Legislature(2003 - 2004)
03/11/2004 01:30 PM Senate L&C
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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
CHAIR CON BUNDE called the Senate Labor and Commerce Standing
Committee meeting to order at 1:32 p.m. Present were Senators
Gary Stevens, Bettye Davis, Ralph Seekins, Hollis French and
Chair Con Bunde. The first order of business to come before the
committee was SB 319.
MR. DON ROBERTS, Kodiak resident, said that SB 319 should not
have seen the light of day. He proclaimed that the Alaska state
constitution says all government originates with the people and
is founded upon their will, only, and is instituted solely for
the good of the people as a whole. "I assure you that neither
the Providence Health Systems nor the State Medical Association
speak for me or the people as a whole." He was concerned that SB
319 deprived people of due process.
MS. MEG SIMONIAN, Anchorage attorney, said she wanted to discuss
section 4 of SB 319 that amends AS 09.55.556. Subsection (c)
overrules two Supreme Court cases that set out reasonable
patient standards, which say basically that a doctor has to
explain everything to a patient that will allow them to make an
informed decision regarding treatment and procedures. This bill
would restrict that information to what the medical experts who
testified in the cases decided a reasonable patient should know.
The American Medical Association's code of ethics, section 808
adopts the reasonable person standard, not the standard that is
included in this bill.
You would be removing Alaska from a majority of states
that have set standards that the American Medical
Association says are appropriate in these cases and
putting it back many years....
MR. MIKE HOGAN, Executive Director, Alaska Physicians and
Surgeons, supported SB 319.
Three out of four doctors actually admit that this
liability crisis has changed the way they practice
medicine. HHS estimates it adds between 5 to 9 percent
to the overall healthcare costs in this country.
The question, do non-economic damage caps really help with
patient access to physicians, is addressed in the legislation.
An HHS study found that states with non-economic damage caps had
a 12 percent increase in the number of physicians per capita
versus states without the caps. Premiums in states with caps are
found to be 17 percent lower than in states without caps.
California adopted non-economic damage caps and from 1975 to
2001 its premium rates increased by 182 percent. Nationally, in
that same time period, rates went up 569 percent. The few
remaining insurance companies have been told that during that
same time period rates for physicians have gone up 1,593
percent. Testimony has indicated that Alaska's supply of
physicians is already at risk and any increase in premium costs
could be devastating to medical care in Alaska.
MS. CINDY LENTINE, Anchorage resident, said she used to be a
beautiful vibrant woman, but now she has no hair, no breasts,
her face is round from steroids and her body is tattooed from
radiation treatments. She will probably not live long enough to
see her grandchildren.
It is all because of negligence on the part of my
physician. Let me tell you why this bill is so
dangerous. By catering to the insurance companies and
the doctors, you're going to only encourage a
substandard level of professional [indisc.] Alaska.
Convincing evidence from other states shows that lowering non-
economic caps did not lower the insurance premiums for doctors.
Legitimate malpractice cases would not be brought forward
because winning will leave the patient clients worse off than
losing.
It renders medical malpractice cases almost impossible
to economically pursue. This is a scary piece of
legislation, because it allows insurance companies to
dictate jury awards. Yes, something has to be done
about medical malpractice insurance high rates for
doctors, but something also has to be in place for the
victims. This bill is not a vehicle to address these
issues....
MS. BRENDA ARNEY, Wasilla resident, related how in the summer of
2003 her husband, Bob, was diagnosed with a tumor on his lung.
He had surgery in Anchorage and his chances for recovery were
quite good. Pathologist reports showed there was no threat of
cancer and his doctor told him he could start exercising the
next day on a stationery bicycle. One night staff turned down
his monitors and left for a coffee break and during that time
Bob, while on heavy pain medication, disconnected his tubes and
catheter and walked out of the hospital making it to a trailer
two blocks away before he needed help. Three days later he died.
His death was caused by negligence of the hospital and
healthcare providers. The hospital said they were
sorry and that they would make changes in some
policies and they said they would erase some of the
hospital bills, but they did not bring Bob back. I
would like a jury to know these facts and judge my
loss, not the Legislature, not the hospital and his
doctors and not an insurance company.
Because Bob was retired, his economic damage loss in a
medical malpractice lawsuit would be quite small. My
pain and suffering since my loss of Bob really cannot
be valued by anyone but myself. Bob's agony before his
death was horrendous. I trust the judgment of a jury
of my and Bob's peers more than the Legislature, the
insurance companies and doctors valuing his life at
$250,000. Bob was my best friend, my soul mate and he
was priceless to me....
