Legislature(1993 - 1994)

09/10/1993 09:00 AM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  REPRESENTATIVE MACKIE asked Mr.  Ford if he was going  to be                 
  at the meeting throughout the day.                                           
  MR. FORD answered in the affirmative.                                        
  Number 192                                                                   
  SHARON  ANDERSON,  Associate   Executive  Director,   Alaska                 
  Regional Hospital,  Anchorage, stated  she was  representing                 
  the Alaska State  Hospital and Nursing Home  Association and                 
  speaking in support of HB  292, reforming Alaska's liability                 
  laws.    The   association  is  a  trade   and  professional                 
  association   representing    Alaska's   community    health                 
  MS. ANDERSON said hospitals, as well as all health providers                 
  in Alaska and across the country, are committed to improving                 
  access to health care while maintaining  the high quality of                 
  health care.                                                                 
  Medical liability has a direct impact  on access to care for                 
  many Americans.  In addition,  the current medical liability                 
  system  contributes significantly  to  the  cost of  medical                 
  MS. ANDERSON said HB 292  contains many provisions that have                 
  proven   successful  in  other   states  to  have  liability                 
  insurance available  to all  health providers  at affordable                 
  But, before touching  on the particulars  in HB 292, let  me                 
  review briefly the need for liability reform:                                
  The Issue                                                                    
  Those of us  who manage Alaska's  hospitals believe that  as                 
  the  debate  over health  reform  and health  care financing                 
  proceeds,   the   problems  caused   by   the  high   price,                 
  inefficiency, inequity and  glacial slowness of the  current                 
  medical  malpractice   and  adjudication   system  must   be                 
  addressed by the state legislature.                                          
  Persons  who  are negligently  injured  by medical  care are                 
  entitled to prompt and fair  compensation of their injuries.                 
  However, the current way that we seek to do this is anything                 
  but prompt and fair.                                                         
  Numerous  studies   over   the  past   twenty   years   have                 
  demonstrated that the present system for redressing injuries                 
  caused by medical care:                                                      
  1.   Costs far too much and works much too slowly.  The                      
       cost of claims  handling and litigation, including                      
       the cost  of both plaintiff and defense attorneys,                      
       consume over  half of  the professional  liability                      
       insurance dollars, meaning that  less than half of                      
       that dollar is returned to the injured patient.                         
  2.   The current system fails to  provide access to the                      
       legal  system for  many,  particularly those  with                      
       small claims.  Also, the  current system sometimes                      
       awards nothing  to  some  with  legitimate  claims                      
       while lavishing exorbitant amounts on others.                           
  3.   Numerous studies show that billions of dollars  of                      
       our  national  health  care  costs  are  spent  on                      
       defense  medicine.   Doctors are induced  to order                      
       more examinations, test, and procedures as a hedge                      
       against accusations of neglect or negligence.                           
  4.   Finally,  the  current system  seriously threatens                      
       access to  health care, particularly  to high risk                      
       services such  as obstetrical  care and  emergency                      
       room care and  to all types  of care in the  rural                      
  It must be recognized that the major reform called for in HB
  292  may not  immediately reduce  overall medical  liability                 
  insurance costs, but it should result in quicker and  fairer                 
  settlement of claims.   The system will be more  predictable                 
  and will help patients, providers,  and underwriters and, in                 
  the long run,  will make  the delivery of  health care  less                 
  expensive and  the cost  of insurance  both predictable  and                 
  House Bill 292 contains the following provisions  (sections)                 
  which we  feel  are vital  to  medical liability  reform  in                 
  Alaska.  Most of the provisions have been reviewed:                          
  Statute of Limitations                                                       
  Cap on Non-Economic Damages                                                  
  Limits on Punitive Damages                                                   
  Periodic Payments                                                            
  Collateral Sources                                                           
  Liability  of  Hospitals  for  the   acts  or  omissions  of                 
  nonemployed personnel.  Section 24:                                          
  MS. ANDERSON said she would like  to touch on the importance                 
  of this section of HB 292, as it is of the utmost importance                 
  to Alaska's hospitals.                                                       
  The intent of Section 24 is to return Alaska law to where it                 
  was prior to  an October, 198,7 Alaska  Supreme Court ruling                 
  entitled Jackson versus Powers.   At that time, the  Supreme                 
  Court held that a general acute  hospital care in Alaska has                 
  a nondelegable duty to provide  emergency room services, and                 
  therefore, is vicariously  liable for  the negligence of  an                 
  emergency room  physician, regardless  if  the physician  is                 
  employed by the hospital.                                                    
  This   means  Alaska  hospitals   are  responsible  for  the                 
  negligence of a non-employed emergency room physician solely                 
  because  the  hospital  is  required,  by  law,  to  provide                 
  emergency room services, regardless if the hospital has been                 
  This   decision  runs   counter  to   recent   trends,  when                 
  legislatures have attempted to protect the often named "deep                 
  pocket" defendants.   The language in  Section 24 of HB  292                 
  will protect Alaska's municipally owned and other  hospitals                 
  from being  named as  deep pocket  defendants in every  case                 
  involving physicians  negligence, even  though the  hospital                 
  was not negligent and has  done everything within its  power                 
  to comply with statutory and regulatory requirements.                        
  The hospital is and will continue to be liable for their own                 
  negligence  and  would  continue to  be  so  liable if  this                 
  section is adopted.                                                          
  MS. ANDERSON  said she  would like  to briefly address  this                 
  particular section and briefly address the current situation                 
  at the Alaska Regional Hospital pertinent to that.  There is                 
  a  statement  that will  be brought  up  later that  this is                 
  nothing but a legal (indiscernible) attempt of the hospitals                 
  to get out of liability for actions of non-employees and the                 
  hospital  could  escape  any   responsibility  for  what  an                 
  emergency room doctor does.  This  bill does not deprive any                 
  hospital patient  of  a cause  of  action against  the  non-                 
  employee who  may have  been negligent.   The hospital  will                 
  still be liable if it  negligently contracts with the person                 
  who is  unfit  to perform  health  care services,  and  that                 
  person subsequently injures  a patient.  At  Alaska Regional                 
  Hospital we do  require that all contract  positions provide                 
  proof of professional  liability coverage prior  to entering                 
  into any kind of  contractual arrangement that we  have with                 
  them.  It is  not the intent  to enter into any  contractual                 
  relationship without this requirement.                                       
  MS. ANDERSON said the Alaska State Hospital and Nursing Home                 
  Association would like to thank  the committee for beginning                 
  the  process  to thoroughly  review  the need  for liability                 
  reform in Alaska.   We know  today's hearing may raise  more                 
  questions than it answers,  so we stand ready to  provide to                 
  the committee additional information or data on the cost and                 
  access impact the threat of liability has on patient care in                 
  Number 278                                                                   
  CHAIRMAN HUDSON asked Ms. Anderson to  expand on the area of                 
  periodic payments that she  listed as one of the  provisions                 
  she felt was vital that Mr. Ford referenced as he  was going                 
  through the definition of the bill.                                          
  MS.  ANDERSON asked SUSAN  MASON, who had  been working with                 
  them  on  the review  of the  bill,  to respond  to Chairman                 
  CHAIRMAN HUDSON asked  Ms. Anderson to  send in any kind  of                 
  comments, critique,  examples, concerns or  support for  any                 
  provisions of the bill to him as he would see that it got to                 
  all of the members of the committee.                                         
  Number 295                                                                   
  REPRESENTATIVE MACKIE referenced since it was an educational                 
  process  for the committee,  he asked  that the  problem the                 
  hospitals  are  facing  was, should  an  outside  physician,                 
  private physician,  that may have  one of their  patients in                 
  one of the hospitals, which conducts surgery by the private,                 
  outside physician,  a non-employee  of the  hospital.   Your                 
  being named in all of the lawsuits that may be filed against                 
  the physician because it occurred in  the hospital, or is it                 
  only  directed toward  emergency room  care?   What  are you                 
  doing  as  far  as  having  your  own  personnel  administer                 
  emergency room care in  the liability problem?  I  am trying                 
  to understand  the  situation a  little  more whereas  if  a                 
  surgery,  malpractice  lawsuit was  filed against  a private                 
  physician, but  it occurred in  the hospital, are  you being                 
  named  in  those kinds  of actions,  and  is that  where the                 
  problem is at.  Could you define that a little more?                         
  Number 300                                                                   
  MS. ANDERSON stated it would be  helpful to the committee to                 
  know that all  physicians at  Alaska Regional Hospital,  and                 
  most  of   the  hospitals  in  the  state   of  Alaska,  are                 
  independent  practitioners.   They apply  for medical  staff                 
  privileges   for   various   (indiscernible)   or   surgical                 
  procedures  within  the walls  of the  hospital.   There are                 
  medical staff  rules, by-laws, that  they must  follow.   By                 
  doing so,  (indiscernible) process  that also goes  on.   As                 
  independent practitioners,  they are  the experts, they  are                 
  the ones who receive the education to know what tests should                 
  be ordered.  By going through that  application process, are                 
  granted privileges ultimately  by the  board of trustees  of                 
  the hospitals to perform those tests  and to treat and admit                 
  patients  within  the  hospital.    There  are  times,  with                 
  response  to  your question,  that a  hospital may  be named                 
  along  with a physician  that has been  a bad outcome.   The                 
  patient may then  file suit against the physician,  and then                 
  sometimes the hospital will be named.                                        
  MS. ANDERSON said  Section 24 is  an attempt to correct  the                 
  Jackson  versus  Powers  decision,  which  applied  only  to                 
  emergency room physicians.   There has been  discussion that                 
  this section  may be  interpreted in  a much  broader scope,                 
  bringing in other physicians, for example,  those who may be                 
  on  call  within   the  emergency   room  setting  or   just                 
  anesthesiologist  who  are  also independent  practitioners.                 
