
rates and the narrow avoidances of mistakes in treatment, as
well as organizational barriers to improvement.
In a culture ruled by a fear of malpractice, the focus on
quality involves a shift from secrecy to transparency--
including reporting and dissecting mistakes.
That shift may be helped by a provision of the Medicare
legislation passed in December that withholds a small part of
Medicare payments if a hospital refuses to disclose quality
data. ``It's not a lot of money, but it's incredibly
historic,'' said Robert Galvin, director for global health
care of G.E. and a founder of the Leapfrog Group, an industry
consortium aimed at improving health care.
A few hospitals, including Dartmouth Hitchcock Medical
Center in New Hampshire and the nine hospitals that form the
Wisconsin Collaborative for Healthcare Quality, have begun to
publish comparative quality data on their Web sites,
including statistics like mortality rates.
At St. Joseph, where a quality strategy was first embraced
in the late 1980's, measurement, standardization and analysis
are obsessions.
``When I came here, everything was done differently,'' said
Filippo Ferrigni, who has led the hospital's intensive care
unit since 1987. ``We didn't even measure blood pressure the
same way in everyone. We decided we needed to have internal
standards for measurement of at least blood pressure,
pulmonary artery pressure, temperature, the fundamental
building blocks of medicine.''
The quality push at St. Joseph and the other hospitals in
the group has led to systemwide benefits. In 1999, the
company was in the red, but in 2002 it had net income of $17
million, on revenue of $1.8 billion. Amid nationwide nursing
shortages, it lowered annual turnover to about 10 percent in
2002 from 15 percent in 2000. The national average turnover
rate is more than 20 percent.
At St. Joseph, the zeal for quality improvement is helping
the sickest patients. When Dr. Ferrigni read an article in a
recent issue of The New England Journal of Medicine linking
high glucose levels to an increased chance of infections, he
knew that he had found his next big opportunity for improving
patient care. Infections acquired in hospitals and intensive
care units are common, according to a report released in
December by the government's Agency for Healthcare Research
and Quality; about two million patients are infected each
year at a cost of more than $4.5 billion.
The stress of illness results in higher gluclose levels for
most patients--not just those with diabetes. Dr. Ferrigni
decided to see if lowering glucose levels in the intensive
care unit by giving patients intravenous insulin would lower
infection levels. Initially, the project ran into
``tremendous resistance,'' he said. Doctors were concerned
that giving patients insulin might result in brain injury and
seizures. Dr. Ferrigni, however, persuaded his colleagues to
allow him to gradually reduce blood sugars of patients in the
intensive care unit. As blood sugars declined among the
patients, overall mortality in the unit declined by 40
percent.
The results were so astonishing that the hospital decided
to make the reduction of glucose levels for all patients, not
just those in intensive care, a quality goal. Today, all
patients are given glucose tests and, if necessary, get
insulin. Hospitalwide, that change is credited with reducing
deaths over all, not just from infections, by 28 percent from
the average recorded from 1998 to 2001.
Because each serious infection costs about $35,000, the
savings are also huge. ``This is the single most important
leverage point for reducing mortality that's available to
hospitals,'' Dr. Ferrigni said. ``This is incredibly powerful
stuff.''
The effort, however, also demonstrated a major
organizational challenge. ``Doctors write the orders, but
nurses have to make it work,'' Dr. Ferrigni said, explaining
that the glucose initiative significantly increased nurses'
workloads.
Blood sugar, once measured four times a day, now must be
measured 12 times a day in intensive care. Once nurses saw
the impact of the glucose testing, however, ``they got all
over it,'' Dr. Ferrigni said.
Some of the greatest quality challenges involve persuading
employees in various departments to cooperate. Consider the
effort, known as 30/30, to cut waiting time in emergency
rooms. The goal is to evaluate patients with life-threatening
illnesses or injuries in just 30 seconds and to reduce the
time needed to admit patients to a hospital bed from the
emergency room to 30 minutes.
Improvements in the emergency room involved a number of
departments. When X-rays were needed, it often took an hour
for an X-ray technician to get to the emergency room. To
solve the problem, one X-ray technician was permanently
transferred there. Or, in admitting psychiatric patients, the
hospital had to wait for an evaluation by an outside
psychological social worker before moving patients out of the
emergency room, a process that averaged 90 minutes. To reduce
the wait, the hospital hired a psychological social worker.
Within two years, SSM St. Joseph has met its objectives in
the emergency room 94 percent of the time, up from about 65
percent when the project began. To help keep the organization
from becoming complacent, patients receive a coupon for $10
of groceries when SSM misses its 30/30 target. The hospital
spent $14,450 in 2003 on coupons.
The hospital now spends about $200,000 more each year on
increased emergency-room staffing. But a jump in admissions
has

[[Page S1472]]

more than made up for that cost. In 2002, St. Joseph garnered
about 68 percent of all new emergency room admissions in St.
Charles County. After years without growth, the hospital also
had a 7 percent increase in patient admissions in general in
2001, and the same increase in 2002.
Some major health care institutions, like Johns Hopkins
and the Mayo Clinic, have been pursuing quality initiatives
for years, but generally the mantra has been slower to
penetrate big institutions.
Large teaching hospitals, which juggle teaching, research
and patient care, have special challenges. Because of their
residency programs, many of their doctors are temporary. At
Yale-New Haven, one big question is whether a hospitalwide
quality effort can succeed when only 10 percent of the
hospital's 2,600 physicians are full-time. The rest are
community physicians or professors at the School of Medicine.
The hospital began its Six Sigma effort in the intensive
care unit, which had its own staff of nurses. The project
involved reducing a relatively high rate of blood-stream
infections that occur in patients who have catheters.
When management broached the subject with Heidi Frankel,
director of surgical critical care at the hospital and a
doctor at the Yale School of Medicine, she was skeptical.
``This isn't an assembly line; it's an I.C.U.,'' Dr. Frankel
recalled saying. ``But it turned out to be a brilliant and
inspired thing to use rigid corporate improvement techniques
in a patient model because there are many things we do that
are repetitive, and that we could standardize.''
After winning over fellow doctors and residents, Dr.
Frankel standardized the catheterization procedure and
created a training video for the regular influx of new
residents. During the last year, the surgical intensive care
unit cut its catheter-related infection rates by about 75
percent. A rigorous quality strategy appeals to many
hospitals not only because it controls costs, but also
because it can improve care. But the process can take years
to master. That is why, at St. Joseph, the true believers
would also recommend a little prayer.

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

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

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

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

The article says:

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

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

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

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

[[Page S1473]]

pain and suffering is not even close to compensating the family and the
child who are the victims of malpractice in these OB/GYN circumstances.
Mr. CORNYN. Will the Senator yield for a further question?
Mr. DURBIN. I am happy to yield without yielding the floor.
Mr. CORNYN. The Senator from Illinois makes an important point, and
that is there will invariably be one or two, perhaps, cases, or a
handful of cases, or an example you can point to where a $250,000 limit
on noneconomic damages might seem to be too low. But would the Senator
agree that what we are trying to do is use a rather indirect means to
try to accomplish a greater good for the patients who are denied access
to health care?
For example, in 154 of the 254 counties in my State, a woman cannot
find a baby doctor to deliver her baby because of the cost of
malpractice insurance. Many obstetricians simply decide to give up and
retire or to move someplace else where malpractice liability rates are
lower.
While the Senator no doubt can find an example where the amount is
lower than a jury perhaps might award, why shouldn't we take a step in
the direction of bringing some predictability and thus bringing some
reasonableness in reducing the rates for liability insurance so people
can have access to doctors where they live?
Mr. DURBIN. The Senator from Texas makes an excellent point. I think
that is the reason, I would say to my colleague, why once this bill is
defeated--and I hope it is defeated--once it is defeated, we really
have a responsibility here.
We come from different sides of the political spectrum. We are about
as far apart as they come in this Chamber in terms of our political
philosophy, but I think we both can see there has a been problem. The
medical malpractice premiums in parts of your State and parts of my
State have reached record high levels. These premiums are forcing my
good doctors in Illinois to retire, move away to another State or to an
area that is friendlier when it comes to the cost of the premiums.
There is a denial of coverage. There is a denial of services to a lot
of poor people in Texas, Illinois, and a lot of other States.