MS. DENISE MORRIS, President and CEO, Alaska Native Justice
Center, said she is concerned that SB 319 would apply in federal
tort claims act cases as well as state medical malpractice
cases. It will apply in cases involving federal healthcare
providers. The IHS facility medical providers do not have
medical malpractice insurance per se and are covered under the
federal tort claims act. This means that a private attorney
representing a plaintiff is rendering a defense against U.S.
attorneys.
If this passes, healthcare providers in the United
States will essentially be immune from cases where
malpractice seriously harmed the retired or elderly
Alaskans living in a rural or subsistence lifestyle,
mothers who do not work outside the home and children
who do not have any earned income. If someone from one
of these groups is seriously injured by malpractice,
their damages will primarily be non-economic. If non-
economic damages are capped at $250,000, no one will
be able to afford to bring these cases and, therefore,
they will not be heard and no remedy will be available
to these individuals that are injured.
Many citizens do not realize how difficult and
expensive it is currently to bring a malpractice claim
against a healthcare provider for negligence or
recklessness that causes harm. Many citizens do not
realize that we in Alaska already have non-economic
damages, which were capped by the Legislature in 1997.
In order for an Alaskan to bring a malpractice claim
against a healthcare professional, he or she must find
a medical expert working the same field as the
healthcare provider to prove that the standard of care
was breached. Sometimes cases require several experts.
It is practically impossible to find healthcare
providers in Alaska who are willing to do medical
malpractice cases. Therefore, experts are almost
always hired from outside the State of Alaska and are
extremely expensive. As you can imagine, it costs tens
of thousands of dollars in costs, alone, to
investigate and pursue a case of malpractice. It can
take in excess of $200,000 to actually go to the final
[indisc.].
Secondly, these cases rarely settle before there is a
tremendous amount of time, effort, work and expense
that is incurred. I am really concerned that if SB 319
is passed, it will have a tremendously adverse effect
on Alaska Natives who live a rural subsistence
lifestyle, for fishermen in the Bristol Bay region...
in the type of industry where a lot of accidents do
occur.
MR. WILLIAM COOK said he is an attorney in Eagle River who has
had several professional malpractice cases, but has not had a
great deal of medical negligence experience. He related how
young people in his congregation volunteer their time teaching
children and they are totally innocent of what is going on. It
would also adversely affect retirees, young stay-at-home
mothers, home-schoolers and Natives.
MR. LES SYREN, Vice Chair, District 31, Republican Party, said
he has a lot of healthcare providers in his family. He is also a
plaintiff's attorney, but as a Republican, he has several
problems with this bill.
First, it seems like we're institutionalizing
prejudgment of a case.... The other thing that offends
me as a Republican is this idea of personal
responsibility.... If we're giving special treatment
to this one group of people, not for any reason other
than they won't be able to get insurance supposedly or
their assets might be at risk, something like that,
that's not right. That just offends my sense of
personal responsibility....
He related several cases involving malpractice - one in which a
sponge was left in a woman's stomach and another in which a
woman had a fibroid removed from her uterus that unbeknownst to
her or her doctor had a viable fetus in it. "Let's not put the
burden on the innocent victims."
MR. PAUL DILLON, Dillon & Findley, had three areas of concern
regarding the effects of this bill on individuals across the
state.
I'm not going to discuss that. It's obvious that this
has profound effects on Alaskans in a very real
sense.... I'm going to cover whether or not the
removal of Continental and Northwest create a market
crisis for doctors, which has been alleged here. I'm
going to talk and address briefly a question of
premium crisis in the context of is there a premium
crisis and, thirdly... I'm going to address whether or
not there's any fixes out there that this committee or
this Legislature should consider as alternatives to
the saddling of Alaskans with the effect of a cap on
damages.
CHAIR BUNDE asked him to limit his testimony to five minutes.
MR. DILLON replied:
Whatever you want, sir.... I have handed out... a list
of all of the various malpractice that has occurred in
this state from 1990 forward as defined by the Alaska
Medical Board. This is a reporting that is required
for purposes of settlement or judgment.... In a
nutshell it defines medical malpractice to a large
degree in this state. We, therefore, know who the
victims of medical malpractice are and who the
practitioners are in the context of what is going on
in the real life situation of hospital medical care.
