PATIENTS FIRST ACT OF 2003MOTION TO PROCEEDRESUMED
Mr. McCONNELL. Mr. President, I have heard colleagues on the other side of the aisle extol the virtues of the Weiss report to justify opposing limits on noneconomic damages. Some of our colleagues on the other side of the aisle seem to view this report as the end all and be all of reports on the effect of damage caps.
This Weiss report makes the rather bold and somewhat astonishing assertion that States with caps on damages actually have higher premiums than States without caps on damages. I never heard of such a conclusion. Indeed, it flies in the face of common sense, common experience, and the expertise of actuaries and insurance commissioners.
As one can imagine, I was intrigued by this report and wanted to learn more about it. Upon reviewing the report, it reminded me of the saying by Mark Twain, or Will Rogers, who said: There are lies, there are damn lies, and then there are statistics.
I am wondering how Weiss calculated the median premiums found in his report. No one can seem to figure that out because the report never really explains how the median premium was established.
The Weiss report uses data over a decade-long period. We are talking about the cost of something, in this case insurance coverage, over a substantial amount of time. Inflation is a pretty basic statistical variable for which one should account. Does the Weiss report take inflation into account in reaching its conclusion regarding caps? It looks as if the Weiss report knows that to do a proper analysis one should take inflation into account. After all, it does so in analyzing insurance company payoffs.
For some inexplicable reason the Weiss report fails to do so in its analysis of the increase in insurance company premiums. There is no indication Weiss took inflation into account, despite the fact it does so in making a similar calculation for insurance company payoffs in other parts of the report. If I didn't know better, I would say such a glaring and telling omission was part of an effort to arrive at a predetermined conclusion.
The publication from which the Weiss report obtained its data is something called the Medical Liability Monitor. It is one of the best sources for medical malpractice premium information. Many legitimate reports use the data found in this publication to help explain the crisis. The most recent comprehensive rate survey in the Medical Liability Monitor, dated October 2002, had a headline that reads "2002 rate survey finds malpractice premiums are soaring. Hard market wallops physicians. Average rate increase more than double those in 2001."
It seems to me the methods the Weiss report uses are not only wrong but, in fact, misleading. The Weiss report is so seriously flawed, according to the Medical Liability Monitor, the experts who collect the data that Weiss manipulated, actually had to print the following disclaimer in a June 2003 issue to ensure this report was not used to mislead the public.
Let me read the most salient parts.
The Weiss ratings analysis of medical malpractice caps cites Medical Liability Monitor as the source of data Weiss uses to calculate average and median premiums for physicians during the last 12 years.
While we are an independent news publication and take no position on tort reform or other proposals to improve the medical liability climate, we feel it necessary to comment on the use of our statistics because some readers have expressed concern.
The medians and averages in the Weiss report are not the numbers we report in our annual rates surveys. Weiss may have taken our numbersthe amounts and increases of premiums paid by doctors State by Stateand used them to arrive at their statistics, but it is impossible from their report to say definitely how our numbers have been used.
It is our view that it is impossible to calculate a valid "average" premium for physicians or for physicians in a particular State or territory, and we state that clearly in the executive summary of our rate survey.
But the editor of the Medical Liability Monitor goes further, advising the leaders it is misleading to use median annual premiums compiled from data from the Medical Liability Monitor to demonstrate the effect of noneconomic damage limits on medical liability rates. This is exactly what Weiss does. The report uses median annual premiums compiled with data from the Medical Liability Monitor to try to demonstrate the effect of noneconomic damage limits on liability rates. Not only is this wrong, it down right misleads the public.
I would be the first to confess I am not an expert on the subject but according to many experts, including the PIAA, it is impossible to calculate a valid and useful median premium using the numbers found in the Medical Liability Monitor for many reasons. One of the obvious reasons is a median is not a weighted average. Thus, the Weiss methodology, as far as we can tell, actually inflates the insurance carrier's premium increase by not weighing premiums according to market share. This is critically important because the highest rate probably has the lowest market share.
In fact, the Medical Liability Monitor does not report how many doctors have a particular premium, so a helpful weighted average is impossible to calculate based upon that data as the authors of the Weiss report will tell you.
In short, according to the very experts upon whom the Weiss report relies, the conclusion of the Weiss report on the effective economic damages are wrong, misleading, and should be avoided.
I think it is better to look at some legitimate studies. While folks should question the Weiss study, we can generally trust CBO. So let's look at some highlights from CBO.
Reading from pertinent parts, States with limits of $250,000 or $350,000 on noneconomic damages have an average combined highest premium increase of 15 percent compared to 44 percent to States without caps on noneconomic damages. In California, where the State has placed a cap on noneconomic damages, punitive damages, or rewards for pain and suffering at a quarter of a million, insurance rates have not shown the sharp increase experienced in other States.
Looking at my next chart which has been used by a number of proponents of the underlying legislation, it is very clear that major cities in States which have adopted some kind of caps on noneconomic damages are experiencing lower malpractice insurance rates for physicians. California and Colorado, where there are sensible restraints on noneconomic damages, whether you look at a specialty of internal medicine or general surgery or obstetrics, there is a dramatic difference between the rates in California and in Colorado compared to States such as New York, Nevada, Illinois, and Florida where there are no such caps.
