Legislature(2005 - 2006)CAPITOL 120

04/21/2005 01:00 PM JUDICIARY

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01:29:12 PM Start
01:29:25 PM SB67
03:35:20 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HCS CSSB 67(JUD) Out of Committee
<Rescheduled from 4/20 meeting>
+ Bills Previously Heard/Scheduled TELECONFERENCED
SB 67 - CLAIMS AGAINST HEALTH CARE PROVIDERS                                                                                  
1:29:25 PM                                                                                                                    
CHAIR McGUIRE announced that the  only order of business would be                                                               
CS  FOR SENATE  BILL NO.  67(JUD)(efd fld),  "An Act  relating to                                                               
claims for personal injury or  wrongful death against health care                                                               
1:29:59 PM                                                                                                                    
SENATOR RALPH  SEEKINS, Alaska State  Legislature, sponsor  of SB
67,  suggested that  the committee  amend the  bill such  that it                                                               
would  apply  to  health  care  services  provided  by  state  or                                                               
municipal  agencies,   and  that  the  committee   also  consider                                                               
instituting  a  two-tier system  such  that  in addition  to  the                                                               
proposed  cap of  $250,000 for  non-economic  damages in  medical                                                               
liability cases, there would also be  a cap of $400,000 when such                                                               
cases  involve  wrongful  death   or  severe  permanent  physical                                                               
impairment that  is more  than 70 percent  disabling.   He opined                                                               
that  the  latter  suggested  change  would  result  in  adequate                                                               
coverage  for plaintiffs  involved in  more egregious  cases, and                                                               
indicated that  such a change  would be acceptable to  members of                                                               
the  Senate.   With regard  to  the former  suggested change,  he                                                               
relayed that  adoption of  the amendment  labeled 24-LS0393\FA.1,                                                               
Crawford,  4/20/05, [which  later  become known  as Amendment  1]                                                               
would effect such a change; this amendment read:                                                                                
     Page 2, following line 18:                                                                                                 
          Insert "(2)  "health care provider" has the                                                                           
     meaning  given in  AS 09.55.560  and  includes a  state                                                                    
     agency  or municipality  the  health  care services  of                                                                    
     which are the  subject of an action that  is subject to                                                                    
     this section;"                                                                                                             
     Renumber the following paragraph accordingly.                                                                              
1:34:43 PM                                                                                                                    
REPRESENTATIVE  GARA asked  whether  any analysis  has been  done                                                               
regarding  whether  changing the  cap  will  make insurance  more                                                               
affordable or available.                                                                                                        
SENATOR  SEEKINS  offered  his   understanding  that  when  Texas                                                               
instituted  a $250,000  cap  on  non-economic damages,  insurance                                                               
rates  in  that state  went  down  by  16-18  percent.   He  then                                                               
     No insurance company,  no actuary, is going  to say, "I                                                                    
     guarantee  that  if  you  do   this,  you'll  get  that                                                                    
     result."  But  the model is very clear, and  so I would                                                                    
     expect that if  there was not a reduction,  we may have                                                                    
     the second  best effect, which  would be a  freezing of                                                                    
     those rates for a reasonable period of time. ...                                                                           
1:36:13 PM                                                                                                                    
REPRESENTATIVE GARA pointed out,  however, that the Texas example                                                               
is  quite   disputed;  additionally,   Texas  went   from  having                                                               
astronomical jury verdicts with no cap  to having a cap.  This is                                                               
much different than  the situation in Alaska,  he opined, because                                                               
Alaska already  has a  cap, so  he is not  sure how  relevant the                                                               
Texas example  really is.   Furthermore, he  noted, for  a person                                                               
with an  80-year lifespan, an award  of $400,000 works out  to be                                                               
about $18 per  day.  Why would  such an award be  fair to someone                                                               
who's  "brain  injured" or  unable  to  walk  or unable  to  hold                                                               
his/her child?                                                                                                                  
SENATOR SEEKINS  pointed out that  there will always  be examples                                                               
of cases  wherein such an  award could  be called "unfair."   The                                                               
alternative to  instituting what he  termed a reasonable  cap, he                                                               
predicted,  is  that  of  not being  able  to  obtain  reasonable                                                               
healthcare; instituting  a cap will allow  insurance companies to                                                               
know the limit of their risk.                                                                                                   
REPRESENTATIVE  ANDERSON  remarked  that  although  there  is  no                                                               
guarantee that  insurance rates will go  down as a result  of the                                                               
passage of SB 67, it is his  belief that passage of the bill will                                                               
result in more physicians setting up practice in Alaska.                                                                        
SENATOR SEEKINS concurred, adding  that he believes instituting a                                                               
cap will  also decrease  litigation costs.   He then  offered his                                                               
understanding  that the  information regarding  awards in  Alaska                                                               
during previous years indicates that  most awards fall within the                                                               
proposed  $250,000 cap  anyway.   Statutorily setting  a $250,000                                                               
cap will allow insurance companies to predict their exposure.                                                                   
1:41:29 PM                                                                                                                    
REPRESENTATIVE GARA  again pointed  out, however, that  there are                                                               
already  caps  and so  insurance  companies  can already  predict                                                               
their  exposure.   He  suggested  that  instead of  lowering  the                                                               
exiting  cap as  is proposed  via  SB 67,  the legislature  could                                                               
simply remove the  stipulation that an award of up  to $2 million                                                               
is  available under  certain circumstances;  such a  change would                                                               
retain the  current caps of  $400,000 or  $1 million if  the case                                                               
involved  death  or serious  injury,  and  might satisfy  is  his                                                               
concern that the bill's proposed caps are too low.                                                                              
SENATOR SEEKINS said it is important  to remember that SB 67 only                                                               
addresses non-economic damage awards.                                                                                           
1:44:30 PM                                                                                                                    
THOMAS O'BRIEN said that as  an alleged victim of malpractice, as                                                               
an Alaskan  citizen, and as a  professional, he is opposed  to SB
67.   He said  that as an  anthropologist specializing  in Alaska                                                               
Native culture, he cannot see how  the bill can be of benefit to,                                                               
or in the best interest of,  Alaska Natives.  In mixed economies,                                                               
those  with  a  subsistence  lifestyle or  those  with  sporadic,                                                               
seasonal  sources  of  income will  never  qualify  for  economic                                                               
damage  awards, and  so would  be at  a distinct  disadvantage in                                                               
medical liability cases.  He went on to say:                                                                                    
     How in the  world can we always place  the interests of                                                                    
     big  business  and  special interest  groups  seemingly                                                                    
     over that of  just regular citizens such  as myself and                                                                    
     others  who feel  that we  are in  a void  of fear  and                                                                    
     uncertainty.     We  have  financial  loss   [and]  our                                                                    
     families  are suffering;  I have  three children  and a                                                                    
     wife, [and] I  don't know what my future will  be.  But                                                                    
     I know  that having  legislation, callous and,  I feel,                                                                    
     reckless legislation  such as this -  that's looking at                                                                    
     the  bottom  line  of  a net  profit  statement  at  an                                                                    
     insurance company - ... doesn't  set well with me as an                                                                    
     And Alaskan to  Alaskan, I'm asking you  to please look                                                                    
     in your  hearts and place  yourself in the  position of                                                                    
     people such  as myself  and others much  actually worse                                                                    
     off  than myself,  and  realize that  it  will be  very                                                                    
     difficult to get  representation with a cap  such as is                                                                    
     suggested in this bill.   I can assure you, having been                                                                    
     two and  a half  years into an  injury [and]  going out                                                                    
     and  seeking good  representation,  there  are not  the                                                                    
     unscrupulous,  ambulance-chasing  attorneys our  there.                                                                    
     There  is a  hardcore  set of  professionals that  will                                                                    
     grill  you, specifically,  and they  will ...  play the                                                                    
     devil's advocate about just  what are the ramifications                                                                    
     of trying to pursue a  malpractice suit.  And they will                                                                    
     tell you in  the hear and now, in this  day, right now,                                                                    
     how  difficult it  is in  the state  of Alaska  to make                                                                    
     that [case  have] ...  a positive  outcome ...  [for] a                                                                    
     plaintiff. ...                                                                                                             
1:48:19 PM                                                                                                                    
GAIL VOIGTLANDER,  Chief Assistant  Attorney General  - Statewide                                                               
Section  Supervisor,  Torts  and Worker's  Compensation  Section,                                                               
Civil Division  (Anchorage), Department of Law  (DOL), [referring                                                               
to  what later  became  known  as Amendment  1,]  said that  this                                                               
proposed  amendment, which  inserts  a  definition of  healthcare                                                               
provider, is necessary because the  state has many lawsuits filed                                                               
by correctional facility inmates  who allege medical malpractice;                                                               
therefore,  adoption  of  the amendment  would  ensure  that  the                                                               
bill's  proposed caps  also  apply to  any  health care  services                                                               