  The intent of Jackson versus Powers was limited in its scope                 
  to emergency room physicians.  So  that by having a contract                 
  with hospital based physicians, emergency room physicians or                 
  as radiologists, pathologists,  and anesthesiologists,  will                 
  enter  into  a  contractual  arrangement  with  a  group  of                 
  physicians  to  provide   that  care.     She  referred   to                 
  independent contractors  and said  we do  require that  they                 
  have  special  liability  insurance,  so   that  it  is  not                 
  releasing  the  physician from  having  coverage to  provide                 
  patients  with  a way  to  sue  the physicians.    Also, the                 
  hospital may  be continued to  be named  in a  suit such  as                 
  that.   Our hospital  did have  a lawsuit  filed against  it                 
  where the emergency room physicians were dropped as a result                 
  of the Jackson versus Powers' decision.   When the jury came                 
  back with the  fault assignment, 10 percent  was assigned to                 
  the patient, 10 percent was assigned to the hospital, and 80                 
  percent  was assigned  to  the physician.   But  because the                 
  physician was dropped  from the suit, the hospital  paid 100                 
  percent of the award that was  assigned by the jury in  that                 
  case.   What we are  seeking to  correct, is that  since the                 
  emergency room physician is an independent contractor,  then                 
  the hospital,  itself, has  no expertise  to determine  what                 
  care should be  rendered to  a patient.   The physician  has                 
  that, that the physician be held responsible for their acts.                 
  The hospital makes some business  decisions in entering into                 
  those contractual  relationships.  I  think that  it is  not                 
  unreasonable  to require that a hospital can choose to enter                 
  into  a contractual  relationship,  here required  to assure                 
  themselves as  well as  the patients  that the physician  is                 
  also covered.                                                                
  Number 359                                                                   
  REPRESENTATIVE MACKIE stated he was not clear as to what her                 
  position  was  on  that  particular  section  of  the  bill.                 
  Whether it was something you agreed with or disagreed with.                  
  MS. ANDERSON answered that they agreed with Section 24.                      
  Number 362                                                                   
  REPRESENTATIVE  MULDER stated  the  critics  would say  that                 
  Section 24 would simply result in hospitals contracting with                 
  all  employees.    If  they  have  no  employees,  they  are                 
  shielding  themselves  from  all liability.    What  is your                 
  response to that?                                                            
  MS.  ANDERSON  answered  she  did   not  think  that  was  a                 
  reasonable interpretation  of  the intent  of the  law.   It                 
  didn't make sense,  to her, to  not be held responsible  for                 
  acts  of your  employees.  On  the other  hand, if it  is an                 
  independent contractor, such as a physician, she felt it was                 
  unfair to ask  a hospital to  assume responsibility for  the                 
  acts  of  the  physicians.    Now  if  the  hospital  rented                 
  privileges  to a physician,  without doing proper procedure,                 
  that may be  that another  cause of action  that would  come                 
  REPRESENTATIVE MULDER asked if this  were enacted in Section                 
  24, would  she see Alaska  Regional Hospital making  more of                 
  their employees contract employees  as opposed to  employees                 
  per se.                                                                      
  MS. ANDERSON answered in  the negative.  She stated  that in                 
  fact, Jackson versus Powers addressed physicians, it did not                 
  address nurses as independent contractors.  As an example to                 
  be shown  later, as  rent a nurse.   In  my mind  those will                 
  still be determined to be employees of the hospital.                         
  Number 385                                                                   
  REPRESENTATIVE NORDLUND thanked Ms. Anderson and  referenced                 
  the fear  was exactly  how it  was stated.   The  particular                 
  statute was  drawn  very  broadly.   It  didn't  talk  about                 
  physicians,  it  spoke  about health  care  providers, which                 
  could  be basically  anybody who  purchased (indiscernible).                 
  If your concern really is just  for physicians, would you be                 
  in favor  of (indiscernible) apply  position (indiscernible)                 
  nurses and basically anybody who works in the hospital?                      
  MS. ANDERSON stated that without speaking on behalf of other                 
  hospitals within the Hospital  Association, our hospital  is                 
  not opposed  to that.   Other  hospitals may have  different                 
  definitions of independent contractors.   In this particular                 
  field,  it  would  require  hospitals  to post,  within  the                 
  hospital as well as publishing in to newspapers, those  non-                 
  employees  that  they  have  entered  into  the  contractual                 
  arrangement with.  Again, the example of the (indiscernible)                 
  having to post  that (indiscernible).   I  don't think  that                 
  there would be opposition to limiting those (indiscernible).                 
  REPRESENTATIVE  NORDLUND  brought  up   a  different  point,                 
  stating  general  comments about  the  bill, he  thought Ms.                 
  Anderson was correct that definitely  they will see there is                 
  certainly  an  effort  to  reduce   the  amount  of  claims.                 
  However, her point about this  legislation needs more prompt                 
  litigation  and court  action.   I don't share  your opinion                 
  about that  as I think  there are provisions  instilled that                 
  are really  going to make the  process more drawn out.   You                 
  may take another look at the bill, in terms of just how fast                 
  actions  are going to be made, to be brought (indiscernible)                 
  the court result (indiscernible).                                            
  Number 400                                                                   
  CHAIRMAN HUDSON  stated the committee initially  had invited                 
  the  Department of  Law,  the court  system,  and others  to                 
  participate in this hearing.  A  lot of the questions, those                 
  nature,  would  likely  be answered  by  them.    It is  the                 
  understanding that  the next  hearing will try  to bring  in                 
  some of the  procedural and the implications and the effects                 
  on systems from those various entities.                                      
  Number 423                                                                   
  REPRESENTATIVE  BROWN  asked Ms.  Anderson  if she  would be                 
  opposed to adding  a requirement for professional  liability                 
  coverage for whatever health care providers or physicians or                 
  whoever is ultimately to be covered under this section.  She                 
  asked Ms. Anderson  if she thinks  it would be a  reasonable                 
  thing to require hospitals to do?                                            
  MS.  ANDERSON answered  that  was  correct.   It  was  their                 
  current practice  at the Alaska Regional Hospital.  She said                 
  she was representing  the Hospital Association today  and it                 
  was  not  one of  the items  the  association voted  on when                 
  reviewing the bill.   She said  she would  be happy to  take                 
  that back to the association.                                                
  Number 437                                                                   
  REPRESENTATIVE GREEN did not know  hospitals worked this way                 
  but his wife was  a practicing dental hygienist and  I think                 
  (indiscernible)  required  that   because  of  dentists  had                 
  authority over her actions, that she  could no longer act as                 
  a  contractor,  and,   in  fact,   became  an  employee   of                 
  (indiscernible).  Would nurses also fall into that category?                 
  MS. ANDERSON referenced what crossed her desk the day before                 
  which was a definition of what is  an independent contractor                 
  is, as well as an employee.  She referred to not contracting                 
  with  employees   and  if  you  have  control  of  the  work                 
  (indiscernible) or  schedules and  what they  are doing  and                 
  such as standards  of care  then the  definition would  fall                 
  into were they are employees rather than contractors.                        
  Number 450                                                                   
  REPRESENTATIVE  MACKIE  had two  concerns  in regard  to the                 
  concern Representative  Brown brought  up about  health care                 
  providers  instead  of stating  position  or something  like                 
  that.  The first concern  is, who else would have  access or                 
  would be in a  position to be an actual health care provider                 
  that  would  have  access  to  the  facility  and  could  be                 
  essentially in that situation.  I think probably, that would                 
  need to be a little more clearly spelled out, I  would agree                 
  with that.   When you are (indiscernible)  contracting these                 
  doctors as  independent contractor  providing they  have the                 
  insurance  and the other  things that are  necessary.  Would                 
  anybody  working  for them  also  (indiscernible)  that same                 
  contract?  Who else would follow that definition?                            
  MS. ANDERSON answered by stating by  virtue of the contract,                 
  anyone who  works for them  must be  (indiscernible) by  the                 
  same requirements as the contractor.                                         
  REPRESENTATIVE MACKIE added so they fall under his liability                 
  and his  direction and so  forth.   Then the other  thing, I                 
  would also agree that  if we are going to look  at releasing                 
  the liability, that we  should also require that there  is a                 
  certain standard  of liability insurance  being provided  by                 
  the physician or  something of that  nature so that  somehow                 
  somebody doesn't slip in under  the wire, unintentionally or                 
  anything  else,  without  any  kind  of  insurance  and  the                 
  hospital is resolved to that  responsibility.  The physician                 
  may or may not have that, then the person that  suffered the                 
  injury  won't have any recourse.  It may be best spelled out                 
  in statute.                                                                  
  Number 488                                                                   
  REPRESENTATIVE  FINKELSTEIN  asked  Ms. Anderson  if  in the                 
  Alaska  Regional  Hospital  are  any  of the  physicians  in                 
  employee positions, or if they are all contract positions.                   
  MS.   ANDERSON   answered    they   were   all   independent                 
  practitioners and some of them were contract, but not all.                   
  MS. ANDERSON stated the intent of this section would be that                 
  if  the  hospital  chooses  to   enter  into  a  contractual                 
  relationship for a physician to provide care, such as in the                 
  emergency  room,  which  was the  intent  of  Jackson versus                 
  Powers, if it were  more broadly extended to those  where we                 
  have contracts.  For instance,  contracts with physicians to                 
  read EKG's or to do neurological studies  or radiologist who                 
  might perform a  test.   Those positions with  whom we  have                 
  contractual  arrangements,  that  they  be  required  to  be                 
  responsible for  their actions.   In our hospital,  to enter                 
  into  a  contractual arrangement,  they  must show  proof of                 
  professional liability insurance.                                            
  Number 542                                                                   
  REPRESENTATIVE FINKELSTEIN  referenced the way  Ms. Anderson                 
  envisioned what she would like to  see happen with the bill.                 
  The hospital would be liable for  some of the positions, the                 
  ones that were  directly working in the  emergency room, and                 
  not  liable  to others  that had  more of  a (indiscernible)                 
  basis,  they  are operating  independently.   Some  would be                 
  liable for some and not for others.  Is that what  you would                 
  see as where you would be liable for none of them?                           
