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Medical Malpractice Legislation

Statement Of Senator Patrick Leahy On Medical Malpractice Legislation (S.2061)

February 23, 2004

Mr. President, I am disappointed that the majority appears to be playing politics with the medical malpractice insurance debate. This is a one-size-fits-all bill for a problem that varies greatly from State to State. The bill before us would encroach on the rights of every State and would yank away, probably for all time, the crucial legal rights of the American people.

Great care is in order whenever Congress considers such drastic steps that target the rights of the public and of the States. But instead of introducing a bipartisan bill and sending it through the committee process to reach consensus, the majority is rushing a partisan bill directly to the Senate Floor.


Instead of letting states find solutions that are best for their citizens, the majority prefers this attempt to tally points on some election year political scoreboard for powerful special interests, at the public’s expense. Instead of looking at the big picture -- at overly broad antitrust immunity, ways to reduce medical errors, and at other real issues that could make a real difference -- the majority has chosen to coddle big insurance companies instead of to cure the problem. Instead of letting the States continue to find solutions that are best for their citizens, they would take a chainsaw to the legal rights of the American people and to the prerogatives of each of the 50 States we represent here in the United States Senate.


This is the second time that the majority has taken this partisan approach. Last July, the majority employed this partisan tactic and failed to pass legislation. Now the majority is again rushing an extreme bill that overrides the laws of each of the 50 States and severely limits the compensation available to some victims of medical malpractice. This time, however, the bill is limited to obstetrical and gynecological care. Having failed to limit the rights of all patients, now the majority wants to limit the legal rights of the most vulnerable patients: mothers and infants.


This is highly unfortunate, because our health care system is in crisis. We have heard that statement so often that it has begun to lose the force of its truth, but that truth is one we must confront, and the crisis is one that must be tackled and solved.

Dramatically rising medical malpractice insurance rates are forcing some doctors to abandon their practices or to cross State lines to find more affordable situations. Patients who need care in high-risk specialties, like obstetrics, and patients in areas already underserved by health care providers, like many rural communities, are too often left without adequate care.

We are the richest and most powerful Nation on earth. We should be able to ensure access to quality health care to all our citizens and to assure the medical profession that its members will not be driven from their calling by the manipulations of the malpractice insurance industry.

The debate about the causes of this latest insurance crisis and the possible cures grows shrill. I had hoped for a calmer and more constructive discussion within the Senate Judiciary Committee and on the Senate Floor.

My principal concerns are straightforward: That we ensure that our Nation’s physicians are able to provide the high quality of medical care that our citizens deserve and for which the United States is world-renowned, and that in those instances where a doctor does harm a patient, that patient should be able to seek appropriate redress through our court system.


To be sure, different States have different experiences with medical malpractice insurance, and insurance remains largely a State-regulated industry. Each State should endeavor to develop its own appropriate solution to rising medical malpractice insurance rates because each State has its own unique problems. Some States such as my own, Vermont, while experiencing problems, do not face as great a crisis as others. Vermont’s legislature is considering legislation to find the right answers for our State, and the same process is underway now in other States. In contrast, in States such as West Virginia, Pennsylvania, Florida, and New Jersey, doctors have walked out of work in protest over the exorbitant rates being extracted from them by their insurance carriers.


Thoughtful solutions to the situation will require creative thinking, a genuine effort to rectify the problem, and bipartisan consensus to achieve real reform. Unfortunately, these are not the characteristics of the bill before us. Indeed, S.2601 is a partisan bill that was introduced only a few days ago without any committee consideration. Ignoring the central truth of this crisis – that it is a problem in the insurance industry, not the tort system – the majority has proposed a plan that would cap non-economic damages across the nation at $250,000 in medical malpractice cases.

The notion that such a one-size-fits-all scheme is the answer runs counter to the factual experience of the States.

Most importantly, the majority’s proposal does nothing to protect true victims of medical malpractice and nothing to prevent malpractice in the first place. A cap of $250,000 would arbitrarily limit compensation that the most seriously injured patients are able to receive. The medical malpractice reform debate too often ignores the men, women and children whose lives have been dramatically – and often permanently – altered by medical errors. The experience of Linda McDougall, who testified last year before the Senate Judiciary Committee, is just one tragic example of such an error. Mrs. McDougall is recovering from an unnecessary double mastectomy, and her testimony reminded us all of the real-life consideration of these issues. Arbitrarily limiting injured patients’ remedies under the law without addressing the system-wide medical errors that result in patient harm and death is a recipe for failure.