provided by state or municipal agencies.                                                                                        
MS.  VOIGTLANDER,  in  response  to  questions,  noted  that  the                                                               
language [in Amendment 1] is  not confined to just the Department                                                               
of Corrections (DOC);  that AS 09.55.560, which  is referenced in                                                               
[Amendment   1],    already   includes   hospitals    and   other                                                               
organizations  whose primary  purpose is  the delivery  of health                                                               
care;  that children  in state  custody  are not  taken to  state                                                               
facilities for  treatment and so  their health care  services are                                                               
already covered  under the bill;  and that she could  not comment                                                               
regarding whether  the bill would  allow recovery from  the state                                                               
for  its  having chosen  a  particular  health care  provider  to                                                               
provide services to children in state custody.                                                                                  
MS. VOIGTLANDER, in  response to further questions,  said she has                                                               
been with the Torts and  Worker's Compensation Section of the DOL                                                               
since  1987  or 1988,  and  that  she  would not  be  comfortable                                                               
agreeing with  the statement that  the average award  for medical                                                               
malpractice  claims   against  the  state  has   been  less  than                                                               
$100,000,  particularly given  that she  can think  of individual                                                               
cases wherein the plaintiff was awarded more than that amount.                                                                  
1:58:29 PM                                                                                                                    
JAMES   JORDAN,   Executive   Director,  Alaska   State   Medical                                                               
Association (ASMA),  relayed that  the ASMA has  already provided                                                               
the  committee with  written testimony,  and  mentioned that  USA                                                             
Today  recently reported  on the  projected national  shortage of                                                             
physicians, a  shortage which,  according to  an alert  issued by                                                               
the  Association  of American  Medical  Colleges,  appears to  be                                                               
particularly  acute  in the  western  states,  states with  which                                                               
Alaska  competes in  recruiting  physicians.   In conclusion,  he                                                               
said that the ASMA urges the committee to support SB 67.                                                                        
REPRESENTATIVE  ANDERSON  asked  how   many  states  have  a  cap                                                               
comparable to what SB 67 is proposing.                                                                                          
MR. JORDAN offered his understanding  that there are five or six;                                                               
additionally,  there  are  six  states with  a  fewer  number  of                                                               
doctors per capita  than Alaska, the lowest of  them being Idaho,                                                               
which  recently   instituted  a   non-economic  damages   cap  of                                                               
$250,000.   He  noted that  two of  the insurance  companies that                                                               
stopped  doing business  in Alaska  are still  doing business  in                                                               
2:01:13 PM                                                                                                                    
REPRESENTATIVE GRUENBERG  offered his recollection that  Ohio had                                                               
created a  commission to come  up with  a solution to  the health                                                               
care  crisis,  that  various  groups  were  represented  on  that                                                               
commission, and  that the  solution the  commission came  up with                                                               
resulted in lower insurance premiums  and more affordable medical                                                               
MR.  JORDAN  said  his understanding  is  that  the  commission's                                                               
solution  did not  result  in lower  insurance  premiums but  did                                                               
result  in  increasing the  availability  of  insurance, that  it                                                               
enticed  more  insurance  companies to  underwrite  insurance  in                                                               
Ohio.   In  response to  a further  question, he  opined that  it                                                               
would be  a very good idea  to establish a similar  commission in                                                               
Alaska, though the  goal at present should be  to first stabilize                                                               
the  current situation  and then  look  into what  might be  done                                                               
towards  effecting a  long-term  solution,  for example,  overall                                                               
repair of the civil justice system.                                                                                             
2:03:38 PM                                                                                                                    
MR. JORDAN,  in response  to still  further questions,  said he's                                                               
not  received any  assurances from  the  insurance industry  that                                                               
premium rates  will be reduced  if the  bill passes, and  has not                                                               
received  any indication  that  NORCAL  Mutual Insurance  Company                                                               
("NORCAL") is intending to stop providing insurance in Alaska.                                                                  
REPRESENTATIVE GARA asked Mr. Jordan  whether his organization is                                                               
part of  the advertisement campaign  that is telling  people that                                                               
"we  risk losing  doctors  in the  state if  we  don't pass  this                                                               
MR. JORDAN said yes.                                                                                                            
2:05:04 PM                                                                                                                    
REPRESENTATIVE GARA  pointed out,  though, that a  report written                                                               
by Legislative Legal and Research  Services, based on information                                                               
from  the  State Medical  Board,  indicates  that the  number  of                                                               
active doctors  per capita in  Alaska has roughly doubled  in the                                                               
last 15 years.   That being the  case, what is the  basis for the                                                               
advertisements  that  claim doctors  are  leaving  the state,  he                                                               
MR.  JORDAN  suggested that  perhaps  the  State Medical  Board's                                                               
information only  reflects licensed  physicians -  not practicing                                                               
physicians  -  whereas  the  database   maintained  by  the  ASMA                                                               
reflects the number of physicians  who are actually practicing in                                                               
Alaska  and does  not include  physicians who  practice in  other                                                               
states but  happen to  have an Alaska  state license.   Remarking                                                               
that  it is  common for  physicians to  obtain licensure  in more                                                               
than one  state to practice,  he also said  that the ASMA  has no                                                               
motivation  to  underreport  the  number  of  physicians  in  its                                                               
2:09:11 PM                                                                                                                    
REPRESENTATIVE GARA  explained that  the State Medical  Board has                                                               
assured him  that the  information in  its database  reflects the                                                               
number of physicians  who are actually practicing  in Alaska, and                                                               
that, yes, that number has increased.                                                                                           
MR.  JORDAN acknowledged  that the  number of  physician who  are                                                               
practicing has  been growing, but  pointed out that  according to                                                               
the  ASMA's database,  there are  37 fewer  practicing physicians                                                               
this  year than  last  year, though  that  decrease could  simply                                                               
reflect that the military physicians  in the ASMA's database have                                                               
been deployed out of state.                                                                                                     
REPRESENTATIVE GARA  asked Mr. Jordan  if he would be  willing to                                                               
swear under oath, under penalty  of perjury, that there are fewer                                                               
physicians practicing  in Alaska today  than there were  10 years                                                               
MR.   JORDAN  acknowledged   that  there   are  more   physicians                                                               
practicing  now than  there were  10 years  ago, but  pointed out                                                               
that currently, not only is there  is a shortage of physicians in                                                               
Alaska,  but there  has not  been a  material improvement  in the                                                               
number of practicing physicians per capita.                                                                                     
REPRESENTATIVE GARA asked  that the ASMA pull its  support of the                                                               
advertisements claiming  that doctors are leaving  Alaska, since,                                                               
as  has been  acknowledged by  Mr. Jordan,  that is  not actually                                                               
2:12:03 PM                                                                                                                    
BRENDA ARNEY  (ph) relayed her personal  experience regarding her                                                               
husband,  who, mid-summer  of  2003, was  diagnosed  as having  a                                                               
tumor in his lung.  Her  husband had surgery the following August                                                               
at a local hospital in Anchorage,  and they were told that all of                                                               
the  tumor had  been  removed and  that her  husband  had a  good                                                               
chance  of  recovery.    However, the  hospital  staff  who  were                                                               
responsible  for   monitoring  her  husband  after   his  surgery                                                               
neglected to do so, and so  while in a disoriented state, he left                                                               
the  hospital and  was found  wandering around  the neighborhood.                                                               
Her  husband  died  three  days  later,  she  said,  due  to  the                                                               
hospital's negligence  as well  as the  negligence of  the health                                                               
care providers.                                                                                                                 
MS. ARNEY said that although  the hospital apologized, waived its                                                               
bill,  and  changed its  policy,  she  wants  a  jury -  not  the                                                               
legislature, the hospital, the doctors,  or the insurance company                                                               
- to know the facts of her case  and judge her loss.  Because her                                                               
husband  was retired,  his economic  damages award  in a  medical                                                               
malpractice lawsuit would be quite small.  She went on to say:                                                                  
     My  pain and  suffering since  the loss  of Bob  really                                                                    
     cannot  be  valued by  anyone  but  me.   Bob's  agony,                                                                    
     before  his death,  was  horrendous.   I  trust to  the                                                                    
     judgment of  a jury of  mine and Bob's peers  more than                                                                    
     the  legislature's,  the  insurance company's,  or  the                                                                    
     doctors'  valuing his  life at  $250,000.   Bob was  my                                                                    
     best friend, he was my  soul mate, and he was priceless                                                                    
     to  me.   Having  my  non-economic  damages limited  at                                                                    
     $250,000 is  a slap in the  face.  The distress  that I                                                                    
     have experienced  since losing Bob, especially  in such                                                                    
