 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
Harming Patient Access to Care: The Impact of Excessive Litigation
Subcommittee on Health
Mr. Victor E. Schwartz Esq.
Thank
you, Mr. Chairman, and members of this Committee, for your kind invitation to
testify today about the medical malpractice liability crisis. By
way of background, I wish to share with you that I have practiced and taught in
the area of liability law for over three decades.
For almost fifteen years, while teaching, I worked exclusively for
injured parties. Since 1980, I have
been affiliated with law firms that have primarily defense practices.
I am now a senior partner at Shook, Hardy & Bacon, L.L.P. and chair
its Public Policy Group. I am
senior author of the Nation's leading torts casebook, and have had the
privilege to serve on each of the Advisory Committees in the American Law
Institute's project that is restating the law of torts for this new century. One
reason why some members of the Committee thought it would be helpful for me to
testify here today is because purported quotes that I made about the medical
liability system and medical malpractice have been placed before this Committee
by other witnesses. When I read
these quotes, it reminded me of a wise insight given to me by my former
minister, Burt Sikkelee. In his
sermons, he admonished our congregation that "something not in context is
pretext." In that regard, it has
been suggested that my views are that a bill such as H.R. 4600 would do nothing
to reduce the burgeoning insurance rates and premiums faced by physicians and
other medical providers throughout our Nation.
This suggestion is simply not true.
I have attached a letter regarding this issue we sent to Mr. Nadler, your
colleague on the Judiciary Committee. I
would like to take a moment to share my response with you. Some
of the comments that have been quoted to you were made about a completely
different piece of legislation that contained no strict limits on the amount of
damages a plaintiff would receive. Instead,
these comments related to a product liability bill considered by this body in
1998. That 1998 bill contained
general principles of tort law and sought to provide a badly needed balance
between plaintiffs and defendants in our legal system.
Again,
that 1998 bill did not contain provisions for strict limits on damages
which ultimately help reduce insurance rates.
Reducing insurance rates is an important consideration, but it is not and
should not be the sole guiding light for enacting tort reform. First
and foremost, tort reform should be fair and balanced, and meet the needs of
both plaintiffs and defendants. If
it is not fair, it is not good. Having
studied the subject of torts from both perspectives of the court aisle, I
believe that tort reform can be fair to both plaintiffs and defendants and
that tort reform can achieve stability in the insurance market. Meaningful reforms such as those in H.R. 4600 will help
bring a degree of predictability and fairness to the civil justice system that
is critical to solving the growing medial access and affordability crisis. Why
Not Let The States Do It?
When
it comes to the specific area of medical malpractice, in the past I have
believed that this should be the exclusive function of the States. Medical malpractice insurance rates are often set on a
state-by-state basis, where state controls could lower costs.
That good premise and that good practice has been upended in recent
years, because when States have passed balanced medical malpractice reforms,
they have been nullified by state courts under obscure portions of very lengthy
and prolix State Constitutions. I
am submitting to this Committee a law review article that was authored by my
colleague, Leah Lorber, and myself that was recently published in the Rutgers
Law Review,[1]
and ask that it be made a part of the record.
The article demonstrates that these decisions do not represent sound
State Constitutional law, and also that they trespass on the Federal
Constitution itself. It is very
pertinent to note that not one of these decisions held a state medical
malpractice law unconstitutional under the Constitution of the United States;
they would be upheld under that Constitution. The
state courts that have nullified state tort reform are in key areas, such as
Arizona, Illinois, and Ohio, all of which have situations that cry out for
medical malpractice reform. In
Arizona, for example, USA Today reports that the medical liability crisis has
forced the maternity ward in Bisbee, Arizona, to close its doors.
Expectant mothers must drive more than a half hour to the nearest town to
deliver.[2]
In Ohio, a general surgeon named Dr. Joan Palomaki was scheduled to close
her practice on June 30, the day before the price she paid for medical liability
insurance would have jumped 80 percent, to about $45,000 a year.[3]
Dr. Palomaki had spent 25 years performing biopsies, lumpectomies,
mastectomies and other breast surgeries. Had
she chosen to stay in medicine, Dr. Palomaki said she would have had to clock
1,000 office visits - half a year's work - just to cover the cost of
insurance.[4] State
court decisions to nullify legislative medical malpractice reforms trespass on
the needs of others, a fact that can be readily appreciated by members of this
Committee. For decades, this
Committee has upheld both the principles and purposes of the Commerce Clause of
the Constitution of the United States. Wayward
action by a few courts in a few states should not undermine national goals,
which is to have fair and balanced tort law, and affordable liability insurance. At
this point in time, the medical malpractice liability crisis is best handled at
the federal level, with uniform principles, giving states some options to
address provisions, such as the cap on pain and suffering damages, where state
policy may provide rules that are appropriate for the individual state.