  MS. ANDERSON stated  she felt  the goal of  the section  was                 
  that the hospital be held liable for its acts of omission or                 
  negligence and  that the physician  be held liable  to their                 
  acts of  omission or  negligence.   In some  instances, both                 
  parties might be named in a suit.                                            
  Number 550                                                                   
  REPRESENTATIVE FINKELSTEIN guessed the answer was that there                 
  would be not  a single  physician in the  facility that  the                 
  hospital be liable for in the way it's interpreted.  Is that                 
  what you are  saying?  I'm just  trying to see if  there are                 
  two  groups or  one  group.    Is  there  a  group  that  is                 
  independent that  the hospital is  still going to  be liable                 
  REPRESENTATIVE MACKIE answered, your own employees, right.                   
  MS. ANDERSON answered correct.  But not for non-employees.                   
  REPRESENTATIVE  FINKELSTEIN  stated  there   would  be  some                 
  physicians that are still employees.                                         
  MS. ANDERSON answered that in their  facility, there are not                 
  any  who are  employees.   There  are facilities  within the                 
  state of Alaska who do employ  physicians and that would not                 
  take away their responsibility in this particular section as                 
  I read it.                                                                   
  REPRESENTATIVE    FINKELSTEIN    referenced     the    point                 
  Representative Mulder  discussed  and  asked  wouldn't  this                 
  section create an incentive for those hospitals that do have                 
  employees  who  are  physicians  to   convert  them  all  to                 
  contracts because they would reduce  their liability.  There                 
  is not much incentive to  have them as your employee  if you                 
  couldn't  sever liability.  Isn't  that the incentive we are                 
  MS.  ANDERSON  stated it  was a  tough  question for  her to                 
  answer because  from her hospital  practice that is  not the                 
  situation.  It is certainly a valid question to take back to                 
  the association.   I do not  believe that was the  intent to                 
  allow  hospitals  to  get  out  of  any  liability  for  the                 
  physicians to escape that (indiscernible).                                   
  Number 569                                                                   
  REPRESENTATIVE GREEN found  it a  difficult situation for  a                 
  reputable hospital  to authorize a physician to have been in                 
  the practice of  contracting a physician and  then drop them                 
  and  still  not  require  the  physician  to  have  adequate                 
  insurance.  It seems  to me that we're looking  for possible                 
  problems which means  you can ride  a bicycle.  We're  going                 
  way  too  far, I  think,  in  trying to  determine  what the                 
  possible  ramification  of  the  hospital  trying  to  avoid                 
  litigation by requiring  all the doctors, in  that hospital,                 
  to  be  independent  contractors.    As  long  as  they  are                 
  employees, the hospital  will be liable.   If they are  not,                 
  then they're  liable under their  own insurance program.   I                 
  don't see that that is any different than  going to a doctor                 
  who is not in a hospital.                                                    
  Number 591                                                                   
  REPRESENTATIVE FINKELSTEIN stated he was just trying to find                 
  out what  the categories are.   We did  find out  that their                 
  hospital  doesn't have  any but  other hospitals do.   There                 
  would  be some  incentive  for that  standard,  which I  was                 
  trying to say.                                                               
  CHAIRMAN HUDSON  added the  incentive could  be either  way.                 
  There certainly has  to be some  incentive to have your  own                 
  doctor attached to  the hospital and  perhaps this would  or                 
  would not have any effect upon that.                                         
  Number 600                                                                   
  REPRESENTATIVE  MACKIE understood  where the  hospitals were                 
  coming from.  It  is probably like any one of  us feel, that                 
  we are responsible for our own actions but something that is                 
  totally out of our control, it is a little bit harder  to be                 
  responsible  for.    There  are  other employees  and  other                 
  responsibilities of liability in which you would still have.                 
  You have cardiology, x-ray technicians,  nurses, a number of                 
  other hospital  staff  and employees  and  probably  on-duty                 
  emergency  room  doctors  and  physicians  that come  in  by                 
  ambulance and  people that  come in  by ambulance  and other                 
  things that the hospital would still... I don't look at this                 
  as an attempt to get out  of all liability.  I look at  this                 
  as an  attempt of not being able to  control the action of a                 
  physician.   That is  not an  employee, an actual  employee,                 
  under your supervision in the hospital, is that correct?                     
  MS. ANDERSON answered that was correct.  As she read it, the                 
  hospital would still  be liable  if we negligently  contract                 
  with a physician or  a group of physicians who are  unfit to                 
  perform the health care services.                                            
  REPRESENTATIVE  MACKIE  added  if  you  were   negligent  in                 
  allowing them to utilize the facility, why not.                              
  TAPE 93-40, SIDE B                                                           
  Number 001                                                                   
  REPRESENTATIVE  PORTER  agreed with  Representative Mackie's                 
  position.    My impression  of  this provision  is  to allow                 
  hospitals  to not be responsible for  positions when they do                 
  not exercise control, training, supervision and those  kinds                 
  of standard  definitions (indiscernible).   Those  hospitals                 
  which have doctors  in that capacity as  employees, there is                 
  some  reason that they do and I  don't see this as providing                 
  that great of an incentive because  as is required now, that                 
  insurance  has  got to  be  provided  by one  or  the other.                 
  (Indiscernible) equity and responsibility if the association                 
  can come up with any definition, for example, an independent                 
  contractor that might add the issue that we are discussing.                  
  REPRESENTATIVE  MACKIE  added, as  we  progress  through the                 
  subcommittee process with this bill, we are bringing out the                 
  points  that  we   need  further  clarification  on.     Not                 
  necessarily whether  we are supportive or  non-supportive of                 
  that particular issue, but at least  getting the bill into a                 
  position that can  be either  supported or non-supported  by                 
  members of the legislature.  I  think that is real important                 
  that we clarify  each one of  these types of  areas that  we                 
  debate.    I  look  at  that  for our  purpose  here  today,                 
  initially to identify this.                                                  
  Number 016                                                                   
  CHAIRMAN HUDSON stated that  was exactly what we are  trying                 
  to do here, is  to understand all the ramifications  of this                 
  very complex body  of policy  and cause and  then to try  to                 
  expand those areas where  we have some questions as  to what                 
  the application (indiscernible).                                             
  CHAIRMAN HUDSON added, that when this first came before him,                 
  personally, not  being in the  industry, he always  tries to                 
  look for the  reasons behind  these kinds of  justifications                 
  for  making  changes.   Since  you and  those  you represent                 
  obviously  believe  that  the  statute  of  limitations  and                 
  obviously section 24,  collateral sources, periodic payments                 
  and things of this  nature, are positive, that it  makes for                 
  improvements.   We've heard  the terms that we want to  make                 
  insurance  more  affordable,  we   want  to  streamline  the                 
  process, we want  to reduce  the time in  which the  injured                 
  party can  receive compensation  and the  settlement can  be                 
  taken off  the  books.   In  those areas,  any  suggestions,                 
  applications or problems, what you hope to be the  solutions                 
  through the various segments of the bill, we would sure like                 
  to have that  input with us so we  can all better understand                 
  MS. ANDERSON answered, she would be happy to provide that.                   
  Number 033                                                                   
  REPRESENTATIVE NORDLUND, added  that as  far as the  request                 
  for  information, maybe  the  committee  could receive  some                 
  documentation  of  what (indiscernible).    How the  medical                 
  liability contributes to the cost, the operating cost.                       
  Number 058                                                                   
  BREAK FOR LUNCH                                                              
  Number 059                                                                   
  CHAIRMAN HUDSON asked Dr. McGuire to make his presentation.                  
  Number 068                                                                   
  DR.  DAVID  MCGUIRE,   Orthopedic  Surgeon,  practicing   in                 
  Anchorage for 20 years was next to testify.  I am associated                 
  with the Alaskan's for  Liability Reform and I speak  as one                 
  of their delegates today.  Mr. Tovanny  is here as well.  He                 
  has  expertise  in the  area  of structured  settlements and                 
  annuities.  There were some questions this morning about the                 
  effectiveness of those structured settlements and annuities.                 