Shouldn't we come together instead of a take it or leave it bill that
has never been referred to the Senate Judiciary Committee, never been
the subject of a hearing, does not address issues of medical safety and
other issues we can agree should be part of this conversation?
Shouldn't we at the end of this debate on this bill sit down and
honestly try, on a bipartisan basis, to find common ground and
compromise that would serve the goal the Senator is suggesting, the
greater good, to make sure these good doctors across America will be
there when we need them?
I thank the Senator from Texas.
Mr. CORNYN. If the Senator will yield for a final question.
Mr. DURBIN. I am happy to yield.
Mr. CORNYN. I appreciate the spirit in which the comments are offered
by the Senator from Illinois, because this is a subject where we do
need to have a rational debate. Unfortunately, because we cannot get 60
votes to allow the floor debate and actually vote, we are engaging in a
hypothetical exercise.
Wouldn't the Senator from Illinois deem it important for this body to
have a realistic, rational debate and ultimately vote to see what the
will of this body and the people we represent is when it comes to
trying to get some handle on reducing the costs of liability insurance
so more mothers can have access to obstetricians and more people can
have access to health insurance by reducing health insurance costs?
Mr. DURBIN. I agree with the Senator from Texas. I thank him for his
comments which I believe are good-faith comments.
In my rank on this side, I do not set the calendar of how bills are
determined; your leader, Senator Frist, does that. I suggest the best
place to start is not on the floor of the Senate but for a group, on a
bipartisan basis, to try to come up with an honest answer to this issue
and bring it to the floor and stand together to try to pass this bill
in a responsible way. Simply bringing a bill, take it or leave it, a
few days, no committee hearings, does not serve the needs we are
addressing.
I see a few other colleagues on the floor so I will go through a few
points quickly and return to the Senate later in the day if there is an
opportunity.
This particular bill does not address the problems of malpractice
premiums in an honest fashion. The problem with malpractice premiums is
a cyclical insurance problem. We have had crises before with high
premiums in the 1970s and 1980s. Many States passed changes in the law
to address this, some in tort reform and some in insurance reform.
This bill does not even look at the insurance companies that are
offering medical malpractice insurance. What it is basically saying is
that we are not even going to ask the question as to whether these
companies are overcharging doctors and hospitals. Instead, we are going
to say that the only culprits, the only people who are at fault in this
conversation, are the victims of medical malpractice. They are the ones
who have to tighten their belt, take fewer dollars. We will not even
consider in 2061 asking that the insurance companies be held
accountable for their own conduct and ask whether they are gouging us
when it comes to prices.
How can we have an honest discussion of the medical malpractice issue
without addressing medical safety, without asking these important
questions of the insurance company?
This bill does not address frivolous lawsuits. The proponents of tort
reform claim frivolous lawsuits are at the root of the problem. This
bill does not do anything to cut down on the number of such suits but
only punishes those who make it to court.
Keep this in mind: If a lawsuit is worth $250,000 in noneconomic
losses, which is the maximum under this bill, this is a lawsuit where
the plaintiff clearly has a cause of action which a jury or judge has
decided is a worthy cause of action worth compensation. These are not
frivolous lawsuits that would have $250,000 in noneconomic losses.
Something happened. A patient went to a hospital or to a doctor and was
injured wrongly.

This bill is saying we are not going to address frivolous lawsuits.
We will basically say those who are entitled to recover are limited in
the amount they can recovery.
One of the worst parts of this bill, we will hear arguments in the
Senate that we need OB/GYNs across America and without these doctors to
deliver babies we will be at a disadvantage. Frankly, no one can argue
with that. But when we read the bill, it is about more than doctors.
This bill, like the last one we considered last year, has been expanded
to provide protection against lawsuits filed against pharmaceutical
companies and medical device companies.
We are finding, time and again in the Senate, whatever the issue, the
Republican side of the aisle insists there be at least one provision in
every bill that is going to benefit the drug companies of America. In
this situation they are saying these drug companies should not be held
accountable for the damages and injuries caused by their products
involved in OB/GYN practice.
Why would we do this? Why would we decide we are going to exempt them
from exposure, liability, and accountability for some of the drugs and
devices that are being used across America that cause injury to
innocent people? That is exactly what they do.
Let me give some examples of the types of litigation that would have
been eliminated by this bill, had it been in law. The Dalkon Shield was
an IUD on the market in the early 1970s and caused thousands of women
to suffer miscarriages, loss of their female organs, and infertility.
It took eight punitive damage awards to force the manager of the Dalkon
Shield to finally recall the product. It was not a law passed by
Congress. It was a lawsuit filed against the company because of their
dangerous product; 400,000 claims were eventually filed against A.H.
Robins, the manufacturer of Dalkon Shields. Evidence established that
Robins, the device company, knew that its IUD was associated with high
rates of pelvic disease and septic abortion and that this company had
misled doctors about the device's safety and had dropped or concealed
studies on the device.
Why in the world we would protect this brand of reckless,
irresponsible corporate behavior with this bill? The honest answer is
because politically

[[Page S1474]]

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

[[Page S1475]]

practice of medicine throughout America. Senator Durbin expressed
concern in the conversations he has been having with doctors in his
State, even though he opposes this bill. I traveled to Alabama this
past week and visited five or six hospitals. I was at Fayette and
Wedowee and Gadsden and Alexander City. As I traveled the State talking
to doctors, to hospitals about their insurance premiums, it is a very
real problem.
This is not a new issue. We have been talking about it for a number
of years. The reform of litigation of malpractice cases in California
is the model for this legislation. It has worked very well in
California.
The people who are paying the premiums, people who are subjected to
lawsuits, people who care about this every day, people who are giving
up their practice every day as a result of abusive lawsuits, they
support this legislation. Do they not know what this is all about? Do
they not know what they are asking for? These are matters that are
quite serious.
I believe capping noneconomic damages has a good effect. When you
look at a doctor who delivers a baby, is that doctor a guarantor of a
healthy baby? They can't do that. They cannot be the guarantor that
every birth they preside over will result in a healthy baby. They are
responsible if they are negligent and that negligence causes damage to
a child. There is no doubt about that. So that is what we need to focus
on.
The limit on damages does not limit damages for injuries in care for
a child who lives many years with a great disability. They can recover
unlimited amounts for that.
Under California law, these are some of the verdicts that have been
rendered to compensate families for children who were born with serious
disabilities: In December, an $84 million verdict was rendered because
of a 5-year-old with cerebral palsy after a mishandled birth; $25
million in San Diego County because a boy had severe brain damage; $27
million in San Bernardino for a woman who was a quadriplegic because of
failure to diagnose a spinal injury; $21 million in Los Angeles for a
newborn girl with cerebral palsy and mental retardation as a result of
a birth-related injury. They go on.
These are real recoveries to compensate people for economic losses
they will have in the future and to allow them every possibility to see
that the child or the person who is injured can be taken care of with
the best conditions we can make. We are concerned about the explosion
of punitive damages. Some people say the person who did wrong ought to
be punished.
As a matter that we need to think about, the system is out of whack.
The person who commits malpractice is not the one who is punished. The
person who commits malpractice--for the most part, hopefully,
certainly, all of them doctors--has insurance. They don't pay the
verdict. The insurance company pays the verdict. How do they get the
$21 million or whatever they have to pay out in the verdict? How do
they get that money to compensate the victims? They raise the rates on
everybody; the innocent and those who commit errors. It is driving up
the cost to practice.
I have a wonderful friend, an OB/GYN, in my hometown of Mobile. We go
to church together. He was telling me about a doctor that just gave up
his practice. He handled 60 or 80 births a year. His insurance was
$60,000 a year. That is almost $1,000 per birth. This week, I was in a
hospital in Alabama. They told me 3 years ago they gave up deliveries--
there were 200 deliveries a year in this small town, and the hospital
had less than 50 beds--because they could not afford the insurance. The
hospital quit doing it. The physician in the community also quit
delivering. This is a fact, a reality, and it is driving good
physicians out of health care.