     a  senseless  and  completely  avoidable  way,  ...  is                                                                    
     something that will never leave me.                                                                                        
2:15:55 PM                                                                                                                    
REPRESENTATIVE  GARA asked  Ms.  Arney whether  she  has filed  a                                                               
lawsuit or made a settlement demand to the hospital.                                                                            
MS. ARNEY said  she has retained attorneys but  nothing have been                                                               
settled yet.                                                                                                                    
REPRESENTATIVE GARA asked Ms. Arney  whether she has yet received                                                               
a settlement offer that she considers fair.                                                                                     
MS. ARNEY said her case has  not progressed that far, adding that                                                               
she  is not  seeking something  of monetary  value but  rather is                                                               
seeking  answers  from the  medical  professionals  in her  case,                                                               
answers that  include being more  responsible for  their actions.                                                               
She said she  has provided the committee  with articles regarding                                                               
this issue, and asked that the  committee take the time to review                                                               
those articles  before making its  decision on  the bill.   It is                                                               
not just doctors,  she noted, but hospitals as well  that need to                                                               
be more responsible for their actions.                                                                                          
MS. ARNEY,  too, noted that  none of  the testimony thus  far has                                                               
indicated that  passage of a  cap such as  SB 67 is  proposing to                                                               
institute  will  make  a difference  in  insurance  premiums,  in                                                               
whether more  companies offer  to underwrite  medical malpractice                                                               
insurance  in  Alaska,  or  in  whether  the  number  of  doctors                                                               
practicing in  Alaska will increase.   Passage  of a cap  on non-                                                               
economic  damages in  medical malpractice  cases could  even make                                                               
the current situation worse, she  suggested, especially when that                                                               
amount must be  spread amongst all of  the [plaintiff's attorneys                                                               
and medical experts hired] in any given case.                                                                                   
2:18:12 PM                                                                                                                    
TERRY  SMITH  (ph) relayed  that  he  has written  Representative                                                               
Coghill  a letter  expressing his  concern regarding  SB 67.   He                                                               
said  he was  injured on  the job,  and his  employer's insurance                                                               
company sent him to a  doctor supposedly specializing in ailments                                                               
of  the hand  and wrist  even  though his  injuries involved  his                                                               
lower lumbar region.   The doctor misdiagnosed  his condition and                                                               
left him in  excruciating pain, he said, and as  a result of that                                                               
misdiagnosis,  he now  has taro  (ph) cyst  disease, wherein  the                                                               
now-present cysts on  his lumbar discs fill up  with spinal fluid                                                               
and cause him pain when he walks.                                                                                               
MR. SMITH offered  to send the doctor's curriculum  vitae (CV) to                                                               
the committee.   He stated that  it was unfair for  the insurance                                                               
company to send  him to a doctor specializing in  ailments of the                                                               
wrist when he had an injury to  his back, adding that he not been                                                               
able to  work since March  29, 2001, and  can't get any  help for                                                               
his current condition.   He characterized the bill as  a bad bill                                                               
and as  a butchery;  doctors will  not be  at all  dissuaded from                                                               
doing  harm if  the  proposed cap  is  in place.    He asked  the                                                               
committee   to  give   serious   consideration   to  the   bill's                                                               
ramifications.  In  conclusion, he mentioned that he  is filing a                                                               
lawsuit  against  the  doctor,  the insurance  company,  and  the                                                               
employer,  all of  whom, he  indicated, are  responsible for  his                                                               
current condition.                                                                                                              
2:21:28 PM                                                                                                                    
DENISE  MORRIS,  President  and Chief  Executive  Officer  (CEO),                                                               
Alaska  Native  Justice  Center,   Inc.  (ANJC),  said  that  the                                                               
unintended  but real  effect  of SB  67 is  that  it creates  two                                                               
classes  of citizens:   wage  earners  with quantifiable,  earned                                                               
income;  and non-wage  earners, which,  as a  group, can  include                                                               
homemakers  who  chose  to  stay  home and  take  care  of  their                                                               
families,  minors  who are  pursuing  their  education, and  many                                                               
Alaska Natives  who live a  subsistence lifestyle.   The societal                                                               
contributions  of these  citizens  will be  undervalued.   Alaska                                                               
Natives residing in  rural Alaska communities, which  adhere to a                                                               
traditional subsistence lifestyle, do  not have traditional wages                                                               
reported on a  W-2 form.  A whaling captain  from Barrow or Point                                                               
Hope or Little  Diomede who supports an entire  community but who                                                               
has no  economic factor will  not be able to  recover; therefore,                                                               
that person's  contribution is  valued much  lower because  of an                                                               
inability to demonstrate hard economic losses.                                                                                  
MS. MORRIS said  that in sum, it makes little  sense to carve out                                                               
an exception in  general state law to benefit  a relatively small                                                               
group  of affluent  tortfeasors -  a group  uniquely situated  to                                                               
fully compensate those they injure,  a group which has tremendous                                                               
opportunity to cause  harm.  She said she  strongly believes that                                                               
SB 67 will adversely affect  Alaska Natives across the state, and                                                               
will provide  little appreciable assistance to  physicians.  Most                                                               
Alaska  Natives  receive  medical  service  through  the  federal                                                               
government,  via the  Indian  Health Service.    In essence,  the                                                               
Federal Tort Claims Act  creates a David-versus-Goliath scenario;                                                               
the plaintiff must  find an attorney who is willing  to take on a                                                               
medical  malpractice claim  against a  physician who  is tendered                                                               
defense  by  the  United States  government  through  the  United                                                               
States  attorney  general's  office  and  all  of  the  resources                                                               
available to  the federal  government.   These physicians  do not                                                               
pay for nor carry medical malpractice insurance.                                                                                
MS. MORRIS  pointed out  that many citizens  may not  realize how                                                               
difficult  and expensive  it is  to bring  a medical  malpractice                                                               
claim against  a health care  provider for negligence  and breach                                                               
of  his/her duty  of  care  to the  patient.    For many  Alaskan                                                               
Natives, if SB  67 passes, there will be no  remedy available for                                                               
them.  Attorneys  will not take a case against  the United States                                                               
government when [non-economic] damages  are limited to $250,000 -                                                               
it just  will not happen.   Alaska already has a  cap on damages,                                                               
which  the  Alaska legislature  passed  in  1997.   And  in  this                                                               
debate, she  remarked, on one  side there are trial  lawyers, and                                                               
on  the  other   side  there  are  physicians   and  health  care                                                               
providers, and  in the  middle there are  citizens who  have been                                                               
injured.   Those citizens  have done  nothing wrong;  all they're                                                               
looking for is a remedy.   Everyone is concerned about the rising                                                               
cost  of health  care; however,  she added,  she doesn't  believe                                                               
that limiting non-economic  damages to $250,000 - via SB  67 - is                                                               
the only solution that the state of Alaska can come up with.                                                                    
2:25:33 PM                                                                                                                    
RICHARD LOUIE  said he worked  for 20 years  at BP as  a computer                                                               
scientist and  auditor.  He asked  his doctor about the  risk [of                                                               
an upcoming operation] but was  not told [what those risks were].                                                               
Now he cannot  work.  He asked the committee  to remember him and                                                               
vote "No" on SB 67.                                                                                                             
MARGARET  LOUIE said  her husband  suffered extensive,  permanent                                                               
brain  damage and  is  now paralyzed  on his  right  side due  to                                                               
medical negligence.   He  husband can no  longer read,  write, or                                                               
speak fluently,  she relayed, and  the lives she and  her husband                                                               
worked so  hard to  build are  so dramatically  changed as  to be                                                               
unrecognizable compared to the lives they were leading before                                                                   
the injury.  She went on to say:                                                                                                
     There is  not a day  that passes that Richard  does not                                                                    
     struggle, from  the time he  wakes up until he  goes to                                                                    
     bed.    It's  a  labor   for  him  to  communicate,  he                                                                    
     struggles  with  curbs  and steps;  worse,  he  is  now                                                                    
     treated as  slow and mentally defective.   Non-economic                                                                    
     losses  and  pain  and suffering  are  terms  that  are                                                                    
     cavalierly tossed around.  You  cannot imagine the loss                                                                    
     of  self  esteem  from not  working  at  your  lifelong                                                                    
     career; at the  loss of your education -  wiped out due                                                                    
     to  a  brain injury;  the  loss  of your  communication                                                                    
     skills  - vocabulary  acquired over  a lifetime;  [and]                                                                    
     the  social  isolation,  including  the  loss  of  your                                                                    
     friends,  now reluctant  to  visit,  because they  miss                                                                    
     their old  friend and they  can't bear to see  what has                                                                    
     happened to you.                                                                                                           
