On February 17, the House Small Business Committee held a hearing entitled, “Medical Liability Reform: Stopping the Skyrocketing Price of Health Care.” While both the House and Senate addressed this issue last year, no final action took place before the end of the 108th Congress (see The Source, 4/08/04).
Explaining that approximately 75 percent of all physicians operate a small business, Dr. Donald Palmisano, former president of the American Medical Association (AMA), stated, “As with any small business, physician practices generally do not have the economic and other resources necessary to absorb or shift the cost of rapidly increasing insurance premiums, let alone the high costs imposed by unfunded government mandates resulting from paperwork and other regulatory requirements. When overhead expenses increase, physicians must either increase fees or cut other expenses just to sustain their practices.” Dr. Palmisano argued that the medical liability “crisis” would have a serious impact on patient care and highlighted statements made by various interest groups and articles written on the issue:
In conclusion, Dr. Palmisano stated, “By enacting meaningful medical liability reforms, Congress had the opportunity to increase access to medical services, eliminate most of the need for medical treatment motivated primarily as a precaution against lawsuits, improve the patient-physician relationship, help prevent avoidable patient injury, and curb the single most wasteful use of precious health care dollars the costs, both financial and emotional, of health care liability litigation.”
Center for Justice and Democracy Executive Director Joanne Doroshow said that the medical malpractice bill (H.R. 534) introduced by Rep. Christopher Cox (R-CA) “is a cruel bill that would reduce the protections and rights of citizens in every state in this country. The bill directly interferes with the independence of our nation’s civil justice system, tying the hands of judges and juries who hear the evidence in a case, and undermining our country’s uniquely individualized system of justice. H.R. 534 would make it more difficult or impossible for injured patients to hold accountable those who have injured them. But in addition, more patients will die if H.R. 534 is enacted.” Ms. Doroshow specifically pointed to a provision in the bill that would eliminate punitive damages against drug companies for drugs and devices approved by the Food and Drug Administration, stating, “Although rare, the prospect of having to pay punitive damages in a lawsuit by an injured patient causes companies and other wrongdoers to operate more safely. In the case of the Dalkon Shield IUD [intrauterine device], which killed and injured thousands of women, it took 11 punitive damage awards over a number of years, totaling in excess of $24.8 million, before A.H. Robins finally agreed to urge doctors and women to remove the device and offered to pay for the removal. Robins would not have taken this needed action without ‘growing concern about the rising tide of punitive damages claims against the company,’ as reported in the Wall Street Journal.”
Citing information provided by the Congressional Budget Office, Ms. Doroshow said that “all of the provisions of the medical malpractice bill, including the $250,000 cap on non-economic damages, ‘would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.’” She also noted that states that placed caps on malpractice awards in the mid-1980s had experienced high insurance rates recently. “For example, Maryland, an American Medical Association (AMA) ‘problem state’ and a ‘crisis state’ according to the American College of Obstetricians and Gynecologists, had had a cap on non-economic damages since 1986, originally $350,000 but later increased somewhat. Despite the cap, the state experienced premiums that ‘rose by more than 70 percent in the last two years.’”