  If we have a few minutes for him,  he may be able to explain                 
  how they can work.                                                           
  The issue, as noted by yourself  and others this morning, is                 
  a  complicated issue.   Therefore, it does  take sometime to                 
  study each and every  one of these points of the  bill.  But                 
  because it is a  complicated issue, shouldn't deter us  from                 
  looking carefully at this because the  fact is that the tort                 
  system affects us all,  and sometimes it affects us  in ways                 
  that  we may  not even know.   It  indicates that  there are                 
  changes   in  business   practices  that   there   are  lost                 
  opportunities, that  there  are businesses,  that no  longer                 
  carry on useful functions.   Largely, this can be  traced to                 
  the  detrimental  effect  of insurance  rates  that  are not                 
  affordable, risks that cannot be defined of an ever changing                 
  pattern of liability in  the tort law.   It is important,  I                 
  believe,  that  we  should  all  understand  that  with  the                 
  exception of the 1986 changes and  with the exception of the                 
  initiative, all of the laws were,  in fact, made by judicial                 
  interpretation.  Put in another way, it is not the case that                 
  these laws have arisen  as a result of the  legislative body                 
  deliberating, and in  due process, producing  a law that  we                 
  all  have to  live  by.   It  is the  fact  that these  laws                 
  continue to be interpreted by the judicial bodies, and it is                 
  our opinion that they have been detrimentally interpreted to                 
  the  point  that  these  liability  burdens  are  no  longer                 
  sustainable.  I think we seek that in many different avenues                 
  of life, and certainly it is not only medicine, this affects                 
  everyone across the board.  If we were to take one or two of                 
  the points and  use them as  examples, not to say  that they                 
  are  the only examples that  could be found,  that may be of                 
  use.  In  this morning's Anchorage   Daily News, we  have an                 
  editorial by the Daily News concerning the  lawsuit that was                 
  filed against  the liquor  store by  the driver  that was  a                 
  minor at the time, and killed someone when he  ran through a                 
  red  light.    It  is  the  case  that  the  idea  of  being                 
  compensated for injury is  a good one, but our  present tort                 
  system has leaned so far that  anybody can sue for anything,                 
  at any time, with some expectation of compensation.  What we                 
  are trying to do with the legislation proposed, is to define                 
  precisely  what those  limits ought  to be,  and under  what                 
  circumstances compensation should occur.  I think most of us                 
  feel that when  someone is  in the process  of committing  a                 
  crime, that  they should reasonably have known was likely to                 
  bring  injury to  someone else,  that it  is ludicrous  that                 
  someone else  should have  to pay  for their  injuries.   It                 
  doesn't seem reasonable  at all, it doesn't  seem productive                 
  in  any way to society.  Here is an example:  Now whether or                 
  not the individual  prevails in this (indiscernible)  is not                 
  even the entire point.  The fact of the matter is, society's                 
  resources are being consumed in the arguing  of the lawsuit,                 
  both in terms  of the judges  that have to sit,  the lawyers                 
  that  are  there,  the defense,  the  cost,  etc.   We  have                 
  proposed, in  this legislation, that  it should be  the case                 
  that if  you are in the  process of committing a  felony, or                 
  committed  a felony, you should be  precluded from a lawsuit                 
  to recover your damages.                                                     
  The second piece of paper that  I gave you was taken from  a                 
  brief that was  filed with the  Supreme Court, the state  of                 
  Alaska, as we speak.  You may recall that in 1988, there was                 
  an initiative developed  by the Citizens Coalition  for Tort                 
  Reform.   That initiative had to do  with a concept of joint                 
  and  severability.  If I  may, for a  minute, just visit the                 
  history of joint  and severability.   The law  of the  land,                 
  prior  to   judicial  interpretation   was   one  known   as                 
  contributory negligence.    It  held that  if  you,  as  the                 
  plaintiff, were  so little  as one  percent responsible  for                 
  your own injuries, that you were precluded from a lawsuit to                 
  recover damages.  I think rightly so, that was harsh, and it                 
  showed  to be  none of  comparative negligence, which  it is                 
  with the exception  that prior to 1988, the law  was that of                 
  joint and severability  also known as  the deep pocket  law,                 
  which  then whomever  the  defendants was  able to  pay, was                 
  required to  pay, whether  or not they  were principally  at                 
  fault.   So we sometimes  had the ridiculous situation where                 
  the  municipalities were  able  to be  held  liable for  the                 
  entire costs of  an injury that  occurred, when in fact,  it                 
  was very little of the municipality that was at  fault.  The                 
  citizens of  Alaska voted  with approximately  a 70  percent                 
  margin, to  change this  law so  that the fault  would be  a                 
  portion amongst the  guilty party.   So if there were  three                 
  parties who were said to be negligent one of whom was 10 and                 
  another of whom was 20 and one of whom was 70, we  felt that                 
  they should pay in proportion to their responsibility.  That                 
  seemed fairly straightforward until things got to court, and                 
  then the ploy  of only suing  the party that apparently  had                 
  any resources came into play.  If an attorney  knew that the                 
  individual or  the entity  who was  70 percent  responsible,                 
  probably didn't have any  money, then what you could  do was                 
  (indiscernible)  the  party  that  was   10  or  20  percent                 
  responsible, and when  you get  to court,  you preclude  the                 
  jury from  understanding that  there was  somebody else  out                 
  there who was  more responsible than the  present defendant.                 
  Therefore, all the damages are awarded against the defendant                 
  because the jury doesn't get a  chance to understand who and                 
  what  was at  fault.   This  has now  been  appealed to  the                 
  Supreme Court.  It  is our intention that what we  meant and                 
  what we advertised and what the citizens of Alaska voted on,                 
  was that  in fact, we  wanted the portion  allocated amongst                 
  the people who  were at  fault, regardless  of whether  they                 
  happen to be in the court room that day.  We don't know what                 
  the court  is going to  say but  it is illustrative  of what                 
  seems to be  a straight forward  proposition, because it  is                 
  then interpreted in  what I would prefer  to (indiscernible)                 
  argument  that leads to  a conclusion  opposite of  what was                 
  Earlier today we talked about the concept of economic verses                 
  non-economic damages.  We also talked about the idea of lump                 
  sum  payments  verses  annuities  or  prorated  settlements.                 
  There is an  example, which I  think is illustrative of  how                 
  the situation goes at  the present and why  I think that  in                 
  the event  of society,  and the  injured person,  this thing                 
  should be  changed.   If a  person who  is 35  years old  is                 
  injured and  can't work  anymore, we  would normally  expect                 
  that they would  work until age 65,  which is 30 years.   If                 
  they made $30  thousand. a year, then  the present situation                 
  multiplied by 30  years times $30,000.  which comes up  with                 
  $900 thousand. and this is how the  damages are awarded.  It                 
  would be as if you went to  your employer and said I think I                 
  am going  to work for you for 30 years,  I'd like you to pay                 
  me  today for  all the money  that I  am going to  earn over                 
  those 30 years.  I think  you can see that sum is  meant for                 
  future income, not for the present income.  The consequences                 
  are  certain.   It  is  enormously  more  expensive  to  the                 
  society,  at  large, to  repay  this  kind of  money  and we                 
  (indiscernible)  the insurance  companies,  and so  on,  but                 
  remember that  somewhere that  money came  from a  business,                 
  from a working  person from somewhere the insurance  got the                 
  premiums.  The  more the insurance  companies pay, the  more                 
  they are going to charge us.  We can debate that all day but                 
  they don't get  the money off trees.   The second thing that                 
  happens to the injured and innocent victim, is that they now                 
  have  a lump sum  of some $900  thousand.    It has been the                 
  case on more than one occasion,  that five or ten years down                 
  the road, the money is entirely gone, but  the injury is not                 
  gone.   Then the person has no  alternative but to return to                 
  the state or some other agency for support for the injury of                 
  which continues.   It is set up an annuity program, and this                 
  can be done,  as I said, very reliably.  I can speak of that                 
  even  in  the  case  of  the  executive  (indiscernible)  in                 
  California.  The people that were  on annuities, in the end,                 
  continue to  receive their annuities,  in spite of  the fact                 
  that the company went bankrupt.                                              
  We have proposed that it should be a  structured settlement,                 
  and the  structured settlement  should acknowledge  the fact                 
  that all of this money isn't earned today, that in fact that                 
  it is earned  over time, it should  be paid over time.   The                 
  same is true  with future non-economic damages,  future pain                 
  and  suffering.   If you pay  it in  a lump sum,  then it is                 
  available today,  but it  may not  be available  when it  is                 
  needed and we  would argue that  the same kind of  treatment                 
  should apply.   The damages should  be repaid in the  normal                 
  course of how  they would  have been earned  as proposed  to                 
  having  a lump sum  payment.  The cost  of providing such an                 
  annuity can be  as little as  one-third of the  cost of  the                 
  lump  sum  payment.   There is  an  enormous savings  to the                 
  system, and I keep saying the  system because it is in  fact                 
  the system, it is not just a single insurance company.  Each                 
  one of these examples in this legislation is the result of a                 
  interpretation by a judge  somewhere.  None of them  are the                 
  result of a deliberate body, such as yourself, sitting down,                 
  deciding what  it is would be the  best law of the  land.  I                 
  would suggest  that there  is absolutely  nothing wrong,  in                 
  fact  there are  many things  right,  with an  approach that                 
  leads us to  deciding what is  going to be most  reasonable,                 
  what is going to  benefit the largest number of  people, and                 
  what  is   going  to   make  this   system  affordable   and                 
  If I may say  just a word about the statute  of limitations.                 
  The  problem  with the  statute  of limitations  is  that it                 
  essentially exists no longer.  If you do  something, whether                 
  you meant  to cause harm or  whether you knew  the event may                 
  have occurred; whether  you were  negligent, you don't  know                 
  when you  may be sued for  something that you've done.   For                 
  example, a pediatrician  who takes  care of a  child can  be                 
  sued up to 21 years later.  If the injury occurred at birth,                 
  when  the child  reaches  the  age  of  maturity,  they  are                 
  empowered under  the present statutes  to file a  lawsuit on                 
  their own behalf.  The problem with that is that there is no                 
  predictability.  When  there is no predictability,  there is                 
  no insurance,  so we  witnessed the development  of what  is                 
  known as claims made insurance.  It  used to be that when we                 
  thought  of insurance,  we thought of  occurrence insurance.                 
  That  is  if  something  we did,  eventually  resolved  in a                 
  lawsuit, then we  would be covered,  regardless of when  the                 
  claim was made.  That left the insurance companies with what                 
  they call,  "the long tail."  It  left them with an exposure                 
  of 20 years  or more  and they couldn't  predict what  their                 
  loss would be so they found a clever way of putting the loss                 
  back on the  individual or  business or the  person who  was                 
  insured.  Here is how they did it.  They said, O.K., we will                 
  only write claims  made insurance.  "Claims  Made Insurance"                 
  means that you must  be insured when the event  occurred and                 
  you must be insured when the claim  is made.  If you have an                 
  event  occur  in year  one but  you  aren't sued  until year                 
  three,  if  you are  not  insured  with the  same  insurance                 
  company  or  if you  haven't  bought a  very  expensive tail                 
  coverage,  you  won't  be  covered.    This  exact  scenario                 
  occurred to the  doctors in Cordova.  They  bought insurance                 
  for three years and  each year the insurance was  higher and                 
  higher and  higher and  in the  fourth year,  they could  no                 
  longer afford the premiums nor  could they afford the  tail,                 
  which was 1 1/2 times what the premiums would  have been for                 
  that  year.    They were  forced  to  quit  buying insurance                 
  altogether, and as  a result of that,  the insurance company                 
  kept all the  money and they  were uninsured for any  claims                 
  that were filed after the third  year, no matter if they had                 
  occurred  during  the  first  three  years  that  they  were                 
  insured.   Claims made insurance  is not unique to medicine.                 