     How  many of  you think  $250,000 is  adequate for  the                                                                    
     suffering  you will  endure for  even one  of the  many                                                                    
     disabilities  that  Richard  has  suffered.    Is  this                                                                    
     enough to make  your life better over  [the] ... course                                                                    
     of a lifetime?   Which, in our case, may  be another 30                                                                    
     years.    And  what  became of  our  legal  battle  for                                                                    
     accountability?  It was a  steep uphill fight, for five                                                                    
     years, and  we never did get  our day in court.   Every                                                                    
     attorney we spoke to, even  the attorney who eventually                                                                    
     tried to  help us,  ultimately all  stopped due  to the                                                                    
     extraordinarily high  cost of expert  medical testimony                                                                    
     -  estimated  to  be  $150,000.   We  were  told  every                                                                    
     medical  malpractice case  must  meet  high burdens  of                                                                    
     proof; causation and  a breach of the  standard of care                                                                    
     must be proven.                                                                                                            
     We  have discovered  that "standard  of care"  is quite                                                                    
     broad  and [that  a breach  of it  is] tough  to prove,                                                                    
     especially  in  a small  community.    We have  learned                                                                    
     doctors are  reluctant to testify against  each other -                                                                    
     [that] meaning, expert testimony  is hard to secure and                                                                    
     for  us in  Alaska, doctors  have to  come up  from the                                                                    
     Lower 48.   Doctors charge  from $1,500 to  $15,000 per                                                                    
     day for  their expert testimony, excluding  first class                                                                    
     airfare, hotel, food, and rental  car.  We have nothing                                                                    
     to gain by speaking before you  today.  I hope you will                                                                    
     remember  [that] the  majority of  your electorate  ...                                                                    
     [are]  not  wealthy  doctors  or  insurance  executives                                                                    
     looking  for ever  higher profits,  but ordinary,  real                                                                    
     people like us  who look to you to protect  us.  Do you                                                                    
     represent  us  and care  about  the  true suffering  of                                                                    
     victims of  medical malpractice?   Please vote  "No" on                                                                    
     Senate Bill 67.                                                                                                            
2:29:56 PM                                                                                                                    
LESTER  K.  SYREN, Attorney  at  Law,  Syren Law  Offices,  after                                                               
noting that  he is a  member in  good standing of  the Republican                                                               
Party of Alaska,  said that he is against SB  67, relayed that as                                                               
an  attorney, he  has taken  on a  couple of  medical malpractice                                                               
cases,  and reminded  members that  he'd testified  on this  same                                                               
issue before during a previous  legislature and provided a couple                                                               
of examples,  one wherein the  patient had  had a sponge  left in                                                               
her abdominal  region, and another  wherein the doctor  removed a                                                               
woman's  uterus  without  realizing that  his  patient's  problem                                                               
stemmed from  the fact  that she  was pregnant.   Mr.  Syren then                                                               
offered  the  following  as  a  quote  from  a  Washington  state                                                               
newspaper  article,  written  by republican  Representative  Gary                                                               
Alexander, who in turn is  purportedly relaying the thoughts of a                                                               
friend of his:                                                                                                                  
     That  Alaska,  which  has made  major  changes  in  its                                                                    
     medical  malpractice  laws,   is  more  appealing,  and                                                                    
     indicated seven  other South  Puget Sound  doctors will                                                                    
     leave our state as well.                                                                                                   
MR. SYREN  surmised that the  author of the article  is bemoaning                                                               
the  fact that  doctors are  leaving the  state of  Washington in                                                               
favor of  going to  Alaska.   He suggested  that this  means that                                                               
republicans in other  states are holding Alaska's  current law up                                                               
as an example of tort  reform.  Notwithstanding the argument that                                                               
since most lawsuits result in  a non-economic damages award in an                                                               
amount less than  the proposed $250,000 cap and so  passage of it                                                               
will not cause harm, he  pointed out that since most non-economic                                                               
awards are  under the amount of  the cap, the cap  won't actually                                                               
fix  anything and  doesn't  have to  anyway.   Additionally,  Mr.                                                               
Syren indicated,  since Mr. Jordan  and the ASMA are  lying about                                                               
doctors leaving the  state, perhaps the ASMA's  claims about what                                                               
the  bill   will  accomplish  are   not  credible  either.     In                                                               
conclusion,  Mr. Syren  suggested that  the bill  be buried  in a                                                               
deep well someplace.                                                                                                            
2:32:21 PM                                                                                                                    
TIM DOOLEY  offered his understanding  that SB 67  was originally                                                               
brought forth as  a means of reducing frivolous  lawsuits, and so                                                               
he doesn't  understand how putting  a cap on  non-frivolous, non-                                                               
economic  damage  awards  will further  that  goal,  particularly                                                               
given that  the bill will institute  a cap on the  most important                                                               
cases of  all, those of the  nun or elderly person,  for example,                                                               
who won't have  the economic loss that an  insurance executive or                                                               
medical doctor  would have.  He  suggested instead that a  cap be                                                               
placed on  physicians' incomes or insurance  executives' incomes,                                                               
or that a cap  be placed on the amount of time  one must spend in                                                               
the waiting  room before being  able to  see a physician  for two                                                               
MR.  DOOLEY said  that  although he  has heard  that  there is  a                                                               
shortage of  doctors, while researching possible  medical schools                                                               
for his  daughter, he  has discovered  that the  American Medical                                                               
Association (AMA)  actually limits the  number of people  who can                                                               
enter into medical  school in order to keep incomes  high for the                                                               
doctors  in  existing practices.    He  offered his  belief  that                                                               
insurance companies routinely  "go in and out of"  Alaska as well                                                               
as every other  state, adding that is seems that  when either the                                                               
insurance companies or the oil  industry wants something from the                                                               
state, they  simply threaten  to leave  the state,  and "somebody                                                               
actually buys  their baloney."  He  pointed out that if  a doctor                                                               
were to  cut up Mark McGuire's  baseball, which he said  sold for                                                               
over $3  million, the  owner of  that baseball  would be  able to                                                               
recover  more money  for the  damage  of that  baseball than  Mr.                                                               
Louie  could  recover  under  SB   67.    That  isn't  right,  he                                                               
RAY RICHARD BROWN, Attorney at  Law, Dillon & Findley, PC, shared                                                               
his belief  that he has  probably litigated, to  completion, more                                                               
medical  malpractice cases  than  any other  sitting attorney  in                                                               
Alaska, and therefore  has a better perspective  on the realities                                                               
of  what  happens in  a  medical  malpractice lawsuit  than  does                                                               
Senator Seekins.  Mr. Brown went on to say:                                                                                     
     We screen  ... between 150  and 200  cases a year  - we                                                                    
     take between  5 and 7.   We spend tens of  thousands of                                                                    
     dollars out  of our  own pocket  to save  [doctors] ...                                                                    
     from  getting  sued.   I  have  many friends  that  are                                                                    
     doctors, we  have a  very high  caliber of  health care                                                                    
     delivery in  this state, but  good doctors,  even great                                                                    
     doctors, like  lawyers, make mistakes.   This bill does                                                                    
     absolutely   nothing  to   curb  insurance   rates,  to                                                                    
     encourage doctors to  come to this state,  or to reduce                                                                    
     ... health care delivery costs.                                                                                            
     Instead  - let  me  be really  clear  about this,  this                                                                    
     isn't anecdotal, this isn't  something I'm relying upon                                                                    
     from reading a book or  a textbook or some self-serving                                                                    
     publication -  if this  bill is  passed, there  will be                                                                    
     people in  this state  - single,  stay-at-home parents,                                                                    
     or  stay at  home  parents that  are  married for  that                                                                    
     matter; [and] children, who I  represent, and I'll give                                                                    
     you  some examples  in a  minute,  not one  or two  but                                                                    
     several  - ...  that die,  that are  mangled, that  are                                                                    
     disfigured, that  will have no  recourse.  And  I don't                                                                    
     care  if it's  [$250,000] or  $400,000 -  these magical                                                                    
     numbers that  people are  pulling out  - these  are ...                                                                    
     [real] people,  and these are  people that  will suffer                                                                    
     because of a bill that will, absolutely, do nothing.                                                                       
MR. BROWN continued:                                                                                                            
     I   have  a   lot  of   suggestions  for   health  care                                                                    
     improvement,  if you'd  like  to hear  them  - I  can't                                                                    
     provide them in three minutes  - but I think they would                                                                    
     be supported  by the health  care community.   But this                                                                    
     bill  does nothing  but punish  people  that have  done                                                                    
     nothing wrong.  You want  to go after lawyers, go after                                                                    
     lawyers, and we  will sit here; if you want  to have us                                                                    
