Legislature(2003 - 2004)
03/17/2004 08:02 AM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 319-CLAIMS AGAINST HEALTH CARE PROVIDERS
MR. BRIAN HOVE, staff to Senator Seekins, sponsor of SB 319,
provided the following explanation of the measure.
SB 319 amends AS 09.55.548 and .556. The proposed
legislation intends to alleviate a growing crisis in
Alaska's health care industry with respect to the
availability of liability insurance. It places a hard
cap on damage awards, clarifies informed consent
language, and limits liability with respect to health
care advice communicated through electronic means.
The fact is Alaska's medical system is breaking down.
Alaska ranks near the bottom in the number of
physicians per capita. What's more, over half of
Alaska's physicians exceed the age of 50. Many will be
retiring within the next 10 years. Attracting and
keeping adequate numbers of high quality physicians in
Alaska is of utmost importance. The availability of
liability insurance plays a critical role in solving
this crisis. Half of the insurers have ceased doing
business in Alaska in the last 12 months. Other
professional liability insurance carriers have not
shown an interest in doing business in the state, due
to the volatile medical liability environment.
This is a complex issue. However, one solution that
has proven particularly effective in other states is
capping non-economic damages. SB 319 intends to help
establish a predictable risk assessment environment by
placing a $250,000 cap on this type of award. It does
not change awards for quantifiable economic damages,
such as lost wages and past and future medical
expenses. The bill also makes revisions, which limit
liability in cases where a patient elects not to
follow advice that was communicated by a health care
provider through electronic means. Lastly, qualifying
language is added relating to informed consent, along
with a sprinkling of punctuation marks. But the bottom
line is this - instituting a $250,000 cap on non-
economic damages will help stabilize the professional
medical liability insurance market here in Alaska,
thereby reinforcing efforts to attract the next
generation of doctors to replace those who are nearing
retirement age.
SENATOR OGAN asked whether the $250,000 damage award limit
includes the attorney's fees.
MR. HOVE said they would.
SENATOR OGAN asked what the typical contingency cost is for tort
attorneys.
MR. HOVE said that is determined on a case-by-case basis but the
amount is not insignificant.
SENATOR OGAN noted if the attorney gets half, and the jury finds
the doctor was negligent because he was drinking the night
before and did irreparable harm, the patient would only get
$125,000.
MR. HOVE said a doctor who was drinking the night before would
be in a different class and that case would not be subject to
this legislation.
CHAIR SEEKINS noted that doctor would be guilty of reckless
behavior, not negligence, and the bill is not intended to cover
any cap for reckless behavior.
SENATOR FRENCH said since the committee last heard the bill, the
committee has received a report entitled, "Physicians Practicing
in Alaska," by the Legislative Research Agency. That report
contains one point that runs contrary to Mr. Hove's statement
that the system is breaking down; it says the number of
physicians is steadily increasing in Alaska every few years. He
asked Mr. Hove to reconcile the two statements.
MR. HOVE replied, "What I see is state-licensed physicians and I
don't know, somebody can tell me if I'm wrong but it seems that
licensed is different from actually practicing."
CHAIR SEEKINS said he asked whether there is a difference
between practicing and licensed physicians in the Senate Labor
and Commerce Committee. He noted that he noticed in a chart of
physicians with awards against them that many of them had non-
resident addresses and he intends to look into why that is. He
asked Mr. Hove to find out how many of the physicians who are
licensed in Alaska actually practice here.
SENATOR FRENCH pointed out the report shows the number of
active, state licensed physicians by year since 1985. That
suggests to him that they are not retired.
CHAIR SEEKINS agreed to follow up on that question and on
Senator Ogan's question about whether Rule 82 applies on top of
the damage award.
SENATOR FRENCH commented that California adopted a $250,000
damage award limit in 1979. He questioned what that amount would
be worth in 2004 if adjusted for inflation. He suggested that
amount could be the current $400,000 cap in Alaska law now.
CHAIR SEEKINS noted the $400,000 cap is a moveable cap with a
multiplier effect - it is not a hard cap. He added that
California has kept the amount at $250,000. He said he would
accommodate one person who flew from Anchorage to testify today
and called Mr. Rhyneer.
DR. GEORGE RHYNEER, an Anchorage cardiologist, told members he
has been practicing in Anchorage for over 30 years. He was
instrumental in getting a cardiac program started in Alaska. He
explained that the reason he is attending today's hearing is so
that he can continue to practice cardiology in Alaska. A number
of years ago, insurance companies were "beating down the door"
to sell him medical malpractice insurance. Four years ago, only
four companies were selling that insurance in Alaska. Last year,
his insurance company cancelled his insurance because it was
unable to make a go of it in Alaska anymore. That was a mutual
insurance company based in Oregon, which is physician owned and
passes on the cost of doing business to the physicians. The
commercial insurance company, CNA, also left Alaska last year so
it left him looking for new insurance and was able to find only
one insurance company that could provide him with the insurance
company he needed. He said one can anticipate, by looking South,
what will happen to medicine in Alaska. He anticipates that
things will continue to get worse in this regard as the
insurance crises in the Lower 48 will move north to Alaska.
Alaska does not have a medical malpractice insurance crisis
right now. However, the same problems that led to the loss of
insurance companies in Alaska will continue with the current
legal atmosphere in the state. Physicians desperately fear they
will lose the ability to buy malpractice insurance in the
foreseeable future at all. If that does occur, he would be
forced into involuntary retirement, as will probably 30 percent
of the practicing physicians in Alaska. He cautioned that if
suddenly there are minimal medical services, the state will have
a real problem, and it could happen abruptly.
DR. RHYNEER said that other solutions may be out there, but the
legislature needs to come up with a solution because the problem
is a legal one.
SENATOR OGAN personally thanked Dr. Rhyneer and his crew for
their good work. He then said that Alaska's small population is
the size of a small city in the Lower 48 and that insurance is a
problem in every sector of the economy. He noted that when the
legislature last dealt with tort reform legislation, there was a
lot of gnashing of teeth and yet those efforts did not stabilize
the insurance industry in Alaska. He expressed concern that the
problem may be the small market rather than exposure to
lawsuits.
DR. RHYNEER indicated the insurance companies have assured him
that [limiting damage awards] is the single most effective
attribute to malpractice legislation that makes a more
predictable environment to do business in. He said the insurance
companies cannot be forced to do business here. The state has to
create a climate that is attractive to insurance companies. If
it is not attractive, they will leave.
CHAIR SEEKINS thanked Dr. Rhyneer and closed public testimony
due to time constraints. He announced the committee would hear
an introduction to SB 323 and then reschedule it.
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