Legislature(2005 - 2006)BELTZ 211

03/01/2005 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled
Moved CSSB 105(L&C) Out of Committee
Moved SB 67 Out of Committee
          SB  67-CLAIMS AGAINST HEALTH CARE PROVIDERS                                                                       
CHAIR BUNDE announced SB 67 to be up for consideration.                                                                         
SENATOR SEEKINS  said there is  some concern about whom  the bill                                                               
covers and that  it is intended to cover a  broad scope of health                                                               
care   providers   including   nurse   practitioners,   physician                                                               
assistants and doctors.                                                                                                         
DONNA MCCRADY, Alaska  Academy of Travel Lawyers,  opposed SB 67,                                                               
but she  immediately dispelled the  idea that  this is a  case of                                                               
lawyers against doctors.  She is a consumer of health  care and a                                                               
citizen in this state and  cares about physicians who are working                                                               
here. She is against the bill  because it is a solution in search                                                               
of a problem. The state already  has a damage cap of $400,000 for                                                               
physical  injury  and  $1  million   cap  for  serious  permanent                                                               
physical  injury or  severe  disfigurement.  She understands  the                                                               
lower figure has been proposed  because of concerns about the low                                                               
number of  physicians practicing  in the  state. But,  Alaska has                                                               
always had a  low number of physicians and data  shows that it is                                                               
She has found  anecdotally no link between the  number of doctors                                                               
in  the state  and the  amount  of the  non-economic damage  cap.                                                               
However, there is an issue with  the lack of a residency program.                                                               
Data shows  that any problems  doctors are having  with insurance                                                               
premiums have to do with the  stock market and nothing to do with                                                               
medical malpractice payout.                                                                                                     
     Particularly in this  state, we don't have  a crisis in                                                                    
     this state  with medical malpractice  - in  premiums or                                                                    
     with  payments   or  settlements....  Again,   we  have                                                                    
     damages capped in this state....  Let me explain from a                                                                    
     practical  matter...there   really  aren't   that  many                                                                    
     lawyers  in Alaska  practicing in  the area  of medical                                                                    
     malpractice  and   the  reason  why  is   it's  a  very                                                                    
     technical area  and it's very expensive  to bring these                                                                    
     If you put  a cap of $250,000  on non-economic damages,                                                                    
     I  can  tell you  right  now  that medical  malpractice                                                                    
     claims lawyers are not going  to be able bring cases on                                                                    
     behalf  of  children,  on  behalf  of  people  who  are                                                                    
     retired, on behalf of  stay-at-home spouses. The reason                                                                    
     why  is people  who are  victims of  medical errors  or                                                                    
     medical malpractice  that fall into those  categories -                                                                    
     those are  folks whose damages  are going to  be mainly                                                                    
     non-economic  value.  Unfortunately the  court  doesn't                                                                    
     put a lot  of economic value on the  lives of children,                                                                    
     stay-at-home spouses or retired  folks. It just doesn't                                                                    
     and sometimes just  the cost - it's not the  fees - can                                                                    
     be over $200,000. So, no  practitioner is going bring a                                                                    
     case on behalf  of somebody in one  of those categories                                                                    
     who  is a  victim  of malpractice  because they're  not                                                                    
     going to be able to afford  to do it. It's not going to                                                                    
     make  any  economic  sense.  So,  you're  going  to  be                                                                    
     cutting out  three categories of Alaskan  citizens that                                                                    
     I can  think of  from even having  access to  the court                                                                    
     system if they were to be victims of malpractice.                                                                          
     Further  there  is  already   standards  of  proof  for                                                                    
     bringing malpractice  cases, more  so than  other kinds                                                                    
     of  negligence  cases.  For  instance,  if  I  bring  a                                                                    
     negligence case, I  have to hire experts and  just by a                                                                    
     practical matter,  I'm going  to have hire  experts who                                                                    
     are in the  Lower 48 in order to bring  a case forward.                                                                    
     That can be quite costly.                                                                                                  
She was also concerned that she didn't see an exemption for                                                                     
gross negligence or reckless behavior in the bill.                                                                              
2:01:38 PM                                                                                                                    
PAT LUBY, Advocacy Director, AARP, believes that accidents do                                                                   
happen - even to skilled health professionals. AARP believes the                                                                
Legislature should focus on prevention, not on damages.                                                                         
     The  tort  system  encourages  providers  to  cover  up                                                                    
     mistakes to  avoid lawsuits  rather than  report errors                                                                    
     and learn  how to prevent  them.... If someone  is hurt                                                                    
     by a  medical mistake, they  are entitled to  some fair                                                                    
     compensation. What  is more important  is to  make sure                                                                    
