Washington, DC — With Bush Republicans in the Senate seeking to use their “health” week to push Medical Malpractice legislation that will do nothing to fix the health care crisis in America today, Senate Democratic Leader Harry Reid delivered the following remarks on the Floor of the US Senate.
The text of Senator Reid’s speech, as prepared, is below.
Mr. President, I rise to object to the Republican medical malpractice bills before the Senate today. These measures do not represent a serious attempt to improve health care or civil justice in the United States. Moving to these bills is a tired political exercise, and the Senate should reject it out of hand.
To think with American consumers paying over 3 dollars for gas, with college tuition moving beyond the reach of many in the middle-class, with the Iraq war dead approaching 2,500, with immigration a security crisis unresolved, with our country’s deficit standing at 9 trillion dollars, with 46 million Americans lacking health care coverage, we are moving to bills that are unnecessary and go nowhere. It is wrong.
We could more profitably use the scarce time remaining in the 109th Congress tackling the urgent challenges facing America’s families: energy, the war, immigration, and the real health care crisis.
Both of these bills the Senate will consider today contain the same one-size-fits-all cap on damages that this body has rejected time and time again. Both contain the same unjustified protections for hospitals, HMOs and insurance companies from previously discarded bills. In fact, these proposals are virtually identical to legislation we turned aside three times last Congress. These bills are the same old song.
Even though these measures would dramatically rewrite the tort laws of all 50 states, and even though they would denigrate the legal rights of countless Americans, they have undergone no serious legislative review in this Congress. Don’t be fooled by the low bill numbers – S. 22 and S. 23 were simply placeholders for legislative text that was only formally introduced last Wednesday. In fact, the text of these bills was not even available online until two days ago. The Majority Leader used a procedure we call “Rule 14” to bring these bills straight to the Senate floor to avoid consideration by either the Judiciary Committee or the Health Committee.
There has not been a single committee hearing. There has not been a single witness… Not a single opportunity to amend, or a single opportunity to improve, compromise or negotiate. With this insurance industry legislation, every step of the process has been abandoned.
Why has the Majority proceeded in this manner? Because this is not a serious exercise in legislating, it is a political stunt being performed for the sole purpose of allowing Republicans to go back to their special interest friends and say “look what we have tried to do to help.” But even they should not be fooled by these transparent theatrics.
The Majority is short-circuiting the committee process because of the illusion of a medical malpractice “crisis.”
Mr. President, there is a health care crisis in this country, but it has nothing to do with tort laws. It is a crisis when 46 million Americans have no health insurance. It is a crisis when health care is too costly for average Americans. It is a crisis when medical errors are the sixth leading cause of death in America. But not a single provision in this legislation will provide health insurance to the uninsured, lower healthcare costs, or make patients safer.
In reality, the whole premise of a medical malpractice “crisis” is unfounded.
Over the weekend, I reviewed an insightful book entitled “The Medical Malpractice Myth” by Professor Tom Baker and published by the University of Chicago Press. The author is a Professor of Law and Director of the Insurance Law Center at the University of Connecticut Law School. Both his father and father-in-law are doctors. He is not affiliated with the trial lawyer association – actually, he is often a consultant for the insurance industry.
In this book, Professor Baker methodically debunks the most common myths in the medical malpractice debate:
Myth #1: “Lawyers, not doctors, cause malpractice”
Professor Baker presents numerous studies demonstrating that the real problem is too much malpractice, not too much litigation. Of course most doctors are skilled professionals who do not commit malpractice. But just as there are a few rotten apples in every basket, there are a small number of unskilled or careless doctors in every state. Unfortunately they do not always come to the attention of licensing boards, and some move from state to state to avoid disciplinary action.
These rotten-apple doctors should be held accountable, and the victims of their negligence deserve to be compensated.