This is the approach that is taken under H.R. 4600. The
Myth That Insurance Companies Will Reap the Profits of Reform
I
have read statements by the Center for Justice & Democracy and other
organizations that suggest that if reform is enacted, either it will not be
effective or if it is, that the benefits of tort reform will be wrenched away
from doctors' hands by commercial insurance companies.
This is another myth that I wish to dispose of today. Back
in 1981 and then again in 1986, I worked with members of this Committee to
support the Federal Risk Retention Act. Those
members of this Committee who served at that time will recall that I sought the
enactment of risk retention, so that if a tort reform were enacted into law, we
could assure all Americans that the benefits of that reform would go to those
who need it - the doctors and, in turn and in this instance, the very
important needs of the patient who seeks and needs medical care at affordable
cost. If commercial insurers were
to reap and hold profits that arose from tort reform, the Federal Risk Retention
Act would provide a ready vehicle for doctors' groups to form their own
insurance pool or band together to form insurance purchasing groups to shop
among commercial insurers for a better price.
There already is in existence The Doctors Company and other mutual
insurance groups that can help guard against that possibility. It
has been noted that on occasion when state tort reforms have been enacted,
insurance premiums for doctors did not immediately drop.
From what I have suggested, that is wise rate-setting policy by
commercial, mutual or doctor-owned insurance companies.
We now know that state reform may last for a very short period of time,
up until it is nullified by a state supreme court.
If an insurance company, again a commercial or mutual company, were to
lower reserves based on a tort reform that would be subject to nullification,
doctors, patients and our Nation would not be well served. Can
Tort Reform Be Effective?
It
has been strongly suggested by the Center for Justice & Democracy and other
organizations that bills such as H.R. 4600 - or tort reform in general - are
not effective. I heard the very
same argument from other groups in 1993, when we sought enactment of the General
Aviation Revitalization Act, signed into law on August 17, 1994 by President
Bill Clinton. This was an act to
address a crisis that occurred in general aviation. The crisis had some interesting similarities to that faced by
physician insurers. The tort system
had gone haywire, and was driving the general aviation industry out of business;
Piper, Cessna and other companies had stopped producing planes.
The promise of tort reform was that it would bring back stability within
the industry. I am pleased to share
with you today a very important fact: a promise made was a promise kept.
Those companies are now back in business; over 25,000 jobs have been
created.[5]
We will submit to this Committee an article to be published in the Journal
of Air Law and Commerce[6] that
details the effectiveness of federal tort reform.
A
bill such as H.R. 4600 can have appropriate and salutary benefits for patients,
doctors and the medical system in the United States.
Doctors are leaving practice because insurance is unaffordable.
Specialists such as OB/GYNs are particularly hit hard.
Even professionals who are merely providing care for patients, such as
nursing homes, have seen insurance soar and have had to go without insurance or
close their doors. Conclusion
I
have kept my remarks brief because my points, which while I believe are
important are very simple. Tort
reform should be enacted if it is fair and balanced.
A bill such as H.R. 4600, which seeks to achieve that balance, will have
an important effect on insurance rates, just like MICRA had positive impacts in
California, and the General Aviation Revitalization Act of 1994 had beneficial
effects for the aviation industry in America. The
commercial insurance industry will not steal greater profits for benefits that
should go to all Americans. That
will not take place, but if it ever does, we have a guardian at the gate:
doctor mutuals and the Risk Retention Act, to ensure that the benefits of
this legislation will help all Americans. It
is true that there is one group that will steadfastly oppose this legislation
under any and all scenarios, those who earn their living by suing people.
If I still earned my living that way, I would be concerned about it too.
The medical malpractice crisis is pervasive.
The needs of our country should be put first, and this Committee should
move forward this legislation as soon as possible. Thank
you for your attention. [1] See Victor E. Schwartz & Leah Lorber, Judicial Nullification of Civil Justice Reform Violates the Fundamental Federal Constitutional Principle of Separation of Powers: How to Restore the Right Balance, 32 Rutgers L. J. 907 (2001). [2] See Steve Freiss, Malpractice gets costlier; Insurance rate hikes put doctors in a bind, USA Today, Apr. 9, 2002 at D7. [3] See Roger Mezger, Insurance costs force doctors to quit, The Plain Dealer, Feb. 18, 2002, at A1. [4] See id. [5] See General Aviation Manufacturers Association, Five Year Results: A Report to the President and Congress on the General Aviation Revitalization Act (1999). [6] See Victor E. Schwartz & Leah Lorber, The General Aviation Revitalization Act: How Rational Civil Justice Reform Revitalized an Industry, J. of Air L. & Com. (forthcoming 2002).
|
|||||||||||
|
