04/21/2005 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SB67 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 67 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
April 21, 2005
1:29 p.m.
MEMBERS PRESENT
Representative Lesil McGuire, Chair
Representative Tom Anderson
Representative John Coghill
Representative Nancy Dahlstrom
Representative Pete Kott
Representative Les Gara
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 67(JUD)(efd fld)
"An Act relating to claims for personal injury or wrongful death
against health care providers."
- MOVED HCS CSSB 67(JUD) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 67
SHORT TITLE: CLAIMS AGAINST HEALTH CARE PROVIDERS
SPONSOR(S): SENATOR(S) SEEKINS
01/21/05 (S) READ THE FIRST TIME - REFERRALS
01/21/05 (S) L&C, JUD
02/08/05 (S) L&C AT 1:30 PM BELTZ 211
02/08/05 (S) Heard & Held
02/08/05 (S) MINUTE(L&C)
03/01/05 (S) L&C AT 1:30 PM BELTZ 211
03/01/05 (S) Moved SB 67 Out of Committee
03/01/05 (S) MINUTE(L&C)
03/02/05 (S) L&C RPT 3DP 1DNP
03/02/05 (S) DP: BUNDE, SEEKINS, STEVENS B
03/02/05 (S) DNP: ELLIS
03/08/05 (S) JUD AT 8:30 AM BUTROVICH 205
03/08/05 (S) Heard & Held
03/08/05 (S) MINUTE(JUD)
03/17/05 (S) JUD AT 8:30 AM BUTROVICH 205
03/17/05 (S) Heard & Held
03/17/05 (S) MINUTE(JUD)
03/22/05 (S) JUD AT 8:30 AM BUTROVICH 205
03/22/05 (S) Heard & Held
03/22/05 (S) MINUTE(JUD)
03/29/05 (S) JUD AT 10:30 AM BUTROVICH 205
03/29/05 (S) Moved CSSB 67(JUD) Out of Committee
03/29/05 (S) MINUTE(JUD)
03/29/05 (S) JUD RPT 2DP 1DNP 1NR 1AM
03/29/05 (S) DP: SEEKINS, HUGGINS
03/29/05 (S) DNP: FRENCH
03/29/05 (S) NR: THERRIAULT
03/29/05 (S) AM: GUESS
03/30/05 (S) CORRECTED JUD RPT W/CS SAME TITLE
04/13/05 (S) TRANSMITTED TO (H)
04/13/05 (S) VERSION: CSSB 67(JUD)(EFD FLD)
04/14/05 (H) READ THE FIRST TIME - REFERRALS
04/14/05 (H) JUD, FIN
04/19/05 (H) JUD AT 1:00 PM CAPITOL 120
04/19/05 (H) Heard & Held
04/19/05 (H) MINUTE(JUD)
04/20/05 (H) JUD AT 1:00 PM CAPITOL 120
04/20/05 (H) Meeting Postponed to 4/21
04/21/05 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
SENATOR RALPH SEEKINS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 67.
THOMAS O'BRIEN
North Pole, Alaska
POSITION STATEMENT: Testified in opposition to SB 67.
GAIL VOIGTLANDER, Chief Assistant Attorney General - Statewide
Section Supervisor
Torts and Worker's Compensation Section
Civil Division (Anchorage)
Department of Law (DOL)
Anchorage, Alaska
POSITION STATEMENT: Provided comments regarding a proposed
amendment to SB 67, and responded to questions.
JAMES JORDAN, Executive Director
Alaska State Medical Association (ASMA)
Anchorage, Alaska
POSITION STATEMENT: During discussion of SB 67, relayed that
the ASMA urges the committee to support the bill, and responded
to questions.
BRENDA ARNEY (ph)
(Address not provided)
POSITION STATEMENT: During discussion of SB 67, provided
comments regarding her personal experience and responded to
questions.
TERRY SMITH (ph)
(Address not provided)
POSITION STATEMENT: Provided comments during discussion of
SB 67.
DENISE MORRIS, President and Chief Executive Officer (CEO)
Alaska Native Justice Center, Inc. (ANJC)
Anchorage, Alaska
POSITION STATEMENT: Provided comments during discussion of
SB 67.
RICHARD LOUIE
Anchorage, Alaska
POSITION STATEMENT: During discussion of SB 67, provided
comments regarding his personal experience, and asked the
committee to vote "No" on the bill.
MARGARET LOUIE
Anchorage, Alaska
POSITION STATEMENT: During discussion of SB 67, provided
comments regarding her and her husband's personal experience,
and asked the committee to vote "No" on the bill.
LESTER K. SYREN, Attorney at Law
Syren Law Offices
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to SB 67.
TIM DOOLEY
Anchorage, Alaska
POSITION STATEMENT: Provided comments during discussion of
SB 67.
RAY RICHARD BROWN, Attorney at Law
Dillon & Findley, PC
Anchorage, Alaska
POSITION STATEMENT: During discussion of SB 67, provided
comments, urged the committee not to pass the bill, suggested
other possible alternatives, and responded to questions.
BRIAN SLOCUM, Administrator
Tanana Valley Clinic
Fairbanks, Alaska
POSITION STATEMENT: Provided comments during discussion of
SB 67 and responded to questions.
ACTION NARRATIVE
CHAIR LESIL McGUIRE called the House Judiciary Standing
Committee meeting to order at 1:29:12 PM. Representatives
McGuire, Coghill, Kott, Dahlstrom, Gruenberg, and Gara were
present at the call to order. Representative Anderson arrived
as the meeting was in progress.
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
providers."
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
remarked:
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
Alaskan.
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
Idaho.
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
care.
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
bill."
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
asked.
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
database.
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
ago.
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
happening.
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
minutes.
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
concluded.
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
out.
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
following:
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
plaintiffs.
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
Anderson.]
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
practicable.
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
doctors.
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%)
disabling.
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
million.
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
damages.
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
members.
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.
ADJOURNMENT
3:35:20 PM
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:35 p.m.
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