     testify under  oath, I'll testify under  oath, [and] if                                                                    
     I can bring billing records  here to show how expensive                                                                    
     it  is to  bring one  of these  cases and  the scrutiny                                                                    
     that we  go through to  bring one of these  cases, I'll                                                                    
     do it.                                                                                                                     
     But you need to listen  to cases like [Jennifer's], who                                                                    
     was a [12-year-old girl from  Tok]...:  for the lack of                                                                    
     $25,  because her  parents didn't  have the  money, she                                                                    
     died of  ... acute  myelocytic leukemia  - $25  and two                                                                    
     stages of malpractice, this child  died.  With this cap                                                                    
     - [$250,000]  or $400,000 -  we couldn't bring  a claim                                                                    
     for that child or her  parents.  Mike, another child in                                                                    
     Fairbanks, died of entirely  survivable burns through a                                                                    
     calamity  of errors  in a  health care  facility -  the                                                                    
     child was medevaced to Seattle  in [a] coma and he died                                                                    
     after suffering two  or three weeks.   We couldn't have                                                                    
     brought this case  [under the proposed cap]  - it would                                                                    
     have  been  impossible. ...  I'll  give  you one  other                                                                    
     example:  a woman,  ... [sexually] dysfunctional at ...                                                                    
     38 years old,  that means no feeling from  the waist to                                                                    
     her mid thighs.  [We]  couldn't have brought this case.                                                                    
     She  can  still  work,  so she  doesn't  have  economic                                                                    
     damages. ...  Think ... how  many ... males  would give                                                                    
     up their sexuality for $250,000; I don't know of any.                                                                      
     Finally, [with  regard to the  argument] ...  that this                                                                    
     might  reduce litigation  because  people are  shooting                                                                    
     for  the stars,  it's not  true.   Since  1993, when  I                                                                    
     first  started  doing  these  cases,  I  can  tell  you                                                                    
     there's  been less  than five  cases where  health care                                                                    
     providers have stepped up to  the plate in the clearest                                                                    
     and most gross of  negligent circumstances and said, "I                                                                    
     want  to settle  this case."    To the  contrary.   The                                                                    
     leukemia  child,  we  spent over  $200,000  in  out-of-                                                                    
     pocket costs  in a case of  clear-cut negligence before                                                                    
     the  case settled,  and that's  a fact.   And  lowering                                                                    
     these caps  will not do  anything to help anybody  - it                                                                    
     will hurt  some people who  are the most  vulnerable in                                                                    
     our society.   And I really  urge you not to  pass this                                                                    
REPRESENTATIVE COGHILL asked Mr. Brown to describe other                                                                        
possible solutions.                                                                                                             
MR. BROWN said Representative Gara's suggestion of retaining the                                                                
current caps of $400,000 and $1 million would probably make                                                                     
cases such as those he used as examples litigable.  He added:                                                                   
     It's  really difficult  for me  because these  are real                                                                    
     people, and so  ... when a case comes in,  I don't want                                                                    
     to ... [pick]  a number and say, "This is  what I think                                                                    
     your  child's  life  was  worth," but  I  do  know  the                                                                    
     realities  of  the  cost of  the  litigation,  and  ...                                                                    
     [Representative Gara's suggested  bifurcated cap] would                                                                    
     probably  make  this  bill   palatable,  and  it  would                                                                    
     probably  allow people  to bring  claims that  would be                                                                    
     economically feasible for the family.                                                                                      
MR. BROWN, in response to another question, offered the                                                                         
     If  you're a  5-year-old or  a 7-year-old  child, or  a                                                                    
     baby,  or  a  12-year-old  without  any  work  history,                                                                    
     here's the way it works  in our system. ... The child's                                                                    
     been  killed ...  -  and  I don't  mean  "killed" in  a                                                                    
     pejorative way;  again, the doctors who  committed this                                                                    
     negligence were  very good doctors  and they  were very                                                                    
     sorry it happened  - so they didn't  "kill" this child,                                                                    
     they were  just negligent.   But you  start out  with a                                                                    
     projection, ... with a proposition  that this child may                                                                    
     and  probably will  graduate with  a four-year  degree,                                                                    
     and then  you try to come  up with a parameter  of what                                                                    
     that child would  have made in their  lifetime and then                                                                    
     you subtract from that what they would have consumed.                                                                      
     There  are  lawyers  that come  up  with  experts  that                                                                    
     suggest that that can be  [$300,000] or $400,000, [but]                                                                    
     most credible economists that I've  worked with - and I                                                                    
     work  with conservative,  reputable economists  - value                                                                    
     that  at  somewhere  between [$250,000]  and  $300,000.                                                                    
     Again, it  depends on the  child ... [but  the economic                                                                    
     loss] is a very small  amount if you can establish that                                                                    
     amount.     [For]   stay-at-home  mothers   there's  no                                                                    
     projection  for their  wages because  they don't  work,                                                                    
     and  you   can't  value  their   services  as   a  mom.                                                                    
     Retirees,  who  have  no  income   ...,  they  have  no                                                                    
     economic  loss and  they don't  have any  other special                                                                    
     damages. ...                                                                                                               
     [So in  the Arney  case, he had]  no economic  loss, so                                                                    
     ... under this bill, $250,000  would be it, and that is                                                                    
     in  a  case  where  the allegation  is  very  egregious                                                                    
     negligence against  a health  care provider.   To bring                                                                    
     that case, unfortunately,  would cost between [$80,000]                                                                    
     and  $125,000 in  out-of-pocket costs.   Then  you take                                                                    
     [attorney] fees off  of that.  Even  if [attorney] fees                                                                    
     are  negotiated -  which  we do,  on  a regular  basis,                                                                    
     sometimes to  make [a]  case settle  - you  can't bring                                                                    
     the case, and  you can't expose that person  to Rule 82                                                                    
     and Rule  79 [of the  Alaska Rules of  Civil Procedure]                                                                    
     with the chance that you would loose.                                                                                      
     And it's a  very real cost for retirees  that have been                                                                    
     able to put aside $100,000  in  a [retirement account],                                                                    
     and then if they lose  this case they lose [that money]                                                                    
     to NORCAL or [Medical  Insurance Exchange of California                                                                    
     (MIEC)] or  to "Providence  Alaska."  Those  are things                                                                    
     that you  have to  consider, and they  are very  real -                                                                    
     they are  not anecdotal -  they are things that  I deal                                                                    
     with every single day.                                                                                                     
2:42:44 PM                                                                                                                    
CHAIR McGUIRE asked Mr. Brown how often he has seen Rule 82                                                                     
enforced against his clients in medical malpractice cases.                                                                      
MR. BROWN  said such has  occurred on two  occasions, attributing                                                               
that low number to his  firm's rigorous screening procedures, and                                                               
suggested that Rule  82 and Rule 79 ensure  that only meritorious                                                               
medical malpractice  cases are brought  forth.  In response  to a                                                               
further  question, he  relayed that  95 percent  of the  cases he                                                               
brings forth  have resulted  in a  favorable disposition  for the                                                               
CHAIR McGUIRE offered her understanding  that Rule 82 and Rule 79                                                               
are not applied very much.                                                                                                      
MR. BROWN  opined that SB 67  will do nothing to  alter how often                                                               
those  rules are  applied, and  offered his  belief that  the low                                                               
number of cases  in which such rules are  applied is attributable                                                               
to the  fact that clients are  warned about those rules  and have                                                               
then chosen not to go forward with their case.                                                                                  
2:46:25 PM                                                                                                                    
MR.  BROWN, in  response to  another question,  relayed that  his                                                               
firm  generally charges  a contingency  fee of  33.3 percent  and                                                               
advances all costs.  So if a  client never receives an award or a                                                               
settlement, his  firm receives  nothing and  is simply  out those                                                               
costs.  He  mentioned, though, that his firm  sometimes charges a                                                               
contingency  fee of  40 percent,  or  a contingency  fee that  is                                                               
bifurcated, or  a reduced  contingency fee,  adding that  he does                                                               
not know  of any lawyers  or law firms that  don't do that.   His                                                               
firm's main goal, he remarked, is [to help] the client.                                                                         
MR.  BROWN, in  response  to  a further  question,  said that  in                                                               
catastrophic injury cases  or death cases, he could  not take the                                                               
risk [of bringing  forth a case] under the proposed  cap, and nor                                                               
could his client.  He elaborated:                                                                                               
     Again,  if  I'm  spending  $200,000,  which  I've  done                                                                    
