House Subcommittee Reconsiders
Link Between Premium Increases and Excessive Litigation
July 19, 2002 - At a July 17 hearing,
the House Energy and Commerce Health Subcommittee heard testimony
on the various forces driving the rapid and dramatic increases
in medical liability premiums. According to Subcommittee Chairman
Michael Bilirakis (R-Fla.), the hearing would be the first
of several regarding problems within the medical liability
system.
Several witnesses, including a Pennsylvania hospital CEO,
an attorney/law professor, and representatives of the American
Academy of Family Physicians (AAFP), American College of Obstetricians
and Gynecologists (ACOG), and Physician Insurers Association
of America (PIAA), reiterated their belief that excessive
litigation was at fault, and expressed their support for Rep.
Jim Greenwood's (R-Pa.) tort reform legislation, the "Help
Efficient, Accessible, Low Cost, Timely Healthcare Act"
(HEALTH Act) (H.R.
4600). This AAMC-supported bill includes a cap on non-economic
damage awards and limits on attorneys' contingency fees, as
well as other tort reforms. During the hearing, Rep. Greenwood
described the current medical liability situation in Pennsylvania
a "full-blown catastrophe."
While the ACOG representative blamed an "ailing civil
justice system" for "severely jeopardizing"
women's healthcare, another women's health advocate, National
Breast Cancer Coalition President Fran Visco, testified that
tort reform would actually reduce the quality of care by eliminating
accountability. Ms. Visco theorized that "too little
oversight and regulation of the insurance industry" (not
excessive litigation) has caused the current crisis. She also
commented that it was "important not to become alarmist"
about reports of patients having difficulty accessing care.
"[W]e have a responsibility not to suggest that the problem
is widespread relative to all patients in all states, until
we have conclusive information."
Other witness' testimonies echoed Ms. Visco's remarks that
the insurance industry's business practices were to blame
for premium increases - that their Wall Street losses were
simply being passed on to physicians. Lauren Townsend of the
Coalition for Consumer Justice asked, if "we're attempting
to get to the bottom of Enron and Global Crossing, why aren't
we getting to the bottom of gross negligence and improprieties
- and yes, accounting shenanigans - that exist in the insurance
industry?" During the hearing, Democrats similarly expressed
concern that mismanaged insurance companies and "corporate
greed" were at fault, not the current medical liability
system. Earlier this month, the Committee's ranking minority
member, John Dingell (D-Mich.) requested a General Accounting
Office (GAO) study to investigate how insurance companies'
practices have led to increases in malpractice insurance premiums
paid by providers. Democrats from the House Judiciary Committee
and Committee on Financial Services joined Rep. Dingell in
requesting the study.
Also during the hearing, Rep. Frank Pallone (D-N.J.) announced
that he had introduced H.R. 5140, a bill "to provide
for a Federal Program to stabilize medical malpractice premiums."
According to Rep. Pallone, the bill would stabilize premiums
by creating a funding pool that insurance companies could
draw from if their financial situations deteriorated.
Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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