  It is in many many areas of life where we have the situation                 
  of  claims made  insurance.   What in  effect has  happened,                 
  then,  is  the  insurance companies  have  responded  to the                 
  unpredictability of the affects of the statute of limitation                 
  and it does so in a  way that puts the ultimate burden  back                 
  on the person  who is  supposed to be  buying insurance  for                 
  events that were out of their  control.  Dick Cavanaugh, who                 
  is  the chairman for the Alaskans  for Liability Reform, has                 
  made this point.  Murder is the only crime that doesn't have                 
  a statute  of limitations.   If  you rob  a bank  or if  you                 
  embezzled,  or  if you  do  these  other things,  there  are                 
  statute of limitations in which an action can be brought.                    
  I had  a conversation this morning in which punitive actions                 
  are not now limited by a statute of limitations.  On the one                 
  hand, we have a criminal behavior that enjoys the statute of                 
  limitation,  but  on  the  other  hand,  you  have  ordinary                 
  business activities which do not.   It seems to be ludicrous                 
  that it should be that way.  With  a statute of limitations,                 
  there  is the  opportunity for  an insurance  to once  again                 
  become  an  occurrence  insurance instead  of  claims  made.                 
  There is the  opportunity for  individuals in businesses  to                 
  have some control over the future direction of the lives and                 
  their businesses.   As it  is now,  an architect  may be  20                 
  years  down the road, may be  out of business, may no longer                 
  be practicing,  and can still  be sued for  something he/she                 
  did while  in practice.   That doesn't  seem reasonable,  it                 
  doesn't  seem  productive.   Time moves  on.   I'm  happy to                 
  discuss any of these issues.   I think there is going to  be                 
  ample discussion as  the session goes  on and each of  these                 
  points will be (indiscernible).   The Alaskans for Liability                 
  Reform has  prepared a  graph paper  which I  think you  all                 
  have, which takes each of these points and tries to show the                 
  changes that is made in legal  terms, if you will, and then,                 
  in plain  English, tells you  our reasoning behind  each and                 
  every one of these.                                                          
  Perhaps a short word and then I would like to leave a little                 
  time for questions for Al.  There is one other controversial                 
  rule  of the court, known as Civil Rule 82.  If I might take                 
  just one moment to  say how that works.   In (indiscernible)                 
  the idea that the other person should pay your law  bills if                 
  they sue  you wrongly, is  a great idea.   It deters  people                 
  from frivolous lawsuits.  If you are vindicated and you win,                 
  you  get  your fees  from  the  lawyer back.    In practice,                 
  however, it has been anything but a  good idea.  The problem                 
  is that when  the defendants insurance company  or otherwise                 
  able to pay  the bill is at  fault, damages for Rule  82 are                 
  always assessed.   Prior to the 1986  legislation, there was                 
  even a schedule  contingent fee for non-contested  cases for                 
  Rule 82.   If,  at that time,  you agreed  that it  was your                 
  fault,  you agreed to  pay it, you would  still be forced to                 
  pay a  percentage of the  final settlement  even though  you                 
  didn't argue  the case.   That was changed  in 1986, but  we                 
  still have this  issue of Rule  82.  The Citizens  Coalition                 
  sued the attorney general for  an interpretation of the law.                 
  We felt that it would be proper to take as an initiative the                 
  subject of the  contingent fee.   The attorney general  said                 
  that  it was the  province of the  court and that  the court                 
  rules are (indiscernible)  to the  initiative process.   The                 
  trial bar asked  to be adjoined  in the suit.   We told  the                 
  judge that we  didn't want them to be adjoined  in the suit,                 
  we wanted the attorney general to render an opinion in court                 
  as to why this should be.  The judge, nevertheless, enjoying                 
  the trial bar,  the lawsuit, and  then found against us  and                 
  the rule 82 fee of $10 thousand.   The state, meanwhile, had                 
  only  $2 thousand for their Rule 82 fees.   We had to post a                 
  bond  of $10 thousand  in order to  appeal this case  to the                 
  Supreme Court.  The Supreme Court  ruled against us and said                 
  that the rules  of the court, including  attorney's fees are                 
  the proprietary (indiscernible) that  the courts prerogative                 
  that they are not addressable  in any way, shape or form  by                 
  the initiative process and they took our $10 thousand, thank                 
  you very much.   Rule  82, on  the other side,  there was  a                 
  worker who sued  an oil company, the big bad oil company, as                 
  you know,  and lost.  The  oil company then asked,  in turn,                 
  for their Rule 82 fees.  It amounted to a substantial amount                 
  of money.  The individual appealed to the Supreme Court, and                 
  the  Supreme Court  is coming  out with  a very  complicated                 
  formula of Rule 82 that says if  you make so much money, you                 
  only have to  pay a percentage.  But if you make more money,                 
  then you have to pay another percentage, - so on and  so on.                 
  You can get this opinion, of which I  think became in effect                 
  July 15  of  this year.   We  argue, that  if  Rule 82  were                 
  equally applied across  the board, if everybody  lived under                 
  the same rules,  then it  might, indeed, be  effective as  a                 
  deterrent to litigation.   But when it is unequally  applied                 
  the way it has  been, traditionally, and the way  we've been                 
  docking that, that it is unequally applied.  All  it does is                 
  add more  money to  the pot and  it doesn't  do anything  to                 
  deter  litigation.   I  am  certainly  happy  to answer  any                 
  Number 320                                                                   
  CHAIRMAN HUDSON thanked  Dr. McGuire, stating his  testimony                 
  was helpful.                                                                 
  Number 324                                                                   
  REPRESENTATIVE   FINKELSTEIN   appreciated   Dr.   McGuire's                 
  testimony.  On Rule 82, just talking about it, which section                 
  was talking about the bill.                                                  
  Number 330                                                                   
  DR. MCGUIRE stated that  Section 24 takes a bit  of study to                 
  understand how something seems  to be saying it one  way and                 
  it ends  up meaning another way.  We  can't just say Rule 82                 
  is appealed, we have to go around  it, saying you can't have                 
  an  agreement to have this, and  in effect, it ends being an                 
  appeal  of Rule 82.   In a  sense, it is  saying that unless                 
  specifically  authorized  by  statute agreement,  attorney's                 
  fees may  not be awarded  to a party  in a civil  action for                 
  personal injury,  death or  property damage,  related to  or                 
  arising out of fault.  I want to take time to point out that                 
  no one  has said that  Rule 82 doesn't  work in the  case of                 
  civil litigants who  are not suing under the  tort statutes.                 
  When  you  have  two  relatively   equal  parties,  say  two                 
  contractors and say  two individuals  suing each other,  and                 
  both have something  to lose,  then Rule 82  has a  salutary                 
  effect because  both parties know that if  they don't settle                 
  this thing, somebody is  going to be paying the  other guy's                 
  attorneys fees.  We were  careful to point out then,  that I                 
  believe this language says that now, that this is reading us                 
  of Rule  82, only  as it  relates to  court law  to personal                 
  injury property rising out of fault.                                         
  REPRESENTATIVE FINKELSTEIN  asked that on  Section 3,  there                 
  are arguments on both  sides on the issue of the  two years,                 
  and I am  certainly very  skeptical, myself.   The bill,  as                 
  explained to me,  in Section 13, if we're  going to say that                 
  no  matter  what, if  you're not  going  to bring  an action                 
  within two years, you can't pursue the actions.  What is it,                 
  in the nature of undiscovered foreign body, within a person,                 
  that makes that particular case so different from  a variety                 
  of other medical  malpractice cases.  Is there  something in                 
  that particular  category that  makes it  so different  that                 
  should be  (indiscernible).  One  of the only  exceptions to                 
  the (indiscernible).                                                         
  Number 368                                                                   
  DR.  MCGUIRE  stated  it  arose  from  the  fact  that  some                 
  individuals  felt  that  it  was  a  particularly  egregious                 
  offense that  if a doctor  or a  nurse or anybody  else left                 
  with  something  inside  someone's  body,  and  they  didn't                 
  discover  it until  sometime later,  it was  so obviously  a                 
  malpractice kind of thing that there should not be a statute                 
  of limitations.  This was felt  proliferously to be the case                 
  by anybody who  addressed the issue.  I think it is a matter                 
  of opinion and  a matter  of judgement.   I certainly  don't                 
  have any problem with the idea  that there can be exceptions                 
  in some  instances because I  think that, once  again, those                 
  are quantifiable exceptions.  I think that in this instance,                 
  it probably has the advantage that everybody doesn't have to                 
  run  down to  do  an  x-ray to  make  sure  they don't  have                 
  something  there.    I  wouldn't  debate  it with  you  very                 
  Number 380                                                                   
  REPRESENTATIVE  FINKELSTEIN  asked  if  there  was  anything                 
  medically more threatening than that  one particular type of                 
  malpractice, more so than some of the other types of things.                 
  It is just more quantifiable.                                                
  Number 386                                                                   
  DR. MCGUIRE answered that was his impression, yes.                           
  Number 388                                                                   
  REPRESENTATIVE  MACKIE  referenced  Dr.   McGuire's  earlier                 
  testimony where he  gave situations of doctors,  in Cordova,                 
  he  believed that insurance  costs rose and  sooner or later                 
  were unable to afford insurance.  You are suggesting some of                 
  these changes out of situations because  of that.  Where, in                 
  this legislation, or where  in the effort to reform  some of                 
  these problems affect  a lot of  citizens in Alaska, is  any                 
  kind of working commitment from insurance companies to lower                 
  their costs.                                                                 
  Number 397                                                                   
  DR.  MCGUIRE  said I  came  to  speak for  the  Alaskans for                 
  Liability Reform, and I didn't say that I came to speak  for                 
  the insurance  companies.  I  don't speak for  the insurance                 
  companies and I have my own separate problems with insurance                 
  companies at times.  This was  the subject of intense debate                 
  in 1986, and that is so if we do all of these laws, who says                 
  that the insurance  companies are going to be around anyway.                 