No group of doctors in America has the hammer falling harder on them
than the doctors who deliver our babies. They are getting hit with
extraordinary increases. They are getting sued to an extraordinary
degree. We need to do something about it. We have bills here, and
whatever the bill is, they say ``we need to do something, but this
isn't the way to do it; but we want to do something.'' They say ``there
are problems, I will admit, Senator, but this isn't the right bill.''
They say ``you have not done this or that,'' and on and on. The result
of that is we never pass anything. I believe it is time to do something
about this issue. We can do something about this.
When you look at the cost of delivering babies in America today, the
liability cost is a very significant portion of it. Not only that,
doctors--particularly those who have been practicing for a number of
years--do not like the agony of going through a lawsuit. There is the
combination of premiums and the threat of being dragged through court
for long periods of time, and that is not good. That is why they are
quitting.
I was at one of the hospitals in Gadsden this week. One of the nurse
supervisors came up to me after I had been asked in the meeting whether
we were going to do anything about the liability problem. She said she
and the hospital had been in litigation. She had been away from the
hospital for 10 days during the trial of this case. They were not
negligent and they won the lawsuit, but millions of dollars were spent
on that litigation. This is happening all over America. Most of the
cases are defendants' verdicts, but many cases are coming in with
extraordinarily high verdicts. The BMW case out of Alabama, decided by
the Supreme Court, raised real questions about how do you decide what
punitive damages ought to be. Does the jury just feel bad this day or
look at the victim and feel sympathetic, or are they more sympathetic
to one person than another? They come up with $50 million for one
person, and maybe in a similar situation they would come up with
$500,000. These are aberrational verdicts in the country.
We are saying that there should be a limit for compensating
noneconomic damages. It is modeled on a successful program in
California. I believe we are facing a national crisis in health care.
It is a crisis that ought to be confronted. It is not going to go away.
A big part of it is litigation. If you don't believe it, ask any doctor
or hospital you know. They sue everybody, including the nurses,
doctors, the aides, the hospital, the manufacturer of the hospital bed,
or whatever, that might be possibly construed as being connected. All
of that adds up to a tremendous burden, a tremendous cost on our health
care system.
The truth is health care costs are continuing to go up. One of the
factors is litigation costs, which are going up even faster than other
costs. We need to contain that and bring some rationality into it. I am
willing to listen to other ideas. I am not sure California is perfect,
but I will say it is working there. I believe it will work for our
country. I thank our majority leader, Dr. Bill Frist, for bringing this
up. It is time to debate this. We need to pass something soon to
protect the availability of health care. We need to make sure hospitals
and doctors are not quitting delivering babies. That hurts us in
America and hurts health care in America.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut is recognized.
Mr. DODD. Mr. President, I have been listening to the arguments posed
by our colleague from Illinois, Senator Durbin, and our colleague from
Alabama, Senator Sessions. I find myself sort of agreeing with both of
these individuals. Clearly, this is an area that cries out for some
solution. We have been back at this issue over and over again. Like my
colleague from Alabama, and I suspect my colleague from Illinois as
well, I was home in Connecticut over the past week and I have received
letters from radiologists, and I have talked to OB/GYNs and others. My
State ranks third in the country in the rate of premiums for OB/GYNs,
which I will address in a minute. This is an area that clearly needs to
be addressed. So I appreciate the comments of my colleague from
Alabama, that is, to see if we cannot find solutions to this.
As the Senator may recall, I have not been shy when it comes to tort
reform issues, having authored the securities litigation reform bill,
uniform standards legislation; and I have dealt with the issue of
terrorism insurance, and Y2K legislation with Bob Bennett. I am someone
who wishes we were debating class action reform now. There, we

[[Page S1476]]

have an agreement. It is not going to satisfy everybody, but I have
agreed with Bill Frist and others. Senators Schumer and Landrieu and I
have worked across party lines to come up with a compromise solution on
class action reform. That is a bill I believe we could actually adopt.
Here we are going to spend 2 days debating a cloture motion we both
recognize is probably going to fail this evening. But we have a class
action reform bill we can get done. I regret I am not arguing on behalf
of that proposal, rather than standing here and reluctantly disagreeing
with this particular bill; although I am agreeing with my colleague
from Alabama that we cannot allow year after year to go by without
addressing this issue. I regret we didn't make the effort here we did
on class action. On class action, once the cloture motion was defeated
on the motion to proceed, people reached out and said let's see where
we can find common ground on this. I think we have done that. Only time
will tell if the compromise will work. That is how you have to function
in this body, when you have 100 Members representing different
constituencies and ideas and proposals, where there is a commonality
and purpose to try to arrive at an answer to a staggering problem. One
of the problems--not all, but one of the problems--is associated with
health care. I will go into that in a minute. It seems to me we should
pause and reach out and see if we cannot find that common answer. It
may not satisfy everybody, but certainly it will come up with some
intelligent responses to this problem.
So I say to my constituency in Connecticut, and elsewhere, I am
listening to you and I hear you. I know we have to answer this. The
question is, is this particular proposal the answer to the problem we
face, with the rising increase in malpractice premiums. What actually
could be done that may address the issue?
As my colleagues know, this legislation is similar to the one the
Senate rejected last year. It would place, as we all know, a $250,000
cap on noneconomic damages that can be awarded to a plaintiff in a
medical malpractice case. The bill we are considering today has been
narrowed, but in narrowing it, its defects have not been remedied. Like
S. 11, the previous bill, this bill would apply to claims brought by
health care professionals, health care organizations, such as HMOs,
insurance companies, as well as product liability claims brought
against medical device and drug manufacturers, by and on behalf of
pregnant women and children. However, it would only apply to claims
relating to obstetrics and gynecological services. We are dealing with
a reduced universe of people in this area, much narrower from the
proposal of last year.
Once again, this legislation would cap noneconomic damages at
$250,000. It would put the same cap on punitive damages while imposing
a stiffer evidentiary standard. It would also reduce economic damages a
victim could collect by subtracting benefits paid by health insurance,
life insurance, disability insurance, and Social Security benefits. In
short, it would make it much harder for the victims of medical
malpractice in this narrow area to receive fair and just compensation,
in my view.
This legislation would not affect all victims of malpractice. We
pointed out the bill we are dealing with seeks to limit the legal
rights of a specific segment of our society, women and newborns.
It is important to remember that this bill is going to affect those
who have actually been injured by malpractice. We are not debating
whether there has been a judgment. There has been a decision that
malpractice has occurred. A jury has already, in these cases, decided
the victims are eligible to collect noneconomic damages. Furthermore,
it will hurt the most seriously injured, those who might receive a
noneconomic damage award of more than $250,000 were it not for the
arbitrary cap.
We are essentially telling women and infants that the injuries and
suffering they experience are not worth as much as injuries and
suffering of others.
The assumption is if we just do this in this one area, we are then
going to be able to bring down the costs of these premiums. In fact, I
suggest that if the empirical evidence made that case, I would be very
tempted to support this bill. I say that to my colleagues who are the
authors of this legislation. But, in fact, the data and information,
unfortunately, does not substantiate the claim that by establishing a
cap, you will achieve the desired results of lesser premiums on
malpractice insurance.
The argument used by supporters of this bill is OB/GYNs are
particularly hit by rising medical premiums. I want to make it clear
that I am not insensitive to that claim. As I said earlier, I have
heard from many in my own State. In Connecticut, we face the third
highest premiums in the country for OB/GYNs. My doctors pay an average
of $102,000 every year in medical liability premiums. I have heard from
them on numerous occasions about the difficulties they face in the
current environment. The vast majority are good doctors who are working
to provide the best possible care they can for their patients. They are
doctors on whom families in Connecticut and newborns can rely. It is
the same across the country. I know, having had a newborn in my own
household, a child born to my wife Jackie and me a little over 2 years
ago, the tremendous care and attention we received from our OB/GYN in
Virginia, where Grace was born.
The question is not whether these people are paying higher premiums.
The question is, Is the solution being proposed by this legislation
actually going to address this problem? Again, if I thought it would do
that, I would be very tempted to support this legislation, as someone
who has offered legislation dealing with frivolous lawsuits and other
claims. I am not adverse to tort reform. In fact, I am disappointed. We
are discussing tort reform in this instance, and we are also going to
be talking about the tort liability of gun manufacturers. It is going
to be interesting to hear people on that issue.
We had language included in the Energy bill to deal with MTBE.
Senator Schumer of New York eloquently made the case, asking why we
should be eliminating the liability of a product that was causing such
damage. I am frustrated to know that we are protecting people from
liability because of the political pressures that occur.
I am prepared to support intelligent tort reform, but this problem,
as serious as it is, is not addressed by this solution. Will this
legislation do anything to reduce premiums? Let me tell you why I don't
think it does.
If we are limiting the ability of women and young children to hold
accountable doctors, nurses, insurance companies, and others for harm
resulting from a mistake, we certainly must make sure we are doing so
for a very good reason.
The answer to the question posed above is a resounding no, in my
view. The suggestive link between jury awards and rising premiums has
not been established at all. In fact, to the contrary. Nor is there a
link between insurance premiums and access to health care. In fact, the
evidence suggests quite the opposite.
The two pillars upon which this bill is based are deeply flawed, in
my view. First, some would suggest jury awards have exploded in both
numbers and dollar amounts. That is something we will hear over and
over, that victims are winning more and more so-called jackpot
malpractice cases. But the facts are quite different.
The amount defendants and insurers are paying for medical malpractice
claims, including jury awards and settlements, has increased in a
manner that is consistent with and even lags behind medical inflation.
Over the 10-year period from 1992 to 2001, the mean payout in medical
malpractice cases rose by 6.2 percent per year, while medical inflation
was rising at 6.7 percent annually over the same period of time. In
other words, malpractice awards are rising exactly in the manner we
would expect. They are tracking health care costs.