Myth #2: “Lawsuits make health care unaffordable”
Professor Baker demonstrates that medical malpractice rates are based more on the cyclical nature of the stock market than on malpractice verdicts. When insurance company investments lose money, the companies raise the rates they charge doctors to compensate for the loss.
As a result, caps on damages do not reduce insurance premiums in the long run. For the most part, insurance rates have not gone down in those states that have capped damages. In my state of Nevada, for example, where legislators convened a special session in 2002 to set a cap of $350,000 on pain and suffering damages, OB/GYN malpractice premiums are 37% higher than in states without caps; general surgery premiums are 52% higher; and internal medicine premiums are 44% higher. In fact, since 2001, claims paid by Nevada’s largest insurer have dropped 16.7% while premiums have increased 32.2%.
From 2000 to 2005, the net payouts of malpractice insurers declined 3.1%. But over the same period in which payouts were declining, net insurance premiums increased 93.2%. So claims decreased, but the companies doubled premiums.
Even if caps on damages did affect malpractice premiums, there is no reason to believe that caps would make health care more affordable overall. According to the Congressional Budget Office, malpractice costs amount to less than 2 percent of overall health care spending. If a reduction of 25-30% in malpractice costs were attainable, it would lower health care costs by only about 0.4 percent to 0.5 percent.
Myth #3: “Lawsuits deny access to care”
Despite the century-old complaint that lawsuits drive doctors from their practices, the medical profession continues to grow each year, and applications to medical schools have increased. The number of physicians in the US has increased every year since 1996, from about 738,000 in 1996 to almost 885,000 in 2004.
In 2003, the non-partisan General Accounting Office surveyed five states repeatedly cited by the AMA as examples of communities suffering from shortages of care because doctors are fleeing. The report concluded that such claims are wildly overstated: “Many of the reported physician actions and hospital-based service reductions were not substantiated or did not widely affect access to health care.” Where doctor shortages exist, they are due to population shifts and the reluctance of doctors to practice in rural and low-income areas.
In any event, caps on damages do not change the availability of physicians. States without caps on damages have more doctors per capita and 14% more active physicians than states with caps on damages.
For example, the number of OB-GYNs in the United States has increased by nearly 25 percent – from 33,000 in 1990 to 42,000 in 2004. But in Nevada, where we have caps on damages, there are 27% fewer OB/GYNs than in states that don’t have caps.
Myth #4: “Lawsuits cause doctors to practice wasteful defensive medicine”
Professor Baker devotes a whole chapter to “defensive medicine” and concludes that it is largely an urban myth. For example, he cites reports from the Congressional Budget Office and the former congressional Office of Technology Assessment that question estimates of defensive medicine. CBO specifically concluded that any savings from reducing defensive medicine would be small at best.
Myth #5: “Most lawsuits are frivolous”
Not every lawsuit has merit, but the tort system has plenty of mechanisms for weeding out frivolous claims. According to Professor Baker, “[m]ost undeserving claims disappear before trial; most trials end in a verdict for the doctor; doctors almost never pay claims out of their own pockets; and hospitals and insurance companies refuse to pay claims unless there is good evidence of malpractice.”
At the same time, the assertion that there exists an “explosion” in medical malpractice payouts in recent years is untrue. The average verdict size is relatively low and has remained stable. A study by Americans for Insurance Reform found payments have been virtually flat since the mid-1980s. As it is, Americans use the civil justice system as a last resort, going to court after all other efforts have failed.
For these reasons, Professor Baker concludes that the medical malpractice “crisis” is the product of exaggeration and distortion. But even if there were a medical malpractice problem that needed to be cured, these bills are not the right medicine. S. 22 and S. 23 are riddled with major flaws. I will highlight only a few of the most egregious aspects of the bills.
First, S. 22 and S. 23 would impose an unreasonably low $250,000 cap on pain and suffering damages. Proponents of these bills claim that the cap is $750,000, but in the typical case where there is a single negligent party the cap remains $250,000.