  We went  through (indiscernible), the  history of  insurance                 
  beginning with Lloyds of London, and the idea of reinsurance                 
  and the  idea of competitive  markets and so  on and  so on.                 
  Let  me try  to answer  the  question, if  I may,  this way.                 
  There was created, in 1975-76,  an organization called MICA,                 
  which was a  Medical Indemnity Corporation of  Alaska and it                 
  was an express  creation of  the legislature  to answer  the                 
  problem of no insurance in the medical malpractice area.  It                 
  was set up to be a mutual non-profit sort of company so that                 
  all the records would be available so that we could study in                 
  fact what happened  in the insurance mechanism.   It depends                 
  on whose opinion  you take as to whether MICA  was a success                 
  or not.  In the end, we learned a  very great deal about the                 
  actual cost  of insurance, about  where the money  went, and                 
  all of that history has been read into the record both  with                 
  Speaker  Cotten's  study  group  and   with  others  and  is                 
  certainly available.   MICA  has subsequently  been sold  to                 
  another  mutual insurance company  and that did  have a good                 
  effect in terms of moderating the race.   I can't argue that                 
  whether or not the whole insurance business ought to be that                 
  of mutual insurance companies or whether or not it should be                 
  that of  for profits.  But what I can tell you, is that when                 
  we had  the mutual  insurance company,  we,  as doctors,  we                 
  still faced the problem of not knowing of what the long tail                 
  was  going to  be  and therefore,  there still  had to  be a                 
  mechanism of reinsurance and that unpredictability makes for                 
  volatility of rates,  for one  year high and  the next  year                 
  low, and nobody knows where it is.   Let me remind you, that                 
  we  used to  have  statutes of  limitations.   It  is not  a                 
  foreign concept.  It isn't something that  we're dreaming up                 
  anew.   There used to be statutes  of limitations.  Even the                 
  IRS has  a statute  of limitations,  but  these statutes  of                 
  limitations were voided  by judicial decree.   They were not                 
  voided  by   legislative   action,  by   referendum  or   by                 
  initiative.  While they can be portrayed as being repugnant,                 
  in order that there is some predictability of affairs, it is                 
  important that there be  some.  If they were of  no good, we                 
  wouldn't have statutes of limitations for criminal offenses.                 
  Number 450                                                                   
  REPRESENTATIVE  FINKELSTEIN  stated  that  Dr. McGuire  made                 
  mention of the issue of 'while  committing a crime,' part of                 
  it all and we had a long discussion, I think that you caught                 
  earlier   on,   the  whole   thing   has  some   very  scary                 
  implications.  I think a lot of us are not completely clear.                 
  An example that came to my mind that we are talking about is                 
  the recent  case with  (indiscernible) Hardware,  where some                 
  kids were out in some sort of felony or misdemeanor crime of                 
  theft, and  were shot.  I assume that  there has been a suit                 
  of trying to recover some of the things.  Are you suggesting                 
  in that  kind of  case that  they should  be precluded  from                 
  suing  because there was some involvement in what some might                 
  consider  to be  a felony  or a  crime, that they  should be                 
  precluded from any compensation?                                             
  Number 462                                                                   
  DR. MCGUIRE answered  the short  answer is "no."   The  long                 
  answer  is that the kids weren't doing  a felony and that is                 
  precisely why the language  says a felony.  I  am completely                 
  sympathetic  to the fact that kids, and sometimes adults, do                 
  things  that  are  not  exactly  within  the  law  but  they                 
  certainly mean  any terrible  harm to  come by  it and  some                 
  injury occurs.  Kids trespass all the time.  We did not have                 
  the intent of misdemeanors.                                                  
  REPRESENTATIVE  FINKELSTEIN understood  that,  but just  the                 
  (indiscernible) between  misdemeanor and felonies,  just the                 
  dollar  amount...    There  are   some  larcenies  that  are                 
  felonies, right?                                                             
  REPRESENTATIVE PORTER added  you are presuming that  in that                 
  case, there  would have  been a  (indiscernible) of  larceny                 
  which  included   intent  to  permanently  deprive  in  that                 
  scenario.  I don't believe that was the case.                                
  REPRESENTATIVE FINKELSTEIN  agreed it could  be argued  that                 
  they were just temporarily stealing the  item.  The key here                 
  is that  the standard would  be changed  in proving  whether                 
  they were  involved  with  that.    It  wouldn't  be  beyond                 
  reasonable doubt, it  would just  be a lower  standard in  a                 
  civil case as to whether they  were involved in a commission                 
  of some sort of larceny which are...  My only point, I'm not                 
  trying  to  get into  the  details  of that,  but  there are                 
  larcenies  that are  felonies, and  they were involved  in a                 
  larceny like act  and I just want  to bring it up  because I                 
  think there is examples  on the other side where  we've seen                 
  enough publicity that we realize that not everyone that fits                 
  these  cases  may   be  some  we   want  to  bar  from   any                 
  DR. MCGUIRE thought  he might want  to be careful that  your                 
  remarks are  meant to clarify and not  obfuscate because the                 
  (indiscernible) of civil justice of  criminal justice is one                 
  that has  evolved over  the years  and we,  as a  collective                 
  society, have decided that some actions  are more harmful to                 
  society,  as  a  whole, than  are  others.    We call  those                 
  felonies.  We take felonies pretty  seriously.  When you are                 
  charged  with a felony,  it is no  laughing matter.   At the                 
  same time, we recognize that  there are those elements which                 
  are not  so serious  to the  fabric of  society and we  call                 
  those misdemeanors.                                                          
  Number 525                                                                   
  REPRESENTATIVE  FINKELSTEIN  stated  he  was  aware  of  the                 
  DR. MCGUIRE wanted  to try to make the point that some of us                 
  believe that when you go out and do something that you  know                 
  or should  know, is  more likely  than not  to cause  others                 
  injuries, when you rob banks, when you drive drunk, when you                 
  run red lights, and as a result of that, you cause injury to                 
  other people, where in the world does it  come with any idea                 
  of fairness that you are the victim and that you ought to be                 
  compensated because you  are the criminal.  It  doesn't make                 
  any sense.   Regardless  of whether or  not it said  that it                 
  should be so,  the fact of the matter is from the Daily News                 
  editorial, that those law-suits are filed.   The fact of the                 
  matter is, we argue that they don't even belong  in court in                 
  the first place.                                                             
  REPRESENTATIVE FINKELSTEIN clarified, I  couldn't agree with                 
  you more in cases where there is conviction (indiscernible).                 
  The discussion we had earlier is  cases where the person was                 
  found innocent of a felony and then in the civil  case, they                 
  try using the lower standard.   Made to prove that they were                 
  involved  in  the felony  anyway.   That is  the case  I was                 
  trying to get  at, I agree with  you on a conviction,  it is                 
  just a different level.                                                      
  DR. MCGUIRE  responded, I  would say  to you,  alright, then                 
  let's use the same standards for  determining fault in civil                 
  action as  they  use in  criminal action.   The  point I  am                 
  trying to  make is we, as a  society, want protection of the                 
  individual, and so  from the arm  of government we demand  a                 
  standard of evidence  beyond reasonable doubt, for  criminal                 
  actions.  But  for civil  actions, the plaintiff  can use  a                 
  different standard and can prove a damage using a  different                 
  standard.  Our argument is that the jury who decides whether                 
  or not there should be civil damages ought to be able to use                 
  the same standard approved relative to  the felony as to the                 
  standard approved relative  to the  damages.  Therefore,  we                 
  want,  at  a  very least,  this  information  be mandatorily                 
  (indiscernible).   I will  say to you,  that I  have a great                 
  deal of faith  in the jury system.   What I don't  have much                 
  faith in, is what the jury gets to hear.   So many times the                 
  instructions to the jury are so restrictive that they  don't                 
  have all the facts of the case  and how can they come to any                 
  conclusion other  than the  one that  is (indiscernible)  or                 
  what  they want it  to be.   We argue  that this is  still a                 
  matter of the jury to decide but by having this law in front                 
  of the  jury, you make sure  that the jury,  who decides the                 
  damages,  gets  to also  decide  the appropriateness  of the                 
  conduct of the plaintiff during the injury.                                  
  CHAIRMAN   HUDSON   stated   he   must  cut   Representative                 
  Finkelstein and Dr. McGuire off to  go on with the scheduled                 
  REPRESENTATIVE  FINKELSTEIN added  he  thought  it was  very                 
  helpful and helped  him understand that it is  two different                 
  levels.  The first situation, where you want to make sure it                 
  is before  the jury and the other is where they are actually                 
  precluded from any  compensation.   They are both  important                 
  but different.                                                               
  CHAIRMAN HUDSON stated it was  very good for the preliminary                 
  hearing  that  these kind  of  discussions come  out because                 
  these are clearly things that we can amplify and home-in on,                 
  on an individual basis.  I  appreciate Dr. McGuire for being                 
  at the meeting.                                                              
  CHAIRMAN HUDSON asked Jeff Feldman and/or Dan Hensley to the                 
  Number 545                                                                   
  LAWYERS ASSOCIATION,  has lived  in the Anchorage  community                 
  for 18 years  and by way of  background, I would say  it has                 
  been  his   practice   represented   both   plaintiffs   and                 
  defendants.    I  have,  on  occasion,  represented  injured                 
  Alaskans.   I  have also represented  many of  Dr. McGuire's                 
  colleagues, some in malpractice actions.  I have represented                 
  engineers and contractors, who have sued, and I am currently                 
  representing  our  Attorney  General Cole,  and  other state                 
  officials  who  were sued  in the  state  action, in  a tort                 
  action presently pending in the courts.                                      