The one party that is not present is the insurance
companies, themselves. I have also provided you with
th
certain pages and excerpts from the 65 annual
report... I'd like to go over those with you
briefly....
He showed the committee that Norcal has 33.43 percent of the
market and Medical Insurance Exchange of California (MIEC) has
34.92 percent and the relative size of the companies. Between
the two of them, they control 70 percent of the market.
Northwest decided to pull out of the Alaska market after asking
for a 100 percent increase in their premiums, which was declined
by the Division of Insurance. He didn't know how many doctors
were affected by this, but he knows they then tried to get
insurance through MIEC or Norcal. If they didn't get insurance
through them, they had the option of going to a surplus line,
which is typically used by individuals who are unable to get
insurance through the normal market. A third way doctors can
seek insurance is the direct approach. They can call an
insurance company directly whether the company is in the state
or not, but this doesn't happen often.
As of 2002, 70 percent of the market was controlled by the
providers that are still here. He didn't know what percentage of
physicians and surgeons were affected by the removal of
Northwest and Norcal. He submitted to the committee that there
is not a crisis for doctors to get malpractice insurance. In
1978, the State of Alaska created an insurance company of its
own. Through the next 10 years it was tremendously successful
and kept premiums down for physicians and, because of its well-
run and effective liability section, it held claims and payouts
down. "So, we already have in the context of experience, a
successful way to resolve our problems."
MR. DILLON said that a number of his family members are doctors.
The last time doctors faced a premium problem where they felt
they were paying too much, they came to the Legislature, who
adopted a process that protected them, but also protected the
rest of Alaska. [END OF TAPE]
TAPE 04-22, SIDE B
2:20 p.m.
MR. DILLON said the purpose of insurance is to cover ourselves
in the event of a mistake. There has never been an attempt to
shift the burden of a mistake from doctors to victims.
That's what this cap is doing, especially in light of
the fact that you already have a cap. Why are we doing
this? We have a cap that exists in the context of what
we are dealing with every day in the courts as it
stands right now.
CHAIR BUNDE asked him to summarize.
MR. DILLON responded that would be hard, but rather than
summarize he went to the question of the review process for
premium rates. The Division of Insurance reviews the premiums
that are charged to physicians and judges them on three
standards - that the rate is not excessive, that it is not
inadequate (too low) and that it doesn't unfairly discriminate.
This means that the premium rates for all companies are going to
be between a range. The more effective and efficient companies
are going to be on the lower end and be able to lower premiums
somewhat. The less efficient are going to have to charge higher
premiums, but generally, all companies are within a marketable
range.
So, you have watchdogs in place. Just as Northwest
came in and sought a massive increase in their premium
base, which was denied, I submit to you that present-
day premiums, while high, and for all I know sitting
here - and I don't know - let me be very clear about
that - whether that constitutes such a percentage of
the doctors' cost as to make it an overwhelming burden
such that it's going to drive them from the state. I
submit, I don't think so, personally.... That cost
factor is certainly less than 5 percent on a national
average, but I don't think that premium cost is going
to drive doctors from the state, especially when we're
not HMOs. These guys can make as much money as they're
willing to go for in the context of what they do.
SENATOR HOLLIS FRENCH said a report about physicians practicing
in Alaska showed a trend over the past 17 years with respect to
our population. The number has gone up pretty steadily over that
time. He thought the appropriate year to look at would be 1997
when tort reform went into effect. Up until that time the number
was increasing, but after that time the number increased, as
well.
Another plaintiff's attorney pointed out to him that this bill
would put victims of car crashes in far better standing in the
eyes of the law than victims of negligence on a doctor's table.
The point made was:
Why would you handle those two people differently? Why
would you allow a person in a car crash to press all
their claims in court and cap the rights of person
damaged on an operating table. I think it is hard to
draw a principle distinction between those two.
SENATOR SEEKINS said he was sure the Labor and Commerce
Committee had looked as far into the matter as it could within
the purposes of the committee. He moved to pass SB 319 from
committee with individual recommendations and attached fiscal
note.
SENATORS HOLLIS FRENCH AND BETTYE DAVIS objected.
CHAIR BUNDE asked for a roll call vote. Senators Gary Stevens,
Ralph Seekins and Chair Con Bunde voted yea; Senators Bettye
Davis and Hollis French voted nay; and SB 319 moved out of
committee.
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