Of course, a rise in premiums might also be explained by an increase
in the number of malpractice claims. That is also an argument we are
hearing. Again, this is not the case. Between 1995 and 2000, the number
of claims filed actually decreased by 4 percent, and the number of
medical malpractice payouts decreased by 8.2 percent between 2001 and
2002. So we are not seeing these numbers go up financially, nor are the
actual numbers of malpractice cases increasing. Both are the

[[Page S1477]]

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

A GAO report from August of last year identified access to care as a
problem--and I am quoting--``in scattered, often rural areas where
providers identified other long-standing factors that also affect the
availability of services.''
The question was asked: Why is this happening? The General Accounting
Office comes back and said there are a lot of other factors that are
causing a decline in the number of OB/GYNs. In addition, the GAO
found--and I am quoting them again--``that many of the reported
provider actions were not substantiated or did not affect access to
health care on a widespread basis.''
Unfortunately, this bill is a misguided attempt to solve a health
care problem with a tort reform solution. I am disappointed that we are
not using this time today to discuss the real issues. One issue I wish
we were discussing is class action reform because I think we have come
up with an answer that a majority of us could support. Regrettably, we
are not spending two days debating that issue. We are debating a bill
that is not going to go anywhere because the solution that is being
called for does not do the job.
So instead of taking the few valuable days we have in this Chamber to
deal with some issues before we adjourn for elections and conventions,
we are not debating class action reform, we are

[[Page S1478]]

debating a bill that is going nowhere. That does not make any sense to
me at all in terms of this agenda. So this is a waste of our time.
Let me get into other areas of health care because there are health
care problems that need addressing. I am disappointed, though, that we
are not going to debate class action reform but instead these tort
reform issues. We do have problems with access to care in our country.
We do have a patient safety problem in our country. We do have a health
care quality issue in this Nation of ours. We do have a problem with
rising health care costs in the Nation. This bill does not answer any
of those problems.
Why are we not discussing real solutions to the issue of access to
health care, to patient safety, to health care quality in this country,
and to the problem of rising health care costs? The American people
have a right to expect from this body better answers than the ones we
are giving them on this bill dealing with the issue of rising premium
costs.
Supporters of this bill are right about one thing: Far too many in
this country have little or no access to health care. The latest Census
Bureau figures released in September are alarming, to say the least.
Forty-four million of our fellow countrymen, more than one out of every
seven people in our great Nation, were without health care in the year
2002. This figure represents a 10 percent increase in the number of
uninsured since the year 2000.
Numerous studies have shown that being uninsured has a drastic impact
on the amount and quality of care individuals receive. Put very simply,
the uninsured receive less care, lower quality care, and are at a
greater risk of dying. The Institute of Medicine has estimated that
every year 18,000 of our fellow citizens die prematurely in this
country as a result of the effects of being uninsured.
Our country has a growing health care underclass. The Bush
administration's response to this crisis has been woefully inadequate.
Tax credits and health savings accounts will do little or nothing to
help the vast majority of the 44 million people who are uninsured, such
as low-income working families. By the way, the majority of the
uninsured work every day on one, two, three, and four jobs. These are
not people sitting around doing nothing. They are working. And we have
nothing to say to them.
We are debating an issue of tort reform when we ought to be dealing
with how to provide some health care coverage for these people and
explain why 18,000 lives a year are being lost prematurely because of
the lack of health insurance. We should be talking about creative ideas
to offer meaningful assistance to the uninsured. There are a variety of
ideas out there that are worth discussing.
We also have a health care quality and patient safety problem in the
country. Again, according to the Institute of Medicine, as many as
98,000 Americans are killed every year as a result of medical errors. A
study conducted by the Rand Corporation and published in the New
England Journal of Medicine last year came to a similar conclusion.
Individuals received the recommended treatment for their condition in
only 55 percent of the cases, according to that study. In other words,
nearly half the time patients did not receive the appropriate care. Why
are we not debating that and discussing that issue today?
There are a variety of proposals to address this real threat to the
American public. I am currently working with our colleagues on both
sides of the aisle on issues that would have some real impact on the
quality of care in our country. One meaningful step we can take almost
immediately is to encourage the use of information technology in the
health care setting.
The Senator from New York, Mrs. Clinton, is deeply interested in this
subject matter, as are several other colleagues. Improving quality is
the best tool we have to address rising health care costs. Supporters
of this legislation we are debating today would have you believe
medical liability costs are the main driver of rising health care
costs. But that is simply not the case. The Congressional Budget Office
has estimated that malpractice costs represent, at most, only 2 percent
of the overall health care costs in our country.

We ought to address this issue, but let's talk about it in the
context in which it is really a problem. Furthermore, while health care
costs more than doubled between the years 1987 and 2001, the total
amount spent on medical liability premiums rose by only 52 percent over
that same period. The real drivers of health care costs are
prescription drugs and hospital spending. We should be using the time
to pursue proposals to address these issues, including expanding the
use of inexpensive generic prescription drugs, better chronic disease
management and preventive medicine, and improving health care quality
and efficiency.
Let me finish by saying, as ranking member of the Subcommittee on
Children and Families, improving the health of women and children has
been a priority of mine and many others who serve on that committee,
including the Presiding Officer. If my colleagues are genuinely
interested in healthier mothers and healthier babies, I can suggest any
number of pieces of legislation that are pending here that would
represent real steps towards achieving that goal. I am the coauthor of
two bills, the Newborn Screening Save Lives Act and the Prematurity
Research Expansion and Education for Mothers who Deliver Infants Early
Act, the PREEMIE legislation, that I believe would go a long way
towards improving the health and well-being of newborns. During the
107th Congress, Senator Harkin introduced the Safe Motherhood Act a
comprehensive bill to ensure safe pregnancy for all women. Senator
Bingaman introduced legislation to expand health care coverage for
pregnant women under Medicaid and the State Children's Health Insurance
Program.
There are a variety of such bills out there, offered on a bipartisan
basis. The Senator from Ohio, Mr. DeWine, and I have worked very hard
on a number of these bills. I am not going to suggest they solve all
the problems, but they are designed to deal with some of the very
issues pregnant women and infants face every day. The idea that you are
going to put a cap on noneconomic recoveries here and that is somehow
going to address these other issues is ludicrous on its face. We ought
to be spending the valuable time of this institution in debating and
discussing and getting some of this legislation passed that could make
a difference to these people.
I am not shy when it comes to tort reform. I have spent a good deal
of time in my Senate career authoring bills dealing with tort reform.
This is not one of them. This is not tort reform. This is not
addressing the issue that people face every day and doctors face with
rising premiums. There is a way of addressing that problem. When we get
around to doing it and working on it, then we can take some pride in
passing something that does something meaningful in this area. This
bill doesn't do it.
I hope cloture will be denied. I yield the floor.
The PRESIDING OFFICER (Mr. Enzi). The Senator from Ohio.
Mr. VOINOVICH. Mr. President, I rise today in strong support of S.
2061, the Healthy Mothers and Healthy Babies Access to Care Act, and I
strongly encourage my colleagues to vote for cloture on the motion to
proceed on this very important legislation.
I would like to point out in the beginning of my remarks, in response
to some of the statements that have been made on the floor this
morning, that there has to be a reason the American College for
Obstetrics and Gynecology, the American Medical Association, and just
about every medical group in the United States of America is supportive
of this legislation. We would not be talking about it unless they
really believed the passage of this legislation would have a dramatic
impact on the liability costs that OB/GYNs are experiencing, causing so
many of them to leave their practices.
This is a personal issue for me. Last summer when my daughter-in-law
was expecting her fourth child, she learned that after the delivery,
her doctor would no longer deliver babies. At the time, her doctor was
in a four-physician group, all of them obstetricians. They never had
any lawsuits against them. Yet their insurance premiums had skyrocketed
from $81,000 to over $381,000 in just 3 years. That is $75,000