In cases where the wrong limb is amputated, or a patient is paralyzed for life, or a mother loses a child, $250,000 is grossly inadequate compensation. And it’s even worse under S. 23: Under this bill, the life of a woman rendered sterile by the gross negligence of an OB/GYN is worth less than that of a man mistakenly sterilized.
Second, these bills discriminate against women. By capping pain and suffering, while simultaneously preserving full compensation for lost wages and salary, these bills de-value the worth of homemakers and stay-at-home parents. For instance, a homemaker whose reproductive system is destroyed by negligent treatment would only suffer non-economic losses, which are arbitrarily capped by the bill.
At the same time, the bills limit punitive damages, a change which disproportionately affects women patients. Punitive damages are very rare in malpractice cases, but the cases where they occur often involve sexual abuse of a female patient.
Third, the bills unjustifiably protect large corporations that own nursing homes from liability when they abuse or kill their patients. The National Citizens Coalition for Nursing Home Reform released a new book, “The Faces of Neglect: Behind the Closed Doors of Nursing Homes” which profiles the heartbreaking experiences of 36 Americans who have suffered from abuse or neglect while in long-term care facilities.
The book includes the story of Barbara Salerno, a Reno, Nevada woman whose father died in a nursing home. Although he suffered from kidney failure and pneumonia, the nursing home failed to provide proper medical care. Ms. Salerno’s father died a prolonged, painful and undignified death. The only way this California nursing home was held accountable was through a lawsuit. S. 22 seeks to take away that right.
The numbers of seniors who could be hurt by this bill are staggering. According to the GAO, 300,000 elderly and disabled residents live in chronically deficient nursing homes where they are “at risk of harm due to woefully deficient care.” 26.2% of nursing homes nationwide were cited for violations related to quality of care by regulatory agencies in 2004, yet this bill gives sweeping liability protections to these negligent facilities.
Fourth, these bills are an affront to federalism. Republicans love to talk about states’ rights, except when they want to impose their federal solution on all 50 states. More than half of all states have already enacted malpractice reforms, but these bills override those state legislative decisions. Specifically, this bill preempts those states that have debated a cap on damages and decided against that step.
For these and other reasons, the pending bills are objectionable. In fact, the entire concept of medical malpractice reform is misguided — the right way to bring down malpractice insurance premiums is to reform the insurance industry, which is badly in need of oversight.
A study commissioned by the Center for Justice and Democracy showed that insurance premiums more than doubled between 2000 and 2004 even though claims pay-outs remained essentially flat. Given this price gouging, it is little wonder that the profits of the nation’s five largest medical malpractice insurers rose by 17.7 percent in 2005 – more than double the Fortune 500 average.
We need to strengthen federal oversight of insurance industry practices that contribute to these rises in malpractice premiums. Unfortunately the insurance industry enjoys almost complete immunity from the federal antitrust laws, and using this exemption, insurance companies can collude to set rates, resulting in higher premiums than true competition would achieve. Federal enforcement officials cannot investigate any such collusion because of the exemption.
The exemption came about during the Depression with the McCarran-Ferguson Act, named after Senator Pat McCarran of Nevada. This Act was passed to give a few years of relief to the insurance industry. Now, some 70 years later, insurance companies are the only businesses — other than major league baseball — not subject to the antitrust laws. The rationale for this exemption has long since passed. Insurance should be subject to federal antitrust laws like every other businesses in America.
I am proud to support Senator Leahy’s bill to accomplish this goal.
In sum, to pretend that these medical malpractice bills have anything to do with making health care more affordable is nothing but a cruel joke. These bills override the sound judgment of state legislatures and juries and substitute the arbitrary judgment of Congress.
We should not reward insurance companies making record profits. We should help doctors by reforming the insurance industry rather than undermining the legal rights of seriously injured malpractice victims.
I intend to vote against cloture on the motions to proceed to S. 22 and S.23, and I urge my colleagues to do the same.