     errors  are  reported  so  that we  can  learn  how  to                                                                    
     prevent them  in the future. AARP  thinks that $250,000                                                                    
     damages  would be  too  low  for non-economic  damages.                                                                    
     Older people  who have  limited income  potential based                                                                    
     on life  expectancy will get  less in  economic damages                                                                    
     than  younger  persons who  are  victims  of a  similar                                                                    
The  Institute  of  Medicine  (IOM)  has  proposed  testing  non-                                                               
judicial  no-fault alternatives  to the  tort system  for medical                                                               
errors.  It might  foster fair  compensation and  error reduction                                                               
and that  should be  the real  goal of  consumer-oriented reform.                                                               
Under  the   IOM  approach,  compensation   would  be   based  on                                                               
avoidability  of errors  rather  than  negligence. It  recommends                                                               
preset  schedules for  compensation with  reasonable limits  that                                                               
may  help  stabilize  malpractice premiums.  Providers  would  be                                                               
required to report errors and  make prompt compensation payments.                                                               
Mandated  reporting  of  errors  would help  experts  in  finding                                                               
system-wide ways to prevent them  in the future. The system would                                                               
continually improve  patient safety; with fewer  errors, the cost                                                               
of compensating injured people would eventually decline.                                                                        
2:03:14 PM                                                                                                                    
CATHY GIESSEL, Nurse Practitioners'  Association, said she had no                                                               
further comments.                                                                                                               
2:04:00 PM                                                                                                                    
SENATOR ELLIS moved Amendment 1.                                                                                                
                      A M E N D M E N T 1                                                                                   
OFFERED IN THE SENATE                          BY SENATOR ELLIS                                                                 
     TO:  SB 67                                                                                                                 
Page 3, line 1:                                                                                                                 
     Delete "$250,000"                                                                                                          
     Insert "$850,000"                                                                                                          
Page 3, line 17:                                                                                                                
     Delete "$250,000"                                                                                                          
     Insert "$850,000"                                                                                                          
CHAIR BUNDE objected for explanation.                                                                                           
SENATOR ELLIS explained  when people from other  states have used                                                               
California as an example of how  good a cap works, they have been                                                               
laughed out of the building. He  changed the amount of the cap to                                                               
reflect  a reasonable  CPI since  1975 in  Alaska and  in today's                                                               
dollars to $850,000.  Indiana and Virginia have a  current cap of                                                               
$1 million; Maryland has an $805,000 cap.                                                                                       
Industry  players  have  said  that   caps  don't  help  doctors'                                                               
premiums go lower.  That led him to think, if  there was going to                                                               
be a  cap, that it should  reasonable reflect the cost  of living                                                               
and economic circumstances over the  many years. His main concern                                                               
was  that  a  lower  cap   would  limit  access  to  counsel  for                                                               
legitimate cases.                                                                                                               
SENATOR SEEKINS asked what the California cap is today.                                                                         
SENATOR ELLIS didn't  know, but if left at the  1975 standard, it                                                               
would be woefully out of date.                                                                                                  
SENATOR  SEEKINS  reflected that  many  states,  as well  as  the                                                               
federal  government,  are  considering  a $250,000  cap  on  non-                                                               
economic  damages. The  bill deals  with non-economic  damages in                                                               
two sections.  The first cap is  at $250,000; if it's  severe, it                                                               
goes to $1 million. Alaska  doesn't have a definition of "severe"                                                               
in its  statutes, so the  court in one  of its cases  imposed the                                                               
definition -  if it  embarrasses someone,  it's a  severe damage.                                                               
This is the first  step, but it does not say  that's all that can                                                               
happen. If the accident gets  to a certain threshold of severity,                                                               
it immediately goes  to the $1 million cap. If  three quarters of                                                               
all  Alaska citizens  will not  be able  to bring  a case  if the                                                               
first step  of liability is  reduced to $250,000  (from $400,000)                                                               
the problem is worse than he thought it was.                                                                                    
CHAIR  BUNDE  noted  there  was  no  further  discussion  on  the                                                               
amendment. Senators  Ben Stevens,  Seekins and Chair  Bunde voted                                                               
nay; Senator Ellis yea; and Amendment 1 failed.                                                                                 
SENATOR  BEN STEVENS  moved to  pass  SB 67  from committee  with                                                               
individual  recommendations. Senators  Seekins,  Ben Stevens  and                                                               
Chair Bunde voted  yea; Senator Ellis voted nay; and  SB 67 moved                                                               
from committee.                                                                                                                 

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