[[Page S1479]]

per person over a period of 3 years. How could physicians be expected
to afford rate hikes such as these?
We need to be doing something about it. This legislation is going to
help. This legislation is so important because the effects of the
medical liability crisis can be felt acutely by the obstetrics/
gynecology community. Data from the American Medical Association
indicates that 19 States currently face a medical liability crisis and
25 States show problem signs. Women of childbearing age have been
impacted the most because 1 out of 11 obstetricians nationwide has
stopped delivering babies and, instead, has scaled back their practice
to gynecology only or just gotten out of the practice. In addition, one
in six has begun to refuse high-risk cases.
How does this affect a patient's access to care? As premiums
increase, women's access to general health care, including regular
screenings for reproductive cancers, high blood pressure, cholesterol,
diabetes, and other serious health risks, will decrease. It leads to
more uninsured women because of health care costs that have gone up as
a result of the fact that malpractice costs have gone up so
astronomically in the last couple of years.
In 2002, 11.7 million women of childbearing age were uninsured.
Without medical liability reform, a greater number of women ages 19 to
44 will move into the ranks of the uninsured. With fewer health care
providers offering full services, the workload has increased
significantly for those who still do. Wait times increase, putting
women at risk. A physician facing higher premiums is likely to practice
defensively, ordering more tests than medically necessary, seeking more
opinions, and giving more referrals.
Women receive less prenatal care in our current environment. Improved
access to prenatal care has resulted in record low infant mortality
rates, an advance now threatened as OB/GYNs drop obstetrics. As some of
you may have read, for the first time since 1958, the U.S. infant
mortality rate is up. According to preliminary data released this month
by statisticians from the CDC, the Nation's infant mortality rate in
2002 was 7 per 1,000 births. That is up from 6.8 in 2001. Some experts
are attributing this to poor access to prenatal care, that that is the
cause of this problem. Women have less preventive care. Women's general
health care is routinely provided by community clinics and OB/GYNs.
Women receive fewer screenings for reproductive cancers, high blood
pressure and cholesterol, diabetes, and other serious health risks as
OB/GYNs and community clinics reduce care.
The ramifications of this medical liability crisis on women's health
care are shocking, and we feel this crisis very strongly in Ohio. The
Medical Liability Monitor ranked Ohio among the top five States for
premium increases in 2002. The OHIC Insurance Company, among the
largest medical liability insurers in the State, has reported that
average premiums for Ohio doctors have doubled over the last 3 years.
I would like to point out that the argument that the insurance
industry is ripping off doctors and raising rates to make up for
investment losses, as some contended here on the floor of the Senate
this morning, is preposterous.
I invite those Members who believe this to read an article from Brown
Brothers Harriman Insurance Asset Management Group.
I ask unanimous consent that the article be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

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

Did Investments Affect Medical Malpractice Premiums?

(By Raghu Ramachandran)

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

loss inflation

AIR claims this shows ``that since 1975, medical
malpractice paid claims per doctor have tracked medical
inflation very closely.'' In fact, the graph and the
underlying data suggest exactly the opposite. First, they
make an erroneous comparison. Since AIR uses real (or
constant) medical dollars, they have already factored out the
effect of medical inflation. So, any increase is a ``real''
increase in excess of medical inflation. One cannot compare
real increases to inflation.
Second, the data show loss costs have increased
significantly faster than inflation. Using data from the AIR
report, we plotted medical inflation (CPI-U), premiums, and
losses to show how each has grown since 1975.
One sees that the losses per doctor have grown at a much
higher rate than either medical inflation or premiums per
doctor. In order for losses in 2001 to have equaled the build
up created by inflation in medical care during the period
1975-2001, companies would have to reduce the amount of paid
losses by approximately 60%. Therefore, losses, not
inflation, are the problem.

economic effect

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

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

Several other analyses also failed to show a correlation
between premiums and the economy. To test if the premium
increases are related to the economy or bond market, we
analyzed the correlation of the change in premiums to GDP and
investment yield. To test whether premiums go up when the
investment yield goes down, we analyzed the correlation
between premiums and the change in yield as well as the
correlation between the change in premiums and the change in
yield.
One could reasonably claim that the premiums (or increases
in premiums) are dependent not upon the company's performance
this year but upon the company's performance in the previous
year. To test this hypothesis, we regressed both premiums and

[[Page S1480]]

change in premiums to both the economy and investment yield
in the previous year. For thoroughness, we also analyzed the
correlation between both premiums and change in premiums with
the change in yields in the prior year.
We also considered alternate measures for GDP and yield. We
used industrial production as an alternate measure of the
economy and the 10-year Treasury note as an alternate measure
of yield. We also analyzed the effect the slope of the yield
curve and the change in slope had on premiums. We performed
all of the analyses above on these new variables.
In 64 different regressions between the economy, yield, and
premiums, the highest coefficient of determination was
0.1505. Therefore, we can state with a fair degree of
certainty that investment yield and the performance of the
economy and interest rates do not influence medical
malpractice premiums.

Stock Market Effect

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

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

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

where do we go from here?

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

Medical malpractice paid loss ratio 1975-2001

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

To increase profitability, companies must effect one of
three changes: reduce their losses, increase their premiums,
or increase their investment income. As the industry, in
aggregate, cannot control return on investments, they have
only two choices. Using the methodology above, we can
estimate the magnitude of the change required to restore
profitability to the industry.
If losses are held constant--i.e., no change in loss and
expense trends, then we are left with increasing premiums to
restore the industry to profitability. For premiums to have
kept up with medical inflation for the period 1975 to 2001,
they would have to increase by 41%. For premiums to have kept
up with the increases in paid losses since 1975, they would
have to increase by 325%. For the industry's average loss
ratio to drop back to its 27-year average, premiums would
need to rise by 59%. For the loss ratio to drop to its nadir
during that period, premiums would have to increase by 368%.

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

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

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

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

rating agency response

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

taming losses

If companies cannot increase their premiums, then they must
be able to control the burgeoning increase in losses. Our
analysis suggests that the level of losses would

[[Page S1481]]

have to decrease by 37% to achieve the average loss ratio and
by 79% to obtain the minimum loss ratio observed over the
past 27 years. Such reductions would require significant
change in the tort environment.

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

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

Summary

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

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

The article goes on to say:

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

The article also goes on to say:

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

Finally, I will finish up with a summary:

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

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

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

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

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

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

Beachwood OB/GYN, Inc.,

Lyndhurst, OH, January 4, 2004.
My Dearest Patients: It is with a heavy heart that I inform
you that I shall be relocating to Minnesota in March. The
decision to leave Ohio is the direct result of the medical
malpractice crisis: with a clean record, my annual premium
will reach well over $100,000 this July. I cannot and will
not, in good conscience play the insurance company's game--
it's just that simple.
What is not simple is saying good-bye, to a town and people
that have given me so much. Ob/Gyn is so different from the
other medical specialities due to the emotional and personal
relationships that exist between us. I have been blessed to
have experienced with so many of you the joy of a new baby's
arrival; prayed about the outcome of a surgery, and also,
shared the painful moments. Indeed, it is I who thank God for
having met you, for, because of you, I have become a better,
more complete, human being.
Do not despair over the continuity of your care. My
colleagues in the practice will keep the ball rolling. From a
practical standpoint, I would encourage you to set up follow-
up appointments with any one of the doctors. Drs. Varyani and
Goldshmidt have schedules that allow for more flexibility,
but Drs. Bellin, Evans, Klein and Vexler are also available
to continue your care. They are all excellent doctors and
have my complete confidence.
Farewell, my friends, and the best to you and your
families.
With sincere affection and melancholy.
Ben Alvarez,
MD.