     several  times, in  these  catastrophic  cases, if  you                                                                    
     have  a  $400,000  cap  or $250,000  cap,  I  would  be                                                                    
     advancing  $200,000 out  my own  money,  my firm's  own                                                                    
     money, with  the chance  of possibly  getting a  fee in                                                                    
     the future. ... Let's say we  reduced our fee to ... 25                                                                    
     percent  of a  $400,000  cap and  we advance  $200,000.                                                                    
     That would  be a $100,000  fee and, believe me,  to get                                                                    
     that  case  to  that  point,  we  would  have  multiple                                                                    
     hundreds  of hours  if  not well  over  1,000 hours  of                                                                    
     attorney  time and  paralegal time  to get  it to  that                                                                    
     point. ...                                                                                                                 
     The  client, then,  after taking  that risk,  the firm,                                                                    
     after taking  that risk and after  spending that money,                                                                    
     would  get $100,000  for the  loss of  their child,  to                                                                    
     become sexually  dysfunctional, to  be crippled,  to be                                                                    
     blind.   [We've] got a  case right now where  a woman's                                                                    
     blind.  That's not fair.   So at some point it's got to                                                                    
     be economically feasible.                                                                                                  
     If you want  to talk about capping  [attorney] fees, we                                                                    
     should talk about that some day.   I don't think it's a                                                                    
     good  idea  for any  number  of  reasons, but  I  would                                                                    
     certainly entertain it.  But  you also would have to do                                                                    
     the other  side of the  equations:  [you've] got  a cap                                                                    
     the defense attorney's fees, [you've]  got to cap their                                                                    
     cost, you've got to make it  a fair playing field.  And                                                                    
     I would  be interested [in that],  and I have a  lot of                                                                    
     respect for my colleagues on the defense bar.                                                                              
     The  medical malpractice  litigation  [field] ...  [for                                                                    
     both]  plaintiffs and  defense  [attorneys]  is a  very                                                                    
     high caliber of practice.   My colleagues that I defend                                                                    
     cases against, I have the  utmost respect for.  And ...                                                                    
     I  haven't  heard  many  of  them  coming  in  here  to                                                                    
     testify, but I suspect  it's because they wouldn't want                                                                    
     to  testify  about  a  bill  that  could  affect  their                                                                    
     economic  viability in  terms of  testifying against  a                                                                    
     malpractice carrier.  But it's  a high practice of law;                                                                    
     you don't get into  medical malpractice unless you have                                                                    
     a lot of  experience and you're willing  to litigate at                                                                    
     a very high level. ...                                                                                                     
2:51:24 PM                                                                                                                    
REPRESENTATIVE ANDERSON suggested that perhaps they could also                                                                  
cap physicians' salaries.                                                                                                       
REPRESENTATIVE GRUENBERG asked whether, in cases wherein the                                                                    
judgment goes against the plaintiff, the defendants have sought                                                                 
costs and attorney fees.                                                                                                        
MR.  BROWN  indicated  that  the  defendants  in  the  cases  his                                                               
plaintiffs lost have done so two  or three times but only once at                                                               
trial.    More common,  however,  is  for  a plaintiff  to  forgo                                                               
his/her case due to exposure to Rule 82 and Rule 79.                                                                            
REPRESENTATIVE GRUENBERG asked whether, in cases wherein the                                                                    
judgment goes against the plaintiff, the defendants have not                                                                    
sought costs and attorney fees.                                                                                                 
MR. BROWN said not that he is aware of.                                                                                         
2:54:45 PM                                                                                                                    
REPRESENTATIVE GARA asked what standard of negligence must be                                                                   
proven in order to [win] a medical malpractice case.                                                                            
MR. BROWN said that the standard is ordinary negligence.  He                                                                    
went on to say:                                                                                                                 
     But what we  look for is more  than ordinary negligence                                                                    
     because  of the  difficulty in  litigating these  case.                                                                    
     ... Basically  we have to  show, by a  preponderance of                                                                    
     the evidence,  that [the behavior  of] the  health care                                                                    
     provider  -   doctor,  nurse,  hospital,   whoever  was                                                                    
     involved in the treatment -  fell below the standard of                                                                    
     care of a physician or  health care provider trained in                                                                    
     a similar  ... or identical  manner, and in a  way that                                                                    
     would  fall   outside  the  parameters   of  acceptable                                                                    
     medical behavior under the circumstances.   It's a very                                                                    
     difficult standard.  Of the  150 to 200 cases we screen                                                                    
     a year,  I can tell  you, fortunately for the  state of                                                                    
     Alaska,  over 95  or 96  percent are  bad outcomes  but                                                                    
     good medicine, and unfortunately  that's what happens -                                                                    
     in the best of care there's bad outcomes.                                                                                  
     And [of] the other 5 percent,  I would say 3 percent of                                                                    
     those  are  bad  medicine  and a  bad  outcome  but  no                                                                    
     damages.   We don't  take cases,  for instance,  if the                                                                    
     damage threshold  is under a  certain amount.   I don't                                                                    
     bring  those  cases for  two  different  reasons:   ...                                                                    
     economically,  it's not  feasible; philosophically,  if                                                                    
     ... a person  has not been ... damaged or  injured in a                                                                    
     way that affects their life or  in a way that they have                                                                    
     really  serious  non-economic  or  economic  losses,  I                                                                    
     won't  bring   those  cases   against  a   health  care                                                                    
     provider.   And frankly,  I don't [know]  of any  of my                                                                    
     other colleagues that do.   I'm sure there are examples                                                                    
     that people  could point to  where it's  happened, but,                                                                    
     as a rule, we have a much higher threshold.                                                                                
     Of those  remaining 2  or 3 percent  that have  met our                                                                    
     rigorous  screening,  and  we  do hours  and  hours  of                                                                    
     medical  research on  our own  - we've  done this  long                                                                    
     enough that  I have a  good idea  of most parts  of the                                                                    
     body, enough to  be neurotic at night when I  go to bed                                                                    
     - ...  we then send them  to an outside expert  and pay                                                                    
     that expert  $1,500 [or] $2,500 [or]  sometimes $4,000,                                                                    
     and sometimes they  disagree with us, and  they call me                                                                    
     and  they say  ..., "Mr.  Brown, I've  read this  and I                                                                    
     think it's a  close call but I just  can't support your                                                                    
     theory" - we  eat the money and we walk  away.  So it's                                                                    
     ... very high  scrutiny and it's a  very high standard;                                                                    
     even though  ordinary negligence  may be what  it says,                                                                    
     it's usually not enough to get you to a jury verdict.                                                                      
REPRESENTATIVE  GARA  asked how  much  it  costs to  get  medical                                                               
experts to testify in medical malpractice cases.                                                                                
MR. BROWN listed amounts of between $5,000 and $15,000 per day.                                                                 
2:59:04 PM                                                                                                                    
REPRESENTATIVE  GARA noted  that  the division  of insurance  has                                                               
provided the  committee with  a report  which shows  that neither                                                               
rates nor the availability of  insurance have been affected since                                                               
the last time  the legislature adopted tort reform  measures.  He                                                               
asked Mr. Brown to comment.                                                                                                     
MR.  BROWN  pointed  out  that when  those  measures  were  being                                                               
debated,  representatives from  the  insurance  industry did  not                                                               
promise that  rates would go  down; instead, they  merely offered                                                               
their belief  that rates might go  down.  In response  to another                                                               
question, he said:                                                                                                              
     There's   a  lot   of  medical   malpractice  insurance                                                                    
     companies that have  left [the state], and  I'd be more                                                                    
     than  happy to  explain  to you  and  provide you,  not                                                                    
     anecdotal,  but actual  documentary  evidence why  they                                                                    
     left  the state  of Alaska,  but that  really isn't  in                                                                    
     serious  dispute. ...  Get NORCAL  and MIEC  to explain                                                                    
     why  these carriers  left  the state:    they left  the                                                                    
     state because they came here to  try to make a bunch of                                                                    
     money,  the   stock  market  was  booming,   they  made                                                                    
     terrible  underwriting mistakes  and tried  to undercut                                                                    
     MIEC and  NORCAL, and  they wrote  bad policies  - they                                                                    
     left  the  state  because  of  the  stock  market,  not                                                                    
     because  of what  they were  paying out  to victims  of                                                                    
     plaintiffs' awards.                                                                                                        
     And so  we've got two, very  well-run, stable companies                                                                    