The most dramatic example, I suppose, is in the area of obstetrics where in California the annual premium is $54,000; in Colorado, $30,000; compare these figures to a premium for obstetrics in Florida, which is $200,000 a year, Illinois is $100,000 a year, Nevada is $107,000 a year, and New York is just under $90,000 a year. These are actual 2002 premium survey data looking at selected specialties in States where there are caps versus States where there are no caps.
I repeat, once again, this legislation does not deny the victim a full recovery for all economic damages, plus on top of that, a quarter of a million dollars for pain and suffering, plus on top of that, punitive damages at twice the amount of economic damages or a quarter of a million, whichever is greater.
This is a bill that does provide for victims. In addition to that, it provides some reasonable restraint on lawyer's fees, which of course also benefit the victim because the dollars the lawyers don't get, the victims do.
We can have many legitimate arguments. I know my colleagues on the other side of the aisle seem to be terribly concerned about States' rights as it applies to this issue. I think that is certainly a reasonable argument to make. But it seems to me it borders on nonsensical to argue that caps on noneconomic damages have not had an impact on premiums, because clearly they have. The facts speak for themselves. All you have to do is look at the premiums for these specialists in States where there are caps on noneconomic damages and compare them to premiums in States where there are not. Clearly it makes an enormous difference.
Taking a look at California again, their underlying legislation, which is commonly referred to as MICRA, is the model for the bill which we hope to be able to proceed to. California has had very stable rates over the years going back to 1976 when MICRA was adopted, going right up to the present. If you look at the rest of the United States, California has had a 182 percent increase in medical malpractice liability insurance premiums over this quarter of a century period, but if you compare that to the rest of the country, there has been a 573 percent increase. Any way you look at it, the California law obviously has had a positive impact on making it possible for physicians to afford their liability insurance and therefore continue to offer health services for their people.
That takes us back to where I started yesterday. A year ago when the underlying bill was offered as an amendment, or a portion of it was offered as an amendment, we had a number of States in crisis. Today we have more States in crisis. Wyoming just yesterday changed from a state with problem signs to a state in crisis. Also, in the year since we last debated this issue, my own State of Kentucky, which was a State with problems a year ago, is now a State in crisis. We have to add both states to the red State list.
Connecticut. A year ago Connecticut was a State in trouble. Today, it is a State with a genuine crisis. So it will have to be added to the crisis State list today.
North Carolina. A year ago North Carolina was a State with problem signs. Today it is a State that is in crisis over this issue.
Arkansas. One year ago when we were considering legislation similar to this, Arkansas was a State with problems. Today, Arkansas is a State in crisis.
Missouri. A year ago, Missouri was in trouble. But today it is in crisis.
Finally, Illinois would have to be added today as a State in crisis.
So let's take a look at the map, where we stand today. As I can count them, there are only six States in America that are currently OK according to the AMA; that is, physicians are not avoiding choosing certain specialties or retiring early or closing their shops over the cost of their medical malpractice premiums. We now have 19 red States. Red States are States in crisis. I think we had 11 this time a year ago. Now we are up to 19. Then the rest of America is yellow. That is, States with problem signs. At the rate we are going, many of these yellow States will become red States in the coming months if we do not act to deal with this truly national problem.
I think the argument of States' rights occasionally makes sense, but this is a national issue, affecting health care for all Americans. This is really largely about the patients. Some people have described this as sort of a titanic struggle with doctors and insurance companies on one side and lawyers on the other. Frankly, I am not particularly interested in that struggle. I am sure it exists in a number of different ways. The real issue is whether or not patients are going to be cared for, whether or not there is going to be a medical professional within reasonable proximity of patients in order to deliver a service all Americans are entitled to. That is no longer the case in a significant part of our country.
In my State in eastern Kentucky we have had a number of horrendous occurrences as a direct result of medical professionals not being available because they went out of business. They simply could not afford to pay their medical malpractice insurance premiums and still be in business. So this is a national crisis.
Let me just say in closing, we are debating a motion to proceed. Reasonable people can differ about how to do something about this crisis, but I don't think there are many Senators coming out here, saying this is not a crisis. It is a crisis. Even those who are opposing the motion to proceed, I would expect most of them think we have a major problem here. One of the advantages of voting for the motion to proceed is to get us onto the bill so amendments can be considered. I would not even rule out the possibility that by the time we came to final passage of this legislation, it might look quite different. I might not like that, but I am not sure where the votes are unless we get onto the bill and have a chance to consider amendments and options to deal with this measure about the national health care crisis.
Two weeks ago we added a prescription drugs benefit to a reformation of Medicare. The House has acted. A conference will unfold in the coming weeks and we will on a bipartisan basis deal with one of the major health care issues confronting senior citizens, that is how to afford prescription drugs and whether or not they are going to have choices under the Medicare program.
Now we need to turn our attention to another major health care crisis, and that is the unavailability of health care in major portions of the country simply because physicians can no longer afford to pay their medical liability insurance premiums and still provide health care for patients. That is why we call this the Patients First Act of 2003.
I hope tomorrow, late morning, when we have the vote on cloture on the motion to proceed, that cloture will be invoked, that we will move on to this legislation, consider the various suggestions that have been made by Senators on both sides of the aisle as to how we ought to deal with this crisis. But let's act. Let's act. Let's make an effort to tackle one of America's great health care problems of the 21st century.
I yield the floor.