Mr. VOINOVICH. After speaking at a physicians' rally in Ohio, I
received a letter from a young doctor, Geoff Cly. Dr. Cly received a
notice from the insurance carrier that the premiums would increase by
20 percent, $30,000, this plus the $20,000 increase from the year
before, forcing him to make a difficult decision of uprooting his
family and practice to go to another State. Doctor Cly was unable to
make the insurance premiums and still take care of his student loan
obligations and his family. He moved to Fort Wayne, IN. He said to me:
Senator, I am going to Indiana. My liability insurance will be less
there. But the practice has gotten so much different than what I
anticipated it to be that I am seriously thinking, after I pay off my
college loans, I am going to get out of medicine.
It is a tragedy what is happening today in my State and other States
throughout this country. For those of my colleagues who think medical
liability reform is a State issue, I ask them to read this letter and
see how the medical liability crisis transcended State lines,
particularly my friends from the neighboring State of West Virginia.
Our Ohio physicians who practice along the border are feeling the
effects of their proximity to West Virginia and its favorable
plaintiffs' verdicts. They are feeling these effects in their
increasing insurance premiums.
It is amazing the number of counties along the West Virginia border
and eastern Ohio where they have no more OB/GYNs. They just left. These
counties go bare, with no OB/GYN to provide services to protect women.
I could go on and give more and more examples of Ohio physicians who
had to leave the practice of medicine. Dr. Komorowski of Bellevue
stopped delivering babies after 20 years when he found out the day
after Christmas last year that his liability insurance was tripling to
more than--listen to this--$180,000. Dr. Komorowski, the only
obstetrician in Bellevue, figured it would cost him nearly 11 months of
his salary to pay the premium increase in addition to taxes and other
expenses.
It is out of control. We need to do something now, not just for Ohio
but

[[Page S1482]]

for the rest of the country as well. Obstetrics/gynecology is among the
top three specialties in the cost of professional liability insurance
premiums. Nationally, insurance premiums for OB/GYNs have increased
dramatically. The median premium increased 167 percent between 1982 and
1998. The median rate rose 7 percent in 2000, 12\1/2\ in 2001, 15.3 in
2002, with increases as high as 69 percent according to a survey by the
Medical Liability Monitor, a newsletter covering the liability
insurance industry.
According to the Physicians Insurance Association of America, OB/GYNs
were first among 28 specialty groups in the number of claims filed
against them in 2000. OB/GYNs were the highest of all the specialty
groups in the average cost of defending against a claim in 2000 at a
cost of almost $35,000. In the 1990s they were first, along with family
physicians, general practitioners, in the percentage of claims against
them closed with a payment of 36 percent. They were second after
neurologists in the average claim payment made during that same period.
Although the number of claims filed against all physicians climbed in
recent decades, the phenomena do not reflect an increased rate of
medical negligence. In fact, OB/GYNs win most of the claims filed
against them. In 1999, an American College of Obstetricians and
Gynecologists survey of its membership found that over one-half, 54
percent of claims against OB/GYNs were dropped by plaintiff attorneys,
dismissed or settled without payment; 54 percent of the cases that did
proceed. OB/GYNs won 7 of 10 times. Enormous resources are spent to
deal with these claims, only 10 percent of which are found to have
merit.

The cost to defend these claims can be staggering and often mean that
physicians invest less in new technologies that help patients. In 2000,
the average cost to defend a claim against the OB/GYN was the highest
of all physicians.
According to the American College of Obstetricians and Gynecologists,
the typical OB/GYN is 47 years old, has been in practice for 15 years
and can expect to be sued 2.53 times over his or her career. Over one-
quarter of the residents have been sued for care provided during their
residency. And that is another problem we are seeing in this country:
Many residencies are going unfulfilled because of the medical
malpractice lawsuit abuse growth in this country. Medical school
enrollments have been impacted by what young people are seeing
happening in the medical profession in this country.
In 1999, 76 percent of the American College of Obstetricians and
Gynecologists fellows reported they had been sued at least once so far
in their career. The average claim takes over 4 years to resolve. I
know from anyone who has been the subject of a lawsuit that 4 years is
4 years of stress as they worry about what is going to happen as a
result of the outcome of that litigation.
The legislation we are debating today gets us on our way to turning
these statistics and stories around. It provides a commonsense approach
to our litigation problems that will help keep consumers from bearing
the cost of costly and unnecessary litigation while making sure that
those with legitimate grievances have recourse through the courts.
Throughout my career in public service, health care has been one of
my top legislative priorities. We all want access to quality,
affordable health care. We do have a problem in this country in terms
of access to quality health care. In my State, I have conducted eight
listening sessions. The result from all those sessions, regardless of
who was there, is that the system is broken, and we need to plow new
ground.
When the quality is not there, when people die or are truly sick due
to negligence or other medical error, they should be compensated. We
want that. But when healthy plaintiffs file meaningless lawsuits to
shake the money tree to get as much as they can get, there is a
snowball effect and all of us pay the price.
The last time I spoke on this subject, I had the front and back cover
of the white pages and the yellow pages of the Cleveland phonebook. The
front cover and back cover of both of them were advertisements for
personal injury lawyers giving specific examples of encouraging people
to file suits based on the information they had in their advertisement.
For the system to work, we must strike a delicate balance between the
rights of aggrieved parties to bring lawsuits and the rights of society
to be protected against frivolous lawsuits and outrageous judgments
that are disproportionate to compensating the injured and made at the
expense of society as a whole.
I have been concerned about this issue since my days as Governor of
Ohio. In 1996, I essentially had to pull teeth in the Ohio Legislature
to pass a tort reform bill. I signed it into law in October of 1996.
Three years later, the supreme court ruled it unconstitutional. If that
law had withstood supreme court scrutiny--and it should have; we now
have what I call a balanced supreme court in Ohio--Ohioans would not be
facing the medical access problems they face today: Doctors leaving
their practice, patients unable to receive the care they need, and the
cost of health insurance going through the roof.
During my time in the Senate, I have continued my work to alleviate
the medical liability crisis. To this end, I have worked with the
American Tort Reform Association to produce a study in August of 2002
that captured the impact of this crisis on Ohio's economy in order to
share these findings with my constituents and colleagues. Guess what we
found. What we have in this country today, in my opinion, not only in
this area but in a lot of areas, is a litigation tornado that is
ripping through the economy. We found in Ohio that the litigation
crisis costs every Ohioan $636 per year and every Ohio family of four
$2,544. These are alarming figures, and the numbers are from 2 years
ago. Which family do you know that can pay $2,500 for the lawsuit abuse
of a few individuals?
Next to the economy and jobs, the most important issue facing our
country today is health care. In fact, it is a major part of what is
wrong with the economy. We have too many uninsured, and those who have
insurance face soaring premiums every year, making it less likely they
can continue to pay them. In addition, employers are facing spiraling
costs and in some cases don't even provide insurance.

I have talked to one employer after another. They say: I want to
provide health insurance for my workers, but I cannot afford to do it
at $10,000 for a family of four. I am asking my employees to pay more
of the premiums. In many instances my employees cannot afford to pay
the premiums so they are going without health insurance.
We have a real problem. Medical malpractice lawsuit abuse reform is
having a dramatic impact on the cost of health insurance, in spite of
what some of my colleagues have said. Providing the sort of commonsense
approach found in the Healthy Mothers and Healthy Babies Access to Care
Act is a win-win situation. The bill will help decrease the rising cost
of health care. It will give patients access to care and it will
curtail the rising cost of medical liability insurance for those
physicians who provide prenatal delivery and postpartum care to mothers
and babies.
Patients will not have to give away large portions of their judgments
to their attorneys. Truly injured parties can recover 100 percent of
their economic damages. Punitive damages are reserved for those cases
where they are truly justified. Doctors and hospitals will not be held
liable for harms they did not cause and physicians can focus on what
they do best--practicing medicine and providing health care.
I urge my colleagues to vote for cloture so we can debate this issue
and have an up-or-down vote on this legislation impacting on our most
important patients: Pregnant women and their newborn babies.
There was some mention made of the General Accounting Office study of
the medical liability crisis and access to care. I ask unanimous
consent to have printed in the Record the response of the American
Medical Association to that General Accounting Office report. It is
very important.
There being no objection, the material was ordered to be printed in
the Record, as follows;

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

The U.S. General Accounting Office (GAO) recently released
two reports related to

[[Page S1483]]

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

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

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

That is what much of this debate is about. It is about physicians
being able to practice medicine and do it in a way they did back when
my wife Janet and I were having our four children. There is a special
relationship between an OB/GYN and a family. It breaks my heart to see
so many of them leaving the practice of medicine because of these
malpractice costs with which they are confronted.
We do have a crisis. This Senate is going to have to face up to it. I
am hoping that we will have 60 votes today on cloture on the motion to
proceed. I think we need to debate this issue. This issue has to be
debated and the American people who are not aware of the crisis need to
be made aware of it.