     here today  - NORCAL and  MIEC.  If you  want insurance                                                                    
     here,  let's go  back  to [having  a Medical  Indemnity                                                                    
     Corporation of  Alaska (MICA)],  let's get  Roger Holms                                                                    
     (ph)  back in  here to  run MICA,  let's let  the state                                                                    
     fund it.   And  they made  a lot of  money, and  it was                                                                    
     because it was  run right, it was run  by somebody that                                                                    
     knew  what they  were doing,  and it  was a  good plan.                                                                    
     You  threaten to  put MICA  in here  and let  the state                                                                    
     fund MICA, we won't hear  a peep out of any malpractice                                                                    
     insurance carrier.   They will  be asking you,  as they                                                                    
     did -  as I  understand it historically  - to  get MICA                                                                    
     out of the way so that  they can make money, as they're                                                                    
     doing  hand over  fist right  today. ...  I'm obviously                                                                    
     biased, [so] get the ...  Division of Insurance in here                                                                    
     [and] ask them what these companies are making.                                                                            
MR. BROWN  added that  he would  love to see  MICA come  into the                                                               
state,  that he  thinks it  would be  a great  idea, and  that he                                                               
would give it 100 percent of his support.                                                                                       
REPRESENTATIVE ANDERSON  asked why  hospitals and  physicians are                                                               
saying that passage of the bill will help the current situation.                                                                
MR. BROWN  said he  would like  to hear  what their  reasoning is                                                               
himself, that he would like  them to show him unbiased, empirical                                                               
evidence that passage of the  bill will, indeed, help the current                                                               
situation.  When he is given  such evidence, he remarked, he will                                                               
analyze  it  and attempt  to  determine  whether it  is  accurate                                                               
evidence.  He  pointed out that he has already  looked at all the                                                               
data,  that   he  has  already   compiled  all   the  statistical                                                               
information  available  from  the insurance  companies,  and  has                                                               
already performed an empirical analysis  of that information; his                                                               
conclusion  is  that  passage  of   the  bill  won't  bring  down                                                               
insurance rates or increase the availability of insurance.                                                                      
REPRESENTATIVE ANDERSON asked why,  then, have six states adopted                                                               
a similar cap.                                                                                                                  
MR. BROWN suggested to Representative  Anderson that he pose that                                                               
question to  the governing  bodies of  those states,  and posited                                                               
that part  of the reply will  be that the  cap did not help.   In                                                               
response to  a question,  he said  he was  surprised to  hear the                                                               
sponsor's testimony  regarding Texas,  and relayed that  he would                                                               
be researching  the statistics that were  offered further because                                                               
he does not believe that they can  be true.  He again opined that                                                               
passage of  the bill  will not impact  insurance rates  in Alaska                                                               
and  will  thus  have  no  impact on  whether  more  doctors  are                                                               
attracted to the state.                                                                                                         
3:05:20 PM                                                                                                                    
BRIAN SLOCUM,  Administrator, Tanana Valley Clinic,  relayed that                                                               
the cost  of medical malpractice  insurance for their  group rose                                                               
from  $258,000 in  2004, to  $648,000 in  2005 -  an increase  of                                                               
$390,000 in  one year, or  an increase of  251 percent.   This is                                                               
not a cost  increase that anyone can hope to  sustain in the long                                                               
term, he  pointed out, and relayed  that in the six  years he has                                                               
been with the Tanana Valley Clinic,  they have only had two minor                                                               
malpractice  settlements   out  of   court.    Now   this  higher                                                               
malpractice cost  is added to  other rising costs  and decreasing                                                               
reimbursement when it  comes to making decisions  about coming to                                                               
Alaska.    He  mentioned  that   the  Tanana  Valley  Clinic  has                                                               
successfully  recruited  one  physician  each in  the  fields  of                                                               
internal medicine and obstetrics in the past five years.                                                                        
[Chair   McGuire  turned   the  gavel   over  to   Representative                                                               
MR. SLOCUM  offered an  example of  an obstetrician  in Wisconsin                                                               
who  refused an  interview offer  with the  Tanana Valley  Clinic                                                               
when she found  out that her medical  malpractice insurance rates                                                               
would increase by $20,000 if she  were to accept a job in Alaska.                                                               
Such  an increase  over  a  10-year span  amounts  to  a loss  of                                                               
$200,000  for the  doctor.   He concluded  by characterizing  the                                                               
current situation  as a crisis,  adding his belief  that although                                                               
passage of  the bill may not  solve all of the  current problems,                                                               
it is a step in the right direction.                                                                                            
3:09:37 PM                                                                                                                    
REPRESENTATIVE COGHILL  asked Mr.  Slocum whether any  doctors at                                                               
the Tanana  Valley Clinic have  recently left because  of medical                                                               
malpractice insurance rate increases.                                                                                           
[Representative Anderson returned the gavel to Chair McGuire.]                                                                  
MR. SLOCUM said  that the Tanana Valley Clinic  does experience a                                                               
certain amount of turnover every  year, but he cannot say whether                                                               
physicians have left simply because of insurance rate increases.                                                                
REPRESENTATIVE  GARA   asked  how  many  doctors   are  currently                                                               
practicing at the Tanana Valley Clinic.                                                                                         
MR. SLOCUM said 26 physicians and 15 "other midlevel providers."                                                                
REPRESENTATIVE  GARA pointed  out that  the insurance  rates that                                                               
the  Tanana  Valley Clinic  is  currently  paying averages  about                                                               
$20,000  per  doctor.    Therefore,   he  asked,  how  could  the                                                               
insurance  rates of  the Wisconsin  obstetrician  who refused  an                                                               
interview with the Tanana Valley  Clinic increase by $20,000 were                                                               
she  to accept  a  job  in Alaska.    Wouldn't  that require  the                                                               
Wisconsin  obstetrician  to  be  currently  getting  her  medical                                                               
malpractice insurance for free?                                                                                                 
MR. SLOCUM  pointed out  that the insurance  rates being  paid by                                                               
the Tanana  Valley Clinic are not  split evenly among all  of its                                                               
physicians; rather,  those with  certain specialties pay  more to                                                               
begin with.                                                                                                                     
3:11:25 PM                                                                                                                    
REPRESENTATIVE GARA asked  Mr. Slocum to explain  why he believes                                                               
that passage  of the proposed  cap will cause  insurance premiums                                                               
to  go  down,  particularly  since  the  Tanana  Valley  Clinic's                                                               
insurance premiums  have gone up  even though there  haven't been                                                               
any malpractice verdicts against its doctors.                                                                                   
MR.  SLOCUM surmised  that the  Tanana  Valley Clinic's  premiums                                                               
have  gone  up  because  they  are  not  based  solely  upon  the                                                               
performance of  its doctors; rather,  those rates are  based upon                                                               
the performance  of doctors  across the  state and  the insurance                                                               
company's estimated losses.                                                                                                     
3:13:03 PM                                                                                                                    
REPRESENTATIVE  GARA  asked  Mr.   Slocum  whether  he  would  be                                                               
amenable to  having a provision  in the  bill which said  that if                                                               
insurance rates  do not  decrease after  passage of  the proposed                                                               
cap, then the proposed cap will sunset.                                                                                         
MR.  SLOCUM   opined  that   such  a   provision  would   not  be                                                               
3:13:57 PM                                                                                                                    
REPRESENTATIVE KOTT noted that the  AMA maintains a list of those                                                               
states  that are  "in crisis,"  and that  Alaska is  not on  that                                                               
list.  He asked for an explanation.                                                                                             
MR. SLOCUM said he wasn't sure why  that is the case, but went on                                                               
to suggest  that perhaps when the  state is looked at  as a whole                                                               
and compared with  the rest of the nation, there  isn't a crisis,                                                               
even though there is a crisis in certain areas of Alaska.                                                                       
3:15:04 PM                                                                                                                    
REPRESENTATIVE  GARA  referred  to  an  article  he'd  read  that                                                               
indicated that one  doctor was moving to Alaska  because not only                                                               
were malpractice  insurance rates  lower than where  he currently                                                               
resides but Alaska doesn't have a state tax on personal income.                                                                 
MR. SLOCUM said  the Tanana Valley Clinic would  welcome any such                                                               
3:16:40 PM                                                                                                                    
CHAIR McGUIRE closed public testimony.                                                                                          
REPRESENTATIVE  ANDERSON  made a  motion  to  adopt Amendment  1,                                                               
which  was   labeled  24-LS0393\FA.1,  Crawford,   4/20/05  [text                                                               
provided previously].                                                                                                           
REPRESENTATIVE GRUENBERG  objected, saying  he sees no  reason to                                                               
immunize the government in this matter.                                                                                         
REPRESENTATIVE ANDERSON  opined that  Amendment 1 would  make the                                                               
bill consistent and provide parity.                                                                                             