  MR. FELDMAN said I come this afternoon with a view that is a                 
  little bit broader than what you might expect from me as the                 
  president   of   the  Alaska   Academy   of  Trial   Lawyers                 
  Association.    I hope  that  we  would all  agree  that the                 
  citizens of this state, the people  that hire and that voted                 
  for you, deserve  a civil  justice system that  is fair  and                 
  protects  their   rights  and   their  cause   for  adequate                 
  compensation.  I don't think anyone would quarrel  with that                 
  overall  goal.   I understand  that  unspoken in  this room,                 
  today,  but very much present  in the minds  of those of you                 
  who have to make these decisions, is a generalized hostility                 
  towards the legal  system, and  perhaps, even a  generalized                 
  hostility  towards lawyers,  in particular.   I am  not here                 
  this afternoon as  an apologist  in the legal  system and  I                 
  have my own  concerns about the legal system,  as I do about                 
  the medical system and  the educational system, in  which my                 
  children currently attend school.  I will tell  you candidly                 
  that  the legislation that  is before you  this afternoon is                 
  not reformed legislation, it is a  misnomer to call it that.                 
  It  is  legislation  which  confers  immunity   and  special                 
  benefits  on  a  very  narrow group  of  society  on special                 
  interest groups.   It benefits,  simply speaking wrongdoers,                 
  people who do not  commit harm, do not commit  negligence on                 
  other parties,  are not  particularly benefited  by much  in                 
  this  legislation.   This  legislation benefits  those who's                 
  conduct injures and  kills your  constituents.  Injures  and                 
  kills  Alaskans.  It  benefits insurers, major corporations,                 
  those who produce  products that are  used in our state  and                 
  professionals, including myself who commit malpractice.   It                 
  lessons  the responsibility  and reduces  their exposure  to                 
  liability that is  clearly its intent.  so lets identify  it                 
  from what it is.                                                             
  TAPE 93-41, SIDE A                                                           
  Number 001                                                                   
  MR. FELDMAN told the committee that HB 292 will, in the end,                 
  hurt  the  very constituents  the committee  represents, the                 
  victims who were unfortunate enough to be maimed or injured.                 
  Mr. Feldman noted that the hearing room was full of lawyers,                 
  doctors,  and  lobbyists,  but  none  of  the  victims  most                 
  affected by this bill.  The victims of catastrophic injuries                 
  brought  on  by someone  else's  negligence, the  widows and                 
  orphans  etc., these are  the people whose  rights are being                 
  changed with this bill.                                                      
  MR. FELDMAN stated that Dr. McGuire was simply wrong when he                 
  stated  that everything  in  the  bill  was the  product  of                 
  judicially  created  law.    The  statutes  of  limitations,                 
  interest  rates,   rules  by   which  certain   issues  were                 
  determined by the  jury, were set by  previous legislatures.                 
  HB 292 purports to undo what previous legislators have done.                 
  MR. FELDMAN pointed  out that the statute of limitations set                 
  at six years would be bad public policy for Alaskans as some                 
  defects won't show  until the  seventh  year.   The  section                 
  would confer immunity   to  manufacturers of products  whose                 
  defects may stay concealed for over six years.                               
  MR. FELDMAN stated that periodic payments puts the victim at                 
  risk  because  the  defendant, whether  it  be  an insurance                 
  company or individual, may not  be around at the end of  the                 
  payment schedule.   It's  also true  that the victims  needs                 
  very during their lifetime and should, therefore, be allowed                 
  to use the  money as the person  sees fit.  For  instance, a                 
  person who is rendered a quadriplegic  may find they need to                 
  build a special house, or move their family out of state  to                 
  be close to a facility  that can more properly take  care of                 
  his needs, etc.                                                              
  MR. FELDMAN concluded by saying HB  292 will make Alaska the                 
  most anti victim state in the nation.  It will not do any of                 
  the  things it is purported  to do and  should be called the                 
  "wrongdoers relief act".                                                     
  Number 146                                                                   
  DAN HENSLEY,  Attorney, reiterated Mr.  Feldman's testimony.                 
  He added that  the people who  promote tort reform state  as                 
  their reasons  for their support  that they  don't like  the                 
  civil liability system because it costs too much, because it                 
  takes  too  long,  because  frivolous  lawsuits  burden  the                 
  system, and because some people with legitimate claims don't                 
  have  access.  Mr. Hensley noted that he would like the same                 
  things but HB  292 does  not accomplish these  things.   For                 
  instance, in Section  2 of  the statute of  repose cuts  out                 
  claims for people who are injured  six years after a product                 
  has been manufactured or a building has been designed.                       
  MR. HENSLEY  explained  Section 3  limits malpractice  suits                 
  such as in the case of a   woman whose has a mammogram which                 
  clearly shows a small cancerous  lesion but the radiologists                 
  somehow becomes confused  and doesn't  tell the patient  and                 
  the cancer grows  and becomes deadly  three years after  the                 
  mammogram was taken the patient would not have a claim.                      
  MR. HENSLEY said language  in Sections 5 and 6  would exempt                 
  the  statute of  limitations provisions  in personal  injury                 
  cases from applying  to people who are  mentally incompetent                 
  or are children.                                                             
  MR. HENSLEY noted  that Sections  20 and 21  weaken the  pre                 
  judgement  interest part  of  our  civil  liability  system.                 
  Currently, if a insurance  company owes "X" amount of  money                 
  today and it knows it will have to eventually pay,  they can                 
  decide whether it's cheaper  of pay now or delay  and invest                 
  the money and pay the pre  judgement interest.   If the  pre                 
  judgement interest rate  is low, its incentive is  to delay.                 
  If it is high,  its incentive is to settle now.   Section 21                 
  reduces the rate of pre judgement  interest to a point where                 
  an insurance company will likely earn  more money on what it                 
  owes  than it would have to pay in prejudgment interest.                     
  MR. HENSLEY  said the Section  20 guts  most of the  kind of                 
  award in which prejudgment interest would have to be paid.                   
  MR.  HENSLEY  noted that  Section  11 would  necessitate the                 
  hiring  of an economist, by  the plaintiff, to calculate the                 
  taxes on future losses.                                                      
  MR. HENSLEY stated that Section 13 would create the need for                 
  the plaintiff  to hire insurance consultants to find out how                 
  periodic  payments would  work for  or against  them.   This                 
  again would increase the costs of the suit.                                  
  Frivolous lawsuits are by and large prevented by Rule 82 but                 
  HB  292,  as it  stands,  would cut  that  out of  the legal                 
  MR. HENSLEY stated that for the  first time under this bill,                 
  the  jury is  allowed to   hear that a  plaintiff has health                 
  insurance In the past, the  jury was prohibited from hearing                 
  this.  The judge would hear this after the case was over and                 
  deduct the health insurance payments  from the juries award.                 
  Under HB  292,  the jury  will  hear about  the  plaintiff's                 
  health insurance but not the fact  that the defendant may or                 
  may not have liability insurance.   Mr. Hensley felt this is                 
  not fair as it gives the wealthy defendant an advantage over                 
  the victim.                                                                  
  Number 257                                                                   
  CHAIRMAN  HUDSON  thanked  the previous  speaker.    He said                 
  speaking for himself,  he has not approached this  bill with                 
  any preordained dislike for lawyers.   Chairman Hudson feels                 
  it  is  wrong to  enter  into  an important  debate  as this                 
  presuming there is a strong bias.                                            
  Number 278                                                                   
  MR.  FELDMAN  stated  he didn't  mean  to  suggest that  his                 
  comments were personnel  to any  one on the  committee.   He                 
  said he understands that there is frustration with the legal                 
  system, but sometimes the good intentions are misplaced.                     
  Number 285                                                                   
  REPRESENTATIVE MACKIE said he did not come to the table with                 
  any  preconceived notions  and  listened  to  Mr.  Feldman's                 
  presentation closely.   Representative Mackie perceived  the                 
  problem to be that business is getting priced out because of                 
  high costs of liability insurance in this state.                             
  Number 315                                                                   
  REPRESENTATIVE  PORTER  asked  if  given  the example  of  a                 
  product   or  building  causing   injury  after   the  sixth                 
  limitation  was imposed,  couldn't  an  attorney assert  the                 
  claim as gross negligence?                                                   
  Number 330                                                                   
  MR. FELDMAN  replied that  there were  no exceptions  in the                 
  statute of limitations  under HB  292 for gross  negligence.                 
  So even he, an attorney, could  prove gross negligence.  Mr.                 
  Feldman further  stated that  gross negligence  is a  higher                 
  standard of negligence then ordinary negligence.                             
  Number 347                                                                   
  MANO FREY, President, AFL-CIO, testified that his union does                 
  not have a general policy on tort reform.  He said he raised                 
  the  concern  that  some  have  alluded to  insurance  costs                 
  decreasing  if HB  292  is passed,  but  no one  can say  so                 
  MR. FREY stated he doesn't think there is a problem with the                 
  size of jury verdicts in this state.  Mr. Frey added that he                 
  hopes the bill would address the problems in a balanced way.                 
  Mr. Frey believes HB  292, as it is currently  drafted, will                 
  only hurt the victims.                                                       
  MR.  FREY stated  that when a   workers  compensation reform                 
  bill was  on the  agenda, one  of the popular  ideas was  to                 
  reduce the  amount of money  that attorneys received.   This                 
  ended up doing a great disservice  to people with legitimate                 
  claims as they couldn't find an attorney to  represent them.                 
  The amount of  work involved versus the possible  payoff was                 
  not high enough to make it worth most attorneys time.                        