[[Page S1484]]

I yield the floor.
The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
Mr. GREGG. Mr. President, what is the present situation relative to
time?
The PRESIDING OFFICER. The Senator's side has 37 minutes and the
other side has 12 and a half minutes.
Mr. GREGG. The Senator from Florida wanted 20 minutes. I ask
unanimous consent that he be allowed to proceed after I speak for 20
minutes, but to the extent his time exceeds 12 minutes, it be debited
against the time of the Democratic membership after we come back from
the policy lunches.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. GREGG. Mr. President, I congratulate the Senator from Ohio for an
excellent statement outlining the gravity of the problem we face, which
is that women in this country are losing access to OB/GYN doctors,
especially if they want to have babies. As a result, we are putting a
lot of pressure on a lot of people--women, specifically, in their
birthing years--and making it difficult, especially in rural areas, to
get the type of health care we want them to get.
We are a society that is built around the concept of babies and
children, and that is one of the more exciting things that happens in
everybody's lifetime. Yet we are a society making it extraordinarily
difficult now for doctors who practice the delivery of children and
babies to practice their trade.
As I have said before, lawyers don't deliver children. Doctors
deliver children. Unfortunately, the doctors are being driven out of
the business by attorneys, and the cost of their malpractice premiums
are going up radically. As a result, many doctors in my State are not
delivering children anymore. I went through the specifics of that
yesterday. I want to read a compelling letter I received from Debbie
Risteen. She lives in Derry, NH. She has six children.
She wrote:

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

That is a pretty compelling letter. It is anecdotal, but it is an
anecdote happening across this country. Stories are being retold. Women
are losing their OBs because these physicians are getting out of the
practice of delivering babies because of the cost of their malpractice
insurance. This bill will help alleviate that problem, and it is
absolutely critical to give women this access and to not do things
extremely discriminatory against women, and especially women who wish
to become pregnant and have children.
I yield the floor.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. Mr. President, I rise today in support of S. 2061, the
Healthy Mothers and Healthy Babies Access to Care Act, the principal
sponsors of which were Senator Gregg and Senator Ensign.
Much of America cannot access basic medical services because lawsuits
are driving insurance premiums through the roof and driving doctors
literally out of business. Seven months ago a majority of Senators
voted to try to do something about this problem. Unfortunately, not a
single Democratic Senator supported our effort and therefore we could
not overcome a filibuster and were prevented from even considering S.
11, the Patients First Act of 2003.
In the last 7 months, the crisis has gotten no better. That is the
bad news. The good news is our resolve has not waned so again we are
before the American people waiting and willing to roll up our sleeves
to fix this problem if our friends on the other side of the aisle will
let us have a chance.
Like the bill we offered last July, the reforms we are now proposing
are tried and true. They are based on California's MICRA legislation,
which for a quarter of a century has stabilized insurance premiums and
helped ensure access to health care for those in the Golden State. The
Healthy Mothers and Healthy Babies Access to Care Act would allow
plaintiffs to recover unlimited economic damages, up to a quarter
million dollars in noneconomic damages, and punitive damages up to the
greater of a quarter million or twice economic damages.
While the reforms in S. 2061 are similar to those in MICRA and S. 11,
the scope of S. 2061 is much more narrow. The bill we are asking the
Senate to begin considering today pertains only to obstetrics and
gynecological services. If our friends across the aisle will not help
us protect all medical professionals with MICRA-type reforms, then
perhaps they will let us take this important step toward reform by
protecting at least one specialty.
OB/GYNs provide some of the most critical medical services in our
country. Unfortunately, OB/GYNs also suffer from some of the highest
premiums. As a result, women and children across our country are placed
in danger as they struggle to find, oftentimes unsuccessfully, basic
obstetric care. This is a nationwide problem. Data from the American
College of Obstetricians and Gynecologists illustrates the legal and
financial jeopardy faced by OB/GYNs across our country today.
Obstetrics and gynecology are among the top three specialties with
the highest professional liability insurance premiums. OB/GYNs were No.
1 among 28 specialty groups in the number of claims filed against them.
OB/GYNs were also the highest of all specialty groups in the average
cost of defending against a claim. OB/GYNs are also facing enormous
increases in the average payout of claims brought against them.
For example, back in 1996, the average award against an OB/GYN was
$254,495. Between 1996 and 1998, the average award went up to about
$350,000--from $250,000 up to $350,000 in 2 years. By 2000, the average
award against an OB/GYN had increased to about $400,000. That is an
increase of almost 40 percent in 4 short years.
This phenomenon is even more striking when one looks at cases
involving alleged brain injuries to newborns.

[[Page S1485]]

Such cases account for 30 percent of all claims against OB/GYNs but
research shows physician error is responsible for fewer than 4 percent
of neurologically impaired infants. Despite the rarity of physician
error in these cases, the average award in these few cases where
obstetricians are at fault has dramatically increased in just a few
years. In 1996, the average award in these type cases was about
$460,000. Two years later, the average award had doubled to $935,000.

Today, the median award in childbirth cases has risen to over $2
million. This is the highest category of award for all types of medical
liability cases. American women should not be misled by these
statistics. They should not worry that despite annual advances in
medical technology and training there is somehow an increasingly poor
level of obstetric care in this country.
No, these troubling statistics do not mean America's medical schools
have lowered their standards and a rash of incompetent obstetricians
has begun to practice medicine. In fact, according to the Society of
Obstetricians and Gynecologists, over 80 percent of all cases that went
to verdict against an OB/GYN resulted in judgments for the physician.
In other words, on average eight out of 10 cases that went to trial
against OB/GYNs were not meritorious.
It is the dramatic increase in awards noted above and the specter of
such awards in settlement negotiations that is driving malpractice
premiums through the roof, not a lowering of medical standards for
practice.
Looking at my own State, the immediate result of skyrocketing
liability premiums is the doctors pack up and move to a State such as
California with liability reform or they just simply close their doors
altogether. When this happens, the ultimate victims, of course, are the
patients, the mothers and their children.
Let's take a look at the Commonwealth of Kentucky. Kentucky does not
have a medical liability reform system. Not surprisingly, liability
insurance rates for OBs in my State increased 64 percent in one year
from 2002 to 2003. Also not surprisingly in the last 3 years, Kentucky
has lost one-fourth of its obstetricians.
Moreover, Kentucky has lost nearly half its potential obstetric
services during this time when one factors in those who have limited
their practices.
As this chart I have shows, roughly 60 percent of the counties in the
Commonwealth of Kentucky have no obstetrician at all--none. These are
counties in red on this map. It is a majority of the counties in my
State that have no obstetricians at all.
Other counties, such as Perry County, down in southeast Kentucky,
down this way, technically have a practicing OB/GYN, but that one
doctor has stopped delivering babies within the last year, so if you
are in Perry County, that doesn't do you much good. Still other
counties, such as Greenup, Lawrence, and Johnson Counties, in northeast
Kentucky, have just one OB/GYN in each county, so if you are a woman in
those counties you better hope there is not another woman having a baby
when you are, or the doctor isn't out of town or busy with another
patient. If that happens, you are going to have to drive through the
hills on the backroads of eastern Kentucky to try to find a doctor to
deliver your baby. All told, 82 of Kentucky's 120 counties have no OBs,
or just have one OB.
According to Dr. Doug Milligan of Lexington, who specializes in
caring for women with high-risk pregnancies, 11 OBs in eastern Kentucky
have recently quit delivering babies or left the State, forcing women
to drive for hours.
According to Dr. Milligan, apart from problems with delivering
babies, some women are developing complications because they are not
getting prenatal care.
So what should we conclude from all of this? The situation I have
just described is not, unfortunately, unique to Kentucky. As you will
hear from my colleagues, States across the country are in similar
straits. So I commend Senator Gregg and Senator Ensign for trying to
address this important problem.
As I have said earlier, their legislation is modeled on reforms that
have stood the test of time in California, and it has been endorsed by
the American Medical Association, the American College of Obstetricians
and Gynecologists, and a host of other medical organizations.
I hope a dozen brave souls on the other side of the aisle will give
the Senate a chance to consider this bill.
I yield the floor.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Mr. President, I understand there was an agreement for
the allocation of time evenly divided between the two parties this
morning, and that there has also been an agreement to divide the time
during the afternoon.
I have talked with our leadership. They have indicated I could use 10
minutes of our time this afternoon, for the Democratic side, and use it
at this time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KENNEDY. What adjustment has to be made in the afternoon will be
made.
Mr. President, I intend to speak to the issue before us, medical
malpractice, in a moment. I will yield myself 6 minutes now and then I
will speak on the medical malpractice in just a moment.