REPRESENTATIVE  GARA said  he doesn't  want  to be  in the  habit                                                               
taking people's rights away for no good reason.                                                                                 
CHAIR  McGUIRE  offered  her belief  that  Amendment  1  provides                                                               
parity for correctional facilities.                                                                                             
REPRESENTATIVE GRUENBERG pointed  out, however, that governmental                                                               
health  care  providers  haven't   any  difficulty  obtaining  or                                                               
affording insurance and  thus there is no reason  to include such                                                               
providers in the bill.                                                                                                          
3:20:27 PM                                                                                                                    
A roll call  vote was taken.   Representatives McGuire, Anderson,                                                               
Coghill,  Kott, and  Dahlstrom  voted in  favor  of Amendment  1.                                                               
Representatives Gruenberg and Gara  voted against it.  Therefore,                                                               
Amendment 1 was adopted by a vote of 5-2.                                                                                       
REPRESENTATIVE  ANDERSON  made a  motion  to  adopt Amendment  2,                                                               
which read [original punctuation  provided though some formatting                                                               
changes were made]:                                                                                                             
     AS 09.55.549 is amended as follows.                                                                                        
     (d)   Except as  provided in (e)  of this  section, the                                                                    
     damages awarded by a court or  a jury under (c) of this                                                                    
     section for  all claims including a  loss of consortium                                                                    
     claim  or  other  derivative claim  arising  out  of  a                                                                    
     single  injury   or  death  may  not   exceed  $250,000                                                                    
     regardless  of  the  number of  health  care  providers                                                                    
     against whom  the claim  is asserted  or the  number of                                                                    
     separate  claims  or  causes  of  action  brought  with                                                                    
     respect to the injury or death.                                                                                            
     (e)  The  damages awarded by a court or  jury under (c)                                                                    
     of  this section  for all  claims including  a loss  of                                                                    
     consortium claim or other  derivative claim arising out                                                                    
     of a  single injury  or death  may not  exceed $400,000                                                                    
     regardless  of  the  number of  health  care  providers                                                                    
     against whom  the claim  is asserted  or the  number of                                                                    
     separate  claims  or  causes  of  action  brought  with                                                                    
     respect  to  the  injury  or  death  when  damages  are                                                                    
     awarded   for  wrongful   death  or   severe  permanent                                                                    
     physical   impairment   which   is  more   than   (70%)                                                                    
     Existing paragraphs  (e) and (f) are  renumbered to (f)                                                                    
     and (g).                                                                                                                   
REPRESENTATIVE GRUENBERG objected.                                                                                              
REPRESENTATIVE  KOTT   indicated  that  he  is   unable  to  find                                                               
information in  his packet  indicating that  any other  state has                                                               
established a similar two-tiered system.                                                                                        
SENATOR SEEKINS  offered his belief  that West Virginia  at least                                                               
has a similar system in place.                                                                                                  
REPRESENTATIVE  KOTT  pointed  out,  though,  that  in  order  to                                                               
qualify for such a cap,  physicians in West Virginia are required                                                               
to  carry  medical malpractice  insurance  in  the amount  of  $1                                                               
SENATOR SEEKINS  offered his belief  that very few  physicians in                                                               
Alaska don't carry medical malpractice insurance.                                                                               
REPRESENTATIVE  ANDERSON  indicated that  he  not  willing to  go                                                               
higher than a $400,000 cap.                                                                                                     
REPRESENTATIVE  GARA   asked  whether,  if  the   information  in                                                               
members' packets  indicates that 22  states currently have  a cap                                                               
on non-economic damage awards  in medical malpractice litigation,                                                               
that  mean that  28  states currently  let  victims recover  full                                                               
SENATOR SEEKINS  said he is unable  to answer that question.   In                                                               
response to a further question,  he outlined, from information in                                                               
members'  packets,  the caps  that  some  other states  currently                                                               
have, and  noted that still  other states are looking  at whether                                                               
to institute a cap similar to what is being proposed via SB 67.                                                                 
REPRESENTATIVE  GARA mentioned  that  they have  not  yet done  a                                                               
study to  determine what physicians  in Alaska would  consider to                                                               
be  an  acceptable  cost for  malpractice  insurance,  and  asked                                                               
Senator  Seekins about  the possibility  of  having the  proposed                                                               
caps  apply  only  to cases  involving  doctors  whose  insurance                                                               
companies  do   not  charge  them  above   that  to-be-determined                                                               
acceptable amount.                                                                                                              
SENATOR SEEKINS pointed out, however,  that both of the insurance                                                               
companies  that  underwrite   medical  malpractice  insurance  in                                                               
Alaska  are "mutual"  companies  and are  not  gouging their  own                                                               
3:28:18 PM                                                                                                                    
A roll call  vote was taken.   Representatives McGuire, Anderson,                                                               
Coghill, Kott,  Dahlstrom, and Gara  voted in favor  of Amendment                                                               
2.    Representative  Gruenberg voted  against  it.    Therefore,                                                               
Amendment 2 was adopted by a vote of 6-1.                                                                                       
3:28:55 PM                                                                                                                    
REPRESENTATIVE KOTT  made a motion to  adopt Conceptual Amendment                                                               
3,  to [annually]  adjust the  amounts  of the  proposed caps  to                                                               
reflect the rate of inflation.                                                                                                  
REPRESENTATIVE ANDERSON objected.                                                                                               
SENATOR SEEKINS said he would prefer a hard cap.                                                                                
CHAIR  McGUIRE said  that philosophically  she opposes  [Consumer                                                               
Price  Index  (CPI)  clauses.   Instead,  she  prefers  that  the                                                               
legislature periodically  review any  monetary amounts  listed in                                                               
statute in order to determine their impact.                                                                                     
3:31:00 PM                                                                                                                    
REPRESENTATIVE  GARA said  he disagrees  that California  did the                                                               
right thing  in instituting a  $250,000 cap  in the late  '70s or                                                               
early '80s,  and believes that  the claims that doing  so reduced                                                               
medical malpractice  insurance rates are unsupportable.   Rather,                                                               
those rates  did not  go down until  California voters  passed an                                                               
initiative giving the commissioner  of insurance the authority to                                                               
reduce  the amounts  that insurance  companies  could charge  for                                                               
premiums.  He indicated that  were $250,000 in early '80s dollars                                                               
to  be adjusted  for  inflation, it  would amount  to  over a  $1                                                               
million in today's  dollars.  Therefore, any cap  that is adopted                                                               
in  Alaska should  be adjusted  for inflation  instead of  simply                                                               
telling people that they are worth less and less every year.                                                                    
3:32:30 PM                                                                                                                    
A roll call vote was taken.   Representatives Kott and Gara voted                                                               
in  favor of  Conceptual Amendment  3.   Representatives McGuire,                                                               
Anderson,  Coghill, Dahlstrom,  and Gruenberg  voted against  it.                                                               
Therefore, Conceptual Amendment 3 failed by a vote of 2-5.                                                                      
REPRESENTATIVE GARA said  he objects to the premise  of the bill,                                                               
that   being  that   it  will   have  an   impact  on   insurance                                                               
availability, adding, "I can't see how  we can ... let this thing                                                               
go through without  having the ... director [of]  the Division of                                                               
Insurance here -  at least Linda Hall can tell  us how much money                                                               
these insurance companies are making in Alaska."                                                                                
CHAIR  McGUIRE  clarified that  at  her  request, Ms.  Hall,  the                                                               
director of the  Division of Insurance, submitted  a large packet                                                               
of information  to the committee  and had been  available earlier                                                               
for questions.                                                                                                                  
REPRESENTATIVE GARA  indicated a  preference for having  Ms. Hall                                                               
speak  directly to  the committee,  as well  as a  preference for                                                               
hearing testimony from the State Medical Board.                                                                                 
REPRESENTATIVE ANDERSON moved to  report [CSSB 67(JUD)(efd fld)],                                                               
as amended, out of committee  with individual recommendations and                                                               
the accompanying zero fiscal notes.                                                                                             
REPRESENTATIVE  GARA objected,  and [made  a motion  to adopt]  a                                                               
further conceptual amendment.                                                                                                   
CHAIR McGUIRE ruled that motion out of order.                                                                                   
REPRESENTATIVE GARA reiterated that he  objected to the motion to                                                               
report the bill from committee.                                                                                                 
3:34:54 PM                                                                                                                    
A roll call  vote was taken.   Representatives McGuire, Anderson,                                                               
Coghill, and Kott  voted in favor of  reporting [CSSB 67(JUD)(efd                                                               
fld)], as amended, out of  committee.  Representatives Dahlstrom,                                                               
Gruenberg,  and  Gara voted  against  it.   Therefore,  HCS  CSSB
67(JUD) was reported from the  House Judiciary Standing Committee                                                               
by a vote of 4-3.                                                                                                               

Document Name Date/Time Subjects