  Number 510                                                                   
  LAURA  KELLY, Vice  President, AFL-CIO,  testified that  she                 
  could not see any  benefit to the  working men and women  of                 
  the state in this legislation.                                               
  MS.  KELLY cited several example of products that science is                 
  just now showing that  they can cause damage to  people well                 
  past the  six year  limitation  in HB  292.   Some of  those                 
  products,  for   example,  are  cellular   phones,  silicone                 
  implants,  and  the  radar  guns  the  police  use  to  trap                 
  MS. KELLY stated she  has great confidence in the  people of                 
  this state that  make up  our juries and  would rather  have                 
  them  deciding  her case  than  having some  artificial caps                 
  imposed by this bill binding the jury.                                       
  MS. KELLY stated her concern is that HB 292 sets a lower cap                 
  for a person  in a wrongful  death action who was  childless                 
  then one with children.   Ms. Kelly felt that  was sending a                 
  clear message  to citizens  of Alaska  about there  relative                 
  TAPE 93-41, SIDE B                                                           
  MS. KELLY  stated she  was bothered  that HB  292 would,  in                 
  effect, give only $10 thousand for the loss of a child  to a                 
  MS. KELLY said she did not believe the state should have any                 
  interest in the area of punitive damages.  There could be no                 
  benefit to the state in capping punitive damages in the most                 
  outrageous and egregious cases.                                              
  Number 055                                                                   
  STEVE  CONN,  Executive  Director,  Alaska  Public  Interest                 
  Research Group, testified his group is bi-partisan and tries                 
  to represent the Alaskan  consumer.  Mr. Conn noted  that he                 
  used to be a professor in the university  system in the area                 
  of justice.  Mr. Conn gave a historical outline of torts.                    
  MR. CONN stated  he thinks it is  important to look  at past                 
  tort reforms to see  if they have achieved any  benefits for                 
  Alaskans.  Has it  lowered insurance premiums?  Has  it made                 
  the  system  more cost  efficient?   Have  the  injured been                 
  served?  Have  the medical profession  been served?  Are  we                 
  safer in terms of the products we use?                                       
  MR.  CONN  suggested that  the  legislature direct,  not the                 
  attorney general's  office, but the Alaska  Judicial Council                 
  to  study  past   tort  reforms  to  answer   the  questions                 
  previously asked.                                                            
  MR. CONN believes that at both the state and federal levels,                 
  the  insurance industry  has  misrepresented  the  facts  in                 
  regards to this bill.  Mr. Conn cited a report done  for the                 
  state of New  York that  contends that the  real problem  is                 
  that there is more malpractice in the health care field than                 
  the system  can  handle  and  that  there  aren't  too  many                 
  lawsuits filed, but too few.                                                 
  MR. CONN stated that of the  suits filed, the amounts of the                 
  awards were  not  disproportionately high  despite  the  few                 
  extreme cases that make the news.                                            
  MR.  CONN pointed  out that  overall nationally  malpractice                 
  insurance premiums  account for less  than 1 percent  of the                 
  total health care spending according to the studies.                         
  MR. CONN again asked the  committee to ascertain whether the                 
  promises made before the last  reform came true before  they                 
  tinker with the system again.                                                
  Number 297                                                                   
  CHAIRMAN HUDSON noted that HB 292,  like most bills that are                 
  introduced in the  legislature, serve  initially as a  forum                 
  for  putting the issue before  those in the legislature that                 
  have  to  make  public policy  decisions.    Chairman Hudson                 
  welcomed  the  input  from the  various  people,  throughout                 
  Alaska, to help fine tune HB 292.                                            
  Number 345                                                                   
  FRANK THOMAS-MEARS,   State Insurance  Administrator, Alaska                 
  Dental Society, said he  is one of the original  founders of                 
  the Alaska Citizens  Coalition for Tort Reform.  Mr. Thomas-                 
  Mears stated  that this  bill is  the first  attempt to  set                 
  forth limitations.  He said that the  citizens coalition has                 
  tried to interest  the trial attorneys,  since 1985, to  sit                 
  down and open  up discussions on  tort reform and the  reply                 
  was "no."   Furthermore the  trial attorneys have  indicated                 
  that if the reform passes they will fight it in the courts.                  
  MR. THOMAS-MEARS stated  that there are finite  resources to                 
  go  around  and  that  a  democracy  cannot  have  unlimited                 
  liability  to  everybody  for  everything  and  exist.    He                 
  asserted that law has been enacted through  case law without                 
  public participation.                                                        
  MR. THOMAS-MEARS stated  he believed our society  needs more                 
  methods of alternate  dispute resolution such  as mediation,                 
  arbitration and peer review.                                                 
  Number 568                                                                   
  REPRESENTATIVE MULDER asked  for an  explanation of the  $10                 
  thousand  figure  for the  death of  a  child that  has been                 
  brought up during some of the previous testimony.                            
  Number 575                                                                   
  MR. FORD responded that in a wrongful death action, sections                 
  20 through 23,   a $10 thousand figure would  apply assuming                 
  that the child had no dependents.                                            
  TAPE 93-42, SIDE A                                                           
  Number 001                                                                   
  There was continuation of  wrongful death discussion between                 
  Mr. Ford and Representative Mulder.                                          
  Number 045                                                                   
  ERIC SANDERS, Attorney, testified as to how  the present law                 
  reads versus the legislation before the committee.  He  said                 
  under present law, there are two kinds of clients.  There is                 
  one type  where there  are dependents.   There  is also  the                 
  wrongful death claim where there are  no dependents.  If you                 
  are married or are  a single person with children,  then you                 
  have dependents.  He  said if he were supporting  his mother                 
  because she  was disabled,  she would  also be a  dependent.                 
  Mr.  Sanders  said in  that  situation,  if a  dependent  is                 
  survived, then they have a claim  for their loss of support.                 
  They would also  have a claim for loss of companionship.  He                 
  said that is one set of claimants, those with dependents                     
  MR. SANDERS said there is a second group of those people who                 
  are not dependents  and have no  dependents.  He said  there                 
  could be  a minor  child, under  18 years old.   Under  that                 
  there would be a  pecuniarily loss.  The way it is currently                 
  done is it  is projected what  that child would have  earned                 
  during the  course of  their life  minus their  consumption.                 
  That is the pecuniarily loss.                                                
  MR. SANDERS said separate and  apart from the wrongful death                 
  statute there is also a law which provides that parents of a                 
  minor child have a claim for the loss of the relationship in                 
  their child.                                                                 
  MR.  SANDERS  said  then  you have  claimants  that  are  no                 
  dependents over the  age of 18.   If you're 18 years  plus 1                 
  day old, you are killed, you  have no dependents, under this                 
  law you're going to get the estate.                                          
  Number 078                                                                   
  REPRESENTATIVE PORTER asked Mr. Sanders  what a person could                 
  conceivably get under Section 6 of HB  292 for the loss of a                 
  child that is over 18 years of age.                                          
  Number 085                                                                   
  MR. SANDERS explained  that HB 292 is  limiting tort actions                 
  not expanding them.   He  added that under  current law  the                 
  estate of an 18 year old would be limited to pecuniary loss,                 
  the  estate  would   not  get  anything  for  the   loss  of                 
  companionship of the child.                                                  
  MR.  SANDERS  asserted  that  the  civil justice  system  is                 
  arbitrary in some regards and this is one example.                           
  MR. THOMAS-MEARS responded  that HB 292 is  arbitrary but he                 
  thinks its as fair as you can get given the framework.                       
  MR. THOMAS-MEARS added  that he  would rather set  arbitrary                 
  limits now with finite limits under rational circumstances.                  
  MR. SANDERS  stated that  if the  insurance companies  would                 
  commit, in writing, to lower premiums if this bill passes he                 
  didn't think there would be opposition to it.  He added that                 
  the  insurance  industry  is   standing  on  the   sidelines                 
  promoting the passage of tort reform limiting victims rights                 
  without committing to any reductions in premiums.                            
  Number 135                                                                   
  CHAIRMAN HUDSON commended  both sides and suggested  that it                 
  be reduced to  writing as there are some good  ideas for the                 
  Number 138                                                                   
  REPRESENTATIVE MACKIE commented  that when tort  reform came                 
  up in 1988,  he understood insurance rates would  be lowered                 
  but it hasn't happened.                                                      
  Number 155                                                                   
  GORDEN  EVANS,  Health  Insurance  Association  of  America,                 
  testified  to their  position on  HB 292.   The  Association                 
  believes that the major focus should  be on the reduction of                 
  the  occurrence  of  malpractice.    This  may  involve  the                 
  relicensing  of the  medical profession,  periodically, with                 
  written  examinations  and  peer audits.    The  association                 
  believes in requiring hospitals and other medical facilities                 
  to  implement  effective  risk  management  practices  as  a                 
  requirement of licensure.  The association is also promoting                 
  the  accumulation  of  information  on  the  medical  field,                 
  including an analysis  of claims  or information of  license                 
  revocations, suspensions and disciplinary actions.  Finally,                 
  to empower the  State Medical  Board to  be able  to act  on                 
  these measures.                                                              
  MR. EVENS explained  that the  association is supportive  of                 
  alternative dispute resolution.  He added that if litigation                 
  is necessary, then every effort be made to make sure that as                 
  much of the award go to the claimant.                                        
  REPRESENTATIVE MACKIE  asked if the  insurance industry  was                 
  supportive  of lowering their rates if  some of these things                 
  in the bill pass.                                                            
  Number 234                                                                   
  MR. EVANS   stated that if  costs are cut  and limited to  a                 
  finite amount,  then it would  follow that.   Premiums would                 
  come down.                                                                   
  Number 255                                                                   
  REPRESENTATIVE  PORTER  asked  for  Mr.  Evans to  give  the                 
  committee an analysis of any  savings or reduction in growth                 
  in insurance premiums.                                                       
  Number 268                                                                   
  MR. EVANS replied that  he was not in  the position to  make                 
  any predictions in that regard.  He added that he would pass                 
  the request along to the association for a reply.                            
  REPRESENTATIVE   PORTER   responded   that   he  hoped   the                 
  association could come up with  some response before session                 
  started as he  knew the  question would come  up during  the                 
  legislature's debate on tort reform.                                         
  Number 276                                                                   
  REPRESENTATIVE GREEN asked Mr. Evans for an approximation of                 
  how much the payout is for all malpractice claims as opposed                 
  to non litigated coverage.                                                   
  Number 290                                                                   
  MR. EVANS replied that he did  not have that information but                 
  would  make  an effort  to  obtain  and provide  it  for the                 
  Number 300                                                                   
  CHAIRMAN  HUDSON stated that  any information  provided that                 
  would  help  the committee  expand  their knowledge  on this                 
  subject will be appreciated.                                                 

Document Name Date/Time Subjects