The Federal Marriage Amendment

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

[[Page S1486]]

crimes law to include hate crimes based upon this flagrant form of
bigotry.
I hope we can all agree that Congress has more pressing challenges to
consider than a divisive, discriminatory constitutional amendment that
responds to a nonexistent problem. Let's focus on the real issues of
war and peace, jobs and the economy, and the many other priorities that
demand our attention so urgently in these troubled times.
Mr. President, as to the issue that we will be voting on this
afternoon, on the medical malpractice legislation, I spoke on this
issue yesterday but there are a few additional points that I wish to
make today.
How much time do I have remaining?
The PRESIDING OFFICER. The Senator has 6 minutes remaining.

medical malpractice legislation

Mr. KENNEDY. Mr. President, today's vote of S. 2061 is a test of the
Senate's character. In the past, this body has had the courage to
reject the simplistic and ineffective responses proposed by those who
contend that the only way to help doctors is to further hurt seriously
injured patients. Unfortunately, as we saw in the Patients' Bill of
Rights debate, the Bush administration and congressional Republicans
are again advocating a policy which will benefit neither doctors nor
patients, only insurance companies. Caps on compensatory damages and
other extreme ``tort reforms'' are not only unfair to the victims of
malpractice, the do not result in a reduction of malpractice insurance
premiums.
Once more, we must stand resolute.
We must not sacrifice the fundamental legal rights of seriously
injured patients on the altar of insurance company profits. We must not
surrender our most vulnerable citizens--seriously injured women and
newborn babies--to the avarice of these companies.
This bill contains most of the same arbitrary and unreasonable
provisions which were decisively rejected by a bipartisan majority of
the Senate last year. The only difference is that last year's bill took
basic rights away from all patients, while this bill takes those rights
away only from women and newborn babies who are the victims of
negligent obstetric and gynecological care. That change does not make
the legislation more acceptable. On the contrary, it adds a new element
of unfairness.
This legislation would deprive seriously injured patients of the
right to recover fair compensation for their injuries by placing
arbitrary caps on compensation for non-economic loss in all obstetrical
and gynecological cases. These caps only serve to hurt those patients
who have suffered the most severe, life-altering injuries and who have
proven their cases in court.
They are the children who suffered serious brain injuries at birth
and will never be able to lead normal lives. They are the women who
last organs, reproductive capacity, and in some cases even years of
life. These are life-altering conditions. It would be terribly wrong to
take their rights away. The Republicans talk about deterring frivolous
cases, but caps by their nature apply only to the most serious cases
which have been proven in court. These badly injured patients are the
last ones we should be depriving of fair compensation.
A person with a severe injury is not made whole merely by receiving
reimbursement for medical bills and lost wages. Noneconomic damages
compensate victims for the very real, though not easily quantifiable,
loss in quality of life that results from a serious, permanent injury.
It is absurd to suggest that $250,000 is fair compensation for a child
who is severely brain injured at birth and, as a result, can never
participate in the normal activities of day-to-day living; or for a
woman who lost her reproductive capacity because of an OB/GYN's
malpractice.
This is not a better bill because it applies only to patients injured
by obstetrical and gynecological malpractice. That just makes it even
more arbitrary.
The entire premise of this bill is both false and offensive. Our
Republican colleagues claim that women and their babies must sacrifice
their fundamental legal rights in order to preserve access to OB/GYN
care. The very idea is outrageous.
For those locales--mostly in sparsely populated areas--where the
availability of specialists is a problem, there are far less drastic
ways to solve it. It is based on the false premise that the
availability of OB/GYN physicians depends on the enactment of draconian
tort reforms. If that were accurate, States that have already enacted
damage caps would have a higher number of OB/GYNs providing care.
However, there is in fact no correlation. States without caps actually
have 28.4 OB/GYNs per 100,000 women, while States with caps have 25.2
OB/GYNs per 100,000 women.
And that is only one of many fallacies in this bill. If the issue is
truly access to obstetric and gynecological care, why has this bill
been written to shield from accountability HMOs that deny needed
medical care to a woman suffering serious complications with her
pregnancy, a pharmaceutical company that fails to warn of dangerous
side effects caused by its new fertility drug, and a manufacturer that
markets a contraceptive device which can seriously injure the user? Who
are the authors of this legislation really trying to protect?
In reality, this legislation is designed to shield the entire health
care industry from basic accountability for the care it provides to
women and their infant children. It is a stalking horse for broader
legislation which would shield them from accountability in all health
care decisions involving all patients. While those across the aisle
like to talk about doctors, the real beneficiaries will be insurance
companies and large health care corporations. This legislation would
enrich them at the expense of the most seriously injured patients;
women and children whose entire lives have been devastated by medical
neglect and corporate abuse.
When will the Republican party start worrying about injured patients
and stop trying to shield big business from the consequences of its
wrongdoing?
If we were to arbitrarily restrict the rights of seriously injured
patients as the sponsors of this legislation propose, what benefits
would result? Certainly less accountability for health care providers
will never improve the quality of health care. It will not even result
in less costly care. The cost of medical malpractice premiums
constitutes less than two-thirds of 1 percent--0.66 percent--of the
Nation's health care expenditures each year. Malpractice premiums are
not the cause of the high rate of medical inflation.
In this era of managed care and cost controls, it is ludicrous to
suggest that the major problem facing American health care is
``defensive medicine.'' The problem is not ``too much health care,'' it
is ``too little'' quality health care.
A CBO report released in January of this year rejected claims being
made about the high cost of ``defensive medicine''. Their analysis
``found no evidence that restrictions or tort liability reduce medical
spending.'' There was ``no statistically significant difference in per
capita health care spending between States with and without limits on
malpractice torts.''
The White House and other supporters of caps have argued that
restricting an injured patient's right to recover fair compensation
will reduce malpractice premiums. But, there is scant evidence to
support their claim. In fact, there is substantial evidence to refute
it. In the past year, there have been dramatic increases in the cost of
medical malpractice insurance in States that already have damage caps
and other restrictive tort reforms on the statute books, as well as the
States that do not. No substantial increase in the number or size of
malpractice judgments has suddenly occurred which would justify the
enormous increase in premiums which many doctors are being forced to
pay.
The reason for sky-high premiums cannot be found in the courtroom.
Caps are not only unfair to patients, they are also an ineffective
way to control medical malpractice premiums. Comprehensive national
studies show that medical malpractice premiums are not significantly
lower on average in States that have enacted damage caps and other
restrictions on patient rights than in States without these
restrictions. Insurance companies are merely pocketing the dollars
which patients no longer receive when ``tort reform'' is enacted.

[[Page S1487]]

Focusing on premiums paid by OB/GYN physicians, the evidence is the
same. Data from the Medical Liability Monitor shows that the average
liability premium for OB/GYNs in 2003 was actually slightly higher in
States with caps of damages--$63,278--than in States without caps--
$59,224. It also showed that the rate of increase last year was higher
in States with caps--17.1 percent--than it was in States without caps--
16.6 percent.
This evidence clearly demonstrates that capping malpractice damages
does not benefit the doctors it purports to help. Their rates remain
virtually the same. It only helps the insurance companies earn even
bigger profits. As Business Week Magazine concluded after reviewing the
data, ``the statistical case for caps is flimsy.'' That was in the
March 3, 2003 issue.
If a Federal cap on non-economic compensatory damages were to pass,
it would sacrifice fair compensation for injured patients in a vain
attempt to reduce medical malpractice premiums. Doctors will not get
the relief they are seeking. Only the insurance companies, which
created the recent market instability, will benefit.
Insurance industry practices are responsible for the sudden dramatic
premium increases which have occurred in some States in the past 2
years. The explanation for these premium spikes can be found not in
legislative halls or in courtrooms, but in the boardrooms of the
insurance companies themselves.
Insurers make much of their money from investment income. Interest
earned on premium dollars is particularly important in medical
malpractice insurance because there is a much longer period of time
between receipt of the premium and payment of the claim than in most
lines of casualty insurance. The industry creates a ``malpractice
crisis'' whenever its investments do poorly. The combination of a sharp
decline in the equity markets and record low interest rates in recent
years is the reason for the sharp increase in medical malpractice
insurance premiums. What we are witnessing is not new. The industry has
engaged in this pattern of behavior repeatedly over the last 30 years.
Last year, Weiss Ratings, Inc., a nationally recognized financial
analyst conducted an in-depth examination of the impact of capping
damages in medical malpractice cases. Their conclusions sharply
contradict the assumptions on which this legislation is based. Weiss
found that capping damages does reduce the amount of money that
malpractice insurance companies pay out to injured patients. However,
those savings are not passed on to doctors in lower premiums.
Between 1991 and 2002, the Weiss analysis shows that premiums rose by
substantially more in the States with damage caps than in the States
without caps. The 12-year increase in the annual malpractice premium
was 48.2 percent in the States that had caps, and only 35.9 percent in
the States that had no caps. In the words of the report:

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

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

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