We are fortunate in this Nation to have many highly qualified medical professionals, and this is especially true in my own home state of Vermont. Unfortunately, good doctors sometimes make errors. It is also unfortunate that some not-so-good doctors manage to make their way into the health care system as well. While we must do all that we can to support the men and women who commit their professional lives to caring for others, we must also ensure that patients have access to adequate remedies should they receive inadequate care.

High malpractice insurance premiums are not the direct result of malpractice lawsuit verdicts. They are the result of investment decisions by the insurance companies and of business models geared toward ever-increasing profits as well as the cyclical hardening of the liability insurance market. In cases where an insurer has made a bad investment, or has experienced the same disappointments from Wall Street that so many Americans have, it should not be able to recoup its losses from the doctors it insures. The insurance company should have to bear the burdens of its own business model, just as the other businesses in the economy do. And a nationwide arbitrary capping of awards available to victims – as the majority has proposed here this week – should not be the first and only solution turned to in a tough medical malpractice insurance market. The problem at hand deserves thoughtful and collaborative consideration in committee to achieve a sensible solution that is fair to patients and that supports our medical professionals in their ability to practice quality health care.


One aspect of the insurance industry’s business model requires a legislative correction: Its blanket exemption from federal antitrust laws. Insurers have for years – too many years – enjoyed a benefit that is novel in our marketplace. The McCarran-Ferguson Act permits insurance companies to operate without being subject to most of the federal antitrust laws, and our nation’s physicians and their patients have been the worse off for it. Using their exemption, insurers can collude to set rates, resulting in higher premiums than true competition would achieve – and because of this exemption, enforcement officials cannot investigate any such collusion. If Congress is serious about controlling rising premiums, we must objectively limit this overly broad exemption in the McCarran-Ferguson Act.

More than a year ago, I introduced the “Medical Malpractice Insurance Antitrust Act of 2003,” S.352. I want to thank Senators Reid, Kennedy, Durbin, Edwards, Rockefeller, Feingold, Boxer and Corzine for cosponsoring this essential and straightforward legislation. Our bill modifies the McCarran-Ferguson Act with respect to medical malpractice insurance, and only for the most pernicious antitrust offenses: price fixing, bid rigging, and market allocations. Only those anticompetitive practices that most certainly will affect premiums are addressed. I am hard-pressed to imagine that anyone could object to a prohibition on insurance carriers’ fixing prices or dividing territories. After all, the rest of our Nation’s industries manage either to abide by these laws or pay the consequences.

Many State insurance commissioners police the industry well within the power they are accorded in their own laws, and some States have antitrust laws of their own that could cover some anticompetitive activities in the insurance industry. Our legislation is a scalpel, not a chainsaw. It would not affect regulation of insurance by state insurance commissioners and other State regulators. But there is no reason to continue, unexamined, a system in which the federal enforcers are precluded from prosecuting the most harmful antitrust violations just because they are committed by insurance companies.

Our legislation is a carefully tailored solution to one critical aspect of the problem of excessive medical malpractice insurance rates. I had hoped for quick action by the Judiciary Committee and then by the full Senate to ensure that this important step on the road to genuine reform is taken before too much more damage is done to the physicians of this country and to the patients they care for.

But our legislation to narrow this loophole in the nation’s anti-trust laws for medical malpractice insurers has languished for more than a year in the Senate Judiciary Committee. Instead of conducting hearings and a markup on our bill, the majority now rushes a “tort reform” agenda item to the floor without any committee consideration.

If Congress is serious about controlling rising medical malpractice insurance premiums, then we must limit the broad exemption to federal antitrust law and promote real competition in the insurance industry, as well as attack this problem at its core by reducing medical errors across our health care system.

Unfortunately, the partisan bill before us is not designed for creating a solution to a serious problem. Instead, it is designed purely for politics, and that is not only a waste of the Senate’s time and of the public’s trust; it is also a shame.

This information came from a
US Senate online article.

*** Any law, statute, regulation or other precedent is subject to change at any time ***

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